Samawi v Faraone (No 2) [2026] NSWSC 1186 | Case summary | Zoe

NSWNSWSC

Samawi v Faraone (No 2)

[2026] NSWSC 1186

Supreme Court of NSW|2026-09-30|Before: Leeming JA

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-09-30

Before

Leeming JA

Catchwords

TRUSTS AND TRUSTEES — right of indemnity — plaintiff found to the constructive trustee of family home — extent to which plaintiff contributed funds to pay trust expenses — mixed account — trustee’s bank account used to pay trust and personal expenses — mortgage repayments to repay loan used to acquire trust and personal assets — apportionment of mortgage repayments — disputed deposits into account — breach of trust — whether trustee liable for diminution in value of trust property due to delay in sale — whether trustee entitled to interest

Source

Original judgment source is linked above.

Catchwords

TRUSTS AND TRUSTEES — right of indemnity — plaintiff found to the constructive trustee of family home — extent to which plaintiff contributed funds to pay trust expenses — mixed account — trustee’s bank account used to pay trust and personal expenses — mortgage repayments to repay loan used to acquire trust and personal assets — apportionment of mortgage repayments — disputed deposits into account — breach of trust — whether trustee liable for diminution in value of trust property due to delay in sale — whether trustee entitled to interest

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Samawi v Faraone (No 2) [2026] NSWSC 1186

Hearing dates: 1 and 2 September 2026

Decision date: 30 September 2026

Jurisdiction: Equity - Real Property List

Before: Leeming JA

Decision: 1. Order that Ms Claudia Faraone be removed as the second cross-claimant.
2. Direct the parties within 14 days of today to supply agreed numbers, or in lieu of agreement, their own numbers supported by calculations or spreadsheet pages, of:
(1) The proportions of mortgage repayments apportionable as trust expenses in accordance within [89] these reasons;
(2) The amount of the mortgage repayments and payments of rates and maintenance fees attributable to the Queensland property in accordance with [90]–[94] in respect of which the plaintiff derived a personal benefit;
(3) The costs incurred by the delay in selling No 35 from 1 February 2026 to 1 September 2026, and the appropriate occupation fee for the occupation of No 35 by the defendants from 1 February 2026 until the property was sold, each of which is to be brought to account in accordance with [178]–[180] of these reasons.
3. The plaintiff is entitled to supply by email to my Associate copied to the defendants any further submissions in relation to the points addressed in paragraphs 83(k), (r), (t)-(w) and (y) of her affidavit of 30 April 2026, by reference to particular transactions (identified by date and page number in the court book), and any other claims not addressed in these reasons, as well as the total claim made by her in accordance with [192]–[205] of these reasons within 7 days of today, and the defendants are entitled to supply by email to my Associate copied to the plaintiff submissions in response within 7 days thereafter. 4. The parties are to supply by email to my Associate, copied to the other side, submissions as to the costs of the proceedings within 14 days of today, and submissions in response by email to my Associate copied to the other side within 7 days thereafter.

There has been slightly more than a year between the first and second hearing in these proceedings. It is convenient to sketch the nature of that delay immediately, not least because an issue which was flagged when the cross-summons was filed, and not resolved, was whether it could extend to a claim for breach of trust based on the delay in selling No 35.
The delay has not only contributed to the costs of servicing the mortgage which now include enforcement action by the mortgagee when repayments ceased to be made. The delay also goes to the largest issue between the parties in dollar terms, namely that, while the property has now been sold, according to Giuseppe, it should have been sold some months earlier, and at a price of $310,000 more than was achieved.
Judgment was delivered on 28 August 2025. It was followed by Raffaella’s notice of intention to appeal. The matter was thereafter stood over by consent with a timetable for further evidence to be settled by December in the event that an appeal was not filed. No appeal was filed. On 9 December 2025, Raffaella was directed to file her lay and expert evidence by 18 February 2026. She was also granted leave to file an amended summons seeking recovery of amounts pursuant to her entitlement to indemnity as trustee. On 9 March 2026, Raffaella was granted an extension of time until 1 and 14 April 2026 for lay and expert evidence, and on 20 April 2026, that timetable was extended until 30 April 2026. Thus it was that some eight months elapsed before Raffaella had served the evidence in chief in support of her application for indemnity from trust property for expenses properly incurred. Special costs orders were made in relation to the relistings requiring extensions of time: Samawi v Faraone [2026] NSWSC 409.
Raffaella’s expert’s evidence was voluminous and complicated. Including attachments, it is around 450 pages long. On 24 June 2026, the hearing tentatively listed on 21 July 2026 was vacated and the matter was set down for hearing on 1 September 2026 with an estimate of 1 day plus. This time it was Giuseppe who required an extension until 31 July 2026 for his lay and expert evidence, with evidence in reply to be served by the plaintiff by 21 August 2026.
There was substantial although not complete compliance with that further extended timetable, with a series of final lay and expert evidence being supplied immediately before the hearing.
In the meantime, two things happened. Raffaella ceased, after her claim to own No 35 beneficially was held to have failed, to make mortgage repayments to the mortgagee (Macquarie Bank Ltd). There were negotiations directed to selling the property towards the end of 2025. Then Macquarie Bank commenced proceedings for possession, and the property has more recently been sold, but at a considerably lower price than had been contemplated in late 2025.
Settlement occurred on 1 September 2026. The price was $1,640,000. The amount paid out to the mortgagee, Macquarie Bank, was some $720,287 (the amount required to discharge Macquarie Bank’s debt was a principal of $718,372, interest of $1,509 and a discharge fee of $400). The amount placed in the trust account of Giuseppe’s solicitors was in excess of $742,000. Stamp duty was $71,527. It is unnecessary to deal with the relatively minor disbursements of the balance of the purchase price. A further payment had not, at the time of the hearing, as yet been received, representing the deposit less the agent’s commission and other adjustments.

It was common ground that the primary issue for resolution was: to what extent had Raffaella established an entitlement to reimbursement for expenses properly incurred by reason of her trusteeship? The answer to that question is, regrettably, exceedingly complex, principally because of the number of transactions claimed to bear upon the trust property. There are literally thousands of transactions over the 16 year period on an account which was used by a variety of people for a variety of purposes, many of which were unconnected with the trust property. Moreover, many of the transactions involve the deposits of cash at bank branches into the account used to make mortgage repayments. Quite a deal of forensic effort was devoted to associating withdrawals from bank accounts in the names of Giuseppe and Claudia and cash deposits, notwithstanding which Raffaella maintained that all cash deposits, with the exception of four, had been made by her and for which she was entitled to indemnity. There are aspects of the history which do not reflect well on daughter or father. Many of the expenses incurred by Raffaella as legal owner of the property were claimed by her as deductions in her personal tax returns, and they were a major contributor to amended assessments, two of which included penalties which followed two separate audits for four financial years. That gives rise to a question as to how the temporary benefit of tax refunds is to be accounted for, and how the ultimate burden when an amended assessment issues is to be accounted for. For, as will be seen below, Raffaella deposited much of the tax refunds she obtained into the 920 account, but then borrowed against trust property when amended assessments issued. Mr Garufi raises a series of presently hypothetical issues, such as the consequences for Raffaella of further audits into her tax returns and her potential exposure to penalties and interest. For his part, Giuseppe accepted that he from time to time was paid in cash, which was never declared as assessable income, some of which cash he claimed contributed to mortgage repayments.
Further, this was by no means a straightforward loan account with regular monthly repayments. Instead, on three occasions, Raffaella drew down further amounts of $20,000, $65,000 and $60,000 (in August 2013, October 2014 and May 2015) and there is a dispute as to the purpose of those drawings and the way in which the funds were deployed. Additionally, there were many other transactions involving the same bank account which were the subject of the parties’ submissions. The parties tendered nine volumes in addition to the three volumes of evidence from the first hearing, much of which was spreadsheets of financial transactions. I have retained many references to the court book in these reasons (CB and PCB, the latter referring to the previous court book), in order to assist the parties should they wish to verify any step of the reasoning, and also against the possibility that other judicial officers are required to do so.
The ultimate positions adopted by the parties were in stark contrast. On Raffaella’s preferred case she was entitled to approximately $322,000. On Giuseppe’s preferred case he was entitled to some $351,000 plus $310,000 for the delay in achieving a sale of the property.
But key aspects of the methodology are not in dispute. One necessary step is to determine what expenses have properly been incurred by way of maintaining No 35. Principally these are servicing the mortgage and paying various property expenses such as rates and various improvements.
This step is made complex because the money lent to Raffaella secured by a mortgage over No 35 was not solely used to pay the purchase price or other costs of acquiring and maintaining No 35. The money borrowed by Raffaella secured by the mortgage over No 35 was also used for purposes which were not trust purposes. This judgment resolves how the repayments are to be apportioned between those which in principle are capable of being recorded as expenses properly incurred by the trustee, and those which have nothing to do with the trust property. Broadly speaking 68-87% of the mortgage repayments serviced trust expenses, with the proportion varying because from time to time the indebtedness increased as Raffaella redrew on the facility, and sometimes that was for trust purposes, other times for her own personal purposes. The difference is large enough, to my mind, to warrant dealing with this differentially over the period, and I note that spreadsheets have already been prepared which would permit that to be done very readily.
The second step, which substantially follows from the first, is to determine the proportion of the mortgage repayments which were used to service Raffaella’s personal indebtedness: principally, the acquisition of the Queensland property which was beneficially owned by Raffaella. Broadly speaking this is 13-32% of the mortgage repayments. My rough calculations are that this is some $180,000.
That permits the determination, from the total amount contributed by Raffaella to the 920 account, of the amount which must be deducted as representing deposits which benefited her personally. On the view I take, Raffaella cannot be heard to say that others rather than herself deposited funds into the 920 account which are allocated to paying Raffaella’s own personal indebtedness, with the result that the funds she deposited are treated as being to meet trust expenses for which she is entitled to an indemnity. This reflects a basic principle of a trustee accounting for a mixed account. Sir George Jessel MR famously said that it was “perfectly plain that [a trustee] cannot be heard to say that he took away the trust money when he had a right to take away his own money”: Re Hallett*’*s Estate (1880) 13 Ch D 696 at 727. It is of course well removed from physical examples of gold sovereigns in a bag also mentioned by the Master of the Rolls, for the debits and credits were transactions in an account, and the particular debits are in fact fractions of the monies transferred to another account to make monthly repayments of the debt secured by mortgages. But the principle is identical, and can be seen in decisions such as Foskett v McKeown [2001] 1 AC 102; [2000] UKHL 29 where proprietary tracing was permitted into parts of the insurance premiums and policy pay-out. It was acknowledged in Raffaella’s submissions, who noted the “principle that applies to withdrawals by trustees from a mixed fund for personal use, namely, that they first withdraw their own funds” (written submissions, para 38(b)).
I am conscious that tracing is not permitted through an overdrawn account: Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552; [2014] NSWCA 310 at [33]. But although I mentioned Foskett v McKeown above, this is not a case of tracing. This is not a case where either Raffaella or Giuseppe claims beneficial ownership of the traceable proceeds of any particular deposit. This is a case of a personal remedy – an account as between trustee and beneficiary. (True it is that Raffaella’s entitlement to be indemnified is secured over the trust property, but that does not convert her claim into an equitable proprietary claim.) Raffaella proceeded to submit that it should be presumed that payments for board or rent should be presumed to be the first source for withdrawals from the 920 account for trust expenses. I do not think that that matters, once it is borne in mind that this is a question of accounting, rather than of “tracing” in the sense of making a proprietary claim on the traceable proceeds of an asset. I mention this because reference was made in Raffaella’s written submissions to the “lowest intermediate balance” rule, although this was not developed in either side’s oral submissions. I do not think any assistance is obtained from that “rule”.
The third step is to determine to what extent Raffaella made payments of trust expenses, for which she is entitled without more to an indemnity. That is complicated because there are a series of factual disputes in relation to many of the payments. It is abundantly clear that many of the transactions upon the 920 account were not carried out by Raffaella. One important class of dispute is that Raffaella on the one hand, and Giuseppe and Claudia on the other hand, each claim that they made large numbers of cash deposits into the relevant account. There are more complicated disputes concerning loans between father and daughter, a wedding gift, a series of redraws by Raffaella, and the way she sought to obtain personal taxation benefits from her ownership of No 35.
To recapitulate, there was a great deal of withdrawals from the 920 account, and other payments, which were trust expenses. To a large extent, payments of “rent” or “board” are to be regarded as meeting those expenses, and I understood this to be common ground between the parties. The critical questions are (a) to what extent were payments made from the 920 account which represented payments which benefited Raffaella personally, (b) to what extent did Raffaella make payments of trust expenses for which she is entitled to indemnity, and (c) in what other ways is Raffaella required to bring to account credits or debits to her position as trustee.

Raffaella was the legal owner of No 35 since settlement of the transfer from her sister and her sister’s husband (Fabiola and Christopher) on 1 December 2010 until it was sold on 1 September 2026. Throughout that time, Raffaella has been indebted, first to the Commonwealth Bank of Australia, and later Macquarie Bank, each of which lent her funds secured by a registered mortgage over the property. The evidence does not suggest there were ever any other secured lenders. However, for much of the period, Raffaella’s indebtedness was also secured by a mortgage over property in her name in Queensland (originally there was a claim advanced by Giuseppe and Claudia that Raffaella was a trustee of the Queensland property, too, but this was abandoned) and a deal of her debt was rolled over from the debt Raffaella had previously incurred to acquire the Queensland property.
Thus for most of the 16 years this judgment addresses, mortgage repayments serviced the debt used to acquire the trust property (No 35) and non-trust property (the Queensland property). The Queensland property was refinanced on 1 December 2010 and the settlement reflected a price of $165,000, as explained in the earlier judgment, especially at [212]-[213].
In September 2013, Raffaella’s loan was “split” into fixed and variable interest components: CB21; nothing turns on this save that it introduces further complexity into the statements. I shall mostly omit those details for the purposes of these reasons. There were further drawings down on the CBA indebtedness as follows:
$20,000 in August 2013;
$65,000 in October 2014;
$60,000 in May 2015.
Raffaella refinanced with Macquarie Bank in March 2019. The drawdown was $760,000: PCB710, and at this stage the payout to CBA on 20 March 2019 was $386,831.71 + $372,725.50 = $759,557.21 (there were also some $400 in fees and interest charges): CB995 and 1021. Thus there was no material increase in indebtedness when Raffaella moved from CBA to Macquarie Bank. Monthly repayments started at $3,694.39 which was less than repayments to CBA had been, but they rose (with rising interest rates) to $4,210.44 per month by the end of 2022 and $4,648.23 by mid 2023.
The redraws of $20,000 and $60,000 were credited to the 920 account (on 12 August 2013 and 22 May 2015): CB974, 978 and 980. The $65,000 was credited to a different account, in circumstances described below.
Every repayment made, first to CBA and then to Macquarie Bank, was made by funds withdrawn from the 920 account.
I did not understand the amount of those repayments to be controversial. They are listed in (for example) two of the columns in Annexure D of Ms Milne’s reply report at CB3387 and Annexure S1 in rows 17 and 18 of the table at CB3408. The annual payments to CBA were $33,581, $54,138, $47,048, $44,467, $43,265, $44,167, $38,246, $33,764 and $25,451 (for the financial years ended 30 June 2011 – 2019 inclusive, noting that the first and last amounts represents 7 and 9 months respectively). The annual repayments to Macquarie Bank were $11,083 (3 months), $31,373, $30,054, $36,978, $48,381, $56,450, $51,863, $4,427 (for the financial years ended 30 June 2019 – 2026) (the last figure is small because Raffaella ceased making repayments after the first judgment in August 2025).
By way of cross-check against original financial records, for the financial year ended 30 June 2018, there were 12 repayments to each of the two CBA mortgage accounts (it will be recalled that the mortgage was “split”). These are found in the statements at CB 984, 990, 999 and 1001. The repayments total $9,246.75 + $9,311.48 + $7,624.17 + $7,582.52 = $33,764.92 which is the amount in the appropriate cell in Annexure S1 of Ms Milne’s reply report at CB3408.
The total repayments were thus $364,127 + $270,609 = $634,736.

Mortgage repayments comprise the single largest source of expenses incurred for the benefit of the trust property which are capable of being the subject of an indemnity. However, there are complexities arising from two main sources.
First, it is common ground that while Raffaella is to be treated as the trustee of No 35, she was the beneficial owner of the Queensland property, and her total indebtedness to CBA and Macquarie Bank from time to time represented (a) the rolled over amount to acquire the Queensland property, and (b) the balance of the purchase price of No 35. Ms Milne’s Annexure E proceeds on the basis that the contribution of No 35 and the Queensland property to the debt was in the ratio of $670,315 to $165,000. The $165,000 represents the pay-out figure of Raffaella’s existing indebtedness secured by mortgage over the Queensland land. I did not understand there to be any dispute at the level of principle that there be an apportionment of the mortgage repayments insofar as they were to support trust assets as opposed to non-trust assets.
Secondly, No 35 was used to secure additional borrowings, which may be summarised as follows:
First, as noted in the earlier judgment (at [212]), at settlement on 1 December 2010, Raffaella’s existing personal loan of $35,000 was paid out and she also received some $14,133;
Secondly, as noted above, Raffaella drew down further amounts of $20,000, $65,000 and $60,000 in 2013, 2014 and 2015. As will be explained below, the $20,000 was used to repay credit card debt (mostly, Giuseppe’s). Some of the further amounts drawn down were connected with No 35 because of the personal tax liability she incurred following the amended ATO assessments.
All these matters presented factual issues which needed resolution before the proportion of each mortgage repayment which was to be regarded as attributable to trust property could be determined. Ms Milne addressed these in various “scenarios” (numbered 1-4) which depended upon assumptions about these relatively small components.
The result of the apportionment by Ms Milne is that the repayments were treated by Ms Milne as being ratably attributed to each of those debts from time to time. The bottom line of Ms Milne’s Annexure E allocated the repayments as follows: $402,826 to No 35, $16,037 to Raffaella’s $35,000 personal loan, $142,237 to Raffaella’s Queensland property, $5,206 to the $20,000 redraw, $40,807 to the $65,000 redraw, $35,399 to the $60,000 redraw, $14,133 to the $35,000 loan to Giuseppe and $8,845 to the $20,000 loan to Giuseppe.
In addition, there were expenses such as council rates and improvements to No 35 over the period, in the order of some $128,000. It is best to defer these details.

The accounting experts retained by the parties (Mr Paul Garufi by Raffaella, Ms Natasha Milne by Giuseppe) adopted substantially different methodologies. Ultimately, Raffaella acknowledged that Ms Milne’s methodology was more straightforward, and that both produced the same result. Submissions from both sides proceeded by reference to the methodology of Ms Milne and the various points of difference identified by her in paragraphs 3.5.1 and 3.5.2 of her report. That was probably a sensible and appropriate approach to take, but it left me without the assistance of oral or written submissions on how each expert derived his or her “bottom line”. Neither expert was ultimately required for cross examination, although the decision not to cross-examine Ms Milne was only made on the morning of the second day of the hearing. That is because ultimately the points of difference turn upon matters of primary fact, rather than points of accounting opinion or expertise.
Pausing for a moment to identify the principal factual issues, they emerge most clearly from two things: a list of assumptions in paragraph 3.5.1 of Ms Milne’s report, and a table of “updated calculations” at p 12 of Exhibit 4, a joint expert report provided on the last day of the hearing (which refers to the subparagraphs in paragraph 3.5.1 of Ms Milne’s report).
To reiterate, there was agreement between the experts that it was necessary and appropriate to apportion repayments to CBA and later Macquarie Bank between trust debt (notably, No 35 held on trust by Raffaella) and non-trust debt (notably, the Queensland property held beneficially by Raffaella). There was also agreement that the proportion would vary in light of the redraws made by Raffaella. Precisely how that would vary depended upon factual findings as to the use that was made of the additional borrowings. The starting point is to determine these proportions, because they reflect the largest component of the trust expenses throughout the period.
There is inevitable overlap in what follows between the determination of the proportions of repayments attributable to trust debt, and consideration of the tax treatment by Raffaella of deductions attributable to No 35 for the years ended 30 June 2011 and 2013, because Raffaella’s amended assessment was the occasion for the second and largest redraw.

There were deposits in 8 years representing tax returns obtained by Raffaella. Mr Garufi and Ms Milne said that the deposits totalled $108,173.21: e.g. CB2921, and in a sense they are right. However, on 3 August 2013, Raffaella transferred $14,613 into the 920 account from her 4619 account, then withdrew the same amount back into the 4619 account, and then transferred $14,613 from the 4627 account back into the 920 account. It seems clear to me that the first two transactions should be netted out. However, that is not how the experts proceeded. (It is perfectly possible that there is an offset somewhere in their calculations; I am not suggesting that there is necessarily an error, and indeed I would be surprised if neither expert had brought this to account.) However, I shall proceed on the basis that the tax returns totalled $93,560.21.
Four of Raffaella’s tax refunds led to audits and amended assessments and penalties. By way of example, in her tax return for the year ended 30 June 2012, she claimed losses of $65,009 on the “supplementary section” of her return as well as $17,097 work related car expenses and other minor expenses: CB1351, the result of which reduced her taxable income from around $117,000 (gross) to $22,178. The $65,009 deduction reflected gross rent of $18,200, interest deductions of $34,546, capital works of $5,982 and other rental deductions of $42,681: CB1353**.** Her employer had withheld tax on her salary, and so the result was a credit of $28,263.12 paid on 17 August 2012.
On the same date, as noted above, an amount of $21,064 was credited to the 920 account: CB267. The entry was styled “Transfer from xx8860 NetBank investement [sic] return”. There were three transactions on Raffaella’s 8860 account on 17 August 2012: the credit from the ATO, a transfer of $7,000 to her 8879 account, and a transfer of $21,064 to the 920 account: CB1344. There was no document in evidence corresponding to the split of the tax return as had been prepared by the accountant in relation to the previous financial year (cf [154]-[156] of the first judgment) and in light of the timing, it is unlikely that one was prepared. Rather the amount was split, some 25% to the 8879 account and 75% to the 920 account.
Both Giuseppe and Raffaella gave evidence before me that Raffaella did not tell Giuseppe about the claim based on her motor vehicle, or its disallowance following the audit. I note that the 25:75 split approximately corresponds with the proportions of the return attributable to the deductions claimed in respect of the motor vehicle and in respect of No 35, but that may be mere coincidence.
Raffaella was audited and the result was a reduction in her motor vehicle deduction from $17,097 to $1,110, and a reduction in the total rental deductions, so that the interest, capital works and other deductions became $7,556, $1,308 and $9,336 respectively: CB1525 and 1526**.** The result was a disallowance of deductions of some $80,000, with her taxable income rising from $22,178 to $103,174 and a consequential tax shortfall of $27,559.59, plus an administrative penalty for recklessness of 50% (being $13,779.40) and a shortfall interest charge: CB1538. The outcome for the following financial year was similar. Thus in August 2014, Raffaella received amended assessments for the years ended 30 June 2012 and 2013 requiring her to pay additional amounts of $28,827.67 and $21,543.40: CB1538 and 1542.
Raffaella’s response was to redraw on the CBA facility an additional $65,000 which was approved on 2 October 2014, increasing the indebtedness from $261,077 to $326,077: CB1552. The amount redrawn was more than enough to pay the entirety of the tax debt, rather than just the proportion of it attributable to the disallowed deductions in respect of No 35. I shall return to this below.
Raffaella brought proceedings in the Administrative Appeals Tribunal over the assessments, which were ultimately compromised in April 2016 on the basis that the penalties be reduced to $8,267.64 and $6,433.56 for each year: PCB587.
From the perspective of the 920 account, $21,064 was deposited into that account (reflecting about 75% of the tax refund). However, Raffaella was not entitled to that refund. The true position as between Raffaella and the Commission of Taxation was conclusively established by the amended tax return, which reflected rental income of $18,200 and deductions of $18,198. That is to say, her ownership of, and receipt of rent from, No 35 produced no material effect on Raffaella’s taxable income.
I mention all of this because there are contemporaneous documents suggesting that Giuseppe was a participant in the attempt by Raffaella to derive a taxation advantage from her legal title to No 35, namely, (a) a spreadsheet prepared by Raffaella’s accountant allocating part of the tax refunds: see the earlier judgment at [150]-[158], and (b) the fact that the refund was transferred into the 920 account.
The 30 June 2012 return mentioned above demonstrates that there was no benefit made by Raffaella for which she is entitled to indemnity (save for the temporal benefit of a refund which carried with it an obligation to repay it plus interest plus a penalty). As will be seen below, Raffaella accepted that she was not entitled to indemnity in respect of the expense she incurred when her assessments were amended. The deposit by her of $21,064 into the 920 account would not have been made had her personal tax return been correct. However, it appears to have been part of the original understanding of how the trust would operate, and indeed it was relied on by Giuseppe at the first hearing in support of his contention that No 35 was held by Raffaella on trust.
It follows that Raffaella should obtain a credit for the amounts of personal tax returns paid by her into the 920 account over the period.
Raffaella may be at risk, at least in theory, of amended assessments for the unaudited years. If, as Raffaella maintained, the errors came about because of negligence falling short of fraud, then the power to issue an amended assessment may have expired many years ago. I do not accept Mr Garufi’s view that Raffaella should obtain a benefit by way of credit of $41,161 in her claim for an indemnity against the possibility that she might incur a tax liability in the future, just as I do not accept that the trust property should bear any part of the burden of the past liabilities incurred by Raffaella from her erroneous personal tax returns. Even if I am wrong about that, the amount of any future liability is too hypothetical to permit it to be brought to account as between Raffaella and Giuseppe.
This results in a credit of $93,560 in favour of Raffaella, which in due course is to be brought to account.
Finally, on 18 November 2016 a payment of $12,750 was made into the 920 account. Raffaella says, and it was not controverted, that it was part of the settlement of her claim against her accountant, with the balance going to fees: CB23. Raffaella is entitled to a credit for this amount, as well.

Raffaella accepts that she is liable to account for $26,750 of this. However, she says that $13,250 was paid to the 920 account across 7 payments and $20,000 was “the amount that Giuseppe had promised to give me for my wedding which ended up happening on 31 October 2015 after it was initially postponed”: CB24.
This redraw was in one respect quite different from the redraw of $65,000 the previous year. The banking records show that Raffaella immediately transferred the whole of the $60,000 from the 920 account to another account (670). On 31 May 2015 there is a further transfer from the 670 account to a 689 account of $20,000 with the description “wedding fund dad”. The 689 account is not one of the 14 accounts of which Raffaella gave evidence in paragraphs 10 and 11 of her main affidavit in this phase of the proceedings; it was however a joint account with Mark which was identified in the earlier phase (see earlier judgment at [82] and the spreadsheet contained at CB2457).
Raffaella’s claim that she need not account for the $20,000 is finely balanced. It is perfectly plain that Giuseppe and Raffaella have fallen out, and that a key element of that falling out is her choice of husband. This happened years ago, at least as early as January 2012 when Raffaella moved out of No 35 and there was the exchange of emails (including the “Che delusione!!!” email summarised at [107]-[112] of the earlier judgment). It was evident from Raffaella’s cross-examination that she continues to blame her father for causing Mark to be imprisoned in connection with an apprehended violence order obtained at his request.
It is quite possible that Raffaella recalled statements that her father would contribute a substantial wedding gift to each of his daughters. It is also possible that Raffaella genuinely has come to believe that she was entitled to such a payment from her father.
There is another point. It would be one thing if the $20,000 described as “wedding fund dad” were debited from the 920 account. It is clear that Giuseppe had access to the 920 account. However, Raffaella caused the $60,000 to be withdrawn from the 920 account on the same day it was credited: CB321. Thus the annotation for the $20,000 of “wedding fund dad” was not visible to him.
Ultimately I have concluded that Raffaella has made out this claim. Giuseppe responded to many paragraphs of Raffaella’s affidavit, including relatively small gifts, refuting them in detail. He made no response to the claim for a $20,000 wedding gift. And his counsel, who gave the appearance of conducting a commendably effective and concise cross-examination, did not cross-examine Raffaella about it. It is also not difficult to hypothesise attempts by a father to reconcile with his daughter, to obtain access to his grandchild, and to treat his daughters equally in relation to their weddings. On balance, I am satisfied that Giuseppe bound himself to pay $20,000 as a wedding gift to his daughter, notwithstanding that at least from time to time he did not approve of the son-in-law.
That conclusion is not reached on the basis of any assessment of Raffaella’s demeanour when giving evidence. I am unpersuaded that I am in any position of advantage in assessing whether Raffaella was giving reliable evidence, or giving unreliable evidence which she sincerely believed to be true, or giving unreliable evidence which she had given no real thought to whether it was true or probable or likely or even possible. Raffaella is an unreliable historian, and I am unpersuaded that she was doing her best to tell the truth on a range of issues in this litigation. Nonetheless, it is the combination of the lack of challenge to this aspect of her evidence, coupled with the inherent plausibility of a father wishing to treat his daughters equally, that persuades me that in this respect Raffaella has discharged the onus of persuading me that she was entitled to part of the drawdown.
Raffaella is also entitled to the benefit of the funds transferred from the $60,000 to the 920 account. Her submissions identify payments of $13,250 and indeed seven transfers adding to that amount may be seen on CB1563.
I find that Raffaella obtained a benefit of $26,750 from the $60,000 draw down for which she must account.

Ms Milne’s various scenarios illustrate the appropriate way, in principle, of determining the apportionment of the cost of servicing the mortgage to trust property as opposed to non-trust property. I do not have a soft copy of the spreadsheet. However, it will be straightforward to divide the payments by slightly modifying the existing spreadsheet.
Ms Milne commences with the loan which was drawn down on 1 December 2010 being apportioned between No 35 ($470,315 or 70.16%), the Queensland property ($165,000 or 24.62%) and the $35,000 indebtedness (5.22%): CB2870. Mr Garufi has a more simplified approach, which puts to one side the $35,000 indebtedness, and splits the repayments $75.38% to No 35 and 24.62% to the Queensland property: CB2915. I think that, on balance, a modification of Ms Milne’s slightly more complicated approach is preferable. (The difference is relatively small.)
The difference comes about not because of any issue of accounting principle, but because of the $14,133 and the $35,000 components of the 1 December 2010 settlement. In final submissions, Giuseppe confirmed, constructively and realistically, that he did not press the claim for the $14,133 (transcript, 2 September 2026, 28.42). So that may be put to one side.
Raffaella gave evidence that in 2009 she obtained a personal loan in the amount of $35,000, and that the money was used for the benefit of Giuseppe, including for flights for her family to Rome where he required surgery: CB17-20. Giuseppe accepted that the $35,000 was “probably” used for family expenses, and said that it was paid out by the funds distributed at settlement: CB50. Raffaella gave evidence that there were further loans made by her at her father’s request because he was in hardship, and that ultimately those loans were repaid in 2018. Giuseppe denied this: CB51.
I find that, in accordance with what was substantially common ground between the parties, the $35,000 personal loan which was discharged on 1 December 2010 was not the conferral of a benefit upon Raffaella for which she must give credit, but the repayment of her own personal indebtedness which she had incurred for the benefit of Giuseppe. In closing address, Raffaella maintained that the $35,000 repayment was of a loan she had taken out for the benefit of her father to pay off credit card debts he had incurred. It was said that it was “part of the common intention that [Raffaella] would get the benefit of [the $35,000 discharging her personal indebtedness]. That’s because it’s not contested that she took the loan out for him, so she got that repaid in 2010”. (Transcript 2 September, 11.17). Counsel then clarified, twice, that he had meant 2018 (T11.24, 12.13). I understood Raffaella’s ultimate position to be that the $35,000 of personal debt incurred by Raffaella for the benefit of her father was (a) paid off by the settlement on 1 December 2010 by being, in effect, rolled into the single debt secured by the mortgage, and (b) was ultimately paid off by payments made by Giuseppe in 2018.
It is tempting to think that the relatively small debts of $14,133 (which was in substance a gift to Raffaella) and $35,000 were forgotten by the family members over the years, and the mortgage payments were regarded simply as servicing the debt on No 35 and the Queensland property. That would lead to Mr Garufi’s apportionment of mortgage repayments, and but for the following, I would favour that approach.
However, the appropriate characterisation must have regard to the totality of the evidence, and that evidence includes, in April 2018, payments of $66,000 made by Giuseppe into the 920 account, each of which was described as “Debt Repayment”. These deposits would have appeared on the missing bank statements (37-40) for the 920 account, but they are found in Giuseppe’s Westpac 751 account statements: CB768 and 769. Between 13 and 18 April 2018, there are five transfers of $10,000 and a final transfer of $6,000 from that account to Raffaella, each described as “Debt Repayment”. They follow the receipt by Giuseppe of an amount of $120,681.23 on 10 April 2018, which he said came from either his income protection or his superannuation.
Further, on 3 September 2018, there is a further $10,000 transferred from Giuseppe’s Westpac 751 account to the 920 account, also labelled “Debt Repayment”: CB781.
Raffaella claimed that the $66,000 deposited by Giuseppe annotated as “Debt repayment” reflected repayments of debts he owed her, and should not be regarded as contributions to the mortgage repayments. Giuseppe said that he made the payments, from income protection insurance from his superannuation trustee when he could not work at Liquorland, and that he “would commonly describe payments as ‘Debt repayment’ when moving amounts of money around”. He added that a transfer of $10,000 to his young son was described as “debt repayment”. In her reply affidavit Raffaella stood by her earlier account.
Ms Milne, expressly on instructions, proceeded on the basis that of the $56,000 deposited in April 2018, $20,000 represented the repayment of the $20,000 first redraw, and the $35,000 represented the repayment of the personal loan obtained by Raffaella in around 2009 which was paid at the settlement on 1 December 2010: CB2645 to 2646 (3.5.2b and c). That is consistent with Raffaella’s affidavit (30 April 2026, paras 37 and 97).
Of course there is a difficulty with the position advanced by Raffaella and Ms Milne. The “repayment” of $35,000 had occurred when Raffaella’s personal loan was repaid on 1 December 2010 out of the funds distributed on settlement. Thereafter the $35,000 was a small component of the indebtedness incurred to finance (principally) No 35 and the Queensland property. And when nearly 8 years later Giuseppe “repaid” the $35,000, that was by way of contribution into the 920 account.
But it does not matter whether the rationale given by the parties strictly accords with the legal position. It is undoubtedly true that Giuseppe styled six large transfers totalling $56,000 in 2018 as “Debt Repayment” and there is a deal of evidence that debts of $35,000 and $20,000 had been incurred to benefit him around a decade earlier, such that it seems sensible to proceed on the basis that the $35,000 component of the debt rolled over on 1 December 2010 continued to be regarded as being funded by the mortgage payments. That accords with Ms Milne’s more complicated approach.
I find that the parties treated the $35,000 debt rolled over on 1 December 2010, and the $20,000 redraw in 2013, as continuing obligations serviced by the mortgage, which were repaid by Giuseppe in 2018.
The only issue for present purposes is to apportion the mortgage repayments as between trust and non-trust expenses. The consequence of the above is that the proportion of each mortgage payment which is to be attributed as a trust expense is:
December 2010 – August 2013: (470,315 + 35,000) : 165,000 [approximately 75.4%];
August 2013 – October 2014: (470,315 + 35,000 + 20,000) : 165,000 [approximately 76.1%];
October 2014 – May 2015: (470,315 + 35,000 + 20,000 + 14,737) : (165,000 + 50,263) [approximately 71.5%];
May 2015 – April 2018: (470,315 + 35,000 + 20,000 + 14,737 + 33,250) : (165,000 + 50,263 + 26,750) [approximately 70.3%];
April 2018 – August 2023: (470,315 + 14,737 + 33,250): (165,000 + 50,263 + 26,750) [approximately 68.2%];
September 2023 – September 2026: (470,315 + 14,737 + 33,250) : (50,263 + 26,750) [approximately 87.1%];
Corresponding calculations produce the amounts of mortgage repayments which are attributable to Raffaella’s personal debt (being the Queensland property, and parts of the $65,000 and $60,000 redraws). I do not have an electronic spreadsheet, but it will not be difficult for the parties to determine this number (it is around 30% of the repayments from December 2010 until mid-September 2023 plus 13% of the repayments from mid-September 2023 to date which is roughly (0.3 x $536,000) + (0.13 x $98,000) = $173,000). The 0.3 is approximately the weighted average of the proportion attributable to the Queensland property in (1)-(5) of the preceding paragraph, while the 0.13 comes from (6).
In addition, there were payments made from the 920 account for council rates and maintenance of the Queensland property. These are collected on the last 13 lines of p 242 of Raffaella’s spreadsheet and the first 52 lines (ie the top two thirds) of the following p 246: CB2357 and 2361. The typeface is very difficult to read, but the amounts appear to exceed $20,000. I think they are the same as the $21,032 under the heading “Mackay – expenses” calculated by Ms Milne at CB2664 and 2867, but if I am wrong about that, the orders I propose will permit that error to be corrected.
It seems to be fair to treat the withdrawals for paying outgoings for Raffaella’s Queensland property in the same way as the proportion of mortgage payments which serviced that property. Before obtaining an indemnity from money paid to meet trustee expenses, Raffaella must first account for the money paid from the 920 account which was used solely to meet expenses on the non-trust property. Otherwise there would be the certainty of double counting. This departs from how, as I understand it, Raffaella has treated these amounts in paragraph 83(o) of her affidavit of 30 April 2026.
I am conscious that all manner of withdrawals for personal expenses appear to have been made from the 920 account, some for the benefit of Raffaella, others for the benefit of other members of the family. However, both experts have drawn a clear line concerning the Queensland property which is now accepted to have been Raffaella’s both legally and beneficially. It seems to me to be appropriate to deal with payments made from the 920 account which are connected with the Queensland property, whether they be payments of expenses or payments to service the loan, in the same way. Raffaella was a trustee who operated a mixed account to service a loan which had been used to acquire trust and non-trust property. She must, before being permitted to proceed on her indemnity as trustee, ensure that she has accounted for all of the payments from her mixed account which are attributable to her personal property.
In other words, some $173,000 + $21,000 = $194,000 of the mortgage repayments and payments of rates and maintenance fees from the 920 account were to the personal benefit of Raffaella, principally in servicing the component of the mortgage debt attributable to the Queensland property. The main question in this phase of the litigation is whether Raffaella has established she has deposited more than $194,000 into the 920 account to meet trust expenses; to the extent she has, she is entitled to an indemnity.
I shall return to the $66,000 deposited by Giuseppe, which is capable of bearing not merely upon the proportion of mortgage repayments which are attributable to trust property, but also to the quantum of trust payments made by Raffaella.

First, there are some 46 deposits of $200 from Raffaella between 1 October 2018 and 12 August 2019. They were made electronically. Each was described as “Direct Credit 301500 DMS TRANSFER Board”. Raffaella gave uncontroversial evidence that in addition to the 13 bank accounts she operated over this period, “I also had an account with ‘My Budget*’*, which is a budgeting service with whom my client number was 3001500”: CB14. The deposits were made weekly. I find that they were made pursuant to an arrangement established by Raffaella or perhaps her employer, and that Raffaella caused the descriptor “Board” to be applied to them.
Raffaella*’*s expert Mr Garufi had initially characterised these regular weekly payments styled “Board” to be what they purported to be. However, Raffaella said she had had “no involvement in this categorisation” and she maintained that they were all payments from her “MyBudget account”: CB26. She said “I have called them ‘Board’ because I was topping up the money going in for rent and board in order to ensure that the mortgage payments and outgoings were paid”: CB27(g). The mortgage payments at this stage were about $700 per week (there were monthly repayments adding to around $2,800 on the fixed and variable interest loans). Raffaella disagreed in cross-examination that there were ample funds to meet the mortgage payments. When she was taken to a summary of the 920 account for this period, which showed a balance in excess of $10,000 for the entirety of the first half of the period, and a balance mostly in excess of $5,000 for the second half of the period, which slipped below $2,000 on one occasion at the end of the period, she acknowledged that her “suggestion that the account needed topping up during this period makes very little sense”: T23.12.
Raffaella accepted that in 2018 she separated from her husband. This was related to a dispute concerning whether she had been subjected to domestic violence at his hands. An apprehended violence order had been obtained although Raffaella maintained that Giuseppe had wrongly exaggerated the position leading to Mark serving time in prison (“the matter escalated unnecessarily”): T24. The final apprehended violence order identified No 35 as Raffaella’s place of residence and was made in June 2018. Exhibit 1 from the first trial (p 107) records mentions of an apprehended violence order sought by the police on 30 May and 6 June 2018, that there were mentions for a sentence in the Local Court on 14 August 2018, that there were mentions described as “Breach of bond” in September and November 2018, and further mentions for sentence in November 2018 and January and February 2019.
Raffaella’s evidence that the payments were not rent, but were required to top-up the account to “ensure that mortgage payments and outgoings were paid” is implausible. The payments appear to have been automatic. If so, then once set up, there was no occasion for her to consider whether an amount was needed to “top up” the 920 account. The balance of the 920 account demonstrates that except for one occasion at the end of the period, the making of the $200 deposit was unneeded in order for mortgage payments and outgoings to be made. What is more, it is the work of a moment to falsify her affidavit evidence, which went to the trouble of rejecting her own accountant’s characterisation, and which asserted that the payments were made to top up the account. There is a myriad of financial records in this litigation, but the 920 account over the past years is absolutely central. The various account statements were exhibited to her earlier affidavits, and a spreadsheet containing the transactions was prominent in her 30 April 2026 affidavit in which she gave the explanation above. It was to say the least reckless to assert that the amounts were deposited to ensure there were sufficient funds to make mortgage repayments and outgoings, and not for the purpose recorded in the transactions themselves, namely “Board”.
I find that these are not payments for which Raffaella is entitled to an indemnity.

Raffaella gave evidence that she and her husband ran a business called “KeepSafe Security Solutions”. She said that customers often paid in cash, upon receipt of an invoice. She said that on the day of installation of the equipment (which seem mostly to have been security doors and flyscreens) payment would occur (“normally always occurred on the day of the invoice because we would print it out, go to the customer’s house and then pay it on the spot on the day of installation”): T39.35. Raffaella identified cash deposits into the 920 account shortly after KeepSafe rendered invoices, and she said that Mark would give her cash paid to him by the customer, some of which she would use to make deposits to the 920 account.
Raffaella gave 6 examples where cash deposits into the 920 account occurred shortly after KeepSafe issuing invoices when responding to the affidavits made by her parents:
KeepSafe invoice dated 2 August 2011 for $6,050, and a deposit on 4 August of $1,500;
KeepSafe invoice dated 6 February 2012 for $6,714, and two deposits on 10 February totalling $930;
KeepSafe invoice dated 16 April 2013 for $3,950, and a deposit on 19 April of $1,000;
KeepSafe invoice dated 12 May 2013 for $13,243.40, and a deposit on 16 May of $2,320;
KeepSafe invoice dated 28 May 2013 for $3,942, and a deposit on 30 May of $650;
KeepSafe invoice dated 21 July 2013 for $7,260, and two deposits on 25 July totalling $1,500 (there is an error in paragraph 16(f) of Raffaella’s affidavit dated 24 August 2026): CB72.
There is a problem with the last example, because there were two deposits made on 25 July 2013, in the amounts of $800 and $700, both at Blacktown Westpoint, and Raffaella in paragraph 17(c) of her affidavit conceded that the $700 was deposited by Claudia, while at paragraph 16(f) of the same affidavit she maintained that the $1,500 was made by her from the $7,260 received 4 days earlier. Both statements cannot be true. This is another example of Raffaella’s lack of care in claiming amounts paid as trustee.
On the other hand, Claudia maintained that she had made all those deposits, and explained by reference to withdrawals from her own account how that had occurred: CB1327. In relation to the 6 deposits mentioned above, she explained that:
On 4 August 2011, she withdrew $1,700 from her 674 account and deposited $1,500 to the 920 account, on both occasions at Blacktown Westpoint;
On 10 February 2012, she withdrew $1,000 from her 674 account and deposited $930 to the 920 account, on both occasions at Blacktown Westpoint;
On 19 April 2013, she withdrew $1,000 from her 674 account and deposited $1,000 to the 920 account, on both occasions at Rouse Hill;
On 16 May 2013, she withdrew $1,100 from her 674 account and deposited $2,320, on both occasions at Blacktown Westpoint;
On 30 May 2013, she withdrew $1,000 from her 674 account and deposited $650 to the 920 account, on both occasions at Blacktown Westpoint;
On 25 July 2013, she withdrew $2,000 from her 674 account at Woodcroft and deposited $1,500 to the 920 account (by two deposits of $700 and $800) at Blacktown Westpoint.
Claudia’s table was more exhaustive than the 6 instances identified above. In addition to the deposits that the respondents conceded, it included withdrawals from the 674 account and deposits to the 920 account on:
4 August 2011 (she withdrew $1,700 and deposited $1,500, both at Blacktown Westpoint),
6 September 2012 ($1,000 and $900, both at Rouse Hill),
21 March 2013 ($1,000 and $800, both at Blacktown Westpoint),
12 December 2013 ($1,000 and $900, both at Blacktown Westpoint),
24 December 2013 ($500 and $500, both at Blacktown Westpoint),
9 January 2014 ($1,600 and $1,200, both at Blacktown Westpoint),
24 January 2014 ($1,000 and $900, both at Blacktown Westpoint),
7 March 2014 ($700 and $650, both at Blacktown Westpoint),
19 March 2014 ($500 and $500, both at Blacktown Westpoint),
30 May 2014 ($800 and $800, both at Blacktown Westpoint),
11 June 2014 ($500 and $400, both at Rouse Hill),
12 June 2014 ($600 and $500, both at Blacktown Westpoint),
27 June 2014 ($1,200 and $1,100, both at Blacktown Westpoint),
24 July 2014 ($2,800 and $2,650, both at Blacktown Westpoint),
19 September 2014 ($800 and $800, both at Rouse Hill), and
9 January 2015 ($400 and $200, both at Rouse Hill).
Some of these payments were identified in [102(8) and (9)] and [103] of the earlier judgment.
Both Raffaella and Claudia were cross-examined about these deposits. Claudia readily acknowledged that she had no clear memory of them. Raffaella seemed to say that she specifically recalled making each cash deposit, saying “Yes, I was either there or I was there and gave Claudia the money to deposit”: T35.
I reject Raffaella’s account. The case against it is overwhelming.
First, aside from the invoices, Raffaella offers no supporting documentation. In cross-examination she volunteered that her husband as sole trader declared all the income; if so, then there should be contemporaneous documents supporting the propositions that cash was received in time for it to be used to make the payments, but no such documents were tendered. It is not uncommon for people who make payments of thousands of dollars in cash to insist upon a receipt, but no receipts were provided.
Secondly, Raffaella’s husband (who gave evidence at the earlier hearing) could have corroborated her account. But he was not called and there was no explanation for his absence.
Thirdly, in contrast with the lack of supporting documentation to Raffaella’s contentions, Claudia’s 674 account indicates the provenance of the withdrawals. The $1,700 withdrawn on 4 August 2011 followed a deposit of slightly more than $1,800 on 2 August 2011 of social security: PCB846. The $1,000 withdrawn on 6 September 2012 coincided with slightly more than $1,100 in social security deposited on the same day: PCB850. The $350 withdrawn on 4 January 2013 coincided with slightly more than $900 of social security deposited on the same day (this withdrawal, exceptionally, is much less than the deposit but the account also shows purchases of approximately $255 at K-Mart Stanhope Gardens on that day). The $1,000 withdrawn on 21 March 2013 coincides with a deposit of slightly more than $1,100 of social security on the same day: PCB853. And so on. In short there is no need to speculate about the source of the funds claimed by Claudia. She was paid social security, she withdrew most of it in cash on the same day or very soon afterwards, and then made deposits in cash almost invariably at the same location as the withdrawal. The pattern of behaviour is inherently plausible. It is true that there was no need, on Claudia’s version of events, for cash to be withdrawn from one Commonwealth Bank account in her name, and deposited into the 920 account, but it was accepted that Claudia was not especially sophisticated with financial transactions.
Fourthly and most importantly, if Raffaella’s account were to be accepted, then she deposited cash amounts on the 21 occasions summarised above in a way uncorroborated by anything at all in the case of 15 of those occasions, and corroborated only by reference to the six KeepSafe invoices in much larger amounts a few days earlier, and her version left entirely unexplained the facts that Claudia had withdrawn amounts in ca**sh from her own 674 account almost invariably at the same location and save for one case in the same or slightly larger amounts on the very same day. This, with all respect to those involved in propounding Raffaella’s case, is fanciful. Any finding as to who deposited the funds has to address not merely the uncontroversial facts established by banking records of the deposits into the 920 account, but also the uncontroversial facts established by banking records of Claudia’s withdrawals on approximately the same day in approximately the same amount. Hence what was said in Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34] and Davey v Want [2026] NSWCA 12 at [15] applies, including to the effect that:

Giuseppe gave a similar account to Claudia. He identified 15 cash deposits in the period from July 2011 to December 2022, and correlated them with withdrawals at the same location (Blacktown Westpoint, Rouse Hill, Stanhope Gardens and Plumpton) in the same or a similar amount (save for an outlier on 16 December 2022).
At the earlier hearing, Giuseppe produced only a small number of pages from his 751 Westpac account. At the 2026 hearing he tendered the entirety of the statements of that account. They show income from a job held at Liquorland, as well as some social security and income protection payments.
The dates, withdrawals from the 751 Westpac account, deposits into the 920 account, and locations identified by Giuseppe are as follows:
8 July 2011 ($700 and $900, both at Blacktown Westpoint);
22 July 2011 ($300 and $900, both at Blacktown Westpoint);
19 December 2014 ($800 and $800, both at Rouse Hill);
10 February 2015 ($1,000 and $1,000, both at Blacktown Westpoint);
11 February 2015 ($1,000 and $1,000, both at Blacktown Westpoint);
16 May 2016 ($300 and $300, both at Rouse Hill);
19 May 2016 ($220 and $200, both at Rouse Hill);
20 June 2016 ($150 and $400, both at Blacktown Westpoint);
19 July 2016 ($1,450 and $1,400, both at Blacktown Westpoint);
12 October 2017 ($900 withdrawn at Woodcroft and $850 deposited at Stanhope Gardens);
18 October 2017 ($2,000 and $2,000, both at Plumpton);
19 December 2017 ($300 and $300, both at Stanhope Gardens);
3 January 2018 ($300 and $300, both at Stanhope Gardens);
18 January 2018 ($300 and $300, both at Stanhope Gardens);
16 December 2022 ($1,000 withdrawn at Rouse Hill, $3,650 deposited at Stanhope Gardens).
The transactions on 16 December 2022, where the deposit is unusually large, much larger than the withdrawal on the same day, and at different locations, do not fit the pattern. The rest substantially reflect the same pattern as may be seen in Claudia’s withdrawals and deposits.
Further, if one turns to Giuseppe’s 751 Westpac account, there is a connection between some of the withdrawals and funds coming into that account. For example, the two withdrawals of $1,000 on 10 and 11 February 2015 follow a deposit of $2,250 on 9 February 2015 which has an entry “Deposit Narelle Smalley car for Italy”: CB645.
Raffaella claimed all of these cash deposits. I shall put to one side for a moment the deposit of $3,650 on 16 December 2022, which does not fit the pattern. I place little weight on the fact that for some of the smaller deposits, the withdrawal was less than the deposit. I am comfortably satisfied that all represent deposits made by Giuseppe, and not by Raffaella. The same reasoning given above applies. In particular, if in fact Raffaella made each and every one of these deposits, not only is there a striking coincidence that she happened to be in the same location as Giuseppe was on the same day when he was withdrawing cash, but also there is a complete failure on Raffaella’s part to explain why Giuseppe was making the withdrawals.
The written submissions supplied at the conclusion of the hearing on behalf of Raffaella contended for the opposite finding. It was said that Raffaella “explained why she made cash deposits and where the funds came from”. That is so, but for the reasons set out above, I do no accept her testimonial evidence. It was said that Raffaella “made appropriate concessions and did not take an absolute position like Claudia and Giuseppe”. Claudia accepted she could not remember individual cash deposits made more than a decade ago; Raffaella and Giuseppe did not. It was also said that Giuseppe’s income was modest, and went into the 571 account, so there was no need to deposit cash into the 920 account, and that Claudia’s denial that Raffaella gave her cash was improbable. Those submissions do not undercut the reasoning set out above, which focusses not upon the cash asserted to have been received by Raffaella from her husband’s business, for which there is scant corroboration, and depends upon the incontrovertible facts that on dozens of occasions there is a correlation between a withdrawal of Claudia’s or Giuseppe’s money from their bank accounts and a deposit on the same day at the same location to the 920 account.
I should add for completeness that part of the reasoning process is in effect coincidence reasoning to which in certain circumstances the use-prohibition in s 95 of the Evidence Act 1995 (NSW) applies. No objection was taken to that course, which was apparent from my earlier judgment (especially [102(9)] where I wrote there was “a very close correlation between withdrawals from Claudia’s account shortly after social security payments are made, and the cash deposits in Raffaella’s [920] account”). Further, this mode of reasoning is not some post-trial insight reached by me on examining the documents. To the contrary, it was at the heart of what had been put forward in Giuseppe’s and Claudia’s affidavits served slightly more than a month before the hearing, to which Raffaella responded substantively in her affidavits in reply. I think the service of the affidavits, in the context of this case where extensive forensic efforts had been undertaken on both sides to address the identity of the depositor, amounted in substance to compliance with the obligation to give notice in s 98(1) of the Evidence Act*.* (Indeed, the service of an affidavit is a better form of notice than the notice that is commonly given in a criminal trial based on statements from witnesses.) I am of the view that the tables exhibited to Giuseppe’s and Claudia’s affidavits which became CB pp 1325 and 1327 have immense probative value in relation to the issue of identifying the maker of the particular cash deposits to the 920 account on the days in those tables. That is because (a) the fact of the withdrawals in the amounts and at the places stated is incontestable, and (b) their number and correlation with deposits at the same place and in approximately the same amount is well nigh impossible to explain save that the same person was involved in each transaction. Accordingly, s 95 does not stand in the way of the use I have made of the improbability that each of Giuseppe and Claudia made numerous withdrawals on the same day at the same location of the same or similar amounts to the deposits almost all of which Raffaella contends were made by her.
I further add that if I were wrong about that, then the absence of objection in litigation where both sides were represented by solicitor and counsel would mean that s 98 was inapplicable. I am bound by the appellate authority to the effect that “not admissible” means “not admissible over objection”: see Hilton v Legal Profession Admission Board [2017] NSWCA 232 at [54]-[55]; Council of the Law Society of New South Wales v XX [2025] NSWCA 4 at [18] and see also the decisions collected in Habambo v R [2023] NSWCCA 328 at [204].

A relatively small category of disputed deposits comprises a series of deposits, all made in cash at Olympic Park, into the 920 account. The majority are $320, but three are smaller ($160, $200 and $240) and some are larger ($390, $400 and so on). Some are annotated “debs rent” or “deb” or “DEBSRENT” and where her name appears, it is common ground that they should be treated as deposits by Raffaella’s sister Deborah. However, Raffaella claims all the payments which lack any annotation. She said that she worked at Olympic Park as a “Channel Development Manager”, and “frequently” made deposits there between 2012 and 2014. There are 16 disputed deposits totalling just under $5,000.
The undisputed deposits (with “Deb” or variants of her name in the deposit’s description) are dated throughout the period (for example, on 23 August 2012, 5 October 2012, 13 December 2013, 18 March 2014, 1 April 2014, 23 April 2014, 24 June 2014, 23 July 2014, 14 August 2014, 14 September 2014, 8 October 2014 and 12 December 2014). There are intervening unattributed deposits on 10 and 12 September 2012 before the “debsrent” deposit on 5 October 2012 of $390. There follows an intervening unattributed deposit on 8 November of $380 before a deposit on 13 December 2012 labelled “deb” in the amount of $400.
I do not accept that Raffaella has established that she made the unattributed deposits.
First, it is inherently more probable that, say, the 8 November 2013 unattributed deposit of $380 was made by Deborah who had a “debsrent” deposit on 5 October and a “deb” deposit on 13 December in similar amounts.
Secondly, there are occasions in the stream of deposits where patterns can be seen. Take for example statement 20 which covers May and June 2013: CB284 and 285. There are deposits by electronic transfer on 23 May ($300 raffy) 31 May ($300 Raffy) 13 June ($300 raffy) 28 June ($300 Raffy) and 12 July ($300 raffy). And then there are unattributed deposits of $320 at Olympic Park on 14 June and 12 July. The fact that Raffaella was making multiple deposits of $300 by electronic transfer throughout this period tends to suggest that the different deposits, in cash and both at Olympic Park in the slightly different amounts of $320 were made by someone other than Raffaella. When to that it is added that Deborah was working at Olympic Park, and concededly made deposits mostly in the amount of $320, the inference that the unattributed deposits of $320 were also made by her is all the stronger.
Thirdly Raffaella has a demonstrated capacity to over-reach in claiming deposits, as is amply illustrated by her claims for the amounts deposited by Claudia and Giuseppe addressed above.
The onus rests on Raffaella. I find that she has not discharged it. Raffaella is not entitled to be indemnified for unattributed cash deposits at Olympic Park between 2012 and 2014.

Raffaella also advanced a general claim based on any payment into the 920 account based on her funds. She said in paragraph 83(e) of her affidavit, that none of her parents or siblings had transferred funds into other of her accounts, and that therefore it was her money (or her husbands) which was deposited into the 920 account.
I do not accept this claim. One difficulty with it is that many deposits by Raffaella were not to meet trust liabilities. This is obvious on the face of the financial records. For example, there were numerous deposits connected with paying for broadband. Another is that Raffaella transferred $500 and $102 from her 5258 account to the 920 account on 23 and 25 February 2016, as may be seen on statement 32 at CB336 and in the printout at CB1469. The transfers were described as “Dress dry cleaning” and “raffy pants”. So far as I can see, Raffaella did not claim to be reimbursed as a trustee for either of those deposits. But those payments indicate that in addition to making payments into the 920 account to pay for trust expenses properly incurred, Raffaella was also making deposits to pay for non-trust expenses. In light of the over-reach on dozens of deposits which I have addressed at length above, and the fact that Raffaella bears the onus, I am not prepared to treat any deposit by Raffaella as appropriately characterised as paying a trust expense without something more than the fact of the deposit, even in light of Raffaella’s affidavit.
The $66,000 of “debt repayments” made by Giuseppe in 2018 fall into a different category. For the reasons already given, I have found that, as to $55,000, they are the repayment by Giuseppe to Raffaella of money lent by him to her. To that extent, they affect the proportion of mortgage repayments attributable to trust as opposed to non-trust property, and Raffaella has thereby obtained a benefit. But it would be wrong to regard the repayment of additional debt incurred by Raffaella as a payment by her of trust expenses. Another way of making this point is that Raffaella lent her father $35,000, which was rolled over in the settlement of No 35 on 1 December 2010, and was ultimately repaid in 2018. Today, in 2026, when the account is being determined, Raffaella is not out of pocket for the $35,000 debt. In fact, at all times, the money lent to her father was borrowed by Raffaella. It would be to give Raffaella a windfall to treat Giuseppe’s deposit of $35,000 in 2018 as a contribution by Raffaella to trust expenses. The $20,000 is in the same position.
That leaves the $11,000 of the deposits made by Giuseppe in 2018 unaccounted for. This should bear the same character as the other amounts deposited by Giuseppe which were also given the same description by him. I am unaware of any other indebtedness as trustee which Raffaella incurred for that $11,000. I therefore shall proceed on the basis that there was a personal debt owed by Giuseppe to his daughter. On that basis, I would give credit to Raffaella for that amount.
Ms Milne’s updated “Resulting Position” in section 3.4 of her report filed 27 August 2026 identifies $302,289 of funds flowing into the 920 account: CB3216. She includes the amounts of $108,173 which should be treated as $93,560 as explained above. She includes the compensation from the accountant in the amount of $12,750. She includes “Transfers/Cash in” from Raffaella and Mark of $206 and “Transfers in from M & R Samawi accounts” of $119,028; I did not understand these transfers to be disputed. However, Ms Milne also includes $55,647 as “Board Paid – M & R Samawi”. Finally she includes interest of $8, an opening balance of $2,224 and the $60,000 drawdown, but these do not represent payments of trust expenses by Raffaella.
Returning to the $55,647 of Board, these represent contributions by Raffaella which Ms Milne has not regarded as trust expenses but rather the payment of rent or board. The amount is broken down at as $16,000 in FY11, $13,050 in FY12, $7,800 in FY19, $1,400 in FY20, $4,397 in FY22 and $13,000.10 in FY23: CB3225. For the reasons given above, the first two components ($16,000 plus $13,050) are the deposits of $1,000 between December 2010 – December 2011 and should not be characterised as rent but rather are trust expenses. The deposits in the financial years ended 30 June 2019 and 2020 should be treated as rent in accordance with their contemporaneous characterisation.
In the financial year ended 30 June 2023, Raffaella made electronic transfers into the 920 account which were characterised in different ways. Some were styled “mortgage” or “topup” (for example $777 on 15 July 2022 “Raffy Mortgage”): CB430. Others, when Raffaella made deposits of $1,000 on Thursday 14 July and $870 on Tuesday 19 July, were styled as “raffy mortgage top”. Others had the appearance of trust property expenses (such as $207 on 19 July “raffy insurance” and $340 on 21 July “raffy electricity”). But still others are described as “rent”. For example, statement 59 of the 920 account commencing 14 August 2022 contains deposits of $777 on 17 August styled “Raffy Mortgage”, $2,223 on 22 August styled “Raffy rent”: CB433. It is surely no accident that the two add to $3,000, or that they preceded the mortgage repayment required on 22 August 2022 which left the amount in credit at $8.62. Yet Raffaella labelled the deposits adding to $3,000 made on 17 and 22 August to identify herself but so that one was “Mortgage” and the other “rent”. There is no good reason not to respect those contemporaneous descriptions. Further, if it were contended that the deposits described as “rent” should be treated as discharging trust expenses, I would reject them for the same reason that I rejected Raffaella’s evidence that the deposits which were styled “board” should be regarded as mortgage repayments.
Raffaella claims the benefit of $40,000 paid by Fabiola, which was mentioned in [39] of the earlier judgment. What precisely occurred more than 15 years ago is far from clear, save that it involved Fabiola. I am not satisfied that it should be regarded as a contribution by Raffaella in respect of which she is entitled to indemnity from property held on trust by her for Giuseppe.

No 35 was sold in July 2026 at a price of $1.64 million. Giuseppe makes a claim against Raffaella for $310,000. The claim is straightforward. He says that after the first judgment, there were proposals to sell the property, that an agent had been agreed, that the estimated price was between $1.95 and $2.05 million, but that Raffaella delayed without good reason. An offer from Giuseppe’s solicitors that the same proceed, with $280,000 being made available for him to pay legal fees, was not responded to for four months. He says that the sale ultimately proceeded on precisely that basis, but that because it took place in mid 2026, the sale price fell, in line with a general decline in price corresponding with interest rate rises and alterations in the Federal Budget to capital gains tax.
Raffaella accepted in cross-examination that Sydney house prices had fallen since late 2025. I think I could take judicial notice of that general fact in any event. But that falls short of establishing a fall of around 15% in the price of a family home in Stanhope Gardens between late 2025 and mid 2026.
Raffaella maintained in cross-examination on this issue that there had been numerous offers between the parties. Her recollection may be correct, but a call was made for the correspondence, and there was no production nor any attempt to adduce evidence of oral, open, communications between the parties. I shall proceed on the basis that there was no response to Giuseppe’s solicitor’s offer of 20 October 2025 for a period of 4 months.
Raffaella opposes the claim that she must bring to account the diminution in the sale price. First she says that it was not pleaded, and that it was only formally indicated at the commencement of the hearing. She is correct to say that it was not pleaded, because the entirety of the proceeding before me has been conducted on the basis of summons and affidavits, in circumstances described in [21] of the first judgment. Normally claims of breach of trust are required to be pleaded (cf UCPR r 6.3(e)) but the rule is not inflexible and the principal issue in the first hearing was whether No 35 was held on constructive trust, and that was heard and determined without pleadings.
Next, I do not accept Raffaella’s implicit submission that she has been denied procedural fairness because this claim emerged only at the commencement of the hearing. Paragraphs 83-95 of Giuseppe’s affidavit filed on 31 July 2026 identified the claim, setting out the background summarised above, annexing documents, and concluding “I ended up having to sell the Property for $1,640,000 which I believe lost $300,000 or more in the sale from Raffaella not agreeing to sell when we proposed”: CB63. Thus Raffaella could have been under no doubt that Giuseppe was seeking, more than a month prior to the second hearing, to make a claim against her for $300,000. By her affidavit in reply, she addressed the circumstances of the delay in the sale at paragraphs 67-77. There was cross-examination of both Raffaella and Giuseppe on this issue, and a call for production of correspondence which was answered. In short, the issue was fully litigated. I fail to see how there was a denial of procedural fairness in its being adjudicated with the multitude of other issues raised by the parties, and I note that although paragraph 60 of Raffaella’s written submissions assert a denial of procedural fairness, that was not mentioned in oral submissions (which addressed this issue at T22-24 of the second day).
Accordingly, I turn to the merits of this aspect of the cross-summons. By September 2025, it was clear that No 35 needed to be sold. Both sides had incurred substantial legal expenses, Raffaella was unwilling to make mortgage repayments without being put in funds, and so far as appears from the evidence, Giuseppe and Claudia were unable to do so.
In those circumstances, Giuseppe’s solicitors presented a formal offer as to the sale which would give the beneficiary access to $280,000 with the balance being kept in trust to abide the outcome of the litigation. That offer was more than reasonable. The amounts to which Raffaella are entitled are nothing like the equity in the property less $280,000. I do not regard it as a reasonable excuse for a trustee to say that she could not part with any of the proceeds of sale until her expert had calculated the amount of indemnity to which she was entitled, because it might exceed the equity in the property. The exercise was complicated, but that is a consequence of the trustee’s failure to maintain clear records of trust expenses. But in any event, it must have been plain from an early stage that (a) the total amount of mortgage repayments was some $634,000, (b) of those only some 75% could represent trust expenses, and (c) a great deal of funds had been paid into the account by others and had been treated as rent. In short it is very difficult to see how there could be a reasonable basis for contending that all, or nearly all, of the “equity” in No 35 of around $1.3 million would be needed to meet an indemnity.
I am also conscious that the delay in selling No 35 caused harm to Raffaella. As she said, her own credit rating would be affected by possession proceedings being commenced against her. I would readily accept that she well knew that would be the case. But even bearing that in mind, I would still conclude that the principal reason that No 35 was not sold earlier than it was was Raffaella’s failure to respond to the reasonable offer put forward by Giuseppe on 20 October 2025.
It was squarely put to Raffaella that she was trying to “starve [her] parents of funds to fight [her] trustee and indemnity claim whilst you delayed selling the property”: T44.31. Raffaella disagreed, but I am of the view that that was a primary motive for her delay. Having been found to be a trustee, she formed the view that her position in the litigation would be strengthened by delaying the inevitable sale of No 35 which would put financial pressure on her parents. I am conscious that that carried with it the consequence of an adverse impact upon her credit rating, because she would be recorded as being in breach of her obligations to Macquarie Bank, but I find that with her long experience in banking she was well aware of that and nonetheless proceeded to delay the sale knowing that the likely consequence would be the commencement of enforcement proceedings by the bank.
I am comfortably satisfied that the deliberate failure to engage in the sale process sought by Giuseppe was a breach of trust by Raffaella. She regarded it as a way of placing more pressure on her father. No relief was sought under s 85 of the Trustee Act, but had it been sought I would not have granted it. Raffaella’s failure to sell No 35 was not reasonable, and it was not a breach of trust for which she ought fairly be excused.
However, the burden rests on Giuseppe to establish what the diminution in value caused by the breach of trust was. I do not accept that the agent’s price guide is a sufficient measure to establish a claim in the order of $300,000. The estimate was not put forward as an opinion of value, and it is notorious that an agent’s estimate is often inflated. Although there has been an across-the-board decline in residential real estate prices in the last few months, there is nothing to suggest that the decline has been in the order of 15%.
It would have been straightforward for Giuseppe to serve admissible evidence of the decline in value of No 35 between October 2025 and earlier this year, especially given the efforts that were directed to much smaller disputes in the transactions upon the 920 account. I conclude that this is not a case where the Court should do its best on exiguous evidence to quantify Giuseppe’s claim. This is a case where evidence was readily available, and has not been served.
However, I do find on the basis of the material put forward that the sale should have been achieved at the end of 2025, with settlement no later than 1 February 2026, 7 months earlier than was achieved.
I am unpersuaded that the expenses incurred by Raffaella from February 2026 were properly incurred. It follows that I do not think that Raffaella is entitled to be indemnified by Giuseppe for the payments made to Macquarie Bank from 1 February 2026, or for Macquarie Bank’s costs of enforcement. Raffaella is legally liable as trustee for those costs, but it would be wrong for her to be indemnified from trust property for costs which ought never have been incurred and which would not have been incurred had the property been sold in December 2026.
However, Giuseppe was receiving the benefit of occupation for the period from February 2026, and my present view is that Raffaella is entitled to offset reasonable rent payments for the period. The parties have not been heard on this (relatively minor) aspect of the account, and the orders I proposed will permit that to occur.

In final submissions, I was told that the disputes between the parties were contained on Exhibit 4. There are 26 issues. In fact, the issues between the parties were more numerous than that (for example the spreadsheet does not address Raffaella’s claim for interest or Giuseppe’s claim for $310,000 based on delay). It may be that it is not necessary to resolve all of the issues identified by the experts, and further, by reason of my departing in part from the approach taken by the experts, that will have introduced some additional issues.
Nonetheless, I shall resolve each issue. I deal with the 26 items in substantially the order of Exhibit 4:
$29,050 representing the deposits mostly of $1,000 by Raffaella (3.5.1(c)(ii)). For the reasons given above, Raffaella is entitled to a credit for these deposits.
$14,168.55 “Transfers/Cash in” and $57,914.84 “Other Cash Deposits” representing 145 deposits (see rows 3 and 4 of Annexure B of Exhibit 4). Some of these have been addressed above. Others were addressed in Raffaella’s affidavit, by reference to line items of a spreadsheet which, so far as I can see, is different from the spreadsheets of the 920 account in the court book. I have addressed the points made in Raffaella’s affidavit at paragraph 83(e)-(j), (l)-(q), (s) and (x). In particular, I am unpersuaded that Raffaella can discharge the onus she bears in establishing that any particular deposit to the 920 account represents a trust expense merely by pointing to a deposit made by her. I have not addressed the points in 83(k), (r), (t)-(w) and (y) because, so far as I can see, I cannot do so on the materials before me, and the orders I propose will permit Raffaella to identify the particular transactions if and to the extent she wishes them to be included in her claim.
Bank charges of $357.55. The 920 account was primarily used for non-trust transactions, but I accept that some of the bank charges were incurred by reason of trust transactions, especially when the account was overdrawn. Half of this amount should be allowed. Likewise, the amount of interest of $7.62 may be divided equally between the Raffaella and Giuseppe.
The solar panel loan and its repayment have been addressed above. Raffaella is entitled to be indemnified for the whole of the repayments, and the cost of the solar panels contributes to the trust expenses.
There is an amount of $8,470 representing 12 transfers which is associated with paragraph 3.5.1(d) of Ms Milne’s first report. I think it is likely that I have addressed these above, but I am not sure what they are and the parties are at liberty to direct me to the 12 transactions to which they apply if they are of the view that they have not been addressed.
An amount of $6,675 for accounting has been addressed in connection with Raffaella’s tax refunds.
The amount of $28,040 which is para 3.5.1(a)(i) has been addressed above when dealing with Claudia’s social security payments; Raffaella is not entitled to claim this.
The amount of $8,800.42 which is para 3.5.1(g)(i) has been addressed above when dealing with the cheque deposited on 3 November 2011 at Blacktown.
Raffaella’s tax returns have been addressed above; she is entitled to a credit for their deposit.
Rent payments of $4,997.14 made at Olympic Park have been addressed above; these do not contribute to Raffaella’s claim.
The loan drawdowns of $20,000 and $60,000 have been addressed above, when dealing with the proportion of mortgage repayments to be treated as trust expenses and when dealing with Giuseppe’s repayments in 2018.
There is an amount of $90 by way of board which is in dispute. That should be treated in the same way as other payments described as board, as having the character of rent, rather than as a contribution to trust assets.
The largest amount in the table is $145,947.31 representing 116 transactions (see Annexure B of Exhibit 4) which are amounts of rent deposited under the name “Shantha”. Commencing from (I believe) 19 September 2014, there were deposits of $1,051.60 roughly fortnightly styled “shantha rent” and the name of the street. Consistently with the reasoning above, these should be treated as payments of rent, rather than trust expenses.
Loan fees of $667 should be apportioned in the same way as the mortgage repayments.
Other cash deposits of $10,692.52 have been addressed above (it is the Plumpton cheque deposit).
If the “insurance claim” of $12,750 represents the payment from Raffaella’s accountant, then it should be treated in the same way as the tax refunds of a trust expense.
The $35,000 personal loan repayment, and the deposits of $66,000 by Giuseppe have been addressed above.
Board of $9,200 paid by Raffaella has been addressed above; it is the 2018-2019 board which does not contribute to Raffaella’s claim.
“Mortgage v Board” of $12,645.10 has been addressed above, it represents the payments styled as rent in around 2022.

The trust expenses were principally a proportion of mortgage repayments totalling $634,736 plus $128,537 of property outgoings. In very large measure, these were met by payments of “rent”. There were also around $194,000 of payments which were to service the loan insofar as it had been used to acquire the Queensland property beneficially held by Raffaella, or to pay outgoings on that property.
The amounts which Raffaella should be taken to have contributed to the payment of trust expenses include:
The tax refunds of $93,560 plus the payment of $12,750;
The repayments of Raffaella’s personal loan for solar panels;
The $29,050 of mostly $1,000 deposits from December 2010 until December 2011;
A component of $11,000 from the $66,000 deposited by Giusepppe in 2018.
There may be some other deposits identified. One difficulty is that Raffaella’s claim in paragraphs 83(a)-(y) of her 30 April 2026 affidavit identifies deposits by line number in her spreadsheet (ranging from 941 to 4,228), but the print exhibited to her affidavit lacks line numbers, and I do not have an electronic copy. Where Raffaella can point to a deposit which unambiguously identifies a trust expense (such as a “raffy electricity”) or which on its face corresponds to a trust expense, then she is entitled to an indemnity. That is because it is a reasonable inference that the deposit of a particular amount, corresponding to an imminently due trust expense, was made by Raffaella for that purpose. The orders will permit Raffaella to identify the deposits claimed by her which correspond to trust expenses.
A second category of deposits is different. It appears that from time to time Raffaella transferred money into the 920 account so as to ensure that there were sufficient funds to permit the next mortgage repayment to be made. By way of example, on 16 August 2022, the balance of the 920 account was $195.99. There were then three deposits, on 17 and 22 August 2022, each of which was necessary so as to permit the direct debit for the mortgage repayment on 22 August of $3,487.37 to occur (PCB434). They were deposits of $777 on 17 August (“Raffy Mortgage”), $2,223 on 22 August (“Raffy Rent”) and a $300 deposit at Bateau Bay also on 22 August. Raffaella caused the first and second of those deposits to be made. The contemporaneous description of the second as “Raffy Rent” means that it is not a trustee expense for which Raffaella is to be indemnified. It may well be that Raffaella paid the amount as rent which she claimed her parents were required to pay, but even if that is so, that does not convert it into a trust expense.
The question is how to deal with dozens of transfers made from other accounts operated by Raffaella into the 920 account which indirectly contributed to enabling mortgage repayments to be made. I favour the following approach, but the orders I make will let the parties be heard on it because I have not heard full submissions on the point. (It may be that in the contest over various particular deposits which were addressed extensively in the evidence, submissions and the foregoing reasons, a large category of deposits may not have been given the attention warranted.)
First, there are deposits which on their face are not trust expenses. For example, on 19 March 2015, Raffaella transferred $1,000 into the 920 account annotating it “car registration”. And consistently with the description, on 20 March there is a debit of $544.50 for “NRMA BLA BLACKTOWN AU” and on 26 March a further debit of $294 described as “200 RTA INTERNET /IVR SURRY HILLS AUS”. This on its face represents a deposit to meet an anticipated non-trust expense, for which Raffaella is not entitled to indemnity. “Raffy Rent” mentioned above is another example.
Secondly, and as noted above, there are deposits which on their face reflect trust expenses such as “raffy electricity”. Prima facie Raffaella is, in my view, entitled to an indemnity for these.
Thirdly, there are deposits which are expressly or impliedly tied with mortgage repayments. These fall into a number of categories. There are deposits which are styled “Raffy Mortgage” or the like, which on their face are connected with trust expenses. There are also unlabelled deposits which were made electronically, by Raffaella. Without more, I am disinclined to accept that these should be treated as trust expenses, bearing in mind that the onus lies on her, and there were many, many non-trust expenses sustained by the 920 account. However, there are also some deposits made electronically by Raffaella imminently before a mortgage repayment is to be made from the 920 account. An example is the $380 deposited on 1 July 2016 when the balance was $1,053.33 but a repayment of $1,338.26 was to be made on 4 July. The banking records sustain the conclusion that the motivating purpose in Raffaella making the deposit was so that the mortgage repayment could proceed. Of course, a proportion of the mortgage repayment was to repay her personal indebtedness, but I think Raffaella should, after making allowance for the personal benefit she received over the period (which is approximately the $194,000 estimated above) be entitled to indemnity for such deposits made by her.
Some instances are more complicated still. Take for example PCB277, the transactions in the 920 account after the loan repayment on 19 December 2014, which left a balance of $11.02. There followed a deposit of $1,300 described as “home loan repay” on 24 December, a debit of $1,300 described as “Rent 35 xxxx” on 29 December, a credit unlabelled transfer of $1,300 on 30 December, a further credit whose label includes “shantha rent” of $1,242.80 on 31 December, then deposits of “Serena rent” and “Deb rent” each of $400 before the next loan repayment of $1,325 on 5 January. None of the transactions described as “rent” can be trust expenses. The “home loan repay” might be thought to be a candidate for a trust expense by Raffaella. But it is surely no coincidence that the next transaction is in the same amount. My present view is that (a) it would be wrong to give Raffaella the benefit of two deposits of $1,300 when, days after the first was made, the same amount was withdrawn from the account, but (b) she may fairly be entitled to the benefit of one of those deposits.
The point of the example in the previous paragraph is that I think there are difficulties proceeding on a line by line basis as the parties have, because it would be quite wrong in an exercise which is directed to calculating a total amount of contributions made by Raffaella to meet trust expenses to count for multiple deposits where, shortly after one of the deposits, there has been a matching withdrawal into another of Raffaella’s accounts.
There is a need to finalise the process of determining Raffaella’s indemnity. There is also a need to do so fairly, but in a way which does not needlessly cause expense. I incline to the view that one should apply a rule of thumb that electronic deposits made by Raffaella which are not netted out as in the example from December 2014 above, and which bear a relationship to the mortgage repayments, such that it can be inferred that they were made for the purpose of permitting a mortgage repayment to be made, are amounts which Raffaella can claim. Deposits which are described in terms which make it clear that they are not trust expenses (such as “Dress dry cleaning” or “car registration”) cannot be claimed. Deposits which are not labelled prima facie may not be claimed, but there may be circumstances (such as where they are made in close proximity to a trust expense) which will make it appropriate for Raffaella to claim them. In articulating that rule of thumb, I am conscious that Raffaella bears the onus, that a trustee is ordinarily required to keep trust property separate from personal property and a deal of the complexity is brought about by a sizable minority of the mortgage repayments being required to repay Raffaella’s personal indebtedness.
Because for the reasons given much earlier in this judgment it was always going to be necessary to hear further from the parties, and because the class of electronic deposits made by Raffaella is of considerable value, I shall make orders which will permit, if they wish, the parties to be heard further on that class of deposits. To be clear, they may be heard on the rule of thumb proposed above, and they may also be heard on whether in any particular case the rule of thumb should be departed from.
Raffaella should also obtain the benefit of the reduction in interest brought about by the $300,000 in her and Mark’s offset account (this is around 87% of $17,594) for that amount.
However, Raffaella must deduct from that some $194,000 for expenses in servicing the debt for, and otherwise maintaining, the Queensland property. She must also deduct the trust expenses after 1 February 2026 by reference to the costs incurred for not selling No 35 by 1 February 2026, although Giuseppe must account for an occupation rent for the same period.
In light of the above, the parties will either be able to agree, or else to reduce their disagreement to particular issues.
I add the following because there may be a misconception as to the extent of the subject matter of this hearing. The question is not to determine the level of indebtedness between Raffaella and Giuseppe. The question is narrower. It is, as defined in the amended summons, “the amount owing to the Plaintiff pursuant to her right of recoupment and indemnity from the Trust, plus interest”. It is true that some of the financial accommodation made between Raffaella and Giuseppe is relevant to that exercise. An example is the money lent by Raffaella to her father in around 2009, which was rolled over into an amount representing $35,000 of the indebtedness. Although in form, the $35,000 disbursed on 1 December 2010 discharged Raffaella’s personal loan, I have accepted her evidence that that loan was undertaken to provide money to her father, and that he repaid her. The consequence is that, to that extent, the mortgage repayments while the $35,000 remained unpaid did not reflect a personal benefit to Raffaella. However, this judgment does not determine generally the debt position as between Raffaella and other members of her family.
I have referred above to the dispute concerning the loan to Fabio Ruggero. Another example is that Raffaella seeks to prove that $400 in line 941 of her spreadsheet represented a payment by Fabiola for some gym equipment sold by Raffaella to her (affidavit of 30 April 2026, paragraph 83(d)). A more substantial example is the amounts of $2,233, $3,000 and $1,473 in paragraph 105 of the affidavit. These were described as “Rent Received”. Raffaella says they were for Giuseppe’s and Claudia’s share of the rent for the period, and that her parents have not repaid her those amounts. That may or may not be the case. But if these payments are in the nature of rent, then they are not payments of trust expenses for which Raffaella is entitled to an indemnity. If what Raffaella says be accepted, then her parents may owe her for an amount of rent. I am not determining, and do not need to determine, that question, or others like it. To reiterate, the issue is the extent to which Raffaella as trustee is entitled to be indemnified, and that turns on (a) the personal benefit Raffaella obtained from payments from the 920 account in relation to her Queensland property, (b) the payments made by Raffaella which reflect trust expenses properly incurred by her in excess of the amount in (a), and (c) other adjustments such as the benefit from the offset account.
There are also relatively large amounts spent on other property improvements, including $2,200 in November 2014 and $11,720 in August 2019 from insurance payments (see Raffaella’s 30 April 2026 affidavit). Mr Garufi included a claim based on entries in the 920 account for $1,500 (“Deposit Raffaella”), $5,000 (“Raffaella Pergola”) and $1,900 (“Raffaella Pergola”) as may be seen at PCB393 on Statement 46 of the 920 account (first report, paragraph 9). But there are entries on PCB 392 and 393 in the preceding fortnight of deposits from “INSURANCE AUST L” of $10,400 and $1,320, which accords with paragraph 94 of Raffaella’s affidavit. In short, the insurance pay-outs paid for the pergola. Those amounts are not amounts for which Raffaella is entitled to be indemnified.

Samawi v Faraone (No 2)

At a glance

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Source

Catchwords

Judgment

JUDGMENT

Delay in the second hearing

Overview of the issues for determination

Raffaella’s ownership of No 35

Calculating the payments for trust purposes

Identifying the source of the mortgage repayments

The expert evidence

Determining trust contributions to servicing the loan

The tax refunds

The first redraw of $20,000 in August 2013

The second redraw of $65,000 in October 2014

The third redraw of $60,000 in May 2015

The purchase and sale of the Queensland property

Conclusions on apportionment of mortgage repayments

Other trust expenses

Raffaella’s separate $20,000 loan – solar panels

Other household expenses

To what extent did Raffaella make mortgage repayments?

Regular $200 deposits of “board” 2018-2019 (para 3.5.1(b))

Regular deposits of $1,000 (December 2010 – December 2011) (para 3.5.1(c)(ii))

Regular payments (mostly of $300) Jan 2013 – Jan 2014

Other cash deposits

(a) Deposits claimed to have been made by Claudia

(b) $14,300 cash deposits by Giuseppe

(c) Cash deposits at Olympic Park “Debs rent” (3.5.1(f))

Two cheque deposits

Repayments by Fabio Ruggero

Other deposits claimed by Raffaella

The benefit of the $300,000 offset

The $310,000 diminution in value of No 35

Interest

Miscellaneous issues

Miscellaneous claims

Conclusions

Orders

Amendments

30 September 2026

Parties

Legislation Cited (3)

Cases Cited (21)