Oliver v Malanos

THE FMC DECISION 11 The primary question before Driver FM concerned the identity of the person or persons who were beneficially entitled to $200,000 of the funds held in the joint account. 12 The appellant contended that all of the $400,000 held in the joint account was held on trust for the children's education expenses. The appellant submitted that he and Ms Fung had acted in accordance with the consent orders and that he and Ms Fung intended that the $400,000 remaining in the joint account be held on trust for their children's education. The appellant further contended that the consent orders, being made pursuant to s 79 of the Family Law Act 1975 (Cth) ('the FLA'), had the effect of altering the parties' property interests in the house so as to vest Ms Fung's share of the $400,000 held in the joint account on trust for their children. 13 The respondent asserted that half of the funds in the account were beneficially owned by Ms Fung at the time of her becoming bankrupt and pursuant to the demand such funds became vested in her trustee. The respondent submitted that the consent orders did not evince an intention that the fund to be created constituted a trust fund, and that in accordance with the general principles governing trust law, no trust was created. The respondent also asserted that the joint account had been used for purposes unrelated to the education of the children. 14 Driver FM found that the dispute was a 'case in which the law of bankruptcy and family law intersect' and considered the enactment of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) ('the amending act') which amended both the Bankruptcy Act and the FLA. 15 At [15]-[16] Driver FM stated: In my view, property disposed of by a spouse pursuant to an order under s. 79(1) of the Family Law Act who later becomes bankrupt does not vest in the trustee in bankruptcy and is protected from the claw back provisions in the Bankruptcy Act. … if the consent orders made by the Family Court had the effect of transferring property from Ms Fung to the children (or to Mr Oliver for the benefit of the children) then that money did not vest in Ms Fung's trustee in bankruptcy and is not available to him. 16 At [19] Driver FM found that order 5 of the consent orders was 'imperfect' and concluded that 'the orders did not expressly create a trust, and until the fund was created, it is hard to see how there could be one'. His Honour found at [20] that there was no trust property until the house was sold and the parties contributed the required amounts into the new account. 17 At [28] Driver FM found: In my view a key feature in this case is that while an account has been created for a separate fund for the children to be held, it has no money in it. The money in the joint ANZ account is held jointly and the account holders have dealt with that money as they pleased, and were free to do so until the account was frozen. 18 At [29] Driver FM concluded that the funds sought by the respondent were not subject to a trust and thus the funds vested in the trustee upon the commencement of Ms Fung's bankruptcy.

THE APPEAL 19 The appellant filed his notice of appeal on 16 February 2011 which raised eight grounds of appeal. Such grounds can be distilled into three main issues in support of the appellant's contention that the $200,000 did not vest in the trustee upon Ms Fung's bankruptcy, namely: 1. Whether as a result of the interaction between the Bankruptcy Act and the FLA, the amount of $200,000 in the joint account formed part of Ms Fung's bankrupt estate. 2. Whether the consent orders created an equity in the $200,000 in favour of the children which survived Ms Fung's bankruptcy; and 3. Whether a valid trust was formed in favour of the children in view of the events following the making of the consent orders. 20 The parties' submissions will be considered against a framework of the above contested issues.

ISSUE 1: THE STATUTORY REGIME 21 The amending act introduced significant changes to both the Bankruptcy Act and the FLA and was intended to create greater certainty in instances where bankruptcy and family law proceedings co-exist. 22 As a result of the amending act, section 79(1) of the FLA now relevantly provides: (1) In property settlement proceedings, the court may make such order as it considers appropriate: (a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or (b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property; including: (c) an order for a settlement of property in substitution for any interest in the property; and (d) an order requiring: (i) either or both of the parties to the marriage; or (ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines. [Emphasis added] 23 Section 58 of the Bankruptcy Act makes provision for the vesting of the property of a bankrupt in the trustee. Section 58 of the Bankruptcy Act relevantly provides: Vesting of property upon bankruptcy--general rule (1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. 24 Significantly, the amending act introduced s 59A into the Bankruptcy Act which provides: Sections 58 and 59 have effect subject to an order under Part VIII or VIIIAB of the Family Law Act 1975. 25 Section 79 of the FLA is contained within Part VIII of the FLA, with the consequence that if orders 5 and 6 are orders made under s 79(1) of the FLA, Ms Fung's $200,000 would be protected from her bankrupt estate by virtue of s 59A of the Bankruptcy Act.

The Appellant's Submissions 26 The appellant submits that the consent orders (including orders 5 and 6) are orders made under Part VIII of the FLA, that Driver FM agreed (see FMC decision at [17]) and accordingly by application of s 59A of the Bankruptcy Act, the funds in the joint account did not vest in the trustee. 27 The appellant submits that the application of s 59A of the Bankruptcy Act is not conditional upon one of the relevant parties being bankrupt when the orders were made. In support of this proposition the appellant submits that if the legislature had intended this effect, it would not have subjected s 58 of the Bankruptcy Act to any 'order under Part VIII or Part VIIIAB' of the FLA.

The Respondent's Submissions 28 The respondent acknowledges that the consent orders were orders made pursuant to s 79(1) of the FLA. However, the respondent submits that such orders do not affect the vesting of the property in accordance with s 58 of the Bankruptcy Act. 29 The respondent contends that prior to the money in the joint account being disposed in accordance with orders 5 and 6, Ms Fung became bankrupt and thus pursuant to s 58 of the Bankruptcy Act, Ms Fung's interest in the joint account vested in the trustee. Ms Fung's bankruptcy and the interests of creditors were not an issue for the Family Court when the consent orders were made. 30 The respondent submits that Driver FM was correct in finding that order 2 'effected a variation of property interests' between the appellant and Ms Fung, but contends that the effect of order 5 was merely 'to create an enforceable liability at an uncertain time following the completion of the sale of the former matrimonial home'. 31 The respondent submits that s 59A of the Bankruptcy Act does not affect the vesting of property pursuant to s 58 unless an order is made under Part VIII or Part VIIIAB of the FLA with respect to the bankrupted property; that it was only after Ms Fung's bankruptcy that the Family Court could make orders to which s 59A would apply. The respondent further contends that such an interpretation of s 59A accords with s 79 of the FLA, and in support points to s 79(1)(b) of such Act which specifically refers to 'vested bankruptcy property'. 32 The respondent also contends that the appellant could have returned to the Family Court or to Driver FM to make an application under s 79A of the FLA to amend, adjust or clarify the orders 5 and 6. The respondent submits that such an application could have been made by the appellant to have $200,000 excised from the funds of Ms Fung's estate for the purpose of the children's education. 33 The respondent further submits that the consent orders did not, and could not have created an equity in the joint account as such account did not exist at the time of the consent orders being made. The respondent contends that orders 1, 2 and 3 of the consent orders have been implemented, but Ms Fung's bankruptcy intervened before orders 5 and 6 could be fulfilled. 34 The respondent lastly submits that order 2 determines how the sale proceeds are to be applied. However the respondent asserts that order 5 is merely a personal obligation unrelated to the property and was to be given effect after the interest in the house became vested in the wife, and at most was a 'statement of intention'.

Consideration 35 Orders 5 and 6 made on 10 April 2008 by the Family Court were orders made under s 79(1) of the FLA. Those orders altered the property interests of the parties to the marriage, and were envisaged by s 79(1)(d) which provides for the making of orders requiring parties to a marriage to 'make, for the benefit of … a child of the marriage, such settlement or transfer of property as the court determines'. 36 It is an erroneous construction of the consent orders to suggest, as the respondent asserts, that the only order properly made under s 79(1) of the FLA is order 2. Such submission may have resulted from the fact that orders 5 and 6 do not immediately follow order 2. However, this does not reduce the force of such orders in any way or render them ineffectual. Such orders were clearly intended to vary the property interests of parties to the marriage as envisaged by s 79(1) of the FLA. Accordingly, this Court must interpret the orders and give effect to their provisions. 37 When the consent orders are read as a whole, it is apparent that orders 2, 5 and 6 are intended to be read together. Order 5 begins with the words: 'Following completion of the sale…'. While order 5 does not explicitly state that the proceeds of the sale must be used to form the 'fund' for the children, it can be reasonably inferred. Driver FM in fact found at [19] of his decision that the $200,000 was to be derived from the proceeds of the sale of the house. 38 Once the Court accepts that orders 5 and 6 are orders made under s 79(1) FLA, it follows that s 59A of the Bankruptcy Act operates to subject the operation of s 58 of the Bankruptcy Act to orders 5 and 6. Accordingly, the transfer of Ms Fung's interest in the property referred to in order 5 overrides the vesting provision of s 58 of the Bankruptcy Act. 39 The Court is unable to agree with the respondent's submission that s 59A of the Bankruptcy Act only applies where one of the relevant parties is bankrupt at the time of the order being made. The text of s 59A does not suggest that such a precondition is incorporated in s 59A. Further, while s 79(1)(b) of the FLA does refer to 'vested bankruptcy property', that reference is merely addressing one circumstance envisaged by s 79(1). No occasion accordingly arose for the appellant to re-apply to either the Family Court or Driver FM to amend or adjust orders 5 and 6 as suggested by the respondent. Such orders had immediate dispositive effect once made, irrespective of the date when Ms Fung became a bankrupt. 40 The Explanatory Memorandum to the amending act at [83]-[84] refers to the situation in which orders are made under s 79 of the FLA and one of the parties subsequently becomes a bankrupt. In these circumstances, the trustee will have standing under s 79A of the FLA to make an application to a court to vary orders made under s 79 of the FLA or make new orders. No application has been made by any party in these proceedings under s 79A. 41 The Court considers that orders 2, 5 and 6 so far as they affect the proprietary interests of the parties to the marriage, and of the children, must be given effect. Such orders have the consequence that Ms Fung's beneficial interest in the $200,000 in the joint account became vested in the fund for the children at the time of the making of the consent orders. 42 For the above reasons, the Court is respectfully unable to agree with the learned Federal Magistrate's conclusion that the monies vested in the respondent at the time of Ms Fung's bankruptcy. Although as a result of the above finding it becomes unnecessary to decide the remaining two issues, the Court will consider those issues for completeness.

Appellant's Submissions 43 The appellant submits that the effect of orders 5 and 6 of the consent orders was, in equity, to 'carve out' $400,000 out of the sale proceeds and require that such funds be held for the purpose of the children's education. The appellant submits that such equitable obligation was not extinguished by Ms Fung's bankruptcy. As a consequence the appellant submits that at the time of her bankruptcy Ms Fung had no beneficial interest in the $200,000 and accordingly such monies did not vest in the respondent. 44 In support of such submission, the appellant relies upon the decision of Needham AJ in Craven v The Official Trustee in Bankruptcy (unreported, Supreme Court, NSW, Needham AJ, 26 July 1991). The appellant also relies on the decision of the Full Court in Official Trustee in Bankruptcy v Mateo (2003) 127 FCR 217 in which the Full Court cited Craven with approval. Further, the appellant relies on the decision of the Full Court in Jones v Daniel (2004) 141 FCR 148 in which the Full Court carefully analysed Mateo. 45 On the basis of the above authorities the appellant submits that the consent orders created an equity which prevents the parties from using the funds in a way contrary to such orders. Further, the appellant contends that any rights Ms Fung retained after the consent orders, and thus any rights which vested in the trustee, were those of a 'bare trustee' only. On this basis, the appellant submits that the trustee was not entitled to make any demand on the joint account.

Respondent's Submissions 46 The respondent submits that the decisions of Craven and Mateo can be factually distinguished since in those decisions the relevant property was transferred from the person who became bankrupt to his or her spouse. 47 The respondent further submits that the appellant's submissions that orders 5 and 6 operate to 'carve out' the $400,000 attempts to read into the orders words which are not present and ignores order 2. The respondent argues that the decision in Craven confirms that where the orders provide for the payment of half of the proceeds of the sale to the wife, such orders create proprietary rights in the wife which form part of the bankrupt estate by virtue of s 58 of the Bankruptcy Act. Further, the respondent submits that the authorities cited by the appellant predate the amending act, although the respondent does not suggest that anything turns on this point.

Consideration 48 In Craven, the husband and wife, upon divorce, made consent orders under s 79(1) of the FLA. The relevant order to the proceedings was as follows: 3. Upon completion of the sale of the matrimonial home referred to in Order 2 hereof, the net proceeds of sale which shall be defined as the balance remaining after payment of the agent's commission and the amount required to discharge the existing encumbrance to Oakhill Pty Limited shall be paid to the wife. 49 Subsequent to the making of the orders the husband was made bankrupt on 20 March 1991. Mrs Craven, the plaintiff in those proceedings, claimed against the trustee that she was entitled to the balance of the proceeds of the sale of the matrimonial home after discharge of the mortgage. She submitted that the orders created an equity in the proceeds from the sale of the house, and such equity survived her husband's bankruptcy. 50 Needham AJ in Craven relied on the principle referred to by Beaumont J at 112 in Sonenco (No 77) Pty Ltd v Silvia (1989) 24 FCR 105 that 'the trustee in bankruptcy takes the property of the bankrupt subject to "equities"…'. Needham AJ also relied upon the High Court's decision in Mullane v Mullane (1983) 158 CLR 436 in which the majority of the High Court stated at 445: In our opinion, therefore, s 79 on its proper construction refers only to orders which work an alteration of the legal or equitable interests in the property of the parties or either of them. An interest in property is a right of a proprietary nature, not a mere personal right. 51 Needham AJ in Craven concluded that the wife was entitled to the whole of the proceeds of the house and found that the consent orders 'created an equitable interest in the land which could be enforced just as a contract of sale could be enforced'. 52 The Full Federal Court in Mateo cited with approval the decision of Needham AJ. In this case the Full Court considered the effect of Family Court orders made under s 79 of the FLA. 53 Branson J in Mateo considered the effect of s 79 of the FLA, observing: …the section is concerned to empower the Family Court directly to alter the interests of the parties to a marriage in property, not merely to make an order requiring the parties or one of them to take steps which will result in their property interest being altered. 54 At [57] in Mateo Wilcox J stated: Craven provides support for the view, advanced by counsel for the respondents, that the effect of a transfer order under s 79 of the Family Law Act is to vest in the beneficiary of the order an equitable estate in the property interest that is the subject of the order. If that is so, what remains, after the order, in the hands of the person who is bound to effect the transfer is a bare legal interest, the market value of which must be nil. 55 Wilcox J considered his conclusion to be consistent with that of McLelland CJ in Eq., in Harris v Walker (1969) 14 FLR 167. McLelland CJ in Eq., in Harris v Walker (1969) 14 FLR 167 found that the effect of an order for settlement was to vest in the husband an equitable estate in fee simple in the land which passed to the executors of the husband's will. 56 Merkel J in Mateo also approved Needham AJ's findings in Craven at [130] and cited Harris v Walker at [128], stating: … a court order settling property between husband and wife, including a requirement that there be a transfer of one party's interest to the other, has generally been regarded as vesting in the transferee an equitable estate or interest in the property pending the transfer of the legal estate or interest. 57 Merkel J found that despite an agreement giving rise to the orders of the Family Court, a transfer of an equitable interest was not effected pursuant to the agreement between the parties, rather its force stems from the order itself. Merkel J relied upon the observations of Lord Diplock in De Lasala v De Lasala [1980] AC 546 at 560 in support of such proposition in which Lord Diplock said: …once they have been made the subject of the court order no longer depend upon the agreement of the parties as the source from which their legal effect is derived. Their legal effect is derived from the court order. 58 Merkel J concluded that the consent orders altered the interests in the matrimonial home of the husband and wife by transferring the equitable interest in the home to his wife. 59 The Full Court of this Court in Jones v Daniel followed the decision in Mateo. Moore J in delivering the judgment of the Court at [14] observed that the judges in Mateo held that when an order is made under s 79 of the FLA 'ordering that a person presently holding a legal interest in the property transfer that interest to another person, a beneficial interest is thereby vested in the other person'. Moore J further said that in Mateo a 'trust was created for the benefit of the other person'. At [15] Moore J concluded that the above two propositions formed the ratio of the Full Court in Mateo. 60 The Court considers that the principle recognised in Craven, Mateo and Jones v Daniel is directly applicable to the present circumstances. Orders 5 and 6 of the consent orders were effective to create a beneficial interest of Ms Fung's $200,000 equity for the benefit of the children. As stated by Needham AJ in Craven such orders created an equitable interest in the fund which could be enforced by the beneficiaries of the fund. 61 The respondent asserts that orders 5 and 6 could not 'carve out' the $400,000 from the fund, as the joint account did not exist at the time of the making of the orders. However, while neither the joint account nor the new account existed at that time, neither did the fund of money that was ordered to be provided in both Mateo and Jones v Daniel. It is clear from the authorities that orders under s 79(1) of the FLA have an immediate dispositive effect and one cannot evade the consequences of such orders by failing to comply strictly with the formalities of the orders or by simply not carrying them into effect. 62 As considered above, s 59A of the Bankruptcy Act gives paramountcy to Family Court orders made under s 79(1) over the vesting provisions of s 58 of the Bankruptcy Act. The Court notes the appellant's submission that s 59A (which was introduced by the amending act in 2005) may have been enacted to give statutory effect to the reasoning in Craven and Mateo. 63 While there is nothing explicit to this effect in the Explanatory Memorandum to the amending act nor in the corresponding Second Reading Speech, the operation of the amendments and the proximity of such amendments to the Full Court decisions in Mateo and Jones v Daniel suggests there is force in the submission. The Court however cannot speculate upon the rationale giving rise to the amending act. 64 For the above reasons the Court concludes that the consent orders created an equity in respect of the $200,000 contribution of Ms Fung which prevails over the respondent.

ISSUE 3: WAS A TRUST FORMED? 65 Driver FM at [20] considered the mandatory elements of a trust to be a 'trustee, trust property, a beneficiary and a personal obligation annexed to the property'. His Honour considered that there was no trust property until the house was sold and the appellant and Ms Fung then met their personal obligation (pursuant to order 5) to contribute the $200,000 each to establish the fund. His Honour considered the rule in Milroy v Lord [1861-73] All ER 783 in support of such proposition. 66 Driver FM found at [26] that there could be no trust formed until the trust property was created or separated. His Honour considered that while the appellant and Ms Fung may have considered that leaving $400,000 in the joint account was in the 'spirit' of the consent orders, his Honour found that this money remained the property of the parties to the marriage and not trust property. 67 At [28] his Honour found that while the new account had been created for the purpose of being a separate fund for the benefit of the children, such account held no money. The account that held the relevant money was the joint account, which the two account holders (i.e. the appellant and Ms Fung) could access without restraint until the DCNSW freezing orders. Driver FM concluded at [29] that the money in question was not held on trust.

Appellant's Submissions 68 The appellant submits that Driver FM misdirected himself regarding the proper principles to be applied when determining the existence of a voluntary express trust, and in respect of his Honour's application of the rule in Milroy v Lord. The appellant further submits that his Honour erred when he concluded that the failure to strictly comply with the consent orders was a failure to do 'everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property'. 69 The appellant relies upon the High Court in Corin v Patton (1990) 169 CLR 540, insofar as that decision gave express recognition to the findings of Griffith CJ in Anning v Anning (1907) 4 CLR 1049 as the preferable test for the constitution of a trust. Such test poses the question whether the donor has done everything which can be done by the donor to transfer the property (see judgments of Mason CJ and Brennan J in Corin). 70 The appellant also submits that his Honour erred in assuming that the property could only be transferred to the appellant by both the appellant and Ms Fung depositing the fund into a separate and new account in the appellant's name. The appellant submits that this approach ignores the fact that there was already a bank account controlled by the appellant which held the sum of $400,000 so nothing else was required to be done. The appellant asserts that Ms Fung had not used the account when the remaining balance reached $400,000 and accordingly the trust was completely constituted and Milroy v Lord has no further application. 71 In the alternative, the appellant submits that the parties did effectively comply with orders 5 and 6. The appellant submits that the parties achieved the desired result intended by such orders by withdrawing all but $400,000 from the joint account instead of opening a new account and freshly depositing the funds. The appellant submits that the final satisfaction of the orders was not possible due to the DCNSW freezing orders. 72 The appellant also submits that when the consent orders were made, the appellant and Ms Fung were under an obligation to 'separate the $400,000 from the rest of the proceeds in some way', and that it is irrelevant whether one deposits the funds into a separate and new account or withdraws all but the required funds out of the old account. The result remains the same. 73 The appellant relies upon Hunter v Moss [1994] 3 All ER 215 in support of the proposition that there is certainty of subject matter even in the circumstances where the owner of an account declares that a portion of the sum of money in the account is held on trust. The appellant submits it is significant that the fund of $400,000 was clearly identifiable and that such fund was created by Ms Fung and the appellant. 74 The appellant also submits in the alternative that the circumstances give rise to an executory trust. This issue however was not developed in submissions, and in view of the Court's findings it is unnecessary to consider such submission.

Respondent's Submissions 75 The respondent submits that Driver FM was correct to conclude that there was no trust property until the parties had complied with their obligation to contribute the prescribed amount into a new account. The respondent refers to the fact that multiple withdrawals were made by the husband and wife from the joint account prior to the freezing orders which demonstrate that there was no trust property. 76 The respondent further submits that his Honour correctly applied the rule in Milroy v Lord, and that not everything was done to create the trust. The monies were still held in the joint account, and thus the property had not been transferred as required.

Consideration 77 It is necessary to have regard to the form of the consent orders and to the conduct of the parties. Order 5 proposed that upon the sale of the house each of the parties 'shall deposit into a fund to be created the sum of $200,000 for the payment of all education expenses for the children'. Order 6 provided that such fund 'shall be in the name of the Husband and shall be managed and administered by him…'. 78 Significantly the consent orders do not refer to the creation of a bank account for this purpose. Rather, the obligation imposed by such orders was to create 'a fund' by the allocation of $200,000 by each party. 79 As envisaged by order 5 of the consent orders, $200,000 from each party was to be paid into the joint account which was opened in September 2008. The joint account was thus opened six months after the orders were made and in the month preceding the settlement of the house. It may be inferred, in the absence of any evidence to the contrary, that the joint account was created solely for the deposit of the proceeds of the sale of the house from which deductions would be made representing the entitlement of each party with the intention that the residue of $400,000 was to constitute the fund. 80 By email dated 30 September 2008 the appellant wrote to his lawyer as follows: Visited ANZ - Rose Bay and they contracted someone on the 1800 number who confirmed they are prioritising the mortgage release under the ref number you gave me. I signed the documents Tuesday and Tina will sign on Wednesday at 9:30 AM. They will then fax to their Mortgage Department for us. I also gave them our instructions to deposit all surplus funds in a new cash management account, which I opened, and Tina will also co-sign that application when she visits them. We will use that account to do our split of the net proceeds from the sale and then keep that account initially for management of the kids education fund until a decision is made on any longer term investments. Tina will be a co-signer for this account. I think that should square things off but let me know if you have any further comment. I have now moved out with the kids and below is my new address for you [sic] records. 81 As indicated in order 5 above, on 20 October 2008 the appellant provided details of all the withdrawals from the account. Set out hereunder is the relevant portion of the appellant's email: I have done the calculations and come up with the following that can be verified by sitting with me for an hour sometime and I will take you through the calculations. In the meantime we should write cheques to each other as follows: - Bottom Line after taking our 200K from each of us for the Education fund is as follows: Thereafter follows a list of transfers and cheques drawn on the balance of the proceeds of the house is set out. 82 It follows that approximately eight months prior to Ms Fung becoming bankrupt a fund was created as envisaged by order 5, although the monies remained in the joint names of the appellant and Ms Fung. There is no evidence that any activity had taken place on the account on the instigation of Ms Fung to erode her $200,000 contribution. Inexplicably, the appellant withdrew, but promptly repaid an amount of $200,000. There is no evidence why such a transaction occurred. In viewing all of the evidence, the Court attaches no significance to it. 83 The respondent's submission that the trust had not been created because the funds remained in the joint account appears to have merit, but for the fact that it overlooks the following events and circumstances. 84 At the date of the bankruptcy of Ms Fung, the fund had been created. By their conduct, the parties had created the fund by allowing $200,000 each to remain in the joint account without deduction. 85 Pursuant to order 6 the fund was 'to be in the name of the Husband'. It was thus the intention that the appellant would control and manage the fund (as distinct from the bank account). There was no requirement that a bank account be created in the sole name of the appellant as a prerequisite to the constitution of 'the fund'. Order 6 merely envisaged that the fund (as distinct from any bank account) would be in the name of the husband and managed and administered by him. 86 Against these facts, it is appropriate to have regard to the observations of the High Court in Corin and particularly to the decision of Mason CJ and McHugh J. Their Honours at 549 quoted from the judgment of Turner LJ in Milroy v Lord as follows: I take the law of this Court to be well settled, that, in order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift. 87 At 550 Mason CJ and McHugh J referred to the observations of Griffith CJ in Anning, where Griffith CJ said at 1057: I think that the words 'necessary to be done', as used by Turner L.J. in Milroy v. Lord, mean necessary to be done by the donor. ... If, however, anything remains to be done by the donor, in the absence of which the donee cannot establish his title to the property as against a third person, the gift is imperfect, and in the absence of consideration the Court will not aid the donee as against the donor. But, if all that remains to be done can be done by the donee himself, so that he does not need the assistance of the Court, the gift is, I think, complete." 88 Griffith CJ in Anning continued at 1057: The question therefore arises, and must be answered with respect to each class of property described in the deed, whether the donor did everything which, according to the nature of the property, was necessary to be done in order to transfer the property and make the gift binding upon himself. 89 Mason CJ and McHugh J in Corin said at 559: Although Griffith C.J. did not explicitly say so, his proposition implicitly recognizes that the donee acquires an equitable estate or interest in the subject matter of the gift once the transaction is complete so far as the donor is concerned. So much was acknowledged by the English Court of Appeal in In re Rose. There the Court concluded that the donor had executed and delivered transfers and share certificates to the donee with the intention of transferring title to the shares to him and had placed him in a position to secure the legal title to the shares by registration subject to an exercise by the directors of their discretion to register the transfers. In this situation the donor could not recall the gift or invoke the aid of the court to prevent registration: see at p 516. The Court held that the donor had parted with his beneficial interest and had become a constructive trustee for the donee. This conclusion did not affect the second proposition in Turner L.J.'s judgment in Milroy v. Lord. As Evershed M.R. stated (at p 510): "... if a document is apt and proper to transfer the property - is in truth the appropriate way in which the property must be transferred - then it does not seem to me to follow from the statement of Turner L.J. that, as a result, either during some limited period or otherwise, a trust may not arise, for the purpose of giving effect to the transfer". See also per Jenkins L.J. at pp 517-518. 90 Applying such principles, it is apparent that Ms Fung had done all that she could do to set up the trust fund with the appellant as the manager. Ms Fung had, by her conduct, surrendered any interest in the monies remaining in the bank account once it had been drawn down to the $200,000 contribution by both the appellant and Ms Fung as envisaged by order 5. There was nothing further required of Ms Fung as a settlor, nor of the appellant, as a prerequisite to the appellant investing or otherwise dealing with the monies in accordance with the terms of the trust. By the terms of order 6 the fund was created when each of the parties contributed the amount of $200,000 each, and upon creation of such fund, the appellant became its trustee. 91 In summary, Ms Fung had done all that was required of her to do to set up the fund that the appellant was to manage and administer. The beneficiaries of the trust were identified, the amount of trust property was identified and the appellant was appointed as trustee of the fund of $400,000. Accordingly, all the requirements to establish the trust existed. The fact that the funds remained in a joint account pending long term investment did not detract from the fact that the trust had crystallised upon the settlement of $400,000 in the fund, since upon this event only the appellant was authorised to manage the fund. 92 The management of the trust was an ongoing process not relevant to the creation of the trust, but it is plain from the events which have happened that the appellant was acting as the sole manager and he was making all decisions with regard to present and future investments for the fund. Ideally, had a separate bank account been opened, or had the name of Ms Fung been removed from the existing joint account, it would have avoided the question which now has arisen. However, these matters do not detract from the fact that the fund has been created of which the appellant became the trustee and manager for the identified beneficiaries. 93 It follows that the Court respectfully differs from the conclusions of the learned Federal Magistrate that the trust has not yet been created. In summary, there was no requirement to set up a 'separate account' as found by his Honour. Rather, the obligation was to create 'a fund', not a bank account. It is unfortunate that the text of the orders is imprecise, but the intention of the orders is plain, namely that a fund be created as distinct from a separate bank account. 94 Accordingly the Court upholds the appellant's submission that the intended fund was created as required by the Court's order as at the date of Ms Fung's bankruptcy. 95 In view of the findings above, the Court upholds the appeal. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.