Tang & Vo
[2016] FCCA 880
•19 April 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TANG & VO | [2016] FCCA 880 |
| Catchwords: FAMILY LAW – De facto property jurisdiction – whether it is necessary to establish that the parties lived together – whether the parties did in fact live together – Elias principle. |
| Legislation: Family Law Act 1975, ss.4AA, 60B, 60CA, 60CC, 61DA, 65DAA, 90SB, 90SM Evidence Act 1995, s.128 |
| Cases cited: Ricci v Jones [2011] FamCAFC 222 Moby v Schulter (2010) FLC ¶93-447, [2010] FamCA 748 Elias (1977) 29 FLR 393, (1977) 3 Fam LR 11,496, (1977) FLC 90-267 JPDJ v DADJ [2005] FMCAfam 86 Nelson v Nelson (1995) 184 CLR 538, (1995) 184 CLR 538, (1995) 132 ALR 133, (1995) 70 ALJR 47, [1995] 19 Leg Rep 14, [1996] ANZ ConvR 280, [1995] HCA 25 Browne v Dunn (1893) 6 R 67 |
| Applicant: | MR TANG |
| Respondent: | MS VO |
| File Number: | MLC 9225 of 2015 |
| Judgment of: | Judge Riley |
| Hearing date: | 2 & 3 March 2016 |
| Date of last submission: | 23 March 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 19 April 2016 |
REPRESENTATION
| Counsel for the applicant: | Mr Nguyen |
| Solicitors for the applicant: | Winstan Lawyers |
| Counsel for the respondent: | Mr Tesoriero |
| Solicitors for the respondent: | Indovino’s Lawyers |
ORDERS
The application filed on 30 September 2015 be dismissed.
DIRECTIONS
The Registrar refer this matter to the State Revenue Office for investigation into whether the respondent received a stamp duty exemption and/or a first homeowners’ grant to which she was not entitled.
The Registrar make available to the State Revenue Office a copy of these orders and the reasons for judgment, and such other documents from the court file as the State Revenue Office may require for its investigation.
IT IS NOTED that publication of this judgment under the pseudonym Tang & Vo is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 9225 of 2015
| MR TANG |
Applicant
And
| MS VO |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for de facto property settlement. A preliminary question has arisen as to whether there was a de facto relationship between the parties. The applicant, Mr Tang, asserts that there was. The respondent, Ms Vo, accepts that they had a casual, dating relationship but denies that it was a de facto relationship.
During the relationship, Mr Tang was unemployed for the bulk of the time and Ms Vo worked as a (occupation omitted). Mr Tang now runs an (omitted) business.
It is common ground that:
a)the parties had a sexual relationship between 2008 and 2014;
b)during that time, they had a number of overseas holidays together, including to (country omitted) and (country omitted);
c)they attended family gatherings as a couple, where they were introduced to and met various relatives as a couple;
d)they attended weddings as a couple;
e)Ms Vo bought a property at Property O in her sole name in 2011 and sold it in 2014;
f)Mr Tang lived at the Property O property between 2011 and July 2014, when the parties separated;
g)in July 2012, Ms Vo bought a second property in her sole name, being Property C as an investment property; and
h)the property at Property C was rented out.
There was a substantial dispute between the parties about whether Ms Vo lived at the Property O property at all or at the same time as Mr Tang. Mr Tang said that they lived there together from 2011 until separation in 2014. He said that after settlement of the purchase on 19 April 2011, they renovated the property over the course of a few weeks and then moved in together.
Ms Vo said in her affidavit that she had never lived in the Property O property with Mr Tang and she had never lived there at all. She said that Mr Tang “was the only one who occupied the Property O property while I owned it.” However, in cross-examination about her receipt of a first homeowners’ grant, Ms Vo said that she had lived in the Property O property for “a few months”, from a few weeks after it was purchased on 19 April 2011 until Mr Tang moved in (Tr.129).
Mr Tang said in his affidavit that he and Ms Vo shared the expenses for the Property O property, including the mortgage.
Ms Vo claimed in her affidavit that Mr Tang was meant to pay her $800 per month rent for the Property O property, but he was often $400 or $500 short. She said that she did not “have the heart to kick him out as he had no job.”
Ms Vo’s brother, Mr D, gave affidavit evidence that was not challenged. He said that he lived with Ms Vo and other members of their family at their parents’ place at Property L, from 1993 until 2015.
Whether it is necessary that the parties lived together
The Full Court of the Family Court has not been definitive about whether parties must have lived together to have been in a de facto relationship. In Ricci v Jones [2011] FamCAFC 222, the Full Court of the Family Court said:
56.Her Honour did consider and accept the decision of Mushin J [in Moby v Schulter [2010] FamCA 748] that s 4AA(2)(b) required parties to have lived together for some time before their relationship could be considered a de facto one.
57.We are of the view that minds might reasonably differ as to this interpretation of the subsection that would require a putative de facto couple to have lived together before satisfying the legislative test; however because of the determination of this appeal, it is unnecessary to consider this point further. (citations omitted)
Patently, the view of the Full Court in paragraph 57 of Ricci v Jones was obiter. The decision of Mushin J in Moby v Schulter was not a decision on appeal so strictly speaking, it is not binding on this court. Consequently, the question is free of binding authority. In the circumstances, it falls to me to determine the issue according to the usual principles of statutory construction.
Section 4AA of the Family Law Act 1975 (“the Act”) relevantly provides that:
Meaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a) a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
The matters set out in s.4AA(1) of the Act are cumulative. That is, to be in a de facto relationship, the parties must not be married and must not be related by family and, having regard to all the circumstances of their relationship, they must have a relationship as a couple living together on a genuine domestic basis.
The parties in the present case were not legally married to each other and were not related by family. The question for the court is the one posed by s.4AA(1)(c) of the Act, namely, whether:
having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis. (emphasis added)
“All the circumstances of their relationship” may include some or all of the matters set out in s.4AA(2) of the Act. Those matters include:
(b) the nature and extent of their common residence;
That consideration assumes that the parties do have a common residence. In other words, it assumes that the parties are living together. That is consistent with the ordinary meaning of s.4AA(1)(c) of the Act, which requires that the parties are a couple living together on a genuine domestic basis. Section 4AA(2)(b) of the Act does not say:
the nature and extent of their common residence, if any.
Pursuant to s.4AA(3) of the Act, none of the circumstances described in s.4AA(2) of the Act must exist for there to be a de facto relationship. But that does not mean that the matters set out in s.4AA(1) of the Act need not exist for there to be a de facto relationship. On the contrary, according to the normal principles of statutory construction, all of the matters set out in s.4AA(1) of the Act must exist for there to be a de facto relationship. One of the matters set out in s.4AA(1) of the Act is that the parties are a couple living together on a genuine domestic basis. That is not “a circumstance of the relationship”. It is a conclusion that the court can draw based on all the circumstances of the relationship.
What s.4AA(2)(b) of the Act requires is a consideration of the nature and extent of the parties’ common residence. For example, particular parties might have lived in a student share house for six months, along with three other people. They might have had a sexual relationship, and be known amongst their friends and family as a couple but have no intermingling of finances or property, no children and no intention to share their lives together long term. These parties would probably not be considered to be in a de facto relationship.
Similar scenarios could arise where people live together in an Antarctic Research Station, or in a hostel, or in an army barracks, or in an aged care facility. Clearly, living together is a necessary but not a sufficient condition. That is, to be in a de facto relationship, the parties must live together. However, living together, by itself, is not enough to establish the existence of a de facto relationship.
Paragraph 4AA(2)(b) of the Act, on normal principles of statutory construction, cannot be used to undermine s.4AA(1)(c) of the Act. That is, the fact that the court may consider the nature and extent of the parties common residence under s.4AA(2)(b) of the Act, as one of the circumstances of the relationship, cannot alter the clear meaning of s.4AA(1)(c) of the Act, which requires that the parties are a couple living together on a genuine domestic basis.
It should also be noted that, under s.90SB of the Act:
A court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a) that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b) that there is a child of the de facto relationship; or
(c) that:
(i) the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii) a failure to make the order or declaration would result in serious injustice to the applicant; or
(d) that the relationship is or was registered under a prescribed law of a State or Territory.
In other words, unless one of the conditions in s.90SB of the Act is satisfied, the court cannot adjust the property interests of the parties, even if the court is satisfied that they were in a de facto relationship.
It is also noteworthy that s.4AA(5)(b) of the Act contemplates that a person can be in two different de facto relationships simultaneously. It follows that a person can live with two different people during the same period. Therefore, a person can be in a de facto relationship with another person even though they are not living together every day. However, because s.4AA(1)(c) of the Act requires that the parties live together, the period or periods of cohabitation must satisfy the normal understanding of living together, as opposed to merely staying over from time to time.
Often, it will seem obvious that a person lives at a particular address because it is their address as shown on their driver’s licence and on other official or third party documents. However, as we know, people sometimes change address without notifying the authorities or service providers.
Whether the parties in the present case lived together
In the present case, the applicant claimed that the parties lived together in the Property O property and, in oral submissions, claimed that, in the alternative, Mr Tang lived in Ms Vo’s house while they were dating. The applicant argued in oral submissions that in either case there was a de facto relationship. However, in written submissions the applicant did not press the argument that it was sufficient to establish a de facto relationship for the parties to be dating while one of them lived in a house owned by the other. I assume the second argument was abandoned. Even if it were not, for the reasons outlined above, I would reject it.
Apart from his oral evidence, the first item of evidence that Mr Tang relied upon to establish that he was in de facto relationship with Ms Vo was an application for a first homeowner grant signed by Ms Vo on or about 30 March 2011. That application was in respect of Property O. Question 6 on that form was as follows:
Will at least one applicant be occupying the home as the principal place of residence for a continuous period of at least six months commencing within 12 months of completion of the eligible transaction.
Ms Vo ticked yes in answer to that question. The form also said:
It is an offence to make a false or misleading statement, and heavy penalties may be imposed.
…
All applicants and their spouse/partner(s) must be considered when answering eligibility questions.
…
It is essential that ALL applicants complete this section.
Under that instruction, the form had two columns, one for the first applicant and one for the second applicant, if any. Ms Vo completed the form as the first applicant. The column for the second applicant was left blank. One of the questions that applied to both the first and second columns was:
Do you have a spouse/partner?
Ms Vo ticked no in answer to that question. The form also included a section that required details of the spouse or partner of an applicant where the spouse or partner was not an applicant for the first homeowners’ grant. Ms Vo crossed out that section of the form. The form also included a section for a declaration by the spouse or partner of an applicant, where the spouse or partner was not an applicant for the first homeowners’ grant. Ms Vo also crossed out that section of the form.
Ms Vo said in cross-examination that she had made entirely truthful statements in her application for a first homeowner’s grant.
Mr Tang argued that Ms Vo had told the truth when she said in her application for a first homeowners’ grant that she would be living at Property O for a continuous period of at least six months commencing within 12 months of completion of the eligible transaction, which was on 19 April 2011.
Mr Tang did not make any submissions about the other aspects of Ms Vo’s application for a first homeowners’ grant, particularly her statement that she did not have a spouse or partner. However, it appears that Mr Tang’s argument is that Ms Vo told the truth in her application for a first homeowners’ grant about her intention to live at Property O but did not tell the truth in that application about whether she had a spouse or partner.
Mr Tang also argued that, if Ms Vo had not lived for six months at Property O, she was obliged to inform the administrators of the first homeowners’ grant scheme of that fact and repay them any money she had been overpaid. If she did not do so, and if she did not live at Property O, then in Mr Tang’s submission, she perpetrated a fraud on the State of Victoria. Either way, Mr Tang submitted Ms Vo was demonstrably a liar and her denials that she lived with Mr Tang should not be accepted.
Ms Vo conceded in cross-examination that she had not advised the administrators of the first homeowners’ grant scheme that she lived at Property O for less than six months and conceded in cross-examination that she had not repaid any of the money that she received by way of a first homeowners’ grant. However, she claimed in cross-examination that she lived at Property O for “a few months” before Mr Tang moved in to the house.
The court was not taken to any bank records which demonstrated that Mr Tang made payments to Ms Vo by way of rent, or which, alternatively, demonstrated that he contributed to mortgage repayments in respect of the Property O property.
Although she was represented by counsel, Ms Vo did not seek a certificate under s.128 of the Evidence Act 1995. Ms Vo’s closing written submissions did not directly address the first homeowner’s grant application. Rather, her written submissions addressed some other matters, discussed below, of a similar nature. The submission was:
It is submitted it is more likely the Respondent made a misrepresentation to the SRO and Insurance company for financial benefit in reduced stamp duty and insurance premiums than it is that the Respondent, her brother who is a (occupation omitted) with the (employer omitted) and her sister are all lying about her not living with the applicant.
The second item of evidence that Mr Tang relied upon to show that he lived with Ms Vo in the Property O property was Ms Vo’s principal place of residence declaration. The purpose of this statutory declaration was to obtain a stamp duty reduction for the purchase of the Property O property. Ms Vo signed that declaration on 3 April 2011. The statutory declaration said:
This statutory declaration should be made by any transferee who intends to occupy the purchased property as their principal place of residence.
…
The PPR concession is subject to the requirement that at least one transferee occupies the land as his or her principal place of residence for a continuous period of 12 months commencing in the 12 month period immediately after the transferee becomes entitled to possession of the land.
I intend to occupy this property as my principal place of residence.
The intended date of the occupation is 19 April 2011.
I undertake to advise the Commissioner of State Revenue in writing, within 30 days of becoming aware that the residence requirement will not be met.
…
I acknowledge that this statutory declaration is true and correct, and I make it in the belief that a person making a false declaration is liable to the penalties of perjury.
On her own evidence, Ms Vo did not occupy the Property O property for 12 months. There was no evidence that she notified the Commissioner of State Revenue that the residence requirements for the stamp duty exemption would not be met. Although Ms Vo was represented by counsel, there was no application for a certificate under s.128 of the Evidence Act 1995. Ms Vo gave oral evidence that she had completed the statutory declaration truthfully.
The arguments of the parties about this item of evidence were the same as those set out above. That is, Mr Tang argued that Ms Vo told the truth in her statutory declaration and that she did live in the property at Property O. He said the alternative was that she had defrauded the revenue. Ms Vo argued that the court should accept that she had made false statements to the State Revenue Office.
The third items of evidence that Mr Tang relied upon to establish that he lived with Ms Vo at Property O were the insurance documents for that property for the periods 19 April 2011 to 19 April 2012, 19 April 2012 to 19 April 2013, 19 April 2013 to 19 April 2014 and 19 April 2014 to 19 April 2015. The first two of those documents stated that the property was owner occupied. The third stated that the property was the primary residence of the owner, namely, Ms Vo. The fourth stated that there had been an amendment effective 30 July 2014. It showed that the type of insurance was “investment, residential rental”.
Again, Ms Vo said in cross-examination that she had been truthful with the insurance company. Again, Mr Tang argued that Ms Vo had been truthful in saying to the insurance company that she lived at Property O and that the alternative was that she had perpetrated insurance fraud by getting the reduced premiums that apply where a property is owner occupied. Ms Vo argued that the court should conclude that she had made a false statement to her insurance company for a financial benefit.
Ms Vo did not disclose her tax returns until the second day of the hearing when the court asked her to.
The tax return for the year ended 30 June 2012 showed that Ms Vo claimed in her tax return that she received $9,600 in rent for the Property O property in that year, that the property was first rented out on 1 May 2011 and that the interest and other expenses paid for the property totalled $20,679, resulting in a loss of $13,079. Ms Vo’s tax agent calculated that she was owed a refund of $4,062.88. The 2012 income tax return showed that Ms Vo’s home address was Property L.
The tax return for the year ended 30 June 2013 showed that Ms Vo claimed in her tax return that she received $9,600 in rent for the Property O property in that year, that the property was first rented out on 1 July 2011 and that the interest and other expenses paid for the property totalled $18,796, resulting in a loss of $9,196. Ms Vo’s tax agent calculated that she was owed a refund of $12,643.75. The 2013 income tax return showed that Ms Vo’s home address was Property L.
The tax return for the year ended 30 June 2014 showed that Ms Vo claimed in her tax return that she received $9,900 in rent for the Property O property in that year, that the property was first rented out on 1 July 2011 and that the interest and other expenses paid for the property totalled $19,398, resulting in a loss of $9,498. Ms Vo’s tax agent calculated that she was owed a refund of $7,914.94. The 2014 income tax return showed that Ms Vo’s home address was Property L.
The tax return for the year ended 30 June 2015 showed that Ms Vo claimed in her tax return that she received $6,000 in rent for the Property O property in that year, that the property was first rented out on 1 July 2011 and that the interest and other expenses paid for the property totalled $13,302, resulting in a loss of $7,302. Ms Vo’s tax agent calculated that she was owed a refund of $14,677.67. The 2015 income tax return showed that Ms Vo’s home address was Property L.
Mr Tang argued that the tax returns could not be accepted as truthful because Ms Vo’s affidavit and oral evidence was that she received much less than $800 per month in rent than her tax returns disclosed ($800 x 12 = $9,600) in relation to the Property O property. Mr Tang also argued that the tax returns could not be believed because Ms Vo did not even claim that she had complied with the Residential Tenancies Act 1997 (Vic) by providing rental invoices and receipts to Mr Tang, and retaining a rental bond. Mr Tang also noted various discrepancies between the tax returns and Ms Vo’s claims in relation to her other property in Property C. Mr Tang reiterated that Ms Vo was a liar and a fraud.
Ms Vo simply submitted that she had made mistakes in her tax return and affidavit and the mistakes should not affect her credibility.
There are also before the court 12 bank statements for Ms Vo's (omitted) account number (omitted). They cover the period 29 March 2011 to 28 May 2014. They all show Ms Vo’s address as Property L.
There are also before the court eight home loan statements for Ms Vo for account number (omitted) and four for account number (omitted). The first bundle covers the period 1 July 2011 to 30 June 2013. The second bundle covers the period 12 October 2012 to 30 June 2013. They all show Ms Vo’s address as Property L.
Similarly, the house insurance documents for the period 19 April 2011 to 25 February 2015 all show Ms Vo’s address as Property L. Other bank records show the same address. As noted above, the tax returns show the same address.
Neither party gave any evidence or made any submissions about the effect of Ms Vo giving her bank, her insurer or the Australian Taxation Office the Property L address as her residential address or said it was a false address or an address used just for convenience. It is worth noting that the tax returns specifically show the Property L address as Ms Vo’s home address, as distinct from her postal address.
Mr Tang also relied on various receipts and invoices for utilities at the Property O property that he said he had paid. That claim does not advance the matter because, as a tenant, he was obliged to pay the utilities anyway.
However, Mr Tang placed a great deal of weight on a text message from Ms Vo to him which he said demonstrated that he paid the council rates. The message said:
Council rates. Property O $1600 x 3yrs = $4,800 $4,800 divide by two = 2400 Property C $2500 x 1.8months = $4500 $4500 divide by two = $2250 $2400 + $2250 = total $4650.
Ms Vo said that the message simply referred to what Mr Tang would have been required to pay if he had been a joint owner of the Property O property and he had paid half.
In addition, there were various affidavits sworn on behalf of each of the parties.
The applicant’s brother, Mr P, swore an affidavit in which he said relevantly that in 2011, Mr Tang “moved out [of home] with” Ms Vo. Mr P claimed that he lent Mr Tang $20,000 for his contribution to the purchase of the Property O property and later lent him another $20,000 and later gave him $35,000 for the purchase of the Property C property.
Mr Tang’s mother, Ms T, and his father, Mr T, also swore affidavits. It was indicated to the court that they needed an interpreter for the purposes of giving oral evidence. However, their affidavits were not sworn through an interpreter. After some discussion, the interpreter who was in court interpreted the affidavits to Mr Tang’s parents. They confirmed that the affidavits were true and correct, except for one amendment that Mr Tang’s mother made to paragraph 27 of her affidavit. Apart from the difficulties with the interpretation of the affidavits of Mr Tang’s parents, his father’s affidavit was unsatisfactory because it simply adopted the mother’s evidence rather than stating what he remembered himself.
In any event, Mr Tang’s parents’ evidence mostly concerned the relationship between Mr Tang and Ms Vo, the renovation of the Property O property and Mr Tang’s financial contribution to the Property O property. Mr Tang’s parents did not say squarely that Mr Tang and Ms Vo lived together. The fact that they had a sexual relationship and were known to be a couple was not in dispute. The renovation of the property and Mr Tang’s financial contribution to the property, if any, do not necessarily mean that Mr Tang and Ms Vo lived there together.
As mentioned above, Ms Vo’s brother, Mr D, gave affidavit evidence that was not challenged. He said that he lived with Ms Vo and other members of their family at their parents’ place in Property L, from 1993 until 2015.
Ms Vo’s sister, Ms N, gave affidavit evidence that she and other members of her family lived at Property L, with Ms Vo until Ms N moved out in 2004. Ms N said that subsequently, she observed Ms Vo to be living there whenever she visited, which was about once per month.
There was other evidence of a financial nature that Mr Tang relied upon to show that Ms Vo was financially dishonest, and that he had contributed money obtained from his brother to assist in the purchase of the Property O property and the Property C property.
Ms Vo argued that the principle in Elias (1977) FLC 90-267, (1977) 29 FLR 393, (1977) 3 FamLR 11,496 had been debunked in JPDJ v DADJ [2005] FMCAfam 86 at [45] and [46], relying on statements of McHugh J in the decision of the High Court in Nelson v Nelson (1995) 184 CLR 538, (1995) 132 ALR 133, (1995) 70 ALJR 47, [1995] 19 Leg Rep 14, [1996] ANZ ConvR 280, [1995] HCA 25. McHugh J said:
31. The doctrine of illegality expounded in Holman was formulated in a society that was vastly different from that which exists today. It was a society that was much less regulated. With the rapid expansion of regulation, it is undeniable that the legal environment in which the doctrine of illegality operates has changed. The underlying policy of Holman is still valid today - the courts must not condone or assist a breach of statute, nor must they help to frustrate the operation of a statute. As Mason J put it in Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd[274], the courts must not "be instrumental in offering an inducement to crime or removing a restraint to crime". However, the Holman rule, stated in the bald dictum: “No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act" [275] is too extreme and inflexible to represent sound legal policy in the late twentieth century even when account is taken of the recognised exceptions to this dictum.
32. One of the most significant reasons for adopting a less rigid approach to illegality than the bald dictum in Holman or, for that matter, the Bowmakers rule adopted in Tinsley is that statutory illegality can arise in a number of different ways[276]. First, the statute may directly prohibit the contract or trust. Secondly, while the statute may not prohibit making the contract or trust, it may prohibit the doing of some particular act that is essential for carrying it out. Thirdly, the statute may not expressly prohibit the contract or trust but the contract or trust may be associated with or made in furtherance of a purpose of frustrating the operation of the statute. Fourthly, the statute may make unlawful the manner in which an otherwise lawful contract or trust is carried out. It would be surprising if sound legal policy required each of these forms of illegality to be treated in the same way. There is, for example, a vast difference between the performance of a contract for carriage of goods by ship that is overloaded in breach of the law and the making of a contract for the carriage of goods where the making of the contract is specifically prohibited [277].
[274] (1978) 139 CLR 410 at 429
[275] Holman (1775) 1 Cowp 341 at 343; 98 ER 1120 at 1121
[276] See Yango (1978) 139 CLR 410 at 413
[277] cf. St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB 267
…
38. Accordingly, in my opinion, even if a case does not come within one of the four exceptions to the Holman dictum to which I have referred, courts should not refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose unless:
(a) the statute discloses an intention that those rights
should be unenforceable in all circumstances; or
(b)(i) the sanction of refusing to enforce those rights is not disproportionate to the seriousness of the unlawful conduct;
(ii) the imposition of the sanction is necessary, having regard to the terms of the statute, to protect its objects or policies; and
(iii) the statute does not disclose an intention that the sanctions and remedies contained in the statute are to be the only legal consequences of a breach of the statute or the frustration of its policies[278].
286 Tinsley v Milligan [1992] Ch 310
In JPDJ v DADJ, Ryan FM, as her Honour then was, noted at [44] that:
In the Marriage of Jordan (1997) FLC 92-736 Chisholm J considered the Elias principle. Writing extra-judicially in an article titled, “Exclusion of Evidence Inconsistent with earlier statement: the rise and fall of the Elias principle” Chisholm J argued that although such a principal seems to be asserted in a number of Family Court decisions, it is inconsistent with High Court authority and does not represent the law.
Ryan FM considered the effect of Nelson and concluded at [46] of JPDJ v DADJ:
The conclusion reached by Chisholm J is compelling. He writes, “If the argument in this paper is accepted, the Elias line of authorities is wrong insofar as it suggests that there is a principle, apart from estoppel the court may or must prevent a party from leading evidence of a proposition that is inconsistent with an earlier statement made to a third party. It follows that in property cases the court will consider all the evidence and make findings about the property of the parties and about their contributions. Earlier inconsistent statements of the kind that feature in the Elias cases will of course be relevant to this fact finding exercise. The court will have to consider whether the earlier statement or the later statement is more likely to be true. Further, the contradiction will be taken into account in determining what confidence the court will have in that party's evidence generally. That all of this falls into the ordinary process of fact finding: no evidence would be excluded, and there would be no presumptions that one or other of the inconsistent statements is more likely to be true.”
Mr Tang did not dispute in his closing written submissions that JPDJ v DADJ accurately stated the current law in relation to the Elias principle. I accept that it does. Therefore, the court must simply weigh up all the evidence and make findings accordingly.
Mr Tang did not challenge the evidence of Ms Vo’s brother, Mr D, to the effect that Ms Vo lived with her parents, and not at the Property O property, for the whole of her relationship with Mr Tang. The rule in Browne v Dunn (1893) 6 R 67, on one view, would require the court to accept that evidence. However, Browne v Dunn does not actually require all evidence to be challenged in cross-examination, if it is apparent from affidavits and so on that the point in issue is disputed. Consequently, the court must assess all of the evidence in the case, and reach its conclusion accordingly.
It is clear in this case that some people are not telling the truth about whether Mr Tang and Ms Vo lived together. This is not a case where someone might be simply mistaken.
Mr Tang was not an entirely honest witness. He failed to disclose assets on the basis that he acquired them after separation. That is beside the point.
Moreover, he was very unimpressive in the witness box. He was often vague and was generally unconvincing. In addition, while he initially said that Ms Vo lived throughout the relationship at the Property O property, he said in cross examination that Ms Vo sometimes stayed at her mother’s house to keep her mother company after her father passed away. He later said that, throughout the alleged period of cohabitation, Ms Vo stayed once or twice per week at her mother’s house.
When cross-examined about the alleged contribution to Property O and Property C sourced from his brother, Mr Tang initially claimed that he had produced bank statements showing that he had received that money. However, when pressed, he conceded that he had only produced bank statements showing the money in his brother’s account. Mr Tang had no bank records or receipts or written agreements in relation to those alleged payments totalling $75,000. This is implausible.
Mr Tang also claimed for the first time in the witness box that he had lent Ms Vo $5,000. He said he had not mentioned it in his affidavit because he had just thought of it and had just remembered. However, he was initially unable to remember when he lent her the $5,000, but later said it was in 2009. This is implausible.
Mr Tang claimed to have $15,000 in savings at the commencement of the relationship but he did not have a bank statement to establish that. It is implausible that he would have had such an amount of money in cash.
Mr Tang also claimed that he paid Ms Vo $800 per month as his contribution to the mortgage, which she paid, but he did not know how much the mortgage cost per month. This state of knowledge is more consistent with a rental agreement. In fact, the mortgage was $1,900 per month. If Mr Tang had been a joint owner, it is likely that he would have paid half the mortgage, or $950 per month, or at least have had an explanation for not doing so. The fact that he did not is suggestive of a tenancy, rather than joint ownership and cohabitation.
There were a number of problems with the evidence of Mr Tang’s parents. Most importantly, they did not actually say in their affidavit evidence that Mr Tang and Ms Vo lived together.
Similarly, Mr Tang’s brother did not say in his affidavit that Mr Tang and Ms Vo lived together. He only said that they “started moving in together”. The claims about the brother lending $40,000 and giving $35,000 to Mr Tang were not supported by Mr Tang’s bank records. There is nothing to show money moving from the brother’s account to Mr Tang’s account, or any other contemporaneous, written record of the alleged transactions. I find these claims implausible.
The evidence that Mr Tang’s family members gave about renovating the Property O property is consistent with Mr Tang and Ms Vo being in a stable and ongoing relationship, that did not extend to them actually living together.
Mr Tang’s initial closing oral submissions were that either Mr Tang and Ms Vo lived together, or, alternatively, that they were in a de facto relationship because they were dating and Mr Tang was renting Ms Vo’s house. It was only when the court made it clear that the second limb of that submission was not tenable that Mr Tang’s submissions changed to rely only on the first limb. That shift in position detracts from the credibility of Mr Tang’s claims.
Ms Vo was also a financially dishonest witness. On her own admission, she made “mistakes” in her tax returns and made false statements to the State revenue authorities and her insurer.
Nevertheless, there is one item of completely disinterested and documented evidence in this case. That is the records showing that Ms Vo gave her bank Property L as her address for correspondence throughout the period of her relationship with Mr Tang. The documents to this effect are contemporaneous, third party records. It is possible that Ms Vo simply failed to update her address with her bank. However, otherwise, there was no reason for Ms Vo to have not given her correct address to the bank. It gave her no advantage. It is rational, in all the circumstances of this case, to give weight to those records.
On the other hand, there was an advantage to Ms Vo in lying to the State Revenue Office, the administrators of the first homeowners’ grant scheme and her insurer about her address. By claiming to live at Property O, Ms Vo obtained a stamp duty exemption, a first home owners grant and reduced insurance premiums, none of which she was entitled to. Ms Vo demonstrated a remarkably cavalier attitude to her misrepresentations. That attitude supports the view that she lied about her address being Property O.
Taking into account all of the evidence in this case, I consider, on the balance of probabilities, that Ms Vo did live during the period 2011 to 2014 at Property L and she did not live with Mr Tang at any time. I consider that she sometimes stayed over at Property O with Mr Tang but did not live there or anywhere else with him.
I consider on the balance of probabilities that Ms Vo did rent Property O to Mr Tang, from the time she bought that property until they separated. I consider that she lied to the court when she said during cross-examination that she lived in that property for the first few months. She lied because she wished to hide the fact that she had defrauded the State of Victoria.
I consider that Ms Vo included in her tax returns the amount that
Mr Tang should have paid her in rent, rather than the amount that he actually paid. This was not a fraud on the revenue, because, if anything, Ms Vo understated the amount of her income tax deductions.
Mr Tang’s payment of the utilities, which Ms Vo conceded, is consistent with him renting the property. I accept Ms Vo’s claim that her text message about council rates was not an acknowledgement that Mr Tang had paid them, but a statement of what he would have paid if he had been a joint owner. Her evidence on this point strikes me as plausible.
Mr Tang’s explanation for not being on title is not plausible. He claimed that it was “the most practical solution to get a loan approved”. However, if he had really contributed as much as he claimed, I am not persuaded that a bank would have baulked at him being on title. In the alternative, even in a domestic situation as this was, it would be reasonable to expect that there would have been some bank record of the alleged payments from Mr Tang’s brother or Ms Vo would have given some written statement acknowledging the payments made by Mr Tang’s brother on behalf of Mr Tang.
For these reasons, I do not accept that Mr Tang and Ms Vo lived together at any time. Consequently, as discussed above, they were not a de facto couple. Accordingly, the application must be dismissed.
I will direct that the Registrar refer the matter to the State Revenue Office for investigation of Ms Vo’s possible fraud in relation to stamp duty and the first homeowners’ grant scheme. I will not refer the issue about the fraud on Ms Vo’s insurers because it is a relatively small amount of money, it is historical and I doubt that they would be interested. I do not consider that there was a fraud on the Commonwealth revenue, so I will not refer the taxation issues for investigation.
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of Judge Riley
Date: 19 April 2016
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