Yeo and Rambaldi v Arifovic and Anor - [2017] FCCA 604

FEDERAL CIRCUIT COURT OF AUSTRALIA

YEO & RAMBALDI v ARIFOVIC & ANOR

[2017] FCCA 604

Catchwords:
BANKRUPTCY – Trustee’s application for sale of real property purchased solely in bankrupt’s name – de-facto relationship between respondents – pooling of funds after bankrupt’s purchase of property and the application of funds to joint living expenses.

RESULTING TRUST – No evidence to support the existence of a resulting trust.

CONSTRUCTIVE TRUST – Based on common intention – no evidence to support.

CONSTRUCTIVE TRUST – Muschinski v Dodds and Baumgartner v Baumgartner type constructive trust – evidence to support such an equitable interest – examination of complex banking arrangements between bankrupt and his de-facto partner – monetary and non-financial contributions to support an equitable interest to the extent of 32.52% of the value of the net proceeds of sale – balance to the trustees – costs argument held over.

Legislation:

Bankruptcy Act 1966 (Cth), s.77C

Family Law Act 1975 (Cth)
Transfer of Land Act 1958 (Vic), s.89A

Cases cited:

Allen v Snyder [1977] 2 NSWLR 685
Baumgartner v Baumgartner (1987) 164 CLR 137
Calverley v Green (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Gissing v Gissing [1971] AC 886
Grant v Edwards [1986] Ch 638
Green v Green (1989) 17 NSWLR 343
Hibberson v George (1989) 12 Fam LR 725
Hohol v Hohol [1981] VR 221
Miller v Sutherland (1990) 14 Fam LR 416
Muschinski v Dodds (1985) 160 CLR 583
Rasmussen v Rasmussen [1995] 1 VR 613
Read v Nicholls [2004] VSC 66
Shepherd v Doolan [2005] NSWSC 42
Sivritas v Sivritas (2008) 23 VR 349

Applicants:

ANDREW REGINALD YEO & GESS MICHAEL RAMBALDI (AS TRUSTEES OF THE BANKRUPT ESTATE OF BROCK SIMON ARIFOVIC)

First Respondent:

BROCK SIMON ARIFOVIC

Second Respondent:

TARA SUZANNE HOCKING

File Number:

MLG 1141 of 2016

Judgment of:

Judge Wilson

Hearing dates:

12-13 December 2016

1 & 13 February 2017

Date of Last Submission:

13 February 2017

Delivered at:

Melbourne

Date delivered:

29 March 2017

Orders pronounced:

19 April 2017

REPRESENTATION

Counsel for the Applicants:

Mr C Moller

Solicitors for the Applicants:

Macpherson + Kelley

First and Second Respondents in person

ORDERS

The respondents give vacant possession of the property at

32 Pimpala Avenue, Seaford in the State of Victoria (“the property”) to the applicants within 30 days of this order.
The applicants are at liberty to sell the property for such price and in such manner and on such terms as the applicants consider appropriate in their absolute discretion.
The applicants apply the proceeds of sale of the property in the following manner -
(a)first, in payment of all costs, charges, expenses and disbursements in selling the property;
(b)second, in payment of any mortgage or encumbrance over or in respect of the title to the property together with any outstanding rates, taxes, charges or other similar outgoings affecting the property;
(c)third, in payment of the costs of the applicants as ordered by the Court;
(d)fourth, to the second respondent the sum…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FCCA 604
Decision Date: 29 March 2017

CaseChat Overview and Summary

In the matter of *Yeo and Rambaldi v Arifovic and Anor*, heard in the Federal Court of Australia, the dispute concerned an application by the trustees in bankruptcy for the sale of real property registered solely in the name of the bankrupt. The property was acquired during a de facto relationship between the bankrupt and the second respondent. Following the purchase of the property, the parties pooled their funds and applied them towards joint living expenses.

The court was required to determine whether the second respondent held an equitable interest in the property, notwithstanding its sole registration in the bankrupt's name. Specifically, the court considered whether a resulting trust or a constructive trust, of the kind recognised in *Muschinski v Dodds* and *Baumgartner v Baumgartner*, could be established based on the contributions made by the second respondent.

After examining the complex banking arrangements between the bankrupt and the second respondent, and considering both monetary and non-financial contributions, the court found no evidence to support the existence of a resulting trust or a constructive trust based on common intention. However, the court determined that the evidence did support an equitable interest in favour of the second respondent to the extent of 32.52% of the net proceeds of sale of the property, based on the principles applicable to a *Muschinski v Dodds* / *Baumgartner v Baumgartner* type constructive trust. The remaining balance of the net proceeds was to be paid to the trustees in bankruptcy. The issue of costs was reserved.

Orders