Banque Commerciale SA (In Liq) v Akhil Holdings Ltd

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

1. On 8 May 2025, a judge of the Federal Circuit and Family Court of Australia, Division 1 dismissed the appellant husband's application for property settlement orders. This was because his Honour found that there "was essentially no asset pool" (at [176]). This embodied a rejection of the appellant's claim that he had an equitable interest in properties owned by the first respondent, being the daughter of the third respondent wife by a previous relationship and by a company (second respondent) which is owned and controlled by her. Due to an oversight by the appellant, the wife was not named as a respondent to the appeal until 6 June 2025 - which is why she appears as the third respondent.
2. The appellant had significant funds in a number of bank accounts in Country H. He transferred a large part of these funds to Australia where they were used to acquire the properties owned by the first and second respondents.
3. The appellant contended that the funds he transferred were charged with a trust in his favour. The funds were "knowingly received" by the first and second respondents who were said to hold them on trust for the appellant pursuant to the first limb of the rule in Barnes v Addy LR 9 Ch App 244 under which strangers can become constructive trustees when they receive and become chargeable with some part of the trust property.
4. The primary issue in the proceedings was the source of the funds that ended up in the appellant's account. He stated they were his and were generated from his business activities. The respondents contended that the funds instead came from Mr G, the third respondent's first husband, and the father of the first respondent. Mr G was said to have extensive business interests in Country H, including real estate development.
5. He died in 2005 after having separated from the third respondent in 2001.
6. The third respondent commenced her relationship with the appellant in late 2002. It ended in December of 2020.
7. The appellant relied only on his own evidence. The respondents however called many witnesses including Mr S and the maternal aunt.
8. The primary judge did not accept the evidence of the appellant. His Honour said:
   1. [The appellant's] credit was fraught throughout the hearing and subject to reasonable and effective attack. When his evidence was undermined by cross-examination he readily sought to create a fresh factual scenario. He was an unconvincing witness.
9. On the other hand, the respondents and their witnesses were found to be credible and to "have given evidence in a truthful and convincing manner" (at [85]).
10. Thus, the transferred funds were not impressed with a constructive trust and the appellant's case failed.
11. In the course of submissions, the appellant also attempted to argue a resulting trust. It too failed because he could not establish the properties were purchased with his money (at [167]).

1. The appellant died in 2025, shortly after the appeal was filed which was continued by Ms Fing, who was named as executor in the appellant's will. While she was substituted as his personal legal representative in these proceedings by order of the appeal registrar on 3 July 2025, no grant of probate has yet been made and s Fing has no formal standing to prosecute the appeal.
2. The Full Court in Wei & Xia [2024] FedCFamC1A 65; (2024) FLC 94-186 said:
   1. The third respondent is an essential party to the proceedings. Her legal personal representative may be substituted as a party (r 3.19(3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Family Law Rules")) but obviously only after they have been appointed. There is no provision in the Family Law Rules for the appointment of a representative pending a grant of probate or letters of administration. An administrator ad litem is a position which requires a formal grant (Hewitt v Gardner [2009] NSWSC 705).
   2. In that case, Ward J (as her Honour then was) applied r 7.10(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW), which permit the Court to "appoint a representative of the deceased person's estate for the purposes of the proceedings". There is no equivalent rule in the Family Law Rules, but there is in the High Court Rules 2004 (Cth) (r 21.06.2(b)) ("the High Court Rules").
   3. Section 56(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides that where the Family Law Rules are insufficient, the High Court Rules apply, insofar as they are capable of applying.
3. After raising this issue, the parties were content with an order being made appointing Ms Fing as the representative of the estate for purpose of the appeal.

1. Before turning to the matters raised in the appeal, we wish to say something about the role of pleadings in Family Law proceedings. Such pleadings (Points of Claim, and Points of Defence) are commonly ordered where there are complex commercial or equitable issues raised, particularly in claims against third parties to the marriage.
2. The modern approach to pleadings was described by Dawson J in Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279 ("Banque Commerciale") at 296-297 as follows:

It is, of course, the purpose of pleadings to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings upon trial may be conducted in an orderly fashion by reference to those issues. The defined issues provide the basis upon which evidence may be ruled admissible or inadmissible upon the ground of relevance. But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings. It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings ...

1. However, on this point this Court has not spoken with one voice. Sitting in the original jurisdiction, Aldridge J stated in Clifton & Aspen [2023] FedCFamC1F 376 ("Clifton"):
   1. Points of claim and points of defence identify the metes and bounds of the dispute that the applicant seeks to make against other respondents and, as with the statements of claim and defence, parties are bound by their pleadings. The case they seek to run is to be heard and determined by reference to the pleadings. Pleadings are not therefore not a general invitation to dance, but a precise articulation of the allegations made against the respondents. Contrary to the submissions of at least junior counsel for the wife in this matter, there is no right to amend the points of claim at any time the applicant feels fit.
2. Conversely, after referring to both Banque Commerciale and Clifton the primary judge adopted the approach of Strum J (also sitting at first instance) in Yong & Weng [2024] FedCFamC1F 440; (2024) 70 Fam LR 1:
   1. In the circumstances, I consider that, especially in this Court, the purpose of pleadings, where ordered and/or filed, is to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings, at trial, may be conducted in an orderly fashion by reference to those issues. However, they are not determinative of proceedings, which are delineated by the orders sought in applications, responses and/or replies, and the evidence adduced in support thereof.
3. We do not agree that pleadings in family law cases should be treated more laxly than in other courts. Parties should be held to their pleaded case. There is little point in making the parties define their case by pleadings unless they are taken to be binding. They supersede what is contained in the application or response. Parties should only be able to do so depart from the pleaded case by leave or, preferably, by amendment to the pleadings. It follows that the pleadings define the relevant issues of disputes which informs the admissibility of evidence sought to be adduced.
4. In Quincey & Quincey [2024] FedCFamC1A 30; (2024) FLC 94-178, Tree J elaborated on this saying:
   1. Plainly the husband did not oppose the admission of the relevant evidence, although after the pertinent cross-examination of the husband had concluded, his counsel noted that, despite no objection having been raised, nonetheless all of that evidence was irrelevant (Transcript 4 May 2023, p.105 lines 15-16). There is no doubt that the relevant evidence was not rejected by the primary judge. Whilst it may have been irrelevant to the pleadings as they then stood, once it was admitted, it was relevant material able to be relied on by the primary judge. Moreover, the husband himself attached the relevant purported loan documentation to his affidavit filed 31 August 2022, which squarely precipitated the lines of cross-examination by counsel for the wife.
5. As Dawson J pointed out, leave to amend might be readily given when the relevant evidence is already before the Court and the new issues are raised without objection. Leave will be granted less readily when it is otherwise. There is no entitlement to amend and any application to do so must be considered on the basis of the demands of justice. This includes consideration of any prejudice to the respondents, whether that can be accommodated in some way and the need for finality in litigation.

1. At the outset it is necessary to say that the grounds of appeal are overly expansive, overlapping and repetitive. The appellant's Summary of Argument reduced the appeal to just four points but the submissions under them ranged widely.
2. We shall follow the approach taken in the Summary of Argument.

Did the primary judge err when he found that the appellant did not have an absolute proprietary interest over the foreign country currency 23,335,000? (Grounds 2, 4, 5 and 6)

1. This was the sole point addressed in oral submissions. The appellant's central contention was that as the funds were, at some stage, undoubtedly in his bank account, he did not have to prove that the funds were his. The collateral submission was that as the respondents did not produce relevant records, including bank records, they could not prove the funds originated from Mr G.
2. The relevant events took place in the first decade of this century so it is not surprising that all relevant documents were not to hand. The primary judge had to do the best that he could on the evidence before him.
3. The respondents' case was that Mr G was a property developer. One of the developments involved 109 apartments in Country H which were sold between 2006 and 2009. Mr S gave evidence that he assisted in the sale of these units and, at the direction of Mr G paid the money into the bank accounts of the appellant for the benefit of the third respondent. As was ultimately accepted by the solicitor for the appellant, Mr S did produce a number of bank accounts showing the receipt of funds from the sale for 67 of those apartments. We accept that those entries did not match the payments into the appellant's accounts but there is no reason why they necessarily should.
4. The appellant, at least on appeal, accepted that Mr S did make the payments into the appellant's accounts but contended that the funds originated from the sale of his businesses.
5. Whilst thousands of pages of documents were tendered at the hearing it was not suggested they that shed any clear light on the resolution of this issue. What they did show was that Mr G was involved with property development. On the other hand, there were no such documents from the appellant.
6. The primary judge took into account that, at least until 2005 or so, the appellant was employed only as a migration agent. He called no witnesses other than himself.
7. His evidence was not accepted. His Honour said:
   1. The Court does not accept [the appellant's] accounts of his business acumen or his evidence generally about his efforts being the source of funds used to purchased assets in Australia. His evidence at trial that [his business] was only the source of 4 percent of his earnings in [Country H] is at odds with his first affidavit and is a scenario raised in response to the credible evidence of [Mr S], filed subsequent to [the appellant's] trail affidavit, that [his business] did not generate profits sufficient to fund the purchase of the properties in Australia. There is no explanation before the Court to explain the failure of [the appellant] to provide any documents to support the claims that he makes regarding the business that he conducted (other than bank statements which are replete with errors) and which do not establish the source of the funds. The failure to produce any documentary evidence of the business enterprises that he says that he conducted has to been seen in the context of him alleging that he was operating an enterprise earning a significant income and hiring 23 people.

...

1. [The appellant] has not established by credible evidence that he is the owner of the funds which were deposited in bank accounts in [Country H] in his name and subsequently transferred to Australia.

1. The respondent's case was accepted for the following reasons:

1. The respondents by their evidence have rebutted the claim by [the appellant] that because he had funds in that account, he was the owner of those funds. Whilst the evidence called by the wife and daughter is imperfect as there are records of transactions that are missing, those matters have been explained, in particular by:

(a) the length of time since the transactions occurred, being about 20 years; > > (b) where it relates to real estate purchased in [Country H] about 20 years ago by a person who is now deceased; > > (c) the difficulty of obtaining all the physical paperwork relating to all parts of the transactions including in circumstances where the documents would have been in possession of [Mr G] or departments in [Country H] where Australian Courts have no power of subpoena; > > (d) where there have been witnesses who have given clear evidence in support of the respondents and corroborated by available documentary records when available; > > (e) where the respondents have produced thousands of pages of documentary records where available and which are consistent with their evidence; > > (f) the convoluted nature of the transactions which were constructed so as to obscure the identity of the true owner of the properties which were sold, being that the apartments were purchased in the name of various individuals to circumvent restrictions on the number of apartments that could be purchased with a single bank loan; and > > (g) witnesses called by the daughter and the third respondent giving credible evidence both in their written and oral evidence.

1. I accept the evidence of the daughter and third respondent's witnesses that [Mr G] was a successful businessman in [Country H], that he supplied the funds to make arrangements to be the beneficial owner of apartments in [Country H] and that he intended the daughter to inherit his wealth on his passing and made arrangements as alleged by the respondents for this to occur.
2. In Lee v Lee [2019] HCA 28; (2019) 266 CLR 129 the plurality said:
   1. A court of appeal is bound to conduct a "real review" of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge's findings unless they are "glaringly improbable" or "contrary to compelling inferences" is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, "in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge".

1. Clearly the primary judge's findings were informed by his impressions of the reliability of the witnesses called.
2. The appellant submitted that his bank accounts were such incontrovertible evidence. We do not agree. Whilst such statements may well be prima facie evidence of ownership, they are no more than that. The evidence that was accepted was that the funds were placed there for the purpose of transmission to the first respondent. It follows from that finding that the appellant had no beneficial interest in them.
3. The appellant referred to a number of authorities on the nature of the relationship between a customer and his or her bank and that of debtor and creditor. Russell v Scott (1936) 55 CLR 440 at 450-451; Croton v The Queen [1967] HCA 48; (1967) 117 CLR 326 at 331; Citigroup Pty Ltd v National Australia Bank Ltd [2012] NSWCA 381; (2012) 82 NSWLR 391 at [41]. We do not need to refer to them in detail: they have nothing to say as to the ownership of the funds as between a creditor and a third party. They are not authorities for the proposition that because funds were deposited into an account, the owner of the account has 'an unrebuttable proprietary interest' in those funds.
4. These grounds are not made out.

Did the primary judge 'over rely' on uncorroborated oral evidence in preference to independent contemporaneous documentary evidence'? (Ground 4)

1. The appellant submitted that there were serious credibility issues with the evidence of Mr G who gave evidence as to the source of the funds in the appellant's account.
2. The substance of this ground is the same as those just discussed and it fails for the same reason.

Did the primary judge fail to apply the principles as to a resulting trust?

1. The law makes a presumption known as a presumption of a resulting trust: "that a person who advances purchase moneys for property, which is held in the name of another person, intends to have a beneficial interest in that property": Bosanac v Commissioner of Taxation (2022) 275 CLR 37 at [8] per Keifel CJ and Gleeson J.
2. A similar statement of principle was recorded by his Honour at [67].
3. The difficulty facing the appellant is that if the funds were never beneficially his, he could not be the provider of them and the presumption would not arise. This was noted at [175(a)].
4. The presumption is a weak one easily rebutted by evidence of actual intention. This was found at [175(d)], consistently with the findings of fact made by his Honour. That fact finding process has not been shown to be erroneous.
5. This ground does not succeed.
6. The final ground raises the indefeasibility of registered title. It arises only if one of the earlier grounds succeeds. It is therefore not necessary to consider it in any detail other than to say that the primary judge correctly did not deal with it because it was not pleaded.
7. Accordingly, all of the appellant's grounds are without merit, the appeal fails.

1. As requested by the respondents, directions will be made for the provision of evidence and submissions on the question of costs.

I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Campton & Christie.