Skye and Saidel & Anor

[2020] FamCA 18

FAMILY COURT OF AUSTRALIA

SKYE & SAIDEL AND ANOR [2020] FamCA 18

FAMILY LAW – PROPERTY – Declaration pursuant to s78 Family Law Act 1975 (Cth) – where a declaration is made that the second respondent is the beneficial owner of the property in question – where the applicant and first respondent do all such things to transfer their right, title and interest in the property to the second respondent – where the matter proceeded undefended on the part of the husband

FAMILY LAW – PROPERTY – CAVEATS – where two caveats were lodged over the property by creditors to secure business debts of the husband – where the caveators are found to not have a caveatable interest – where the caveators were served with these proceedings and put on notice however they did not intervene – where an order is made directing that the Registrar of Titles for Victoria remove the caveats over the property

Family Law Act 1975 (Cth) s 78
Land Titles Act 1994 (Qld) s 122
Transfer of Land Act 1958 (Vic) s 90(3), 106A
Family Law Rules 2004 (Cth) r 11.02

Auricchio & Auricchio & Ors (No 2) [2014] FamCA 240
Camden Pty Ltd and Laue and Ors (2018) FLC 93-840; 58 Fam LR 97; [2018] FamCAFC 91
Green & Wall [2019] FamCA 76
Lyons v Lyons [1967] VR 169
Masson v Parsons [2019] HCA 21; 93 ALJR 848
Muschinski v Dodds (1985) 160 CLR 583; 60 ALJR 52
Tailor & Tailor [2019] FamCA 383
Vaughan & Bele (No 2) [2012] FamCA 605

APPLICANT: Ms Skye

FIRST RESPONDENT: Mr Saidel

SECOND RESPONDENT: Ms Hewart

FILE NUMBER: MLC 8982 of 2018

DATE DELIVERED: 17 January 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 10 September 2019 and
8 October 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P. Testart

SOLICITOR FOR THE APPLICANT: Testart Family Lawyers

THE FIRST RESPONDENT: In Person

COUNSEL FOR THE SECOND RESPONDENT: Ms Swann

SOLICITOR FOR THE SECOND RESPONDENT: Lakey Family Lawyers

Orders

IT IS DECLARED THAT

1. Pursuant to s 78 of the Family Law Act 1975 (Cth):

1.1.Ms Hewart (“the Second Named Respondent”) is the beneficial owner of the entire fee simple interest in the real property situated at B Street, Suburb C in the State of Victoria, and being the whole of the land more particularly described in Certificate of Title Volume … Folio … (B Street) to the exclusion of the Applicant Wife (“the Wife”) and the First Respondent Husband (“the Husband”);

1.2.The Husband not having a beneficial interest in B Street:

1.2.1.D Pty Ltd (the “first caveator”) does not have a caveatable interest and the charge based upon which caveat No AL… was registered on 29 December 2014 does not encumber B Street; and

1.2.2.The husband could not grant the mortgage to Mr E (the second caveator) based upon which caveat no AR… was registered on 22 August 2018, the mortgage does not encumber B Street and the second caveator does not have a caveatable interest.      

IT IS ORDERED THAT

1. Pursuant to s 90 (3) of the Transfer of Land Act 1958 (Vic.), the Registrar of Titles for Victoria be and is hereby directed to remove caveats numbered AL… and AR… from the title to the real property

2. A copy of the Reasons and the Orders made this day shall as soon as practicable be served upon the caveators and provided in due course to the Registrar of Titles.

3. By 4.00 pm on 17 February 2020 the Wife shall do all such acts and things and sign all such documents necessary to transfer her right title and interest to and in the real property to the Second Respondent, Ms Hewart.

4. By 4.00 pm on 17 February 2020 the Husband shall do all such acts and things and sign all such documents as necessary to transfer his right, title and interest to and in the real property to the Second Named Respondent.

5. Contemporaneously with the transfers provided for in orders 4 and 5 herein, the Second Named Respondent shall do all such acts and things and sign all documents necessary to discharge the current F Bank mortgage encumbering the real property and to refinance the mortgage into her sole name.

6. If either the Husband or the Wife  refuses or neglects to sign (within seven (7) days of a written request to do so) any documents or do any act necessary to give effect to the terms of these Orders:

7.1.The Registrar of the Melbourne Registry of the Federal Circuit Court of Australia is hereby appointed pursuant to provisions of section 106A of the Family Law Act 1975 (Cth), to execute such documents on behalf of the Husband or the Wife.

7.2.Pursuant to section 106A of the Family Law Act 1975 (Cth), the Wife is hereby appointed to execute the client authorisation form and the State Revenue Office Duties form in the name of the Husband and the Wife in order to satisfy any online requirements to complete the transfer.

1. Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:

8.1.The Husband and the Wife  be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at the date of these orders;

8.2.Any money standing to the credit of the Husband and Wife jointly in any joint account  to be divided equally between the Husband and the Wife;

8.3.The Husband and the Wife  hereby forego any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;

8.4.All insurance policies are to become the sole property of the owner named hereon;

8.5.Each of the Husband and the Wife be liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and

8.6.Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

IT IS FURTHER ORDERED

1. That all extant applications be dismissed and removed from the list of cases awaiting hearing.

10.  Certify for counsel.

AND THE COURT NOTES:

A.As far as it is practicable to do so, these Orders are made having regard to the provisions of s 81 of the Family Law Act 1975 (Cth) so as to determine for all time the financial relationship between the parties and avoiding further proceedings.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Skye & Saidel has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8982 of 2018

Ms Skye

Applicant

And

Mr Saidel

Respondent

REASONS FOR JUDGMENT

1. This matter was first listed before me in the Judicial Duty List on 10 September 2019. On that date it was adjourned part heard for further hearing before me on 8 October 2019.

2. On 7 August 2018 the wife filed an Initiating Application seeking orders for property settlement. The orders the wife sought included an order that the first respondent husband (“the husband”) transfer his interest in the property known as and situate at B Street, Suburb C in the State of Victoria, being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“B Street”). The matter was listed for a Case Assessment Conference on 14 November 2018. On that date the wife was represented by her solicitor. There was no appearance by or on behalf of the husband. The husband was ordered to file and serve a Response and Financial Statement by 5 December 2018. The matter was otherwise adjourned for a telephone mention on 19 December 2018 and the wife’s costs were reserved. It was noted that if the husband did not file his answering material or attend the telephone mention that the wife would be seeking to have the matter listed on an undefended basis. The wife was to provide a copy of the orders to the husband within 48 hours together with a covering letter in relation to the wife’s application to have the matter listed for an undefended hearing in the event that the husband failed to comply.

3. The husband did participate in the telephone mention on 19 December 2018 and the wife was represented by counsel on that date. There was a notation to the orders made that day to the effect that the husband had advised that he had “forwarded his Response and Financial Statement to the Court” and would email copies to the wife’s counsel. On 7 January 2019, the husband filed a handwritten Financial Statement sworn on 4 December 2018, but has not filed any other documents.  On 19 December 2018 an order was made for the parties to attend a conciliation conference on 25 February 2019 and the husband and the wife were required to provide each other with a list of their assets and liabilities and their respective proposals.

4. The husband failed to appear at the conciliation conference conducted by Registrar Mestrovic on 25 February 2019. As a consequence the Registrar made orders inter alia that the wife file and serve an Amended Initiating Application and any Affidavit she intended to rely on upon her mother Ms Hewart (“the second named respondent”) and listed the matter in the Judicial Duty List on 29 April 2019 for final property orders on an undefended basis, in the event that the husband failed to comply with paragraph 3 of those orders, which required him to file and serve a Response and all Affidavit material upon which he sought to rely upon on both the wife and the second named respondent.

5. On 24 April 2019, the wife filed an Amended Initiating Application in which she sought inter alia orders that within 28 days she and the husband transfer their right title and interest in B Street to the second named respondent.

6. The husband appeared in person at the hearing in the Judicial Duty List on 29 April 2019. On that date orders were made formally joining Ms Hewart as a party to the proceedings, requiring the husband to vacate B Street within 21 days, both the husband and the second named respondent were required to file any Response, their Affidavits and a Financial Statement within a further 21 days and in the event that the parties had not agreed upon a value of the property, the wife was to nominate three valuers and the husband was to choose one from those nominated. The husband and the wife were to share the cost of the preparation of a sworn valuation. The order also provided for service upon the husband by email. The parties were ordered to attend a conciliation conference at 9.15 am on 18 July 2019 and all interim applications were otherwise dismissed.

7. On 19 June 2019, the second named respondent filed a Response to Initiating Application albeit she did not specify the orders she was seeking. On 15 August 2019 the second named respondent filed an Amended Response to Initiating Application seeking inter alia a declaration pursuant to s 78 of the Family Law Act 1975 (Cth) (“the Act”) as to the legal and beneficial ownership of B Street and consequential orders.

8. The husband did not appear and was not represented at the conciliation conference on 18 July 2019 and the matter was then listed in the Judicial Duty List on 10 September 2019 for the purposes of a possible undefended hearing. The husband was ordered to pay the costs of the wife and the second named respondent fixed in the sum of $1,100 each within 28 days. The orders made that day noted that the husband had not filed his answering material and had not nominated a valuer to value B Street as ordered. The husband has not paid the costs he was ordered to pay.

9. The husband similarly did not attend the hearing in the Judicial Duty List on 10 September 2019. On that date orders were made requiring the second named respondent to file and serve any further Affidavits upon which she sought to rely by 4.00pm on 20 September 2019 and for the parties to file and serve written submissions in support of their respective cases. The matter was otherwise adjourned for further hearing before me on 8 October 2019.

10. I am satisfied that the husband was served with a copy of the orders made on 10 September 2019 and in fact he appeared at the hearing before me on 8 October 2019. I am also satisfied that the husband was aware of the orders being sought by the wife and the second named respondent. When asked what his position was with respect to the orders sought by the wife and the second named respondent, the husband advised that he had not been able to obtain legal advice. Although counsel for both the wife and the second named respondent asked to have the matter stood down with a view to reaching agreement with the husband, they were not able to do so.  Absent any agreement both counsel for the wife and the second named respondent submitted that they should be permitted to proceed with their respective applications on an undefended basis. Having explained to the husband what they proposed, he elected not to make any submissions.

11. Rule 11.02(c) of the Family Law Rules 2004 (Cth) (“the Rules”) makes provision for the Court to determine a matter as if it were undefended if a party to the relevant proceedings has not complied with the Rules, the Regulations or a procedural order. The main purpose of the Rules is to “...ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case” (r 1.04) and the Court is required to actively manage cases so as to promote that purpose. The husband in this case has not complied with the Rules generally or with orders of the court including the orders requiring him to file answering material and the order that he pay the wife and the second named respondent’s costs. Although the husband advised that he had been unable to obtain legal advice, these proceedings have been on foot since August 2016 and I am satisfied that in these circumstances he has had ample time to engage solicitors. With or without legal representation the husband is required to comply with the Rules and Regulations and with orders made by the court and he has not done so. Absent legal representation he must present his own case and he elected not to do so. In my view not having legal representation is in these circumstances not a reason to further delay the hearing of the matter. The wife and the second named respondent are entitled to have their respective applications heard and determined and on that basis, I dealt with their respective applications on an undefended basis and on the basis of the evidence of the wife and the second named respondent. Statements of facts are in these circumstances to be treated as findings of fact unless otherwise indicated.

Background

1. The husband is 42 years of age. He works in hospitality and both prior to and during the relationship ran a retail business.  At the time he swore his handwritten Financial Statement he was working as a labourer earning $930 per week gross.

2. The wife is 42 years of age and is employed as a para-legal earning approximately $80,000 per annum.

3. The husband and wife commenced cohabitation in or around August 2001, marrying in 2009. There is one child of the marriage X who is 8 years of age.  The husband and wife separated under the one roof in or about June 2016. The husband and wife continued to live separately and apart under the one roof in B Street until the husband was ordered to vacate the property.

4. The second named respondent is the wife’s mother. She lives in a granny flat at B Street. The husband, wife and the second named respondent are the joint registered proprietors of B Street. The wife and the second named respondent seek a declaration that the second named respondent is the beneficial owner of property to the exclusion of the husband and the wife and consequential orders for the transfer of B Street to the second named respondent.

5. The wife and the second named respondent in particular and to a lesser degree the husband intermingled their finances and although these proceedings are undefended, the history of their financial affairs including their acquisition of real property is relevant for the purposes of the matters the Court must determine.

6. In 2000, prior to commencing cohabitation with the husband, the wife and the second named respondent purchased a block of land in Suburb G and built a house in which the wife then lived. The second named respondent paid the deposit and the property was registered in their joint names with the second named respondent guaranteeing the loan. The husband moved into Suburb G shortly after he and the wife met and they lived in that property until 2003, when it was sold and they rented an apartment in Suburb P. The husband did not contribute to the mortgage or other outgoings during the time he and the wife lived together in Suburb G.

7. In or about 2002 the wife and the second named respondent purchased a block of land in H Town for $367,500.  They used the $80,000 they had each inherited and they borrowed the balance of the purchase price from the Q Bank. The loan was secured over the title to the property at J Street, Suburb K occupied by and registered in the second respondent’s name, leaving H Town unencumbered.   

8. In July 2004, the wife and the second named respondent sold H Town for $395,000. The wife then purchased an apartment in Suburb L which was registered in the joint names of the husband and the wife. The wife was able to purchase Suburb L without any mortgage using the net proceeds of sale of H Town. The Suburb K mortgage which at that time had a balance of approximately $160,000 was not discharged.

9. Prior to meeting the wife, the husband purchased a ¼ share in M Business. He obtained a loan which was secured over his parent’s home. In or about June 2005, the husband and wife borrowed $225,000 against the Suburb L apartment which had been purchased with the proceeds of sale of H Town. They used $72,000 to repay the husband’s parents and paid the second named respondent $80,000 which was the amount of the inheritance she had contributed to H Town.  The Suburb K mortgage was again not discharged, however, the wife having retained the second named respondent’s share of the net proceeds of sale of H Town for her own benefit, the wife made those mortgage payments until its sale in 2011, when that mortgage was discharged.  

10. In or about November 2009, the husband and wife sold Suburb L. The net proceeds of sale were approximately $300,000 which was paid into their joint account. In or about 2010, N Pty Ltd in its capacity as the trustee of the R Family Trust purchased the M Business remaining ¾ interest in the business. Although the wife said she did not know how much the husband had paid it was her evidence that he had used approximately $100,000 of the proceeds of sale of Suburb L to purchase the remaining ¾ of the business and a Motor vehicle 1. In 2011 there was a fire at the business and the husband used the balance of the funds to pay staff while waiting for the insurance claim to be settled.

11. In 2011 the second named respondent sold Suburb K for $550,000 and purchased B Street for the same amount. The amount required to discharge the Suburb K mortgage at settlement was $127,303. The second named respondent paid a deposit $35,000, she used the net proceeds of sale of $322,329 after discharge of the mortgage and a further $8,385 of her own money. As the Suburb K mortgage had not been discharged when H Town was sold the second named respondent did not have sufficient funds to both complete the purchase of B Street and to build the granny flat and borrowed $220,000 from F Bank to both complete the purchase and the construction of the granny flat. The parties lived together in the house at B Street until the granny flat had been completed and thereafter the husband and the wife lived in the house and the second named respondent lived in the granny flat. Between September 2011 and January 2014 the husband and the wife deposited $350.00 per week into the mortgage account. The second named respondent paid the rates and other outgoings including insurance and utilities.

1. In January 2014, payments made by the husband to the mortgage account were dishonoured and since then the second named respondent has made all the mortgage payments and has continued to pay all of the rates and other outgoings with respect to B Street as well as the utilities. The second named respondent also paid for repairs and improvements to the property whilst the husband was living there including a new gate at a cost of $6,500, a new driveway at a cost of $16,500 and electrical rewiring at a cost of approximately $1,000. After the husband’s payments were dishonoured, the wife initially paid the second named respondent $250 per week, which she increased to $320 per week and eventually to $350 per week, which the second named respondent applied to the mortgage. The husband continued to live at the property until he was ordered to leave without making any financial contribution.  

2. The second named respondent also deposed to having provided the husband and wife with other financial assistance and practical support including caring for the child of their marriage during the day, purchasing two vehicles for the husband, paying approximately $4,000 to the Sheriff for his outstanding traffic fines. She also deposed that when she paid the outstanding fines to stop the Sheriff taking possession of the husband’s car, he agreed to transfer his interest in B Street to the second named respondent in recognition of the assistance she had given him. Both the husband and the wife have had the benefit of occupying the house at B Street property largely at the second named respondent’s expense, both as to the acquisition of the property and its upkeep.

Legal And Beneficial Interests  

1. The second named respondent is not a party to the marriage, however, in circumstances where there is a single justiciable controversy this Court can exercise its accrued jurisdiction to make the orders the second named respondent seeks. In this case, the Court could not determine the proceedings pursuant to s 79 of the Act without first determining the husband and wife’s legal and equitable interests in B Street. As the Full Court said in Camden Pty Ltd and Laue and Ors (2018) FLC 93-840 at [11] s 78 of the Act “…provides a proper judicial basis for the making of a declaration” which binds the husband and the wife and the second named respondent, so long as the proceedings in which the declaration is to be made is as in this case a matrimonial cause.

2. The second named respondent’s case is that the husband and the wife hold their interest in B Street on trust for her pursuant to a resulting or implied trust or a constructive trust. The wife acknowledges that she and the husband do not have a beneficial interest in B Street. As previously referred to, the husband has not filed any answering material other than a handwritten Financial Statement and has not actively participated in the proceedings and the matter has proceeded on an undefended basis.

3. As submitted by counsel for the second named respondent, there is an established principle that when land is registered in the name of someone other than the person who provided the funds for its acquisition, there is a presumption of a resulting trust in favour of the person who provided those funds save that when the person advancing those funds transfers an interest in that land to a spouse or as in this case a child, and the spouse of that child the presumption of advancement generally applies. The presumption being that it was intended that interest be a beneficial interest. That presumption of advancement may be rebutted by evidence demonstrating in this case that it was not intended that the husband and the wife would have a beneficial interest in the property.   

4. In this case, the uncontested evidence is that the only reason B Street was registered in the joint names of the husband and the wife and the second named respondent was because the second named respondent could not, based upon her age and income at the time, borrow the funds she needed to complete the purchase. This was as a direct result of the fact that Suburb K was subject to the mortgage which the second named respondent and the wife obtained to purchase H Town and that although this advance was for the purchase of H Town, when H Town was sold the husband and the wife retained the proceeds of sale for their benefit and did not discharge the mortgage. This left the second named respondent short of the funds she needed to complete the purchase of B Street. I am satisfied that absent the mortgage over Suburb K, the second named respondent would have been able to purchase B Street and complete construction of the granny flat without having to borrow or either the husband or the wife needing to be registered on title. Whilst following the purchase until early 2014, the husband and wife made weekly payments of $350 per week into the mortgage account in their joint names and from 2014 to date the wife has made payments to the second named respondent which she has applied to the mortgage. In my view the fact that the second named respondent has paid all of the rates and other outgoings and paid for the maintenance and improvement of the property is further evidence in support of the rebuttal of the presumption of advancement. Although it is not in dispute that the husband and the wife paid the mortgage for some 27 months and that since January 2014, the wife has indirectly contributed is in my view not inconstant with the second named respondent being the beneficial owner of the property, particularly in circumstances where they have had the benefit of occupying the property. In all of the circumstances, I am satisfied on the balance of probabilities that the presumption of advancement is rebutted and that there is a resulting trust in favour of the second named respondent.

5. In the alternative, the second named respondent relied upon there being a constructive trust in her favour. In Muschinski v Dodds (1985) 160 CLR 583 Deane J with whom Mason J agreed discussing the nature and function of a constructive trust said (at p.614) as follows:

   …Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention of assertion would contrary to equitable principles.

6. As previously discussed the husband and the wife made no contribution to the acquisition of the property and although they have contributed initially directly and after January 2014 the wife has contributed indirectly to payment of the mortgage, they have not otherwise contributed to either the outgoings, the maintenance of or the maintenance or any improvements to the property and have had the substantial benefit of living in the property. In so far as the husband asserted in his handwritten Financial Statement filed 7 January 2019 to having contributed a total of $11,900 to the construction of the second respondent’s granny flat, an assertion disputed by the second named respondent, he has in any event as previously referred to having received significant financial benefits from the second respondent which far outweigh, even if accepted, any contribution he claims to have made. I am satisfied having regard to the uncontested evidence before me that it would be unconscionable for either the husband or the wife to claim a beneficial interest in B Street and that in these circumstances they hold their legal interest pursuant to a constructive trust for the second named respondent.

7. In all of the circumstances, I propose to make the declaration sought by the wife and the second named respondent seeks and to make the consequential orders necessary to give effect to that declaration.

The Caveats

1. The issues in this case are further complicated by the existence of two caveats lodged on the B Street title, which both the wife and the second named respondent are seeking be removed by the Registrar of Titles for Victoria.

2. The first of those caveats (the “first caveat”) was lodged by D Pty Ltd on 29 December 2014. The second named respondent deposed that she was unaware of the first caveat until these proceedings were issued and the information she now has in relation to that caveat is based upon what she has been told by the wife and emails she has been shown passing between the solicitors for the wife and the solicitors for the first caveator. The first caveat was lodged on the basis of a Credit Account Application and guarantee for the supply of materials for the business, which was signed by the husband in his capacity as a director of the company on 14 September 2013. The agreement signed by the husband provided as follows:

   11.1To better secure D Pty Ltd’s rights under this guarantee, each guarantor as beneficial owner agrees to charge the interest that he, she or it has, either solely, jointly or as tenant in common, in any real estate.

   11.2each Guarantor acknowledges D Pty Ltd’s right to lodge a caveat on any real estate that Guarantor has an interest as described in clause 11.1 to support the charge given by that Guarantor to D Pty Ltd under clause 11.1. ….

3. On 29 December 2014, a caveat was lodged over the title to B Street pursuant to the terms of the credit Account Application and guarantee signed by the husband. The wife deposes to the first caveator having issued proceedings to recover the debt and judgement being entered in the first its favour. The debt with the addition of court costs and interest is approximately $20,000. I am satisfied that the first caveator has been given notice of these proceedings, is aware of the orders sought by the wife and the second named respondent and has elected not to intervene.

4. The second caveat was lodged by Mr E (“the second caveator”) on 22 August 2018. Mr E was appointed as the liquidator of the company. In that capacity he issued proceedings in the Supreme Court of Victoria against the company and the husband in his capacity as a director of the company to recover monies owing to the company’s creditors, primarily the ATO. Those proceedings were settled on the basis of the husband granting a mortgage over his interest in B Street. The second caveat was lodged on the basis of that equitable mortgage.

5. On 29 August 2018, after the wife became aware of the second caveat she instructed her solicitor to write to the second caveator’s solicitor as follows:

   ‘Dear Mr O

   I act on behalf of Ms Skye in respect of all family law matters.

   I refer to the attached Caveat Notice, dated 22 August 2018.

   My client disputes the caveat.

   Please forward to me, via email, all instruments (for example, loan contracts) upon which you say the caveat, or mortgage, relies, within 7 days.

   Yours faithfully,

   Marc Testart’

6. The second caveator’s solicitor replied on 3 September 2018 as follows:

   ‘Dear Marc,

   As requested I attach a copy of the mortgage granted by Mr Saidel over his interest in the property, in settlement of Supreme Court Proceedings against him. My client maintains he has a valid instrument. Any attempt by your client to remove it will be opposed.’

7. The wife’s solicitor responded to the second caveator’s correspondence dated 3 September 2018 as follows:

   ‘Dear Mr O,

   I have reviewed the attached documentation, being the document which purports to be a mortgage between Mr Saidel and Mr E.

   It is axiomatic that a mortgage over a piece of real estate requires the consent of all joint tenants. Nobody obtained the consent of my client, Ms Skye in respect of the purported mortgage. Mr Saidel therefore did not have the power to unilaterally grant a mortgage over the property known as B Street, Suburb C; you ought to know this.

   Accordingly the mortgage is not worth the paper it is written on, and your client has no caveatable interest in the property known as B Street, Suburb C.

   If your client does not withdraw the caveat within 7 days, we will join him to the Family Court Proceedings (attached), returnable 14 November 2018, and seek, inter alia, indemnity costs against him.

   We will produce this email, and all other relevant correspondence, to the Court.

   Yours faithfully,

   Marc Testart.’

8. The wife attached a copy of her Initiating Application to the correspondence sent to the second caveator on 3 September 2018.

9. Later that day on 3 September 2018, the solicitor for the second caveator responded to earlier communication from the wife’s solicitor as follows:

   ‘Dear Marc,

   Your analysis is not correct. The mortgage can be granted by one joint proprietor in respect of his interest without the consent of the other proprietors. The mortgage subsists so long as he has an interest in the land. There is clear Supreme Court support for this position. (see: Lyons v Lyons).

   The Family Court may determine the ownership issue between the husband and wife. If the husband is found to have no interest in the property, then my clients mortgage would fail as a necessary consequence. If the husband is found to have an interest, then the mortgage would remain. In either event the joinder of my client would serve no purpose, but if joined, they will seek costs as against your client.’

10. I am satisfied that the second named caveator is aware of the proceedings and the orders sought by the wife and the second named respondent and has elected not to intervene in the proceedings.

11. I accept as acknowledged by counsel for both the wife and the second named respondent that the husband as a joint tenant could charge or mortgage his interest in B Street without notice to the other registered proprietors. As acknowledged by counsel for the wife it is a well-established principle that where there is a joint tenancy no distinction is drawn between the interest of any one tenant and that of any other tenant and that a joint tenant can alienate his interest in favour of a stranger and that stranger become a tenant in common as to an undivided share of the land in question. However the circumstances in which the joint tenancy may be severed to enable that to occur are limited and at the very least would require notice being given to the other joint tenants. I am satisfied that in this case there was no notice given. It also follows axiomatically that in these circumstances the wife and the second named respondent could not have agreed to the joint tenancy being severed. 

12. Counsel for both the wife and the second named respondent relied upon the decision of McInerney J in Lyons v Lyons [1967] VR 169 in support of their submissions that although a joint tenant can charge, or mortgage their interest in land without notice to the other registered proprietors, they are only able to do so to the extent that it does not interfere with the rights of the other joint tenants in relation to that land. His Honour said at page 181 as follows:

    …I do not, therefore, find persuasive Dr. Mendes Da Costa's arguments in support of the view that the mortgage effects a severance. Furthermore, it seems to me that if the transaction does not effect a severance (because it does not destroy any of the four unities) there is no real ground for holding that its effect is to suspend the joint tenancy. I therefore accept as correct the reasoning and the conclusion in People v Nogarr, supra, according as it does with what I understand to be long-standing conveyancing opinion both in Australia and New Zealand, as expressed for instance by Dr. Kerr and Mr. Adams in the passages cited earlier in this judgment.

13. His Honour further states at page 181:

    …Since the mortgage did not sever the joint tenancy the respondents Lyons and O'Connell as executor and executrix respectively of William Patrick Lyons were not entitled to claim any estate in the land as tenants in common with the applicant. They therefore do not show any reason why their caveat No. … should not be removed, and they are not, in my view, entitled to be registered as proprietors of any interest in the land.

14. More importantly in this case I have found that the husband did and does not hold his interest in the property beneficially and in these circumstances has no   interest to mortgage or charge which can sustain the caveats lodged over the title. In these circumstances the caveats cannot be sustained.

15. Although counsel for both the wife and the second named respondent initially sought orders setting aside the second mortgage or declaring it void ab initio and an order requiring the husband to do all such things and sign such documents as may be required to assume sole liability for, and indemnify the wife and the second named respondent against any liability in respect of the company and orders pursuant to s 106A of the Act in the event of the husband failing to comply at the at the conclusion of the case they had amended their respective applications, seeking instead orders requiring the Registrar of Titles to remove the caveats lodged by the first and second caveators. In my view a more practical and appropriate course in all of the circumstances of this case.

16. In Auricchio & Auricchio & Ors (No 2) [2014] FamCA 240 (“Auricchio”) Forrest J dealing with an application for the removal of a caveat lodged by the wife, pursuant to s 122 of the Land Title Act 1994 (Qld) on the basis of her claim a beneficial interest in land on the grounds of an implied, resulting or constructive trust having made financial and non-financial contributions to the acquisition, maintenance and improvement of the land in question. His Honour determined that he could order the removal of the caveat pursuant to s 114(3) of the Act and issued a mandatory injunction requiring that the wife, as a party to the proceedings, remove the caveat.

17. In Auricchio, his Honour observed (at [29]-[32]) that this Court has jurisdiction to deal with an application for the removal of a caveat and noted that an order could also have been made in that case directing the Queensland Registrar of Titles to remove the caveat. His Honour observed as follows:

    [29] By s31(1)(a) of the Family Law Act 1975 (Cth) this Court is given jurisdiction with respect to matters arising under this Act in respect of which matrimonial causes are instituted under this Act. Allsop CJ writing extra-curially [“”Accrued” Federal Jurisdiction and the Family Court”. Family Court Conference, Melbourne, 2013] described “matter” as meaning:

    …the justiciable controversy between actors to it, comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or among them. It is not the cause or causes of action brought, nor is it the proceedings.

18. In Auricchio, his Honour further said with respect to the making or an order directed to the Queensland Registrar of Titles to remove the caveat as follows:

    [60]I am also of the view that I could have simply made an order, such as is made by the Supreme Court when it determines that a caveat should be removed pursuant to an application brought pursuant to s 127 of the Land Title Act, namely that the caveat “be removed.” Such an order is not an injunction directed at the caveator to do all things necessary to remove the caveat but rather an order that the Queensland Registrar of Titles must act on.

    [61] I am satisfied, just as Cronin J was in Vaughan v Bele (No 2) [2012] FamCA 605 when he determined that this Court had power, exercising Federal Jurisdiction, to order the Victorian Registrar of Titles to issue a new certificate of title pursuant to a provision of the Transfer of Land Act 1958 (Vic), that this court could have made an order that the caveat “be removed.” Section 79 of the Judiciary Act picks up the power contained within s127 of the Land Title Act, federalises it and authorises the exercise of the power by this Court exercising federal jurisdiction.

    [Footnotes omitted]

19. In Tailor & Tailor [2019] FamCA 383 McEvoy J considered the power of this Court exercising federal jurisdiction, to “pick up” and apply the law of the relevant state, where appropriate, pursuant to s 79 of the Judiciary Act 1903 (Cth). His Honour referred to Auricchio with approval. See also Masson v Parsons [2019] HCA 21 at [1].

1. Similarly, in Vaughan & Bele (No 2) [2012] FamCA 605 Cronin J stated that the power to make orders directing the Registrar of Titles to undertake a task lies in the Court‘s exercising “accrued” jurisdiction:

   [69] Thus if the claims – in this case the pursuit of an order against the registrar of titles that could be made under the Transfer of Land Act, is part and parcel of the claim between the applicant and the respondent, there may be a single justiciable controversy and if so, the Court has jurisdiction and power in the whole matter. It is not to the point that an action against the Registrar of Titles would be in a separate proceeding and involve a different party. The question is whether there is a single justiciable controversy identifiable. That also depends upon what the parties have done. In this case the parties have sold a property pursuant to an order. That process requires production of a title which has not been produced.

   [70] The claims involving the Registrar are therefore related to the dispute between the application and the respondent.  Thus, here there is one justiciable controversy and the title issue is simply part of the substratum of facts.  Here, the Registrar of Titles recognises the Court’s orders under the state legislation.  In my view, the Court has power to make the orders suggested by the Registrar and should do so. 

   [71] The power, therefore, to make orders lies in the Court exercising what is called its accrued jurisdiction. This issue is about power. The jurisdiction comes from ss 34, 114(2A) and probably s 90SS. Section 34 points to s 31(1)(aa) which confers jurisdiction in matters arising under the Act in respect of which de facto financial causes are instituted. That is the case here.

   [72] There is a justiciable controversy arising out of the de facto relationship between the applicant and the respondent and that was litigated under the de facto financial cause.  The No 9 property was to be sold as part of that dispute and the production of the title was always, albeit not specifically so stated, part of the substratum of facts that had to be determined to complete the matter or controversy. 

   [73] A justiciable controversy may involve both federal and state law. See Valceski & Valceski [2007] FLC 93-312 citing Fencott & Muller (1983) 152 CLR 570. The jurisdiction to make the ancillary order is clearly extant.

   [74] The power comes from the capacity of a court to order the Registrar to create the new title. In my view, therefore, there is one controversy and the court does have the jurisdiction and the power to make the orders sought under the Transfer of Land Act, which would enable the Registrar to take the course suggested. I propose to make orders accordingly.

2. Allsop CJ, in his paper on the accrued jurisdiction of the Family Court, referred to by Forrest J in Auricchio, discussed the question of ordering a state official to do something. Referring to the decision in Vaughan, his Honour stated at page [40]:

   In Vaughan v Bele (No 2) Cronin J ordered the Registrar of Titles to issue a new certificate of title. This seems to me to be undoubtedly correct. The Transfer of Land Act 1958 (Vic) conferred power on a Court of competent jurisdiction to make a vesting order, and upon service of that order, the relevant order was to be endorsed on the title. Section 103 of the Act provided that the Court may direct the Registrar to cancel the existing title and substitute a new one. Section 79 of the Judiciary Act picked up that Act, federalised it, and authorised the exercise of the power.

3. In the decision of Green & Wall [2019] FamCA 76 (“Green”), Cronin J made an order pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (“Transfer of Land Act”) that the Registrar of Titles for Victoria remove a caveat lodged by the husband’s solicitors on behalf of the husband. Section 90(3) of the Transfer of Land Act permits a court, upon application against a caveator, to make such order as it considers fit. Cronin J held (at [14]-[15]) that while such an application to remove a caveat could have been made to the State court, the Family Court has the power arising from the accrued jurisdiction to direct the removal of the caveat.

4. I am satisfied as submitted by counsel for both the wife and the second named respondent that this Court has the power to make an order directing the Victorian Registrar of Titles to remove a caveat.

5. In the present proceedings there are two caveats lodged by D Pty Ltd and Mr E (“the caveators”) on the B Street property. These caveats were registered on title allegedly to secure business debts incurred by the husband. The caveators have been put on notice of these proceedings, and been given an opportunity to be heard. They have both elected not to intervene.

6. In all of the circumstances, the husband having no interest in B Street, I propose to accede to the applications of the applicant and the second named respondent and make orders directing the Registrar of Titles to remove the two caveats.

Property Proceedings Between The Husband And The Wife

1. According to the wife’s Financial Statement filed 7 August 2018 excluding any interest in B Street, she owned a Motor vehicle 2 worth $15,000 which is subject to a loan of $34,000, furniture and contents worth $15,000, had minimal savings in a bank account in her name and superannuation of $68,000. The only property other than his registered interest in B Street disclosed by the husband in his Financial Statement filed 7 January 2019 was a Motor vehicle 3. He did not attribute any value to that vehicle. He also disclosed superannuation entitlements of $20,000. The husband’s liabilities included a tax debt of $135,000 and the husband deposed to a hire purchase lease of $20,000 although it is not clear what that relates to.

2. The orders sought by the wife are in effect that the parties retain what they each have, including their respective superannuation entitlements and it follows that they be responsible for any liabilities in their respective names.

3. I have already found that it is appropriate to deal with this matter on an undefended basis and although there is in effect no property of any substance to be divided, I am satisfied that the wife is entitled to have these proceedings determined and to have the security and finality of orders ending her financial relationship with the husband. In these circumstances I propose to make the orders the wife seeks.     

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 17 January 2020.

Associate:

Date:  17 January 2020