[2015] HCA 28
Tonna v Mendonca [2019] NSWSC 1849
Tory v Tory [2007] NSWSC 1078
UBS AG v Tyne (2018) 265 CLR 77
[2018] HCA 45
Valceski v Valceski (2007) 70 NSWLR 36
[2007] NSWSC 440
Watson v Foxman (1995) 49 NSWLR 315
Xie v Li [2019] NSWSC 808
Young v Lalic [2006] NSWSC 18
Judgment (10 paragraphs)
[1]
These proceedings
A lapsing notice was issued was in respect of the caveat. On 15 February 2019, the wife commenced these proceedings by summons, seeking an order to extend the caveat and declaratory relief in respect of the wife's interest in the Liverpool property. In support of the application, the wife swore an affidavit which was, again, brief but, for the first time, contained details about the money which she brought to Australia (being the $25,000 Canadian dollars or 40,000 Deutsche marks), her father's gift of US$20,000, and the use of these funds to contribute to the purchase of the Liverpool townhouse. On 20 February 2019, this Court made an order pursuant to section 94K of the Real Property Act 1900 (NSW) that the caveat be extended until further order.
On 13 March 2019, the public prosecutor in Warsaw decided to discontinue the criminal proceedings against the husband in respect of the sale of the property using the wife's power of attorney. The decision appears to have turned upon a range of matters, including, that it could not be concluded that the power of attorney was effectively revoked or that the property had been purchased with the wife's funds alone as opposed to with marital assets. In addition, the proceeds of sale were now subject to civil proceedings and should be settled in those proceedings.
However, on 22 November 2019, Judge Alicja Szkotnicka of the District Court of Warsaw discontinued the Polish proceedings for division of joint property due to the husband's failure to satisfy the formal requirements of the application, having been required to do so by 26 September 2019. The wife said she discussed the suspension of the Polish proceedings with her Polish lawyer, who was going to make a complaint about the suspension. The order was later set aside by Judge Alicja Szkotnicka, on 1 April 2020.
On 21 December 2020, the husband's solicitors contended that the wife was Anshun or issue estopped from agitating any interest in the Liverpool property given consent orders made in the Australian family law proceedings in 2009. On 19 January 2021, the wife served a second notice to admit facts, going to the management and rental income of the Liverpool property. The husband admitted that he has not accounted to the wife for any of the rental income earned by the Liverpool property.
[2]
Conclusion
The difficulty in determining what happened in this case is significant as the critical events occurred more than 30 years ago, few contemporaneous documents remain, all witnesses were giving evidence in a language other than their native tongue, and the key witnesses' evidence was affected by the difficulties described in Watson v Foxman. My overall impression was that the husband would say whatever would assist his case, regardless of its truth, whilst the wife and Mr Olek were also inclined, albeit to a lesser extent, to add details to enhance the wife's claim.
Whatever the difficulties, the burden of proof rests on the wife. The standard of proof is the civil standard, being proof on the balance of probabilities but qualified having regard to the gravity of the questions to be determined: section 140(2), Evidence Act 1995 (NSW); Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; [1938] HCA 34. As Dixon J observed in Briginshaw at 361, "The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found."
When the wife and the husband came to Australia in 1985, they were a young couple (the husband was aged 25 and the wife was aged 21), had been together for three years, and were expecting their first child. They came to live with the husband's mother and stepfather, it would appear, with the intention of staying in Australia for some time. They brought with them funds from Poland for their new life. It is inherently likely that the couple pooled their funds in the husband's recently opened German bank account before transferring the funds to Australia.
According to the surviving records, the husband had a permit to take foreign currency worth some 30,000 Deutsche marks out of Poland. Both agree that he took more foreign currency out of Poland than he declared. In addition, the wife had a permit to take currency from an "A" account, into which foreign currency could be held. Self-evidently the "A" account must have had some money in it. Thus, the wife had some foreign currency. The wife's evidence as to how she came by the 40,000 Deutsche mark is credible. The suggested inconsistency in the wife's evidence, referred to at [27] is not of great moment, although I expect the wife's evidence in cross-examination was the late addition of a detail as to what she thought she may have done at the time, rather than a genuine recollection.
[3]
SHOULD THIS COURT DETERMINE THE MATTER?
Dealing firstly with whether this Court should determine the wife's claim at all, the husband did not suggest that this Court lacked jurisdiction to determine the wife's claim but submitted that these proceedings are a matrimonial cause as defined in section 4(1) of the Family Law Act and should be dealt with by the Family Court of Australia. Section 4(1) relevantly provides:
matrimonial cause means:
…
(ca) proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i) arising out of the marital relationship;
(ii) in relation to concurrent, pending or completed divorce or validity of marriage proceedings between those parties; …
The Family Court and the Federal Circuit Court are ordinarily the courts in which matrimonial causes should be instituted: Song v Shi [2011] NSWSC 1207 at [7] per Brereton J; Choi v Kim [2013] NSWSC 1774 at [14] per White J; Shah v Sanjiv [2014] NSWSC 1535 at [28] per White J. However, the wife does not seek an alteration of property interests under section 79 of the Family Law Act - which general concerns the whole of the couple's marital pool of assets by reference to a range of statutory considerations - but the application of equitable principles in respect of one property. This Court is the natural place to determine such an application: Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27 at [3], [35], [37], [48] per Brereton J; Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 at [24] per Brereton J; Xie v Li [2019] NSWSC 808 at [20]-[22] per Rein J. The position may be different if there were proceedings already on foot in the Family Court, or soon to be commenced, or there was an application to transfer these proceedings to the Family Court.
In addition, the husband's submission was made two years after the commencement of these proceedings, when the parties have committed time and money to advancing their respective positions. There seems to be no utility in transferring these proceedings to the Family Court for relief which is other than relief sought under the Family Law Act. I decline to transfer these proceedings to the Family Court (if that is what is sought) or to refrain from determining the wife's application.
Further, the husband submitted that, in order to institute the present proceedings, the wife needed leave under section 44(3) of the Family Law Act, which provides: (emphasis added)
Where …:
(a) a divorce order has taken effect …
proceedings of a kind referred to in paragraph … (ca) … of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 …) … shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a) - the date on which the divorce order took effect; …
The court may grant such leave at any time, even if the proceedings have already been instituted.
[4]
RESULTING TRUST
There was no dispute as to the principles. Where two persons jointly provide the purchase money for the property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money: Calverley v Green (1984) 155 CLR 242 at 246-247, 251, 258, 261, 266, 269; [1984] HCA 81; Foundas v Arambatzis [2020] NSWCA 47 at [51].
There is no presumption of advancement as between de facto partners: Shepherd v Doolan [2005] NSWSC 42 at [21] per White J, citing Napier v Public Trustee (WA) (1980) 55 ALJR 1 at 3 and Calverley v Green; Hill v Dunn [2019] NSWSC 419 at [32]-[34] per Henry J; Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249; (2021) 390 ALR 74 at [144]-[150] per McKerracher J.
It falls on the party claiming there is no trust to rebut the presumption as a matter of fact, by establishing on the balance of probabilities a contrary intention of the party providing the funds or the common intention where two parties provide the funds: Nelson v Nelson (1995) 184 CLR 538 at 547; [1995] HCA 25; Black Uhlans Incorporated v New South Wales Crime Commission [2002] NSWSC 1060; (2002) 12 BPR 22,421 at [136] per Campbell J; Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 at [162]-[163] per Ward CJ in Eq; Tonna v Mendonca [2019] NSWSC 1849 at [465] per Ward CJ in Eq. As Hallen J explained in Papas v Co [2018] NSWSC 1404 at [336]:
The onus of establishing the presumption of a resulting trust lies on the person who is asserting the existence of the resulting trust. When the presumption arises, "it performs a similar function to the civil onus of proof by requiring the person against whom the presumption applies to adduce evidence, or to point to other evidence in the case, that rebuts the presumption": Vlahos Pty Ltd v Vlahos [2017] VSCA 166, at 58, in reference to Muschinski v Dodds (1985) 160 CLR 583, at 612; [1985] HCA 78.
It is essential that the alleged contribution bears the character of purchase monies: Amit Laundry Pty Ltd v Jain at [166], citing Calverley at 246 and Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57 at [28]-[30]. As to proof of each party's contribution, Campbell J explained in Cetojevic v Cetojevic [2006] NSWSC 431 at [36]:
… I bear in mind that in an exercise such as this precise accounting is often not to be expected, and that sometimes a broad brush estimate needs to be made to ensure that the onus of proof does not itself become an instrument of injustice. However, it is still necessary for the tribunal of fact to be in a position of being persuaded that, at the least, a certain amount of contributions were made by one particular party, and to be satisfied as to how those contributions relate to the contributions made by the other party. …
[5]
ISSUE ESTOPPEL
The husband submitted that the wife was issue estopped by reason of the consent orders made by the Family Court in 2009 and the wife's subsequent withdrawal of the caveat. These events were said to have established that the wife did not have an interest in the property justifying the caveat. By those orders, the wife and the husband submitted their family law dispute to the Polish courts and, to the extent that the Polish courts did not have jurisdiction to deal with the Liverpool property - which the parties agree it does not - then the wife must be taken to have abandoned her claim to the Liverpool property.
In order for an issue estoppel to arise, there must first be a judicial determination or adjudication of some identifiable issue of fact or law: Blair v Curran (1939) 62 CLR 464 at 531-532; [1939] HCA 23. This is no less so in the case of a judgment by consent: Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665 at [110]-[112]. The judicial decision must be final in nature: Ekes at [110]; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [22]. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion: Blair at 531; Tomlinson at [22]. Nothing but what is "legally indispensable" to the conclusion is finally closed or precluded: Blair at 532.
The consent orders (reproduced at [118]) did not record the results of any adjudication by the Court. Orders 1 and 2 of the Orders recorded that the Application and the Response be "withdrawn". The withdrawal of an application is an act of the parties, not the Court. Order 3 noted that the wife would provide the defendant with a withdrawal of caveat over the Liverpool Property. The withdrawal of court process is just that: a withdrawal before there is any adjudication or determination of the claim. A withdrawal is akin to a discontinuance. A bare discontinuance does not of itself operate as a release or an extinguishment of the claim or in any other way bar further proceedings: Owners of the Cargo of the "Kronprinz" v Owners of the "Kronprinz" (the "Ardandhu") (1887) 12 App Cas 256; KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116 at [39]. The issue of whether the wife had a caveatable interest in the Liverpool property was not, to use the words adopted by Bathurst CJ in Ekes at [117], "put to rest" by Order 3, which did not involve a determination by the Court on any issue.
[6]
ANSHUN ESTOPPEL
The husband submitted that these proceeding were an attempt by the wife to relitigate issues which were the subject of the earlier family law proceedings and were thus Anshun estopped or an abuse of process, relying on Tomlinson at [22]; Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 at [24] per Handley JA (Mason P and Heydon JA agreeing); Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; [2009] NSWCA 69 at [68] per Macfarlan JA (Handley AJA agreeing). A judgment in favour of the wife in these proceeding was said to conflict with the consent orders made in those proceedings by declaring inconsistent rights in respect of the same transaction or matter: see Rippon v Chilcotin at [20]; Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 at [61]-[62] per Young CJ in Eq.
It was submitted that a decision on the wife's favour would necessarily conflict with Order 3, requiring the wife to withdraw the caveat over the Liverpool property. The wife also sought to litigate in this Court notwithstanding the agreement of the parties, recorded in Order 4, that the appropriate forum was Poland. It was submitted that the wife had given no proper explanation as to why she sought to relitigate her interest in the Liverpool property after having had an opportunity to fully litigate this issue in the earlier family law proceeding. Whilst the wife claimed that the Polish courts had no jurisdiction over the Liverpool property, this had always been the case, including when the wife consented to the orders. The wife was legally represented at the time and could be taken to have been aware of this.
In determining whether the principle in Anshun applies, it is not sufficient merely to ask whether a matter could have been raised in earlier proceedings; rather, it will depend on all of the circumstances of the case: Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1. One circumstance that may tend against the operation of the principle is if a party obtains further relevant material that was not reasonably available to it in the earlier proceedings: Arnold v National Westminster Bank plc [1991] 2 AC 93 at 109, cited in Johnson at 25. The critical inquiry is one of reasonableness: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602-603; [1981] HCA 45; Tomlinson at [22].
It was apparently in contemplation of both parties to the family law proceedings in 2009 that a Polish court could determine the dispute between the parties with respect to all property interests between the parties, including the Liverpool property. That assumption was mistaken. I do not accept that the wife may be taken to have known, in 2009, that the Polish court did not in fact have jurisdiction to grant relief in respect of the Liverpool Property. Her evidence is to the contrary. There is no reason to assume that her family law solicitors in Parramatta were knowledgeable on the subject or were asked to, or did, advise her on that subject.
[7]
DELAY
The husband submitted that the wife seeks an equitable remedy of a declaration, which is discretionary: City of Enfield v Development Assessment Commission (1999) 199 CLR 135; [2000] HCA 5 at [58] per Gaudron J; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581; [1992] HCA 10. As such, relief may be declined "if the party has been guilty of unwarrantable delay": Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [56] per Gaudron and Gummow JJ citing R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389 at 400; [1949] HCA 33. The wife was said to have been guilty of unwarrantable delay in seeking the relief in these proceedings.
I take the husband's submission to be a reference to the equitable defence of laches. Drawing on my judgment in In the matter of Pacific Springs Pty Ltd [2020] NSWSC 1240; (2020) 148 ACSR 454 at [185]-[191], in Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at [163], Young JA (Allsop P and Macfarlan JA agreeing) identified the elements of the defence of laches as comprising three components: knowledge of the wrong, delay and unconscionable prejudice caused by the delay. This summary has been approved in Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [415] per Gleeson JA (Meagher and Barrett JJA agreeing); Chung-Yi Pty Ltd v Chih-Yang Chang (No 2) [2018] NSWSC 1112; (2018) 128 ACSR 585 at [96] per Ball J; Finance & Guarantee Company Pty Ltd v Auswild [2019] VSC 664 at [568] per Riordan J; Clementi v Rossi [2019] VSC 725 at [330] per McMillan J.
In Crawley v Short, Young JA also stated (at [164]): "the key element is whether, in all the circumstances, 'it would be practically unjust to give a remedy' ... Normally, that means that the defendant must show both delay and detriment suffered by the delay. As Young JA further stated in that same case (at [175]):
…all three elements must be taken together and the ultimate question asked as to whether, in all the circumstances, the plaintiff has impliedly, in equity, released the defendant from his or her claim or has so acted as to make it unfair that the claim should now succeed.
This evaluative analysis accords with what Meagher JA (with whom Beazley P and Emmett JA agreed) stated in Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [73]:
The doctrine of laches is directed to a broader and different question. That question is whether, as between the parties, it would be practically unjust to give relief which otherwise would be just. In answering that question, account is taken of the length of any delay, the nature of acts done during the period of that delay, whether the plaintiff had sufficient knowledge to justify the commencement of proceedings, whether there has been prejudice to the defendant or others and the nature of the relief claimed…
[8]
ACCOUNTING FOR RENT
The wife claimed an account for rent from 20 August 2003 on, when it was said that the husband took steps to have rent from paid into a different account in his name only. As noted at [89], the husband in fact paid rent into the Husband's Rent Account from 5 June 2000. According to the bank statements for the Husband's Rent Account, the husband received net rental income of $19,500 from 5 June 2000 to 19 August 2003. A portion of this amount, however, is not claimed by the wife and so I put it to one side.
The rental income was calculated from 20 August 2003 to 5 November 2009 by using gross rental income of $190 a week and allowing an agreed 25% of gross rental income as expenses. The husband submitted that the net rental income in this period should be further discounted to allow for a six week vacancy each year.
There is some evidence in later rental years (when records have been produced on subpoena) that, from time to time, tenancies were terminated and new tenants found. Century 21 managed the property from November 2009 until March 2020, during which time there appears to have been three tenancies: Mshait (unknown duration), Begum (4 years) then Herrara (3 years). It is reasonable, therefore, to allow for say two tenancies over the six year period from August 2003 to November 2009, with a loss of rent between these tenancies of say three months ($1,710) and a letting fee (the Century 21 agreement provided for a letting fee of one week's rent). I will deduct half of these amounts ($950) from the half share of the rent claimed by the wife.
From 6 November 2009 on - when bank statements for the Husband's Second Rent Account are available - net rental income is derived from the bank statements. The husband submitted that the net rental income should be further discounted by 20% to allow for capital expenses relating to maintenance and renovation of the property during this period.
Having reviewed the trust ledger for Century 21 from May 2012 to May 2020, the husband provided $4,000 to fund repairs. Other than this, maintenance expenses in relation to the property were deducted from rental income. In the absence of any evidence that the husband incurred other capital expenses which have not already been paid by the managing agent before the net rental income was deposited into the Husband's Second Rent Account, it is not clear to me why the rental income should be further discounted. I will, however, deduct half of the $4,000 cash paid by the husband from the half share of the rent claimed by the wife.
[9]
STATUTORY SALE
The wife seeks orders for the appointment of trustees for sale and for the Liverpool property to be sold and the proceeds divided between the parties in proportion to their respective interests. In the event of disagreement between joint owners of property, such an order is made virtually as of course: Tory v Tory [2007] NSWSC 1078 at [42]; French v Bremner [2019] NSWSC 1033 at [472], affirmed on appeal on this issue in French v Bremner [2020] NSWCA 339 at [115]. There is no reason why such an order should not be made in this case.
The wife has succeeded. Her costs should be paid by the husband.
I request the parties to bring in Short Minutes of Order giving effect to these reasons, within 14 days.
[10]
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: 15 July 2021
Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181
Gillespie v Gillespie [2013] 2 Qd R 440; [2013] QCA 99
Hill v Dunn [2019] NSWSC 419
In the marriage of Molier and Van Wyk (1980) 7 Fam LR 18
In the matter of Pacific Springs Pty Ltd [2020] NSWSC 1240; (2020) 148 ACSR 454
J A Westaway & Son Pty Ltd v Registrar-General [1996] NSWSC 413; (1996) 7 BPR 14,773
Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1
KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116
Lamshed v Lamshed (1963) 109 CLR 440; [1963] HCA 60
Napier v Public Trustee (WA) (1980) 55 ALJR 1
Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25
Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57
Orr v Ford (1989) 167 CLR 316; [1989] HCA 4
Owners of the Cargo of the "Kronprinz" v Owners of the "Kronprinz" (the "Ardandhu") (1887) 12 App Cas 256
Papas v Co [2018] NSWSC 1404
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389; [1949] HCA 33
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57
Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142
Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431
Shah v Sanjiv [2014] NSWSC 1535
Shepherd v Doolan [2005] NSWSC 42
Song v Shi [2011] NSWSC 1207
Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Tonna v Mendonca [2019] NSWSC 1849
Tory v Tory [2007] NSWSC 1078
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440
Watson v Foxman (1995) 49 NSWLR 315
Xie v Li [2019] NSWSC 808
Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27
Texts Cited: Peter Grimes, The Practice of the Land Titles Office (New South Wales) - Supplement to Third Edition to 1st February 1969 (1969, Law Book Co)
Category: Principal judgment
Parties: Beata Kurzyp (Plaintiff)
Peter Douglas Kurzyp (Defendant)
Representation: Counsel:
Mr A Harding SC (Plaintiff)
Mr D Moujalli (Defendant)
Buying the townhouse
According to the wife, in February and March 1987, the couple began to look for a home and settled upon the Liverpool townhouse. According to the wife, the husband asked her whether they could use the gift from her father to buy the townhouse, and the wife agreed. The husband said that they could also use some of the remaining funds transferred from overseas.
The husband denies this conversation. The husband said he never talked to the wife about buying property. Rather, his step-father suggested that he invest in property as the husband was then considering investing in a business and "it was better to buy property, since I was paying $250 per week for accommodation".
The real estate agent was Mr Olek at Richard Hutchens Real Estate in Liverpool who, as matters have turned out, became the wife's second husband many years later. According to Mr Olek, he asked the couple if they needed assistance with a home loan. The husband said, "No. We have cash in a bank." Although Mr Olek was relying entirely on his memory, he said there was "[n]o possibility" that the husband could have said, "I have cash in a bank." Whilst Mr Olek had hundreds of such conversations with prospective purchasers over the years, "It was one of very little customers who was speaking to me in Polish." In addition, it was routine for him to ask such questions and, if he was qualifying a purchaser, he did not qualify one purchaser if he had two purchasers in front of him.
After some negotiations, a $65,500 price was agreed. Mr Olek says that the wife gave him a cash holding deposit of $500 and the receptionist at the real estate agency gave her a receipt, "I looked at it at the point where the receptionist was actually writing the deposit receipt down."
Mr Olek took instructions from the couple to prepare a Sales Advice, and told them that the property could be owned in different ways such as tenants in common or a joint tenancy. The wife looked at her husband and said, "We will buy as joint tenants, yes?", and the husband agreed. As the wife recalls it, either she or the husband said, "We are buying it together".
The husband does not recall this conversation but says, "I never considered buying the Liverpool property together with the [wife] at the time. We were not then married." He denied ever speaking with Mr Olek about the wife having a share in the property. The husband said he invested in the Liverpool property for himself, "I didn't invest that so that she would have a share of it. … I never said she could be an equal owner. If I had thought about that, if I had thought she - I wouldn't have brought the property. I didn't say that to anyone, to Olek or Nad[o]lski or anyone. I bought it for myself."
The funds as ultimately transferred to Australia was 142,000 Deutsche marks, or some $72,000 Australian dollars. The 'gap' between the funds which the husband was permitted to take from Poland and the funds which were transferred to Australia was 112,000 Deutsche marks. Funds brought by the wife from her "A" account could well have bridged part of this 'gap'. The wife's 40,000 Deutche mark would have comprised only 36% of the 'gap'. This is plausible. The husband's evidence that he was very rich and the wife was very, very, very poor carries little weight.
When the pooled funds were transferred to Australia in August 1985, the couple had a two month old baby. As some of these monies, at least, likely came from the wife's "A" account, and the couple were embarking upon family life, depositing the funds into a joint account in Australia would have been an unremarkable thing to do. The husband does not point to any other account into which the monies were deposited.
There is no doubt that the wife's father came to Australia. The fact that the wife's father gave the wife US$20,000 is corroborated by Ms Malchevski, who was a credible witness. The fact that the couple were looking for a home for their young family is inherently likely. That the wife would use the father's gift for that purpose is also likely.
Whilst I accept that it would have been unusual for Mr Olek to deal with a Polish couple who had funds to buy their first home outright, and this may well have made this purchase stand out in his recollection, I otherwise place little weight on Mr Olek's weight as to the specifics of his conversations with the couple so many years ago.
There is documentary evidence that the wife's name was initially on the transaction documents. The wife's name initially appeared on the transfer, before it was crossed out by the solicitor. The $1 duty stamp on the transfer in the absence of an "Alteration Noted" over-stamp on the amendment indicates that the husband and the wife were the purchasers named on the Contract for Sale of Land but the wife's name was deleted from the transfer after settlement: see [60]-[63]. The alteration is consistent with the husband giving instructions to the solicitor that the Liverpool townhouse would be purchased in his name alone, either because he had provided all of the monies to pay for the property, or simply because that is how he wished the property to be held and the wife agreed at the time (as described by the wife in her first affidavit: see [53]) or the solicitor regarded the husband as the client and did not take the wife's instructions on the subject.
The husband agreed that it was possible that the monies used to purchase the Liverpool property came from the couple's joint account. The husband does not point to any other bank account in use at the time. In that event, the funds used to purchase the Liverpool property were co-mingled funds including the wife's "A" account (to the extent that the funds had not then been exhausted), the gift from the wife's father and the wife's earnings from her various jobs. The inconsistency in the wife's evidence referred to at [54] is immaterial.
Consistent with the couple purchasing the Liverpool townhouse using joint funds, the couple married ten months later and, in statutory declarations completed two months after their wedding, the husband and the wife each declared that they had a joint bank account and had joint interests in "everything". The couple were then expecting their second child.
Also consistently with this, shortly before returning to Poland, the couple opened a joint bank account at the Commonwealth Bank, into which (according to the wife and Mr Olek) rent from the Liverpool property was paid. The husband agreed that the rent may have been deposited into a joint account at some stage, but did not recall. The husband did not point to any other bank account in his name alone into which the rent was paid at that time. By 2000, however, the husband opened the Husband's Rent Account, being likely at a time when the couple had separated or their relationship was experiencing uncertainty. Rent from the Liverpool property was paid into that account thereafter. Consistent with the fact that the husband was thereby diverting rental income from a joint account unbeknownst to the wife are the conversations described by Christopher before his return to Australia (see [92] and [94]) and the 'top up' of the Second Joint Account with funds from the Husband's Rent Account when the wife returned to live in Australia (see [99]-[100]).
Also consistent with the wife having contributed to the acquisition of the Liverpool property is the husband's conversation with Christopher in 2005, when the husband said, "We bought it equally … fifty-fifty". Christopher was a credible witness.
Standing against acceptance of the wife's version of events is her failure, when commencing family law proceedings in Australia in 2006, to refer to any contributions made by her to the acquisition of the Liverpool property and the suggestion that, at the commencement of their relationship, "The Husband had DM 40,000". The wife did not mention the 25,000 Canadian dollars or her father's gift. It may be that in 2006, being almost 20 years after the Liverpool townhouse was purchased and in the absence of the documentary material which has now come to light in these proceedings, the wife did not have in mind the specifics of the transaction, bearing in mind that the family law affidavits referred to a large number of properties and business interests in Australia and Poland, of which the Liverpool townhouse was but one. That said, the wife's recollection of these matters would also have been better in 2006 than 13 years later, when these proceedings were commenced.
It is apparent that the wife's affidavits filed in the family law proceedings were prepared in support of an application for interim relief. The affidavits were brief. It would have be unremarkable - had the family law proceeding continued to a final hearing - for the wife to supplement these affidavits with a more substantive and detailed account. The wife said she prepared four affidavits in total in the family law proceedings, albeit the husband's solicitors have only located two affidavits from the Court's records in Parramatta. It is quite possible that the wife prepared additional affidavits which were not filed with the Court and became unnecessary once the proceedings resolved by consent orders.
Also tending against acceptance of the wife's version of events is that she did not do anything to press her claim in respect of the Liverpool property from February 2009 until July 2018. It was not unreasonable for the wife to proceed on the assumption that the husband would commence the family law proceedings in Poland - where he lived - but after some years of inaction on the husband's party, the wife did not commence proceedings herself. It does appear that the husband and the wife were unable to communicate on any matter of substance. I accept the wife's evidence as to her difficulties in dealing with her ex-husband; her description was consistent with the husband's presentation when giving evidence.
Matters were only brought to a head in 2018 as a consequence of the husband's sale of a property in Poland in the wife's name pursuant to her power of attorney, which had been revoked, and the allegations and counter allegations made in connection with that event. It was this which finally prompted the husband's lawyer to petition for partition of marital property in Poland, but then seeking no relief in respect of the Liverpool property, which it had been anticipated - when the family law proceedings in Australia were resolved by consent - would be dealt with in the Polish proceedings. Nor does it appear that the husband has prosecuted those proceeding expeditiously since.
Having considered this evidence, I am satisfied on the balance of probabilities that the wife's version of events should be accepted. The wife did bring funds from Poland to Australia from her "A" account, which were deposited into the First Joint Account. Those funds comprised 40,000 Deutsche marks or, when transferred to Australia, $20,473. Her father did give her US$20,000 on his visit to Australia. These funds were contributed to the purchase price of the Liverpool property, albeit some of the 40,000 Deutsche marks had likely been expended in the meantime and replenished by the wife's earnings.
However, leave is not required for proceedings under section 78 of the Family Law Act, which provides:
In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
To the extent that these proceedings may be considered to be under section 78 of the Family Law Act, there is no requirement for leave.
The husband relied on In the marriage of Molier and Van Wyk (1980) 7 Fam LR 18, where it was held that parties may not apply to the Court under section 78 to declare their title or rights in respect of property which has already been the subject of an order under section 79: at 412. The husband submitted that, by reason of the consent orders made in the family law proceedings, an order had been made under section 79.
Whilst, when commencing the family law proceedings, the wife did seek an order under section 79 of the Family Law Act, the orders made, by consent and without admission, were not made pursuant to section 79 and, indeed, no order was made altering the property interests of the wife and the husband. Rather, the Court noted the parties' agreement to abandon the family law proceedings, with no cost consequences, and to pursue the matter in Poland. Re Molier has no application on the facts of this case.
Further, leave is not required where proceedings were instituted with the consent of the parties. These proceedings have been on foot for two years and it is reasonable to infer that the husband consented to the proceedings being brought in this Court, having not raised the issue until the defendant served his outline of opening submissions.
The husband's opposition to the declaration of a resulting trust was on the basis that the Court would not be satisfied that the wife contributed to the purchase price of the Liverpool property. The husband did not otherwise suggest that, if I was so satisfied, a resulting trust did not arise. That approach was correct.
When the property was purchased, the couple were in a de facto marriage relationship. They had a young child. They intended to marry. I have found that the wife contributed to the purchase price. Her contribution was her father's gift ($24,000) and whatever remained in the First Joint Account from her 40,000 Deutsche mark ($20,473). It may be the First Joint Account also contained joint funds of the couple derived from their business activities together in Poland and Hungary, as well as the wife's earnings from her employment in Australia. I conclude that her contribution to the purchase price was at least half of the purchase price, entitling her to the declaration sought of a resulting trust of a one-half share.
The orders also made plain why the pleadings and caveat were to be withdrawn: the parties had agreed to have the substantive rights of the parties determined in another forum. It was implicit within the orders that the Family Court of Australia had not determined such rights, but was permitting the parties to bring the family law proceedings in Australia to an end without the ordinary consequences which may attend such an abandonment (that is, costs orders) so that the Polish court could determine the matters between the parties. The orders were made "by consent and without admission". Order 4 noted the agreement of the parties that the appropriate forum was in Poland, and cannot be construed as an agreement by the parties that, to the extent that the Polish courts did not have jurisdiction over the Liverpool property, the parties' claims were abandoned. The orders determined nothing in respect of the wife's interest in the Liverpool property. There was no issue estoppel.
Further, in order for the principles of Anshun estoppel to operate, the plaintiff must have prosecuted the earlier proceeding to its conclusion by final judgment or settlement. The principles have no application where that has not occurred, such as where the plaintiff merely discontinued the earlier proceeding: DA Christie Pty Ltd v Baker [1996] 2 VR 582 at 602; Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431 at [36]; Tomlinson at [22]. The wife did not prosecute the family law proceedings to a conclusion by final judgment or settlement but discontinued the proceedings. There is no Anshun estoppel.
Discontinuing proceedings and recommencing further proceedings may, however, amount to an abuse of process, including where use of the Court's procedures occasions unjustifiable oppression to a party or where the use serves to bring the administration of justice into disrepute: UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 at [1] per Kiefel CJ, Bell and Keane JJ. Serial proceedings discontinued prior to judgment would be an obvious example of an abuse of process: at [46]. However, as in Johnson, this is a case in which earlier proceedings were brought to completion against the background of a communicated likelihood of later proceedings being commenced: at [78] per Gageler J. There is no abuse of process here.
In respect of the element of unconscionable prejudice, there must be substantial detriment, not merely a trivial inconvenience, caused by the plaintiff's delay: Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 at [153] per Doyle CJ; Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) and (No 10) (2008) 39 WAR 1; [2008] WASC 239 at [9314] per Owen J. The classic example of prejudice is where the defendant has reasonably acted to his or her detriment in reliance on the plaintiff's delay: Lamshed v Lamshed (1963) 109 CLR 440; [1963] HCA 60; Bell Group Ltd at [9312]. Prejudice may also arise where evidence is lost or witnesses have passed away. In this respect, the issue is not whether evidence per se may have been lost; rather, it is whether evidence that "may have cast a different complexion on the matter has been lost": Orr v Ford (1989) 167 CLR 316 at 330; [1989] HCA 4 per Wilson, Toohey and Gaudron JJ; Gillespie v Gillespie [2013] 2 Qd R 440; [2013] QCA 99 at [94]-[95] per Margaret Wilson J (McMurdo P and White JA agreeing).
Ultimately, as noted above, an evaluative analysis must be conducted, cognisant of the matters identified by Meagher JA in Gerace v Auzhair Supplies at [73], as well as "the type of transaction" under consideration (see Crawley v Short at [180]). As Dixon CJ, Webb and Kitto JJ said in Fysh v Page (1956) 96 CLR 233 at 243; [1956] HCA 13:
…If a plaintiff establishes prima-facie grounds for relief the question whether he is defeated by delay must itself be governed by the kind of considerations upon which the principles of equity proceed. If the delay means that to grant relief would place the party whose title might otherwise be voidable on equitable grounds in an unreasonable situation, or if, because of change of circumstances, it would give the party claiming relief an unjust advantage or would impose an unfair prejudice on the opposite party, these are matters which may suffice to answer the prima-facie grounds for relief…
I agree that the wife has delayed bringing this claim for many years. The wife understood, in 1987, that, on becoming a permanent resident, her husband would put the title to the Liverpool property in both names. The wife moved back to Poland from 1990 to 2005. In 2006, the wife came to learn that the Liverpool property had not been put in both names: the wife came to know of the wrong. Whilst the wife initially took some steps in respect of the Liverpool property, in the family law proceedings, the parties decided in 2009 to litigate the matter in Poland. Neither took any steps to do so for another nine years. It is apparent that the husband was in no hurry to progress the matter either.
But the critical problem for the husband in seeking to rely on the defence of laches is that there is no evidence of unconscionable prejudice caused by the delay. The husband did not give any evidence, for example, that he had acted, to his detriment, on the assumption that the wife no longer pressed such a claim. Rather, the husband simply continued to hold the property, earning rent and incurring expenses. The defence of laches is not established.
Using the plaintiff's calculation less $950 and $2,000, the wife is entitled to $89,815 in unpaid rent. The plaintiff will need to recalculate the interest on this amount.
Mr Olek recommended a solicitor, Chris Nadolski, to act on the purchase, and they accepted his recommendation. Mr Olek prepared the Sales Advice reflecting the couple's instructions to buy the property as joint tenants. Mr Olek said he recalled preparing this Sales Advice, notwithstanding that he had prepared hundreds of such documents over the years.
This particular one is actually pretty much memorable because I didn't have as many purchasers in my career selling properties, residential properties - I was doing it for a period of about two years - that came to my office and offered cash to purchase the property. So, it's really easy to remember a person or people like that. There was the two of them sitting in front of me and saying that they have cash to purchase 67 or 65 and a-half thousand dollars property.
Mr Olek also prepared a cover letter forwarding the Sales Advice to the solicitor. Mr Olek recalled that the letter described the purchase as the husband and wife "as joint tenants".
The wife recalls seeing a sales notice issued by the agent in both their names. However, her husband then said to her, "We will buy the unit only in my name as you do not have Australian permanent residence. I will add your name after you obtain permanent residence." The wife said, "I trust you will do it".
According to the wife, a 10% deposit was paid using cash received from the wife's father and the wife deposited the balance of the father's gift to the First Joint Account. In her third affidavit, the wife said she withdrew the 10% deposit from the First Joint Account. Either way, the husband denies this.
Mr Olek says that he received a front page of the contract for sale at the real estate office, with a note advising that the full contract had been delivered to Mr Nadolski. The contract was not then executed. Mr Olek did not see a full version of the contract prior to exchange, but spoke to Mr Nadolski in relation to exchange and settlement.
In her third affidavit, the wife said that she signed the contract for sale, with her husband (this is inconsistent with her first affidavit, where the wife understood from her conversation with the husband after the sales notice was issued that the property would be bought in his name alone). The wife said that she later received a letter from Mr Nadolski addressed to "B and P Kurzyp" informing them that contracts had been exchanged. The wife agreed that she did not mention this until her third affidavit in these proceedings, nor mention it in her family law affidavits. The husband says the wife did not sign the contract, "as she wasn't meant to. At that time we were not married and she did not have the right of permanent residence in Australia" (although I note that the husband did not then have permanent residence either).
Neither party has a copy of the contract for sale. A subpoena to the parties' then solicitor, Mr Nadolski, returned no documents. In cross-examination, Mr Olek also said that he saw a copy of the front page of the contract after exchange, signed by the vendors and also by the wife and husband. This was not referred to in his affidavit, which was a notable omission.
The sale completed on 8 May 1987. The transfer survives, signed by Mr Nadolski as solicitor for the transferee. It was registered on 15 May 1987. According to the transfer, the property was transferred to the husband alone. The wife's name was written on the transfer but crossed out, with the change initialled by Mr Nadolski. Also added in handwriting was the husband's occupation, car mechanic.
The wife said the deletion of her name was done without her knowledge or authority. The husband said he had no knowledge of the circumstances in which the wife's name was entered and then crossed out on the transfer. The husband said that he did not know anything about this document and that Mr Olek "arranged everything". Further, "I have nothing to do with the document. I didn't order anything. It is a matter of Olek and Nad[o]lski."
The transfer was stamped for duty for $1. This indicates that the parties on the transfer were the same as the parties on the Contract for Sale of Land when the transfer and contract were presented for stamping. In 1987, an agreement for the sale of land and the transfer were each liable to ad valorem duty: section 41(1), paragraph (1) under the heading "Conveyance of any Property" and paragraph (3)(a) under the heading "Real Property Act 1900, as amended" in the second schedule, Stamp Duties Act 1920 (NSW). However, where duty had been paid on an agreement, a conveyance "made in conformity with the agreement" was only liable to duty of one dollar: section 41(4)(a). Conveyance was defined as including a transfer: section 65.
However, the Stamp Duties Office's practice was to over-stamp amendments to documents presented for stamping with a circular imprint reading "Alteration Noted. Stamp Duties Office": Peter Grimes, The Practice of the Land Titles Office (New South Wales) - Supplement to Third Edition to 1st February 1969 (1969, Law Book Co) at 32; see J A Westaway & Son Pty Ltd v Registrar-General [1996] NSWSC 413; (1996) 7 BPR 14,773 at 14,786 in respect of an amended transfer in 1991.
The transfer does not bear such a stamp. This suggests that the amendment to the transfer was made after the transfer had been stamped. Usual conveyancing practice requires the purchaser to provide a stamped transfer to the vendor's solicitor for the vendor to sign and provide on settlement: Carringville Pty Ltd v Gatto Group Pty Ltd [2003] NSWSC 123; (2003) 11 BPR 21,069 at [35] per Young CJ in Eq. The fact that the amendment on the transfer was not initialled by the vendors suggests that the amendment was made after completion and before the transfer was provided to the Land Titles Office for registration.
What this tells me overall is that, when the transfer was stamped for duty, the purchasers on the contract for sale of land corresponded to the purchasers on the transfer, entitling the purchasers to pay only $1 duty on the transfer. That is, the wife's name was on the Contract for Sale of Land. Subsequently, the transfer was amended - likely after settlement - to delete the wife as a purchaser. Mr Nadolski would have been most unlikely to make such an alteration in the absence of instructions, at least from the husband and (one would hope) also from the wife. The husband's evidence that he had nothing to do with the alteration of the transfer is also most unlikely.
As such, the wife's evidence that she signed the Contract for Sale is likely correct, as is Mr Olek's evidence regarding the couple's instructions that the Liverpool property would be purchased together. Ultimately, whether the wife signed the Contract for Sale is not particularly germane. The fact that the wife signed the contract does not necessarily mean she contributed to the purchase price.
The wife says that the purchase was completed using funds from the First Joint Account. The wife said her husband went to Mr Nadolski's office for the settlement, taking a bank cheque drawn from the First Joint Account. The wife says she checked the First Joint Account the day after the purchase was completed and recalls that, as expected, the money had been withdrawn. The husband says he paid for the townhouse with cash from his savings. The husband agreed it was possible that the monies used to purchase the Liverpool property came from the joint account.
Ms Malchevski recalls speaking to the wife over the phone, when the wife said, "I bought a townhouse in Liverpool". Ms Malchevski agreed that the wife did not say that the townhouse had been purchased using the gift from her father. Rather, Ms Malchevski assumed this,
I never asked the question because it's not really my business. My understanding was that they were short of money. They were - she wanted to buy the - to have her own place" …
So my understanding was that with the money that Mr Wieslaw brought, they would be able to - to afford it.
As the wife described events in her third affidavit, the wife came to learn that her name was not on the title of the property when the couple took the title deed to the bank for safe keeping and she saw that her name was not on the document. She was upset and asked her husband about it. They then had a conversation in the same terms as already described at [53]. The husband denies this conversation.
The wife agreed that she did not speak to the solicitor Mr Nadolski about this at the time, "Because between us, he asked me not to overreact, and he - I don't know how to explain to you, but if your own husband tells you that one day you will get your name on the title because you are my wife anyway, why would I run to the solicitors and make a fuss about it? … I only rely on a promise of my husband, which was the most important thing to me."
On completion, the Liverpool townhouse was the couple's home for the next three years.