Title: Judgment Template
Author: Hayley Leaver
Company: Federal Court of Australia
Document comments: v1.3

Federal Circuit and Family Court of Australia
(DIVISION 1)

Moretto & Cosola (No 2) [2022] FedCFamC1F 924    
File number(s): | PAC 3192 of 2019
Judgment of: | SCHONELL J
Date of judgment: | 25 November 2022
Catchwords: | FAMILY LAW – PROPERTY – Where the applicant contended that it was not just and equitable to make an order for financial adjustment, whilst the responded contended that it was – Where the respondent was not found to be a credible witness – Where there were inconsistencies in the respondent’s evidence – Where the respondent borrowed monies on several occasions for her son without the input of the applicant – Where the evidence demonstrated that the parties kept their financial affairs separate – Where the Court found that it is not just and equitable to make an order for adjustment of property interests – Respondent’s Response dismissed – Where it was found that the respondent holds the recreational vehicle on trust for the applicant – Orders made for the respondent to transfer interest to the applicant’s sole name.
Legislation: | Family Law Act 1975 (Cth) ss 90SF, 90SM

Cases cited:

Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Bosanac v Commissioner of Taxation [2022] HCA 34
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Watson and Ling (2013) FLC 93-527; [2013] FamCA 57

Division: | Division 1 First Instance
Number of paragraphs: | 87
Date of hearing: | 12 – 13 October 2022
Place: | Sydney
Counsel for the Applicant: | Mr Kenny
Solicitor for the Applicant: | York Law Family Law Specialists
Solicitor for the Respondent: | Michael Vassili Barristers & Solicitors

ORDERS
| PAC 3192 of 2019
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR MORETTO
Applicant

AND:

MS COSOLA
Respondent

order made by: | SCHONELL J
DATE OF ORDER: | 25 NOVEMBER 2022

THE COURT ORDERS THAT:

1.	It be declared that the respondent holds Recreational Vehicle 1 on trust for the applicant. 
2.	For the purposes of giving effect to the declaration above, the respondent shall within 14 days do all acts and things and sign all documents presented to her by the applicant to transfer Recreational Vehicle 1 into the applicant’s sole name.
3.	The Amended Response to Application for Final Orders filed 6 December 2019 is dismissed.

Note:	The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Moretto & Cosola has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT
SCHONELL J:
1	Before the Court are proceedings initially commenced by the applicant de facto husband (“the applicant”) arising as a consequence of the breakdown of the parties’ de facto relationship.
2	Whilst it initially was a matter of some controversy, it is ultimately an agreed fact that the parties’ de facto relationship commenced in or about January 2004 and concluded in December 2018. The relationship was thus a little under 15 years.
3	Each of the parties brought to the relationship a property. In the case of the applicant, a property at Suburb D (“the Suburb D property”), and in the case of the respondent de facto wife (“the respondent”), a property at Suburb G (“the Suburb G property”). During the course of the parties’ relationship they resided together in the applicant’s home at Suburb D. There were no children of the relationship. 
4	A significant feature of the relationship was what was contended by the applicant’s counsel to be a separation of the parties’ financial lives.  In that respect, he contended that the parties did not conduct a joint bank account, each of the parties paid for and maintained the outgoings on their respective homes, and that with the exception of the company H Pty Ltd (“H Pty Ltd”) of which the applicant was the sole director but the applicant and respondent were the shareholders, led, it was said, separate financial lives. H Pty Ltd ceased trading prior to separation and the applicant thereafter established a new company of which he is the sole director and shareholder. 
5	The parties are at issue as to what the outcome of the proceedings should be. The applicant contends that each party should retain the property and liabilities in their respective name, save in relation to a recreational vehicle which the applicant contends is registered in the respondent’s name but held on trust for him. In that respect, he seeks a declaration and consequential orders in relation to the recreational vehicle. He says that consistent with the observations of the High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), the Court would determine that it is not just and equitable for there to be an order pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”).
6	The respondent contends that the Court would be satisfied that it is just and equitable to make an order and that the Court should divide the parties’ assets equally.
7	The applicant relied upon the following documents:
(1)	Amended Initiating Application filed 8 April 2020;
(2)	Affidavit of applicant filed 14 June 2022;
(3)	Affidavit of Ms J filed 30 October 2020;
(4)	Affidavit of Mr K filed 26 August 2022;
(5)	Affidavit of Mr L filed 26 August 2022;
(6)	Affidavit of Dr M filed 4 November 2020;
(7)	Financial Statement filed 14 June 2022; and
(8)	Case Outline.
8	The applicant tendered various documents.
9	The applicant was cross-examined. The applicant’s counsel described the cross-examination as superficial. I do not attach such descriptor to the cross-examination but nevertheless note that it was, by any measure, economical. I found the applicant to be overall a truthful witness and his credibility was not impeached other than in relation to a contention as to what funds were held by the parties in a shoebox at or about separation.
10	In that respect, in his affidavit, he said:
117.	…
The above two [vehicles] were sold in about 2018. After paying out the leases, the proceeds received for each car were: [Motor Vehicle 1] $23,000; [Motor Vehicle 2] $26,500. The purchasers of each of the above cars paid the difference between the selling price and the lease in cash to us. I kept the cash in a shoebox in the walk-in robe at home. By separation, [Ms Cosola] and I had used about $14,500 of the cash leaving a balance of about $35,000. At separation, [Ms Cosola] removed the box with the cash and retained that for her benefit. 
11	The respondent denied removing any cash from the shoebox.
12	The evidence in the applicant’s affidavit does not establish how he concluded what had been spent or how much was left. When cross-examined about this, he said “I don’t know how much was missing”. I accept his concession. He has not established what, if any, moneys were removed by the respondent. Otherwise, I accept his evidence as set out in his affidavit and given by him in cross-examination.
13	There was no cross-examination of any of the other witnesses in the applicant’s case. I accept their evidence in so far as it is relevant to the issues I have to determine.
14	The respondent for her part relied upon the following documents:
(1)	Amended Response to Final Orders filed 7 July 2022;
(2)	Affidavit of respondent filed 23 June 2022;
(3)	Affidavit of Ms N filed 30 October 2020;
(4)	Affidavit of Ms P filed 30 October 2020;
(5)	Affidavit of Ms Q filed 30 October 2020;
(6)	Affidavit of Mr R filed 23 August 2022;
(7)	Affidavit of Mr S filed 26 August 2022:
(8)	Financial Statement filed 23 June 2022; and
(9)	Case Outline.
15	She also tendered various documents.
16	The respondent was cross-examined at length by the applicant’s counsel. There are parts of her evidence that I found very unsatisfactory and consequentially unreliable. Her credibility was significantly undermined by her insistent maintenance of factual propositions that were demonstrated to be irreconcilable and inconsistent with objective and credible documentary records. 
17	The respondent was cross-examined about a loan application submitted to the T Bank in or about July 2006 (Exhibit 8). The respondent accepted that her signature was on the loan application. The loan application identified that as at July 2006, there was $34,000 owing to the Commonwealth Bank of Australia (“CBA”) and $66,000 owing to the V Bank. Notwithstanding such contentions in a document to which she had affixed her signature and made a declaration that the information was true and correct, she denied that she had a loan either to the CBA of $34,000 or to the V Bank of $66,000. She said that it was a mistake in the document. 
18	In a non-responsive way, the respondent then said that one or other of the loans was in fact a loan of the applicant. If so, then the mistake she had earlier suggested was not so absolute. The proposition that one of the loans was the applicant’s was never put to the applicant in cross-examination nor appeared in her affidavit. It was not explored in re-examination or explained in submissions why in a loan application in the sole name of the respondent, she would include a liability of the applicant, particularly in circumstances where the loan application made no reference to any of the assets of the applicant. The respondent insisted at some length that she did not have any liabilities to a bank at that time. 
19	Statements for a line of credit from the V Bank in the respondent’s name dating back to 11 January 2006 became Exhibit 11 in the proceedings. These statements disclosed that as at 11 January 2006, there was an outstanding debt of approximately $80,000 and as at 9 June 2006, there was an outstanding debt of approximately $67,000.
20	I do not accept the respondent’s evidence that she did not have a liability to various banking institutions as at June 2006. I reject her evidence that the loan application was in error in asserting that she had liabilities to financial institutions. Her responses to these propositions were not persuasive and diminished her credibility. 
21	The evidence given by the applicant in relation to the loan application to the T Bank was also unsatisfactory. The loan application made reference to the respondent’s income being $5,146 gross per month. Forming part of the documents provided to the T Bank was the respondent’s tax return for the year ended 30 June 2006 (Exhibit 9), which identified a taxable income of $62,156. Part of Exhibit 9 was a pay advice for the respondent for the period 1 July 2006 to 31 July 2006 disclosing an annual salary of $61,750. The respondent was the bookkeeper for the company and her affidavit records her doing the bookkeeping and administrative work for the company.
22	The applicant tendered the respondent’s income tax return (Exhibit 10) and Notice of Assessment (Exhibit 14) for the year ended 30 June 2006, which disclosed a taxable income of $14,532. The inference sought to be drawn by the applicant was that the respondent misled the T Bank in relation to her income for the purposes of obtaining a loan in circumstances where her income was in reality less than $15,000 gross per annum despite the representation of a greater amount. The respondent contends that the loan application document was prepared by her accountant and disavowed any responsibility for it. I do not accept the evidence of the respondent that the responsibility for the loan application which she declared was true and correct falls to others. Such assertion by her diminished her credibility.
23	Much of her affidavit, until the concession was made at the commencement of the trial, sought to suggest that the parties’ de facto relationship commenced earlier than 2004. This is inconsistent with the position that she now adopts at trial.  The respondent contended that she had only borrowed approximately $253,000 from banks to lend to her son Mr S. The actual amount borrowed was vastly in excess of that. The applicant contended that it was in excess of $600,000, while the respondent’s son Mr S contended that he thought it was in the order of $560,000.  By any measure, the amount contended by the respondent was significantly different to the amount actually borrowed.
24	The consequence of the cross-examination is to shine an intense light on and call into question overall the reliability of the respondent’s evidence. The cumulative effect of the above examples lead to the conclusion that I find the respondent to be an unreliable witness. Her evidence in a number of places has been found wanting. Where the evidence of the respondent conflicts with that of the applicant, I prefer the applicant’s evidence.
25	I found the respondent’s sister Ms N and her daughters Ms Q and Ms P to be truthful witnesses. Their cross-examination was cursory and little was achieved in relation to impeachment of the evidence that they gave. The respondent’s son Mr S was also cross-examined. I found him to be a truthful witness. The applicant’s counsel contended that I should find otherwise in relation to his evidence.  I do not accept the submissions advanced in any way by the applicant’s counsel that he was an unsatisfactory witness. In my view, he gave his evidence truthfully and directly. He had no specific recollection of any particular events and was at pains to make it clear that the loans that he received from his mother, which were secured over her Suburb G property, were a private matter between him and his mother and did not involve the applicant in any way. I accept his evidence where he said that he had made some payments when he could to his mother by way of rent and/or board, and that on occasions he was in arrears in relation to the payments under the various loans.
Background 
26	The applicant was born in 1960 and is currently aged 62 years. The respondent was born in 1959 and is currently aged 63 years. 
27	The parties commenced cohabitation in January 2004 and separated on a final basis in December 2018. The respondent contends that the parties became engaged in mid-2002, which the applicant denies. In any case, the parties never married. 
28	There are no children of the relationship. The applicant has two children from a previous relationship and the respondent has four children from a previous relationship. 
29	In or around June 2001, the applicant established a sole trader business by the name of U Company. The applicant contends that the respondent started doing the invoices and banking for the business. He says that given his illiteracy, he gave her access to the bank account. Shortly prior to commencing cohabitation, in December 2003, the parties established the company H Pty Ltd. 
30	The applicant contends that since commencing cohabitation, the respondent managed the paperwork and financial aspects of the business. He denies that the respondent attended building sites or liaised with customers. The applicant contends that he is unaware of whether the respondent was paid a wage or what income she declared and/or paid herself. 
31	At the commencement of cohabitation, the applicant owned the Suburb D property, superannuation entitlements, a truck, household contents and 50 per cent shareholdings in H Pty Ltd The applicant contends that he had a loan of $600,000 owing to his parents and a loan of $50,000 for his truck. 
32	For her part, at the commencement of cohabitation, the respondent owned the Suburb G property, some superannuation entitlements, a car, savings, household contents and 50 per cent shareholdings in H Pty Ltd.   
33	Since commencing cohabitation and until separation, the parties lived in the Suburb D property. The respondent’s four children also moved into the Suburb D property for various periods. The applicant contends that he did not receive rent from the respondent’s children when they were living in the Suburb D property. The applicant contends that after early 2007, his children seldom came to his house and only stayed overnight on limited occasions, which amounted to no more than a handful of times per year. I accept his evidence.
34	In or around March 2004, the respondent’s Suburb G property was rented out and the rent was paid directly into her account. The parties are at issue as to when the respondent’s son Mr S moved into the Suburb G property. The applicant contends that the respondent’s son paid no rent, whilst the respondent contends that he paid $150 per week in board payments which decreased to $100 per week and that at times she would accept renovations done to the property in lieu of payment. 
35	Between 2006 and 2019, on multiple occasions, the respondent drew down on the mortgage to loan monies to her son Mr S. The respondent contends that her son would pay her moneys which she would then use to pay off the mortgage. She contends that there is currently no mortgage outstanding to the T Bank.
36	The applicant contends that in or about 2013, he started to draw against his superannuation to supplement his income. 
37	In or about 2014, a recreational watercraft was purchased in the respondent’s name. Subsequent to separation, the respondent sold it to her daughter.
38	The parties are at issue as to the date on which each of the two recreational vehicles were purchased. Nothing turns on the date. The applicant says that the first recreational vehicle was registered in his name and that he paid for it using his superannuation. He says that the recreational vehicle was written off following an accident and that he subsequently received an insurance payout for it. The applicant says that the second recreational vehicle was purchased using the funds from the insurance payout and from further drawing on his superannuation. He says that the respondent told him to put the recreational vehicle in her name which he did. He says that she holds it on trust for him. The respondent denies that this is the case. 
39	The applicant contends that in around 2017, he ceased using his sole trader business. After separation in December 2018, H Pty Ltd ceased trading. The applicant subsequently established a new company by the name of W Pty Ltd. 
40	During the relationship, renovations were undertaken to the Suburb D property. The parties are at issue about what renovations were carried out. The respondent says that she assisted with the renovations in various ways such as through cleaning bricks and passing bricks to the bricklayer, which the applicant denies. Similarly, renovations were undertaken at the Suburb G property. The parties are also at issue as to what the renovations were and what each party’s contribution was.
APPLICABLE LAW
41	In Stanford, the High Court said:
35.	It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order. 
36.	The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured. 
37.	First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. …
38.	Secondly, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. … 
…
40.	Thirdly, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. 
41.	… If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot (s 71A) make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage. 
42.	In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). 
(Emphasis in original)
(Footnotes omitted)
42	Consequently, the starting point in any financial case is to identify the legal and equitable title to the parties’ assets and make a finding as to whether it is just and equitable to make an order within the terms of s 90SM(3) of the Act before determining what the final order should be. It is not axiomatic, if it ever were, that the breakdown of a relationship (or marriage) automatically leads to an alteration of existing legal and equitable interests (Watson and Ling (2013) FLC 93-527 at [14]).
43	The High Court recognises that in the majority of cases the just and equitable requirement will be readily met. However, as identified by the Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”), “there will be a range of cases … where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation” (at [85]) (emphasis in original).   
44	Section 90SM(3) of the Act prescribes a condition of the exercise of the property adjustment power by the Court is that an order is only to be made if it is just and equitable to do so.  Section 90SM(4) sets out the matters to be taken into account in considering what, if any, order ought to be made for property alteration. The High Court, however, makes clear that s 90SM(3) and s 90SM(4) should not be conflated.  
45	Consequentially, there may be factors other than those identified in s 90SM that mean that it would not be just and equitable to make an order but equally a consideration of the s 90SM factors may lead to the same conclusion. As the plurality make plain in Stanford, “a court must have a principled reason for interfering with the existing legal and equitable interests of the parties” (at [41]). 
46	I will first determine what the legal and equitable interests of the parties are. I will then consider whether it is just and equitable to make an order. Part of that process will involve a consideration of the s 90SM(4) factors. If I determine that it is not just and equitable, then I would dismiss the applications. If I determine that it is, then I will go onto consider the matters under s 90SM(4) and s 90SF(3) and make such orders as I consider just and equitable.
THE LEGAL AND EQUITABLE INTERESTS OF THE PARTIES 
47	The parties prepared a Balance Sheet, which became Exhibit 19 in the proceedings. That Balance Sheet is reproduced below:
ASSETS

No

Ownership

Description

Applicant De Facto
Husband’s Value

Respondent De Facto Wife’s Value

| | Real Estate | |
1 | A | F Street, Suburb D | $3,400,000.00 | $3,400,000.00
2 | R | X Street, Suburb G | $900,000.00 | $900,000.00
| | Bank Accounts | |
3 | A | CBA Pensioner Security Account #...74 @ 10.10.22 | EXCLUDE | EXCLUDE
4 | A | CBA Account #...61 @ 10.10.22 | EXCLUDE | EXCLUDE
5 | R | CBA Smart Access Account ending #...90 | EXCLUDE | EXCLUDE
6 | R | CBA Goal Saver Account ending #...55 | EXCLUDE | EXCLUDE
| | Companies, Partnerships & Trusts | |
7 | A | W Pty Ltd | NIL | NIL
8 | A | Mr Moretto T/as U Company | NIL | NIL
9 | R | H Pty Ltd | NIL | NIL
| | Investments/Shares | |
10 | R | Z Company shares (685 @ $... @ 10.10.2022) | $2,993.00 | $2,993.00
11 | A | AA Company shares (1,400 @ $... @ 10.10.2022) | 10,360.00 | $10,360.00
| | Motor Vehicles, Boats Etc. | |
12 | R | Motor Vehicle 3 | $15,000.00 | $15,000.00
13 | R ITF A | Recreational Vehicle 1 - unregistered (registered in the name of the de facto wife on trust for the de facto husband) | $50,000.00 | $50,000.00
14 | A | Motor Vehicle 4 - unregistered | $3,250.00 | $3,250.00
15 | A | Motor Vehicle 5 - unregistered (20 years old plus) | $750.00 | $750.00
16 | A | Motor Vehicle 6 | $10,000.00 | $10,000.00
17 | A | Motor Vehicle 7 | $15,000.00 | $15,000.00
18 | A | Motor Vehicle 8 | NIL | NIL
| | Household Effects, Artwork & Jewellery | |
19 | A | Household contents (Est) | EXCLUDE | EXCLUDE
20 | R | Household contents (Est) | EXCLUDE | EXCLUDE
21 | R | Jewellery (Est) | $20,000.00 | $5,000.00
22 | A | 2 Watches | EXCLUDE | EXCLUDE
| | Miscellaneous | |
| TOTAL | | $4,427,353.00 | $4,412,353.00
ADDBACKS
No | Ownership | Description | Applicant’s Value | Respondent’s Value
23 | A | Withdrawals from Superannuation Fund 1 | NIL | NIL
24 | R | Sale of recreational watercraft to Respondent's daughter | $10,000.00 | $10,000.00
25 | R | Cash taken by Respondent from home at separation | $35,0000.00 | NIL
| TOTAL | | $45,000.00 | $10,000.00
LIABILITIES
No | Ownership | Description | Applicant’s Value | Respondent’s Value
| | Mortgages | |
28 | A | F Street, Suburb D - Loan owing to Aplicant's parents [Caveat registered for debt due to the Husband's parents] | $600,000.00 | $600,000.00
| | Credit Card | |
29 | A | CBA credit card #...49 (Bal 10.10.22 $3,569.15) | EXCLUDE | EXCLUDE
30 | R | CBA credit card #...45 | EXCLUDE | EXCLUDE
31 | R | CBA credit card #...87 | EXCLUDE | EXCLUDE
| | Other Liabilities | |
31A | A | Mr L | $47,000.00 | $47,000.00
31B | A | Mr K | $65,500.00 | $65,500.00
31C | R | Mr R | $87,450.00 | $87,450.00
| TOTAL | | $799,950.00 | $799,950.00
SUPERANNUATION
No | Ownership | Description | Applicant’s Value | Respondent’s Value
32 | A | Superannuation Fund 1 - Fully Retired Income Stream (member …67) - as at 10.10.2022 | $5,012.00 | $5,012.00
33 | A | Superannuation Fund 1 - (as at 10.10.2022) (current balance $61,678; additional sum of $142,405 agreed “addback” referable to legal costs paid from super withdrawals) | $204,083.00 | $204,083.00
34 | R | Superannuation Fund 2 (member …41) | $29,698.00 | $29,698.00
| TOTAL | | $238,793.00 | $238,793.00
FINANCIAL RESOURCES
No | Ownership | Description | Applicant’s Value | Respondent’s Value
37 | | | |
38 | | | |
| TOTAL | | $0.00 | $0.00
GROSS ASSETS | $4,427,353.00 | $4,412,353.00
LESS LIABILITIES | $799,950.00 | $799,950.00
NET ASSETS | $3,627,403.00 | $3,612,403.00
ADDBACKS | $45,000.00 | $10,000.00
NET ASSETS & ADDBACKS | $3,672,403.00 | $3,622,403.00
ADD SUPERANNUATION | $238,793.00 | $238,793.00
NET TOTAL ASSETS (INCLUDING SUPERANNUATION) | $3,911,196.00 | $3,861,196.00
48	The parties’ legal and equitable interests are set above. It is apparent that the parties were at issue in relation to three matters only, namely a reference at Item 13 to a recreational vehicle said to be held on trust by the respondent for the applicant, Item 21 being the value of jewellery, and Item 25 being monies said to have been taken from the home at separation by the respondent.
49	In relation to Item 13, the applicant said the following in his affidavit: 
133. 	In or about 2015 [Ms Cosola] and I purchased our first [recreational vehicle]. We bought it from Melbourne for about $30,000. The [recreational vehicle] was registered in my name. On the way up from Melbourne to Sydney the [recreational vehicle] was involved in an accident and was written off. I paid for the [recreational vehicle] by drawing against my own superannuation. The insurance company paid the insurance payout and the payout was deposited into my bank account (not super).
134. 	Approximately two years later we decided to purchase another [recreational vehicle]. We purchased this second [recreational vehicle] for $65,000. The purchase price was funded by the balance of the insurance payout from the first [recreational vehicle] (noting that some of the proceeds were spent) and a further draw down on my superannuation. Notwithstanding I was not at fault in the accident when the first [recreational vehicle] was written off, [Ms Cosola] said to me at the time words to the effect “If you put the [recreational vehicle] this time in your name because of the last accident the insurance premium will be much higher. Why don’t you register the [recreational vehicle] in my name?” I agreed. Accordingly, we registered the second [recreational vehicle] in her name however I paid for it. I contend that she has at all times held the [recreational vehicle] in trust for me.
135. 	The [recreational vehicle] insurance and registration came up for renewal in December 2018 however this was not attended to, and the [recreational vehicle] remains at my home unregistered and uninsured. In about early 2020 I requested [Ms Cosola] provide me with the registration and insurance papers for the [recreational vehicle]. She provided the registration papers and otherwise indicated that she does not have or is not able to obtain the paperwork in relation to the insurance. The [recreational vehicle] remains uninsured and unregistered.
136. 	In relation to the [recreational vehicle], I contend that she holds the [recreational vehicle] in trust for me and I seek that the court make a declaration to that effect. 
50	He was not cross-examined on these assertions.
51	The respondent in her affidavit chose to respond to paragraphs of the applicant’s affidavit. In particular, she said:
80. 	In or around April 2018, [Ms Moretto] and I purchased [Recreational Vehicle 1] for $85,500, not including extras, funded as follows:
a. 	The deposit of $8,550 paid from [H Pty Ltd];
b. 	The insurance payment of not more than $56,000; and
c. 	The balance of funds from a source that I now do not recall.
The [recreational vehicle] was registered in my sole name. I say that the [recreational vehicle] is presently worth between $65,000 and $70,000. It is presently in [Mr Moretto]’s possession. I deny that I hold the [recreational vehicle] on trust for [Mr Moretto] however, I am content for the Court to order the transfer of the recreational vehicle] into [Mr Moretto]’s sole name.  
52	Notwithstanding what was said in her affidavit, in her Case Outline she sought a declaration as to ownership. 
53	In Bosanac v Commissioner of Taxation [2022] HCA 34, Kiefel CJ and Gleeson J observed: 
12.	A trust of a legal estate in property taken in the name of another is taken to “result” to the person who advances the purchase money. The categories of resulting trust include trusts arising from A’s payment for the conveyance of rights to B; the voluntary transfer of rights inter vivos from A to B; and the transfer of rights on a failed declared trust. The term “resulting trust” states a legal response to proved facts. The presumption of a resulting trust developed by analogy from the rule of the common law that where a feoffment, or conveyance, is made without consideration, the feoffment results to the feoffer. It arose from the common practice of the 15th to 17th centuries of those having fee simple estates in land to put them in use (the precursor to the trust) for themselves. Because words of trust were not included on the face of the conveyance and because the transfers were gratuitous, the court supplied a presumption of a declaration to uses. There were various advantages to the practice, including avoiding the hardship of feudal times, and avoiding escheat and forfeiture to the Crown in time of war, such as the Wars of the Roses.
13.	The presumption can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land (or other property) held on trust for him or her. The presumption cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence, and where more than one person pays the purchase price, as here, regard is necessarily had to evidence of each of their intentions.
…
32.	The question of intention is entirely one of fact, and concerns the intention manifested by the person or persons who contributed funds towards the purchase of the property. In Martin v Martin, it was observed that for the most part it can be assumed that proof of intention will be made out by the circumstances. Reference was made to what had been said by Cussen J in Davies v The National Trustees Executors and Agency Co of Australasia Ltd:
“It is impossible to try to arrange into certain sets of categories certain facts, and say beforehand they will or will not become decisive or immaterial. The attention must be kept steadily fixed on the one fact in issue – What was at the time the intention of the purchaser or transferor? Anything which is relevant to that issue is admissible.”
(Footnotes omitted)  
54	The evidence reveals that the first recreational vehicle was purchased by the applicant from funds provided by him and purchased in his name. It was damaged and the applicant received the proceeds of the insurance. The funds were banked to his account. The second recreational vehicle was again purchased using funds provided by the applicant. I prefer his evidence to that of the respondent. His evidence was specific and not challenged. The respondent did not know where the balance of the funds came from. There is no reason not to accept the evidence of the applicant in circumstances of the respondent not knowing. The recreational vehicle was registered in the respondent’s name in specific circumstances that were not the subject of challenge by the respondent. I am satisfied that it was not the intention of the applicant that the respondent be the owner of the recreational vehicle or have a beneficial interest in it. It was merely registered in her name for insurance purposes.
55	The recreational vehicle was not removed by the respondent on separation but left at the applicant’s home. This is inconsistent with how she treated her other movable property such as her personal property and the recreational watercraft. I find that the presumption has not been rebutted. I find that the respondent holds the recreational vehicle on trust for the applicant.
56	In relation to Item 21, there is no evidence to support a finding that the respondent’s jewellery has a value of $20,000. I accept the respondent’s admission against interest that it has a value of $5,000. Likewise, in relation to Item 25, there is no evidence that would support a finding that the respondent took $35,000 from the home at the time of separation. Her evidence is that it was at best $3,000 and it was not taken from the proceeds of sale of the motor vehicles.
57	Accordingly, the legal and equitable interests of the parties are identified as follows:
ASSETS
No | Ownership | Description | Value
| | Real Estate |
1 | A | F Street, Suburb D | $3,400,000.00
2 | R | X Street, Suburb G | $900,000.00
| | Bank Accounts |
3 | A | CBA Pensioner Security Account #...74 @ 10.10.22 | EXCLUDE
4 | A | CBA Account #...61 @ 10.10.22 | EXCLUDE
5 | R | CBA Smart Access Account ending #...90 | EXCLUDE
6 | R | CBA Goal Saver Account ending #...55 | EXCLUDE
| | Companies, Partnerships & Trusts |
7 | A | W Pty Ltd | NIL
8 | A | Mr Moretto T/as U Company | NIL
9 | R | H Pty Ltd | NIL
| | Investments/Shares |
10 | R | Z Company shares (685 @ $... @ 10.10.2022) | $2,993.00
11 | A | AA Company Shares (1,400 @ $... @ 10.10.2022) | $10,360.00
| | Motor Vehicles, Boats Etc. |
12 | R | Motor Vehicle 3 | $15,000.00
13 | A | Recreational Vehicle 1 - unregistered (registered in the name of the de facto wife on trust for the de facto husband) | $50,000.00
14 | A | Motor Vehicle 4 - unregistered | $3,250.00
15 | A | Motor Vehicle 5 - unregistered (20 years old plus) | $750.00
16 | A | Motor Vehicle 6 | $10,000.00
17 | A | Motor Vehicle 7 | $15,000.00
18 | A | Motor Vehicle 8 | NIL
| | Household Effects, Artwork & Jewellery |
19 | A | Household contents (Est) | EXCLUDE
20 | R | Household contents (Est) | EXCLUDE
21 | R | Jewellery (Est) | $5,000.00
22 | A | 2 Watches | EXCLUDE
| | Miscellaneous |
| TOTAL | | $4,412,353.00
ADDBACKS
No | Ownership | Description | Value
23 | A | Withdrawals from Superannuation Fund 1 | NIL
24 | R | Sale of recreational watercraft to Respondent's daughter | $10,000.00
25 | R | Cash taken by Respondent from home at separation | NIL
| TOTAL | | $10,000.00
LIABILITIES
No | Ownership | Description | Value
| | Mortgages |
28 | A | F Street, Suburb D - Loan owing to Aplicant's parents [Caveat registered for debt due to the Husband's parents] | $600,000.00
| | Credit Card |
29 | A | CBA credit card #...49 (Bal 10.10.22 $3,569.15) | EXCLUDE
30 | R | CBA credit card #...45 | EXCLUDE
31 | R | CBA credit card #...87 | EXCLUDE
| | Other Liabilities |
31A | A | Mr L | $47,000.00
31B | A | Mr K | $65,500.00
31C | R | Mr R | $87,450.00
| TOTAL | | $799,950.00
SUPERANNUATION
No | Ownership | Description | Value
32 | A | Superannuation Fund 1 - Fully Retired Income Stream (member …67) - as at 10.10.2022 | $5,012.00
33 | A | Superannuation Fund 1 - (as at 10.10.2022) (current balance $61,678; additional sum of $142,405 agreed “addback” referable to legal costs paid from super withdrawals) | $204,083.00
34 | R | Superannuation Fund 2 (member …41) | $29,698.00
| TOTAL | | $238,793.00
FINANCIAL RESOURCES
No | Ownership | Description | Value
37 | | |
38 | | |
| TOTAL | |
GROSS ASSETS | $4,412,353.00
LESS LIABILITIES | $799,950.00
NET ASSETS | $3,612,403.00
ADDBACKS | $10,000.00
NET ASSETS & ADDBACKS | $3,622,403.00
ADD SUPERANNUATION | $238,793.00
NET TOTAL ASSETS (INCLUDING SUPERANNUATION) | $3,861,196.00
IS IT JUST AND EQUITABLE TO MAKE AN ORDER?
58	The applicant in essence contends, taking up the language of their Honours in the High Court, that the stated and unstated arrangements during the relationship, including but not limited to the separation of their financial affairs, were such as to lead to the conclusion that it is not just and equitable to make an order for property adjustment.
59	It appears the parties commenced a relationship in around 1996 or 1997. The date is irrelevant. The respondent contends that the parties became engaged in mid-2002. The applicant denies that the parties were engaged but admits that he purchased a number of pieces of jewellery for the respondent. Not every factual matter in dispute requires a finding. The evidence is clear that the parties did not marry nor is there any evidence of a plan to marry. It is not necessary to make any finding. 
60	As stated earlier, at the commencement of cohabitation in 2004, each of the parties owned a home. The applicant owned the Suburb D property, whilst the respondent owned the Suburb G property. Upon the commencement of cohabitation, the respondent came to live in the applicant’s home at Suburb D.
61	At no stage during the course of the relationship was there acquisition of any joint real estate.  Some renovations were conducted to each party’s home. However, there is no evidence that such renovations were undertaken as a consequence of a joint decision by each of the parties to otherwise improve the particular property for their joint mutual benefit or to confer some equitable interest on the other. In that respect, the respondent contends that she met the cost of any renovations to her property. The applicant does not contend that he spent money on the renovations to the respondent’s Suburb G property. Each of the parties undertook some work on the other’s property.  
62	The respondent contends that the work that she undertook on the applicant’s Suburb D property was more significant than as contended for by him. In circumstances where I have determined that the respondent’s reliability is an issue, I prefer the applicant’s evidence compared to hers. I accept his evidence that whatever work the respondent did on the Suburb D property was relatively modest.
63	An issue arose in the proceedings as to the value of the renovations that were conducted to the Suburb D property. The consequence was that the proceedings could not complete and the parties instructed the jointly appointed single expert to undertake a valuation directed to determining the additional value attributed to the Suburb D property by the renovations that were conducted to the property. The parties subsequently jointly tendered the report from the valuer and indicated that they did not want to make any further submissions. The report of the valuer became Exhibit 21. The valuer recorded in his report “it is difficult to see any discernible added value to the home” but later on concluded that the value added was $20,000. Irrespective of that value, I am not satisfied, in view of my findings as to the works undertaken on the property and by whom, that the value could in any way be attributed solely to the contributions or effort of the respondent. 
64	During the course of the relationship, the respondent borrowed money secured against her Suburb G property on numerous occasions for the benefit of her son Mr S. The applicant denies knowing the extent of the borrowings by the respondent. The cross-examination of both the respondent and the respondent’s son Mr S revealed that these were transactions that were entered into between them as a private matter between mother and son. They were not transactions, as far as the respondent and her son were concerned, that involved the applicant in any way. If it were only one transaction, then the failure to consult or discuss with the applicant may be explainable. The evidence reveals, however, at least 19 separate loans over a period between 2006 and 2018. The sheer number of them in my view reveals a pattern of dealing with the respondent’s property to the conscious and considered exclusion of the applicant. I am satisfied having seen the cross-examination of the respondent that the dealing by her with the Suburb G property in this manner was very much consistent with her view that it was her property to deal with as she saw fit and not a matter about which she needed to even consult with, or seek the agreement or approval of the applicant. 
65	The respondent does not adduce any evidence of having consulted with the applicant prior to borrowing funds. The loans are in her sole name. She gives no evidence of having sought his view in relation to the dealings with her own property as part of their wider financial life together. Likewise, there is no evidence that the applicant sought the respondent’s view in dealing with his property as he saw fit. I am satisfied that the parties’ dealings with their real estate is entirely consistent with the view that they regarded their property as entirely theirs to deal with as they saw fit and without the necessity or need to consult the other. The clear unstated assumption of the parties was that they could deal with their property to the exclusion of the other.
66	The applicant gives evidence that in 2003, H Pty Ltd was established. The applicant was the sole director and both parties were equal shareholders. The applicant states that the company was established because at that time he was working for Y Company, who required a company to undertake the work and not a sole trader business. The applicant gives evidence that he used both the company and his sole trader business to run his business until approximately 2017 when he ceased operating his sole trader business. This history was not the subject of any challenge by the respondent. I accept his evidence.
67	The respondent said that she attended at the applicant’s work at least once every two or three months to assist the applicant. This was denied by the applicant. I accept the applicant’s denial.
68	The company conducted a bank account and the respondent worked in the business undertaking bookkeeping and administrative roles. The respondent’s evidence about receiving a wage is contradictory. She contended that she was not paid a wage. However, her tax return (Exhibit 6) discloses her receiving an income from the company in one year. She also said in her affidavit that any wages she did receive were used to pay household expenses. In evidence are two tax returns for two years which show that she received a payment from the company of which one is a dividend. In light of the contradictions in her evidence, I am not able to find that she received a wage in other years. 
69	The company acquired a number of motor vehicles including Motor Vehicle 2 and Motor Vehicle 1. The respondent had use of Motor Vehicle 1.  The vehicles were sold in 2018.
70	In late 2018, the applicant says that the only equipment the company owned were some tools and some materials, none of which he contended had any value. The applicant was not challenged on this assertion. Both parties made assertions as to the value of the equipment. They are made in circumstances were they each do not have the requisite qualifications or experience to express such an opinion. No value is attributed in the Schedule of Assets to the company. I am unable to find that the equipment had any value.
71	It is common ground that the parties did not have a joint bank account. During the course of the relationship, the respondent purchased a recreational watercraft. She retained it at the date of separation and sold it to her daughter and retained the proceeds. A motor vehicle was purchased and given to the applicant which he has retained. A recreational vehicle was purchased using the funds of the applicant.  It was written off following an accident, and a subsequent recreational vehicle was purchased and registered in the name of the respondent. I have addressed earlier in these reasons the ownership of the recreational vehicle.
72	During the course of the relationship, each of the parties made a contribution to the other by way of a homemaker.  In that respect, the applicant contends that the parties shared the cooking and domestic chores. I accept his evidence. I accept the evidence of the respondent that she took the applicant to various medical appointments and hospitals, and cared for him after an operation.
73	Each of the parties’ children stayed in the applicant’s home at Suburb D for short periods of time. Each made some modest contribution to the care of the other party’s children.
74	There is no evidence of the respondent paying directly for the outgoings on the Suburb D property or the cost of renovations to the Suburb D property.  All of these costs were met from the income generated by H Pty Ltd. The respondent contends that her wages were part of the overall income that was used to meet various expenses. For the reasons given earlier, I am unable to find that she received wages from the company for years other than those for which there is evidence. 
75	Likewise, in relation to the Suburb G property, there is no evidence that the applicant made any financial contribution to the outgoings of that property, to the cost of renovations, or to the expenses in relation to the management or upkeep of the property. The respondent was free to do with her Suburb G property what she liked. For a long time, the property was occupied by her son who paid rent. When he could not afford to pay rent, the evidence is that he effected repairs and renovations to the Suburb G property. 
76	There is no evidence that the parties had a discussion about how they would manage their financial affairs.  
77	Each party retained a responsibility for their own debts. The applicant did not call upon the respondent to meet his debt obligations nor did the respondent call upon the applicant to meet hers.
78	There is no evidence of the parties making any future plans for their life together. There is no evidence that the parties executed mutual wills, named the other as beneficiaries on their superannuation policies, or took out life insurances naming the other as a beneficiary. There is a lack of evidence as to how the parties would share their assets or superannuation upon retirement and a lack of evidence as to any future plans that they might have had they not separated.
79	The applicant contends that he had a lack of knowledge in relation to how the respondent dealt with her assets. I accept his evidence.  He did not know how much had been borrowed by her or how much she had lent to her son. The respondent conceded that he would not have known how much she borrowed.
80	There is no evidence that either party has made any post separation contribution to the other.
81	The applicant is aged 62 and has an income of $695 gross per week. Part of that includes a payment from his superannuation. He has some health issues. The respondent is 63 and earns $603 gross per week. She also has some health issues. I note both parties submitted within the context of the cases that they presented that there should be no adjustment under s 90SF(3).
82	Each party owns a home. At the commencement of cohabitation, the applicant’s home was worth $1,050,000 as determined by a single expert. It was subject to a debt to his parents. His home is valued for the purposes of the hearing at $3,400,000. It is subject to the same liability. 
83	At the commencement of cohabitation, the respondent’s home was worth $335,000 as determined by a single expert. Her home is valued for the purposes of the hearing at $900,000. It is unencumbered. 
84	I accept each party has a liability for legal fees.
CONCLUSION
85	I am satisfied that the unstated assumptions underpinning the parties' relationships were that during the relationship they were each free to deal with their assets as they chose to do so. They gave effect to that assumption during the relationship. The parties did not intermingle their financial affairs and did not conduct a joint personal bank account. They held and dealt with their real property, being their single biggest asset, free of consultation or consideration of what the other party may have thought was appropriate to do. The respondent had the benefit of occupation of the applicant’s home rent free whilst making her home available for use to her son. Her children lived in the applicant’s home for periods of time.
86	There is no presumption that following the breakdown of a relationship lasting 15 years that an order should be made adjusting the parties’ legal and equitable interests in their property. There must be a principled basis for doing so, arising out of how the parties conducted their relationship. I am not satisfied that one has been established. I am not satisfied that it is just and equitable to make an order.  
87	I otherwise will make the declaration sought by the applicant and dismiss the Amended Response.

I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell.

Associate:

Dated:	25 November 2022

Moretto & Cosola (No 2) [2022] FedCFamC1F 924