Bathurst City Council v PWC Properties Pty Ltd

"...Mr Paul Thomas is giving evidence in response to a summons issued at the request of the applicant. We didn't actual arrange for Paul Thomas to be a witness... And Deputy President, you may have seen from the material we - the relationship between Arthur Thomas and Paul Thomas, it's - I don't want to say it's completely ruined or non-existent, it's not. And for example I have instructions that, they saw each other over Christmas as a family event and that sort of thing. But, we certainly haven't had any opportunity to have discussions with Mr Paul Thomas and it's potentially the case that he might be adverse to us. > > DEPUTY PRESIDENT: So, he could be a hostile witness. > > MR BLACK: That's right. And I just don't know. But as I say, I just flag that."

8. There were serious technical issues receiving Paul's evidence. The Tribunal was unable to successfully receive his evidence by Microsoft Teams, which, unfortunately is a common occurrence. In the end, Paul testified by means of a telephone, which is not the preferable way of receiving evidence.
9. Despite the technical difficulties, Paul gave straightforward testimony. Like his father, Paul was a candid witness, and the Tribunal formed the view that the answers he gave reflected his recollection and version of events.
10. As previously mentioned, the Tribunal also received evidence from the Respondent's daughter, Julie-Anne and his ex-wife, Janice.
11. The only further matter that should be noted, was that the evidence of Janice, although short, was quite compelling. She was a forceful and direct witness who impressed the Tribunal.

Was the Parkwood property held in a constructive trust?

1. The Applicant accepts that, throughout, the Respondent has consistently asserted that the Parkwood property was always intended to be owned by his son, Paul - Exhibit 3 p. 10 para 48.
2. This state of affairs was repeated by Julie-Anne in a response to a Statutory Notice issued by Member Bradley of AAT1 and dated 10 December 2019. In that response, Julie-Anne made this statement - Exhibit 1 T33 p. 281:

"The intention of purchase of the above property was for Mr Paul Thomas to be the sole owner and resident. > > Mr Arthur Thomas was guarantor for the loan to assist Mr Paul Thomas in purchasing his first residence."

3. Julie-Anne re-iterated her understanding of the Parkwood property in a Statutory Declaration of 14 December 2021 in which she deposed as follows - Exhibit 8 p. 1:

"5. I can recall that, at around that time in 2003, Paul was renting a property in Parkwood. He was interested in buying a house and was considering purchasing a property on acreage or in an urban area. He ended up deciding a house in the urban area was preferable. The property he settled on was 4 Fortuna Place, Parkwood.

4. I can recall that Paul had a car that he sold to go towards the deposit. He also would have had money because he was working and had been saving up money towards the house. I believe it was a combination of that and selling the car, but I cannot remember the specific details and am not sure if I would have inquired more. I was just happy that Paul had bought a house.
5. I have always considered the property at 4 Fortuna Place, Parkwood to be Paul's property. Paul had always paid for the house and has always lived there. I remember from speaking with Paul and Dad that Paul used to give Dad money for the mortgage.
6. I only found out that the house was in dad's name around the time his pension was dropped."
7. The Applicant noted, correctly, that in the Respondent's 2008 Will, the Parkwood property was bequeathed to Paul, whereas in his 2017 Will, his property (without specific mention of the Parkwood property as in the 2008 Will) is bequeathed in equal shares to his children. The Applicant then contended - Exhibit 3 p. 10 para 50:

"...In circumstances where the Respondent's property in his 2017 Will is bequeathed in equal shares to his five children, the Secretary notes that Ms Wiersma stands to gain more as a beneficiary under the Will if the Parkwood property remains as part of his residual estate. By declaring in support of the Respondent and her brother, Mr Paul Thomas, Ms Wiersma appears to accept that she would be entitled to a lesser share of the Respondent's estate than is in fact provided for in the 2017 Will."

8. Insofar as it would be in Julie-Anne's financial interest to contend that the Parkwood property remained part of the residual estate of the Respondent, it is telling that she states and testifies to the contrary. In short, despite it is not in her potential financial interests, Julie-Anne has consistently stated and testified that the Parkwood property is, in reality, Paul's property.
9. This understanding of Julie-Anne's is made explicitly clear both in her Statutory Declaration and her testimony.
10. First, in her Statutory Declaration, she deposed as follows - Exhibit 8 p. 1:

"9. I am the executor of my father's will. I know that his unit will be divided equally between his children. The will would acknowledge that the Parkwood property belongs completely to Paul. It was never Dad's property."

11. Second, when questioned by Ms Forsyth about her Statutory Declaration, the following exchange occurred - Tr. 21.3.2022 p. 54:

"So when you say you know that, at paragraph 7, that I've always considered the property at 4 Fortuna Place Parkwood to be Paul's property, would you say that that stems from your reading of the will in 2008, and I don't mean that in a legal term?--- I don't think I've ever read the will, I don't think I have a copy of it, I think I only had the paperwork to say I'm executor of the will. > > Okay?---But dad - we've spoken about that, it's never been dad's property and that's why, in the will, it would only have dad's unit. He would never be able to put the - Paul's house in the will because it's never been dad's property. > > Okay, and that's your understanding, that it was never included in the will because it was never your father's property?---Yes, exactly."

12. Janice made a Statutory Declaration, dated 8 December 2021, in which she deposed that she also understood the Parkwood property to be Paul's - Exhibit 7 pp. 1 - 2:

"5. Paul was very keen around this time to buy his first home. He ended up deciding to purchase a property at 4 Fortuna Place, Parkwood. Arthur agreed to go guarantor for the loan. Apparently they went to the bank and for some reason Paul could not get a loan in his name, and the bank would only draw up the loan in Arthur's name. That is what I heard afterwards. > > ...

13. I have spoken with Paul about his mortgage repayments over the years. He used to come down to Burleigh Waters regulary [sic] and give his father cash to pay the mortgage. Paul wanted to do it over the internet, but Arthur did not have internet. Paul paid all the bills, mortgage repayments, and insurance relating to his house by giving cash to Arthur. Paul also helped Arthur with his unit and was never given any rent for that.

14. Our family all know that the 4 Fortuna Place, Parkwood property belongs to Paul. Arthur would have only stepped foot in it a few times."
15. At the Hearing, I asked Janice a clarificatory Question about paragraph 10 of her Statutory Declaration, and the following exchange occurred - Tr. 21.3.2022 pp. 58 - 59:

"Okay. And I think you said in your statutory declaration at paragraph 10, that our family knows that the Fortune Place, Parkwood, property belongs to Paul, Arthur would only have step foot in it a few times?---He hasn't been in there very much - I think probably - when Paul first bought it, Arthur obviously went and had a look at it, and I'd say he's been on the property four times, maybe five times, in the whole - since 2003. You know, sort of like at Christmas time when the daughter comes up from Sydney and we'll all get together up there. He's only visited the property - I doubt it'd be five times in its entirety. > > So although you can tell me that, you know, that your son has improved the property by replacing toilets and has carried out general maintenance because you visited - - -?---Yes, yes, just - that's all, he hasn't - like he wants to put a garage in and all the rest of it but he can't. > > Yes, but you can tell me that because you've physically seen what's going on, is that correct?---Yes, yes, I've - as I said, I've been fairly regularly visiting up there. > > But your husband - ex-husband, couldn't tell me that because he hardly ever visits the place?---No, no. Look you're asking to draw a floor plan; I don't know if he could know how to do it. You know, he's - as I said, in the entirety since 2003, he's probably, at the most, been there five times. And that's at family gatherings. > > ... > > WITNESS: Please sort it out, I mean the property is Paul's, it is not Arthur's, never has been and never will be Arthur's property. It is Paul's and he has paid the mortgage; he has paid the rates, he has paid everything on that property, he has maintained it, it is 100 per cent Paul's property. He paid his father and his father paid the bank. It was because Paul was unable to get a loan in his name that it was put into Arthur's name, it should not have been put into his name, he should've been as guarantor, or trustee, or whatever you would call that, Arthur was never to own the property."

16. Reference can next be made to the statement made by Paul in response to Member Bradley's Statutory Notice dated 9 December 2019. In response to Questions posed, Paul provided the following information - Exhibit 1 T34 pp. 282 - 283:

"I, Mr Paul Thomas, purchased the above property for my sole ownership and as my permanent residency. > > The bank advised that for the Loan Application to be successful it would have to go in my Fathers name, (Mr Arthur Thomas) as per the broker's advice. It was my Father's intention to go Guarantor for my first property. > > By doing this, I missed out on my First Home Buyers Grant. > > ... > > My financial contribution was the sale of my car as deposit. > > ... > > Yes, I, Mr Paul Thomas have lived in my property since I purchased it in 2004. > > ... > > I, Mr Paul Thomas have maintained this property. > > ... > > Yes, improvements have been made. > > ... > > No, I have never paid any rent. I have paid Mortgage, insurance, Land & Water Rates, Utilities etc. > > ... > > I, Mr Paul Thomas, have paid fully for the property, as I am the sole owner. > > ... > > Repayment of the mortgage was paid by cash directly to my Father, Mr Arthur Thomas."

17. At the Hearing, under examination by Mr Black, Paul confirmed the correctness of his answers - Tr. 21.3.2022 p. 43:

"Is there anything about those answers that you feel needs to be corrected?---Which in particular are you talking about? > > Well, let me put it this way, on reading those answers, did you feel that any of them were wrong? Just giving you a chance to identify whether there was anything you thought on reflection was wrong. I'm not suggesting there is, I'm just asking you whether you thought there was?---I don't believe there is."

18. Attention will be given below to a document completed in March 2019 by Paul in relation to a social security payment.
19. Turning finally to the evidence of the Respondent, attention can first be directed towards his Statutory Declaration of 30 September 2021.
20. The Respondent deposed that the Commonwealth Bank refused to lend money to Paul to purchase the Parkwood property, and a suggestion was made that the loan be in his name, with a mortgage over his Burleigh Heads unit. The Respondent further deposed that he was not involved in, or was present, during the inspection of the Parkwood property or the payment of a deposit. He also could not remember the signing of a contract of sale. Importantly, the Respondent deposed as follows - Exhibit 6 p. 3 para 26:

"I did not realise that I was going to be on the title for the Parkwood property and was not aware that I was at the time. I was just happy that Paul got his mortgage through. We all understood that the Parkwood property belonged to Paul."

21. It will be recalled that, when the Respondent visited the Robina Centrelink office on 29 August 2017, he told the Centrelink officer that his "own opinion is that he does not and never has owned the home which was purchased in 2004 for his Son" - Exhibit 1 T41 p. 574.
22. As mentioned earlier, the Tribunal found the Respondent to be an honest and direct witness. However, as previous examiners of him found, he can be, at times, confused and confusing. This confusion is exemplified in the confused financial circumstances surrounding the dealings of the Respondent and his son, Paul.
23. The Tribunal could, perhaps, set out in a number of pages the complicated and often perplexing financial dealings between father and son. In part, some of this confusion was born in the fact that the Respondent was stubborn in his refusal to accept and join the challenges and benefits of the digital age. He did not have a computer, an email account, or engage in telephone, let alone, computer banking. Rather, he was a child of the earlier era of cheques and physical money transactions.
24. The Applicant, quite properly, and with forensic attention to detail, has set out, for the benefit of the Tribunal, a history of the available bank statements of the Respondent. They cover, in some detail, the period between 2004 and 2010, and in some instances up and to including 2013 - Exhibit 3 pp. 12 - 13 paras 58 - 60. The Tribunal has perused, not only those paragraphs, but the numerous accounts contained in Attachment C to Exhibit 3. The Tribunal agrees that there is no obvious pattern in terms of deposits in those documents, but the Tribunal finds no issue with this.
25. The relationship between the Respondent and his son, Paul, like most family relationships, was not defined by bonds of strict financial rectitude. In short, like most family financial relationships, it was relatively relaxed and allowed bounds of latitude and freedom. A reading of the statements in Attachment C illustrates, overall, no set strict pattern of repayments. This should be of no surprise, after reading the Statutory Declaration of the Respondent. It would appear to the Tribunal, that the Respondent was a loving and quite tolerant father of his son, Paul, who was irregular with his financial commitments.
26. It is appropriate to deal, at this stage, with the Applicant's submission about the previous work history of the Respondent and how this shines a light on his understanding of the documentation surrounding the loan, mortgage, repayments and legal relationship between himself and Paul.
27. The Applicant made the following submissions - RCS pp. 2 - 3 paras 8 - 9:

"8. The Secretary further notes that the Applicant has a significant work history with New Zealand Insurance as an underwriter and then commercial underwriter over a 30-year period and in charge of 'serious finance'. He was eventually promoted to manager and gave oral evidence that while he purportedly found legal documents 'confusing', he was familiar nonetheless with legal documents 'from a policy insurance side'.

28. The Secretary contends that it can reasonably be inferred that the Applicant's professional experience demonstrates that he understood these documents. In any event, the Secretary notes the Respondent explained that he knew he had an interest in the Parkwood Property because, 'I was concerned I would lose my unit'. Accordingly, the Secretary submits that the Respondent's oral evidence is self-serving and any assertion that he did not know the Parkwood Property was not in his name or that he did not know he had an interest in that property to be without foundation."
29. The Tribunal does not agree with the inferences the Applicant seeks to draw from the Respondent's work background.
30. It is the case that the Respondent worked in the insurance industry for many years; however, he left that industry in 1989, over 30 years ago, and worked for two decades as a taxi driver. Having observed the Respondent in the witness box, he was, by 2022, a frail elderly gentleman, softly spoken and having difficulties in understanding some of the questions posed. He did not give the Tribunal the impression of being a man with a towering intellect who was au fait with the law governing real estate, mortgages and trusts.
31. Looking at what occurred from a distance, it is tolerably clear to the Tribunal that the Respondent did have some understanding of the legal arrangements between himself and Paul, albeit in an imprecise way. He did know that the Parkwood property loan was in his name, and that his Burleigh Heads unit was mortgaged to secure the loan. In his mind, Paul was the "owner" of the Parkwood property. The Respondent's concern about losing his unit, no doubt sprang from the fact that his unit was mortgaged to pay for the Parkwood property, and if Paul ceased paying his share of the loan, then such a scenario could eventuate.
32. In short, the Tribunal does not draw any adverse inferences against the Respondent on the basis of his work history in the insurance industry and his subsequent failure to disclose his legal ownership of the Parkwood property. Indeed, on the contrary, if one was to impute to the Respondent a degree of legal knowledge that far exceeds what he possesses, then a case could be made for suggesting that he did not disclose legal ownership of the Parkwood property because he considered that Paul had equitable ownership, and all he had, as in Agnew, was the bare legal title to the property which had no value.
33. It is necessary, however, to deal with one issue raised by the Applicant about the financial dealings of the parties as they go to the heart of whether there was, in fact, a constructive trust between the Respondent and Paul.
34. The Applicant points out that the Respondent testified that he deposited the cash payments received by Paul, along with his own funds, into a Commonwealth Bank Mortgage Interest Saver Account, and used the money from that account for his own personal use, including body corporate bills - SCS p. 2 para 7. The following exchange occurred at the Hearing between the Respondent and Ms Forsyth - Tr. 21.3.2022 pp. 27 - 28:

"You just said you had taken that money out to pay for bills. You had body corporate? ---Yes. Well, body corp, it's usually around the $500 mark, but I can't specifically recall this one in '14, because that's eight years ago, I can't recall it. But there's nothing fraudulent, it's just money I had in the offset and I'd use it to pay the mortgage. > > No suggestion it was fraudulent, Mr Thomas. What I'm asking though is, you got money from Paul, cash?---Paul, yes. > > You put it in the offset account to go then pay the mortgage?---Yes. > > But then, you were also withdrawing that money to pay your bills. Would that be fair to say?---It sounds correct, yes. Yes. > > ... > > But would it be then fair to say that that was a regular occurrence, there was money being withdrawn whenever you needed it?---Yes, it was my money and I just thought well I needed it to pay the mortgage and also my own living standards. But in '14, I was receiving a pension. I wasn't driving taxis anymore."

35. In light of this intermingling of moneys in the Respondent's Mortgage Interest Saver Account, the Applicant made the following submissions - SCS p. 4 paras 16 - 20:

"16. The Secretary further notes that the Respondent gave evidence that 'Paul would always pay me the mortgage repayment in cash' and further, 'I would deposit the cash into my account'; the Secretary contends the Respondent's evidence was in reference to the MIS account.

36. In his evidence, Paul confirmed that in 2004 he was paying $500 per week off the mortgage as the repayments were $2,000 per month and that he would pay this money in cash to the Respondent. The Secretary contends however that the MIS account statements do not corroborate the oral evidence of either the Respondent and Paul.
37. For example, the deposit made on 3 April 2014 in the amount of $1,000 into the MIS account was not subsequently transferred to the Standard Variable Rate Home Loan Transactions account... The Secretary notes however that an amount of $3,000 was withdrawn from the MIS account on 2 June 2014 and appears to be for the benefit of the Respondent, which is consistent with his oral evidence.
38. Similar withdrawals were made on 1 August 2014 in the amount of $1,500, on 27 October 2014 in the amount of $1,000, 8 December in the amount of $500, 1 May 2017 in the amount of $500, 1 December 2015 in the amount of $800, 27 March 2017 in the amount of $6,000...
39. The Secretary contends that when the evidence is viewed in its totality and objectively, the weight of the evidence would suggest there was no joint endeavour between the Respondent and Paul."
40. The Tribunal does not agree with the Applicant's interpretation of the evidence. The Tribunal prefers the following interpretation provided by Mr Black on behalf of the Respondent - RRS p. 1 para 3:

"...Once it is accepted that Paul in fact made the regular cash payments that have been described in the evidence, it is immaterial whether Mr Thomas used that cash or different funds to pay the mortgage. The purpose of Paul's cash was to pay down his 'share' of the mortgage. Even if Mr Thomas essentially treated Paul's cash as part of his 'consolidated revenue', he nevertheless ensured that the mortgage payments were made out of that 'consolidated revenue'. Regardless of whether Paul's cash payments were applied directly or indirectly towards the mortgage, they were nonetheless mortgage payments."

41. The financial records of the Respondent are untidy and, sometimes, not easy to follow. It would appear, as Mr Black submits, he did not separate Paul's repayments from other funds. Rather, there was a haphazard comingling. The Respondent's approach to his bank accounts could be described as laissez faire. This ultimately led to Paul ceasing payments altogether because he believed that he had paid his fair share of the mortgage, and whilst the Respondent disputed it, he had no tidy paperwork to counter that ultimatum.
42. However, none of this is to the point. The central issue is one of joint intent. The evidence highlights that there was a very clear understanding that Paul would pay his father a sum of money calculated weekly, and paid usually monthly, for his share of the mortgage repayments. Paul would travel from Parkwood to Burleigh Heads and give the Respondent that sum of money in cash, usually over a lunch. The Respondent would pay that money into his Mortgage Interest Saver Account. That account was also credited with other moneys deposited by the Respondent. From that pool of funds, the Respondent would pay the mortgage, as well as meet a number of other legal obligations. It could be categorised, as Mr Black submits, a "consolidated revenue account". In any event, the money was comingled, and the Respondent paid his bills as and when they fell due. There is no suggestion that the Respondent improperly dealt with the moneys he received or that he failed to meet his mortgage obligations. The substantive questions are whether Paul, at agreed times, gave the Respondent agreed amounts of money to repay the mortgage, whether those moneys were paid into his Mortgage Interest Saver Account, and whether the Respondent actually repaid the mortgage out of the funds in his Mortgage Interest Saver Account. The answer to those questions is in the affirmative.
43. This leads to a serious issue that requires careful consideration, as, on its face, it undercuts some of the evidence put forward on behalf of the Respondent with respect to the Parkwood property.
44. The Applicant referred the Tribunal to various statements of the Respondent that, since the purchase of the Parkwood property, Paul made mortgage repayments, paid outgoings on the property and undertook upkeep work on the Parkwood property - Exhibit 1 T18 p. 182, T26 p. 218 and Exhibit 4 p. 2 para 8.
45. The Tribunal's attention was drawn to ostensibly different information provided by Paul when he applied for a Newstart Allowance in March 2019 - Exhibit 3 Attachment D pp. 549 - 554.
46. Under the heading "Home Ownership Details", the following information is given - Exhibit 3 Attachment D p. 551:

"I do not own or am not paying a mortgage for the home I am living in > > My home is not owned by a trust or company I have an interest in > > I do not own a home and have to live somewhere else."

47. After drawing the Tribunal's attention to this answer, the Applicant referred the Tribunal to a number of constructive trust cases, one of which, was Follone - Exhibit 4 p. 3 paras 12 - 14.
48. The following submission was made by the Applicant:

"12. The Courts have applied high standards when deciding whether a constructive trust should be imposed. In particular, the law of equity will not step in to give substance or proprietary effect to loose, informal 'family' arrangements."

49. The Applicant then quoted from Follone and then submitted as follows - Exhibit 4 p. 3 para 14:

"14. In Follone the Tribunal stated that 'there must be some external evidence of their existence, beyond the bald assertions of the parties that claim to be privy to them'. Pursuant to Follone, the Secretary submits there is no satisfactory evidence that there was a common intention in relation to beneficial ownership of the Parkwood Property."

50. Before returning to the Newstart Allowance Form, it is desirable to address the legal point raised by the Applicant.
51. At the outset, constructive trusts are to be distinguished from express or resulting trusts. The category of constructive trusts is residual and contains various types of trusts. As a matter of common sense, constructive trusts are inferred because there is no clear trust documentation. The absence of clear documentation creating the trust and outlining its terms is almost always the case for constructive trusts. So, some care needs to be taken when quoting Follone as authority for the proposition that equity will not intervene to effect 'loose' family arrangements. If that proposition were taken too literally, then a decision-maker would be in error, as the Full Court decision in Agnew illustrates. In that matter, there was simply a 'loose' family arrangement.
52. It will be recalled that in Agnew, the father said to the sons of their farm: "it's yours now". There was no documentation backing up this promise or exhortation. Rather, the sons took their father on his word, acted in reliance on it, improved the farm and expended considerable sums of money in the process. The Full Court decided that the father held the farm on a constructive trust for his sons.
53. In Agnew, their Honours also discussed the notion of detriment, and, without going into any great detail, focused on the aim of frustrating unconscionable conduct. In this regard, it is useful to refer to a wider principle set out in the American Restatement of Restitution (1937):

"Where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain, a constructive trust arises."

54. It is the task of a decision-maker to shine a bright light on the dealings and understanding of the parties, particularly, when, as in this case, it involves complicated family arrangements. If Follone stands for the proposition that family "expectations" and informal agreements cannot be relied upon when determining if a constructive trust exists, then, with due respect, Follone is at odds with Agnew and cannot be held up as good authority. However, a closer reading of Follone does not support such a bald proposition. All Follone stands for is that the mere suggestion of a family or informal agreement without any evidence supporting it, is not sufficient to found (for example) a constructive trust.
55. Each matter brings with it different factual circumstances and different interpersonal relationships. It would be wrong to try and pigeonhole each matter, as a decision-maker is required to closely examine the evidence and reach a considered view of the intention of the parties.
56. The Tribunal agrees with Follone insofar as it was stated that "there must be some external evidence" of the existence of a particular legal or equitable relationship that goes beyond "the bald assertions of the parties" (at 482).
57. In Agnew, that external evidence comprised the reliance of the brothers on their father's promise with many years of hard work and personal expenditure given in reliance on the promise.
58. The Applicant drew the Tribunal's attention to a number of Tribunal determinations including Slamkova and Secretary, Department of Social Security [2017] AATA 137 (Slamkova). This was another instance of a parent allegedly holding a property on trust for a son. The Applicant quoted Senior Member Toohey (at [61]):

"...there must be something of real substance to support a claim that a property of which a person is the registered owner of 100 per cent, is in fact held on trust for another."

59. The Tribunal agrees with this statement of the law; however, it is helpful to set out all of Senior Member Toohey's findings:

"59. I recognise that families come to many different arrangements to help each other, and do not always do so with an eye to circumstances that might arise many years later, or not at all. I recognise that it is not uncommon for families to leave arrangements, even those involving substantial property and financial interests, undocumented as between each other.

60. There is much about Ms Slamkova's claims that is entirely plausible. It is plausible that a bank would require one or more guarantors for a loan to a young person just starting out. It is plausible that Ms Slamkova had a limited understanding of the details of documents she was signing at the time of the purchase. It is plausible that family members would, in effect, pool their income to help pay off a loan as quickly as possible, and there is the evidence of Aleksandar Slamkov's pay slips to show that his pay went into an account in her name.
61. That said, there must be something of real substance to support a claim that a property of which a person is the registered owner of 100 per cent, is in fact held on trust for another.
62. The Secretary submits that Ms Slamkova and Aleksandar Slamkov re-arranged their finances from mid-2014, after her claim for newstart allowance was rejected, to give the appearance that he was the beneficial owner of 100 per cent of the property so that she would qualify for newstart allowance. Some of the information before the Tribunal gives that appearance. For example, despite the documents provided by Bobb Property Group indicating otherwise, there is no evidence of payment of rent into Aleksandar Slamkov's bank account until July 2014. There is no evidence of rental payments into any other account, or to anyone, before that date.
63. I am unable to make a finding that Ms Slamkova deliberately re-arranged her finances as the Secretary submits. However, even leaving that aside, I am not satisfied on the information before me that she has held, or holds, the property on trust for her son.
64. Ms Slamkova's oral evidence was of limited assistance. Her memory of events and dates was poor. Aleksandar Slamkov has provided limited information, some of which I find improbable. There are many questions left unanswered. The information in the documents amounts to the following:
    • Ms Slamkova has at all times been the sole registered owner of the property;
    • her available tax returns show that she has declared herself to the sole owner, and she has declared the rental income and claimed deductible expenses since at least 2008;
    • the only evidence of loan repayments is from an account in Ms Slamkova's name showing repayments from January 2000 to July 2004;
    • according to her tax returns, the property had been rented since 2004, and since at least 2008-2009, for 52 weeks each year (except in 2009-2010 when it was rented for 35 weeks);
    • there is no independent evidence of where, or to whom, the rent was paid before July 2014.
65. As set out above, there is reason to doubt the veracity of the contents of some documents submitted by Ms Slamkova and Aleksandar Slamkov, in particular, the purported agreement with Bobb Property Group, the letters from Bobb Property Group, and the letter from Ms Slamkova authorising all payments to her son. If those documents are genuine, there is no evidence that those instructions were carried out.
66. It is not enough to say it is 'logical' to infer that Ms Slamkova could not have put up the deposit and repaid the loan on the property on her limited income. Apart from anything else, she does not dispute that she had owned another property since around 1999 which her tax returns show had been rented out 52 weeks a year from 1 July 2004. Ms Slamkova gave evidence that she sold the property in 2011 for $210,000 and gave $100,000 to her children. It would be just as 'logical' to believe she had income from sources other than her employment in previous years."
67. It is tolerably clear that the factual matrix in Slamkova is quite different from this matter. In Slamkova, there was little of "real substance" to support the proposition that there was a trust relationship between mother and son with respect to the property in question. Indeed, a fair reading of the material before Senior Member Toohey supported an alternative proposition. In this matter, in contradistinction, there is an abundance of material that supports the proposition that the Parkwood property was held by the Respondent on trust for his son.
68. The only material before the Tribunal that would seriously cast doubt on a finding of a constructive trust is Paul's Newstart Allowance application form.
69. Paul was questioned by both Mr Black and Ms Forsyth about this form.
70. First, the following exchange occurred between Paul and Mr Black - Tr. 21.3.2022 pp. 43 - 44:

"Okay. Now, did you make a claim for some sort of social security payment in about March 2019?---I did. > > Do you recognise the information in this document as relating to that claim?---I do recognise it. I recognise my answers there, but - - - > > All right. And, look, what I want to check first of all is in relation to the property at 4 Fortuna Place, you've described that in that earlier document as essentially that's your property?---Yes. > > Is that right?---Yes. > > Okay. Do you consider yourself to owe any money towards a mortgage or any debt in relation to that property?---No. > > Are you able to say when you consider you had paid off any debt or mortgage that you had in relation to that property?---It would've been a few years ago. > > In this document, this Claim Answers document, it's the third page, at the top it says, 'type of accommodation'?---Yes. > > Now, a bit more than half-way down it talks about fee type. It says 'other', do you see that?---Yes. > > Then it says, 'Total amount paid for premises $200 fortnightly'?---Yes, I see that. > > Is that information that you provided?---It is... > > ...What does that $200 fortnight refer to?---Well, it's I suppose a combination of rates, you know, house insurance, stuff like that. > > Okay?---You know, I suppose if you add the water and sewerage rate notice, council rates, household insurance. > > Yes?---Over the year and divided it up."

71. Ms Forsyth then asked Paul the following Questions - Tr. 21.3.2022 pp. 44 - 45:

"...So the amount that you just said there - well, that was referred to you, that 200 fortnightly under fee type, 200 per fortnight- - -?---Yes. > > ‑ ‑ ‑ you say that's made up of rates, home insurance, and stuff like that?‑‑‑Yes, general - this is a form - looking at the date, this is a form I would have filled out when I was heavily medicated after an incident I had here. > > Sorry, Mr Thomas, we didn't quite catch the end of that sentence. You say it was after an incident in when?---Yes. So, I was a victim of a home invasion, and I, you know, had two guys burst through the front door and work me over with a metal bar, so, I was heavily medicated with a few injuries and broken bones. > > When did that occur, that home invasion?---In 19 March > > Which year?---2019. > > Now, with that $200, you say you started paying that from 15 June 2004; is that right?---No, it would've been higher than that earlier on. > > And what would that amount be?---I paid $500 a week. > > And what did that amount entail? What was that for?---For the mortgage."

72. After asking questions relating to the mortgage repayments, Ms Forsyth returned to the Newstart Allowance claim form, and referred Paul to the Question relating to the "Type of Accommodation". Before he answered the Question, the following exchange occurred between the Tribunal and Ms Forsyth - Tr. 21.3.2022 p. 46:

"DEPUTY PRESIDENT: Just before you go, Mr Thomas, I'll just ask a question of Ms Forsyth. I don't have the online form in front of me, but it looks like, when I look at this, as if they've populated - it's a form populated and you choose in part what's populated by Centrelink, because it seems a bit odd the wording there. You know--- > > MS FORSYTH: In terms of - - - > > DEPUTY PRESIDENT: Yes, it doesn't look like that's an answer that the person would give, it looks like people are given multiple opportunities to basically highlight one of the prepopulated answers. > > ... > > MS FORSYTH: - - - I understood that, and I understand those answers are prepopulated and there's some sort of tick - - - > > DEPUTY PRESIDENT: Yes. > > MS FORSYTH: - - - twisty that you click on and provide - - - > > DEPUTY PRESIDENT: And I'm just wondering whether he hasn't ticked one and he's just - you've got there potential opportunities all populated there and they're not - - -"

73. First, Paul explained that he "completed" the Newstart Allowance claim form when he was recovering from a severe assault following a home invasion and was heavily medicated. In his Newstart Allowance claim form, Paul describes a serious violent assault that occurred on 17 March 2019, involving two masked men armed with an axe, metal bar and hammers, smashing down the front door of his home and then assaulting him - Exhibit 3 Attachment D p. 552.
74. The Tribunal accepts that such an event occurred as it is referred to by other members of the family. For example, the Respondent, in his Statutory Declaration, deposed as follows - Exhibit 6 pp. 3 - 4 para 37:

"I understand that Paul was assaulted during a home invasion a few years ago. I found out about this through other family members. I heard two men broke into his house and assaulted him. I know Paul had a security camera installed in the house which captured the people who did it, but I am not sure what came of it."

75. The home invasion is also mentioned in the Statutory Declaration of Janice - Exhibit 7 p. 1 para 7:

"In 2019, Paul was assaulted during a home invasion. He went through a bad time and was too scared to leave his house for a while. He was unable to do anything. He had busted ribs, arm and other injuries and no means of getting a job."

76. Paul explained that the $200 fortnightly accommodation expenses he noted on the Newstart Allowance claim form related to rates, insurance and utilities. The Tribunal observed Paul give the answers set out above, and accepts the truthfulness of his testimony.
77. Further there is nothing in the "Home Ownership Details" part of the Newstart Allowance claim form that casts any doubt on the arrangement that existed between the Respondent and Paul. As was made tolerably clear during the exchange between the Tribunal and Ms Forsyth, it would appear that the "answers" under the heading of "Home Ownership Details" were prepopulated.
78. The first two "answers" are not inconsistent with Paul's living arrangements. He was not paying a mortgage for the Parkwood property in 2019, as he had told his father two years prior that he had fully paid his share of mortgage repayments. Further, the Parkwood property is not owned by a company or trust that Paul has an interest in. The final "answer" makes no sense, as it purports to state that Paul does not own a home and has to live somewhere else. However, elsewhere in the form, Paul recounts that he was assaulted at his home on 17 March 2019. Moreover, he states he started living at his home on 28 March 2019 - Exhibit 3 Attachment D p. 549. It would appear that, after being assaulted on 17 March 2019, Paul has hospitalised and was heavily medicated. It may be that Paul only returned to his home on 28 March 2019. The electronic claim form gives an applicant an opportunity to choose prepopulated "drop down" answers. It is not helpful, having regard to Paul's medical state, to interrogate the claim form in an overly forensic manner. The Tribunal has formed the view that Paul filled out the claim form to the best of his ability at the time, and there is nothing in the form that casts any serious doubt on the arrangements that existed between himself and his father over the period commencing with the purchase of the Parkwood property.
79. It was pointed out by the Full Court in Agnew that following the High Court decision of Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 613 - 614, it is no longer necessary to show a common intention as to the ownership of the beneficial interest to establish a constructive trust - at 363. However, on the facts before them, their Honours proceeded on the basis to find a common intention constructive trust. Insofar as the factual matrix in this matter has similarities to Agnew, the Tribunal also proceeds on the basis of determining if a common intention constructive trust exists.
80. The first question is whether the evidence establishes that there was a common intention between the Respondent and Paul that the Parkwood property was to be purchased, and held, for Paul's sole benefit.
81. The Applicant properly accepts that throughout the history of the application, the Respondent has consistently asserted that the Parkwood property was always intended to belong to his Paul - Exhibit 3 p. 10 para 48.
82. For the reasons that have been set out at length above, the Tribunal accepts that the Respondent and Paul intended that the Parkwood property be purchased for the sole benefit of Paul.
83. This intention is succinctly summed up in the Respondent's Statutory Declaration as follows - Exhibit 6 p. 3 para 24:

"24. I thought that the property Paul wanted to buy looked affordable for him, and he convinced me that he could meet the repayments. All I could see was my son was trying to purchase property, and I wanted to help him."

84. The Tribunal has not only evidence from the Respondent and Paul, but also from Janice and Julie-Anne. The evidence from Julie-Anne is of significance, because her support for the proposition that the Parkwood property was always intended to be for Paul's sole benefit is actually to her detriment, having regard to the terms of the Respondent's final Will. The testimony of Janice was particularly powerful, and she ended her evidence with a heartfelt plea - Tr. 21.3.2022 p. 58:

"Please sort it out, I mean the property is Paul's, it is not Arthur's, never has been and never will be Arthur's property. It is Paul's and he has paid the mortgage; he has paid the rates, he has paid everything on that property, he has maintained it, it is 100 per cent Paul's property..."

85. The Tribunal, therefore, accepts that there was a common intention that the Parkwood property be purchased and held for Paul.
86. The second question is whether Paul acted to his detriment. The question of detriment was explained by the Full Court in Agnew as follows (at 363):

"...That is, one should not look for an act that can be seen to be to the claimant's detriment when done, but for an act done by the claimant in reliance on the conduct of the legal owner in circumstances where detriment would be suffered if the owner were permitted to depart from the assumption that induced the reliance..."

87. The Tribunal agrees with the submissions of the legal representatives of the Respondent that the following detriment would result if Paul was deprived of his beneficial interest in the Parkwood property - Exhibit 5 pp. 8 - 9 para 45:

(a) If the Respondent were permitted to renege on the intention that Paul would have the beneficial ownership of the Parkwood property, then the detriment would be that Paul would not gain his rightful proprietary interest in the property. In this regard, reference can also be made to the following observations in Agnew at 364: "The primary judge was correct in his treatment of detriment... His Honour said that if Mr Agnew had attempted to renege on his contract, his sons would have rightly complained that a refusal to transfer legal title to them 'would have been a detriment because it would mean that they would not gain their rightful proprietary interest in the land'". > > (b) In addition, relying on the common intention, Paul contributed funds from the sale of his motor vehicle in 2003 towards the purchase of the Parkwood property and has paid outgoings on the property and maintained it for 18 years.

88. The third question is whether, having regard to the factual findings made above, it would be an equitable fraud if the Respondent were permitted to depart from the common intention that the Parkwood property was beneficially owned by Paul.
89. The evidence presented establishes, to the satisfaction of the Tribunal, that Paul made substantial financial contributions for the purchase of the Parkwood property, gave his father substantial sums of money for the repayment of the mortgage over a period of approximately 13 years and has paid the outgoings on the Parkwood property since its purchase in 2004. The only substantial argument against this state of affairs is the Newstart Allowance claim form - Exhibit 3 p. 13 paras 62 - 65.
90. The Tribunal does not accept that there is any inconsistency of evidence given by Paul, and, even if there were some inconsistencies, they are minor and can be explained by his medical state when he filled out the Newstart Allowance claim form. Further, even if it accepted that there were inconsistencies in the Newstart Allowance claim form (which the Tribunal does not subscribe to), then the totality of the evidence from the Respondent, Janice, Julie-Anne, and the copious documentation presented, establishes, to the satisfaction of the Tribunal, that an equitable fraud would be occasioned if the Respondent were allowed to depart from the clearly established common intention that Paul is the beneficial owner of the Parkwood property.
91. The Tribunal is, therefore, satisfied that the three elements for a common purpose constructive trust have been met. It is not necessary, in these circumstances, to go further and ascertain if a joint endeavour constructive trust was established.
92. The Tribunal finds that the Respondent has held the Parkwood property on trust since the time that Paul acted in reliance on the conduct which gave rise to its imposition occurred, which, in this matter, is from the outset, and thus, at all material times.

1. It is not disputed that, having found that the Respondent holds the Parkwood property on trust for Paul, it is necessary to apply Part 3.18 of the Act to determine if there should be attribution of the asset to the Respondent. Part 3.18 provides how the assets and income of a private trust may be treated as being attributed to an individual. The rationale of Part 3.18 is to provide a statutory scheme to apply the social security means test where a person holds and controls assets in private trusts and companies. Section 1207 of the Act provides that for a trust asset or income to be attributed to an individual for the purposes of the means test:

(a) the trust must be a designated private trust - s 1207P; > > (b) the trust must be a controlled private trust in relation to the individual - s 1207V; and > > (c) the individual must be an attributable stakeholder of the trust - s 1207X.

2. In particular, it is accepted by the Respondent that any constructive trust arising in this matter is a designated private trust within the meaning of s 1207P of the Act and a controlled private trust for the purposes of s 1207V - Exhibit 5 p. 10 para 51.
3. Section 1208E deems the percentage attribution of the stakeholder determined by s 1207X of the trust assets, to be assets of the attributable stakeholder for the purposes of the stakeholder's personal assets test. Section 1208E provides as follows:

"Attribution of assets > > (1) For the purposes of this Act, if:

(a) an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and

(b) at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and

(c) if, at that time, that asset had been owned by the individual instead of by the company or trust, the value of the asset would not be required to be disregarded by any express provision of this Act; and

(d) at that time, the asset is not an excluded asset (see subsection (2));

there is to be included in the value of the individual's assets an amount equal to the individual's asset attribution percentage of the value of the asset referred to in paragraph (b).

Note: For attribution of the assets of a special disability trust, see section 1209Y.

Excluded assets

(2) The Secretary may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a particular company or trust, a specified asset is an excluded asset.

(3) A determination under subsection (2) has effect accordingly.

(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision-making principles."

1. Turning next to s 1207X, this section provides that an attributable stakeholder is deemed to have 100% of the assets and income of the trust attributed to him or her, unless the Applicant determines a lesser percentage. Subsections 1207X(2) and (5) provide as follows:

"Trust > > (2) For the purposes of this Part, if: > > (a) a trust is a controlled private trust in relation to an individual; and

(b) the trust is not a concessional primary production trust in relation to the individual (see section 1208U);

then:

(c) the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and

(d) if the individual is an attributable stakeholder of the trust--the individual's asset attribution percentage in relation to the trust is:

(i) 100%; or

(ii) if the Secretary determines a lower percentage in relation to the individual and the trust--that lower percentage; and

(e) if the individual is an attributable stakeholder of the trust--the individual's income attribution percentage in relation to the trust is:

(i) 100%; or

(ii) if the Secretary determines a lower percentage in relation to the individual and the trust--that lower percentage.

...

(5) In making a determination under this section, the Secretary must comply with any relevant decision-making principles."

1. In Kang v Secretary, Department of Social Services [2017] FCA 895, McKerracher J had to consider the above provisions in respect of a person who was held in the reviewable decision to be an attributable stakeholder pursuant to s 1207X and where 100% of the Trust assets were attributed to the applicant personally. McKerracher J helpfully discussed the relevant legal principles, which are of relevance to this matter:

"12. Having satisfied para (a) and para (b) of subs 1207X(2) of the Act, the provision gives the decision maker discretion to:

(a) determine whether the individual is not an attributable stakeholder of the trust; and

(b) determine whether, in the event that the individual is an attributable stakeholder, whether the individual's asset attribution percentage in relation to the trust will be either 100% or a lower percentage.

1. There are no express criteria under the Act setting out when a person who is an attributable stakeholder should be determined to be otherwise, or when a person's asset attribution percentage should be determined to be lower than 100%. However, subs 1207X(5) of the Act provides that in making a determination under s 1207X, the respondent 'must comply with any relevant decision-making principles'. It is also common ground between the parties that the relevant decision-making principles are the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 (Cth) (the Attribution Principles).
2. Part 2 of the Attribution Principles governs the exercise of discretion in determining that an individual is not an attributable stakeholder. Section 5 of the Attribution Principles states the following purpose:

[Part 2] sets out decision-making principles with which the Secretary must comply in making a determination, under paragraph 1207X(1)(a) or (2)(c) of the Act, that an individual is not an attributable stakeholder of a company or trust.

3. Sections 6 to 13 of the Attribution Principles set out various matters which the respondent (and the Tribunal on review) must consider in the exercise of that discretion. Amongst other things, the decision maker must consider:

(a) The 'relationship between the individual and the company or trust having regard to ... the reason why, but for a determination, the individual would be an attributable stakeholder ... and ... the circumstances mentioned in this Part': subs 6(2).

(b) '[W]hether, having regard to the relationship between the individual and the company or trust, the individual can reasonably be expected to exercise effective control in relation to the company or trust': subs 7(2)(c).

(c) '[W]hether the individual has received a benefit from a distribution made by the company or trust': subs 9(1).

(d) '[W]hether it is reasonably foreseeable that the individual may receive a benefit from a future distribution by the company or trust': subs 10(1).

(e) '[W]hether the individual receives or derives any kind of benefit (other than a benefit mentioned in section 9 or 10) from the assets or income, or both, of the company or trust': subs 11(1). 'Benefit' for the purposes of this section is 'not limited to a benefit to which the individual has a legal or equitable entitlement' and 'includes benefits received or derived in the form of property or services': subs 11(2).

1. Part 3 of the Attribution Principles governs the exercise of the discretion in determining whether an attributable stakeholder's asset attribution percentage in relation to a trust should be a percentage lower than 100%: s 14 of the Attributable Principles. Part 3 sets out various matters which the respondent must consider in the exercise of that discretion, which include the same considerations referred to in Pt 2, as discussed above: ss 16-22 of the Attribution Principles."
2. As McKerracher J explains, when determining if an individual is not an attributable stakeholder, a decision-maker is required to consider the principles prescribed by Part 2 of the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2017 (Cth) (the Principles). Although McKerracher J referred to the 2000 version of the Principles, for present purposes, there are no significant differences with the current (2017) version.
3. It is helpful to set out in full below all the provisions in Part 2 of the Principles, and then to address the submissions made by the Applicant and the Respondent.
4. Part 2 provides as follows:

"Part 2 Determination that individual is not attributable stakeholder > > 5 Purpose > > This Part sets out decision-making principles with which the Secretary must comply in making a determination, under paragraph 1207X (1) (a) or (2) (c) of the Act, that an individual is not an attributable stakeholder of a company or trust. > > 6 Application > > (1) This Part applies if, but for a determination by the Secretary, the individual would be an attributable stakeholder of the company or trust. > > (2) The Secretary must consider the relationship between the individual and the company or trust having regard to:

(a) the reason why, but for a determination, the individual would be an attributable stakeholder; and

(b) the circumstances mentioned in this Part.

(3) In particular, the Secretary must consider whether the effect of one or more of the circumstances mentioned in this Part, in relation to the individual and the company or trust, provides a sufficient basis on which to determine that the individual is not an attributable stakeholder of the company or trust.

7 Circumstances affecting relationship with company or trust

(1) The Secretary must consider whether there are relevant circumstances that make it inappropriate for the individual to be an attributable stakeholder of the company or trust.

(2) For subsection (1), relevant circumstances include the extent to which the relationship between the individual and the company or trust is affected by any of the following circumstances:

(a) circumstances arising from the legal structure of the company or trust;

(b) circumstances arising from the administrative arrangements of the company or trust;

(c) whether, having regard to the relationship between the individual and the company or trust, the individual can reasonably be expected to exercise effective control in relation to the company or trust.

8 Contribution to company or trust

If the individual has made a contribution to the company or trust, the Secretary must consider the circumstances in which the contribution was made and, in particular:

(a) the value of the contribution; and

(b) the proportion that the value of the contribution has to the total assets of the company or trust at the time of the contribution; and

(c) the effect of the contribution on the financial position of the company or trust; and

(d) if the individual received consideration for the contribution, the amount of consideration.

9 Past benefit from distributions by company or trust

(1) The Secretary must consider whether the individual has received a benefit from a distribution made by the company or trust.

(2) If an individual has received a benefit, the Secretary must also consider:

(a) the value of the benefit; and

(b) if the individual has received a benefit on more than 1 occasion, the frequency with which the individual has received benefits.

(3) For this section, a distribution includes distributions:

(a) in the case of a distribution by a company - of the capital or income, or both, of the company; and

(b) in the case of a distribution by a trust - of the corpus or income, or both, of the trust.

10 Future benefit from distributions by company or trust

(1) The Secretary must consider whether it is reasonably foreseeable that the individual may receive a benefit from a future distribution by the company or trust.

(2) If subsection (1) applies, the Secretary must also consider the likely value of the benefit.

(3) For this section, the Secretary must have regard to:

(a) the constituent documents of the company; or

(b) documents, if any, establishing the terms of the trust.

(4) For this section, a distribution includes distributions:

(a) in the case of a distribution by a company - of the capital or income, or both, of the company; and

(b) in the case of a distribution by a trust - of the corpus or income, or both, of the trust.

11 Benefit from assets and income of company or trust

(1) The Secretary must consider whether the individual receives or derives any kind of benefit (other than a benefit mentioned in section 9 or 10) from the assets or income, or both, of the company or trust.

(2) For this section, benefit:

(a) is not limited to a benefit to which the individual has a legal or equitable entitlement; and

(b) includes benefits received or derived in the form of property or services.

12 Existing attribution to individual

(1) The Secretary must consider whether the individual is:

(a) under the Act - an attributable stakeholder of any other company or trust; or

(b) under the Veterans' Entitlements Act 1986 - an attributable stakeholder of the company or trust, or of any other company or trust.

(2) If subsection (1) applies, the Secretary must also consider:

(a) the asset attribution percentage attributed to the individual, if any; and

(b) the income attribution percentage attributed to the individual, if any.

13 Other circumstances

The Secretary must consider any other circumstance that affects the involvement of the individual with the activities or the administration of the company or trust."

(emphasis in original)

1. The Respondent's legal representatives made the following initial submissions on whether the Respondent should be an attributable stakeholder of the constructive trust - Exhibit 5 pp. 10 - 13 paras 53 - 68:

(a) there should be a determination that the Respondent is not an attributable stakeholder in relation to the Parkwood property - p. 10 para 53; > > (b) the Respondent is the trustee, but in circumstances where he is a bare trustee. Paul would be entitled to call for the immediate conveyance of the legal title of the Parkwood property - p. 11 para 58; > > (c) with respect to s 7 of the Principles, the following circumstances apply: > > > (i) circumstances arising from the legal structure of the trust (s 7(2)(a)). There is a constructive trust, which arose from the date of the conduct giving rise to its effect. The purpose of the trust is to avoid what would be otherwise be an unconscionable assertion of ownership. The "common intention" was for Paul to achieve full ownership of the Parkwood property. This weighs heavily in favour of a finding that the Respondent should not be an attributable stakeholder of the Parkwood property trust - p. 11 para 59(a); > > > > (ii) whether the relationship between the individual and the trust is affected by circumstances arising from the administrative arrangements of the trust (s 7(2)(b)). It is submitted that there are no formal administrative arrangements in place, but the de facto arrangement is that Paul has full and complete control of the trust asset (the Parkwood property). This arrangement affects the Respondent's relationship to the trust, in the sense that it makes his "trustee" role symbolic - p. 11 para 59(b); > > > > (iii) whether, having regard to the relationship between the individual and the trust, the individual can reasonably be expected to exercise effective control in relation to the trust (s7(2)(c)). It is pointed out that Paul has been in physical possession of the Parkwood property since its purchase and the family has always recognised that the property belongs to him. In these circumstances, the Respondent cannot reasonably be expected to exercise "effective" control over the Parkwood property - p. 11 para 59(c) > > (d) with respect to s 8 of the Principles, the Respondent refers to the Applicant's contention that all payments towards the mortgage of the Parkwood property originate from the Respondent's bank account - p. 12 para 61. In response, the Respondent makes the following submissions: > > > (i) it is conceded that the Respondent has contributed to the trust, in that he took out a loan in his own name, secured in part by a mortgage over his Burleigh Heads unit - p. 12 para 61(a); > > > > (iii) it is the substance of the contribution made by the Respondent that must be assessed. Looked at objectively, the Respondent's contribution was essentially to facilitate, not substantively fund, Paul's purchase of the Parkwood property - p. 12 para 61(b); > > > > (ii) both Julie-Anne and Janice, as well as Paul, have provided statements and given evidence that the Respondent has not contributed to the upkeep or maintenance of the Parkwood property, and has only visited the property on rare occasions - p. 13 para 62; > > > > (iii) the Respondent has contributed to the Parkwood property trust only to the extent of facilitating the purchase of the property in a way common for parents to assist their adult children. The contribution of the Respondent does not amount to a substantial proportion of the value of the Parkwood property, and this circumstance supports a finding that it is inappropriate that the Respondent be an attributable stakeholder of the trust - p. 13 para 63; > > (e) with respect to ss 9(1) and 10(1) of the Principles, namely, whether the individual has received, or it is reasonably foreseeable that the individual may receive, a benefit from a distribution of the trust, the answer is "no" - p. 13 para 64; > > (f) section 11 of the Principles requires a decision-maker to consider whether the individual receives or derives any kind of benefit from the assets or income of the trust. The Applicant contends that the Respondent has received a benefit from holding the legal title of the Parkwood property, and through rental income. It is submitted that this contention should be rejected for the following reasons: > > > (i) the Respondent does not have beneficial ownership of the Parkwood property. The mere legal ownership of the property provides no benefit, and the Respondent has not (for example) benefited from use of the property as security for other loans - p. 13 para 65(a); > > > > (ii) Paul's Newstart Allowance claim form did not, in fact, assert the payment of rent. The weight of the evidence is that no such rental income was received or paid. Instead, there was the repayment of the loan funds that the Respondent secured on Paul's behalf - p. 13 para 65(b); > > (g) section 12 of the Principles is not relevant - p. 13 para 66; > > (h) taken as a whole, it would be inappropriate for the Respondent to be an attributable stakeholder of the Parkwood property trust. The Principles allow for a determination to be made which ameliorates against the, potentially harsh, consequences of the operation of Part 3.18 of the Act. The Respondent has not deliberately attempted, by deception, to gain a benefit. Once he realised the issue relating to the Parkwood property, he self-declared that issue on 29 August 2017 - p. 13 para 67; and > > (i) the available material supports the making of a determination that the Respondent is not an attributable stakeholder - p. 13 para 68.

2. Mr Black, on behalf of the Respondent, made the following supplementary submissions - RCS pp. 5 - 6 para 18:

(a) the evidence establishes that the Respondent has no effective control over the Parkwood property and all effective control has rested with Paul since its purchase. This, it is contended, weighs heavily against a determination that the Respondent should be an attributable stakeholder;

(b) the purpose of the purchase of the Parkwood property was for it to be for Paul's sole benefit. Again, it is contended, this weighs against a determination that the Respondent should be an attributable stakeholder; and

(c) there is no realistic prospect that the Respondent will receive any kind of "distribution" or benefit from the Parkwood property in the future.

1. The Applicant also provided detailed submissions on the question of attribution of trust assets. Although not conceding that the three elements of a constructive trust exist (Exhibit 3 p. 13 para 66), nonetheless provided the following submissions on the basis that the Tribunal finds that such a trust exists:

(a) the Applicant notes that the Respondent holds legal title to the trust property and is the trustee of it - p. 15 para 75(a); > > (b) all payments towards the Parkwood property purchase, exclusive of the $10,000 deposit attributed to Paul, have been made by the Respondent from his personal bank account. All evidence of Paul's contributions towards the mortgage repayments are contradictory, and arguably self-serving, in the context in which the information was given - p. 15 para 75(b); > > (c) the Respondent holds the legal title to the Parkwood property, and, according to Paul's Newstart Allowance claim form, the Respondent has benefitted from the rental income since the date of purchase - p. 15 para 75(c); > > (d) regarding the Respondent's existing attribution, the Applicant considers that the state of evidence is not such that a percentage attribution ought to be ascribed to Paul - p. 15 para 75(d); and > > (e) in the absence of the Tribunal being satisfied that any attribution percentage above 0% ought to be assigned to Paul, the Respondent's attribution must be 100% - p. 15 para 76.

2. The Tribunal has been presented with hundreds of pages of financial documentation, some of which shine little light on this matter. However, despite the voluminous documentation, what emerges from the evidence is a relatively straightforward situation. The Respondent, in his advanced years, determined to help his son, Paul, purchase a property on the Gold Coast. No doubt, the Respondent thought that it would be a good investment, and 18 years later, this has proved to be correct. However, Paul had few assets and limited income, and it came to pass that the Respondent, rather than being the guarantor for Paul, had to purchase the Parkwood property in his name, and mortgage his Burleigh Heads unit. Although the Respondent was the "legal" owner of the Parkwood property, he never lived there, nor did he usually pay for the outgoings on the property. In the period 2004 until 2016, Paul regularly paid the rates on the Parkwood property. It was only in 2016, when the Respondent discovered that Paul was falling behind with the rates that the Respondent assisted him with a "payment plan" - Exhibit 6 p. 3 para 33. Again, this was the product of a father trying to help his son, rather than the Respondent believing that he had a legal obligation to pay the rates because he was the legal owner of the Parkwood property.
3. Due to his inability to master the computer age, Paul would visit his father monthly, and pay him in cash, the mortgage payments on the Parkwood property. That money was comingled by the Respondent with his own moneys in a bank account. Eventually, Paul stopped paying mortgage repayments, and there was a falling out between father and son over the failure by the Respondent to transfer legal title to the Parkwood property to Paul. This failure was born of the Respondent's understandable unwillingness to pay for the transfer costs, which having regard to stamp duty, could have been substantial. Accordingly, the Parkwood property remains in the name of the Respondent, but throughout, the Respondent, Paul, Janice, Julie-Anne and perhaps other members of the Thomas family, have all regarded the property as belonging to Paul. In short, the Respondent is a bare trustee of the constructive trust.
4. The reality is Paul is in physical possession of the Parkwood property, and has been so since its purchase in 2004. According to Janice, the Respondent has only visited the property on a few occasions over the years. No doubt, since the falling out of father and son, the Respondent's visits have become even more rare. In these circumstances, it would be almost impossible for the Respondent to exercise "effective" control over the Parkwood property. Indeed, if the Respondent were to attempt to sell the property, apart from equitable remedies open to Paul to prevent the sale, he would also be in a position to place a caveat on the property to prevent the sale. In short, the Respondent has "paper" ownership of the Parkwood property, and his actual ability to dispose of the property or otherwise deal with it, without the permission of Paul, is non-existent.
5. The Applicant correctly points out that, not only is the Respondent the legal owner of the Parkwood property, but that all mortgage repayments were made from his personal bank account. However, the Tribunal accepts, based on the evidence presented, and the testimony of the Respondent, that Paul made monthly cash payments for the repayment of the mortgage. It is inconceivable that the Respondent could have paid the Parkwood property mortgage repayments. He was not a man of wealth, and the extremely poor conditions he faced once his Age Pension was reduced, highlight the true nature of his financial worth.
6. Much of the Respondent's case is based on the veracity of the Newstart Allowance claim form that was partially completed by Paul when he was heavily medicated following a home invasion. For the reasons outlined above, the Tribunal does not draw any adverse conclusions from the Newstart Allowance claim form.
7. The Tribunal agrees with the submissions of the legal representatives of the Respondent in Exhibit 5, as set out above. Those submissions comport with the evidence presented, and also comport with the view the Tribunal has formed of the credit that should be given to the evidence, particularly, of the Respondent.
8. In these circumstances, the Tribunal determines under s 1207X(2)(c) that the Respondent is not an attributable stakeholder of the Parkwood property for the purposes of the Act.
9. It is not necessary in these circumstances for the Tribunal to go further and determine what "asset attribution percentage" should be assigned to the Respondent under s 1207X(2)(d). For the sake of completeness, the Tribunal agrees with the submissions of the legal representatives of the Respondent, as set out in RCS pp. 6 - 7 paras 20 - 25. If the Tribunal were required to determine an asset attribution percentage, for the cogent reasons set out in RCS pp. 6 - 7 paras 20 - 25, the Tribunal would make a determination of 0%.

I certify that the preceding 177 (one hundred and seventy-seven) paragraphs are a true copy of the reasons for the decision herein of Deputy President J Sosso

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