Tindall & Vendric
[2022] FedCFamC2F 1504
Federal Circuit and Family Court of Australia
(DIVISION 2)
Tindall & Vendric [2022] FedCFamC2F 1504
File number(s): PAC3787 of 2019 Judgment of: JUDGE OBRADOVIC Date of judgment: 10 November 2022 Catchwords: FAMILY LAW – Property – whether an equitable interest in property exists – whether property is held on constructive trust – adjustment of property interests –assessment of contributions – just and equitable. Legislation: Family Law Act 1975 (Cth) ss.75, 78, 79 Cases cited: Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd [2015] FCAFC 23
Australian Workers' Union v Leighton Contractors Pty Limited [2013] FCAFC 4
1 Awad v Awad NSWSC 385
Bevan & Bevan [2013] FamCAFC 116
Chapman & Chapman [2014] FamCAFC 91
Crabtree-Vickers Pty. Ltd. v Australian Direct Mail Advertising & Addressing Co. Pty. Ltd. [1975] HCA 49
Daniel Terry Behman v Tarek Behman (also known as Terry Behman) [2015] NSWSC 1787
Dare v Pulham [1982] HCA 70
Gilchrist & Gilchrist & Anor[2009] FamCAFC 199
Gissing v Gissing [1970] UKHL 3
Guimelli v Guimelli [199] HCA 10
Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188
Hickey & Hickey & Anor [2003] FamCA 395
Hohol v Hohol (1980) FLC 90-824
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – Western Australian Branch [1992] FCA 856
Khalif & Khalif [2021] FamCAFC 123
Muschinski v Dodds [1985] HCA 78
Rasmussen v Rasmussen [1995] 1 VR 613
Russell & Russell [1999] FamCA 1875
Scott & Danton [2014] FamCAFC 203
Shepherd v Doolan & Ors; Shepherd v Doolan & Anor; Estate of Doolan [2005] NSWSC 42
Silvia (Trustee) v Williams [2018] FCAFC 194
Stanford & Stanford [2012] HCA 52
Teal & Teal [2010] FamCAFC 12
Trower & Kirwan [2022] FedCFamC2F 1230
Watson v Foxman (1995) 49 NSWLR 315
Zubcic & Zubcic [2018] FamCA 129
Division: Division 2 Family Law Number of paragraphs: 202 Date of last submission/s: 7 December 2021 Date of hearing: 11, 12 and 19 October 2021 Place: Parramatta Counsel for the Applicant: Mr Breeze Solicitors for the Applicant: Prime Lawyers Appearing for the First Respondent: In person Appearing for the Second Respondent: In person Appearing for the Third Respondent: In person ORDERS
PAC 3787 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR TINDALL
Applicant
AND: MS VENDRIC
First Respondent
MR VENDRIC
Second Respondent
MS B VENDRIC
Third Respondent
order made by:
JUDGE OBRADOVIC
DATE OF ORDER:
10 November 2022
THE COURT ORDERS THAT:
Pursuant to section 90XT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”), whenever a splittable payment becomes payable in respect of the Applicant Husband's interest in the Super Fund C, D Pty Ltd, the trustee of the Super Fund C ("the Trustee"), shall pay to the First Respondent Wife the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) using a base amount of $13,382 of the Husband's entitlement as a member of the Super Fund C as at the operative time, and there should be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these Orders.
The Trustee of the Super Fund C do all such acts and things and sign all such documents as may be necessary to calculate, in accordance with the requirements of the Act and the Regulations, the entitlement awarded to the Wife in Order 1.
The operative time for Orders 1 and 2 is 4 business days after service of a certified sealed copy of these Orders upon the Trustee, at which time these Orders shall have effect.
Having been accorded procedural fairness in relation to the making of these Orders, Orders 1 to 3 shall bind the Trustee.
The Wife and Husband do all acts and things and sign all necessary documents to close any bank accounts in their joint names with the balance to be divided equally between them.
Subject to any other order to the contrary, the Husband and the Wife be solely, legally and beneficially entitled to the exclusion of the other, to all real and personal property and resources (including superannuation) of whatsoever nature and kind as in their respective ownership, possession and/or control as at the date of these Orders, or to which he or she may become entitled after the making of these Orders including but not limited to money on deposit, shareholdings, insurance policies, motor vehicles and personal effects.
Except as otherwise provided for herein, from the date of these Orders, the Husband do all acts and things necessary to indemnify, and keep indemnified, the Wife from and against all liabilities of the Husband including, but not limited to:
(a)all liabilities including claims, actions, suits or demands of whatsoever nature arising out of, or in connection with, the Husband’s interest in any business or real property;
(b)taxation (including CGT); and
(c)duties (including stamp duty);
whether past, present or future.
Except as otherwise provided for herein, from the date of these Orders, the Wife do all acts and things necessary to indemnify, and keep indemnified, the Husband from and against all liabilities of the Wife including, but not limited to:
(a)all liabilities including claims, actions, suits or demands of whatsoever nature arising out of, or in connection with, the Wife’s interest in any business or real property;
(b)taxation (including CGT); and
(c)duties (including stamp duty);
whether past, present or future.
Within 7 days, the Second and Third Respondents do all acts and things and sign all necessary documents to transfer to the Wife, the sum of $16,000 currently held by them on behalf of the Husband and the Wife.
In the event that any party refuses or neglects to execute any deed or instrument, the Registrar of the Federal Circuit and Family Court of Australia at Parramatta is appointed pursuant to section 106A of the Act to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
THE COURT FURTHER ORDERS THAT:
The Respondents are to file and serve any evidence and written submissions in respect of costs by 4pm on 8 December 2022.
The Applicant is to file and serve any evidence and written submissions in respect of costs by 4pm on 5 January 2023.
The Respondents are to file and serve any submissions in reply by 4pm on 19 January 2023.
Unless the parties object, the Court is to deal with the issue of costs on the papers and judgment will be reserved to be delivered on a date to be advised.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Tindall & Vendric has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC:
These are reasons for judgment in respect of an application for property adjustment orders sought by Mr Tindall, the applicant (“husband”). The respondents to the application are the applicant’s former wife, Ms Vendric (“wife”), the first respondent, and her parents Mr Vendric (“Mr Vendric”) and Ms B Vendric (“Ms B Vendric”), the second and third respondents respectively.
The Court acknowledges that the parties have had a long wait for the determination of their property dispute, and the angst that the delay must have caused them. For that, the Court apologises.
In a nutshell
The husband and wife (collectively “spouses”) began cohabitation in April 2010. They have one child together, X, who was born in 2017. The spouses separated on a final basis in March 2018. They were divorced in September 2019.
In May 2011, Mr and Ms B Vendric, the wife’s parents, (collectively “parents”) purchased the property located at E Street, Suburb F (“E Street, Suburb F Property”). At all material times they have been and remain the legal owners of the property.
An arrangement was agreed to by the parties in or around May 2011 that the husband and wife would live in the E Street, Suburb F Property and make regular payments pursuant to that arrangement. How these payments are to be classified and what their purpose was is in dispute.
It is not in dispute that at the time of purchase of the E Street, Suburb F Property, the parents paid the deposit as well as the associated costs of purchase, such as stamp duty and conveyance costs. It is also not in dispute that the loan used to pay for the balance of the purchase price was taken out by the parents, and that they are the mortgagors and remain liable for the loan repayments. It is not in dispute that the spouses did not make any financial contributions towards the E Street, Suburb F Property at the time of purchase.
The spouses moved into the E Street, Suburb F Property in August 2011. They purchased various household items and there was work which was carried out on the property. Between August 2011 and April 2012, the spouses lived in the property and after a separation of many months, resumed living in the property from April 2013 until final separation in March 2018.
During the time they lived in the E Street, Suburb F Property, the spouses made payments to the parents. The amount appears to have varied, but was on average $500 per week. However, the payments were not always made regularly, and there were periods when no payments were made.
The husband claims that he and the wife hold an equitable interest in the property by reason of representations being made by and on behalf of the parents, and the husband relying on those representations to his detriment; by way of constructive trust consequent upon the payments made by them during the time they resided in the property as well as some improvements made to the property. The husband claims that the parties agreed that the spouses would be entitled to all of the equity in the property upon its sale, as well as any moneys which were held by the parents on their behalf as “savings”.
The wife and the parents deny that a constructive trust arises, and say that the husband’s application for a declaration of trust should be dismissed.
Other than the E Street, Suburb F Property (which is in contention) the pool consists mostly of superannuation, but there are also motor vehicles, some savings and household contents.
Procedural Matters
Proceedings for both property and parenting orders were commenced by the husband in August 2019.
On 21 October 2019, the husband was directed to file and serve Points of Claim, in relation to the claims he made against the second and third respondents. He did not do so, although an attempt at filing had been made.
It appears however, that a document was at least served on the respondents on or about 2 December 2019, because each of them filed an affidavit annexing their Points of Defence in early 2020.
On 28 May 2020, the husband was granted leave to file and serve an amended Points of Claim within 28 days. He did not do so.
Instead, on 16 September 2020, the husband’s solicitor swore and filed an affidavit, annexing the amended Points of Claim. While it is most unfortunate that the Court’s order for the filing of pleadings have not been complied with, in the interests of justice, the Court has in this instance taken a pragmatic approach to such failures and not treated them as fatal to the applicant’s case.
The amended Points of Claim, were further sought to be amended, without leave having been obtained, through the written submissions[1] which were made at the conclusion of the proceedings.
[1] Filed 10 November 2021
Litigation is to be conducted in an orderly fashion. It is not a process of unearthing the issues through the trial; the ambit of the dispute, the issues and the basis upon which the claim is made ought to be clear at the commencement of the hearing, particularly where parties have been directed to file pleadings and where evidence in chief is by way of affidavit.
In a recent judgment of another judge of this Court it was noted as follows[2]:
[140] As was pointed out by French CJ in Aon Risk Management Limited v Australian National University courts have an obligation to ensure that the litigation coming before them is transed effectively and efficiently, not only in the interests of the individual parties concerned but also in the interests of other litigants and users of the court, whose cases are inevitably affected by how other cases in the system are managed. His Honour said as follows:
...the adversarial system has been qualified by changing practices in the courts directed to the reduction of costs and delay and the realisation that the courts are concerned not only with justice between the parties, which remains their priority, but also with the public interest in the proper and efficient use of public resources.
[141] In the case, French CJ also noted that courts have the inherent authority to control their processes and prevent their application in a way which would be unfair to a party or would otherwise bring the administration of justice into disrepute among right-thinking people...
(citations omitted)
[2] Trower & Kirwan [2022] FedCFamC2F 1230 at [140]-[141] per Judge Brown
The High Court examined the issue of pleadings and whether parties are bound by them in Dare v Pulham[3]. The High Court held that if facts change based on evidence adduced during trial that they should not be prevented from relying on such evidence and should be able to seek relief which the evidence provides, so long as it is “founded on the pleadings” In Gilchrist & Gilchrist & Anor[4], the Full Court of the then Family Court of Australia followed the High Court in Dare v Pulham, holding that relief sought is to be founded on the pleadings, unless the parties have chosen to disregard the pleadings.
[3] [1982] HCA 70
[4] [2009] FamCAFC 199
Proceedings under the Family Law Act 1975 (Cth) (“the Act”) are not subject to strict pleadings. The respondents did not suggest any prejudice in their respective written submissions in reply in respect of the further amended Points of Claim. The further amendments to the Points of Claim simply clarify the particulars and as such the Court has ultimately treated the Points of Claim annexed to the applicant’s written submissions as the applicant’s case (“POC”).
The husband is bound by the way that his case was pleaded, and in this regard the pleadings which the applicant is held to are the POC annexed to the husband’s written submissions filed 10 November 2021.
The respondents are taken to have continued to rely on their Points of Defences (“POD”) as referred to at [14] above.
The matter was originally listed for hearing in respect of both property and parenting on 8 and 9 February 2021, as a reserve. Final Parenting Orders were made by consent on the day, and the matter was otherwise not reached. The property aspect of the proceedings was then listed for hearing on 11 and 12 October 2021, but was not completed within that time frame. A third day of hearing occurred on 19 October 2021, and the proceedings concluded with written submissions ultimately being filed.
Relevant Legal Principles
Property Adjustment
The overall approach to the determination of an application for property adjustment orders pursuant to s.79 of the Act was set out by the High Court in Stanford & Stanford.[5] Such approach was subsequently considered by the Full Court of the then Family Court in Bevan & Bevan[6], Chapman & Chapman[7] and Scott & Danton.[8]
[5] [2012] HCA 52 (“Stanford”)
[6] [2013] FamCAFC 116 (“Bevan”)
[7] [2014] FamCAFC 91 (“Chapman”)
[8] [2014] FamCAFC 203 (“Scott”)
Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.
The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[9]
[9] Russell & Russell [1999] FamCA 1875; Teal & Teal [2010] FamCAFC 120
The just and equitable requirement is “one permeating the entire process”. [10]
[10] Bevan at [86]
The “preferred” approach to the determination of an application under s.79 of the Act remains the well-known four-step approach; namely:[11]
(a) Firstly, making findings as to the identity and value of the property, liabilities and financial resources of the parties as at the date of the hearing.
(b) Secondly, the Court identifying and assessing the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c), and determining the contribution-based entitlements of the parties expressed as a percentage of the net value of the parties’ property.
(c) Thirdly, identifying and assessing the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g) including, as a result of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant, and determining the adjustment (if any) that should be made to the contribution-based entitlements of the parties established at step two above.
(d) Fourthly, considering the effect of those findings and determinations, resolving what order is just and equitable in all the circumstances of the case.
Constructive Trusts
[11] Hickey & Hickey & Anor [2003] FamCA 395 at [39] cited in Halstron & Halstron [2022] FedCFamC1A 65 at [29]
In Khalif & Khalif[12]the Full Court of the then Family Court of Australia referred to the requirements for the establishment of a common intention constructive trust, in summary:
(a) The essential elements of a common intention constructive trust are[13]:
(i)That the parties formed a common intention as to the ownership of the beneficial interest. This will usually be formed at the time of the transaction and may be inferred as a matter of fact from the words or conduct of the parties;
(i)That the party claiming a beneficial interest must show that he, or she, has acted to his, or her, detriment; and
(ii)That it would be a fraud on the claimant for the other party to assert that the claimant had no beneficial interest in the property.
(b) Once the trust is established, the interest arising under it will be to the extent that the parties are inferred to have intended;[14] and
(c) The common intention of the parties is a question of fact, and proof of same which are evidentiary matters, may be direct by means of express agreement or it may be implied from conduct.[15]
[12] [2021] FamCAFC 123 (“Khalif”)at [7]–[14]
[13] Hohol v Hohol [1981] VR 221; (1980) FLC 90-824 at 75,205
[14] Gissing v Gissing [1970] UKHL 3; [1971] AC 886 at 908
[15] Silvia (Trustee) v Williams [2018] FCAFC 194 at [16]
As noted in Khalif[16], in Rasmussen v Rasmussen[17], Coldrey J said to similar effect:
… In determining whether there is a common intention that a claimant was to have a beneficial interest in the property the court will look firstly for direct evidence of any express communications between the parties or the making of admissions by them. In addition, the common intention may be inferred from the conduct of the parties, for example, contributions to the cost of the property claimed or its maintenance. Such conduct is also of factual importance in determining whether a claimant has acted to his or her detriment. However, what is to be enforced is an actual intention inferred as a matter of fact…
[16] Khalif at [11]
[17] [1995] 1 VR 613 at [615]
In the Supreme Court of New South Wales, the applicable principles for the establishment of a constructive trust have been summarised as follows:[18]
[18] In Daniel Terry Behman v Tarek Behman (also known as Terry Behman) [2015] NSWSC 1787 Rein J derived and set out at [33] the relevant principles from the decision of White J (as he then was) in Shepherd v Doolan & Ors; Shepherd v Doolan & Anor; Estate of Doolan [2005] NSWSC 42 (“Shepherd v Doolan”).
1. the inquiry for the purposes of determining whether there was a common intention is inquiry as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons would have intended;
2. the intention need not be that the parties have a specific share of the property;
3. intention may be established by:
1. agreement as to how the property should be held;
2. express statements of intention;
3. intentions inferred from conduct;
4. a common intention that a party have a beneficial interest in a property owned by another will not be inferred merely from their joint occupation of property, nor the carrying out of household duties, nor the bringing up of children on the property, nor the doing of repairs, renovations, maintenance, decoration or improvement, nor the provision of furniture;
5. the intentions may be inferred from financial contributions, direct or indirect, to the acquisition of property, including the paying of mortgage or the payment of expenses which free up funds for that purpose. In the case of 'the common intention' constructive trust there is no presumption that the beneficial interest is in proportion with the contribution of the purchase price;
6. declarations about intentions before or at the time of the transaction or so close in time after the transaction as to constitute a part of it can be relied on;
7. a plaintiff must show that he or she acted to his or her detriment in a way referable to the agreement or intention that she have an interest in the property;
8. conduct which is insufficient to establish a common intention as to ownership of the property may be sufficient to constitute relevant actions to the plaintiff's detriment to establish a trust if the common intention is established otherwise;
9. conduct may be both the evidence from which an intention that the plaintiff have a beneficial interest can be inferred and the act of detrimental reliance;
10. equality is equity but that statement can be departed from when the parties make disproportionate contributions to the acquisition of the property;
11. the constructive trust may arise after the acquisition of a property where the common intention is formed at a later time.
(citations omitted)
Importantly, before a constructive trust is imposed, the Court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust.[19]
[19] Guimelli v Guimelli [199] HCA 10 at [10] per Gleeson CJ, McHugh, Gummow and Callinan JJ
The enquiry is to the actual intention (express statements as to intention) or inferred intention (from conduct) of the parties, not imputed by law. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue.[20]
[20] Shepherd v Doolan at [34]
The onus of proof rests on the applicant to prove that he had been inducted to rely on the promises of the respondents, noting that what attracts the equitable principle is not the promise itself but the expectation it creates.[21]
[21] Awad v Awad NSWSC 385 at [40] citing Sackar J in Zupicic and High Court authorities referred to therein
For reasons which are explained, the applicant has not discharged the onus.
However, a constructive trust is also referred to in the jurisprudence as a remedial institution. It is a trust that is imposed by the operation of law, independently of the intention of the parties involved, where it would otherwise be unconscionable for a person’s interest in a property not to be recognised.[22]
[22] Zubcic & Zubcic [2018] FamCA 129 at [189] not disturbed on appeal
In Muschinski v Dodds[23], Deane J stated:
… the rationale of the constructive trust must still be found essentially in its remedial function… the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle…
Such equitable relief by way of constructive trust will only properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use or for the benefit of another.[24]
[23] [1985] HCA 78 at [6] per Deane J
[24] Cited in Zubcic at [190]-[191]
For reasons which are explained, in all of the circumstances of this case, the applicant has not established that equity requires the imposition of a constructive trust in respect of the E Street, Suburb F Property.
Determination and Relevant Findings
As noted above, before the Court is able to determine, whether it is just and equitable to make a property adjustment order it is necessary to start by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.[25]
[25] Stanford at [37]
The primary issue for determination in these proceedings is whether the E Street, Suburb F Property forms part of the pool of assets subject to property adjustment orders.
The applicant seeks a declaration pursuant to s.78 of the Act that Mr Vendric and Ms B Vendric hold their right title and interest in the property “on constructive trust as to 100% of that right, title and interest or as to such percentage as this Honourable Court determines” for the husband and wife in equal shares, subject to the husband and wife “repaying” the parents the costs and expenses “to be assessed following disclosure” incurred by them in purchasing the property or that an equitable charge arises in favour of the husband and wife with respect to such costs and expenses.
While the lack of a valuation of the E Street, Suburb F Property was identified as an issue at the commencement of the proceedings, given the Court’s determination in respect of the pool of assets subject to property adjustment orders, the lack of evidence of current value was ultimately not a relevant matter.
Findings of Fact
The Court has carefully considered the TOC and the POD. The findings of fact reflect the admissions made by the three respondents in their POD.
Furthermore, a Notice to Admit Facts and Authenticity of Documents by the wife was served on the husband on 21 September 2021. The Response to Notice to Admit was served on 5 October 2021. Both documents are attached to the Wife’s Case Outline Document filed 7 October 2021 and were relied upon at hearing. The findings of fact reflect the admissions made by the applicant in that Response.
The findings of fact also reflect any agreed facts and/or uncontested evidence. Where the evidence is contested and relevant, the Court has made relevant findings after weighing up the evidence.
Not all of the evidence in the proceedings has been discussed in these reasons for judgment, and only the relevant factual findings are referred to.
Background
The husband was born in 1980. He is presently 42 years old.
The wife was born in 1986. She is presently 34 years old.
The spouses met in or about 2008 and commenced living together in 2010.
In May 2011, the parents purchased the E Street, Suburb F Property.
On 5 August 2011, the spouses moved into the E Street, Suburb F Property.
The spouses separated in April 2012, while they resumed their relationship in December 2012 they did not recommence living together until April 2013.
The spouses were married in 2015.
There is one child of the spouses’ relationship, X, who was born in 2017.
The spouses separated on a final basis in March 2018. At that time, the husband moved out of the E Street, Suburb F property.
The wife moved out of the E Street, Suburb F Property in October 2019.
Contributions
The spouses commenced living together at a rental unit in Suburb G on 13 April 2010.
At the time of the commencement of the spouses’ cohabitation, the husband was the owner of a property situate at H Street, City J (“H Street, City J property”) and a managed investment account with Bank K (“Bank K shares”).
At the commencement of cohabitation, the parties had the following assets and liabilities:
Ownership Description Wife Motor Vehicle 1 Wife Savings Wife Loan from parents # 1 for $25,500 Wife Loan from parents # 2 for $18,850 Husband Property at H Street, City J, subject to a mortgage Husband Credit Card debt Husband Furniture and household contents Husband Bank K shares Husband Motor Vehicle 2 Husband Motorbike
Between April 2010 and August 2011, the parties equally shared their living and rental expenses.
When the husband sold his property in H Street, City J in August 2011 netting proceeds of $40,865, part of the net proceeds were applied towards the payment of his credit card debt of $18,500 (part of which was said to have accrued during the relationship and the balance prior to the relationship). It is noted that as at April 2010, the husband had a credit card debt of $18,000.[26] He has not explained in his evidence how then a year later, he still had a debt of some $18,000 on his credit card but only $9,000 of that was from pre-cohabitation. It is an assertion (or more properly, an opinion), like many others made in the husband’s evidence that is vague and not properly explained.
[26] The husband conceded as much in his Response to the Notice to Admit Facts
The balance of the net proceeds of sale of the H Street, City J property of approximately $21,500, the husband conceded, was not applied to any joint assets of the spouses including savings, nor towards any debts which the wife had. The balance of the proceeds of sale was used by the husband to purchase a motor vehicle, pay off some debts and other things while he was living separated from the wife. Some of the money was used for a holiday by the spouses in 2013. The husband’s recollection of how the funds were spent was vague and contradictory.
In October 2013, the husband sold $6,600 worth of Bank K shares and a further $11,200 worth of Bank K shares in May 2014. The husband’s oral evidence was that the shares were sold in 2015 (or possibly in 2013 and 2015), for approximately $17,000. This was different to his evidence in chief (and his POC) where he asserted that the shares were sold in or about 2013 netting $17,824.36. To add to the confusion, the husband’s evidence in chief further asserted that the Bank K shares were surrendered in 2015 “so as to make a substantial contribution to the cost of the … wedding”.
The husband said in his oral evidence that the funds from the sale of the shares were utilised for the spouses’ wedding (and/or possibly the wedding ring). The husband’s evidence was most unclear about this. When it was put to the husband that the spouses were engaged in 2013, that is before the May 2014 sale of shares, and that he could not have paid for $12,500 for an engagement ring from the proceeds of sale of the shares, the husband said that he must have used leftover money from the savings from the sale of the H Street, City J property to buy the ring. The husband’s evidence in chief asserted that he used “a further $12,500 of my personal savings to purchase the engagement ring”. It is not in dispute that the husband purchased the engagement ring.
Following the resumption of cohabitation in April 2013, the spouses opened up a joint bank account. The husband’s wages were paid into this account and the wife took on the responsibility of ensuring that the spouses’ financial responsibilities were met.
In July 2015, the spouses obtained a $20,000 loan from the parents to repay a secured loan against the husband’s car.[27]
[27] See also [84] - [86] and [122] of the Reasons.
At the commencement of the spouses’ relationship, the husband was employed as a transport worker and worked a varied schedule from Monday to Friday and occasionally on weekends. He then worked for Mr Vendric, and subsequently returned to transport work.
When X was born, the wife commenced maternity leave and did not return to work for approximately 9 months. The husband also took paternity leave, however for 2 weeks only.
The wife returned to work for 4 days per week when X was approximately 9 months old whilst he attended day care during this time. The parents would assist from time to time to collect X if the wife was unable to.
During the spouses’ relationship, the wife says that she cared for the majority of X’s needs, including bathing, feeding, taking him to medical appointments and social activities. She further says she was responsible for purchasing X’s clothes, toys and other items as required. The husband did however assist the wife on a handful of occasions when X woke during the night and with other tasks.
After the spouses’ separation, the wife says that she has been solely responsible for all aspects of X’s care, save for the time he spends with the husband. Prior to final parenting orders being made by consent on 8 February 2021, the husband was assessed to pay child support in the amount of $95 per week (previously assessed to pay $65 per week). The wife was and is currently responsible for meeting all other costs associated with the care of X when not in the husband’s care.
The husband also claims that he made a number of non-financial contributions including:
(a)Initial renovations to the property including removing wallpaper, painting and removal of rubbish;
(b)Basic house repairs;
(c)Organising kitchen renovation;
(d)Homemaker responsibilities shared with the wife; and
(e)Child caring responsibilities shared with the wife.
These are discussed, as appropriate, later in these Reasons.
At the time of the spouses’ separation, X was approximately 11 months old.
At the time of separation, the husband moved out of the E Street, Suburb F Property and the wife and X continued to live there until October 2019.
From March to around June 2018 the husband spent most weekends with the child and was responsible for the child’s transport. Since about June or July 2018 the child has spent alternate weekends with the husband from Friday afternoon to Sunday afternoon. Final parenting orders were made by consent on 8 February 2021. X continues to live with the wife and spend alternate weekends, and half school holidays with the husband.
The financial arrangements between the wife and the parents
Between the wife and the parents, there existed at all material times, a relationship of financial and general support by the parents towards the wife, irrespective of her relationship with the husband.
This is the context in which the parents purchased the E Street, Suburb F Property.
For example, in 2007, the parents lent the wife some $18,850 for university fees, flights to Country L and car repairs. The Court accepts that the parents paid the wife’s costs of these things, and that she agreed to repay them back such moneys, as and when she could.
Likewise, in about 2009 the wife borrowed money from her parents to purchase a motor vehicle, the Motor Vehicle 1 that she had at the time she and the husband commenced living together. The amount the parents lent her was $25,500.
While these payments were said to be the subject of two separate “Loan Agreements” the documents produced are more akin to an acknowledgement of payment by the parents to the wife and an acknowledgment that the moneys will be repaid when called upon and/or when possible, rather than a legally binding contract.
These types of arrangements are typical of the way the parents assisted the wife. They would pay for things and then she would pay them back. Such an arrangement continued after she commenced living with the husband, for the duration of their relationship and after separation. While the spouses were together, the parents also assisted the husband with similar arrangements – for example, by lending the parties money to purchase a motor vehicle which the husband drove.
The parents provided assistance to the husband and wife during their relationship including but not limited to paying for airfares and travel, contributing towards the wedding, paying various bills, repayment of loans, providing use of cars and equipment, providing the husband with flexible employment, looking after the child including drop-offs and pick-ups, paying for dinners out, paying for the costs of special occasions such as Christmas, and providing flexible rent arrangements.
In or around October 2015, the husband started working at Mr Vendric’s company M for 2 days per week. After 3 months, Mr Vendric gave the husband an option to either work full time for him or to terminate his employment. The husband commenced working fulltime for Mr Vendric’s company with a salary package where the husband received remuneration of $75,000, a phone, and a car.
In or around November 2016, the husband resigned from his employment with Company M.
Before his employment the husband made payments to Mr Vendric towards the car of $350 per fortnight. After he became employed by Company M these payments ceased, as the car formed part of his salary. Once the husband resigned from Company M he recommenced making the $350 payments for the car.
Mr Vendric supported the husband by purchasing him a laptop and printer, introducing him to customers and suppliers, and providing a flexible work environment.
The husband conceded in cross-examination that the parents paid the wife’s mobile phone, home internet, the wife’s car insurance, registration, car maintenance and tolls, and that during the period the wife was on maternity leave that they paid for the spouses’ electricity bills. The husband however asserted that such payments were part of the wife’s salary package with the parents’ business. The assertion that the payments were part of the wife’s salary package was not put to the parents or the wife in cross-examination, and has not been established on the evidence.
The purchase of the E Street, Suburb F Property and the representations and conduct relied upon by the Husband to establish a constructive trust
The four representations
The husband claims[28] that in or around 2010, and prior to the purchase of the property, the wife “suggested” that her parents should be approached to buy a property for the husband and wife, that the parents could claim it as in investment property and that it was not otherwise financially possible for the spouses to purchase a unit (“first representations”).
[28] Being a reference to the POC
The husband claims[29] that the substance of the first representations were discussed by the spouses and by the wife with her parents, later in 2010, and that following such discussions the wife told the husband that her parents had “agreed in substance of the first representations”, in that they agreed to:
(a)Buy a property for the couple, such property to be held in the names of the second and third respondents;
(b)To finance such purchase by entering into a mortgage linked to an offset account, into which the couple would make payments as they were able, so as to reduce the payments to be made;
(c)All payment of water and council rates, insurance capital expenditure and body corporate fees were to be paid by the couple; and
(d)Pursuant to such arrangement, any profit would be to the benefit of the couple.
(“second representations”).
[29] POC
The husband further claims[30] that later in 2010, and prior to the purchase of the E Street, Suburb F Property, the wife said to the husband:
(a)That he need not be concerned that his name was not on any property bought, as he could trust her and her family;
(b)That half of the offset account would be his, as would half of any profit derived from the arrangement; and
(c)The more money the couple put into the offset account, the less interest was charged and the more money the couple would save.
(“third representations”)
[30] POC
Lastly, the fourth representations were claimed to have been made following the making of the first, second and third representations, where the spouses and the parents discussed the intended purchase, at which time the husband was said to have again inquired how the couple might benefit from an arrangement in which their name was not on title of any property purchased, to which the parents responded:
(a)Although they would buy the property pursuant to the proposed arrangement, it would in truth be owned by the couple;
(b)They wished to enter into the arrangement to better the couple’s future;
(c)The benefit of the arrangement was that the couple would engage in saving, and would receive the difference between the cost of purchasing the property and its value; and
(d)For example if the cost of purchasing the property was $660,000 and the property purchased had a value of $1m, the couple would benefit by $340,000.
(“fourth representations”)
All of the representations are said to be continuing and to have been made by the wife as actual or ostensible agent of the parents.
Evidence of representations and conduct
The husband asserts that the property was purchased by the parents to assist the spouses as they could not afford to purchase a property on their own. The husband recalls in his Affidavit the wife’s comment that “My parents can buy the place for us and claim it as an investment property”. The husband recalls the wife stating that if they were to relocate, the property would be refinanced and they would retain the profits, which is denied by the wife and the parents. There was also an agreement alleged between the spouses and the parents that the offset account would be treated as the spouses’ savings. The husband claims that he did not understand this arrangement at the time and that he was uncomfortable before proceeding.
The husband provides evidence that his uneasiness over this decision was because he believed that by not having his name on any of the property documents was putting the spouses “at risk”. He says this fear was ultimately alleviated by the wife’s reassurance that this was a good financial decision, because the husband “trusted her judgement” as she “was an accountant”.
The husband claims that the wife would often reassure him saying:
You can trust me and my family…
The offset account is our savings account.
You will always be entitled to your half of the savings in the offset account and the equity in the property.
We don’t have to pay the amount regularly but the more we pay, the less interest is charged and the more we save.
The husband says that when he voiced his concerns with the parents, they responded by assuring him that he and the wife would reap any capital growth from the property.
You both will get a chance to save some money and earn equity so you can buy your own place down the track. We will give you and [Ms Vendric] the difference between our costs and the value. If the property values at a Million and our costs are $660,000, you and [Ms Vendric] get $340,000.
The husband says that he subsequently agreed to use this offset account as their savings “as it made sense to also reap the benefit of reducing the loan”.
The wife on the other hand says that it was in or around 2008 that her parents first started discussing with her the purchase of an investment property by the parents, and that the discussions were about the type of property they were thinking about buying and its location.
She further says that in the second half of 2010, she had a conversation with her parents during which Mr Vendric said:
When we buy an investment property, you should live in it. You work in the city so it makes sense and I would prefer to rent the property to a family member then to a stranger. You would pay rent but we could charge you a discounted rate. That means that you could live somewhere nicer than where you are living in [Suburb G].
In 2017, the husband and wife began looking for a property of their own to purchase. The property which they were interested in was located in Town N and valued at $1.2 million. Mr Vendric recalls that this occurred on several occasions, where the husband and wife sought to purchase their “own property”, however nothing ever eventuated.
Around this time, the wife approached Ms B Vendric to see if she could assist with the purchase of the property. Ms B Vendric was not in a position to provide an answer due to a number of factors including but not limited to, her back operation, the prospect of being made redundant at her work, and the amount of assistance that would need to also be provided to Mr Vendric and Ms B Vendric’s son, Mr O (“Mr O ”).
In Mr Vendric’s evidence, he says that he cannot recall any conversations he had with either the husband or the wife about gifting them the property. He however deposed that the assistance he would be able to provide would be dependent on the “economic profit” of the E Street, Suburb F Property. “Economic profit” is defined by Mr Vendric as being the profit that would be obtained from selling the property once all expenses, including the loan, any renovations etc., had been deducted from the sale price, with the left over amount being the “economic profit”. In this way, Mr Vendric says that he would have only been able to assist the wife and the husband with 50% of any profit. Mr Vendric goes further and says the size of the 50% of the economic profit would also be influenced by other things including, the fact he would also need to provide the same level of assistance to Mr O.
Both Mr and Ms B Vendric denied that they had any conversation with the wife or husband before purchasing the property suggesting that they would be given the “equity” in the property or that it was a gift for them. Mr Vendric denies that he told either the husband or the wife that the property was theirs. Mr Vendric also denies that he told the spouses that they were paying the mortgage.
The property was purchased by the parents on 16 May 2011 for $636,000, who paid a deposit of 10% at the time of purchase. Mr and Ms B Vendric also spent an additional $33,182 on the property to pay for costs of purchase including, stamp duty, government charges and legal fees. All these purchase costs were paid by Mr and Ms B Vendric.
It is both Mr and Ms B Vendric’s evidence that the property was purchased as an investment. They say that they were getting older, and had various health issues, and that they decided that they needed to purchase a property in order to financially secure themselves for their retirement.
Mr Vendric decided to rent the property to his daughter in order to assist her, as she was living in a “very run down and dirty” apartment in Suburb G at the time. He offered the property to rent at $500 per week, which was below the market rate of $510-$550 per week.[31]
[31] The parents’ evidence includes a rental appraisal.
The parents concede that there was no written rental agreement in place, but they contend that there was an oral agreement between themselves and the wife for the payment of $500 per week in rent.
The husband says in his evidence that he and the wife agreed to pay the sum of $600 per week into the offset account. The husband says that he would transfer $250 to $300 per week to the wife, depending on his income at the time, who then transferred the full amount into the offset account.
The wife says that the parents permitted the spouses to live in the property, on the basis that rent and utilities were paid to them.
Renovations
In or around July 2011, the parents commenced renovations on the E Street, Suburb F Property. They were aided with these works by their son, Mr O, as well as the wife. Mr Vendric says that the renovations were completed over a period of 4 months and that substantial renovations were conducted including renovating the bathroom and replacing the flooring. The cost of the renovations were approximately $30,000.
Over this 4 month period, Mr Vendric says that he travelled from his home in the Region P to the property at 6am and would leave to return home between 6pm and 7pm, most nights. Mr Vendric says that the husband “would not move a finger” and “never offered any help”. Mr Vendric also recalls the husband saying “this is not my apartment, so it’s not my problem to deal with it, leave me alone”. Mr Vendric says during the bathroom renovations he travelled every day to the property to “watch over the tradesmen” and that the husband “did not assist”. The Court accepts Mr Vendric’s evidence as to the minimal input by the husband.
The husband asserted in his evidence in chief that:
The [E Street, Suburb F] property was purchased in or about May 2011… We then renovated the Bathroom, replaced floor coverings and blinds and we re-painted the entire apartment. [Ms Vendric] and I moved in to the [E Street, Suburb F] property in August 2011.
The impression from this paragraph is that the spouses did the renovation work mentioned and that it was done after purchase but before they moved into the property. It became clear during the husband’s cross-examination that:
(a)Mr Vendric repainted the whole apartment, and that the husband’s entire involvement consisted of “helping a couple of times with regards to removing wallpaper and sanding of some cupboards and internal parts”;
(b)The spouses did not purchase any materials to renovate the property, such costs were met by the parents;
(c)Contractors, who were paid by the parents, renovated the bathroom. The wife chose a lot of the interiors for the bathroom, the fittings and liaised with different plumbers and electricians, and organised the insulation and the husband personally did none of the work or the organisation associated with having the work done. The bathroom renovation was conducted in 2013;
(d)The floor coverings were replaced sometime after the spouses moved into the property, and were done around the same time as the blinds; and
(e)The painting was done before the spouses moved into the property in August 2011.
The husband further claims that he made a number renovations and improvements to the property, without consulting with the parents. These renovations included:
(a)The purchase and installation of an air-conditioner on 1 March 2017;
(b)The purchase and installation of a new hot water system on 20 September 2018; and
(c)The purchase and installation of a new dishwasher.
Mr Vendric agrees that this work was done without his knowledge or authority.
Payments
The parents say that the wife would pay the rent directly into their account. Any “excess funds” which may have been paid into the account would then be used to build up “savings” with them to ensure that money was available for any ongoing expenses. In addition, those excess funds would be used to reimburse the parents for anything they had paid for, for either the husband or the wife. Any funds which remained after all expenses had been met would be considered the wife’s and the husband’s “savings”.
The wife says that an arrangement existed between the spouses and the parents whereby they would pay rent, utility or other expense payments by way of bank transfer to the parents’ account. The wife says that if the payments which her and the husband made exceeded the amount that was owed to the parents this would be considered a “surplus” and would then be treated as the spouses’ “savings”. These “savings” would then be used as an “offset” against “other expenses [the parents] met for us at some later date”.
It is the wife’s evidence that any fixtures or additions to the property were paid in lieu of rent. The wife claims that the purchase of a dishwasher, air-conditioner and hot water system were offset against what was owed to the parents in rental and other expenses. The wife states that the same was true for the 9 occasions which they paid council and water rates, totalling $1,884.
The wife states that she had an agreement with the husband where he would pay her $250 per week which was to cover “his share of the rent”. The husband’s payments would often be more than $250 as he would also be paying a portion of the utilities and other living expenses. The wife would then transfer these funds to the parents describing the payments as “mortgage”, “home loan” or “home deposit”. However, the wife denies that she ever thought that her or the husband owned the property, but rather used these words to describe what the parents would use these funds for.
During the spouses’ separation in 2012 the wife says that a friend moved in with her from June 2012 to February 2013. The wife’s friend paid the same amount in rent as the husband was previously paying, being $250 per week.
On 22 July 2015, the parents loaned $20,000 to the parties in order to repay a loan of $18,000 for the husband’s car. This loan was repaid on 6 August 2015. Further, the wife states that Mr Vendric purchased a Motor Vehicle 3 for the husband to drive. The wife says the husband paid Mr Vendric $350 per week for the use of the car up until the husband took a job with him. Once the husband resigned from this position, in December 2016, he began making repayments once more in the amount of $400 per week. Once the spouses separated on a final basis the car was returned to the Mr Vendric. The wife says the total payments made on the car were $8,900. The husband makes no claim in respect of that car.
The husband made further payments to the parents from December 2016 to March 2017 in the amount of $15,575 which were described as “rent phone car” or “rent car phone”, to cover expenses which the parents had paid for the husband, being a combination of the rent, his phone bill, and the car repayments.
Between March 2017 and January 2018, the spouses did not make many payments to the parents. In that period they only paid $4,500, with the rest of the rent owed being drawn down from “their savings”.
Ms B Vendric says that the $255,680 which was paid by the husband and wife from August 2011 to March 2018, made up of the following:
(a)$172,000 was applied towards rent; (344 weeks @$500 per week);
(b)$4,270 for internet bills; ($60 per month);
(c)$6,910 for Ms Vendric's mobile phone expenses; ($89.95 per month);
(d)$2,192 for Mr Tindall's mobile phone expenses; ($139 per month);
(e)$12,546 for Ms Vendric's Motor Vehicle 1 expenses (incl servicing, registration and maintenance);
(f)$9,653 for Motor Vehicle 3 motor vehicle expenses (including servicing and registration);
(g)$1,670 for road tolls expenses;
(h)$14,425 for household furniture;
(i)$2,859 for refund to Ms Vendric for Couch;
(j)$2,365 for electricity bills; and
(k)$20,000 for a short-term car loan, which allowed Mr Tindall to repay debt he had on his car.
The wife says that over the course of the relationship the spouses paid the parents $252,821, being broken down in the following way:
(a)$172,500 for rent of the E Street, Suburb F property;
(b)$13,373 for phone and internet expenses;
(c)$11,981 for the Motor Vehicle 1 expenses;
(d)$9,654 for the Motor Vehicle 3 car expenses;
(e)$1,670 for tolls;
(f)$14,425 for household furniture;
(g)$2,365 for electricity;
(h)$20,000 for the loan; and
(i)$15,963 in excess.
The wife states that the parents are holding $15,963 by way of “savings” for the husband and wife.
It was not clarified at the hearing (including through cross-examination) whether the said rent payments took into account the period of time when the husband did not reside in the property. Given that 344 weeks is a period of some 6 and a half years, it appears that it was not taken into account. As such, the husband has been given credit by Ms B Vendric and the wife in her calculations as having made weekly payments during the time he was not living in the property, and when the payments were only made by the wife.
The differences in the wife’s calculations compared to Ms B Vendric’s calculations were not explored in cross-examination. Where the two are in conflict, the Court will give the husband the benefit of the difference. As such, the Court finds that the parents hold $16,000[32] on behalf of the spouses.
[32] Rounded up to the nearest hundred
Between April 2018 and December 2018, the wife did not pay any rent as “she was unable to do so”. Ms B Vendric contends that the amount of unpaid rent and expenses by the wife in this period were $28,572. The wife recommenced paying $550 per week in rent from January 2019 to October 2019.
In October 2019, the wife moved out of the E Street, Suburb F Property and Mr O moved into the property. Mr O is paying $500 per week in rent and is currently residing in the property.
Credit
Due to the nature of this case, evidentiary findings in respect of asserted conduct and representations are very important.
As was observed by McLelland CJ in Eq in Watson v Foxman:[33]
Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances … Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
[33](1995) 49 NSWLR 315 at 318-319, cited in Evans v Braddock [2015] NSWSC 249 at [70]
It is so here in respect of the husband’s evidence in its entirety.
It became clear during the hearing that the husband took poetic licence with his evidence.
At times the husband’s evidence was very vague, at times inconsistent and even outright misleading. An example of such evidence is that referred to at [113] dealing with the renovations to the property, noting the findings at [114].
The husband conceded that his evidence about the renovations was misleading, and that he did none of the work. He explained that he “thought [him]… being part of that house, and being there, and being subject to the whole thing… that [he]... was part of it”.
The husband’s oral evidence went from saying that the reason they moved into the E Street, Suburb F Property in August 2011 was because the wife had an interest in the property[34] (not the spouses) to saying “I recall the electricity bills arriving to the property but they were in your parent’s (sic) name, which I found very odd because we’re the people renting the apartment”[35] when he was asked about paying the electricity bills. His affidavit referred to “us” as having conversations with the parents, but he then conceded that he never discussed such matters with the parents.
[34] T:53 line 33
[35] T:87 line 46
The husband conceded that he did not understand the importance of being accurate and precise in his evidence in chief at the time he swore his trial affidavit, but that while “timeline things could be a little off…” he said that “… most of the rest of the affidavit is pretty accurate”.
Furthermore, noting the vague nature and imprecision of the husband’s evidence in respect of important matters, including matters which could easily have been checked against documents such as bank statements but appear not to have been before they were sworn to, unless the husband’s evidence is corroborated (in respect of contributions, where it is capable of being corroborated), it will be given little weight.
On balance, where the evidence of the husband and that of the respondents conflicts, the Court prefers the evidence of the respondents. This is not only so because of the difficulties with the husband’s evidence which have been identified, but it is also because of the implausibility of some of his assertions in general.
Conclusion as to the Pool and Determination of whether there was a Constructive Trust
The submissions made in the husband’s case that a constructive trust is established by both direct evidence of four sets of representations and circumstantial evidence of the conduct of the parties, is rejected.
The husband’s evidence in respect of the constructive trust was a moving feast.
In essence, the husband’s case was that the moneys which the spouses paid to the parents was to be placed into the parents’ “offset account” – except that there was no “offset account”. The husband then says that such moneys were to be used by the parents to reduce the interest payable on the property but at the same time act as a savings account for the spouses. If his evidence is accepted in this regard, that is all of the moneys the spouses paid was to be kept in this manner by the parents, it would mean that the spouses made no direct financial contributions towards the E Street, Suburb F Property whatsoever. Even after the filing of evidence in chief, three days of hearing, and lengthy written submissions, the husband’s case remained confused.
The Four Representations
The representations have not been made out.
On balance the Court finds that the conversations between the parties about the purchase of the E Street, Suburb F Property, and the financial arrangements between the parties were in accordance with the evidence given by the respondents.
The oral evidence of the husband is that bar the one conversation at [20] of the husband’s affidavit filed 7 August 2019, he never actually had any conversations with the parents, and that whatever he understood to have been the arrangement, came from his discussions with the wife.
The Court finds that the conversations which occurred between the parties in respect of the E Street, Suburb F Property were as asserted by the respondents and not as asserted by the husband. That is, the parents wanted to purchase an investment property and did so with their children in mind, and in particular with their daughter in mind. They purchased a property with a view to having the spouses live there in order to assist not only the spouses but also the parents by ensuring that everyone was benefiting. The E Street, Suburb F Property was not bought for the spouses to own or have an interest in, it was bought, in part, for them to live in while being a long term retirement plan for the parents.
The circumstantial evidence and conduct
The Court finds that while the wife did attend properties with Ms B Vendric prior to the purchase of the E Street, Suburb F Property, this was not because the properties which the parents were interested in purchasing were being purchased for the husband and the wife. The parents were in essence, killing two birds with one stone. They were investing in a property for their retirement and at the same time assisting the husband and wife by purchasing a property which the spouses would be happy to live in as tenants. In the dynamics of the Vendric family, there was nothing unusual about the wife taking a keen interest in the property her parents were purchasing.
Likewise can be said of Exhibit 2. It shows the wife’s happy reaction at the purchase of the property because it was a property that she would live in. The parents did not simply purchase any property, they purchased a property with the spouses in mind, to accommodate them and to ensure that they would be happy living there. If anything, this was a contribution by the parents on behalf of the wife.
The wife’s evidence about the references to “mortgage”, “home loan” and “home deposit” on the bank statements is accepted. That is, the Court accepts that these were references made for the benefit of the parents (in order to understand where the moneys were to be directed) and not as a reference to the nature of such payments. That is, the spouses were not paying the mortgage.
Likewise, the fact that the wife obtained appraisals for the property, and put herself out as the owner of the property for the purposes of those appraisals, is not evidence of common intention of the parties as to the ownership of the property. There is no evidence from the husband that he was in any way involved in this process or interested in this process. The Court accepts the wife’s evidence that she was interested in ascertaining what the equity in the property was as this coincided with the representations made by her parents that they might be able to assist the spouses with a purchase of a home of their own once they had some equity in their investment property.
In addition, the fact that the amount transferred to the parents by the spouses exceeded what was allegedly agreed to be paid cannot of itself favour the applicant’s case only, particularly in circumstances where the respondents case is that the overpayment was intended to offset or reimburse the parents for other payments made on the spouses’ behalf.
The arrangement between the husband and the parents in respect of the husband’s car was not of a similar ilk as the constructive trust asserted over the E Street, Suburb F Property. The motor vehicle was never his.
The submission that the various financial arrangements as asserted by the respondents make no logical sense is a submission made through the prism of a particular (perhaps even conservative and/or culturally different) view point of familial arrangements and familial support. It is a submission that fails to appreciate that these particular parents have continued to and will continue to support their children, notwithstanding that they are adults. It may be an unusual arrangement in modern Australian society, but it is not an illogical one.
Agency
Despite pleading an agency by the wife on behalf of the parents, the husband has not established on the evidence that any agency, whether actual or apparent, existed (and indeed these matters were not submitted upon):
(a)Firstly, there is no evidence of actual authority.
(b)Secondly, the jurisprudence[36] is clear that three things need to be established for apparent authority:[37]
(i)A representation was made by an agent, that they had authority to act on the principal’s behalf in entering into the arrangement with a third party;
(ii)The person granting authority to the agent, did so with ‘actual’ authority; and
(iii)The third party was induced by this representation, and in fact relied upon it.
[36] See for example: Crabtree-Vickers Pty. Ltd. v Australian Direct Mail Advertising &Addressing Co. Pty. Ltd. [1975] HCA 49; (1975) 133 CLR 72 (“Crabtree-Vicker”)
[37] Diplock LJ in Freeman & Lockyer (A Firm) v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480 at 502–9; Crabtree-Vickers at [14]; Australian Workers' Union v Leighton Contractors Pty Limited [2013] FCAFC 4 (“AWU v Leighton”) at [92].
It is not sufficient for the agent to simply hold themselves out as having authority to act on behalf of the principal for apparent authority to be established.[38] Rather, apparent authority will only be established where the principal is holding out that the agent is acting with authority, and the third party subsequently relies on that apparent authority.[39]
[38] J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – Western Australian Branch [1992] FCA 856; (1992) 111 ALR 502 at 533-534 per French J
[39] Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd [2015] FCAFC 23 (“Kaizen”) at [95]-[96] (Buchanan and Jagot JJ, Greenwood J agreeing) citing Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 at [36], see further Kaizen at [122].
The third party must then show that they relied on this representation and must establish that there are circumstances which justify this belief, and that the person with which they were dealing with was acting with authority.[40]
[40] Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188 at [79]; AWU v Leighton at [86] (Katzmann J, Dowsett J not deciding, McKerracher J agreeing).
In circumstances where the Court accepts the evidence of the respondents over that of the applicant in respect of alleged conversations, and where the Court has made findings that the husband has not in fact suffered any detriment, the agency which is alleged has not been made out.
Is the E Street, Suburb F Property held on trust for the spouses?
The husband claims that in reliance upon the first to fourth representations:
(a)The spouses re-painted the property at their expense and the parents paid tradesmen to renovate the bathroom and replace floor coverings and blinds, and
(b)The spouses commenced to reside there on August 2011; and
(c)The spouses commenced to pay about $500 to $600 per week into the offset account, of which the applicant paid $250 to $300.
Furthermore, the husband claims that in further reliance upon the first to fourth representations, that he:
(a)Did not seek to purchase a unit with the wife which they could have been able to afford, and thereby did not receive an opportunity to own property which would improve in value;
(b)Sold the H Street, City J Property and applied the proceeds of $40,865.87 to the discharge of debt ($9,000), the payment of living expenses, and the purchase of a motorcycle, in consequence of which he lost the benefit of capital improvement of that property; and
(c)Together with the first respondent paid the water and council rates, insurance, capital expenditure and body corporate fees.
Lastly, the husband claims further detriment by way of arranging and paying for: the installation of an air-conditioner, the expense totalled $5,225; a hot water system, the expense totalled $1,199; and a new dishwasher for which the expense totalled $800.
It is worth repeating at this point that:[41]
The ultimate basis for the imposition of a constructive trust is that it would be unconscionable for the holder of the legal title to the property to assert that he holds it free of any beneficial interest in the claimant. However, although “unconscionability” is the underlying basis upon which equity will intervene, it is not itself a sufficient description of the principles upon which equity does so. Equitable rights do not arise merely because the Court considers it fair in all the proven circumstances that the legal owner of property should hold it, or a portion of it, for the benefit of another.
[41] Shepherd v Doolan at [30]
Likewise, and as noted earlier[42] a common intention that a party have a beneficial interest in a property owned by another will not be inferred merely from their joint occupation of property, nor the carrying out of household duties, nor the bringing up of children on the property, nor the doing of repairs, renovations, maintenance, decoration or improvement, nor the provision of furniture.
[42] See [34] of these Reasons
Despite his assertions as to the renovation work carried out on the property, the husband conceded in his oral evidence that he in fact did not do any of the painting and that it was Mr Vendric who did all of it. He likewise conceded that he did not do any of the renovation work.
In respect of the payments made by the spouses to the parents, the spouses did not always make weekly payments and indeed, took a prolonged holiday from making any weekly payments during the time the wife was on maternity leave. While the spouses were separated, the husband moved out of the property and did not make any payments to the parents for the duration of the time he was not living at the property, which was approximately 12 months.
At the time of the purchase of the E Street, Suburb F Property, the husband had equity in his H Street, City J property of about $40,000 and he had the K shares valued approximately $17,000. Both of the spouses were working. They had reasonable incomes. The spouses carried no risk and suffered no detriment at the time of the purchase.
Even though the husband asserted in his evidence that he was “persuaded” by the wife to sell the H Street, City J property so that they parties could proceed with the idea (set out in the first representation), the husband never actually contributed any funds to the E Street, Suburb F Property from the sale of the H Street, City J property or otherwise. He likewise, did not suggest or press the wife that the funds ought to be put towards a property which the parties purchased themselves. Indeed, there is no evidence on balance that the reason the spouses did not seek to purchase other property was because of the E Street, Suburb F Property. The husband’s evidence as to how the net proceeds of sale were spent did not accord with the POC.
The moneys spent towards the air-conditioner, hot-water system and dishwasher were accounted for (and given credit for) by the parents in their reconciliation of the moneys which the spouses had paid them and which the spouses owed to them. Mr Vendric says that such installations were done without his permission, knowledge or approval, and were only made known to him after the fact.
On a few occasions the wife paid council fees and/or water rates, however these amounts were accounted for as being in lieu of rent for that period.
The husband’s conduct after the alleged promise was inconsistent with a genuine belief in the representations he alleges, which are in any event, not found to have been made as asserted by the husband. If anything, the husband was a disinterested occupant of the property, who benefited from the arrangement between the parties.
The evidence does not establish any detriment to the husband suffered as a result of the arrangement concerning the E Street, Suburb F Property. Indeed, the husband (and the wife) benefited from the arrangement by being afforded a lifestyle that was “lavish”, and the ability for discretionary spending without the worry of loan repayment constraints or a landlord who expected to be paid on time all the time.
The spouses benefited by living in a home they were secure in and had some autonomy about, they benefited by not having to make strict regular payments and having accommodations made for their somewhat lavish lifestyle. They travelled and went on holidays, they had their bills paid by the parents (and then they repaid them at their leisure), and they took payment breaks from time to time without any detriment or without threat of being evicted.
The parents were secure in their investment by having occupants who would ensure that the property was well looked after; it was, after all, their daughter who was living there. They also no doubt benefited emotionally from having the capacity to help their adult child.
The Court finds that the common intention of the parties was not for the spouses to own the property, but simply to live in it. The Court finds that the husband was at times confused by the discussions he had with the wife, and about how the arrangement would work exactly in terms of their “savings”, but the Court does not accept that the husband at any time while the spouses were living in the E Street, Suburb F Property understood or thought that the property was his and the wife’s.
There was never any pressure on the spouses by the parents to pay the rent on time and/or to keep up with the mortgage repayments. It is hard to imagine a third party mortgagee or landlord acting in a similar manner towards the spouses.
If the arrangement had been one as asserted by the husband, one might have expected to see some responsibility being borne by the spouses in respect of the financial liabilities associated with the property. For example, that they would have been aware of the mortgage repayments, and indeed taken responsibility for them, and/or that they would have taken responsibility for most if not all of the costs associated with the property.
The constructive trust asserted by the husband is more akin to a very generous gift than a trust. It is all benefit to the spouses without any risk or detriment.
As E Street, Suburb F Property is property which the parents are the legal and beneficial owners of. The spouses have no equitable or legal interest in that property, including any equitable charge.
The Pool
The evidence establishes that there is some $16,000 held by the parents on behalf of the spouses as “savings”.
It is the wife’s case that since separation she has taken additional loans from her parents, being made up of the following:
(a)$21,450 in back-pay of rent accrued between April 2018 and December 2018;
(b)$23,000 loan for Motor Vehicle 3 dated 4 June 2018;
(c)$15,489 loan for various expenses paid for by the parents on the wife’s behalf after separation to August 2020; and
(d)$20,000 loan for legal expenses dated 18 October 2019.
The Court accepts that moneys is owing in respect of the rent, various expenses and the Motor Vehicle 3, these being of a similar nature as the arrangements during the spouses’ relationship. The loan for the payment of legal costs is not a matter to be included in the balance sheet.
At final hearing, the pool consisted of the following[43]:
[43] The wife’s household contents have not been included in the pool noting the husband’s submission at [60](b) regarding this issue, namely that the wife gave “reasonably cogent evidence about the lack of household contents. It is accepted that the applicant did not lead any cogent evidence about the value of the household contents, and it is open to find that the wife’s value of $0 could be accepted”.
Ownership Description Value Husband Super Fund C $102,212 Husband Bank K account #...61 $472 Husband Bank K account #...72 $21 Husband Motor Vehicle 4 $16,433 Husband Household contents $4,000 Husband Motorbike $8,000 Husband Company L Leasing account #...01 ($16,433) Wife Super Fund M $157,166 Wife Bank K account #...71 $2,629 Wife Motor Vehicle 3 $18,000[44] Wife Diamond Ring $5,000 Parents Funds held on behalf of spouses $16,000 Wife Personal Loan from Mr and Ms B Vendric ($23,000) Wife Funds owing to Mr and Ms B Vendric on account of unpaid rent for the period April 2018 to December 2018 ($21,450)
Wife Funds owing to Mr and Ms B Vendric on account of expenses they have paid on wife’s behalf for the period April 2018 to August 2020 ($15,489) Wife Bank K credit card account #...70 ($254) Total $253,307 [44] The Court accepts the wife’s value. The husband submits that being that it is the wife’s vehicle, she is “probably in a better positon to know its value”.
Assessment as to Contributions
The spouses cohabited from April 2011 to April 2012, and then again from April 2013 to March 2018, which is a total period of about 6 years.
At the commencement of the relationship, the husband had assets which were superior in value to those of the wife.
Until the time of the birth of their only child, both parties worked full-time. After taking maternity leave, the wife returned to employment for 4 days per week.
During the period of cohabitation, the wife’s income was superior to that of the husband. This was balanced by the sale of the husband’s H Street, City J property and Bank K shares, some of which was used to pay off the husband’s pre-cohabitation debts, some utilised for the benefit of the spouses, and some utilised for the benefit of the husband whilst the spouses were separated.
Having regard to the totality of the various contributions made by the parties, their respective contributions are assessed as being slightly in favour of the wife. This is primarily because of her significant post-separation contributions towards the care of their only child.
The overall contributions are assessed as 55% to the wife and 45% to the husband.
Future Needs
The wife continues to be X’s primary carer with the child living with her 12 out of 14 nights per fortnight. The husband pays child support, but only in the assessed amount of $75 per week.
The wife is a type 1 diabetic and is required to wear an insulin pump. She has since re-partnered and is living with her new partner. The wife says all expenses are shared equally between her and her new partner.
The wife works four days per week as a manager and in the financial years ending 2019 and 2020 earnt $82,733 and $112,109 respectively.
The husband works full-time as a transport worker and in 2019 earnt $72,231.
The wife has a superior earning capacity to that of the husband.
There will be a modest adjustment in favour of the wife of 5%.
Overall Adjustment
In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the joint use of property by the parties. The requirement is primarily so satisfied in this instance.
Noting the earlier findings, there will be an overall adjustment in the wife’s favour of 60%.
The total pool is made up of $253,307 worth of assets. The assets the wife currently holds are worth $138,602, namely 54.7% of the pool (the moneys held by the parents are taken for the purposes of this calculation only to be held by the wife), and that the assets the husband currently holds are worth $114,705, namely 45.3% of the pool. Given the property held by the parties, it is only the superannuation that is to be adjusted.
As such, the husband is to receive $101,323, made up as follows:
Ownership Description Value Husband Super Fund C $88,830 Husband Bank K account #...61 $472 Husband Bank K account #...72 $21 Husband Motor Vehicle 4 $16,433 Husband Household contents $4,000 Husband Motorbike $8,000 Husband Company L Leasing account #...01 ($16,433) Total: $101,323
As such, the wife is to receive $142,384, made up as follows:
Ownership Description Value Wife Super Fund M $157,166 Wife Bank K account #...71 $2,629 Wife Motor Vehicle 3 $18,000 Wife Diamond Ring $5,000 Husband Super Fund C $13,382 Parents Funds held on behalf of spouses $16,000 Wife Personal Loan from Mr and Ms B Vendric ($23,000) Wife Funds owing to Mr and Ms B Vendric on account of unpaid rent for the period April 2018 to December 2018 ($21,450)
Wife Funds owing to Mr and Ms B Vendric on account of internet, mobile phone, motor vehicle and toll expenses they have paid on the wife’s behalf for the period April 2018 to August 2020. ($15,489) Wife Bank K credit card account #...70 ($254) Total: $ 151,986 Conclusion
In all of the circumstances, the proposed adjustment and consequential orders are just and equitable.
Further and in respect of any application for costs, orders are made for the filing of evidence and written submissions, and unless there is objection, the issue of costs will be dealt with on the papers.
I certify that the preceding two hundred and two (202) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic. Associate:
Dated: 10 November 2022
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