Saba v Plumb - [2018] NSWCA 60 - NSWCA 2018 case summary — Zoe

NSWNSWCA

Saba v Plumb

[2018] NSWCA 60

Court of Appeal (NSW)|2018-02-21|Before: Macfarlan JA, Black J

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2018-02-21

Before

Macfarlan JA, Black J

Catchwords

[2012] HCA 17 Barton v Official Receiver (1986) 161 CLR 75
[1986] HCA 44 Briginshaw v Briginshaw (1938) 60 CLR 336
[1938] HCA 34 Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557
[1998] HCA 26 Fox v Percy (2003) 214 CLR 118

Source

Original judgment source is linked above.

Catchwords

[2012] HCA 17 Barton v Official Receiver (1986) 161 CLR 75[1986] HCA 44 Briginshaw v Briginshaw (1938) 60 CLR 336[1938] HCA 34 Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557[1998] HCA 26 Fox v Percy (2003) 214 CLR 118[2003] HCA 22 Jones v Dunkel (1959) 101 CLR 298[1959] HCA 8 Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563[1995] HCA 68 Marcolongo v Chen (2011) 242 CLR 546[2011] HCA 3 Ostrowski v Palmer (2008) 218 CLR 493[2012] HCA 5 Saba v Plumb [2017] NSWSC 622 SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189

Judgment (29 paragraphs)

[1]

Solicitors: Fraser Clancy Lawyers (Appellant) Lexes Lawyers (Second Respondent) File Number(s): CA 2017/173625 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity - Real Property List Citation: [2017] NSWSC 622 Date of Decision: 19 May 2017 Before: Black J File Number(s): SC 2016/110233

[3]

HEADNOTE [This headnote is not to be read as part of the judgment] In 2005 the respondents, Mr Noel Plumb and Ms Jeanette Minifie, purchased a property in which they subsequently lived in a de facto relationship. They held the title to the property as tenants in common. In 2011 there was a confrontation between Mr Plumb and Mr Anthony Saba, the appellant and a neighbour of the respondents. As a result, the police sought an apprehended violence order against Mr Plumb on behalf of Mr Saba and Mr Plumb sought an AVO against Mr Saba (the "Plumb AVO proceedings"). Relevantly, the latter proceedings continued into September 2012. In June 2012, after the breakdown of the respondents' relationship, Mr Plumb transferred his interest in the property to Ms Minifie pursuant to a property settlement effected by Consent Orders of the Family Court of Australia. In September 2012 the Plumb AVO proceedings were dismissed, with indemnity costs awarded against Mr Plumb. Costs were assessed in 2015 and judgment was entered in favour of Mr Saba against Mr Plumb. Due to his inability to enforce the judgment, Mr Saba commenced proceedings in the Equity Division, alleging that Mr Plumb's disposition to Ms Minifie of his interest in the property was voidable under s 37A of the Conveyancing Act 1919 (NSW). After a six day hearing before Black J, his Honour dismissed Mr Saba's claim and a defensive cross-claim filed by Ms Minifie. On appeal, the appellant argued that: (i) The primary judge's conclusion that Mr Plumb did not have the intention to which s 37A of the Conveyancing Act referred was implausible and inconsistent with "all the objective, incontrovertible evidence"; and, (ii) Contrary to the primary judge's finding, Ms Minifie had not established pursuant to s 37A(3) of the Conveyancing Act that she was a purchaser of Mr Plumb's interest in the property and that she did not have notice of his alleged intent. Held, dismissing the appeal: In relation to (i): (1) For the purposes of s 37A of the Conveyancing Act "it [is] necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly": [65]. Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3 followed. (2) Section 37A is enlivened by an intent to defraud future creditors and an intent to defraud any present or future creditor will suffice. As a result, the relevant issue was whether Mr Plumb intended to defraud Mr Saba, that being the way in which Mr Saba framed his case: [69]. Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; [1998] HCA 26 followed. (3) The primary judge was correct in concluding that Mr Saba did not establish that Mr Plumb knew that his superannuation funds would not be available to meet a future costs judgment in Mr Saba's favour: [73]-[83]. (4) It was open to the primary judge to find that the property transfer was driven by Ms Minifie's desire, acted on by Mr Plumb, to leave the property to her daughter: [84]-[88]. In relation to (ii): (1) The primary judge was correct in concluding that Ms Minifie was a purchaser for valuable consideration: [99]-[104]. Barton v Official Receiver (1986) 161 CLR 75; [1986] HCA 44 referred to. (2) The primary judge was correct in concluding that Ms Minifie established that she did not have relevant notice: [105]-[108].

[4]

Judgment

MACFARLAN JA: In 2005 the first respondent, Mr Noel Plumb, and the second respondent, Ms Jeanette Minifie, purchased a property in which they subsequently lived in a de facto relationship. The purchase was mainly funded by Ms Minifie but Mr Plumb contributed as well. They held the title to the property as tenants in common: Ms Minifie had a 75% interest in the property and Mr Plumb had 25%.
On 27 January 2011 there was a confrontation between Mr Plumb and Mr Anthony Saba, the appellant and a neighbour of the respondents. The police sought an apprehended violence order ("AVO") against Mr Plumb on behalf of Mr Saba (the "Police AVO proceedings") and Mr Plumb sought an AVO against Mr Saba (the "Plumb AVO proceedings"). These proceedings were on foot in 2011 and into 2012. Ultimately, on 15 March 2012 Mr Plumb succeeded on an appeal against the Police AVO that had been granted against him. The Plumb AVO proceedings continued. Relevantly, evidence was taken in those proceedings on 29 March 2012, including from Ms Minifie.
In the meantime, the relationship between Mr Plumb and Ms Minifie had deteriorated and Ms Minifie had moved into a separate bedroom at the property in October 2011. In the period from January to March 2012 they discussed termination of their relationship and in March 2012 Ms Minifie "demanded" that Mr Plumb enter into a property settlement with her.
On 4 June 2012 the respondents signed a Family Court document entitled "Consent Orders" in which they recorded an agreed settlement of their financial affairs. The settlement provided, inter alia, for Mr Plumb to transfer his 25% interest in the property to Ms Minifie and for Ms Minifie to grant to Mr Plumb a qualified "personal right to reside … for life" at the property.
The Family Court made orders in accordance with the Consent Orders on 14 June 2012.
On 28 September 2012 the Plumb AVO proceedings were dismissed. Subsequently Mr Plumb's appeal against that order was also dismissed and indemnity costs were awarded against him. Those costs were assessed in 2015 as $232,187.12, including the costs of assessment. Judgment was entered in favour of Mr Saba against Mr Plumb for that amount.
Due to his inability to enforce the judgment, Mr Saba commenced the present proceedings in the Equity Division, alleging that Mr Plumb's disposition to Ms Minifie of his 25% interest in the subject property was voidable under s 37A of the Conveyancing Act 1919 (NSW). He alleged that Mr Plumb made the disposition with intent to defraud his creditors by rendering his property interest unavailable to satisfy Mr Saba's judgment.
Section 37A of the Conveyancing Act is in the following terms: "37A Voluntary alienation to defraud creditors voidable (1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced. (2) This section does not affect the law of bankruptcy for the time being in force. (3) This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors."
After a six day hearing before Black J, his Honour dismissed Mr Saba's claim and a defensive cross-claim filed by Ms Minifie contending that if Mr Saba's claim was upheld, Ms Minifie should not be required to re-transfer the full 25% interest in the property as Mr Plumb's actual beneficial interest was considerably less than that percentage. In so doing, his Honour rejected what he described as Mr Saba's "primary claim" that: "Mr Plumb and Ms Minifie had not genuinely terminated their relationship in late 2011 or early 2012 and that the consent orders made by the Family Court of Australia in June 2012 were not genuinely made in order to give effect to the termination of that relationship" (Judgment [27]).
Mr Plumb was not represented in the Equity Division proceedings until counsel commenced to represent him a few days before the final hearing took place.
On appeal, Mr Saba did not challenge the finding concerning his "primary claim" (see [9] above). Instead, he contended that the primary judge's conclusion that Mr Plumb did not have the intention to which s 37A referred was implausible and inconsistent with "all the objective, incontrovertible evidence" (Notice of Appeal, ground 3). Moreover, he contended that, contrary to the primary judge's finding, Ms Minifie had not established pursuant to s 37A(3) that she was a purchaser of Mr Plumb's interest in the property and that she did not have notice of his alleged intent.
For the reasons given below, I consider that Mr Saba's appeal should be dismissed with costs.

[7]

The court hearing on 14 February 2012

On 14 February 2012 the Plumb AVO proceedings were listed for hearing before Magistrate Reiss. The following exchange occurred between counsel and the magistrate: "HIS HONOUR: I'd imagine if nothing else, as indicated previously, I presume that costs might be a massive impediment to any resolution of the matter at this late stage. ARCH [Mr Plumb's solicitor]: I understand that it is possible that that might be an issue at this stage. HIS HONOUR: That problem for one party or another is only going to get larger from hereon in. So you have two short witnesses and whether or not you go into evidence Mr Barham [Mr Saba's counsel] depends upon submissions that may be made at the end of the applicant's case? BARHAM: Yes your Honour."
His Honour's oral judgment delivered on that day included the following: "Mr Plumb has clearly been inappropriate by remaining on the property and calling Mr Saba a coward and inviting him to come out and discuss the issue, clearly inappropriate. It was very clearly and in no uncertain terms as he has in a sense acknowledged himself in any event being told to leave and he declined to do so because in his mind he wished to persist and have a discussion with Mr Saba about matters of concern to him. Certainly inappropriate behaviour, not the kind of behaviour that reflects any level of fear or concern. Mr Plumb has said that he has fears of harassment and possible further assault and yet from what I see from his behaviour in fact is a man without fear in a number of circumstances. I have evidence before the court [that] he certainly sees himself as very passionate about his issues concerning the environment, has had matters of protest and the like in which he has had confrontation or issues with the police. Clearly on the evidence before the court he is not in any way cowered by any of those confrontations or issues and is well prepared to continue with what he sees as an appropriate behaviour and agenda and despite allegations of some aggressive behaviour on prior occasions including when his deck chairs were being delivered there is evidence which he has accepted of moving towards Mr Saba. … I have already made a general indication about my view of the evidence of Mr Saba. For Mr Plumb often in his evidence he has been evasive, non-responsive, argumentative and even on simple matters has put forward very evasive and indirect answers including today which ultimately he then moves away from and adopts a more straightforward acknowledgment. … Much of the evidence shows Mr Plumb is a very strong willed, determined individual, in no way cowered by anything of the knowledge or behaviour of Mr Saba and indeed again has very clearly been very forthright, determined, obstinate on 27 January 2011 when being asked very vigorously to leave somebody else's property, not the behaviour of somebody who holds fear. I am certainly not persuaded at this stage that he has fears of any ongoing possibility of a physical assault or harassment of the kind that might be relevant to the making of a final interim order."
For these reasons, the magistrate declined to continue the interim AVO that had been made against Mr Saba.

[12]

Mr Plumb's evidence

In his principal affidavit, Mr Plumb recounted that Ms Minifie had moved into a separate bedroom at the property in late 2011 and that in January 2012 she repeatedly told him that "she could not take any more of [his] emotional withdrawal, the stress, [his] depression and anger and the neighbours' hostility towards her".
Amongst the statements he said that she made were: "'Noel, we need to go our separate ways. I want out. You have got me afraid to step out the door because Saba is always lurking and watching, he is egging his boys on as well.'" "'You won't stop, you're like your brothers, obsessed [with the court proceedings] and can't [you] see what you're doing to me.'"
Mr Plumb then deposed to a conversation in March 2012 as follows: "59. She … reminded me of our conversation in 2011 wherein she said words to the effect that she was 'entitled to the share of the property I had given you as you had failed to meet your promises to me' and that she was 'anxious that my daughter would have difficulties with her inheritance if you remained as part owner of the house.' 60. She said 'I want my property back now as we agreed when I made my Will; you have not kept your promises. My daughter deserves better than this, my daughter should not have to share this house with you.' 61. She told me, 'Our marriage is over and I want to be able to make up my own mind, make my own decisions, without having to worry about you all the time. It's too late to fix things, you would not listen to me for years, and everything had to be done your way.' 62. She said something like 'Noel, I am not happy that you are in such a mess but I want my life back. I do not see any other way but for you to leave. I am not leaving this house, Saba is not going to force me out with his nasty harassment and malice but you have got yourself into this mess.' 63. Embroiled as I was in the legal proceedings against the Plaintiff, I was very distressed and depressed. I sought the assistance of my brother, an accountant, to finalise the Family Court Consent Orders. 64. I said to Jennie words to the effect: 'The Consent Orders should confirm my life interest in the house as agreed by us last year when you made your Will. Why don't we divide the house and live separately in it without needing to intrude on each other all of the time.' 65. This was feasible because the house is a tri-level house that permits separate bedrooms, bathrooms, dining and living or study areas for each of us with separate access, separated by a mid-level kitchen and laundry for common use. Neither of us wanted to leave the rare bushland amenity with convenient city access that would have followed the sale of the house and a split in the proceeds. Our children were all independently established and long since made clear that they had no desire to live with us … 66. Jennie agreed to my proposal. She said words to the effect: 'All I want is to make my daughter's inheritance uncomplicated.' 67 The Family Court Settlement between Jennie and me had nothing whatsoever to do with the legal proceedings between me and the Plaintiff, except that the stress of the said proceedings took its toll on our relationship. The Consent Orders had their genesis in 2011 when Jennie and I discussed Jennie's testamentary plans."
The first sentence of paragraph 67, which I have quoted immediately above, was admitted into evidence on the basis that it was to be treated as a submission only. It is not clear why this limitation was imposed because it was relevant to Mr Plumb's state of mind which was a fundamental issue in the proceedings.
In cross-examination, Mr Plumb elaborated on his discussions with his brother, an accountant: "Q. And you sought advice from one of your brothers, who is an accountant? A. I did, because I was struggling with how we might somehow find a way to both retain amenity at the property. Jennie wanted simply to buy me out, I didn't want to do that. I talked to Charlie and he said, 'Oh, have you thought about this?' Which was essentially a - a life tenancy, and I think he was aware that some of his clients had these, and so then I went and made some further inquiries, and we worked - we worked out something that suited us."
Mr Plumb also gave the following evidence in cross-examination: " …I undertook [the Family Court settlement] because it seemed to be the best solution where we could both maintain our living amenity in a quite uniquely beautiful location, and otherwise we faced, for me, a very substantial loss of amenity, and probably for Jennie as well, because there just wouldn't be enough money to go around to give her an equivalent home after we - if we decided to either buy me out or she sold it and paid me out. So we negotiated this arrangement. That was the motivation."
Mr Plumb gave the following evidence in cross-examination: "Q. If costs orders were made, you knew that money would be paid from joint funds A. That wasn't necessarily the case. Q. Do you mean by that, that you perhaps could have paid costs from your superannuation monies? A. No. I mean that when the matter started, I had some funds, I seem to recall that I - I paid Marsden's direct, the first solicitor that attended for a day. But, not necessarily, but probably. Q. You didn't have much money by June 2012 which wasn't contained in superannuation funds, did you? A. That's right. Q. Were you able to access your superannuation fund as at 2012? A. Yes. Q. Were you able to draw out money in lump sums? A. Yes. Q. You weren't proposing, though, to touch your superannuation monies if you could help it, were you? A. I will never touch the superannuation monies, which is the only thing I have left to pass on to my children, to pay legal costs, because it is a never-ending circle. Q. So if you didn't have much money yourself and you weren't going to touch your superannuation monies, then the only way that any costs order would be met, other than by way of assets being sold, would be by money in joint bank accounts or by Ms Minifie contributing, wouldn't it? A. I'm - well, no, we dissolved our marriage. … Q. Before you had separated, and after the magistrate had made the orders that he made when he made the comments on 14 February, you understood that there was a risk of an adverse costs order? A. This is about the third or fourth time you've asked this question in the same manner, Mr Barham, and I will give you the same answer. It was a factor, it wasn't a particularly significant factor because I strongly believed that I would be successful, and my solicitor had - my solicitor had told me that I had a good chance of success. Q. But if you weren't successful and you weren't touching your superannuation monies - so I'm asking in this same period - if you were not successful in the proceedings, and if you did not have much money and you were not going to touch your superannuation monies, the only way that a cost order would be met by 'ready money', if I can use the expression, would be by Ms Minifie contributing, wouldn't it? A. (a) I never considered it and (b) thinking about it now that you raise it, I would have seen it as a matter of honour that I didn't cause Ms Minifie to pay for any such settlement. Whether that meant I had to go and find another job, take a loan, whatever. It just - but it wasn't on my radar. Q. Well I suggest to you, sir, that you were cognoscente of the fact that you had money in joint accounts and that Ms Minifie would be adversely affected by any costs order made against you. A. No. I didn't - A, I didn't consider there would be a costs order at that stage. And, B, why would Ms Minifie be obliged to pay a costs order for me?"
Mr Plumb said in cross-examination that at the court hearing on 29 March 2012 Ms Minifie was "very strongly cross-examined" and appeared very stressed.

[13]

Ms Minifie's evidence

Ms Minifie's principal affidavit included the following evidence: "97 … out of the blue, around Christmas 2011 Noel told me words to the effect that Mr Saba's solicitors and Noel's solicitors were working on a settlement. I was very happy and felt relieved that the case would be over. I started to have hope that my relationship with Noel should improve, as Noel would soon be freed from the case and his health would benefit. 98 Sometime in January 2012 Noel told me words to the effect that Mr Saba had changed his mind and was no longer interested in settling. I felt anger and frustration, based on my belief that my relationship with Noel could not withstand the on-going AVO proceedings. 99 Noel became very depressed and avoided any real response for several weeks, just walking away from me whenever I tried to talk with him. This did not improve matters one little bit. 100 The AVO proceedings took its toll on us individually and collectively. I observed Noel becoming totally withdrawn from me and experiencing longer bouts of depression. I also became depressed and sought treatment from a psychologist. 101 I was a witness in the AVO proceedings. Because I was a witness, I would wait outside the Court room and did not know how things were going on inside. I recall being present for some of the initial court appearances, and then at some point was told to wait outside as I was yet to give evidence. 102 Sometime in March 2012 I said to Noel words to the effect: I said: 'I can't take it anymore; my life is miserable. I want a separation. I don't think you're ever going to fulfil your promise of renovating the property.' Noel: 'I don't know how I could live if we sell the house and I only have a quarter of the value of the house, and have to rehouse myself. I couldn't live on my low income from part-time bush regeneration.' I said: 'Noel, you should have thought of that earlier. I don't think you deserve one quarter of the value of the house because you did not meet all of your commitment to me.' Noel: 'That was not just down to me. You went off to work and I had to deal with all the issues on my own.' I said: 'Do you mean going off to work and you going to see Tony Saba without a witness?' Noel: 'Yes.' I said: 'I am sorry but I can't keep on supporting your actions when I think that you should stop!' Noel said: 'I believe that I can win because I told the truth.' 103 This conversation occurred around the time that Noel won his appeal. I recall the day that Noel came home and looked optimistic. But despite this, I was determined to reach a family law settlement with Noel because I had had enough and also I felt that I needed to give my daughter certainty. 104 Sometime in late March 2012 I said to Noel words to the effect: I said: 'Regardless of your victory in the appeal, I really need to have a settlement with you. I'm not going to throw you out on the street. In my Will you have the right to reside in the house for life. I just want back the 25% I gave you. I want certainty.' Noel: 'You can always change your Will, and I could be left with nothing.' I said: 'I would not do that to you.' Noel looked stressed and didn't talk to me for 2 days. 105 Some days later Noel approached me again. He said to me words to the effect: Noel: 'I've spoken with Charlie and he told me that we can make binding consent orders in the Family Court. That way my life interest is more secure than if it was in a Will.' [I knew that Charlie was Noel's brother] I said: 'Noel, you can have the life interest, but I want my own space with separate living areas.' Noel: 'Okay.' … 117 It is my intention to pass ownership of the property to my daughter. She was only a few months old when her father died in a helicopter accident in Papua New Guinea in 1986. 118 With full legal control over my home I could protect my interest in the property, and leave it to my daughter in good condition. She has lived in the house in the past after returning from overseas for several weeks and I hope that she will live in it in the future. … 120 The situation regarding any potential costs orders in the AVO proceedings did not enter my mind when agreeing to the Consent orders. But the situation of the continuing and ongoing AVO proceedings did. I was fed up with the whole process and had had enough."
In answer to a suggestion put to her in cross-examination that Ms Minifie not only wanted the court case to go away but also for Mr Plumb to win it, she said "I was concerned about the harassment of myself". When asked how she saw her settlement with Mr Plumb as a new beginning, she said "Just that I have legal control over the property and that gives me some certainty for the future".
She agreed that when the court proceedings were not settled by Christmas 2011 she felt anger and frustration. The following exchange then occurred: Q. And the frustration and anger you felt was that the risk had returned that, if Mr Plumb lost the case that there was a risk of an adverse costs order being made against Mr Plumb. That was part of it, wasn't it? A. No. I was also very concerned about the stress and of continuing the proceedings and the - and I pointed that out in the affidavit. Q. When you say part of it, but the other part of it was that you were very concerned about a costs order adverse to Mr Plumb, weren't you? A. I was more concerned about the health issue. I was extremely concerned by January 2012. Q. You were very concerned about your relationship with Mr Plumb as well, weren't you? A. Yes."
Ms Minifie said that she thought that on 29 March 2012 she heard the magistrate make the statement referred to in [22] above. She denied however that there was an argument "or anything like that" between herself and Mr Plumb after court on 29 March 2012. Her verified cross-claim is arguably inconsistent with this evidence as it alleges that on 29 March 2012 Ms Minifie "demanded" of Mr Plumb that their relationship end, that there be a property settlement and that the distribution of their property should reflect Mr Plumb's "failure to honour his commitments in connection with the purchase" of the property.

[14]

Particularisation of Mr Saba's case

At an early directions hearing, the Court rejected Ms Minifie's request for an order for pleadings. However, by letter of 5 May 2016 Ms Minifie' solicitors sought particulars, including as to the events that Mr Saba relied upon. Mr Saba's solicitors responded as follows: "The Plaintiff says that the relevant conduct was engaged in by the First and Second Defendants at or around the time of the hearing of the Local Court proceedings on 14 June 2012, the execution of the Family Court of Australia Consent Orders on 14 May 2012 [in fact, on 4 June 2012], the transfer of Mr Plumb's interest in the land also on 14 June 2012, the subsequent registration of the Consent Orders and the subsequent registration of that transfer on 18 July 2012."
In answer to a request to specify each "motivation or intent" relied upon, the solicitors replied: "The Plaintiff relies upon the elements of s37A(1) of the Conveyancing Act and relevantly that the First Defendant alienated the First Defendant's interest in the property by transferring that interest to the Second Defendant with intend to defraud the First Defendant's creditors."
The solicitors added the following in further answer to a number of questions: " … the Plaintiff says that at all material times, the Second Defendant was aware of the First Defendant's Court proceedings and the First Defendant's liability to pay costs to the Plaintiff if the case was lost. The Second Defendant was also aware of the First Defendant's financial and personal circumstances and must have been aware that the transfer of the First Defendant's interest in the property, particularly for no consideration, would have the effect of defrauding the First Defendant's creditors."
Ms Minifie's solicitors complained about the adequacy of these particulars provided on behalf of Mr Saba but the Court (not constituted by the present primary judge) did not accept her complaint.
As Mr Plumb's state of mind as to the availability of his superannuation to satisfy Mr Saba's costs judgment assumed particular significance in the primary judge's judgment and in the argument on appeal, it is necessary to describe as follows what was said about it at the Equity Division hearing in addition to the references in evidence to which I have earlier referred and which I conclude below did not squarely raise the topic.
The first reference was in Mr Saba's closing written submissions which were delivered to the court on the morning that final addresses took place. The submissions included the following: "As at 4 June 2012 it is likely that Mr Plumb could have paid the legal costs (as this was prior to his appeal) which he has been ordered to pay, from his superannuation, but he declines to do so, vehemently so in the witness box). The entire argument put forward by the defendants through their evidence about the house being sole et cetera is a plea to emotion. The court is not apprised of other sources of finance available to Mr Plumb. The court is also not aware of Mr Saba's personal circumstances, but it is aware that he has incurred a large amount of legal costs. As with the financial position of the defendants, that is not a relevant consideration."
The submissions added the further observation that superannuation "is just not accessible to a creditor".
In the course of the final address of Mr Barham, counsel for Mr Saba, the following exchange occurred: "HIS HONOUR: … I wanted to just ask you: had you ever put anything to Mr Plumb as to his knowledge of Mr Saba's rights as against his superannuation? BARHAM: I don't recall if I did, your Honour. HIS HONOUR: You may wish to check that over the luncheon adjournment. I should also ask you in the territory: had you put anything to Ms Minifie as to her knowledge of Mr Saba's rights as against Mr Plumb's superannuation? BARHAM: I don't think I put it to Ms Minifie, your Honour. Mr Plumb's answer was enough, but it's common knowledge, in my respectful submission, that it's untouchable. HIS HONOUR: You can come back, if you wish, in the time you have to tell me what evidence I have that will allow me to draw an inference as to common knowledge and common knowledge of whom. I should also note that, so far as I understand the Bankruptcy Act, if that is common knowledge, it's correct, but I haven't had submissions about that and that's not a matter that, at this stage, I think I need to decide when no-one has put it in issue. The question here may not be what is the fact of the provisions in the Bankruptcy Act, but whether there is knowledge which is, you say, is common knowledge amongst the persons involved of access or inability to access that asset. I'm happy to leave that with you. BARHAM: I may be incorrect about the Bankruptcy Act, your Honour, but my reaction without looking at it is that if money is placed in there within a relation back period or something like that, then it may be able to be accessed by a trustee in bankruptcy but not otherwise. HIS HONOUR: If people wish to make submissions, they can, but here the question may not be so much what is the fact of the Bankruptcy Act as the extent to which it is or is not, as you say, common knowledge and perhaps even more relevantly the extent to which it is the knowledge of Mr Plumb or Ms Minifie that asset was not accessible to Mr Saba … "
In his address, Mr Alexander, counsel for Ms Minifie, referred to the need for the court to consider "what Mr Plumb's state of mind would have been in relation to his superannuation" and noted that Mr Saba bore the onus of proof. Mr Alexander later noted that questions were not put to Ms Minifie on behalf of Mr Saba about her state of mind in relation to Mr Plumb's superannuation.
In reply, Mr Barham referred the primary judge to the evidence quoted in [29] to [33] above and submitted that as Mr Plumb went to see his brother, an accountant, before the Family Court Consent Orders were signed, the "strong likelihood is that he knew exactly what the situation was with superannuation, and his answers reflect that".

[16]

Whether Mr Plumb intended to defraud creditors

In response to Mr Saba's submission that the magistrate's reasons given for refusing on 14 February 2012 to continue the interim AVO earlier granted in favour of Mr Plumb would have indicated to Mr Plumb that Mr Saba might succeed in the proceedings, the primary judge agreed that they would have emphasised the possibility that Mr Saba would succeed. The primary judge did not accept however that the magistrate's reasons would have indicated to Mr Plumb that he was "bound to or likely to lose the application or was at substantially greater risk than Mr Saba as to the costs of the proceedings". His Honour found that Mr Plumb was confident in his prospects of success but noted Mr Plumb's evidence acknowledging that there was always a risk of loss of proceedings and an adverse costs order if that occurred.
Having referred to Mr Plumb's evidence of his confidence of success, his Honour said: "While I recognise that that evidence is consistent with Mr Plumb's interest in the proceedings, and could potentially be self-serving, it also seems to me to be consistent with the objective probabilities. In the ordinary course, one might think that parties generally bring proceedings anticipating their success not their failure. There is no reason to think that Mr Plumb was any less confident of his success in the AVO proceedings, irrespective of any matters that might with hindsight have indicated the contrary possibility, than Mr Saba appears to have been confident of his success in this claim. The fact that their respective confidence as to the success of their respective claims was, with hindsight, misplaced does not mean that it did not exist" (Judgment [61]).
His Honour then said that "the level of costs that Mr Plumb could reasonably have foreseen, in 2012, as recoverable by Mr Saba if Mr Plumb failed in the AVO proceedings in the Local Court is plainly a matter that is relevant to his intention in respect of the impugned transaction". His Honour then referred to the settlement offers (as to which see [15] and [16] above) and described the amount of $9,300 that Mr Saba sought by his letter of 9 June 2011 as a "relatively modest amount" of costs. His Honour concluded that costs of the magnitude later incurred (totalling $232,187.20) could not reasonably have been foreseen in mid-2012 as likely to be incurred.
The primary judge then referred to Mr Plumb's evidence that he would "never touch [his] superannuation monies" (see [33] above) but noted that there was a real distinction between the position in mid-2012 (when the costs in view would have been "somewhere in excess of $30,000") and those accrued at the time of the Equity Division hearing ($232,187.12).
His Honour noted that "Mr Saba's closing submissions proceeded on the assumption that a costs judgment could not be enforced against the monies held by [Mr Plumb] in a superannuation fund or funds" and continued: "The proposition that Mr Plumb's superannuation was 'not available to creditors' was not elaborated by reference to the provisions in the Bankruptcy Act 1966 (Cth), to which I will refer below, which may or may not have rendered it available in an appropriate case to a trustee in bankruptcy of Mr Plumb. The proposition that this matter was 'well-known' was not established as a matter of evidence, and, more importantly, as I will note below, it was not established that the matter was known to Mr Plumb. The proposition that 'nothing' was left for the payment of creditors, and Mr Plumb's knowledge of that matter, depended upon the premise as to the treatment of monies retained in superannuation funds and Mr Plumb's knowledge of that matter" (Judgment [80]).
After referring to provisions of the Bankruptcy Act, his Honour proceeded as follows to reject Mr Saba's claim against Mr Plumb: "82 It may be that these provisions would not have allowed recovery of a costs judgment against Mr Plumb's monies held in a superannuation fund or funds as a matter of fact, where Mr Plumb's evidence (noted above) was that no further amounts had been deposited to the superannuation fund or funds since 2009 to 2010. Even if that is the case, Mr Saba did not seek to establish Mr Plumb's knowledge of that matter or that the amount of $181,000 that he had retained in his superannuation fund or funds, after the transfer of his interest in the property to Ms Minifie in 2012, would not be available to meet a future costs judgment in Mr Saba's favour. The proposition that Mr Plumb knew, at any relevant time, the fact (if it is a fact) that Mr Saba (or a trustee in bankruptcy) could not enforce a costs judgment against those monies at any relevant time was not put to Mr Plumb to allow him an opportunity to respond to it. That omission is significant, particularly where there were no pleadings and Mr Saba's particulars did not specifically identify any issue as to the superannuation monies to give notice to Mr Plumb (who, as I noted above, was self-represented for much of the case) that his knowledge of how they would be treated was in issue. In that situation, the rule in Brown v Dunn (1893) 6 R 67 [sic] is an important aspect of procedural fairness, and I should not draw an inference as to Mr Plumb's knowledge to which he has had no opportunity to respond. 83 It seems to me that knowledge that Mr Plumb's superannuation funds would not be available to meet a costs judgment in Mr Saba's favour was essential to any intent of Mr Plumb to defeat creditors. The transfer of Mr Plumb's interest in the East Ryde property to Ms Minifie would only affect Mr Saba's ability to enforce a claim for costs in any reasonably foreseeable amount against Mr Plumb if that costs judgment could not be enforced against the substantial funds that Mr Plumb retained in a superannuation fund or funds. Where a finding could not properly be made that Mr Plumb knew that those funds were not readily available to, and sufficient to, meet a costs order in favour of Mr Saba in any reasonably foreseeable amount, then Mr Saba has not established that Mr Plumb intended that the relevant transaction had the proscribed effect under s 37A of the Conveyancing Act. 84 In summary, I am not satisfied that a fraudulent intent on the part of Mr Plumb was established, where it was not established that he recognised or sought to protect himself against any substantial risk of failure of the AVO proceedings; it was not established that he knew the amount that was reasonably likely to be involved (as distinct from the amount now involved) would exceed assets to which he had access; and, in particular, it was not established and I should not infer, where it was not put to him, that he knew that Mr Saba or a trustee in bankruptcy could not access his superannuation entitlements to meet a costs judgment against him."
Later in his judgment, his Honour gave the following further summary: "In summary, I am not satisfied that Mr Plumb intended, at the time the consent orders were sought and made by the Family Court in June 2012, that the transfer of his interest in the East Ryde property to Ms Minifie would have the consequence of defeating or making it more difficult for Mr Saba to exercise any claim to costs in any reasonably foreseeable amount. As I have noted above, the amount of costs then in issue could not reasonably have been foreseen to be the very substantial amount now claimed, and the question whether it would have been more difficult for Mr Saba or a trustee in bankruptcy to enforce a costs judgment against the substantial monies held by Mr Plumb in a superannuation fund or funds than against Mr Plumb's interest in the East Ryde property was not adequately addressed. Irrespective of the answer to that question, it was not put to Mr Plumb that he was aware of any such difficulty in Mr Saba (or a trustee in bankruptcy) enforcing a future costs judgment against those monies, so that the transfer of his interest in the property to Ms Minifie would adversely affect Mr Saba's ability to enforce such a judgment" (Judgment [128]).

[17]

Whether Ms Minifie was a purchaser in good faith without notice

The primary judge proceeded on the basis that Ms Minifie bore the onus of establishing that she was a purchaser in good faith without notice.
His Honour found first that Ms Minifie was "a purchaser for valuable consideration" within the meaning of the definition of "purchaser" in s 7. He held that Ms Minifie provided consideration both because she granted a right of residence in the property to Mr Plumb and because "she compromised the claims that would otherwise have been available to her in respect of that property under the Family Law Act."
On the issue of notice, his Honour referred, with apparent acceptance, to Ms Minifie's evidence that the potential costs orders did not enter her mind when agreeing to the Family Court Consent Orders and found that her "opposition to the proceedings was driven by the very real effect that they were then having upon Mr Plumb and her relationship with him". His Honour proceeded as follows to find that Ms Minifie did not have notice of Mr Plumb's alleged fraudulent intent: "94 As Mr Alexander points out, the suggestion that Ms Minifie recognised an intent on Mr Plumb's part to defraud Mr Saba, as a future creditor, requires not only that she have recognised that Mr Plumb was likely to lose the AVO proceedings, but more significantly that the conduct of proceedings in the Local Court would result in a costs order of such magnitude that he could not pay them from his remaining assets (including, I interpolate, monies held in superannuation funds to which I have referred above) and that the consent orders made by the Family Court were structured to avoid the need for him to do so. It was not specifically put to Ms Minifie that she reasoned in that manner and it does not seem to me that she did so or a reasonable person in her position would have done so. … 96 … I find that, in entering into the Family Court orders, Ms Minifie focused, not surprisingly, upon the difficulties which she then perceived in her relationship with Mr Plumb and how those difficulties could be addressed by a separation and consensual arrangements for future residence in the East Ryde property. It seems to me that Ms Minifie's attention at that time was squarely focused on her own needs and (to some extent) Mr Plumb's needs, to which it was not surprising she had reference given their long history. Ms Minifie has established that she was not on notice of Mr Plumb's alleged intent to defraud creditors, or Mr Saba as a further creditor, had such intent been established."

[20]

Section 37A of the Conveyancing Act

The principles applicable to an action under s 37A of the Conveyancing Act were authoritatively stated by the High Court in Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3. In that case, a property development company transferred a project property to a financial advisor of the company to put it out of reach of Mrs Marcolongo, a future creditor of the company in relation to another project. This Court refused relief under s 37A because it considered that that section was only enlivened where there was an "'actual' or 'predominantly' fraudulent intent or purpose to deprive creditors of their rights or the fruit of their rights and that this required an element of dishonesty'", which it held was absent in that case (at [8]). The High Court reversed this decision, holding that Mrs Marcolongo had established an "intent to defraud creditors" as contemplated by the section.
The plurality in the High Court (comprising French CJ, Gummow, Crennan and Bell JJ) first referred to the proposition accepted by the High Court in SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189; [2007] HCA 35 at [8] that "fraud is infinite in variety". Their Honours emphasised that constructive knowledge or notice as understood in equity is insufficient for the purposes of s 37A, but rejected that the corollary was that an intention to defraud required "a desire to 'cheat' or 'swindle' those prejudiced" ([25]-[28]). Thus their Honours accepted at [32] that it is: " … unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss: it [is] necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly."
Consistently with this, their Honours accepted the proposition stated in an earlier decision that: "If [a debtor] disposes of an asset which would be available to his creditors with the intention of prejudicing them by putting it, or its worth, beyond their reach, he is in the ordinary case acting in a fashion not honest in the context of the relationship of debtor and creditor" (at [32]).
Whilst their Honours recognised that the existence of the intent to defraud referred to in s 37A may be inferred from objective circumstances, they accepted that it remained necessary to find as a fact that that intent existed (at [34]). In the case before their Honours, the intent to "defraud", which they said "includes the hindering or delaying of creditors" (at [56]), was supported by admissions made in cross-examination by Ms Yang, the debtor's principal. As described by Heydon J in his separate judgment at [78], Ms Yang admitted in cross-examination that "a reason for her signing the contract of sale on behalf of [the debtor] was to get the property away from those who might claim against that company and to avoid the company suffering a 'big loss' in the form of the $600,000 claim [of Mrs Marcolongo]".
The plurality in Marcolongo v Chen also made clear that the intent to defraud contemplated by s 37A need not be the sole or predominant intent in relation to the transaction in question (at [57]). No doubt however the intent must be of some significance and not, as Heydon J put it, "'merely incidental' to other intentions" (at [87]).
Further, as earlier confirmed in Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; [1998] HCA 26 at [10], s 37A is enlivened by an intent to defraud future creditors and an intent to defraud any present or future creditor will suffice. As a result, I refer below to the relevant issue as being whether Mr Plumb intended to defraud Mr Saba, that being the way in which Mr Saba framed his case.

[21]

Whether he believed his superannuation funds would be available

As indicated, Mr Plumb's state of mind concerning a creditor's ability to access his superannuation entitlement was fundamental to the primary judge's reasoning (see [53] to [56] above). This entitlement was identified in the Family Court Consent Orders as being $181,000 (see [25] above). In evidence, Mr Plumb indicated that in 2012 he was entitled to draw on that entitlement (no doubt because of his age), although whether he was entitled to access the whole of it was not made clear.
In cross-examination, Mr Plumb stated firmly that he would not draw on his superannuation to pay the costs debt due to Mr Saba but, as the primary judge pointed out, this assertion related to the debt as it stood at the time of the Equity Division hearing. His statement did not indicate what his attitude would have been in June 2012 to payment out of his superannuation of whatever he then thought might be the potential debt. What he thought that amount might be was not explored in the evidence but it can be inferred that he would have thought that it would be far less than the amount of the subsequent costs judgment of $232,187.12.
Mr Plumb's belief in June 2012 as to whether Mr Saba could, as a matter of law, obtain access to Mr Plumb's superannuation to satisfy his judgment was relevant to whether Mr Plumb intended by the transfer of his 25% interest to defraud Mr Saba. If Mr Plumb believed in June 2012 that Mr Saba would be unable directly to attach his superannuation to satisfy any costs judgment in favour of Mr Saba and that any trustee in bankruptcy of Mr Plumb's estate would similarly be unable to use it for that purpose, an inference that Mr Plumb intended to defraud Mr Saba was capable of being drawn. To put it in reverse, if Mr Plumb thought that Mr Saba could use Mr Plumb's superannuation to satisfy any costs judgment in favour of Mr Saba, it is most unlikely that he intended to defraud Mr Saba by transferring his 25% interest in the property to Ms Minifie. The primary judge recognised this in stating: "It seems to me that knowledge that Mr Plumb's superannuation funds would not be available to meet a costs judgment in Mr Saba's favour was essential to any intent of Mr Plumb to defeat creditors" (Judgment [83]).
As recorded earlier (see [54] to [56] above), the primary judge concluded that Mr Saba did not establish that Mr Plumb knew that his superannuation funds would not be available to meet a future costs judgment in Mr Saba's favour. His Honour declined to draw an inference that Mr Plumb knew this when the proposition that he did know or believe it was not put to him in cross-examination and he therefore did not have an opportunity to respond to it. His Honour considered that the absence of pleadings or particulars identifying any issue as to the superannuation funds was significant in determining whether Mr Plumb had been afforded procedural fairness. His Honour took into account in this context that Mr Plumb was self-represented "for much of the case" (in fact until shortly before the final hearing).
For the following reasons, I consider that the primary judge's approach was correct.
Mr Saba's claim was one alleging an intent to defraud. As noted earlier, fraud can take a variety of forms (see [65] above). A particular type of fraud is no less fraudulent in nature because it differs from other types of fraud. As the High Court indicated in Marcolongo v Chen, the intent to defraud to which s 37A refers involves dishonesty, albeit that that dishonesty may be constituted by an intent to delay or hinder creditors without involving "a desire to 'cheat' or 'swindle' those prejudiced" (ibid).
In these circumstances, the principle that allegations of fraud "must be pleaded distinctly and with particularity and clearly proved" (Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 573; [1995] HCA 68) is applicable to the present case. The principle is reflected in r 15.3 of the Uniform Civil Procedure Rules 2005 (NSW) requiring a pleading to "give particulars of any fraud … on which the party relies" and r 15.4(1) which requires that a pleading that alleges any "condition of mind" (which is defined to include any fraudulent intention: r 15.4(2)) must give "particulars of the facts on which the party pleading relies".
As became apparent in final address at first instance (and as reflected in Mr Saba's submissions on appeal), Mr Saba relies as a central element of his fraud case on the assertion that upon transfer of Mr Plumb's 25% interest in the property, Mr Plumb was left with no significant assets with which he could satisfy any costs judgment in favour of Mr Saba and, in particular in this respect, that Mr Plumb's superannuation funds were not available for such purpose.
There being no pleadings, this was an essential matter for Mr Saba to particularise prior to the hearing at first instance, especially when Mr Plumb acquired legal representation only shortly before the hearing. It does not matter for present purposes that a judge (not being the primary judge) declined to order Mr Saba to provide further particulars. Mr Saba has to bear the consequences of the absence of proper and timely notice of his case being given to Mr Plumb. He may have been able to overcome that difficulty by raising the issue directly in the cross-examination of Mr Plumb but, if he had, arguably Mr Plumb would have been entitled to complain of the absence of earlier notice.
In any event, it was not squarely raised with Mr Plumb in cross-examination. It was suggested to him in cross-examination, first, that he was not "proposing … to touch" his superannuation funds and, secondly, that in those circumstances "the only way that any costs order would be met, other than by way of assets being sold, would be by money in joint bank accounts or by Ms Minifie contributing" (see [33] above). He agreed with the former proposition but did not give a full response to the latter, and was not pressed to go further. It could be argued that it was implicit in the latter proposition (which was put to Mr Plumb in cross-examination a second time) that he believed that Mr Saba would not be entitled to obtain access to Mr Plumb's superannuation funds. That he had that belief however was not squarely put and Mr Plumb did not respond clearly to it when it was put to him implicitly.
On appeal, Mr Saba submitted that the primary judge should have found that Mr Plumb believed that his superannuation funds were unavailable to his creditors because, although Mr Saba bore the onus of proving Mr Plumb's fraudulent intention, Mr Saba had made out a prima facie case that Mr Plumb had the relevant belief, with the result that Mr Plumb bore an evidentiary onus of leading evidence to contradict that case (see Strong v Woolworths Ltd (2012) 246 CLR 182; [2012] HCA 5 at [53]; Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2014] NSWCA 440 at [53]-[55]). He submitted that he had established that prima facie case because it was common knowledge in the community that superannuation funds were protected from creditors.
I do not accept that submission. The Court is not able to infer that the alleged fact is so notorious that it can be assumed that every member of the community, including Mr Plumb, was aware of it in June 2012. In my view, whether Mr Plumb believed that to be so needed to be established by evidence. In criminal law, there is a general principle that ignorance of the law is not an excuse but that does not equate to a presumption that everyone knows the law (Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536 at 546; Ostrowski v Palmer (2008) 218 CLR 493 at 500; [2008] HCA 30).
Mr Saba thus did not establish a prima facie case on the superannuation issue and an evidentiary burden was not cast on Mr Plumb to lead evidence to contradict it. Rather, the point was a matter for Mr Saba to prove in discharge of his legal onus. As the primary judge held, he did not do this.
In the circumstances that I have described in [75] to [79] above, it would in my view have taken a strong prima facie case on this point to shift an evidentiary onus to Mr Plumb. The claim against Mr Plumb was a serious allegation of fraud. In accordance with the principles stated in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; [1938] HCA 34 and reflected in s 140(2) of the Evidence Act 1995 (NSW), he was entitled to be notified of the matters Mr Saba relied upon to support his case and to have the gravity of the allegation against him taken into account in the determination of the proceedings. The Court's satisfaction as to any liability he might have was not to be arrived at "by inexact proofs, indefinite testimony, or indirect inferences" (ibid). Reliance upon an inference as to general community knowledge concerning a creditor's right of access to its debtor's superannuation funds would have been of that character.

[22]

Assuming that belief that superannuation protected not established

Mr Saba submitted on appeal that "even if Mr Plumb thought his superannuation could be accessed by creditors", Mr Saba was still entitled to succeed because the property transfer still had "the effect that it protected the family home from claims by prospective creditors" (written submissions [64]).
I do not accept this submission. After a lengthy hearing, the primary judge found that the respondents' family settlement was a bona fide agreement designed to deal with a genuine breakdown in their relationship. The property interest transfer formed part of that agreement. In the absence of a finding that Mr Plumb believed that he would not have any other assets to meet a costs order in favour of Mr Saba, it would be difficult, if not impossible, to draw an inference that an additional purpose of the settlement was an intent to defeat creditors. The primary judge did not draw it and, in the absence of error being established, it is not this Court's role to re-examine the facts to decide whether it should be drawn. Rather, this Court's role is to determine whether not drawing the inference was, in effect, glaringly improbable in light of the evidence before his Honour. Mr Saba did not establish that it was. Whilst there was much evidence highlighting the importance the respondents placed on their home, it did not compel the inference for which Mr Saba contends.
In summary, Mr Saba relied upon the following matters as compelling the inference that Mr Plumb, at least in part, was motivated by an intent to hinder or delay Mr Saba in enforcement of any costs judgment.
Mr Saba contended that: ● Mr Plumb was "aware that Ms Minifie had become distressed about the effect of the litigation on her and specifically on her interest in the property". ● Mr Plumb intended to continue the AVO proceedings whilst Ms Minifie wanted them to stop. ● Both Mr Plumb and Ms Minifie had "an attachment to the [property] that was not merely financial". ● Both respondents "appreciated that there was a risk of an adverse costs order". ● Ms Minifie wanted to protect her interest in the property so that she could leave it to her daughter. ● "Ms Minifie's distress and frustration over the AVO proceedings boiled over on 29 March 2012" when she "demanded" that Mr Plumb transfer his 25% interest in the property back to her.
Whilst these matters raise a serious question as to Mr Plumb's intent, they do not, at least in the absence of a finding that Mr Plumb believed that the transfer of his interest to Ms Minifie would prevent Mr Saba enforcing any costs judgment, indicate that his Honour's judgment was "glaringly improbable" or otherwise within one of the epithets used in Fox v Percy (see [63] above). Notwithstanding these matters, it was open to his Honour to find that the property transfer was driven by Ms Minifie's desire, acted on by Mr Plumb, to leave the property to her daughter, which she could not be sure of being able to do if there was an outstanding interest held by Mr Plumb.
Before concluding on the question of Mr Plumb's intent, it is necessary to deal with the following further submissions made by Mr Saba on appeal.
First, Mr Saba complained that the primary judge acted on a presumption that parties to litigation always think they will succeed. Although his Honour made passing observations to this effect, his Honour, correctly, focused on Mr Plumb's individual state of mind. Whilst finding that Mr Plumb was confident of his success, he appropriately referred to Mr Plumb's evidence that he recognised "that there was always a risk of [the] loss [of] proceedings and of a costs order if that occurred" (Judgment [60]). There was therefore no error in his Honour's approach.
Secondly, Mr Saba was critical of his Honour's remark that s 37A may rarely be enlivened where the defendant to proceedings under that section has not faced a substantial damages claim brought by the other party. I do not see this remark as having done more than state the obvious, namely, that alienations of property to defraud creditors are most commonly made in response to large substantive claims made or to be made against the transferor. His Honour did not suggest that the section could not apply where, as here, the only prospective liability was one for costs.
Thirdly, Mr Saba submitted that his Honour erred in taking into account Mr Plumb's unawareness of the actual amount of any costs order that might be made against him. However, what his Honour relevantly said was that "the level of costs that Mr Plumb could reasonably have foreseen, in 2012, as recoverable by Mr Saba if Mr Plumb failed in the AVO proceedings in the Local Court is plainly a matter that is relevant to his intention in respect of the impugned transaction" (Judgment [69]). There was no error in this observation. What Mr Plumb could reasonably have foreseen in this regard was one factor, amongst others, that was relevant to determining what his intention was in June 2012. His Honour did not, erroneously, suggest that Mr Plumb's ignorance of the precise amount of the costs was fatal to Mr Saba's s 37A claim.
Nor was there any error in his Honour referring in this context to the amount of costs sought by Mr Saba in his offer letter of 9 June 2011 as "relatively modest". Compared to the time and effort thus far expended by Mr Saba in relation to the AVO proceedings, the undoubtedly escalating costs of the continuing proceedings and the apparent value of Mr Plumb's share of the property and his superannuation (as recorded in the Family Court Consent Orders), the description of the amount as "modest" was not inapt.
Fourthly, Mr Saba contended that the primary judge "failed to give sufficient weight to the absence of material witnesses who could have corroborated the alleged domestic circumstances of the first and second respondents and their expectations as to the outcome of the proceedings". He referred in this respect to some 10 or 11 persons whom Mr Plumb failed to call and to documentary evidence that he failed to tender. He submitted that these people "could have variously given evidence about the circumstances of the Transfer, the legal advice given to Mr Plumb about his prospects in the AVO proceedings (given legal professional privilege had been waived by Mr Plumb … ), the couple's financial arrangements, and the breakdown of the de facto relationship". The documents referred to were said to relate to similar topics.
Mr Saba's submissions did no more than speculate that these persons were able to give evidence that bore upon the critical issue of whether Mr Plumb had an intent to hinder or defeat a claim that Mr Saba might make, the implication in Mr Saba's submissions seeming to be that Mr Plumb may have made an admission to one or more of these persons. In these circumstances, at least one of the conditions described by Glass JA in Payne v Parker [1976] 1 NSWLR 191 at 202 as necessary to attract the principle in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 was not fulfilled: "I would think it insufficient to meet the requirements of principle that one party merely claims that the missing witness has knowledge, or that, upon the evidence, he may have knowledge. Unless, upon the evidence, the tribunal of fact is entitled to conclude that he probably would have knowledge, there would seem to be no basis for any adverse deduction from the failure to call him."
This approach was referred to with approval by the plurality in ASIC v Hellicar (2012) 247 CLR 345; [2012] HCA 17 at [169].
Similar observations are applicable to corresponding submissions by Mr Saba that Ms Minifie did not call various persons to give evidence.

[24]

Whether a purchaser

The word "purchaser" in s 37A of the Conveyancing Act is defined in s 7 of the Act to mean "a purchaser for valuable consideration". As noted at [58] above, the primary judge found that Ms Minifie gave consideration, first, by her grant of a right of ongoing residence to Mr Plumb and, secondly, by agreeing in the Family Court Consent Orders to a compromise in respect of claims that "would otherwise have been available to her in respect of [the] property under the Family Law Act".
In challenging these findings, Mr Saba first submitted that, according to the figures appearing in the Consent Orders, "Mr Plumb was exchanging a 40% interest in the … property for a right to reside at the property for life". Even if this is the effect of those figures, they do not assist Mr Saba as it is not for this Court, nor was it for the primary judge, to assess the value of the consideration given by each party to see whether it equated or bore some other asserted relationship. It is sufficient to conclude that the right to reside at the property was an apparently valuable right that Ms Minifie gave to Mr Plumb. As the High Court indicated in Barton v Official Receiver (1986) 161 CLR 75 at 86; [1986] HCA 44, in this context the Court does not make any inquiry as to the adequacy of consideration, it being sufficient if the transferee has given consideration for its purchase "which has a real and substantial value, and not one which is merely nominal or trivial or colourable".
Secondly, Mr Saba submitted that the right of residence that Mr Plumb obtained under the Family Court Consent Orders was something he already had as his 25% interest in the property gave him a legal right of occupation as a co-owner. However, the rights were different because the right of occupation that he had as a co-owner could be defeated by Ms Minifie obtaining from the Court an order, albeit discretionary, under s 66G of the Conveyancing Act, appointing trustees for sale of the property. On the other hand, as a result of the Consent Orders, Mr Plumb had, at least arguably, a right to restrain Ms Minifie from selling the property unless she arranged to bind the purchaser to give effect to Mr Plumb's continuing right of occupation.
Thirdly, Mr Saba submitted that the "legal quality of the right of residency agreed on by the parties" could be disregarded and regard had only to the "practical reality" that Mr Plumb continued to reside on the property after the Family Court Consent Orders as he had done before. The nature of Mr Plumb's legal rights cannot however be disregarded. By the Consent Orders, he received a right that was, for the reasons I have identified, different in character from that which he had before. It does not matter that his right has not yet been formalised by an instrument other than the Consent Orders, as the agreement evidenced by that document was plainly intended to have binding effect.
Fourthly, Mr Saba submitted that there was no evidentiary basis for the primary judge's conclusion that Ms Minifie compromised claims under the Family Law Act that she would have had in respect of the property. However, there was evidence that Mr Plumb and Ms Minifie lived in a de facto relationship, purchased the property together and made differential contributions to the purchase and maintenance of the property, and that Ms Minifie contended that her registered interest in the property did not adequately reflect the contributions she had made. This evidence was sufficient to indicate that Ms Minifie had a potential claim to a Family Court property settlement. Her foregoing of that constituted consideration for the transfer of Mr Plumb's 25% interest in the property to her.
In these circumstances, I do not consider that there was any error in the primary judge's conclusion that Ms Minifie was a purchaser for valuable consideration.

[25]

Whether Ms Minifie had notice of Mr Plumb's alleged intent to defraud Mr Saba

As noted above, the primary judge found that, when agreeing to the Family Court Consent Orders, Ms Minifie did not have notice of the alleged intent of Mr Plumb to delay or hinder Mr Saba in his enforcement of any costs order that he might obtain (see [59] above). His Honour found that, instead, Ms Minifie was focused on the difficulties in her relationship with Mr Plumb and how they could be addressed. This accorded with her evidence that a potential costs order did not enter her mind when agreeing to the Family Court Consent Orders. On her evidence, she believed that her relationship with Mr Plumb could not withstand the continuation of the AVO proceedings which Mr Plumb was determined to pursue. She thus sought a settlement that would terminate the financial aspects of their arrangements and enable her to pass full ownership of the property to her daughter. Whilst Mr Plumb was given a right to continue to reside in the property, Ms Minifie obtained his registered 25% interest which she thought was not proportionate to the contributions he had made in relation to the property.
Whilst Ms Minifie said that she wanted to protect her interest in the property to enable her to leave it to her daughter in good condition, this did not necessarily mean that she believed that Mr Saba might take Mr Plumb's 25% interest in the property to satisfy a judgment in his favour. The primary judge had the advantage of seeing and hearing the witnesses give their evidence. His Honour's conclusion about Ms Minifie's state of mind involved the determination of a credit issue. I do not consider that his conclusion was glaringly improbable or otherwise inconsistent with the evidence.
Ms Minifie's concessions that she was aware of a risk that court proceedings could be lost and that the losing party might be ordered to pay costs were relevant for his Honour to consider but did not require a different conclusion to that which his Honour reached. That is particularly so when Ms Minifie did not say, and the proposition was apparently not put to her in cross-examination, that she believed that Mr Plumb would have insufficient assets to pay any costs found to be due to Mr Saba. As with Mr Plumb, it was not suggested to Ms Minifie in cross-examination that she believed that Mr Plumb's superannuation funds would not be available for that purpose.
For these reasons, Mr Saba's challenge to his Honour's finding that Ms Minifie established that she did not have relevant notice in my view fails.

[27]

ORDER

For the reasons I have given, Mr Saba's appeal should be dismissed with costs.
SACKVILLE AJA: I agree with the orders proposed by Macfarlan JA and, subject to what follows, with his Honour's reasons.
As the primary Judge recorded, the principal claim made by the appellant (Mr Saba) at trial was that the respondents' personal relationship had not broken down and that the consent orders made by the Family Court in June 2012 did not constitute a genuine adjustment of their property rights in consequence of the alleged breakdown. [1] The primary Judge accepted the evidence given by the respondents (Mr Plumb and Ms Minifie, respectively) that their relationship had indeed broken down and that the Family Court orders represented a genuine adjustment of their property rights. Mr Saba does not challenge these findings on the appeal.
Mr Saba mounted an alternative case at trial. The primary Judge described this case as a "claim that the transaction was, on its face, an attempt to defeat or delay Mr Saba's claim for costs". [2] It is, however, fair to say that the alternative case was subsidiary to the principal claim, which rested on a sustained attack on the credibility of Mr Plumb and, to a lesser extent, Ms Minifie.
A good deal of the cross-examination of Mr Plumb, as the primary Judge remarked on more than one occasion, seems to have been of marginal relevance to the issues in the proceedings. But the thrust of the cross-examination was to challenge Mr Plumb's claim that his relationship with Ms Minifie had broken down and that the consent orders were made in consequence of that breakdown. It was put to Mr Plumb that his objective in executing the consent orders was to divest himself of as many assets as possible in order to protect himself from a potential costs claim by Mr Saba. Mr Plumb rejected these suggestions and his denial was accepted by the primary Judge.
The alternative case presented at trial faced the difficulty that it is not easy to disentangle a claim that a transaction was fraudulent because it involved an elaborate pretence perpetrated by two persons, from a claim that even if the impugned transaction was genuinely negotiated between these persons it is nevertheless liable to be set aside as a fraud on a third party. It was suggested to Mr Plumb in his cross-examination (and denied by him) that he appreciated that Mr Saba's interests would be affected by the making of the consent orders. However, this suggestion was made in the context of a cross-examination directed to establishing that the very reason Mr Plumb entered into the consent orders was to prevent Mr Saba from enforcing any future costs orders. It was not put to Mr Plumb - no doubt because it would have been very difficult to do so - that even though the consent orders represented a genuinely negotiated adjustment of property rights between the parties, Mr Plumb appreciated that the effect of the orders was to prevent or impede Mr Saba from enforcing any costs order he might obtain in the future.
Mr Newlinds SC, who appeared with Ms Jeliba for Mr Saba, developed the alternative argument on the appeal. His main submission was that on the facts found by the primary Judge both Mr Plumb and Ms Minifie appreciated that there was a substantial risk that Mr Plumb would lose his case against Mr Saba and be subjected to an adverse costs order. Even if the breakdown of their personal relationship was genuine and the Family Court orders represented a genuine adjustment of their financial relationship, the effect of the orders, so Mr Newlinds argued, was to defeat or delay Mr Saba's prospective claim as a judgment creditor. This followed from the fact that the transfer of Mr Plumb's 25 per cent interest in the co-owned property to Ms Minifie deprived him of the one asset against which execution of any judgment debt could have been levied. This was sufficient to establish that Mr Plumb had the necessary intent to defraud creditors within the meaning of s 37A(1) of the Conveyancing Act.
Mr Newlinds correctly emphasised that the High Court has given a "liberal construction" of s 37A(1) of the Conveyancing Act to reflect the statute's purpose of suppressing fraud. [3] Thus an alienation of property is voidable if the alienor intends to hinder, defeat or delay a creditor (or potential creditor), even though the alienor does not actually intend to defraud or does not appreciate that his or her acts are dishonest. [4] Nonetheless, s 37A(1) of the Conveyancing Act applies only where the alienor has an intention to hinder, delay or defeat creditors and in that sense has acted dishonestly. [5]
It is not easy to see how a finding to that effect could be made against Mr Plumb having regard to his evidence that the consent orders represented a negotiated arrangement with Ms Minifie and that he did not consider that Mr Saba's interests would be adversely affected by the making of the orders. Mr Plumb described the latter suggestion as "ridiculous", a denial that the primary Judge appears to have accepted.
Mr Newlinds attempted to overcome the difficulty created by the credit-based findings in two ways. The first was to invite the Court to draw an inference as to Mr Plumb's intention from the objective circumstances of the case. Mr Newlinds invoked the proposition endorsed by the High Court in Marcolongo v Chen that an intention to delay or defeat creditors can be more readily inferred, even in the absence of evidence of a direct intention, where the outcome is a necessary consequence of a voluntary settlement. [6] Mr Newlinds submitted that Mr Plumb had divested himself of his interest in the East Ryde property without receiving any benefit. In effect Mr Plumb had voluntarily disposed of his sole asset that could be used to satisfy creditors.
The findings of the primary Judge establish that the transfer of Mr Plumb's interest in the East Ryde property was the consequence of a negotiated arrangement between the parties following the breakdown of the relationship. The terms of the arrangement may have been unusual, but they satisfied each party's objectives. Ms Minifie wanted full legal title to the property primarily because she wanted to be able to leave the property to her children. Mr Plumb wanted to be able to live in the property for life, bearing in mind that the design of the house was such that the parties could live separately on different levels. Both wanted to be free from potential claims by the other. In this respect Mr Plumb was aware that Ms Minifie claimed to have contributed more than 75 per cent of the purchase price of the property and claimed to be entitled to an increase in her interest in the property. The consent orders achieved the parties' objectives.
It is true that Mr Plumb was entitled by value of his interest as tenant in common to remain in possession of the property, subject to Ms Minifie's concurrent right to remain in possession. But Mr Plumb's interest as co-owner was always liable to be terminated and converted into money if Ms Minifie applied for an order under s 66G of the Conveyancing Act for the sale of the co-owned property. The terms of the consent order conferred a personal right on Mr Plumb, presumably enforceable against Ms Minifie, to reside at the East Ryde property for life. Mr Plumb's transfer of his interest in the East Ryde property was therefore not a voluntary settlement in the sense used by the High Court in Marcolongo v Chen.
Mr Newlinds also challenged the primary Judge's finding that he was not satisfied that Mr Plumb was aware that his superannuation entitlements were immune from attachment by a judgment creditor. In my view, it is by no means clear that even if that challenge succeeded, it would justify a finding that Mr Plumb intended to defeat or delay Mr Saba's potential claim as a judgment creditor. Mr Plumb's awareness that his superannuation entitlements were protected would not necessarily undercut his evidence that he never adverted to the effect the consent orders or transfer might have on any future costs order that Mr Saba might have obtained. In any event, I agree with Macfarlan JA's reasons for rejecting the challenge. The only comment I would add is that if, as Mr Newlinds submitted, it is common knowledge in the community that superannuation entitlements are immune from execution at the suit of a judgment creditor, it is curious that the legal representatives took so long to identify the correct statutory source of the immunity.
The second way in which Mr Newlinds sought to overcome difficulty created by the primary Judge's credit based findings of fact was to challenge some of those findings. The challenge was not pursued in a systematic fashion and, in my opinion, no basis was shown for interfering with the primary Judge's assessment of the evidence.
EMMETT AJA: The question in this appeal is whether an order should be made that the transfer on 14 June 2012 of the one quarter share held by the first respondent, Mr Noel Plumb, as tenant-in-common of a property situated at East Ryde was voidable. The transferee was the second respondent, Ms Jeanette Minifie. The appellant, Mr Anthony Saba, sought the order under s 37A of the Conveyancing Act 1919 (NSW).
Section 37A relevantly provides that every alienation of property made with intent to defraud creditors is to be voidable at the instance of any person thereby prejudiced. However, s 37A does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors.
Mr Plumb had commenced proceedings against Mr Saba in the Local Court seeking apprehended violence orders against him. Ultimately, Mr Plumb was unsuccessful and he was ordered to pay Mr Saba's costs of the proceedings. Absent any interest in the East Ryde property, Mr Plumb will be unable to meet the order for costs. Hence, Mr Saba seeks to void the transfer made by Mr Plumb to Ms Minifie.
The East Ryde property was acquired by Mr Plumb and Ms Minifie in October 2005. Mr Plumb acquired a 25% interest as tenant-in-common and Ms Minifie acquired a 75% interest as tenant-in-common. Mr Plumb and Ms Minifie lived together in the East Ryde property. However, in 2011, their relationship began to deteriorate and thereafter worsened.
On 14 June 2012, orders were made by consent by the Family Court of Australia implementing a property settlement between Mr Plumb and Ms Minifie. The orders recorded the agreement between Mr Plumb and Ms Minifie that Ms Minifie had made a substantial contribution of 85% to the acquisition, conservation and improvement of the assets that were acquired and built up during their relationship and that Mr Plumb made a modest contribution of about 15% to the acquisition, conservation and improvement of the assets acquired and built up during their relationship. The orders provided for Mr Plumb to transfer his one quarter interest in the East Ryde property to Ms Minifie and for Ms Minifie to grant Mr Plumb a lifetime right of residency in the East Ryde property.
Mr Saba brought proceedings against Mr Plumb and Ms Minifie in the Equity Division. Although the transfer was made pursuant to orders made under s 79 of the Family Law Act 1975 (Cth), it is common ground that it is nevertheless open to the Court in an appropriate case to make an order under s 37A voiding the effect of the transfer. On 19 May 2017, for reasons published on that day, a judge of the Equity Division ordered that Mr Saba's claim be dismissed. By Notice of Appeal filed on 18 August 2017, Mr Saba appealed from the orders made by the primary judge.
I have had the advantage of reading in draft form the proposed reasons of Macfarlan JA for dismissing Mr Saba's appeal with costs. I agree with the orders proposed by Macfarlan JA for the reasons proposed by his Honour.

Saba v Plumb

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