Australian Competition and Consumer Commission v Employsure Pty Ltd

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

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. The applicant husband ("the husband") commenced parenting proceedings in this Court on 13 November 2020. On 21 December 2020, the first respondent ("the wife") filed a response raising property orders seeking a split 70:30, as well as parenting issues, and the husband filed a reply on 1 February 2021, relevantly, seeking a split 50:50. In final submissions the father through his counsel Mr Connor confirmed the husband seeks no adjustment under s79. In substance this is because there is no property pool for alteration of interests and any recovery under s106B could not benefit the husband given his role in the alleged instrument or disposition and his dissipation of funds.
2. This is day 5 of the final property hearing, which was heard on the following days 13 September 2023, 14 September 2023, 30 July 2024, 31 July 2024, and 1 August 2024.
3. The husband was initially unrepresented at the commencement of the final property hearing. An order had been made under s 102NA of the Family Law Act 1975 (Cth) ("Act") which entitled him to obtain legal representation, which occurred at the time the matter came back before the Court for day 3 of the property hearing on 30 July 2024. The wife has been represented in the property proceedings by Mr Reeve. The husband's representation from day 3, has been by Mr Connor of counsel.
4. The proceedings acquired an expanded complexity in circumstances relating to an investment property registered in the name of the husband at E Street, Suburb F ("the [Suburb F] property") which was refinanced in early 2022 by the husband, despite an injunction of this Court, he had paid out a number of secured and unsecured creditors and he dissipated the balance of the refinancing proceeds received by him. The wife joined three parties seeking recovery under s106B against the incoming mortgagee as second respondent and seeking a remedy against an individual certifier and that individual's corporate entity under the Australian Consumer Law as fourth and fifth respondents. The second respondent was represented at the hearing by Mr K Geddes KC for the first two days and then Mr M. Young SC for the balance of the hearing. Mr J Neal represented the fourth and fifth respondents.
5. The Suburb F property was acquired by the husband in late 2014 for $1,250,000 with the intention of building a home which was only partially complete at the time these property proceedings were commenced.
6. The husband was born in Country G in 1986, and the wife was born in Country H in 1993. The husband and wife commenced living together in early 2010, the parties married in 2012 and separated on a final basis on 19 September 2019. There are five children of the husband and wife. V, born in 2011, W born in 2013, X born in 2014, Y born in 2016 and Z born in 2017.
7. The husband established a corporate entity, C Pty Ltd, being the third respondent for his business in 2013. That entity is now in liquidation, and although the third respondent in the proceedings, there is a statutory stay of the proceedings against the corporate third respondent as a result of that entity being placed into liquidation. The husband demolished an old house on the Suburb F property over the period 2014/2015 and began construction of two homes on that property.
8. The husband had significant issues in the construction of the proposed homes on the Suburb F property, in relation to financing and creditors as well as issues with the local council. After these proceedings, and a joinder of issues between the husband and the wife on property, an injunction was granted, on 5 August 2021, which restrained the husband, in substance, from encumbering the Suburb F property without the wife's knowledge and consent, subject to borrowings of up to $160,000 to complete building works.
9. In mid-February 2022, without the knowledge or consent of the wife, the husband entered into a refinancing transaction action, using the third respondent as the borrower and the husband as guarantor with the second respondent, B Pty Ltd ("the second respondent") as a mortgagee lender refinancing a total lending secured over the Suburb F property for a total of $4,194,014.83. That refinancing exceeded the permissible amount of $160,000 identified in order 6 made on 5 August 2021, and was a clear breach of the Court's interlocutory injunctive order against the husband, restraining him from encumbering that Suburb F property without the wife's knowledge and consent. The wife did not know or consent to the refinancing with the second respondent.
10. Following that refinancing, the matter came back before this Court on 17 March 2022. It was apparent, from information provided, that the husband appeared to have received $1,419,873.18 from the refinancing transaction, which was paid into his Commonwealth Bank of Australia ("CBA") account and which he cashed out through the CBA in mid-February 2022.
11. When asked by the Court, "What have you done with the $1.4 million?", the husband said, "They don't exist. They are not available," and in the course of that hearing, the husband said, "The funds have been used. The funds have all gone, and they are not available," and said that the Court could make such orders as it wished.
12. The husband identified that he was not working, and he had no assets or possessions that can be repossessed and that the making of any orders against him would serve no purpose. The husband indicated he was not trading and that he is unemployed. The husband stated injunctions against him would be pointless. The husband then referred to issues relating to the children and his desire to protect the relationship with his children and that he went to the extent of manipulating a Court document, which he regretted. The husband referred to being bombarded with financial stress, anxiety and depression and that, they have taken a toll on him over the last four years of his life, and that when the relationship broke down, the property was half-complete, and that the wife had not assisted with the construction, and that he was on the verge of bankruptcy, and that what he had done and how he had acted was in a sense self-help.
13. The husband referred to two property sales that fell through, and he engaged in an act of self-help, to pull himself out of the situation, pay his debts and bills, and put money in his pocket for work that he completed on the project. The husband maintained that the wife had never assisted in the construction, had never been present and had never funded anything. The husband indicated that he would not be returning to the property, that he would not be completing the project, and that he was taking time off due to a personal level of stress, anxiety and depression that he faced throughout the property proceedings and in relation to the parenting matters.
14. The husband referred to have been working hard and that he was done with it, and that his credit rating would be ruined, his finances ruined, and that he had spent endless thousands of dollars. In response to third party recovery raised under s 106B of the Act, the husband said it would be hard to achieve as there are no funds, that he would not be making any repayments against the mortgage for which he is liable, and that the burden is on him, and referring to the stress he had taken so that the wife could benefit down the road. The husband said, "That all ends because I am not finishing the project, and I will not return."
15. When the matter came back before the Court on 23 March 2022, the husband explained that he had not had time to put on an affidavit. The Court, permitted the examination of the husband, gave the husband a warning in relation to an entitlement to claim privilege against self-incrimination, which the husband claimed. The Court was satisfied with the requirements of s 128(4) of the Evidence Act 1995 (Cth) and issued a certificate. It is not necessary to set out any content from the confidential transcript beyond identifying that the Court was unable to identify the existence of any funds held by the husband that could be recovered.
16. It is apparent that the wife had obtained the PEXA document, dated mid-February 2022, that identified the substantive amount of funds that were provided, and the transactions conducted through the PEXA settlement. It was following this evidence that the second respondent was joined to the proceeding by a point of claim seeking relief under s 106B of the Act. There was a letter of particulars seeking to expand the nature of the s 106B case in relation to the alleged want of bona fides that was marked exhibit N.
17. There also emerged a letter dated 4 February 2022, prior to the refinancing by the second respondent, from the fourth and fifth respondents, the fourth respondent being the corporate mind of the fifth respondent, a corporate entity. The letter had a header with a description "Certifiers" and was addressed "To whom it may concern" and was signed by the fourth respondent as an accredited certifier being a certifier relating to the Suburb F property. That letter was forwarded by the husband to the broker by email in early 2022 and was forwarded by the broker to the refinancer representatives the following day. The fourth respondent subsequently had conversations with representatives of the second respondent prior to the refinancing that occurred in mid-February 2022. It was in these circumstances that the second respondent filed a cross-claim against the fourth and fifth respondents, both in negligence and for misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth) Schedule 2 ("ACL"). The second respondent also cross claimed against the husband for its losses under the contractual documents entered into by the husband in the refinancing. The wife joined the fourth and fifth respondents to the proceedings pursuant to orders made on 4 May 2023 based on an alleged cause of action for misleading and deceptive conduct under the ACL. There was no jurisdictional challenge in relation to the proceedings against the fourth and fifth respondents, which fell within the associated jurisdiction under s134 to the jurisdiction vested by s132 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), being the replacement provision for associated jurisdiction in the former s33 of the Family Law Act 1975 (Cth). Likewise the second respondent's claim against the applicant, given its joined under s106B, fell within the said associated jurisdiction.

1. The primary issue in these proceedings is whether there should be any alteration of property interests as between the husband and the wife. In summary, for reasons the Court will identify, as to the unsuccessful outcome of the s106B case and unsuccessful outcome of the ACL case, there is in fact, no property in respect of which it is just and equitable to make any order altering property interests under s 79 of the Act, and the property proceeding should be dismissed.
2. The second subsidiary issue in the proceedings is whether the wife can succeed in the proceedings brought under s 106B against the second respondent. For the reasons in this judgment, that application must be dismissed.
3. The third subsidiary issue in the proceedings is whether the wife can succeed against the fourth and fifth respondents and, for the reasons identified in this judgment that application also must be dismissed.
4. The remaining issue in the proceedings is the liability of the husband to the second respondent which sought relief under the two loan agreements, guarantee and memorandum that bind the husband for their losses which, together with interest in accordance with those documents amounts to, as of today, an amount outstanding of $8,224,142.97. For the reasons identified in this judgement, the second respondent is entitled to that judgment against the husband.

1. The chronology prepared from that provided by the fourth and fifth respondents and the wife, as well as defined by the Court given the evidence that has and has not been read is as follows:

The Husband ceases operation of J Company. Husband establishes and registers C Pty Ltd, the Third Respondent.

The husband purchased property at Suburb F for approximately $1,250,000.00.

The husband, through his business, demolishes old house on Suburb F property and began construction of 2 homes on the property.

The husband and his friend, Mr K, jointly purchase L Street, Suburb M for approximately $1,040,000.00, which the husband denies.

The husband, through his business, demolishes the old house on the Suburb M property and built homes on the property.

The family begins residing in the Suburb M property.

Council issues development consent for the Property (...), for demolition of existing structures, construction of a dual occupancy and 2 inground swimming pools.

The family ceases to reside in the Suburb M property.

The Husband and Mr K sell the Suburb M property for

approximately $1,150,000.00, which the husband denies.

Mr N, accredited certifier, issues construction certificate for the Property.

The husband and Wife reconcile after period of separation. Husband refuses to give Wife money. Wife applies for family tax benefits.

Council issues Order to Wasem to cease all work on the Property.

Council issues Development Consent for the Property (...), for two lot Torrens title subdivision of an approved dual occupancy.

Mr N issues modified construction certificate for the Property.

Council issues Development Control Order, ordering all works to cease at the Premises.

Letter from the Council to Wasem advising refusal to modify Development Consent No ....

Mr O issues Determination for the Property and Amended Construction Certificate.

The husband files an Application for parenting orders.

The parties organised a property valuation for the Suburb F property.

Valuation report for Suburb F property indicates various minimal matters to attend to before property is completed.

Council issues Notice of Intention to give a Development Control Order.

The husband exchanged contracts to sell E 2 Street, Suburb F NSW.

Parties participate in Conciliation Conference. Wife discovers various debts owed in relation to the Suburb F property besides home loan to P Bank.

Wife's lawyers receive correspondence from Husband's lawyers claiming necessity to borrow approximately $100,000 to complete construction.

Wife observes listing for Suburb F property on real estate website with forthcoming auction.

Council writes to Q Pty Ltd refusing to approve the proposed modifications for the Property.

PP Conveyancing advise Wife's lawyers they are no longer acting for Husband on Suburb F conveyance.

An injunction order is made restraining the husband from further encumbering the Suburb F property without the wife's knowledge and consent.

A notation in the orders permitted the borrowing up to $160,000 to complete building works to comply with the Contract of Sale.

Council issues Development Control Order to the husband to undertake works to ensure compliance with Development Consent

R Law Firm advise Wife's lawyers that S Law Firm are no longer acting on the Suburb F conveyance.

T Law Firm advise Wife's lawyers that they are instructed to act on the Suburb F property.

The husband's broker, Mr AA, approaches Mr BB in relation to the proposed deal.

JJ Company contacts CC Company regarding Husband's mortgage offer, stating that the security is a Duplex currently on 1 title and that the purpose of the funds is for a new constructions project/joint venture.

Letters of offers for the first and second mortgage over the Suburb F property is signed.

Mr DD speaks with Mr EE of FF Real Estate Agency and GG Real Estate Agency

Wife gives birth to sixth child, with new partner Mr HH.

Mr DD of CC Company has a conversation with Mr EE from FF Real Estate Agency, where the agent informed Mr DD that the agent had heard of problems with the building, including excessive building height and council closing the building down for a period, and the lack of knowledge as to whether this has been rectified or if it prevented settlement of the sale.

The husband contacts Mr Attia in relation to the property.

JJ Company confirms purpose of the loan is to start another construction project, and that the exit strategy will be the sale of 2 security properties.

At 2:11pm, the husband sends Mr Attia a text message with a Real Estate link to the Property, showing that it was on the market.

At 2:17pm, The husband sends Mr Attia an email attaching stamped plans

At 2:19pm, the husband sends Mr Attia an email with attachments.

At 3:23pm, the husband sends a text to Mr Attia with a number of photographs of the property.

At 8:54pm, the husband sends an email to Mr Attia with instructions on what to include in his report.

Mr Attia drives past the Property and has a look at

At 10:38pm, the husband sends an email to Mr AA, broker

"Attached is letter from private certifier. Pls fast-track the loan documents".

At 7:06am, an email from Mr AA to Mr DD and Mr BB forwarding the husband's email with attachment

Mr BB approaches Mr LL of MM Pty Ltd concerning investing in a First Mortgage of Property.

The husband sends a text to Mr Attia indicating the lender might call him to discuss.

Mr LL, Mr NN, Mr BB, the husband and Mr AA inspect the property.

Title search of Property indicates mortgage to Westpac, and caveats.

A company search is conducted for C Pty Ltd and indicates multiple default judgments.

Mr BB conducts a site inspection for 45 minutes with Mr LL and Mr NN.

Mr BB of CC Company speaks to Fourth Respondent and confirms that they wrote the letter, the accuracy of the certification letter, and the status of the development and any outstanding items before provision of occupancy certificate.

Mr DD sends an email requesting for documents to obtain from the husband.

The husband executes and returns security documents for the loans.

CC Company raise concerns regarding whether cash out amount of transaction is used on another construction project, and Husband and Third Respondent are choosing to refinance so close to project completion and sale.

At 4:29pm, Mr DD to Mr LL "Please see attached agent appraisal from The Agency and my general notes I made from agent calls.

Also, please see attached letter from the certifier".

Mr DD sends an email to Mr LL confirming the allocation for the first mortgage on the property.

Loans settle. Proceeds of loan disbursed to Westpac as existing first mortgagee, and numerous other creditors.

The husband, as a guarantor and through C Pty Ltd refinances the Suburb F property for a total of $4,194,014.83, without the wife's knowledge or consent or further Court Order.

Husband sends text message to Wife to the effect of "Life is full of disappointment you will see that soon enough."

Wife's lawyers contact KK Law Firm representing Mr U regarding funds loaned to Husband, discover Husband's refinance of the Suburb F property, together with various caveats discharged and a new caveat lodged by Mr U.

Wife's lawyers receive an email from KK Law Firm indicating that Husband paid Mr U $100,000 in addition to PEXA settlement. The settlement indicates the Husband has received liquid funds of $1.419 M.

A telephone conversation between Mr BB and Mr Attia regarding the property.

Husband and Third Respondent defaults on first and second mortgage on Suburb F property.

Husband examined and gives oral evidence. Husband ordered inter alia to remit settlement funds and depose affidavit explaining what he has done with the money.

An order is made which identified that the husband remit all settlement proceeds received by him or on his behalf in early 2022 in the sum of $1,419,873.18 to Marsdens Law Group's Trust Account and file and serve an affidavit providing full account of the application by him of those funds.

"Just checking in on progress identifying docs/work required for the completion of [Suburb F property]...

[Mr AA], any update getting certificates from [Mr Wasem]?..

[Mr Attia] have you heard anything new from [Mr Wasem]?"

CC Company confirm that Second Respondent is reliant on Husband and Third Respondent in relation to providing documentation for subdivision of the property. None provided.

Second Respondent issued formal default notices to Husband and

Letter from Bransgroves Lawyers to Marsden Law Group.

B Pty Ltd is joined in the proceedings as a second respondent.

Husband and Third Respondent cancel insurance policy for Suburb F property.

Email from Mr QQ of OO Company to Mr BB enclosing OO Company Report.

Third respondent placed into liquidation by Court order

Email from Region RR Council to Mr BB in relation to the refusal of the application due to non-compliance with development standards.

Mr SS prepares a single expert valuation report for Suburb F property.

The fourth and fifth respondent's file Points of Defence.

Current Title search of Property indicates two mortgages by B Pty Ltd and three caveats.

First day of final hearing for the property matter.

Second day of final hearing for the property matter and the part-head property matter is fixed for 19 February 2024 - 23 February 2024.

Mr SS prepares an amended single expert valuation report for the Suburb F property.

B Pty Ltd files an Application in a Proceeding which sought to vacate the hearing dates on 19 February - 23 February 2024.

Third day of hearing for an adjournment is conducted and the hearing dates for February are vacated.

Fourth day of final hearing for the property matter.

Firth day of final hearing for the property matter.

Sixth day of hearing for the property matter and final property orders made.

1. The following affidavits were treated as read, with annexures treated as being in evidence:

(1) Affidavit of Applicant Husband dated 12 November 2020;

(2) Affidavit of Applicant Husband dated 25 May 2021;

(3) Affidavit of Applicant Husband dated 6 October 2021;

(4) Affidavit of Applicant Husband dated 7 December 2021;

(5) Affidavit of Applicant Husband dated 13 December 2021;

(6) Affidavit of Applicant Husband dated 4 February 2022;

(7) Affidavit of Applicant Husband dated 2 November 2022;

(8) Affidavit of Applicant Husband dated 18 November 2022;

(9) Affidavit of Respondent Wife dated 4 May 2022;

(10) Affidavit of Respondent Wife dated 18 May 2023;

(11) Affidavit of Mr SS dated 30 June 2023;

(12) Affidavit of Mr DD dated 25 August 2023;

(13) Affidavit of Mr BB dated 28 August 2023;

(14) Affidavit of Ms TT dated 29 August 2023;

(15) Affidavit of Ms UU dated 6 September 2023;

(16) Affidavit of Mr VV 11 September 2023;

(17) Affidavit of Ms TT dated 12 September 2023;

(18) Affidavit of Mr SS dated 31 January 2024; and

(19) Affidavit of Mr BB dated 29 July 2024.

1. The following exhibits were tendered into evidence in the proceedings:

(1) Exhibit A: Respondent Wife's Tender Bundle dated 12 September 2023.

(2) Exhibit B: Respondent Wife's Financial Statement dated 9 June 2021.

(3) Exhibit C: Applicant Husband's Financial Statement dated 1 February 2021.

(4) Exhibit D: Joint Balance Sheet (13 September 2022).

(5) Exhibit E: Page 88 of the Respondent Wife's Affidavit annexed text message from the Applicant Husband sealed 21 December 2020.

(6) Exhibit F: The Fourth and Fifth Respondent's Tender Bundle dated 12 September 2023.

(7) Exhibit G: The Second Respondent's Tender Bundle with Index dated 13 September 2023.

(8) Exhibit H: Letter from Marsdens Law Group to Bransgrove Lawyers dated 24 July 2024.

(9) Exhibit I: Transcript of Hearing dated 17 March 2022.

(10) Exhibit J: Transcript for Public of the Hearing dated 23 March 2022.

(11) Exhibit K: Transcript In Confidence of the Hearing date 23 March 2022.

(12) Exhibit L - The First Respondent's Particulars dated 26 September 2023.

(13) Exhibit M- Page 79 of 94 of the Fourth Respondent's Affidavit being an invoice with an issue date of 4 February 2022.

(14) Exhibit N - Bransgroves Lawyers Letter dated 4 December 2023.

(15) Exhibit O - Applicant Husband's Annexure Page for Affidavit dated 18 November 2022 and Tenancy Invoice dated October 2019.

1. The husband identified the background to the relationship between the parties and the children of the marriage. The husband identified that some consumption of alcohol and drugs had occurred, but which he maintained that he never endangered the children. The husband identified his response to circumstances that gave rise to consent ADVOs and admitted to an incident in early 2018 of punching a hole in the wall and being charged with damaging property, and admitted throwing the wife's phone against the wall in early 2018. The husband admitted there was an incident where he swore at the wife and threatened her partner and explained that he was surprised at the new relationship and admitted that he overreacted, for which he was sorry.
2. The husband identified the courses he had undertaken and the time he had spent with the children. The husband also identified that at the commencement of the relationship he had little assets other than a vehicle, but throughout the relationship he worked, and the wife did not, and that he had been the financial provider for the family and explained that he had acquired the Suburb F property as an investment property to develop the two houses with the hope of achieving a profit.
3. The husband contended they shared equal parental responsibility but given his work, it is apparent that the majority of the parenting responsibility and homemaker contributions were done by the wife.
4. The husband identified setting up the third respondent, of which he was sole director, and the acquisition of the Suburb F property and the undertaking of significant work on that property and encountering problems, which the Court has already referred to with the council and with creditors, both involving the corporate entity as well as problems by him with the ATO.
5. At the time that the parties separated, apart from some vehicles, a small amount of money, and a small amount of superannuation, the only real asset was the Suburb F property encumbered to Westpac, which had a number of caveators on title in relation to that property. The husband alleged that at the time of the commencement of the relationship his Motor Vehicle 1 was purchased for approximately $90,000, and that his Motor Vehicle 2 was purchased for approximately $70,000, and that he had approximately $100,000 in the bank, and $50,000 of furniture and tools of trade worth approximately $100,000, and that, accordingly, his initial contribution was of the order of $410,000, and that the wife had only just left school so that she made no financial contribution at the commencement of the relationship.
6. The husband identified as being a tradesperson and through his income providing for the rent, food, utilities, clothing, childcare expenses, medical expenses, car registration, maintenance and personal needs. The husband contended that he did most of the cooking and shopping, although that does not sit neatly with his concession that the wife primarily was responsible for domestic duties and had the primary care and responsibility of the children, given that he was working.
7. There was an assertion that the parties kept their finances separate, though it is patent that the husband's finances were used for the purpose of sustaining the family, and that included the funds of the third respondent now in liquidation which on the evidence the Court is satisfied was treated as a financial resource of the husband.
8. The history in relation to the construction of the Suburb F property and unsuccessful sale endeavours were identified by the husband, including the borrowing of funds from private lenders that gave rise to various judgments and caveats. The nature of those borrowings were addressed in more detail in the husband's affidavit dated 18 November 2022, but it is not necessary to set them out.
9. The husband referred to the last loan agreement being the refinancing with the second respondent and his endeavours to finish the project. The husband identified that in February 2022 he completed a consolidation of debt, and after paying P Bank and Mr U and the builder being the third respondent there was no more money. The husband alleged others are now responsible to ensure all trades are paid, and that he had taken his entitlements from the project.
10. The husband asserted that he was entitled to money retained in the project and he said the balance of equity is not part of the property pool in his affidavit dated 18 November 2022. That is a clear misconception by the husband of the nature of the creation of the property pool for the purpose of adjustment under s 79 of the Act, but it has a relevance in relation to an Application for Contempt that was filed on 4 May 2022 and which today the wife consented to having that application dismissed.
11. The Court had earlier indicated given the child-focused nature of these proceedings, with five children, that the contempt contravention application would be heard after the outcome of the property proceedings, which would also permit determination of the gravity of the losses. Mindful of the five children, and outstanding parenting issues, the Court indicated, that if convicted, the Court would not impose a custodial sentence. The Court was conscious of the very serious consequences potentially hanging over the husband, with ongoing parenting responsibilities, and the delay likely to occur before determination of the contravention application. The Court described the conduct of the husband in disregarding the injunction order made on 5 August 2021 by Newbrun J was, at a minimum, egregious and, if convicted, was criminal conduct.
12. In giving the above indication the Court was mindful of the significant period of stress over which the husband had difficulties in developing the Suburb F property together with his clear misconception as to what would form part of the property pool in relation to s 79 of the Act which would have been factors taken into account on sentencing. The Court was also seeking to focus on advancing a meaningful relationship between the children and the husband. At the hearing today the Court congratulated the wife on her ability to prioritise the best interests of the children, agreeing to a consent order to dismiss that contempt contravention application.
13. The husband's affidavit dated 18 November 2022, wrongly asserted that the wife is not entitled to money from the project and wrongly contended that he had not breached any Court orders and blamed the wife for destroying him financially, a proposition the Court notes has absolutely no foundation and that the financial circumstances of the husband were of his own making. The husband identified steps that were taken to borrow funds to pay out the ATO, to settle debts owing from paid taxes from prior years and identified using moneys of the third respondent for family expenses, and that there was mismanagement on his part.
14. The husband identified what he contended were the costs he had incurred in the construction and the contributions he had made to the Suburb F property project. The husband referred to having withdrawn his superannuation and said that the Suburb M property was not one in which he had an interest, and made reference to the wife's hobby as a potential financial resource. The husband also made reference to the Centrelink benefits being received by the wife. The husband made reference to the support he allegedly provided to the children, although not paying child support.
15. In his oral evidence, the husband identified that he lives in a property with his cousin for which he pays approximately $280 of a $580 rental per week and that he works approximately one to two days a week. The husband said in oral evidence his weekly income is about $300-500. The husband also identified a problem with physical ailments and that he borrows his brother's car. The husband said he has no superannuation left. The husband identified that he had substantial liabilities that he had guaranteed in relation to the corporate entity in the order of $1.2 million as well as whatever liability he was found to have to the second respondent.
16. The husband also gave some oral evidence about his dealings leading up to the refinancing of the second respondent. Suffice to say that the husband was not honest or truthful in his dealings with those acting on behalf of the second respondent or, indeed, with the fourth and fifth respondent or the first respondent.

1. The wife filed an affidavit dated 8 May 2022, identifying what had occurred in relation to the injunctions, and, in particular, the hurtful and nasty email that was sent to her by the husband on 24 February 2022 which it is not necessary to set out. The wife referred to the dispersal of the funds from the PEXA records, and that the husband had received $1,419,873.18, which he cashed out through the Commonwealth Bank in mid February 2022.
2. The wife also set out the details of the relationship, including attempted reconciliations and that she had always been the primary carer of the children, and that, since separation, they had sporadic time with the husband. The wife identified having no significant assets or liabilities in her name and identified an earlier business that had been conducted by the husband and identified the various rental properties that she lived in. The wife referred to the acquisition of the Suburb F property but did not know how the deposit had been paid or how much had been subject of any mortgage. The wife did appreciate that there were houses intended to be constructed on the property. The wife referred to an alleged property in L Street, Suburb M that the husband denied having any interest in. The wife made reference to the husband buying and selling various vehicles and not being aware of the value or the amounts involved and acknowledged that the husband was the main financial provider, while she was the primary carer for the children.
3. The wife identified she was dependent on the husband for expenses for herself the children and daily household expenses, and, when separated, she applied for Centrelink payments. The wife identified she had been the primary homemaker and undertaken the household duties in relation to meals, washing, cleaning, taking the children to school, homework, medical appointments, as well as looking after pets, and that she received limited assistance from the husband, who said to her, "That's not my job."
4. The wife identified that she had no information in relation to the husband's business dealings and that he was very evasive in relation to his financial dealings throughout the relationship, and she wasn't aware of his current financial position. The husband declined to provide access to the wife to his financial statements, and she had no knowledge of the default judgments that had been obtained or that were paid out by the refinancing facility over the Suburb F property.
5. The wife identified that she had owned a vehicle that was sold and that she uses a vehicle owned by her current partner, she does not have any superannuation, that she owes an amount to the CBA and a Mastercard, and that she receives limited assistance from the husband since separation in relation to the children, and that he has never paid child support.
6. The mother identified that she pays approximately $600 a week, and that she receives Government Centrelink payments in the order of about $1100, and that she struggles to meet her ends and look after the children. The mother identified having a sixth child in 2022 with her new partner, who earns a base salary of $52,000 plus commission, and who provides assistance by way of paying for an eight-seat vehicle as well as providing assistance with other household expenses.
7. The wife identified sporadic gifts to the children from the husband and identified her history of the relationship and also the husband's problems in the past involving alcohol and drugs. The wife also annexed the PEXA settlement record which identified the total funds financed on the mortgage security over the Suburb F property in the sum of $4,194,014.83. The PEXA Settlement Completion Record dated mid-February 2022 is as follows:

1. In January 2022, CC Company, the facilitator for the new mortgagee, through Mr DD, exchanged email communications with JJ Company, the borrower's broker, through Mr AA, the exchange was as follows:

(a) [Mr DD] to [Mr AA] (January 2022 at 1:13PM)

Hi [Mr AA], Below are some key details I would need to assist me with preparing the LOOs:

• Type of loan/s: 1st & 2nd
• Loan advance (net proceeds), if borrower has specified ($):
• Term of loan: (i.e 12 months, 6 months)
• Property Type & Property Address (House, land, rural, regional, metro) - address:
• Indicative borrower rate: 9.5% for 1st and 18% for 2nd
• Brokerage Fee (%)
• Establishment fee (%): 2.2%
• Indicative Valuation: (if you have a current valuation report please attach)
• Purpose of loan:
• LVR 65% for 1st and 78% for 2nd
• Exist strategy

(b) [Mr AA] to [Mr DD] (January 2022 at 11:32)

Hi [Mr DD],

Client is happy for a 12 month term. If client repays loan in 6 months is there any penalty? Security is a duplex which is currently on 1 title. It is a Residential dwelling in [Suburb F].

Estimated Value: $6,000,000.

$3,900,000 1st Mortgage (65% LVR)

$1,080 2nd Mortgage (78% LVR)

Brokerage Fee $46,800 (1% Inc GST)

Client would like to pay his interest monthly.

Borrower: [C] PTY LTD

Guarantor: [Mr Wasem]

Exit Strategy: Sale of the 2 security properties

Purpose of funds: New construction project/joint venture

Please email me the LOO"

(c) [Mr DD] to [Mr AA] (January 2022 at 11:47am)

Hi [Mr AA],

With the 6 months repayment, I believe there shouldn't be any penalty, but [Mr BB] can provide final confirmation to that. Could you please provide the prepaid interest period for this loan --> 3 months? 6 months?, security property address and I would like to confirm that it's 1.1% (incl GST) brokerage fee for the 1st and the 2nd loan?

1. In February 2022, CC Company, the facilitator for the new mortgagee, and JJ Company, the borrower's broker, exchanged a series of text messages. The exchange was as follows:

[CC] - "[Mr AA], can yo in please confirm the purpose of the loan and the exit strategy for [Suburb F]".

[CC]- "I'll use this information when marketing to investors"

[JJ] - "Purpose is to start another construction project"

[JJ] - "Exit strategy will be sale of the 2 security properties"

[CC]- "Joint venture construction project?"

[JJ] - "Yes"

1. The wife identified the first mortgage in relation to that refinancing was for $3,770,000 and that the second was for $754,000, and the interest rate returns in relation to that transaction with the husband being the guarantor. The wife also provided a title search, as at February 2022, which showed a mortgage by Westpac and seven registered caveats.
2. The wife also referred to correspondence on 11 February 2022 by email, which includes questions about whether the cash-out amount was being used for another construction and why the husband and the third respondent are choosing to refinance so close to the project completion and sale. Reference is also made to a credit rating record from an ASIC search and the letter from the fourth and fifth respondents of 4 February 2022. The letter dated 4 February 2022 from the fourth and fifth respondents, had a heading D Pty Ltd, and was as follows:

To whom it may concern,

I wish to confirm that the above mentioned property has been inspected by our office. The newly built Dual Occupancy Development has been constructed in accordance with the approved documents and can easily be finalised via Final Occupation Certificate. The property owner has all the necessary documentation to submit the Subdivision Application through [Region RR] Council.

The Dual Occupancy has been completed with high-end quality finishes and is clear of any noticeable defects or non-compliance issues. The Section 88b Instrument documents have been submitted to my office and all appear in order.

We see no issues in finalising the approval on the above mentioned property and can work quickly with the property owner to finalize all the necessary approval.

If you have any questions please do not hesitate to contact me.

Kind Regards,

[Mr Attia]

Accredited Certifier

1. There is also, included in the annexures to the wife's affidavit dated 18 May 2023, the husband commenced email communications to the fourth and fifth respondents in February 2022 which are as follows:

(a) [Mr Wasem] to [Mr Attia] (January 2022 at 2:19pm)

Hi [Mr Attia],

Please find attached additional documents to assist in your report

(b) [Mr Wasem] to [Mr Attia] (January 2022 at 8:54pm)

Hi [Mr Attia],

For the report.

It's please make mention that the property has gas, water, electricity and sewage connected and running.

And that I have provided you and have viewed the fellow documents that are completed and I possession for the purposes of occupation certification and subdivision

88b instrument

Work as exicuited

As build

Sub division planes

Work as executed

That the workmanship and quality of the entire development is of a very high quality and defect free.

That the entire building to your knowledge is build to comply with the DA is in accordance with the building standards and DA APPROVED PLAINS.

AND to you knowledge that there is nothing holding back the builder obtaining OC AND SUB DEVISION.

AND should they wish to call you and discuss any that you would be more than happy to discuss and question that they may have"

(c) [Mr Wasem] to [Mr Attia] (February 2022 at 2:19pm)

Hi [Mr Attia],

Please find attached additional documents to assist in your report

1. The husband continued the email communications to the fourth and fifth respondents on 4 February 2022:

(a) [Mr Wasem] to [Mr Attia] (February 2022 at 10:07am)

Hi [Mr Attia],

When do you think you will be able to get the report done for me? It's the last thing im waiting for.

(b) [Mr Attia] to [Mr Wasem] (February 2022 at 9:34pm)

1. There was a brief cross-examination of the wife by a counsel on behalf of the husband. That cross examination in substance reinforced the credibility of the wife and the evidence that she has given. There was no cross-examination of the wife by the other parties to these proceedings.

1. Mr SS, the valuer, provided affidavit evidence in relation to two different points of time in respect of his opinion as to the fair market value of the Suburb F property and the undertaking of rectification work in his assessment. Mr SS gave oral evidence which contradicted the opinion evidence he had given as to the fair market value, which he sought to explain away by reason of being an identified process of mortgagee sale and contending that his opinions needed to be reduced by an amount of 10 per cent. The Court found that evidence entirely unpersuasive and lacking in credibility.
2. No satisfactory explanation was given by Mr SS as to why he had not identified any relevant assumption in respect of the fair market value in circumstances where one of the clients for whom he was providing the valuation was the mortgagee in possession, a fact of which he knew, and where, in the context of the report itself, he identified that the sale would either be by the mortgagee or by the owner. In those circumstances, the Court places little weight on Mr SS's opinions in relation to value or in relation to the impact of a mortgagee sale. In any event, the process by which the sale that has been achieved, which is yet to settle, was identified in the most recent affidavit of Mr BB, and it was accepted by the wife that the sale was at a fair market value.
3. That acceptance is inconsistent with the contention, now advanced, that there should be some 10 per cent reduction because of the condition or method of marketing of the property. The Court does not accept that Mr SS's evidence in relation to any suggested deduction is credible and rejects the proposition that the sale achieved by the second respondent for an exchange of contracts still to be completed is other than a reflection of the fair market value, which the Court finds was the fair market value at the time of the transaction in mid-February 2022, and that the costs that have been identified in Mr BB's affidavit in respect of achieving that sale are costs that would in substance have been incurred in achieving a sale as at mid-February 2022. There is no basis for any reduction to the fair market value sale.
4. Mr SS's opinions were also all based on an assumption that has not come to pass that there were separate title certificates for the two properties and an occupation certificate. His opinion evidence is of no assistance to the Court.

1. Mr BB put on two affidavits, the first affidavit seeking to explain what occurred in the refinancing and the steps of alleged due diligence undertaken by CC Company on behalf of the second respondent. It is apparent that Mr BB was a decision-maker in relation to whether this transaction proceeded and recommended it to the other investors, relevantly, through the email that was sent by Mr DD, which was shown to Mr BB dated early February 2022, which is as follows:

Dear Investors,

Please find attached information on a new loan opportunity available in [Suburb F] NSW [...].

Additional note: please reply to all.

Loan Summary

• Loan amount: $3,770,00

• LVR: 65%

• Mortgage: 1st

• Investor return: 11%

• Term: 12 months

Other relevant information

• [CC Company] has personally inspected the property and can confirm it is close to completion.
• Final checklist is an overall clean-up, landscape work, and installing some appliances (most of which have been purchased already) but the Duplex itself is largely complete.
• Additional documents such as the valuation report can be provided upon request.

1. That email, together with the executive summary, which was referred to as "part of the attached information", was sent out to the investors that collectively became the new mortgagee. The email identified a loan summary and other relevant information. The first dot point identifies that the CC Company had personally inspected the property and "can confirm it is close to completion". That inspection was carried out by Mr BB together with two of the investors, both of whom put on affidavits. A proposition that was advanced was that "Final checklist is an overall clean-up, landscape work and installing some appliances, most of which have been purchased already, but the property itself is largely complete and proffered additional documents on request".
2. The Executive Summary relevantly asserts, in the third sentence:

The duplex is currently held under a single title, but the borrower has received approval on title subdivision...

(emphasis added)

and is, at this stage, awaiting an occupation certificate to be issued.

1. The proposition that the borrower had received approval on title subdivision is false. That is false information that was not derived from the fourth or fifth respondents. It is false information that goes to a conclusion in relation to the completion of the property in accordance with the approved plans in order to obtain such subdivision on title. The false assumption was at the heart of a very serious misunderstanding by CC Company and, obviously, the investors. That misunderstanding was not due to any communication from the fourth or fifth respondents. No explanation that was satisfactory was advanced as to where that false information came from or why it was provided to the investors. The false information is of significance of a material kind in relation to the issue of causation to which the Court with return.
2. Mr BB's affidavit evidence put a gloss on the communications he received from the fourth and fifth respondents. Without any proper foundation, he asserted that the fourth and fifth respondents had held themselves out to be the certifier of the Suburb F property project. That was an assumption that was neither open nor supported by the content of the communication sent on 4 February 2022, and on any view of the conversation accepted by Mr BB, it was patently not the position communicated on 8 February 2022 orally to Mr BB.
3. Mr BB explained, in the course of his oral evidence, that he had also put his parents into the investors in the new mortgagee. He maintained that he had no knowledge of the family law proceedings involving property issues on foot. He acknowledged that he did have information that identified a number of caveats, but he left it to the legal team described as KK Law Firm to deal with those caveators, to proceed with the transaction.
4. There is considerable force in the characterisation by Mr Reeve's that this was asset lending by the second respondent. In other words, which focused solely upon the second respondent's appetite for risk and return. Mr BB identified that this was the first construction short-term lending that he had been involved in, and that was manifestly apparent through his lack of understanding of the information that he had available in relation to the incomplete plan approval and construction of the properties. Mr BB did not appreciate the differences between the as-built and approved plan information that he had available through the valuation report provided by the intended borrower. Mr BB did not appreciate the obvious generality of the information provided by the fourth and fifth respondents at the request of the borrower. In substance, the whole of the content of the email of 4 February 2022 from the fourth and fifth respondent had already been provided by the broker on behalf of Mr Wasem to the second respondent.
5. Mr BB gave oral evidence that, had he been aware of the existence of family property proceedings, the transaction would not have proceeded. The Court accepts that evidence. Mr BB gave oral evidence that made clear that the distressed state, in terms of other creditors of the borrower and the guarantor, were of limited concern, given the extent of the funds being provided in the further project that the husband had falsely represented the further funds were to be utilised for.
6. The Court does not accept the evidence of Mr BB that he relied upon the information provided by the fourth and fifth respondents in proceeding with the transaction in mid-February 2022. That evidence is inconsistent with the false assertion identified in the executive summary that has no such source.
7. The affidavit of Mr BB dated 29 July 2024, identified that the that the purchase price that was to be received was in the amount of $2,950,000. Mr BB's affidavit also identified that the settlement date for the contract for sale is late 2024 and that it was unconditional. That affidavit also made reference to the sale costs and the maintenance and holding costs that was incurred which was in the sum of $11,324.75. Mr BB identified that the husband paid $99,900 of the $410,00 which was owed to the second respondent.

1. There was affidavit evidence put on by Mr LL and Mr NN. Neither of their affidavits addressed the false information in the executive summary dated 11 February 2022. The Court is not bound to accept their evidence. Their evidence does not sit neatly with any inducement or reliance on the communication sent on 4 February 2022, given the failure to explain that false statement and how the 4 February 2022 communication could possibly have been a cause of entering into the transaction, rather than that false statement of a higher and very different characterisation in the executive summary dated 11 February 2022.
2. The evidence of Mr LL and Mr NN does not advance in any material way that the second respondent acted upon the letter from the certifier, notwithstanding that it was described underneath the executive summary as part of the security document as a letter from the certifier. That evidence, albeit unchallenged, cannot be accepted, because of the absence of any explanation about the importance and impact of the false statement in the executive summary. It can be given no weight in respect of the causal issue of inducement or reliance upon either the letter from the certifier and the further communication orally provided by the fourth respondent to Mr BB on 8 February 2022. A causal link is also entirely inconsistent with any inducement or reliance being placed on what was said in the letter of 4 February 2022, given the content of that communication, which the Court accepts occurred as put to Mr BB in cross-examination by Mr Neal on 8 February 2022.
3. The absence of the calling of the fourth respondent, who had put on an affidavit, simply permits a Jones v Dunkel conclusion where an adverse inference is open. The Court does not accept that the failure to call him undermines the conclusion that must be drawn from the admissions made by Mr BB in cross-examination as to the content of the conversation on 8 February 2022, which completely destroys any reasonable person being induced by or relying upon the generalised letter dated 4 February 2022.

1. The affidavits by Ms TT annexed the relevant first tranche of contractual documents, with the balance of those documents being annexed to the affidavit of Mr DD. Mr DD also gave evidence, but at the time he was the analyst and was supposed to be engaged in the detail. His evidence was of limited significance, given that he was not the decision maker in relation to proceeding with the transaction. Suffice to say, however, he certainly did not grind down into the detail in relation to understanding the transactions, no doubt, in part, because a construction short-term lending had not been undertaken before by this entity or through this entity on behalf of lenders. There was, however, no basis to say that Mr DD was aware of there being family law property proceedings on foot.

1. In submissions of the applicant, Mr Connor, on behalf of the applicant, submitted that no claim for any property adjustment was advanced by the husband, given that there was no property, and that the application for an adjustment of property interests should be dismissed because there was no property to adjust. Mr Connor also submitted that his client did not consent to the orders being sought on behalf of the second respondent under the guarantee and loan documents, and sought to resist costs orders, including suggesting that the wife should be responsible for the costs incurred by the fourth, fifth and second respondents.

1. Mr Reeve submitted that the wife has been the primary carer of the five children and one would expect her to remain to be the primary carer.
2. Mr Reeve identified that there are no significant initial contributions issues, the wife was the home maker and parent. Mr Reeve's submission identified the fact that the husband's conduct lack attention to his as a parent, the fact that the husband paid little child support, and the husband's use of illicit drugs favoured the contributions of the wife post-separation.
3. In relation s 75(2), Mr Reeve identified the maintenance needs favour the wife because of the young age of the children and the responsibility she has for them.
4. Mr Reeve submitted that the husband, as guarantor and through the third respondent, refinanced the Suburb F property with the second respondent for a total of $4,194,014.83, without the wife's knowledge, consent or further Court order.
5. The proposition that was advanced by Mr Reeve was that the wife asserted that the husband refinanced the property for purposes of defeating her claim in this property settlement, and will have that effect if the orders the wife sought are not granted.
6. Mr Reeve submitted that the wife does not accept that the second respondent is a bona fide purchaser within s 106B(3)(c) and the second respondent has not conducted their business in a way which was adequately protective of the interests of the various stakeholders in the property. The second respondent did not properly perform the due diligence that was reasonably expected of them. Mr Reeve identified that the second respondent has lent to a borrower with no real expectation that the borrower had the capacity to pay the loan interest obligation. The second respondent obtained a personal guarantee from the husband without concerning themselves as to how the calling in of that guarantee obligation would impact on other persons including the wife and children.
7. Mr Reeve identified that the second respondent, in their assessment of the suitability of the property to be issued an Occupancy Certificate, accepted and relied on the representations made by the fourth and fifth respondents, without requesting or obtaining further documentation from the fourth and fifth respondents to verify the accuracy of those representations.
8. Mr Reeve submitted that the second respondent did not adequately ascertain the value of the Suburb F property used as security by commissioning their own report, or adequately checking the Valuation Report and its information sources that was provided by the husband and the third respondent.
9. Mr Reeve submitted that if the Court is against the wife and finds that the second respondent is a bona fide purchaser then the Court's discretion remains engaged to determine what are the "proper" orders to be made in the circumstances. Mr Reeve identified that the determination would engage the discretion in s 106B which is not fettered or mitigated by other principles, for example equitable principle.
10. Mr Reeve submitted that the relief is discretionary, that the requirements under s 106B are met, given that the husband entered into the mortgage and subsequent advance to the husband of liquid funds is both an instrument and disposition.
11. The proposition of whether the second respondent is a bona fide purchase was based on if they had constructive notice of the damage that the loan advances to the husband will cause to the wife's claim. It was suggested by Mr Reeve that the second respondent had actual notice.
12. Mr Reeve submitted that the conduct of the fifth respondent producing the D Pty Ltd Certificate "To Whom it may concern" on 4 February 2022 is misleading and deceptive, if the second respondent's evidence about the state of the Suburb F property is accepted. Mr Reeve identified that the conduct occurred in the course of trade and commerce and that the wife suffered loss because of the conduct of the fifth respondent.
13. Mr Reeve submitted that the wife's position under s 90AE is to be engaged as complement to s 106B so as to effect a final, just, and equitable division of property between the husband and wife.
14. Mr Reeve identified that the husband's deceptive actions has implicated multiple third parties to the marriage.
15. Mr Reeve maintained that the criteria in relation to s 106B(1) was, obviously, one that was satisfied because of the intention of the husband to defeat the wife's interest in the instruments and dispositions that occurred in mid-February 2022. Mr Reeve recognised the difficulty in relation to setting aside the mortgage, and sought no such order. The setting aside of the mortgage would undo the sale transaction that is on foot for completion in December.
16. Mr Reeve refined his case so as to attack the disposition of the approximately $1.4 million paid to the husband identified in the PEXA transaction to CBA. Mr Reeve submitted that whilst that was the disposition which was sought to be set aside, it was only sought to be set aside preferable to what was said to be slivers available, either through the unsecured creditors that were paid out, or through an alleged reduction in what might have been the same proceeds. The Court raised with Mr Reeve that the $1.4 million was paid into a CBA account and then withdrawn by the borrower in cash from CBA. That the disposition of the $1.4 million was for value by the second respondent. Mr Reeve maintained that the Court could, nonetheless, make orders affecting that disposition and through s 80 of the Act or otherwise, if the Court finds a sliver of entitlement for the benefit of the wife.
17. Mr Reeve sought to get around the roadblocks raised by Mr Young. There was, of course, an exchange between counsel and the Court earlier during the hearing, given the sale price, and given the cost of sale, and given the amount of secured creditors that were paid out, which amounted to $2,634,000. The roadblocks that have been identified was that the sale price achieved in the most recent affidavit of Mr BB, dated 29 July 2024, to settle later this year, was that one which involved a reduction of sale costs. Mr Reeve sought to argue a lesser amount of sale costs should be taken into account, consistent with that identified in the evidence of Mr SS. For reasons already given, the Court places no weight on the evidence given by Mr SS as to what would be reasonable costs in that regard. The Court finds that the actual costs that were identified, as having been incurred by Mr BB, were reasonable and what would have been incurred had the sale been achieved as at mid-February 2022. Mr Reeve submitted that the reference to bone fide purchaser should not be read as mala fides, and that the Court should find that the second respondent, through its agent, had been so negligent as to find that there was a want of bona fides by the second respondent.
18. There is a decision binding on this Court of the High Court of Australia, being Board of Fire Commissioner (NSW) v Ardouin [1961] HCA 71; (1961) 109 CLR 105, that makes clear that negligence is an entirely different concept from a want of bona fides. Negligence, whether gross negligence, does not constitute there being a want of bona fides by the relevant party. Mr Reeve submitted that the want of bona fides in the present case was one that should be found as a result of constructive notice of his client's interests. In substance, Mr Reeve maintained that there were not reasonable inquiries that should have been made by the second respondent and, accordingly, they should be imputed with constructive notice of his client's property proceedings and, accordingly, interest in the Suburb F property.
19. Mr BB identified in the title searches that were undertaken identifying the various caveators and the desire to obtain a clean title in relation to the asset and the paying out of the other creditors in the context of a transaction in which substantial funds were being provided to the borrower, purportedly for a new project. Mr Reeve pointed out that no question was asked as to whether there were family law proceedings on foot of the borrower. On the evidence before the Court the only inference that can be drawn is that no such question was asked.
20. It is a most unsatisfactory position that the state of the law in relation to caveatable interest is one that it does not recognise the potential property interests of a de facto or married person with respect to proceedings on foot in the Federal Circuit and Family Court of Australia, be it division 1 or division 2. That is an unsatisfactory feature that cries out for legislative reform to prevent the enormous injustice and unfairness that occurs where, despite efforts to try and protect a de facto or spouse, a transaction proceeds by a fraudulent party inconsistent with existing injunctions that defeat that party's interests. Urgent law reform is called for to prevent the type of tragedy that occurred in this case being repeated. This Court has regularly made orders permitting the filing of a caveat by the spouse or the de facto and foreshadowing an anti-suit injunction to restrain any attempt to remove the caveat. The Court is aware that a different view has been expressed in division 1, albeit that view does not appear to be binding, as the precise issue of the orders being made by this Court were not before that Court.
21. In substance, Mr Reeve maintained that inquiries should have been made to identify the proceedings on foot by his client. Mr Reeve did identify that the caveat identified a law firm for an amount of 50,000 as one of the caveators, included an email address and identified that the evidence was effectively silent upon what occurred at the time of the settlement, which involved the withdrawal of that caveat by the solicitor and the putting on of that caveat again after the transaction was completed by the solicitor. There was some cross-examination of the husband to the effect that it was done by the solicitor for his benefit, and the husband suggested he had not requested such a step.
22. The Court is not in a position to make a finding about the communications that took place between the solicitor being the subject of that caveat and the borrower. The Court raised with Mr Reeve the problem that asking information from the borrower about whether there were any proceedings on foot may not have given rise to a truthful answer. Mr Reeve maintained that they were reasonable inquiries that should have been made. The second respondent was not acting on behalf of the wife, nor did the second respondent owe any fiduciary duty to the wife, and other than ensuring it was not a party to a dishonest transaction, the second respondent was entitled to look after its own interests and evaluate the risks that it was willing to accept. The Court does not accept that the second respondent should have taken steps to inquire into the underlying basis of the caveator claims given the instructions for the same to be paid out from the borrower.
23. The Court can draw no inference that the second respondent became aware of the family law proceedings through the communications in respect of the removal of caveats. There was no communication from the borrower identifying some dispute about the amount of those caveats in a way that would have put the second respondent on notice of a need to inquire into the underlying source of the caveat debts.
24. The Court accepts the force of Mr Reeve's submissions that this was a transaction where the borrower was not the subject of any statement of assets and liabilities, no identified capacity to repay, where the borrower, in fact, was a $2 company, and where there was no identification of assets and liabilities of the guarantor, and where it was apparent that the guarantor and the borrower were stressed in terms of proceedings against them.
25. Those matters rise no higher than factors relevant to a potential negligence by the second respondent or the facilitator in proceeding with the transaction. They do not identify circumstances by reason of which reasonable financier should have taken further steps to ascertain the source of the underlying debts the subject of the caveats. This is not a case where there was a wilful shutting of eyes by the second respondent or by the facilitator.
26. Mr Reeve submitted that even if there was not a finding of the want bona fides, the Court still had power to affect the interest of the second respondent by making an order in relation to the alleged disposition and the slither argument, and identified his client as having been the real victim who had no control in relation to the transaction that occurred in February 2022,and that his client was the real interested party.
27. In relation to the claim against the fourth and fifth respondents, Mr Reeve accepted that the issue of causation may include an issue of reasonableness. Mr Reeve maintained that the letter of 4 February 2022 was misleading. It was suggested that there had been no inspection of the property. Paragraph 37 of Mr Attia's affidavit dated 14 August 2023 that was admitted into evidence is an admission. The affidavit admission does not prove that there was no inspection. Mr Reeve maintained that the letter was misleading in other ways identified in his case outline.
28. As earlier identified, the information in the letter was information that had been provided through the broker by Mr Wasem to the lender. In considering whether or not the letter could lead into error in the ways alleged, a careful reading of the same does not support the representations alleged. To the extent of future representation, the Court is not satisfied that there was not a reasonable basis for the representation, given the stage that it was being represented by the borrower that the project had reached. That said, it was particularly foolhardy of the fourth respondent to be including content being suggested by the husband in the certificate, or at least in the document that he signed. However, nothing in the document, on a fair reading, conveyed that the fourth and fifth respondents were the certifier of the Suburb F property construction. It is apparent from the evidence of Mr BB that this was a false assumption that he adopted in seeking to elevate and explain why the communication by that email was alleged to be a cause of entering into the refinancing transactions that occurred in mid-February 2022.

1. Mr Young identified the transactional documents in respect of the liability as against the husband. In relation to the elements of s 106B , Mr Young maintained that, even at the time of the transaction, the elements of s 106B(1) would not be made out because of the other secured creditors effectively eating up any net proceeds and that, accordingly, there was no defeating of any anticipated order because, on the submission advanced, no net pool would have been available even without the refinancing. The difficulty with Mr Young's submission is that he ignores pt VIIIAA of the Act and the power of this Court to affect the interests of third parties in relation to the competing position between a spouse and a creditor.
2. This Court has earlier identified the need for law reform to ensure that pt VIIIAA of the Act is extended to de facto relationships and that the injunctive powers of the Court should be construed as broad enough to provide the same remedies. Putting that to one side, Mr Young's submission in relation to the requirements of s 106B(1) are not accepted in light of the fact that the Court would have been in a position to potentially defer the interests of the other alleged secured creditors, other than the mortgagee, in favour of the wife. Accordingly, that submission advanced by Mr Young is not accepted.
3. In relation to s 106B(3), Mr Young submitted that the relevant want of bona fides was knowledge that the disposition or instrument was likely to defeat the interests of a person falling within s 106B(1). Mr Young submitted that it was that knowledge that was the critical question in relation to bona fides, and whilst accepting that that knowledge could extend to constructive knowledge, maintained that the particulars provided in exhibit L, were not capable advancing the proposition of actual knowledge by the second respondent that the settlement or disposition was likely to defeat the interests of the wife.
4. Mr Young accepted that there could be constructive knowledge, but maintained there was no deliberate shutting of eyes, and maintained that this was not a case where the Court should find that the lender should have been aware by making reasonable inquiry.
5. Mr Young also submitted that it was potentially feasible to request the Registrar General to record an injunction. That possibility in no way engages with the current unsatisfactory state of the law where there is no right to impose a caveat. The Court does not accept that the argument as to anonomity in relation to s 121 of the Family Law Act 1975 (Cth) relevantly advances the case of the second respondent.
6. Mr Young maintained that the relevant disposition that was sought to be attacked by Mr Reeve was a disposition to the CBA for value, and that this was not a case where there was constructive notice by the mortgagee that the payment through that disposition to CBA of the amount in favour of the borrower was likely to defeat the interest of the wife.
7. Mr Young also maintained that that disposition was for value. In relation to the reference to the unsecured creditors, Mr Young also embraced the proposition that the second respondent's position was secured, and it was their mortgaged interest in respect of which those payments were made to what were described as the unsecured creditors.
8. Mr Young also invited the Court at the commencement of the hearing this week, to find that there should be an adverse cost order against the respondent wife and otherwise orders against the husband for the costs of the second respondent. Mr Young also asked for judgment against the applicant for the losses sustained by the second respondent and identified the contractual documents to support the same.

1. Mr Neal substantially relied upon his submissions which summarised the sequence of the communications to which the Court has referred and put that the alleged representations were not misleading or deceptive and that there is no breach of s 18 of the ACL. Further, Mr Neal submitted that there was no reliance on any representation by the second respondent and identified the false information in the communications sent to the financiers on 11 February 2022, and submitted that any alleged causal link was severed by the conduct of the facilitator.
2. Mr Neal submitted that if the loans had gone ahead, there would still be no different position than the one that currently exists in relation to the outcome identified in the second affidavit of Mr BB. Finally, Mr Neal submitted that given the role of the fraudster husband, there would have to be a significant apportionment of the lion's share to the fraudster if there was found to be any loss.
3. In relation to the absence of reliance, Mr Neal also focused on the acceptance of the communications, put in cross examination, that occurred on about 9 February 2022 in which the fourth respondent said:

"I'm not appointed PCA for the job, and I'm new to the job ... I have not worked with [Mr Wasem] before. I have limited documents. I have asked [Mr Wasem] for the documents for the occupation certificate and not received them. I have not received any further documents from [Mr Wasem] supporting his application for an occupation certificate despite my requests. The Court also accepts that they always said, 'It is your call to decide whether to loan money to [Mr Wasem].'"

1. Mr Neal focused upon s 236 of the ACL language "because of" in relation to the causal link and the necessity for that causal link, as identified in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25. The first proposition advanced, was there was no causation because Mr BB did not rely on the fourth and fifth respondents in recommending the loan to investors, and he would have recommended the loan without the fourth and fifth respondents' letter and that the loan would still have gone ahead, and alternatively, that Mr BB's actions were so negligent that his conduct severed any causal nexus.
2. The relevant issue of causation and reliance in the present case is not that, Mr Neal pointed out, of the wife, but that of the second respondent. Mr Neal pointed out that Mr BB thought it was a good deal, his parents invested in the loan, and that his state of mind was reflected in the communication on the 11 February 2022, and that he thought the pricing of the mortgages was set having regard to the risk of the loan as a whole and was satisfied with the value of the property when it was sufficient to cover the interest if the loan was not repaid. Mr Neal submitted that, in those circumstances, there was no causation referring to Eric Preston Pty Limited and Euros Securities Pty Ltd [2011] FCFAFC 11.
3. Mr Neal maintained that there was a break in the causation because of the negligence of the facilitator, and that the evidence of Mr LL and Mr NN was of no moment, that in no way could be provided to their assertions of reliance on the D Pty Ltd letter.
4. Mr Neal also pointed out that there was a further secured amount of $310,000 owed that should be added to the net sum, that would create a further roadblock in relation to any actual recovery.
5. Mr Neal submitted that there was an apportionable claim under s 87CB of the ACL, if the Court found otherwise, and identified two concurrent wrongdoers, being the husband and the second respondent.
6. Mr Neal identified the deliberate contravention of the order of the 5th of August by the husband and the fraudulent and misleading conduct of the husband in the context of that apportionment, and contended if there was an apportionment, it would be 5 per cent to the fourth and fifth respondents, 10 per cent to the second respondent, and 85 per cent to the husband.
7. In relation to costs, Mr Neal also produced communications from 4 December 2023, offering to pay a particular amount as a Calderbank offer. That letter was sent at a time where the sale transaction as identified Mr BB's second affidavit had not taken place. There was no repeat of that offer after that affidavit had been put on.

1. In respect of the of relevant property law under pt VIII of the Family Law Act 1975 (Cth), the Court has taken into account the relevant property law principles identified in Ryder and Brooks [2024] FedCFamC2F 503 at [129] - [136].
2. Section 106B of the Family Law Act 1975 (Cth) is as follows:

Section 106B

Transactions to defeat claims

(1) In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

(1A) If:

1. a party to a marriage, or a party to a de facto relationship, is a bankrupt; and
   1. the bankruptcy trustee is a party to proceedings under this Act;

the court may set aside or restrain the making of an instrument or disposition:

1. which is made or proposed to be made by or on behalf of, or by direction or in the interest of, the bankrupt; and
   1. which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

(1B) If:

1. a party to a marriage, or a party to a de facto relationship, is a debtor subject to a personal insolvency agreement; and
2. the trustee of the agreement is a party to proceedings under this Act;

the court may set aside or restrain the making of an instrument or disposition:

1. which is made or proposed to be made by or on behalf of, or by direction or in the interest of, the debtor; and
   1. which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

(2) The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order.

(3) The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.

(4) A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.

(4AA) An application may be made to the court for an order under this section by:

1. a party to the proceedings; or

2. a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the instrument or disposition were made; or

3. any other person whose interests would be affected by the making of the instrument or disposition.

(4A) In addition to the powers the court has under this section, the court may also do any or all of the things listed in subsection 80(1) or 90SS(1).

(5) In this section:

"disposition" includes:

1. a sale or gift; and

2. the issue, grant, creation, transfer or cancellation of, or a variation of the rights attaching to, an interest in a company or a trust.

"interest":

1. in a company includes:
   1. a share in or debenture of the company; and
   2. an option over a share in or debenture of the company (whether the share or debenture is issued or not); and
      1. in a trust includes:
         1. a beneficial interest in the trust; and
         2. the interest of a settlor in property subject to the trust; and
         3. a power of appointment under the trust; and
         4. a power to rescind or vary a provision of, or to rescind or vary the effect of the exercise of a power under, the trust; and
         5. an interest that is conditional, contingent or deferred.

1. The principles, which the Court has taken into account, in relation to s 106B of the Act including the need for association with property proceedings, meaning of bona fides and discretion are identified in Wei v Xia (No 5) [2023] FedCFamC1F 679 at [594] - [597]; Porter & Porter [2022] FedCFamC1F 102 at [49] - [55]; Cun & Zhihui (No 4) [2023] FedCFamC1F 581 at [62] - [66] by the learned Harper J, in Jess & Jess (No 4) FedCFamC1A 189 at [13] by the learned Aldridge, Riethmuller and Schonell JJ, and Valder & Saklani (No 3) [2023] FedCFamC1F 98 at [103] - [105].
2. Section 18 of the ACL is as follows:

Section 18 Misleading or Deceptive Conduct

18(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

18(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).

1. Section 4 of the ACL is as follows:

Section 4 Misleading representations with respect to future matters

1. If:
   1. a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
   2. the person does not have reasonable grounds for making the representation;

the representation is taken, for the purpose of this Schedule, to be misleading.

1. For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:

   1. a party to the proceeding; or

   2. any other person

the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.

1. To avoid doubt, subsection (2) does not:
   1. have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or
   2. have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.
2. Subsection (1) does not limit by implication the meaning of a reference in this Schedule to:

   1. a misleading representation; or

   2. a representation that is misleading in a material particular; or

   3. conduct that is misleading or is likely or liable to mislead;

and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.

Actions for damages

1. If:
   1. A person (the claimant) suffers loss or damage because of the conduct of another person; and
   2. The conducted contravened a provision of Chapter 2 or 3;

the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.

1. An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.

1. The Court has also taken into account in relation to these ACL provisions, the principles in relation to reliance on representations which causes a person to suffer loss or damage was identified in Harvard Nominees Pty Ltd v Tiller (No 2) [2020] FCA 604 at [469] - [499] by the learned Jackson J.
2. The principles in relation to causation was identified by the High Court of Australia in the judgment of their Honours French CJ, Gummow, Hayne, Heydon and Kiefel JJ in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25 at [25], [27] - [29] which are as follows:.-

...In either case it involves consideration of a notional cause and effect relationship between the conduct and the state of mind of the relevant person or class of persons. The test is necessarily objective. [25]

In Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592, the approach of the characterization of conduct direct to identified individuals was set out in the joint judgment of the majority as follows:

"The plaintiff must establish a causal link between the impugned conduct and the loss that is claimed. That depends on analysing the conduct of the defendant in relation to that plaintiff alone. So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known."

Although this passage begins by referring to the need to establish a causal link between the impugned conduct and the claimed loss, it is clear that thereafter their Honours were addressing the task of characterisation. [27]

Determination of the causation of loss or damage may require account to be taken of subjective factors relating to a particular person's reaction to conduct found to be misleading or deceptive or likely to mislead or deceive. A misstatement of fact may be misleading or deceptive in the sense that it would have a tendency to lead anyone into error. However, it may be disbelieved by its addressee. In that event the misstatement would not ordinarily be causative of any loss or damage flowing from the subsequent conduct of the addressee. [28]

A person accused of engaging in misleading or deceptive conduct may claim that its effects were negated by a contemporaneous disclaimer by that person, or a subsequent disclaimer of reliance by the person allegedly affected by the conduct. The contemporaneous disclaimer by the person engaging in the impugned conduct is likely to go to the characterisation of the conduct. A subsequent declaration of non-reliance by a person said to have been affected by the conduct is more likely to be relevant to the question of causation. [29]

1. The relevant misleading and deceptive conduct principles are further identified by the High Court of Australia in the judgment of their Honours Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ in Self Care IP Holdings Pty v Allergan Australia Pty Ltd [2023] HCA 8; (2023) 408 ALR 195; (2023) 97 ALJR 388 at [80] - [83]. The principles in relation to conduct that is likely, or is likely to be, misleading or deceptive was further usefully identified by the learned Jackman J in Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344 at [34] which is as follows:

Further, I note that conduct is, or is likely to be, misleading or deceptive if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ). In addition, the threshold "likely to be" is satisfied where there is a real and not remote possibility that conduct will mislead or deceive: Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142; (2021) 392 ALR 205 at [89] (Rares, Murphy and Abraham JJ).

1. The principles in relation proportionate liability for appropriate claims are identified by High Court of Australia in Tesseract Internation Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24 at [108]- [118].

1. The balance sheet identifying the parties' assets and liabilities and the Court's findings are as follows:

Properties at E Street, Suburb F (on completion value)

Setting aside of refinances over Suburb F property received by Husband

First and Second Mortgages from B Pty Ltd (second respondent)

CBA Fixed Rate Personal Loan #...30 as at 8 September 2022

1. The Court has taken into account the principles in s 43 of the Act and as these are related proceedings s 60B and s 69ZM of the Act and also the overarching purpose in s 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth). It is taking into account those principles that are part of the reason why the Court has delivered this ex-temporary decision, so as to facilitate, as soon as possible, a conclusion to the property proceedings that have remained on foot. The Court earlier today made orders facilitating the expeditious re-fixing of those parenting proceedings to bring them to an end, and an end to what must be an extremely stressful position of litigation for the wife and husband before this Court.
2. The Court is firmly of the view that publishing the oral reasons now and making final orders in respect of the property proceedings are ultimately in the best interests of the children, so as to facilitate the filing disposition of all proceedings before this Court.

SECTION 79 CLAIM

1. The above balance sheet identifies that there is no effective property for the purpose of s 79 of the Act. The Court does not accept Motor Vehicle 3 is likely to be an asset that can be sold and divided given that it is not registered in the name of the husband and the Court accepts that the husbands need a vehicle for work and interacting with his children. While the Court would have, had there been property, as the Court has indicated, found that there was a significant and important home-maker contribution by the wife throughout the relationship, over which the parties had five children. This would have more than equated with the financial contributions and the initial contributions made by the husband, and that a future allowance, had there been property that it was just an equitable to alter, would have been required, depending on the amount available, an adjustment in the order of 10%, totalling in the order of 60 per cent in favour of the wife and approximately 40 per cent in favour of the husband. However, the Court is not in a position where it can make those final orders because there is no property from which any adjustment can be made.
2. It is in these circumstances that the Court is not satisfied that it is just and equitable, as required under s 79(2) of the Act, to make any order altering the interest of the parties. Given the absence of property, there is little utility in identifying each of the factors under s 75(2) of the Act that the Court would otherwise have addressed in detail. It is apparent, however, from the substance of the reasons already given, that the Court has had regard to the factors of the kind that would have been taken into account in identifying what may have occurred, had there been property available for distribution.
3. In all the circumstances, the existence of the liabilities, as significant as they are against the husband, provides no basis whatsoever for any adjustment of interests in respect of those liabilities for which the wife played no role whatsoever. They are all liabilities of the husband. It is unfortunate that the wife still has some small liabilities that she must carry on her own.
4. It is a tragedy in the present case that the husband managed to defeat the Court being able to make proper property adjustment orders in favouring of the wife. It is little satisfaction for the wife to be told that the law relating to caveats has not been satisfactorily amended as identified above. It is an awful outcome for the wife and her children that property which should have been available for the alteration of property interests has been effectively dissipated in breach of an injunction of this Court, and the wife and the children are left with no effective remedy by this Court in relation to s 79 of the Act.
5. The Court notes that the contravention application is not one that would have resulted in any useful outcome in terms of a payment to the wife and were not proceedings that would have further advanced the interests of the children. It also would not have advanced the interests of the children for the father to be incarcerated because of his disgraceful conduct which the Court has identified. That contravention application is no longer pursued.
6. The Court finds it is not just and equitable to make any property alteration between the husband and wife. Accordingly, in relation to the s 79 claim advanced by the wife, the Court dismisses the application for the alteration of property interest between the husband and the wife.

1. It follows like night and day, for the reasons already identified, the Court does not accept that this is a case where there is a disposition or settlement that can be set aside under s 106B as against the second respondent. The Court does not accept that there was a deliberate shutting of the eyes to the interest of the wife or that this is a case where the Court should find there was constructive notice because a reasonable person or a reasonable lender in the shoes of the mortgagee should have made inquiries to identify the likely defeating of her interest from the transaction.
2. The Court, for the reasons earlier identified, does accept that the wife made out the requirements of s 106B(1) however, the Court does not accept that the second respondent engaged in a settlement or disposition that was not bona fides. The proposition that a finding of not being bona fide equates with a finding of mala fides was one contested by Mr Reeve.
3. Whilst the section does not refer to mala fides, the effect of actual or constructive notice that it would defeat the interests, in essence constitutes a finding of mala fides. The Court must take into account the Briginshaw Principle (see: Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336), as to the clarity and satisfaction needed in finding mala fides by the second respondent, in the context of s 106B. Whilst Mr BB did give evidence on some issues which the Court found unreliable, he was not a dishonest witness, and the Court does not accept that he deliberately shut his eyes to the likely impact of the settlement or disposition, defeating the interests of the wife. The Court is also not satisfied that the second respondent had constructive notice that the disposition or settlement, would be likely to defeat the interests of the wife.
4. The Court does not accept that the second respondent was required to make further inquiry of the caveators to identify the underlying indebtedness, or that there was other failure to make a reasonable inquiry that would have disclosed the relevant, likely defeating, of interest. The Court must take into account under s 106B(3) of the Act, that on the face of the proceedings, the second respondent was a bona fide purchaser of its mortgage interest, given the findings made by the Court, and that was an acquisition of a mortgage interest for full value. Indeed, for value well in excess of the value of the property in the ultimate outcome. The second respondent is now, in equity, no longer the owner of the property, because it has been the subject of a contract for sale, due to complete later this year.
5. Setting aside the mortgage would adversely affect that interest, even if the Court had found that there was circumstances in which the purchaser, the second respondent, could be said not to be a bona fide purchaser, the Court would still not be satisfied that it is appropriate to set aside the interest that has been acquired from the mortgagee under the contract for sale, and, accordingly, would not set aside the mortgage. Further, insofar as the dispositions are concerned, the disposition of the $1.5 million to the husband was a disposition for value, and it was a proper concession by Mr Reeve that there cannot be a benefit received from the fraud of the husband.
6. In essence, the second respondent provided full value for the payment made to the CBA. Thereupon, the husband became a creditor of the CBA. The Court does not accept that even if there had been a finding of want of bona fides, the disposition to the CBA is a disposition that should be set aside in all circumstances. Accordingly, although the Court is very sympathetic to the terrible plight that the wife has been placed in by the conduct of the husband, the Court is not satisfied that it can make orders under s 106B of the Act in favour of the wife. Accordingly, the Court dismisses the wife's claim under s 106B against the second respondent.

1. There then arises the remaining claim, which is the misleading and deceptive conduct claim by the wife against the second respondent. It is apparent that that claim depends not just on a finding of misleading and deceptive conduct, but also a causal link in terms of the second respondent refinancing with that misleading deceptive conduct. In summary, for the reasons the Court has given, the Court is not persuaded that the second respondent was induced by or relied upon the "To whom it may concern" letter from the fourth and fifth respondents and is not satisfied that the letter of 4 February 2022 was a cause of the second respondent entering into the refinancing. There was no loss suffered by the first respondent because of the alleged misleading conduct.
2. In this regard, the Court has earlier identified the very important false assertion in the executive summary that is entirely inconsistent with the true state of facts and supersedes any alleged causal link to the alleged conduct by the fourth and fifth respondent. That false assertion is not in any way derived from the letter of 4 February 2022 by the fourth and fifth respondents. Its content was not satisfactorily explained by Mr BB, nor was its significance explained by either Mr NN or Mr LL. As earlier explained, the materiality of that false statement entirely overarches and severs any alleged conduct reflected in the content of the 4 February 2022 letter. The false proposition that the borrower has received approval on title subdivision is a proposition that overarches and supersedes any content of the letter of 4 February 2022. Approval on title subdivision would mean completion of construction in accordance with approved plans and an entitlement to an occupation certificate. No such false proposition based on a received approval on title subdivision can be derived from the letter of 4 February 2022, or anything conveyed on or about 8 or 9 February 2022 in the oral communications. The Court does not accept that the reference in security documentation to the letter from a certifier amounts to a causal link, given that false statement. That false statement was not caused in any way by the fourth and fifth respondents.
3. The Court also finds that the generality of the content of the letter of 4 February 2022 provided no basis for the plainly false assumption made by Mr BB that the fourth and fifth respondents were certifiers of the construction project at the Suburb F property in circumstances where they were not the certifier for that project. That fact was clearly conveyed by the conversation on 8 February 2022. The Court further finds that no reasonable person would rely upon the content of the 4 February 2022 letter, given its generality and the very limited identification of an inspection that had been undertaken.
4. The Court is not satisfied that the content of the letter of 4 February 2022 was content that induced or was relied upon by the second respondent. The whole of the content had already been provided in the borrower's application by the broker. The letter was one sent to the borrower, not the second respondent and, whilst included in the description of security documentation, the Court does not accept that that letter of 4 February 2022 was a cause of the second respondent entering into the refinancing transaction. In these circumstances, there can be no loss by reason or because of the entering into of that refinancing transaction by the second respondent. For that reason alone, the misleading and deceptive claim must fail.
5. Further, for the reasons the Court has already given, the Court is not satisfied that the content of the letter, carefully read, would lead into error and, given the communications identified between the borrower and the fourth and fifth respondent. The Court is not satisfied that there was not a reasonable basis for the future representation contained in the letter of 4 February 2022. Accordingly, the Court is not satisfied there was, in fact, any misleading and deceptive conduct, and accordingly, no contravention of s 18 of the ACL. For these reasons, the Court dismisses the wife's claim against the fourth respondent and fifth respondent. It is unnecessary to consider the apportionment outcome, however for the record the Court would have adopted the % responsibilities advanced by the fourth and fifth respondents.

1. In relation to the claim by the second respondent against the husband, the Court has been taken to the first and second loan documents in the memorandum and guarantee. It is not necessary for the Court to set the same out. It is patent that the husband has a contractual liability for the full amount of the loss that has been identified in the schedules to the affidavit of Mr BB and Ms TT. In these circumstances, the second respondent is entitled to judgment in the sum of $8,242,144.97 which is to be paid by the husband within 28 days of the order being made. The Court is satisfied that it has jurisdiction in respect of the matter that includes the contractual indebtedness of the applicant to the second respondent which entity was joined by in the property matter by the subject of the s 106B case.

1. The remaining issue to deal with is that of costs. In relation to costs, the Court has taken into account in relation to the provisions of ss 117(1), 117(2) and 117(2A), which are as follows:.

Section 117 Costs

(1) Subject to subsection (2), subsection 102QAB(6) and sections 117AA and 117AC, each party to proceedings under this Act must bear the party's own costs.

(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

(a) the financial circumstances of each of the parties to the proceedings;

(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings,

particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g) such other matters as the court considers relevant.

1. Dealing first with the costs of the wife as against the husband, in relation to s 117(1) these proceedings are ones in respect of which there are clearly circumstances that justify the Court in making a cost order against the husband. Those circumstances are the fraudulent conduct of the husband and his breach of the injunction. The Court has taken into account the parlous financial circumstances of both parties.
2. There is no relevant factor in relation to s 117(2A)(b) to be taken into account.
3. In relation to s 117(2A)(c), the Court has taken into account the conduct of the proceedings as identified as egregious conduct by the husband in failing to comply with the injunction, and encumbering the only potential property available to meet an alteration of property interests in favour of the wife.
4. The Court is satisfied that these proceedings, include the s 106B, where necessitated by the failure of the husband to comply with the Court's injunctive order under s 117(2A)(d) of the Act.
5. In relation to s 117(2A)(e), the lack of success in the present case by the wife is not for want of merit in her entitlement to a proper and fair share of a property pool, had there been one available and she would otherwise have succeeded in an alteration of property interest had there been a pool or had the husband not dissipated the property.
6. In relation to s 117(2A)(f), There is no relevant offer in writing to take into account, and the Court has taken into account, as a relevant circumstance, that these proceedings, under s 106B of the Act, were reasonable and open to taken by the wife in circumstances where the borrower was a $2 company without any assets, and where the guarantor had no capacity, independently, to fund the lending that took place, and where no balance sheet of assets and liabilities had been obtained by the financier. As a result of which, it was reasonable for the wife to bring the s 106B proceedings against the party that was joined, and it was reasonable to pursue the misleading and deceptive conduct case, all generated from the fraudulent conduct of the husband.
7. Accordingly, the Court is satisfied that there are circumstances that justify the Court in making an order against the husband. The Court does not accept the proposition advanced by Mr Connor, that the proceedings against the second and fourth and fifth respondents should not have been pursued by the wife. The Court finds it was reasonable for the wife to do so and that the husband was the cause of the need for those proceedings, and accordingly should be ordered to pay the whole of the costs of these property proceedings of the wife, including her claims against the second and fourth and fifth respondents. Accordingly, pursuant to s 117 of the Act the husband is to pay the whole of the wife's costs of the whole of these property proceedings, including the whole of the costs of the property proceedings against the second respondent, fourth respondent and fifth respondent, as agreed or assessed.
8. On the first day of the further hearing this week, which was day 4, the Court does not accept that the unsuccessful outcome was inevitable and finds that it was reasonable for the wife to pursue and maintain the proceedings until the close of hearing today. The Court has taken into account each of the factors under s 117(2A) of the Act, to which it is earlier referred. As a result of which, the Court is not satisfied that there are circumstances that would justify the Court in making any order in favour of the second respondent as against the wife.
9. The Court has taken into account, the successful outcome in terms of the position of the second respondent, but regards the factors in relation to the fraud perpetrated by the husband, who is in essence the cause of these s 106B proceedings, together with the parlous circumstances of the wife, and the other matters to which the Court has referred under s 117(2A), as meaning that no order should be made in favour of the second respondent as against the applicant. The Court is, however, satisfied taking into account the factors under s 117 of the Act, including s 117(2A), notwithstanding his parlous position, that the husband should pay the whole of the costs of the second respondent as agreed or assessed.
10. In relation to the costs of the fourth and fifth respondents, there was tendered into evidence a Calderbank offer made on 4 December 2023. At that time, no sale had been achieved of the property. It was not unreasonable, in circumstances where no sale had been achieved, for the first respondent not to accept the offer that might have provided some funds that was made in that letter. At that time, it was not known what value might be achieved in the sale of the property, and it was not known what the balance of the expenses may have been, and there may have been a property pool available for distribution to the wife. In the Court's view, it was, entirely reasonable for the wife to reject that offer at that stage.
11. The Court did identify that a potential different position might have been attained, had that offer been made at the time of the commencement of the fourth day of hearing, when the evidence of Mr BB in his second affidavit had been put on. No such offer was made. The Court is not satisfied that there is a circumstance that justifies the Court making any cost order against the applicant in favour of the fourth and fifth respondents. The Court has taken into account the factors to which it is referred under s 117(2A) of the Act, including notwithstanding the success of the fourth and fifth respondents, that the real cause of this fraud was the applicant husband and the parlous position of the first respondent wife.
12. Accordingly, the Court is satisfied, however, that the husband fraudster, notwithstanding his parlous position, should be the subject of an order for payment of the costs of the fourth and fifth respondents by way of a Bullock order, notwithstanding that there was no intermediate claim. Accordingly, the Court makes the order pursuant to s 117 of the Act that the husband, by way of Bullock Order, pays the fourth respondent's and fifth respondent's costs of the whole of these property proceedings as agreed or assessed.
13. It is for these reasons the Court makes the above orders.

I certify that the preceding one hundred and sixty-four (164) numbered paragraphs are a true copy of the Oral Published Reasons for Judgment of Judge Street.