Sandoz & Sandoz
[2024] FedCFamC1A 226
•5 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Sandoz & Sandoz [2024] FedCFamC1A 226
Appeal from: Sandoz & Sandoz [2024] FedCFamC2F 825 Appeal number: NAA 200 of 2024 File number: PAC 2735 of 2022 Judgment of: CAMPTON J Date of judgment: 5 December 2024 Catchwords: FAMILY LAW – APPEAL – PARENTING – Where the wife contends an error by the primary judge in failing to give any reasons for the regime as to time spent between each parent and the child during the Christmas holiday and Easter periods or why the regime proposed by the Independent Children’s Lawyer was adopted in promoting the best interests of the child in preference to the differing regimes proposed by either parent – Where the parties and the Independent Children’s Lawyer did not approach the subject matter as de minimis or insignificant – Error established – Orders made in the re-exercise of discretion as agreed by the parents and the Independent Children’s Lawyer during the hearing of the appeal – Costs certificate ordered for the Independent Children’s Lawyer for the costs of the appeal.
FAMILY LAW – APPEAL – PROPERTY – Where the wife contended error by the primary judge in concluding that the wife and the maternal grandmother did not discharge the onus of proof to establish a common intention trust – Where the primary judge identified material that was either extraneous and took it into account, or failed in the reasons to consider and evaluate that material – Where the parties advanced conflicting evidence as to a matter significant to the outcome – Where both sets of evidence should be referred to and reasons provided to explain findings of fact which are critical or determinative – Where the reasons were unable to discern conflict between untested testimony and other evidence – Where the primary judge made overarching blanket findings as to credibility that cloaked the integrity of the fact finding process – Where the primary judge made errors of fact – Where the reasons do not ensure that justice is seen to be done – Where it was found that a trust arrangement was the only logical and plausible conclusion – Where the incontrovertible facts are sufficient to discharge the onus of proof to establish a common-intention constructive trust –Appeal allowed – Re-exercise of discretion – Declaration made that the wife holds her interest in a real property on trust for the benefit of the maternal grandmother – Costs certificates ordered for each of the husband, the wife, and the maternal grandmother for the costs of the appeal.
FAMILY LAW – APPEAL – PROPERTY – Where the determination pursuant to s 79 of the Family Law Act 1975 (Cth) was infected by multiple errors – Where the error as to the common intention constructive trust corrupts the reasons as to the determination as to the adjustment property between the husband and the wife – Matter remitted for re-hearing before a judge other than the primary judge – Costs certificates ordered for the husband and the wife for the costs of the re-hearing.
Legislation: Evidence Act1995 (Cth) s 63 and s 67
Family Law Act 1975 (Cth) s 78 and s 79
Federal Proceedings (Costs) Act 1981 (Cth)
Cases cited: Aitken & Aitken (2023) FLC 94 -142; [2023] FedCFamC1A 69
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
DL v The Queen (2018) 266 CLR 1; [2018] HCA 26
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
G v H (1994) 181 CLR 387; [1994] HCA 48
Hall and Hall (1979) FLC 90-713; [1979] FamCA 73
Khalif & Khalif [2021] FamCAFC 123
Mead v Mead (2007) FLC 93-327; [2007] HCA 25
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Queensland v Masson (2020) 381 ALR 560; [2020] HCA 28
Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasinghan (2000) 168 ALR 407; [2000] HCA 1
Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Saltern & Mink [2020] FamCAFC 320
Shell & Armel [2022] FedCFamC1A 83
Silvia (Trustee) v Williams [2018] FCAFC 194
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
U v U (2002) 211 CLR 238; [2002] HCA 36
Valceski v Valceski (2007) FLC 93-312; [2007] NSWSC 440
Warby & Warby (2001) FLC 93-091; [2001] FamCA 1469
Warren & Coombes (1979) 142 CLR 531; [1979] HCA 9
Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816; [2005] HCA 57
Yarrow & Yarrow [2022] FedCFamC1A 135
Number of paragraphs: 130 Date of hearing: 20 November 2024 Place: Sydney Counsel for the Appellant: Mr Ford Solicitor for the Appellant: Lewarne & Goldsmith Counsel for the First Respondent: Mr Grew Solicitor for the First Respondent: Coleman Greig Lawyers Counsel for the Second Respondent: Mr Eardley Solicitor for the Second Respondent: Hammond Nguyen Turnbull Counsel for the Independent Children's Lawyer: Ms Rebehy Solicitor for the Independent Children's Lawyer: Shedden & Associates ORDERS
NAA 200 of 2024
PAC 2735 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS SANDOZ
Appellant
AND: MR SANDOZ
First Respondent
MS CANNING
Second Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
5 DECEMBER 2024
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.Order 11(a) made on 2 July 2024 be varied with the inclusion of the additional periods of time that the child X born in 2015 (“the child”) shall spend with Mr Sandoz (“the husband”):
(a)In Easter in 2025 and each odd year thereafter from 3.00 pm Easter Saturday until before school (or 9.00 am Easter Tuesday);
(b)In Easter in 2026 and each even year thereafter from after school (or 3.00 pm) Holy Thursday until 3.00 pm Easter Saturday;
(c)In Christmas in 2024 and each even year thereafter from 10.00 am Christmas Eve until 2.00 pm Christmas Day; and
(d)In Christmas in 2025 and each odd year thereafter from 10.00 am Christmas Eve until 10.00 am Christmas Day.
3.Order 11(b) made on 2 July 2024 be varied with the inclusion of the additional periods of time the child shall spend with Ms Sandoz (“the wife”):
(a)In Easter in 2025 and each odd year thereafter from after school (or 3.00 pm) Holy Thursday until 3.00 pm Easter Saturday;
(b)In Easter in 2026 and each even year thereafter from 3.00 pm Easter Saturday until before school (or 9.00 am Easter Tuesday);
(c)In Christmas in 2024 and each even year thereafter from 2.00 pm Christmas day until 2.00 pm Boxing Day; and
(d)In Christmas in 2025 and each odd year thereafter from 10.00 am Christmas day until 2.00 pm Boxing Day.
4.Each parent be permitted to travel interstate with the child during times that the child is in the care of that parent provided the other parent is provided with two weeks’ notice of such travel occurring with a copy of the travel itinerary and such travel occurs during school holiday periods.
5.Orders 19–24 inclusive made on 2 July 2024 are discharged.
6.The Court declares that the interest of the wife in the land comprised at Folio Identifier ..., known as C Street, Suburb D NSW is held on trust in favour of the maternal grandmother, Ms Canning.
7.The matter pursuant to s 79 of the Family Law Act 1975 (Cth) as between the husband and the wife is remitted for rehearing to a judge of the Federal Circuit and Family Court of Australia (Division 2) other than the primary judge.
8.The wife is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to the appeal.
9.The husband is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to him in respect of the costs incurred by him in relation to the appeal.
10.The second respondent, Ms Canning, is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to the appeal.
11.The Independent Children’s Lawyer is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to them in respect of the costs incurred by them in relation to the appeal.
12.The wife is granted a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to a rehearing.
13.The husband is granted a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to him in respect of the costs incurred by him in relation to a rehearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sandoz & Sandoz has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
This is an appeal from orders made on 2 July 2024 by a judge of the Federal Circuit and Family Court of Australia (Division 2) as to both parenting and the adjustment of property. The parties to the proceedings were:
·The appellant, Ms Sandoz (“the wife”);
·The first respondent, Mr Sandoz (“the husband”);
·The second respondent, Ms Canning (“the maternal grandmother”);
·The third respondent, Mr G (“the maternal grandfather”), who died on 9 April 2024, eight weeks prior to the trial. He was removed as a party to the proceeding on 2 May 2024; and
·The Independent Children’s Lawyer (“the ICL”).
The husband and the wife commenced cohabitation in 2012, were married in 2014, and separated on a final basis on or around 29 June 2021. Their child, X, was born in 2015. On 23 May 2022 the husband commenced the proceedings. The maternal grandparents were joined as parties on 19 December 2023.
The parenting orders made on 2 July 2024 provide for the wife to have sole parental responsibility for the child, for the child to live with the wife, and for the child to spend time with the husband during the school term on a fortnightly schedule from Thursday after school to the commencement of school on Monday in Week 1, and on Thursday after school to the commencement of school on Friday in Week 2, and for half the school holidays. They further provide for the child to spend time with each of the respective parents on Father’s Day and Mother’s Day, for the removal of the child from the Airport Watchlist, and permit both parents to internationally travel with the child.
The parenting challenge of the wife by way of her Further Amended Notice of Appeal filed on 9 October 2024 is confined as to a failure to determine a dispute as to specified time spent by the parents with the child in the Christmas period and Easter, and as to interstate travel. The husband and the ICL oppose the parenting appeal. The maternal grandmother made no submissions as to the parenting appeal.
The financial orders challenged on appeal are two-fold. This first challenge is to orders made by the primary judge dismissing the relief sought by each of the wife and the maternal grandmother that the wife held her legal interest in a property at C Street, Suburb D (“the [Suburb D] property”) beneficially for the maternal grandparents. The second is from the orders made pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) adjusting the property of the husband and the wife.
The husband opposes the financial appeal. The maternal grandmother “essentially adopts the approach of a “submitting appearance” in relation to the appeal”, citing that the determination of the primary judge as to the wife not holding her interest in the property beneficially for she and her late ex-husband “does not affect or disrupt”, “[her] occupation and ownership of the property”. That said, the maternal grandmother adopted the wife’s submissions to the challenge on this topic. The ICL did not wish to be heard on the financial orders challenge.
For the reasons that follow, the appeal is allowed as to both the parenting and financial challenges.
In the event the parenting appeal was allowed, the husband, the wife, and the ICL agreed to a re-exercise of discretion as to the terms of further orders specifying time spent by the child annually with each parent at Easter and Christmas, with notations as to the interstate travel.
As to the financial appeal, a declaration is made that the interest of the wife in the Suburb D property is held on trust by the wife in favour of the maternal grandmother. The s 79 matter is remitted for re-hearing before a judge of the Federal Circuit and Family Court of Australia (Division 2) other than the primary judge.
BACKGROUND
The maternal grandfather was born in 1943 in Country M. His health challenges were numerous. The maternal grandmother was born in 1950 in Country M and is currently 74 years old.
The husband was born in 1970 and is currently 53 years old. The wife was born in 1975 and is currently 49 years old.
In 1992 the maternal grandparents purchased V Street, Suburb O (“the [Suburb O] property”) without any mortgage liability.
In 1997 the wife married Mr P.
In early 1999 the maternal grandparents each appointed the wife as their power of attorney.
In mid-1999 the wife and Mr P purchased W Street, Suburb Y (“the [Suburb Y] property”). The maternal grandparents provided a guarantee for a loan for $250,000 obtained by the wife and Mr P used to acquire the Suburb Y property. That loan was secured by way of a mortgage over their Suburb O property.
In 2002 the wife and Mr P purchased Q Street, Suburb D (“the [Q Street] property”).
From late 1997 until early 2005 the maternal grandparents were in Country M progressing treatment for the maternal grandfather’s health challenges.
In 2003 the wife identified a property for sale at C Street, Suburb D (“the [Suburb D] property”) close to the Q Street property. She told her parents in Country M that she thought it would be suitable for them. Both of her parents agreed with the purchase proceeding. The primary judge’s evaluation (or the absence thereof) of the affidavit evidence of each as to conversations between the wife and her parents at this time, their intentions and what they said were their common understandings, are the subject of challenge in the appeal.
In 2003 the wife’s parents Suburb O property was sold for $430,000.
In 2003, nine years prior the cohabitation of the husband and the wife, the Suburb D property was acquired for $520,000. The maternal grandparents and the wife were recorded on the title as owners of the Suburb D property as joint tenants. At the time of acquisition of the Suburb D property, a mortgage in the sum of $402,226 was obtained from R Bank. That mortgage was re-financed in May 2004 with a mortgage from the CBA.
In early 2005, the maternal grandparents commenced to reside in the Suburb D property on their return from Country M. They lived in the property since that time.
In 2004 K was born, the eldest child of the wife and Mr P. In 2006 L, their younger child, was born.
On 28 May 2007 the maternal grandparents received a statement from the Commonwealth Bank of Australia (“CBA”) demanding payment of $1,346,852 alleged to be then owing on home loans secured by way of mortgage over the Suburb D property. The letter asserted that on 13 April 2007 CBA had given notice to Mr P, the wife, and the maternal grandparents, requiring payment of home loan account arrears. The unchallenged evidence of the wife at trial was “we were advised that [Mr P] was forging our [she and the maternal grandparents] signatures to obtain loan approvals over our joint matrimonial properties and also my parents’ home [the Suburb D property]”.
In 2007 the wife and Mr P separated on a final basis.
In late 2007 the Q Street property was sold. The totality of the sale proceeds was paid to CBA.
The wife and the maternal grandparents commenced proceedings against CBA in the Supreme Court grounded from an alleged fraud occasioned by Mr P. In 2009 the proceedings settled. The wife and the maternal grandparents entered a deed of settlement and release with CBA providing for them to make a payment to CBA of $166,667. On 19 December 2009 the wife and the maternal grandparents obtained a loan secured by way of mortgage in favour of Westpac over the Suburb D property in the sum of $166,667.
The loan funds raised from Westpac were paid to the CBA. Since that time, the wife has made the interest only loan repayments to Westpac. At the date of the trial the value of the Westpac mortgage secured on the Suburb D property was $145,401.
In 2012 the husband and the wife commenced cohabitation.
In mid-2013, the husband and the wife purchased a property at N Street, Suburb D (“the [N Street] property”) for $760,000, funded by $210,000 from the husband’s savings, $38,000 from the wife’s savings, and a mortgage secured over the property in the sum of $560,000 in favour of Westpac (at [94]).
In 2014 the husband and the wife married.
In mid-2015 the husband received a redundancy payment of $84,769. The primary judge did not make any findings as to the use and application of these funds. The parties gave conflicting evidence as the husband thereafter being unemployed for extended periods. The primary judge did not make any findings as to those periods.
In 2015 the child X was born.
In 2016 the wife and Mr P entered consent orders as to the parenting of their children K and L.
In late 2017 the husband received a compensation payment from an accident in the sum of $128,426 after payment of his legal fees. The primary judge found that some funds were used to pay off credit card debt, household expenses, and $40,000 of those funds was used towards reduction of the mortgage over the N Street property in favour of Westpac (at [97]).
In June 2021 the wife vacated the N Street property. The primary judge found that the parties separated on a final basis “on about” this date.
In early 2022 the N Street property was sold for approximately $1,880,000. The balance remaining after payment of the mortgage discharge amount and selling costs was $1,360,544.
On 23 May 2022 the husband commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2).
On 30 January 2023 interim parenting orders were made providing for the child to live with the wife and spend time with the husband for four nights each fortnight during school terms. Further orders made on that day provided for each of the husband and the wife to receive $136,054 from the proceeds of sale of the N Street property. The balance of $1,088,435 remained in trust for husband and wife at trial.
A Family Report was dated 15 September 2023 was released.
On 22 August 2023 the wife filed points of claim identifying declaratory relief pursuant to s 78 of the Act that she held her legal interest in the Suburb D property beneficially for the maternal grandparents by way of express trust, resulting trust, or common intention constructive trust. On 12 September 2023 the husband filed points of defence “not admitting” the claim and particulars pleaded by the wife.
On 19 December 2023 the maternal grandparents filed a Response to Initiating Application seeking:
Declaration
2. Declaratory relief is sought that [the wife] (First Respondent) holds her legal interest in the property situated at [C Street, Suburb D] beneficially for [the maternal grandfather] and [the maternal grandmother].
(As per the original)
After the death of the maternal grandfather, and in the shadow of the trial, the legal interest of the wife in the Suburb D property, by operation of the right of survivorship upon the joint tenancy, increased from one third to one half.
The financial orders under challenge made on 2 July 2024 provide:
Property
19. The [maternal grandmother’s] application for a declaration that the [wife] holds her legal interest in the property situate at [C Street, Suburb D], NSW, on trust for the Second Respondent is dismissed.
20. The [wife] and Second Respondent’s applications for a declaration pursuant to s 78 of the Family Law Act 1975 (Cth), that the [wife] has no beneficial interest in the property situate at [C Street, Suburb D], NSW, are dismissed.
21. The totality of the sale proceeds held in the trust account of [J Law Firm] of $1,088,435, be forthwith dispersed between the parties as follows:
(a) [Husband]: 45 per cent,
(b) [Wife]: 55 per cent.
22. Simultaneously with the above Order, the [wife] shall pay to the [husband] the sum of $154,894.
23. Except as otherwise provided in these Orders, the [husband] be solely entitled, to the exclusion of the [wife] to the following:
(a) All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name;
(b) Furniture, furnishings and effects in his possession or control;
(c) All interests in life insurance policies and superannuation funds standing in his sole name;
(d) Any other item of personalty or financial resource in his possession or control.
24. Except as otherwise provided in these Orders, the [mother] be solely entitled, to the exclusion of the [husband] to the following:
(a) The [wife’s] interest in the property situate at and known as [C Street, Suburb D], and the [wife] shall continue to be responsible for any indebtedness of any mortgage over the property and will keep the [husband] indemnified of any liability or indebtedness in relation to that property;
(b) All motor vehicles in her name;
(c) All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name;
(d) Furniture, furnishings and effects in her possession or control;
(e) All interests in life insurance policies and superannuation funds standing in her sole name;
(f) Any other item of personalty or financial resource in her possession or control.
Findings were made that the non-superannuation assets of the husband and wife, including the wife’s half interest in the Suburb D property, were valued at $2,139,110, add backs were $272,108, superannuation assets were $913,504, and liabilities were $201,757 (at [88]). The net assets of the husband and wife, including superannuation, were found to be $3,122,965 (at [88]).
The primary judge found that the value of the wife’s legal and beneficial interest in the Suburb D property was $962,500 (being 50 per cent of its total value) and that the value of the wife’s interest in the mortgage liability secured on that property was $145,401 (being the whole value of the mortgage) (at [87]), hence net $817,099.
In the event the wife and the maternal grandmother were unsuccessful in their declaratory relief as to the wife holding her interest in the Suburb D property for the benefit of the maternal grandparents, the husband sought a contribution finding of 55 per cent in his favour and 45 per cent to the wife (at [103]). In that event the wife sought a contribution finding of 60 per cent in her favour and 40 per cent to the husband (Transcript 6 June 2024. p.320 lines 4–32). The primary judge incorrectly proceeded on the basis that, in that event, she sought a contribution finding as to equality (at [104]).
The primary judge made a finding of equality as to contribution (at [105]).
The wife sought an adjustment to the contribution finding of 10 per cent in her favour. The husband contended that there should be no adjustment to the contribution finding. The primary judge found an adjustment to the contributions finding of 5 per cent in favour of the wife.
Accordingly, the wife achieved an adjustment of 55 per cent of the property of the parties as found by the primary judge and the husband 45 per cent.
During the hearing of the appeal, it was an agreed fact that:
1.On 8 August 2024 Orders were made by [the primary judge], providing that inter alia;
a. Final Orders 19-22 (inclusive) made 2 July 2024 be stayed;
b.Husband received $435,374 from the proceeds held in [J Law Firm] Trust Account;
c.Wife received $443,746 from the proceeds held in [J Law Firm] Trust Account;
2.On or about 3 September 2024, both the husband and wife received the sums noted at 1b and 1c.
3.The balance of the Trust Account of [J Law Firm] is $215,158.91 plus interest accrued from the date of this statement of agreed facts.
THE APPEAL
The Further Amended Notice of Appeal filed on 9 October 2024 contained four grounds of appeal. They were:
1. That [the primary judge] erred in failing to make parenting orders for [the child] born […] 2015 to spend time with the parents over Christmas Day and Easter, as well as orders in respect of interstate travel
2. That [the primary judge] erred in his application of the law in failing to find that the [wife] held her interest in the property located at [C Street, Suburb D] in the State of New South Wales on common intention constructive trust for the [maternal grandmother].
3. That [the primary judge] erred in finding 55% to the wife was a just and equitable result, pursuant to section 79(2) of the Family Law Act 1975 (Cth), given all of the circumstances, particularly her substantial post-separation contribution
4. That [the primary judge] failed to give reasons or adequate reasons for [the] orders
(Underlining emphasis removed)
THE PARENTING APPEAL
Ground 1 – “That [the primary judge] erred in failing to make parenting orders for [the child] born […] 2015 to spend time with the parents over Christmas Day and Easter, as well as orders in respect of interstate travel”
Ground 4 – “That [the primary judge] failed to give reasons or adequate reasons for [the] orders”
The construction of the appeal overlaps and groups these grounds. The parties conducted the hearing of the appeal in that way. They will be considered on that basis, contending a jurisdictional error and a failure to give reasons.
The parenting orders made on 2 July 2024 relevant to the challenge of the wife on appeal provide for the child to spend time with the father:
(i)For half of the school holidays after the conclusion of Terms 1–3;
(ii)For the Christmas school holidays:
(a) The first seven (7) nights with the [husband] commencing from the last day of school that [the child] attends until 10.00am on the 8th day after the conclusion of school.
(b) The following fourteen (14) nights with the [wife] with changeover to occur at 10.00am for the purpose of this time.
(c) For the purpose of calculation of the [wife’s] fourteen (14) nights during this period that any night [the child] is with the father for the Christmas Eve shall not be included in the calculation of the [wife’s] fourteen (14) nights for holidays.
(d) The following fourteen (14) nights with the [husband] with changeover to occur at 10.00am.
(e) The remaining school holiday period with the [wife] until the commencement of the first day of school that [the child] attends.
At trial, the wife sought a specific regime as to the time spent with the child for both Christmas and Easter as articulated in Exhibit J. As to this subject matter, Exhibit J provided:
7.Unless otherwise agreed and varied between the parties, [the child] shall spend time with the [wife] and [the husband] during the longer Christmas School Holiday period at the conclusion of Term 4 in the following manner:
a.With the [husband] from 18 December at 3:00pm or conclusion of school until 25 December at 10:00am.
b.With the [wife] from 25 December at 10:00am until 8 January at 10:00am.
c.With the [husband] from 8 January at 10:00am until 22 January at 10:00am.
d.The remaining school holiday period with the [wife] until the commencement of the first school day that [the child] attends.
…
8.Unless as otherwise agreed by the [wife] & the [husband] the following shall apply:
a.the [husband] shall spend time with [the child] on the following special occasions if [the child] is not otherwise in the [husband’s] care:
…
ii.During the Easter holiday period each year from 3:00pm on Holy Thursday or the conclusion of school until 10:00am on Easter Sunday.
b.The [wife] shall spend time [the child] on the following special days if [the child] is not otherwise in the [wife’s] care:
…
ii.During the Easter holiday period each year from 10:00am on Easter Sunday until 9:00am or the commencement of school on Tuesday.
The father sought a regime for Christmas and Easter in accordance with his Case Outline filed on 30 May 2024. As to this issue, his Case Outline provided:
4.That the child shall spend time with the [husband] on the following occasions in the event that [the child] is not already in his case pursuant to Order 2 or 2.1.1:
…
4.2 For Christmas:
4.2.1 From 2:00pm Christmas Day to 3:00pm Boxing Day in odd numbered years; or
4.2.2 From 12:00pm Christmas Eve to 2:00pm Christmas Day in even numbered years.
4.3 For Easter:
4.3.1 From after school (or 3:00pm) Holy Thursday to 3:00pm Easter Saturday in even numbered years; or
4.3.2 From 3:00pm Easter Saturday to 3:00pm Easter Monday in odd numbered years.
The ICL’s proposed final parenting minute of order was Exhibit K. It provides:
8.For the purpose of the school holidays following Term 1, in the event that the Easter period falls within the holiday period then any time that is lost in school holidays for the other party to have time over Easter shall be made up immediately following the Easter special occasions as provided for in these orders by the other party to ensure that the school holidays are equalised [sic] between the parties including any period of time for the Easter special occasions.
9.Unless otherwise agreed and varied between the parties, [the child] shall spend time with the [wife] and [husband] during the longer Christmas School Holiday period at the conclusion of Term 4 in the following manner:
a.The first seven (7) nights with the [husband] commencing from the last day of school that [the child] attends until 10.00sm on the 8th day after the conclusion of school.
b.The following fourteen (14) nights with the [wife] with changeover to occur at 10.00am for the purpose of this time.
c.For the purpose of calculation of the [wife’s] fourteen (14) nights during this period that any night [the child] is with the father for the Christmas Eve shall not be included in the calculation of the [wife’s] fourteen (14) nights for holidays.
d.The following fourteen (14) nights with the [husband] with changeover to occur at 10.00am.
e.The remaining school holiday period with the [wife] until the commencement of the first day of school that [the child] attends.
The husband was cross-examined as to issue as to defined time spent by each parent at Easter and Christmas each year (Transcript 3 June 2024, p.73 line 44 to p.74 line 24). He said he had “no issues in changing those particular aspects of [his orders sought as to those subject matters]”.
At the hearing before the primary judge, the ICL submitted:
And the general regime in relation to the school holiday period is one of, generally, equality and with a provision in the Christmas school holidays for a longer block period of 14 days, so each parent – so [the child] can enjoy a longer period of holidays with each parent. Your Honour, the ICL has not entered into submitting orders regarding minute details regarding such things as division of Christmas, division of Easter, division of birthdays. Those are matters that the ICL says that the parties can make their own submissions about as to what they feel is in the best interest of [the child]. The ICL does support, however, that [the child] should be spending Mother’s Day with the mother and Father’s Day with the father, in terms of orders as sought by the ICL.
(Emphasis added) (Transcript 5 June 2024, p.236 lines 31–40).
The husband did not make any oral submissions as to the time to be spent on Christmas Day and Easter.
The wife in oral submissions identified for the primary judge the comparisons between her minute of order sought as to specified time spent at Christmas and that as sought by the ICL, confirming that the “the ICL deliberately didn’t venture into those fields” and inviting the primary judge to make the orders sought by the wife (Transcript 6 June 2024, p.293 line 36 to p.294 line 9).
The wife makes two complaints. The first is that the primary judge did not engage with the competing relief before him on the subject matter of specified time spent with each parent at Christmas and Easter each year, failing to quell the controversy. This challenge has no merit. The orders reproduce the proposal of the ICL.
The second is an absence of any reasons for either the orders arrived at, or as to the failure to make the orders sought as to specified Christmas and Easter time spent with each parent.
In his Summary of Argument, the husband submitted, citing Saltern & Mink [2020] FamCAFC 320, that that the primary judge was not required to make mention of every fact or argument raised and that “the lack of any meaningful submissions by the parties” left it open to the primary judge to make no specific orders for time on Christmas Day and Easter. The submission is hollow having regard to the cross-examination of the husband and the identified submissions of the ICL and wife on the subject matter.
The ICL in the Summary of Argument submitted that primary judge was not bound by the parties’ parenting proposals, identifying the principles set out in U v U (2002) 211 CLR 238. This submission misapprehends the complaint by way of the ground. Plainly, it is permissible for a primary judge, provided the parties are afforded procedural fairness, to make orders different to those sought. If the parties’ proposals do not meet the child’s best interests, it would be illogical for a judge to be bound to choose one of the proposals. The complaint is as to an absence of any reasons for this integer of the parenting decision. The relevance of the ICL’s submission that the Court Child Expert made no recommendation for specific orders for time spent on Christmas Day and Easter was not further elucidated at the hearing of the appeal. It is misconceived. While the primary judge inevitably gives considerable weight to the views of a Family Report writer or single expert, they are not bound by those views. A Family Report writer or single expert does not usurp the role of the court (Hall and Hall (1979) FLC 90-713 at 78,819).
The obligation to provide reasons is well established and uncontroversial (Bennett and Bennett (1991) FLC 92-191 (“Bennett”)). While the adequacy of the reasons will depend upon the circumstances of the case, reasons will be inadequate if:
(a)The appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)Justice is not seen to have been done.
The subject matter of complaint by way of the grounds was not considered by the parties or the ICL to be de minimis or insignificant.
The reasons are devoid of any consideration by the primary judge of the complained subject matter. The primary judge’s reasoning does not disclose why the specified Christmas holiday time regime was ordered, or why no time was specified to be spent with each parent at Christmas or Easter. This Court and the parties are denied the opportunity to detect error and denied knowledge as to why their respective cases, here relevantly that of the wife, was rejected. During the appeal the husband and the ICL conceded the reasons ground in the parenting appeal.
Ground 4, insofar as it relates to the parenting challenge, is established.
Conclusion as to the parenting appeal
During the hearing of the appeal the parents and the ICL agreed to the terms of additional orders specifying time spent by each parent with the child during the Christmas and Easter period each year and as to interstate travel. In the re-exercise of discretion, I am satisfied that those agreed orders promote the best interests of the child. Such orders will be made as agreed.
THE FINANCIAL APPEAL – THE SUBURB D PROPERTY DETERMINATION
Ground 2 – “That [the primary judge] erred in his application of the law in failing to find that the [mother] held her interest in the property located at [C Street, Suburb D] in the State of New South Wales on common intention constructive trust for the second respondent.”
Ground 4 – “That [the primary judge] failed to give reasons or adequate reasons for [the] orders”
The parties conducted the hearing of the appeal as to these grounds in conjunction. They will be considered on that basis.
The primary judge identified (at [70]) that a common intention constructive trust will be recognised where the common intention of the wife and the maternal grandparents demonstrates that it was intended that the maternal grandparents would have a beneficial interest in the Suburb D property and have acted to their detriment in reliance upon such intention. The establishment of a common intention is a question of fact that may arise from express agreement or will be inferred from conduct (Silvia (Trustee) v Williams [2018] FCAFC 194). Such intention is usually formed at the time of the transaction and may be established by the party claiming the beneficial interest having acted to their detriment (Khalif & Khalif [2021] FamCAFC 123 (“Khalif”)). If established, it would be unconscionable for the other parties to deny the common intention.
The wife and maternal grandmother bore the evidentiary onus to establish the requisite factual elements to establish a common intention constructive trust at the date of acquisition of the Suburb D property. At trial the husband “put [both the wife and the maternal grandmother] to proof on those trust arguments” (Transcript 3 June 2024, p.5 lines 9–10).
The primary judge concluded that the wife and the maternal grandmother failed to discharge the onus of proof to establish that the wife’s legal interest in the Suburb D property was held on trust for the maternal grandparents (at [80]). No challenge is made to the conclusion that the wife’s claim of a resulting trust failed (at [76]).
The primary judge found that the wife and the maternal grandmother’s evidence as to the circumstances in which the wife became a joint tenant with her parents on the title to the Suburb D property to be “significantly unreliable”, it being “less than clear and in certain respects incorrect.” The primary judge further said, “[t]he Court has had regard to objective records relating to the purchase of the above Suburb D property, particularly where in conflict with the wife’s evidence and the evidence of the maternal grandmother” (italics emphasis added) (at [65]).
The evaluation of the primary judge as to the evidence relevant to establishing the claim of a common intention constructive trust are recorded at [72]–[76]. That evaluation was concluded by overarching blanket findings made as to the credibility of the wife and the maternal grandmother supported by the consideration of documents that were said to be inconsistent with the asserted trust.
The reasons then record:
77…the requisite legal elements of the common intention constructive trust are simply not made out, whether pursuant to the pleaded common intention constructive trust in the Points of Claim, or otherwise. This can now be clarified.
78 Firstly, as to the first legal element, there is no persuasive evidence that the mother and her parents formed a common intention as to the ownership of the beneficial interest in the property at [C Street Suburb D]. The second element relating to acting to one’s detriment in reliance upon that common intention falls away because there again is no persuasive evidence of any common intention.
The primary judge then concluded that the wife and maternal grandmother had failed to establish a common intention constructive trust (at [80]).
The wife asserted in her Amended Summary of Argument that in dismissing the common intention constructive trust claims made, the primary judge “relied heavily” on the assessment of two matters, being:
(c)Findings of fact that contradicted the [wife’s] evidence that she only discovered she was on title after the commencement of the CBA litigation in 2007; and
(d)“[G]lobal credit/reliability findings in respect of both the [wife] and the [maternal grandmother].”
In his Summary of Argument, the husband said:
27. [The primary judge] did not accept that the [wife] (or the [maternal grandmother]) had discharged her evidentiary onus at the requisite time. No cogent explanation for the inconsistencies as between the documentary evidence referred to by [the primary judge] at [AB: P73 [72] – P77 [72]] is offered by the [wife], and particularly in relation to how the [wife] and [the maternal grandmother] came to be on title on the Transfer document on settlement in [...] 2003.
28. [The primary judge] had the benefit of seeing the [wife] and [the maternal grandmother] extensively throughout the duration of the 4 day trial in the witness box, and was entitled to make findings relating to the weight to be given to their evidence in the circumstances of the factual findings he sets out at [AB: P73 [72] – P77 [72]].
(Italics emphasis added)
The husband submitted at the hearing of the appeal that this Court should not interfere with the primary judge’s findings as to credit and that they were open on the evidence, recognising the advantages enjoyed by a primary judge in making factual findings.
As will be seen, the primary judge’s determination that the wife and maternal grandmother had failed to establish a common intention constructive trust was infected by a series of errors of law.
The first error of law fixes on the affidavit of the deceased maternal grandfather filed on 19 December 2023, prior to his death on 9 April 2024. The identified error was not the subject of any complaint or mention by the wife, either in the grounds of appeal or in her Summary of Argument, but that does not mean it can or should be ignored. It was recognised by the husband in his Summary of Argument but said to be immaterial. This is an appeal by way of rehearing, the procedure of which requires the correction of material error when it is identified by an appeal court (Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [30]-[32]; Warren v Coombes (1979) 142 CLR 531 at 552-553).
The reasons record the wife relying on the affidavit of the maternal grandfather (at [8(h)]). The primary judge said that regard was had to “all the written evidence referred to above” (at [15]), including the affidavit of the maternal grandfather.
The transcript at the commencement of the trial is less than clear as to whether the wife read that affidavit in her case. The transcript later records some cursory cross-examination of the wife by the husband on the content of the maternal grandfather’s affidavit on the topic of the Suburb O property being used as security for the borrowings of she and Mr P subsequently applied to purchase their Suburb Y property in 1999. It records the primary judge being uncertain at that time of that cross-examination if any party was “expressly relying” on the maternal grandfather’s affidavit (Transcript 6 June 2024, p.144 line 20). It was not suggested at the hearing of the appeal that the grandfather’s evidence was not admissible (s 63 and s 67 Evidence Act1995 (Cth)). The maternal grandfather’s affidavit was not identified in the oral submissions of any party at trial.
The evidence of the deceased maternal grandfather was as to the wife and Mr P borrowing monies secured upon the Suburb O property of the maternal grandparents to acquire their Suburb Y property, as to the wife and Mr P being required to service any mortgage that would result in a shortfall from the proceeds of sale of the Suburb O property applied to acquiring the Suburb D property, and the necessity of the wife to be a party to any borrowing. His evidence expressly identified that the wife had “no interest in our property” and that the Suburb D property is “solely that of mine and [the maternal grandmother]”. He identified that, despite the wife having “our Power of Attorney”, neither he nor the maternal grandmother had provided the wife with any benefits of that appointment. He went on to give evidence as to Suburb D property having been modified to meet his health needs.
No adverse finding is made as to the integrity and reliability of the evidence of the maternal grandfather. No reason is advanced not to accept his evidence. His evidence is not expressly evaluated by the primary judge.
The husband’s submission that the evidence of the maternal grandfather was not material to the outcome of the issue as to the beneficial ownership of the Suburb D property is not accepted. The evidence is material and probative to an understanding between the wife and the maternal grandparents at the time of the acquisition of the Suburb D property and into the future, and as to the maternal grandfather acting to his detriment relying on it.
The primary judge erred at law, either by:
(a)If no party relied on the evidence of the maternal grandfather, by taking it into account, considering an extraneous or irrelevant matter (Shell & Armel [2022] FedCFamC1A 83 at [42]); or
(b)If it was relied upon, the reasons are inadequate in how it, as a material consideration, was taken into account and evaluated (Waterways Authority v Fitzgibbon (2005) 79 ALJR 1816 (“Waterways Authority v Fitzgibbon”) at [130]–[131]). Reasons are inadequate unless they identify the basis of the decision and the extent to which the parties’ submissions were understood, or if they do not justice to the issues posed by the parties in the proceeding (Bennett;Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110; Yarrow & Yarrow [2022] FedCFamC1A 135 at [17])). The inadequacy of the reasons engages with both considerations.
The second error is in part an extension of the first error as to the adequacy of the reasons.
There was no cross-examination at trial challenging the affidavit evidence as to the understandings of the wife or her parents formed at the time of acquisition of the Suburb D property. The reasons do not record the content, by way of particulars or summary, of the evidence of the wife and the maternal grandmother on this subject matter. The failure of the primary judge to record identify or evaluate that content is unexplained.
A primary judge is not bound to accept evidence that was not the subject of cross-examination. If a witness is not accepted as credible, or the evidence is contradicted, or it is inherently improbable nor unreasonable, that unchallenged evidence is open to be not accepted. While generally there is no obligation to give reasons for why individual pieces of evidence are accepted or rejected (Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasinghan (2000) 168 ALR 407 at [67]), if the parties advance conflicting evidence on a matter significant to the outcome, both sets of evidence should be referred to and reasons provided for why the judge prefers one set of evidence to the other so that reasons explain particular findings of fact which are critical or determinative (Waterways Authority v Fitzgibbon at [130]–[131]; DL v The Queen (2018) 266 CLR 1 at [130]).
The reasons fail to demonstrate whether the uncontested testimony as to the content of exchanges and understandings between the wife and her parents at the time of the acquisition of the Suburb D property was found to have occurred, or whether they were rejected or not accepted, either in whole or in part. It is self-evidently difficult and challenging, if not impossible, to discern conflict between the unchallenged evidence of the wife and the maternal grandmother and “objective records” when one body of the relevant evidence said to be in conflict is omitted. The pathway of reasoning is not sufficiently discernible when consideration is given to cogent evidence that was critical or determinative of the conclusion (Aitken & Aitken (2023) FLC 94-142 at [42]).
The reasons do not do justice to the issue as to the beneficial ownership of the Suburb D property posed by the parties and hence are inadequate. Ground 4 established.
The first limb of the third error is the conclusion that unchallenged evidence of the wife was “significantly unreliable”. That finding was not reasonably open on the evidence (Edwards v Noble (1971) 125 CLR 296 at 304). The conclusion as to unreliability is anchored and flows from a central primary finding that the wife either expressly or implicitly “knew” at the time of the completion of the purchase of the Suburb D property that she and her parents “had gone on title to this property as joint tenants” because of the “clear terms of the transfer document” (italics emphasis added) (at [72(j)(i)]). As will be seen, that central primary finding was glaringly improbable (Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550).
As a precursor to the blanket overarching credit finding as to the reliability of the wife’s evidence, the reasons record:
16 The Court found that the parties, when giving their oral evidence, usually sought to give responsive answers to questions asked of them. Their demeanour was unremarkable.
The transfer document completing the acquisition of the Suburb D property is not executed by the wife or her parents, but by a solicitor (Appeal Book, p.391). The primary judge was alerted to this fact during submissions and taken to the transfer document itself (Transcript 6 June 2024, p.273 lines 28–39). There was no cross-examination of the wife on the content of the transfer document. The wife’s unchallenged evidence was that Mr P alone dealt with the solicitor on the Suburb D purchase and that she did not speak to the solicitor. At the hearing of the appeal the husband did not identify any other relevant evidence as to the wife’s knowledge of the content of the transfer document by reference to the appeal book or the transcript to support this central primary finding.
The primary judge inferred that the wife knew she was “on the title” of the Suburb D property from the content of R Bank and CBA mortgage documents. The wife was not cross-examined as to the content mortgage documents. Her evidence that she did not sign them at the solicitor’s office and that Mr P would bring them home and she would sign them where marked was cogent, unchallenged, and not addressed by the primary judge. The findings were infected by the erroneous primary factual finding as to the wife either executing or being aware of the content of the transfer document. The findings were not open.
The failure of the primary judge to accept the wife’s evidence that she knew she was “on the title” of the Suburb D property only from the time of the CBA demand and litigation was in error because the earlier findings as to her knowledge on that topic were not open. Her unchallenged testimony on this topic accords with the uncontroversial facts.
The inference drawn from the fact of the wife meeting payments for the 2009 Westpac loan used to pay the CBA settlement from that time to date is corrupted by the failure of the primary judge to engage with the cogent unchallenged evidence of the wife by way of explanation as to why she paid the interest on that Westpac loan. Her evidence was that she paid the interest on the mortgage because she “felt responsible to pay this debt loan” originating from the dealings of her prior husband. The wife’s further unchallenged evidence was:
30.I recall that the Commonwealth Bank had excused my parents from the debt because it was evidence that they were not privy to the dealings of [Mr P] however given my income and earning capacity they could not excuse me and accordingly I was required to obtain finance my parents to keep their home. I was otherwise required to obtain a debt loan due to my name being on the title of the property.
(As per the original)
The primary judge did not address this evidence in the conclusion.
The email of the wife sent in 2018 to family members as to one of her assets including “[C Street, Suburb D] (third of title)” (italics emphasis added) was not the subject of probative cross-examination. The process of drawing inferences from established facts simply involves logical deduction (G v H (1994) 181 CLR 387 at [4]; Mead v Mead (2007) FLC 93-327 at [13]). The inference drawn from the 2018 email was not reconciled by the primary judge with the evidence as to the events that unfolded from the acquisition of the property in 2003 to the CBA litigation and the other events that occurred over 15 years. The failure of the primary judge to reconcile the fact and content of this chronology of the wife’s increasing knowledge over time was illogical.
The second limb of the third error is the conclusion that the maternal grandmother’s evidence was “significantly unreliable” as to exchanges and understandings between the wife and she at the time of the acquisition of the Suburb D property. This finding also was not reasonably open on the evidence.
The maternal grandmother gave evidence in her affidavit of conversations as to the proceeds of sale of the Suburb O property to be applied to the purchase of the Suburb D property, and as to there being a potential shortfall and it being met by the wife securing a loan. She referred to the Suburb O and Suburb D properties as “our[s]”. In her affidavit the maternal grandmother said:
41.[The wife] has been my power of attorney since 1999. She is required to look out for my best interests. [The wife] should not be beneficially entitled to the [Suburb D] property by virtue of her breach of fiduciary duties. [The wife] ought to account for any ‘benefit’ [the husband] says she has.
…
44.It was never my intention for [the wife] to hold a beneficial interest in the [Suburb D] property…
The reasons identify two primary findings informing the primary judge to conclude that the unchallenged evidence of the maternal grandmother as to exchanges and understandings at the time of the acquisition of the Suburb D property was significantly unreliable (at [72(m)]). The first is:
It became quite apparent to the Court during the cross-examination of the maternal grandmother, that, inter alia, legal terminology appearing in her affidavit was legal terminology that she did not understand.
For example, in paragraph 41 of her affidavit she had stated:
[The wife] […] has been my power of attorney since 1999. She is required to look out for my best interests. [The wife] should not be beneficially entitled to the [Suburb D] property by virtue of her breach of fiduciary duties. [The wife] ought to account for any “benefit” [the husband] […] says she has.
The maternal grandmother was cross-examined in relation to the word “fiduciary”. She was asked what that word meant, to which she frankly stated, “I never heard about this word.” She was asked whether she understood the meaning of the phrase, “fiduciary duty” and she stated, “I’ve told you I never heard about this word.” Later, she stated, “Like, she’s doing her duty. It means she wants to keep paying the loan.” When asked again about the meaning of the word “fiduciary” she stated, “Well, I’ve told you, I never heard about it. When I read it – well, actually, I have my education in [Language S]. I learn English here by correspondence. I don’t know every word does that mean 100 per cent.”
The reasons do not record the maternal grandmother’s later evidence giving context to her understanding as to the word “fiduciary”, being:
[Counsel for the husband]: Paragraph 41 you say:
[The wife] has been my power of attorney since 1999. She’s required to look out for my best interests. [The wife] should not be beneficially entitled to the [Suburb D] property by virtue of her breach of fiduciary duties.
…
[The maternal grandmother]: ---Well, I can see it. I took the full meaning of the phrase. And, I know what is it. Like, I know the meaning of the phrase. Like, she’s doing her duty. It means she wants to keep paying the loan.
[Counsel for the husband]: What are her fiduciary duties?
[The maternal grandmother]: ---Well, like I said, I never heard about it. But, from the whole meaning of the phrase, I knew what that meant.
…
[The maternal grandmother]: ---I learn English here by correspondence. I don’t know every word does that mean 100 per cent.
[Counsel for the husband]: I see?
[The maternal grandmother]: ---But, saying the whole word, the whole phrase. Then, I know what it means.
(Emphasis added) (Transcript 4 June 2024, p.177 line 10 to p.178 line 15)
The transcript is clear from this oral evidence not identified by the primary judge that whilst the maternal grandmother did not understand the legal import of the word, she understood the context. The following exchange then took place:
[Counsel for the husband]: Ma’am, you said that you understand the phrase “fiduciary duties” in the context of that paragraph, and I think, from my recollection of the court’s note - - -?
…
[Counsel for the husband]: Of course. You gave a response about the meaning of the word “fiduciary duties”?
[The maternal grandmother]: ---Yes. Yes.
[Counsel for the husband]: And you said, “In its context of that paragraph, I understand it to mean”?
[The maternal grandmother]: ---Yes.
[Counsel for the husband]: Can you just remind me, what did you understand it to mean?
[The maternal grandmother]: ---Does it mean “supposed”? Like “supposed to pay”? Does that mean “supposed to” – no - - -
[Counsel for the husband]: I’m asking about - - -?
[The maternal grandmother]: ---Well, I don’t know .....
[Counsel for the husband]: - - - your understanding. I’m asking what you understand it to mean in that context?
[The maternal grandmother]: ---Well, that – that – well, actually, I trust [the wife] in everything she does. Because all what she did since she born, she work to our benefit. We love her so much, and I trust her in anything she does for me, even with my eyes closed. I know she work not for herself, she work for me and [the maternal grandfather], because me and [the maternal grandfather], we sacrificed all her life – all our life just to support her any time, with any issue, with any problem. I trust her, and I know, whatever she did, she did to my benefit and [the maternal grandfather’s] benefit.
(Emphasis added) (Transcript 4 June 2024, p.182 lines 21–44)
Immediately following that exchange, the maternal grandmother referred to the Suburb D property as “my own home”.
The reasons do not explain why this material oral evidence was not identified or evaluated.
The observations of the High Court in Queensland v Masson (2020) 381 ALR 560 at [112] are apposite to the basis of the conclusory credibility finding:
The oft unspoken reality that lay witness statements are liable to be workshopped, amended and settled by lawyers, the risk that lay and, therefore, understandably deferential witnesses do not quibble with many of the changes made by lawyers in the process – because the changes do not appear to many lay witnesses necessarily to alter the meaning of what they intended to convey – and the danger that, when such changes are later subjected to a curial analysis of the kind undertaken in this matter, they are found to be productive of a different meaning from that which the witness intended, means that the approach of basing decisions on the ipsissima verba of civil litigation lay witness statements is highly problematic. It is the oral evidence of the witness, and usually, therefore, the trial judge's assessment of it, that is of paramount importance.
The primary judge failed to address or evaluate the totality of the oral evidence of the maternal grandmother. It is inherently illogical to infer that the use of the single word “fiduciary” in a 46-paragraph affidavit would lead to a conclusion that the whole of the unchallenged testimony was “significantly unreliable”. That conclusory finding is glaringly improbable. If the balance of the remaining cogent evidence of the maternal grandmother is not to be accepted, or is to be rejected, the primary judge ought to have stated the specific reasons for the rejection of that evidence.
The second finding was that the maternal grandmother’s oral evidence was “opaque” and hence unreliable (at [72(m)]). Leaving aside the reasons not identifying the nexus between evidence that is said to be “opaque” or unclear and an absence of reliability, the reasons record:
[Counsel for the husband]: It's correct, isn't it, that this house is really half [the wife’s], in your understanding?
[The maternal grandmother]: What's your last word?
[Counsel for the husband]: You understand this house is half [the wife’s]?
[The maternal grandmother]: It's not half [the wife].
[Counsel for the husband]: I see?
[The maternal grandmother]: It's only the third.
…
[The maternal grandmother]: And her name is - is being put there just because, me and her husband, we were unable to - to - to leave my husband to do my financial report and my financial work.
[Counsel for the husband]: I see?
[The maternal grandmother]: That's how her name been on the title.
[(Transcript 4 June 2024, p.183 lines 13–30)]
That selected evidence, in and of itself, absent more, is not opaque or unclear. To compound the issue, the reasons fail to identify both the introductory exchange prior to that recorded in the paragraph above, and the later oral evidence of the maternal grandmother giving the oral evidence further context.
The introductory exchange was as to the legal title of the Suburb D property, not the beneficial interest in the property:
[Counsel for the husband]: The property itself records on its legal title, [the wife] - - -?
[The maternal grandmother]: ---That’s so.
(Transcript 4 June 2024, p.182 line 46)
The maternal grandmother’s evidence as to the wife, prior to the death of the maternal grandfather, being “only” a third on the title, was accurate. It was not opaque. The later oral evidence not identified, giving context to the earlier response, was as to her desire for the wife to have the Suburb D property on her passing, not that the wife has any current interest in the property:
HIS HONOUR: Okay. Thank - - -?
[The maternal grandmother]: ---That’s – that’s my home. That’s – that – that’s my grandchildren’s home. They call it [grandma and grandpa] home. It mean grandma and grandpa house. Even [the child], his name, he call – his mum said, “I’m on – I’m with my [grandma and grandpa] house, mum”. They don’t care – call it [C Street, Suburb D]. They call it [grandma and grandpa] house, grandma and grandpa house. That’s why I wish one of them, one day, they live in this – in this house, because it’s not to return to my memory, where did you live?
(Emphasis added) (Transcript 4 June 2024, p.188 lines 14–20)
The impact of the blanket overarching credibility findings of the primary judge as to the evidence of the wife and the maternal grandmother cloaked the integrity of the fact-finding process on the Suburb D property determination. The credibility findings were superficial. They were infected by core findings that were not open to contradict the unchallenged testimony of the wife and the maternal grandmother as to the conversations and intention they each had at the time of the purchase of the Suburb D property.
The errors of the primary judge referred to above vitiate the ultimate determination that the wife and the maternal grandmother had failed to discharge the onus of proof to establish that the wife’s legal interest in the Suburb D property was held on trust for the maternal grandparents.
The wife contends that the primary judge additionally fell into error by “ignoring the following incontrovertible facts and uncontested testimony” in the sense identified by the High Court in (Fox v Percy (2003) 214 CLR 118 (“Fox v Percy”)):
28Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
29That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
….
31Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.
(Emphasis added) (Footnotes removed)
The determination as to whether a common intention constructive trust is established is binary. The wife’s submission is that incontrovertible facts are sufficient to discharge the onus of proof that fell upon she and her mother that she held her interest in the Suburb D property on trust for her parents, and consequently the primary judge was in error in finding otherwise.
The incontrovertible facts including from the uncontested evidence are:
(a)The Suburb O property owned by the maternal grandparents in which they lived was unencumbered. The maternal grandparents permitted the wife and Mr P to borrow $250,000 secured by way of mortgage on the Suburb O property to purchase their own property.
(b)There was no evidence that the maternal grandparents gifted the value of that mortgage loan of $250,000 to the wife or Mr P. There is no evidence that the maternal grandparents ever received from wife and Mr P the value of their mortgage secured on Suburb O paid out on its sale. It is illogical that the wife would receive the benefit of the money from the Suburb O property and for the maternal grandparents to effectively surrender the funds from that property and receive no benefit in return, absent them being the subject of gift.
(c)The wife was given responsibility by her parents to sell the Suburb O property in which they lived, and acquire the Suburb D property for them to live in.
(d)The Suburb D property was sourced and acquired for the purposes of the maternal grandparents being close to the wife and her family, and because it was suitable for the maternal grandfather’s specific health needs.
(e)The unchallenged testimony was that the wife and the maternal grandparents all understood at the time of the acquisition of the Suburb D property that it was to be purchased for the benefit of the maternal grandparents and not the wife.
(f)The sale of the Suburb O property and the purchase of the Suburb D property by way of the maternal grandparents’ powers of attorney was through Mr P providing instructions to the solicitor acting on the transactions. The wife did not speak to the solicitor, signing documents at her home. She did not sign the transfer document for the acquisition of the Suburb D property.
(g)The evidence as to the source of funds used to complete the acquisition of the Suburb D property over and above the R Bank mortgage to the value of approximately $117,774 is unclear, save from that contained in the maternal grandfather’s affidavit. At trial, the wife’s belated oral evidence as to gifting those funds to the parents was a product of what Mr P had told her, he having control of the transaction. Her evidence was that Mr P told her they had borrowed those initial funds. That evidence was not from her own knowledge. She conceded during the hearing that she did not remember the details, and that the transactions were a long time ago. That evidence is inherently probable.
(h)The wife was not aware at the time of the acquisition of the Suburb D property that she was a joint registered owner with her parents as joint tenants. The purpose of the wife having any role in the transaction was to assist the parents in securing finance. The wife only became aware that she was “on the title” of the property was at the time of the CBA litigation.
(i)The maternal grandparents occupied the Suburb D property after they returned from Country M and continued to live there.
(j)The fraud of Mr P threatened the property. The Westpac loan was obtained to mitigate the prejudice suffered by the parents from the dealings of Mr P. The fact the wife has paid the entirety of the mortgage repayments is logical and consistent with a trust arrangement, as is the whole of the value of the mortgage being attributed to her by way of a liability on the s 79 balance sheet. The wife paying the Westpac mortgage payments because her prior husband damaged the maternal grandparent’s interest in their home is consistent with that of a bare trustee.
(k)The maternal grandparents paid the council rates, water rates, and outgoings and otherwise maintained the Suburb D property.
(l)The maternal grandparents paid for the improvements to the Suburb D property to aid the maternal grandfather’s health.
(m)The maternal grandparents always had acted consistently with their intention that the wife would hold any interest in the Suburb D property for their benefit. They have never acted in any way that was other than consistent with them holding the entire beneficial interest in the property.
(n)There is scant evidence that the wife acted consistently with having a beneficial interest in the Suburb D property. The potential interpretation of the email dated 14 May 2018 was not explored in the oral evidence.
The primary judge did not deal with the incontrovertible facts. The common intention is established by the exchanges between the wife and the maternal grandparents at the time of acquisition, and by the conduct of the wife and the maternal grandparents, directing to one conclusion, namely that the wife held her legal interest in Suburb D on trust for the maternal grandparents. The maternal grandparents acted to their detriment. The trust arrangement is not implausible. It is a logical and plausible conclusion consistent with the incontrovertible facts. Those facts establish a common intention constructive trust as identified in Khalif. The primary judge’s conclusion as to the failure to establish a common intention constructive trust is contrary to the incontrovertible facts in a Fox v Percy sense. It is in error.
Conclusion as to the appeal from the finding as to the beneficial interest in the Suburb D property
Error has been established and the appeal allowed as to the dismissal of the claim as to the wife holding her legal interest in the Suburb D property for her parents.
In so far as is necessary, notwithstanding that the wife sought declaratory relief by way of s 78 of the Act, the claim of the maternal grandmother was grounded from the accrued jurisdiction of this court to determine non-federal claims (Warby & Warby (2001) FLC 93-091; Valceski v Valceski (2007) FLC 93-312). Such consideration was not featured in the reasons of the primary judge. The property interests of the wife in the Suburb D property are the subject of the non-federal claim by the maternal grandmother. Identification of the wife’s property interests is critical to the resolution of the federal s 79 claims made by each of the husband and the wife (Stanford v Stanford (2012) 247 CLR 108). The determination of the interests of the maternal grandmother is hence a relevant consideration in a determination of the adjustment of property between the husband and the wife. The non-severable nature of the claims and the common substratum of facts identify a single justiciable controversy. I am satisfied that an accrued jurisdiction is engaged to determine the non-federal claim of the maternal grandmother.
The facts as recorded earlier establish a common intention constructive trust. A declaration will be made that the wife holds her legal interest in the Suburb D property on trust for the maternal grandmother.
THE FINANCIAL APPEAL – THE S 79 PROPERTY DETERMINATION
Ground 3 – “That [the primary judge] erred in finding 55% to the [wife] was just and equitable result, pursuant to section 79(2) of the Family Law Act 1975 (Cth), given all of the circumstances, particularly her substantial post-separation contribution”
The primary judge erred by incorrectly recording (at [104]) that the wife sought a contribution finding of equality in the event she and the maternal grandmother were unsuccessful in the Suburb D property determination. In that event, she sought a contribution finding as to 60 per cent in her favour. The wife’s submission was not understood by the primary judge, such that justice was not afforded to the contribution issue posed by the husband and the wife.
The contribution finding made by the primary judge of equality was informed by the finding in error that the wife held a half interest in the Suburb D property. That error corrupts the reasons for the ultimate s 79 determination.
This ground complained that the primary judge failed to take into account the fact that the maternal grandfather’s death caused the net value of the wife’s interest in the Suburb D property in the shadow of the trial increased from $496,266 (one third of the value less the mortgage) to $817,099 (one half of the value less the mortgage), being an increase of $ 320,833, equating in the range of 10 per cent of the property of the parties. The reasons are devoid as to the identification of this material matter, and hence its consideration.
Ground 3 is established.
Conclusion as to the s 79 appeal
The wife sought a re-exercise of discretion in the s 79 aspect of the appeal. The husband opposed it, seeking for the matter to be remitted for re-hearing. He identified that if the Suburb D property appeal was successful, the identification and value of the pool of the property of he and the wife substantially changes, that there had been an elapse of time since the trial with consequential changes to the parties’ financial circumstances, including each accessing further funds from the sale of the N Street property, with a current residual balance being subject to the stay of the primary s 79 orders, and that further updating evidence as to relevant financial circumstances and testing of that evidence was required. This submission has merit.
The s 79 proceeding will be remitted for rehearing before another Division 2 judge other than the primary judge.
COSTS
The appeal has succeeded on questions of law to which no party contributed. In those circumstances it was agreed there should be no orders as to costs payable by any party or the ICL. All parties and the ICL should have a certificate under the Federal Proceedings (Costs) Act 1981 (Cth) for the appeal. The husband and the wife should have a certificate by way of that Act for any rehearing.
I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 5 December 2024
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