Sandoz & Sandoz

Case [2024] FedCFamC1A 226

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…

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AGLC
Sandoz & Sandoz [2024] FedCFamC1A 226
Case
[2024] FedCFamC1A 226
Decision Date

CaseChat Overview and Summary

In the case of Sandoz & Sandoz, the appeal primarily concerned two aspects: parenting arrangements and property settlement. The wife contested the parenting orders, specifically the time allocation for Christmas and Easter holidays between the child and each parent. Additionally, she challenged the property settlement, particularly the decision not to recognize a common intention constructive trust for the Suburb D property in favor of the maternal grandmother. The appeal was heard by Campton J in the Federal Circuit and Family Court of Australia, Division 1 Appellate Jurisdiction.

The legal issues addressed involved whether the primary judge erred in not providing adequate reasons for the time allocation between the child and each parent during significant holiday periods, and whether the primary judge correctly concluded that the wife and maternal grandmother did not establish a common intention constructive trust. The court found that the primary judge did indeed err in not providing reasons for the holiday time allocation and that the primary judge's failure to recognize the common intention constructive trust was also erroneous. The reasons given by the primary judge were insufficient, as they did not adequately address the conflicting evidence or provide a clear rationale for the findings.

In re-exercising the discretion, the court agreed with the terms of additional orders for time spent by each parent with the child during Christmas and Easter, as agreed by the parents and the Independent Children’s Lawyer. For the property settlement, the court found that the wife and the maternal grandmother did discharge the onus of proof to establish a common intention constructive trust. The court ordered that the wife holds her interest in the Suburb D property on trust for the maternal grandmother. The determination regarding the adjustment of property between the husband and the wife was found to be infected by errors, and thus the matter was remitted for re-hearing before a different judge. Costs certificates were ordered for the wife, the husband, the maternal grandmother, and the Independent Children’s Lawyer for the costs of the appeal and rehearing.

Orders

Orders of the court

NAA 200 of 2024

PAC 2735 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

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.

Background

Background to the litigation

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]”.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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 DETERMINATIONGround 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]).

Ratio Decidendi

Legal Principle Established

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:Property19. 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]).