Chief Commissioner of State Revenue v McFadden

Background

1. This is an appeal from the decision of the Tribunal dated 2 January 2019 (the Decision). The Decision dealt with an application which sought review of the decision made by the Commissioner under the LTM Act on 25 September 2017 to issue land tax assessments under the LTM Act for the 2016 and 2017 land tax years in relation to certain land at Double Bay on the basis that the relevant land did not qualify for the exemption provided under s 10(1)(r) of the LTM Act.
2. The Land in question is Lot 2 in Strata Plan 17324, and is located at XXX. The application was made under s 96 of the Taxation Administration Act 1996 (TA Act) for the administrative review by the Tribunal of the Commissioner's decision.
3. The provisions of s 100 of the TA Act applied to the Tribunal's review of the Commissioner's decision, that is, Ms McFadden had the onus of proof. The Tribunal noted that the only evidence provided was in the form of affidavits, which were unchallenged. The Tribunal summarised these affidavits as follows: "Background - overview of the Land 8 The Land is one of two lots in a strata plan. The building in which it is located was originally a two-storey building comprising two apartments: Lot 1 on the ground floor, and Lot 2 (being the Land) on the first floor. Works undertaken by the Applicant and her husband have added an additional third storey, which is also comprised in the Land. 9 The Applicant is the sole registered proprietor of the Land, which she purchased in April 1999. The Applicant and Mr Woods acquired Lot 1 in November 2013; they are the registered proprietors of it as tenants in common in equal shares. 10 Between November 2013 and December 2014 the Applicant and her husband undertook building works involving both the Land and Lot 1. Since December 2014 the Applicant and her husband have occupied the Land and Lot 1 as their matrimonial home. 11 It is common ground between the Applicant and the Respondent that the effect of these works has been: (1) To combine the Land and Lot 1 into a single residence; and (2) To render the Land incapable of use as a separate dwelling. All of this has occurred, however, with the strata plan continuing and both lots in it (including the Land) retaining their separate legal identities under the Real Property Act. There is thus a mismatch between, on the other hand, the title status of the Land as a separate lot in a strata plan and, on its other, its practical use, as an integrated part of a single residence. Background - the Applicant's property dealings and arrangements 12 The Applicant and Mr Woods married in 1996. Before doing so they entered into a pre-marital agreement dated 17 August 1996 (the Agreement) which makes elaborate provision for the regulation of property matters between the couple. These reasons will return below to certain specific provisions of the Agreement, but its general purpose is summarised in recitals B and C which provide as follows: "B The parties intend this agreement shall provide for their financial relationship: (a) during their marriage; and (b) should the marriage irretrievably break down. C Each party has been independently advised by his or her separate legal representative prior to entering into this agreement as to the effect of this agreement and his or her rights under Part VIII of the Family Law Act 1975 (Cth)…". 13 For several years after their marriage, the Applicant and Mr Woods occupied as their matrimonial home a property in ### Road, Neutral Bay which belonged to the Applicant at the time of the marriage. 14 In July 1998 the Applicant and Mr Woods purchased ###, Double Bay as their prospective marital home. They bought that property as tenants in common, with the Applicant having a ¾ share and Mr Woods a ¼ share. They then embarked on a programme of renovations, which were not completed until September 2001 when they moved into that property as their matrimonial home. 15 In the meantime: (1) The Applicant in April 1999 sold the ### Road property; (2) In that month, she purchased the Land, title to which was registered in her name alone; (3) Between April and August 1999 the couple undertook renovations of the Land; and (4) In August 1999 they took up residence in the Land. 16 In September 2001, following the completion of the renovations to 16 Castra Place, they ceased to reside in the Land and moved to 16 Castra Place. They continued to live there until December 2014, and in the first half of 2015 they sold XXX. 17 Between September 2001 and January 2014 the Land was leased to tenants. In January 2014, however, the couple received consent from Woollahra Municipal Council to convert the property at ### (including the Land) from duplex apartments into a single residence. They then embarked on this process, which was completed in late 2014. On 5 December 2014 the Applicant and Mr Woods ceased residing in XXX and moved next door into the newly renovated and integrated XXX, which remains their matrimonial home."

Clause 14 of the LTM Act

1. Section 10(1)(r) of the LTM Act deals with the exemption from land tax for principal places of residences. In particular, Schedule 1A clause 14 of the LTM Act applies where the principal place of residence is alleged to comprise two or more strata lots. It provides relevantly as follows: "14 Application of exemption to residence comprised of 2 or more lots in a strata plan (1) The principal place of residence exemption does not extend to land that is comprised of 2 or more strata lots, and that is used and occupied by the owner of the lots (or by one of them) as a principal place of residence, unless: (a) the strata lots (excluding any ancillary lot) have adjoining walls or floors, and (b) the strata lots are in the same ownership, and (c) the strata lots comprise a single residence (excluding any additional residential occupancy that may be disregarded under clause 4). (1A) Strata lots are in the same ownership if: (a) the lots are owned by the same person or, if any of the lots are jointly owned, the lots are all jointly owned by the same persons, or (b) each lot is beneficially owned by the same person or, if any of the lots have more than one beneficial owner, each lot is beneficially owned by the same persons (subject to clause 11). (2) For the purposes of this clause, 2 or more strata lots are not to be regarded as comprising a single residence unless there is internal access between all the strata lots (other than any ancillary lot), such as internal connecting doors or internal staircases."
2. The issue in dispute between the parties was whether the two strata lots comprised in the Land and Lot 1 are "…in the same ownership…" for the purposes of clause 14(1)(b) of Schedule 1A to the LTM Act.
3. The Tribunal found that each lot is beneficially owned by the same persons by reason of its conclusion that Ms McFadden held the Land as a constructive trustee for a beneficial interest held in equity by her husband Mr Woods. This was by reason of Mr Woods having acted to his detriment on the basis of a common intention that he have a beneficial interest in the Land arising out of his making financial contributions in connection with the Land.
4. At the heart of this appeal is the Commissioner's contention that this conclusion of the existence of a constructive trust was arrived at by reason of certain errors of law set out in his Notice of Appeal.

The Tribunal's reasoning

1. The Tribunal set out the main clauses of the Agreement at [24]-[25]. Clause 6 of the Agreement is at the heart of the dispute between the parties. It provides as follows: "The parties agree that any real property purchased by them from the date of this agreement and during the relationship as their matrimonial home shall be owned as tenants in common in proportion to their financial contributions. The parties also agree that until they purchase a property as their matrimonial home they will reside in [the Applicant's] property at 35B Shellcove Road, Neutral Bay and the provision of this property for their joint use shall be a contribution to their shared lifestyle referred to in clause 19 of this agreement."
2. The Tribunal then made some initial observations concerning the Agreement: [26]-[28]. Therein it noted that one of the functions of the Agreement is to operate as a financial agreement within the meaning of s 90B of the Family Law Act 1975 (Cth) and more particularly to deal with the matters referred to in s 90B(2) of that Act. The agreement also takes the opportunity afforded by s 90B(3) to deal with other matters, including ownership by the spouses of certain categories of property during the marriage.
3. Secondly, the Tribunal noted that the drafting of the Agreement "is at times less than ideal". This was because, the Tribunal stated, the objectives of the Agreement are "ambitious" and the drafting challenges of regulating the affairs of the spouses over their entire married life with absolute clarity "are probably insurmountable". For example, the Tribunal noted that the authors of the Agreement have adopted a somewhat inconsistent approach to the use of the plural and the singular, especially in the case of third party personal pronouns: [28].
4. Next, the Tribunal respectfully adopted the summary of the law provided by White J (as he then was) in Shepherd v Doolan [2005] NSWSC 42, in particular at [31]-[44].
5. The Tribunal then turned to applying these principles: [31]-[49]. The Tribunal stated that the first question is whether there is any evidence of a common intention that Mr Woods have a beneficial interest in the Land. It noted that Ms McFadden submitted that clause 6 of the Agreement provided that evidence; while the Commissioner submitted that it does not. The Tribunal's conclusion was that, despite drafting anomalies that could be said to exist in the Agreement's other provisions, it was possible to read clause 6 consistently and sensibly so as to demonstrate the parties' intention in relation to their respective interests in their marital home.
6. It also noted at [34], however, that clause 6: "As a provision whose objective is to set out the rules which regulate the ownership of the spouse's marital home this sentence might be considered too imprecise to be entirely successful."
7. The Tribunal then identified some of the ambiguities in clause 6. It commented that even if clause 6 is deficient as a contractual provision, it nonetheless forms one element in the wider scheme established by the spouses and directed at regulating their respective entitlements to the real and personal property acquired by one or both of them during, or in such circumstances before, the marriage.
8. After considering the wording and text of clause 6 and its context in the wording of the Agreement as a whole, in a more or less orthodox fashion of contractual construction based upon the text itself, the Tribunal concluded that clause 6 of the Agreement demonstrates the common intentions of the spouses that the acquisition of the Land should be governed by its terms so as to mean that the Land constitutes "real property purchased by them after the date of this Agreement" and shall be owned by the parties as tenants in common in proportion to their financial contributions.
9. Accordingly, the Tribunal concluded that there was by virtue of clause 6 a demonstration of the common intentions of the spouses in respect of the Land that satisfied the test summarised by White J in Shepherd v Doolan at [37] where his Honour said: "The intention may be established in various ways. There may be an agreement between the parties as to how the property should be held. There may be express statements as to their intention. Their intention may be inferred from conduct. The question of what acts demonstrate an agreement or common intention referable to the beneficial enjoyment of the property is one of evidence, not law." (citations omitted)
10. Next, at [42], the Tribunal noted the unchallenged evidence in Mr Woods' affidavit that he made certain contributions to the costs of the renovation of the land in 1999 of both a financial type and also as personal services as project manager for the renovations.
11. Further or alternatively, at [44], the Tribunal concluded that clause 6 could be regarded as recording an overall intention of the parties which is applicable to their acquisition and integration over an extended period of the Land and Lot 1 as a single matrimonial residence. It noted that Mr Woods' evidence, which was also unchallenged, was that significantly larger sums were contributed by Mr Woods in the renovation and integration of Lot 1 and the Land into a single residence in 2013 and 2014.
12. We also note that it was Mr Woods' evidence that he would not have made the contributions that he did other than with the intention and understanding that he would have an interest in the Land proportionate to his contributions. This was not disputed by Ms McFadden.
13. The Tribunal concluded, on either basis, that Mr Woods had acted to his detriment in a way referable to the Agreement or intention that he have an interest in the Land. Accordingly, the Tribunal was satisfied that there was a constructive trust under which Mr Woods had an interest in the Land. Therefore, the Land and Lot 1 had the same beneficial owners for the purposes of clause 14(1A)(b) of Schedule 1A of the LTM Act, and thus qualified for exemption under s 10(1)(r) of the LTM Act.
14. At [48] the Tribunal noted a second argument raised by Ms McFadden as follows: "There was a second argument raised on behalf of the Applicant, that clause 6 amounted to a declaration of trust over the matrimonial home by the spouse who owns it, in favour of the other spouse. Counsel for the Respondent replied in effect that the terms of the clause were not apt to do so. In view of my conclusion as to the common intention of the spouses, it is not necessary for me to reach a conclusion on this issue. If I had been required to do so, however, my inclination would have been to agree with counsel for the Respondent."

Grounds of Appeal - Grounds 1-3

1. The Appeal Panel gave leave to amend the Notice of Appeal in terms of the document being Agreed Bundle Volume 2, tab 2, save for ground 3A which were not pressed by the Commissioner and ground 4 of the original grounds that was deleted.
2. The first three grounds of appeal can be dealt with together and were expressed as follows: "1. The Tribunal erred by not applying principles of contractual interpretation to the prenuptial agreement dated 17 August 1996 (defined as "the Agreement" in the Decision) to determine the objective intention of the parties as disclosed by that Agreement. 2. The Tribunal erred in rejecting the Commissioner's argument that no subjective intention could grant equitable relief in the face of the clear terms of the Agreement and in failing to give reasons for doing so. 3. The Tribunal erred in that it was not open to find that the parties had a subjective intention that the Respondent's husband should have a share in Lot 2/SP 17324 (referred to as "the Land" in the Decision) where the Agreement made specific provision for the parties' property rights."

The Submissions of the Commissioner

1. The Commissioner contended that the Tribunal erred when it allegedly did not seek to ascertain the objective meaning of the Agreement in accordance with accepted principles as set out in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at [22]-[24] per Mason J. According to the Commissioner, the relationship between the parties is governed by a contract dealing specifically with the parties' property rights, and any claim based on equity must be established having regard to it.
2. According to the Commissioner, "the contract must provide for, or implicitly impose a personal obligation with respect to the Land on the Respondent as the vehicle for giving effect to the parties' intention". Further, as the Agreement was the formal expression of the parties' intention with respect to the whole of their mutual property rights, the first step was to ascertain the contractual reach of its provisions.
3. It was submitted that the question the Tribunal ought to have asked, which it did not, was whether on the proper contractual interpretation of the Agreement the parties had imposed a personal obligation with respect to the Land on Ms McFadden, and if it did not, whether it would be unconscientious for Ms McFadden to insist on her legal rights as registered proprietor of the Land. The Tribunal did not reach any conclusion about the proper interpretation of the Agreement, the Commissioner contended. It was said that it was a necessary step in evaluating any claim based on equity jurisdiction to require the legal owner of land to give effect to rights enforceable in equity.
4. The Commissioner submitted that the Tribunal did not deal with Ms McFadden's claim that an express trust had been created, and that was a necessary first step in evaluating the Respondent's contention that the Agreement was the source of the intention to hold property on trust. The Commissioner submitted that the Agreement could not create express trusts with respect to the Land as there was no presently existing specified trust property. It was said that the Tribunal erred by proceeding to consider the question of subjective intention without working through the interpretation of the contract, and in doing so inverted the logical analysis of the parties' rights.
5. Next, and in particular with regard to ground 2, the Commissioner submitted that the Tribunal interpreted the pre-nuptial agreement between the parties to ascertain their subjective intention, without giving reasons for the conclusion that, as objectively interpreted, there was no agreement concerning the beneficial ownership of the Land.
6. Counsel for the Commissioner explained in oral argument that the contention was that the Tribunal agreed with the Commissioner's submission that objectively interpreted, the Agreement did not give rise to any obligation on the part of Ms McFadden to recognise financial contributions to the Land as giving rise to any ownership rights in Mr Woods. This was said to be based upon the Tribunal's Statement of Reasons at [48]. Hence, it was submitted that the Tribunal's conclusion that clause 6 of the Agreement evidenced a common intention that Mr Woods had an interest in the Land must have been based upon a subjective interpretation of the Agreement and not based upon the objective interpretation of the Agreement as a matter of ordinary contractual law.

Ms McFadden's Submissions: grounds 1-3

1. Ms McFadden submitted that if the legal owner has agreed that Mr Woods is to have some defined interest in the Land, a court would give effect to that Agreement, as an express trust, provided that the writing requirements found in s 23C and s 54A of the Conveyancing Act which re-enact the Statute of Frauds 1677, are satisfied. If the writing requirements are not satisfied, then the trust can only take effect as a resulting, implied or constructive trust. If there is a written agreement which complies with the writing requirements, and which establishes an express trust, no occasion for the imposition of a constructive trust arises: the trust is enforceable only as an express trust.
2. Ms McFadden submitted a constructive trust could arise if there is an agreement proved of which specific performance could not have been ordered because of the Statute of Frauds 1677, citing in support Ogilvie v Ryan (1976) 2 NSWLR 504 at 525; Green v Green (1989) 17 NSWLR 343 at 354. We note that in Green v Green at 354 it was also accepted that a constructive trust could arise in a case where a contract or an express trust at the time of the acquisition may not be established because of lack of certainty, provided there can be found an inferred common intention.
3. Ms McFadden contended that clause 6 of the Agreement could not take effect as an agreement to create an express trust (or for that matter as a declaration of an express trust) because there was no sufficient writing for the purposes of either s 23C or s 54A because the Agreement did not identify the subject matter of the trust - that is, the Land. Further, any parole evidence could not be relied upon for the same reasons: citing Australia and New Zealand Banking Group v Widin (1990) 26 FCR 21 at 29.
4. Ms McFadden submitted that what the Tribunal did was to conclude that the Agreement and in particular clause 6, demonstrated a common intention referable to the Land, and this was a question of evidence, not law: citing White J in Shepherd v Doolan at [36].
5. Dealing particularly with ground 1, Ms McFadden contended there was no error in failing to construe the Agreement "objectively" as under the principles of equity the relevance of the Agreement is to show the actual (i.e. subjective) intention of the parties. The only relevance of the Agreement in the present case, it was stated, is whether it evidences the common intention which satisfies the first element for a common intention constructive trust.
6. With regard to ground 2, Ms McFadden submitted that the alleged error contended for by the Commissioner that equitable relief under a common intention constructive trust was not available, given the existence of the Agreement and its alleged true objective meaning, was misconceived. This was because of the misapprehension in the Commissioner's submission that the Agreement creates enforceable obligations in respect of the Land.
7. As the Agreement is not directly enforceable at law, given the absence of compliance with s 23C and s 54A of the Conveyancing Act, regard can be had to the Agreement to discern what is the parties' common intention with respect to the interests of the parties in the property in question.
8. With respect to ground 3, Ms McFadden contended that it was open to the Tribunal to find a subjective intention to found a common intention constructive trust despite "the Agreement making specific provision for the parties' property rights". For the reasons advanced previously, Ms McFadden submitted that in circumstances where the Agreement does not create enforceable rights in respect of the Land and there being no express trust, the question simply was whether the Agreement evidenced a common intention that Mr Woods should have an interest in the Land which may arise after the date of the acquisition.

Consideration

1. During oral argument, certain matters were accepted by counsel for the Commissioner as follows: 1. that there is no dispute that the principles summarised by White J in Shepherd v Doolan as adopted by the Tribunal is a correct statement of the law; 2. that no express trust arises because of a want of writing as to the specifics of the Land as being the subject matter of the express trust or declaration of the trust; and 3. that there was some evidence that could support the finding of a relevant common intention such that it could not be said there was no evidence at all on this matter.
2. We accept the proposition that a common intention constructive trust will not arise if there exists an express trust or declaration of trust which is enforceable in respect of the Land to the same effect as the common intention constructive trust alleged to arise. Accordingly, whilst it may have been an error for the Tribunal not to squarely deal with this question, nothing turns on this for the purposes of this appeal. This is because it is accepted on appeal by both parties that there can be no enforceable express trust or declaration of trust for want of writing setting out the specifics of the Land in question.
3. Otherwise, we accept the submissions of Ms McFadden and reject these grounds of appeal. In particular, we refer to the following propositions of law which were not disputed in the appeal before us: 1. the question of what acts demonstrated agreement or common intention referable to the beneficial enjoyment of the property is one of evidence, not law: Shepherd v Doolan at [37]; 2. as a matter of evidence, not law, the common intention may be established by there being "an agreement between the parties as to how the property should be held": Shepherd v Doolan at [37]; 3. the common intention may be evidenced by the Agreement even where, as a matter of contract or an express trust, at the time of the acquisition the trust cannot be established because of lack of certainty or consideration or non-compliance with statutory requirements of writing; 4. the common intention may be found in a written agreement of the parties and not just in an oral agreement or from conduct: Ford & Lee, The Law of Trusts (Thomson Reuters, Loose Leaf Edition) at [22.4220], [22.4260] and [22.4280].
4. We accept where the Agreement is ineffective to give rise to an express trust the question is whether the Agreement nevertheless evidences a common intention constructive trust. We also accept that this issue is one of the joint subjective intention of the parties which may arise solely from the Agreement, irrespective of the Agreement's position as a matter of strict contract law.
5. Further, in such a case the so-called "objective" or "proper" interpretation of the Agreement loses its relevance. For example, the proper interpretation of the Agreement may be that it is void for uncertainty, but this does not prevent the principles of equity intervening to prevent unconscientious conduct.
6. In our view, the Tribunal below had real doubts about whether or not the Agreement was expressed in sufficiently certain terms so as to amount to a binding legal contract and, further, as discussed above, the parties, in our view correctly, accepted that the Agreement could not be effective to bring about any form of express trust or equitable interest in the land in favour of Mr Woods due to the want of specific writing that would comply with ss 23C and 54 of the Conveyancing Act.
7. In our view, there was no error in the approach of the Tribunal in considering whether or not the Agreement provided evidence of the common intention of the parties that Mr Woods would receive an interest in the Land in return for his contributions to the Land which he made from time to time.
8. In addition, as this question is an issue of evidence not law, in our view, the conclusion of the Tribunal below involved an issue of fact, not law. Accordingly, in the absence of some legal error in the Tribunal's approach, leave to appeal would be required. This is particularly so given the concession that there was some evidence upon which it could be said that the Tribunal found common intention between the parties existed.
9. Further and alternatively, we accept the contention of Ms McFadden that a common intention can be inferred from conduct such as the making of financial contributions in circumstances where the registered proprietor would not have permitted such financial contributions without having a common intention with the contributor that he or she would receive an interest in the property: see Shepherd v Doolan at [38]. The Tribunal found that Mr Woods, by his contribution in the period from November 2013 to December 2014, which was the significant sum of $750,000, acted to his detriment in a way referable to the Agreement or intention that he have an interest in the Land: [41]-[45].
10. We note that Ms McFadden gave evidence by affidavit and did not dispute that this contribution was pursuant to a common intention that Mr Woods have an interest in the Land. She was not challenged on this assertion. In our view, this evidence justifies the conclusion that Mr Woods acted to his detriment in a way referable to this common intention.
11. In conclusion, we agree with the submissions of Ms McFadden that the Tribunal concluded that the two necessary elements for a common intention constructive trust as set out in the agreed principles summarised by White J in Shepherd v Doolan was satisfied as follows: 1. the relevant common intention existed as evidenced by the Agreement: [31]-[40]; 2. Mr Woods had acted to his detriment in a way referable to that common intention for either or both of the financial contributions made in 1999 and later in 2013-2014: [41]-[44].
12. Both of these conclusions are properly regarded as findings of fact and there was no error of law in the Tribunal's reasoning process. The reasoning process was entirely orthodox and in accordance with the principles referred to above.
13. Accordingly, we reject grounds 1-3 of the Appeal.

Ground 3B

1. Ground 3B is as follows: "The Tribunal erred in finding that the facts and circumstances justified equitable relief in the form of a constructive trust."
2. The submission of the Commissioner was that the Tribunal erred in that it did not make a specific finding that there existed the unconscientious exercise of legal rights.
3. In our view, it is not necessary for the Tribunal to make a specific finding of unconscientious conduct. The statement of principles agreed to be applicable to the case as set out by White J in Shepherd v Doolan, in particular at [30]-[31], do not require any findings beyond those made by the Tribunal. The equitable interest arises by reason of the common intention and one party acting to their detriment. A legal owner seeking to resile permits equity to intervene to impose a remedy or declare the existence of the constructive trust which has already arisen by reason of the common intention and relevant conduct of the person who has acted to their detriment: JD Heydon and MJ Leeming, Jacob's Law of Trusts in Australia, (LexisNexis, 8th Edition, 2016) at [13-11] page 238 and Parsons v McBain (2001) 109 FCR 120; 192 ALR 772.
4. Further, and in any event, it is implicit in the decision by reasons of the findings on detriment that a departure by Ms McFadden from the common intention as found by the Tribunal, would be unconscionable in the circumstances.
5. Accordingly, we reject ground 3B of the Appeal.

Ground 5

1. Ground 5 reads as follows: "The Tribunal failed to consider as a relevant consideration that the Land had been purchased by the Respondent alone with no contribution from her husband."
2. The Commissioner submitted that clause 6, on its proper construction, relates to the holding of the registered title and that the parties agreed to act in concert to purchase a matrimonial home. Other property might not be within the meaning of "matrimonial home". Further, the payments made by Mr Woods were minor and could not be regarded as contributions to the purchase price of the property.
3. These submissions appeared to be put forward to challenge the finding in favour of Ms McFadden that there was a common intention or that Mr Woods acted to his detriment in making contributions to the purchase. The submissions are also relied on for ground 6.
4. We disagree with the contention that the Tribunal, in the context of clause 6, failed to consider as a relevant consideration that the Land had been purchased by the Respondent alone. In particular, the matter was specifically considered at [37], the salient features of which included the following: "The first issue is whether, so far as the intentions demonstrated by the spouses in clause 6 are concerned, the Land is real property purchased "by them". The answer, in my view, is that - assuming for the moment that the element of purchase is satisfied - it is: … Any other approach would establish artificial constraints on the implementation of the spouses' clear underlying intention, to regulate their respective entitlements to the matrimonial home for the time being on a mutually agreeable basis for the duration of the marriage, and in the varying circumstances which they may encounter during their marriage. Hence, in my view, the word "them" in clause 6 refers to one or the other or both of the spouses so as to be capable of giving effect to that intention in as flexible and accommodating a way as practical."
5. Accordingly, we reject ground 5.

Ground 6

1. Ground 6 reads as follows: "The Tribunal erred in finding that the Land was purchased "by them as their matrimonial home" under clause 6 of the Agreement."
2. This ground appears to be a challenge to the Tribunal's finding at [38(5)] that the Land was purchased in 1999 "by them as their matrimonial home" as evidenced by clause 6 of the Agreement. No written submissions were made in support of this contention. The finding is a finding of fact. Further, it was based on the mutual unchallenged evidence of the parties in their affidavits.
3. This ground does not appear to raise any question of law and, accordingly, it is not open to the Commissioner to challenge it on this Appeal. Further, and in any event, the finding as a finding of fact appears to be well open to the Tribunal to make based upon the evidence before it.
4. Accordingly, we reject ground 6.

Costs

1. Ms McFadden submitted that the Appeal should be dismissed with costs. It made submissions as to why costs should be ordered in its favour, principally on the basis that the grounds of appeal were not tenable. This was a reference to s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
2. Section 60(1) provides that the ordinary position in this type of case is that each party is to pay their own costs but that the Tribunal may award costs if there are special circumstances. Special circumstances means out of the ordinary but not necessarily extraordinary or exceptional: see Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120.
3. A claim being untenable is a relevant factor when considering whether special circumstances exist: see s 60(3)(c) of the NCAT Act.
4. However, in our view the fact the Commissioner's grounds of appeal did not succeed does not mean the appeal was untenable. It is clear the Tribunal was required to interpret the Agreement for the purpose of deciding the common intention of the parties on the constructive trust issue and in what circumstances the agreement was intended to operate. The Tribunal itself recognised the drafting of the agreement was "at times less than ideal": Reasons at [27].
5. In these circumstances we do not accept the appeal had no tenable basis.
6. Further, appeals of this type are not otherwise out of the ordinary and there is no reason to depart from the position in s 60(1) of the NCAT Act that each party should pay their own costs.

Disposition

1. The Appeal Panel makes the following orders: 1. The Appeal is dismissed. 2. The respondent's application for costs is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 August 2019