Federal Court of Australia Watton v Whitton (Trustee), in the matter of Watton [2021] FCA 832 File number(s): NSD 1718 of 2017 Judgment of: FARRELL J Date of judgment: 22 July 2021 Catchwords: BANKRUPTCY AND INSOLVENCY – application for enforcement of claimed contract said to be partly written and partly oral between applicant and former bankrupt in relation to division of marital assets upon claimed irretrievable breakdown of their marriage in September 2006 – application dismissed EQUITY – part performance – whether applicant's actions are unequivocally referable to agreement of the nature alleged – where no agreement of the nature alleged found – relief denied Legislation: Bankruptcy Act 1966 (Cth) ss 30, 120, 121 Family Law Act 1975 (Cth) ss 90C, 90DA, 90G Cases cited: Chen v Chen [2016] FamCA 758 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 In Marriage of Woodcock (1997) 137 FLR 14 Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164 Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 Official Trustee in Bankruptcy v Lopatinsky [2003] FCAFC 109; (2003) 129 FCR 234 Pipikos v Trayans [2018] HCA 39; (2018) 265 CLR 522 Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 114 Date of last submissions: 13 December 2019 Dates of hearing: 22-23 October, 4 December 2019 Counsel for the Applicant: Mr S Lipp Solicitor for the Applicant: Madison Marcus Counsel for the Respondent: Dr S Hartford Davis Solicitor for the Respondent: Piper Alderman ORDERS NSD 1718 of 2017 IN THE MATTER OF THE BANKRUPT ESTATE OF STEVEN LEONARD WATTON BETWEEN: CHARLENE WATTON Applicant AND: ROBERT WHITTON (IN HIS CAPACITY AS THE TRUSTEE IN BANKRUPTCY OF THE BANKRUPT ESTATE OF STEVEN LEONARD WATTON) Respondent order made by: FARRELL J DATE OF ORDER: 22 July 2021 THE COURT ORDERS THAT: 1. By 4 pm on Friday, 30 July 2021, the parties provide to Justice Farrell's Associate draft orders consistent with these reasons and as to costs. 2. If either party considers that the costs order should not be that the applicant pay the respondent's costs as agreed or taxed, that party should provide brief written submissions with the draft orders provided in accordance with Order 1. Responsive submissions may be provided by 4 pm on Friday, 6 August 2021. 3. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FARRELL J: Introduction 1 This application concerns the beneficial ownership of a property located at 14 Mailey Circuit, Rouse Hill in the State of New South Wales (Rouse Hill property or Property). The Property was acquired by Steven Leonard Watton in 1998. He lived in a house on the Property and operated a scaffolding business from it through a company, Combined Scaffolds Pty Ltd, of which he was the sole shareholder and director when he met the applicant, Charlene Lorinda Watton, in 2000. They commenced living together in 2001 and she started working in Combined Scaffolds' business in 2002. 2 I will refer to the Wattons as Steven and Charlene for clarity and mean them no disrespect. 3 Steven and Charlene married on 24 September 2005. Charlene says that their marriage broke down irretrievably in September 2006 and Steven moved out of the Rouse Hill property although they continued to work together and conduct business from those premises. Steven resumed residence at the Property in July 2016 after Charlene ceased to reside there. Divorce proceedings were commenced in 2018, after these proceedings had been initiated, and their divorce was made final on 25 November 2018. 4 The Rouse Hill property was one of two properties registered in Steven's name on 12 November 2007, when a sequestration order was made by a Registrar of the Federal Magistrates Court of Australia (as it was then known) and the respondent was appointed as trustee of Steven's bankrupt estate. The other property is known as 1 Menin Road, Oakville in the State of New South Wales (Oakville property). It was vacant land most probably acquired by Steven in October 2005. It was used to store scaffolding and other equipment associated with Combined Scaffold's business. 5 Both properties were subject to substantial mortgages from the time Steven acquired them. 6 Charlene seeks declarations and orders under s 30 of the Bankruptcy Act 1966 (Cth) that she is the beneficial owner of the Rouse Hill property and claims specific performance of what she claims is an agreement which she reached in September 2006 with Steven (claimed contract). She says the claimed contract is partly oral (conversations which she had with Steven around September 2006 which are not further particularised) and partly written, being an undated document signed by both Steven and Charlene which on its face purports to be a "financial agreement" under s 90C of the Family Law Act 1975 (Cth) (Purported BFA). 7 The claimed contract is that Steven and Charlene would divide their marital property as follows: (a) Steven would do all things necessary to transfer the Rouse Hill property to Charlene and she would be responsible for repayment of the loan secured over that property; and (b) The Oakville property would remain with Steven and he would be responsible for repaying the loan associated with that property. 8 Steven was automatically discharged from bankruptcy on 4 December 2010, but the trustee remains trustee of his bankrupt estate. 9 The trustee says that the claimed contract is not enforceable on a number of bases and cross-claims that the claimed contract is void as against him as trustee under ss 120 or 121 of the Bankruptcy Act. He seeks orders with respect to vacant possession and sale of the Rouse Hill property which has been registered in his name since August 2015. The trustee also claims that the Purported BFA is void because of the failure to comply with the requirements of ss 90DA and 90G of the Family Law Act. 10 Charlene did not press a pleaded constructive trust claim arising from payments made in relation to a loan secured over the Rouse Hill property from April 2007 to July 2016 or a claim that the trustee should be estopped from claiming a legal right to the whole or part of the Rouse Hill property. She also did not press pleaded claims under the Family Law Act based on the premise that the Purported BFA was a "financial agreement" under s 90C of that Act. In supplementary submissions dated 12 December 2019, the applicant sought to re-introduce an argument of part performance, seeking specific performance of the agreement on the basis that mortgage repayments and the maintenance of the property 'are unequivocally referable to the terms of a contract of the nature alleged and are therefore acts of part performance'. Background 11 Charlene relied on her affidavit affirmed on 31 May 2018 and she was cross-examined. The trustee relied on his affidavits sworn on 30 July 2018 (as to [12]-[19]), 13 September 2018 and 31 July 2019. While notice was given that he was required for cross-examination the trustee was not cross-examined. The trustee also relied on the affidavit of Sean Wengel sworn on 31 July 2019 and, although available, he was not cross-examined. The Court Book was tendered as exhibit 1. Steven did not give evidence. 12 What follows is derived from that evidence and from Charlene's cross-examination. It is set out in roughly chronological order. Rouse Hill property, Steven and Charlene 13 Steven acquired the Rouse Hill property on 10 September 1998 and he was its registered proprietor. The purchase price was $225,000 secured by a mortgage for approximately $200,000. 14 When Steven and Charlene met in 2000, he resided at and operated a scaffolding business from the Rouse Hill property through Combined Scaffolds. 15 Steven and Charlene commenced cohabiting at the Rouse Hill property in 2001. 16 In July 2003, Steven refinanced the funding of the Rouse Hill property with St George Bank Limited and granted a mortgage over it to St George Bank. 17 Charlene's tax returns for the period to 30 June in 2004-2006 describe her as a bookkeeper working for Combined Scaffolds (in addition to other companies from the 2005 financial year); she is described as a bookkeeper working for Elite Equipment in her return for the 2007 financial year. For the years to 30 June 2008-2014, she is described as a manager or office manager or administrator working for the companies indicated at [85] below. Combined Scaffolds, Watton Equipment and DCT winding up notice 18 An extract of a search of the register maintained by the Australian Securities and Investments Commission (ASIC) indicates that Steven was and remained the sole director, secretary and shareholder from the time of its incorporation on 24 March 2000 until it was deregistered on 30 December 2012. 19 The director's report in Combined Scaffold's financial statements for the financial year ended 30 June 2005 indicates that it had a profit after tax of $32,147.98 in the financial year ended 30 June 2004 and $224,715.28 in the financial year ended 30 June 2005. 20 On 15 August 2005, the Deputy Commissioner of Taxation (DCT) notified ASIC that it had filed an application to wind up Combined Scaffolds in this Court in proceedings NSD1388/2005 on 12 August 2005. 21 In cross-examination, Charlene admitted that around the time the DCT's winding up notice was served she was aware of the winding up notice and that there were debts, but said that she did not understand its severity. She said that: In 2005, she was not aware of any incapacity to pay those debts; she "was always under the impression" that Steven was "dragging his heels for some reason or he was going to use the money elsewhere or something". She was never truly concerned that he or his company was in severe financial hardship. She said that Steven is a very "charismatic person" with "the gift of the gab". Whenever she would raise concerns, Steven would assure her that there was nothing to worry about and it would be handled. 22 On 16 August 2005, Watton Equipment Pty Ltd was incorporated. A search of ASIC's register indicates that Charlene was its sole shareholder, director and secretary until it was deregistered on 30 November 2013. It is Charlene's evidence that its main business was scaffold labour hire and transportation and her brother, John Bonner (who worked as a "Scaffolding Leading Hand") assisted her in its operation. 23 In cross-examination Charlene said that she received advice from an accountant that, with the exponential growth of the scaffolding business, it would be "in our best interests" to start splitting services between two companies, with Watton Equipment's business being labour hire and transport and Combined Scaffolds' business being scaffolding hire. In relation to the coincidence of timing with the DCT's winding up notice she said: "I think that's exponentially speedy if I've managed to rush to my accountant and go, "Help me. There's drama afoot. Start up a new company in 24 hours". I think that's probably unrealistic". 24 The director's report in Combined Scaffold's financial statements for the financial year ended 30 June 2006 indicates that it had a loss of $8,492 after providing for tax for that financial year. Steven and Charlene marry 25 Charlene and Steven were married on 24 September 2005. Lawteal Seconds loan 26 On 17 October 2005, Lawteal Seconds Pty Ltd approved a loan to Steven of $136,400 for a period of 12 months at an interest rate of 24.1% per annum (with a late payment fee of an additional 7.5% per annum) (Lawteal Seconds loan). The borrowing was secured by a second mortgage over the Rouse Hill property. A borrower's statement issued on 11 November 2005 indicates that the loan was advanced and the appraised value of the Rouse Hill property was then $520,000. Oakville property 27 There are three registered dealings dated 21 October 2005 in evidence which relate to the Oakville property. It is Charlene's evidence that Steven purchased the Oakville property in early 2004 for $1,050,000 supported by a mortgage of $950,000. In my view, the evidence supports a finding that the purchase was completed in October 2005 having regard to registered dealings, being: (a) A transfer of the Oakville property executed by Gregory John Bradshaw in favour of Steven for a consideration of $1,050,000; (b) A mortgage over the Oakville property executed by Steven in favour of Mr Bradshaw for an amount of $50,000 to incur interest at a rate of 14% per annum (or 12% if interest was paid on time); (c) A mortgage over the Oakville property executed by Steven in favour of ING Bank (Australia) Limited with the dutiable amount being $840,000. Steven's signature was witnessed by "Charlene Bonner", and the fact that there is no mention of the Oakville property in Steven's 2005 tax return but he discloses rental and claims tax deductions in relation to that property in his 2006 tax return. DCT withdraws winding up application 28 On 18 November 2005, the DCT withdrew its application to wind up Combined Scaffolds. GIO serves statutory demand 29 By a statutory demand dated 6 July 2006, the Government Insurance Office (GIO) as workers compensation nominal insurer demanded payment of workers compensation premiums in an amount of $75,781.41. Purported BFA and marriage breakdown 30 The Purported BFA may be described as follows: (a) The front page of the Purported BFA is undated in the space provided for a date to be inserted. (b) It states that it is between Steven (first party) and Charlene (second party), each of whose address is said to be at the Rouse Hill property. (c) It relevantly provides as follows: WHEREAS A The parties have been married since 24 September, 2005; B The parties have separated and propose seeking to divorce; C The parties own the property known as 14 Mailey Circuit, Rouse Hill being the whole of the land contained in Folio Identifier [redacted]; D In order to promote harmony between themselves and to reduce the possibility of resorting to litigation, the parties set out in this Agreement the arrangement they have reached about their property and the obligations to one another arising from their intended separation. THEREFORE, promises considered, and in consideration of the mutual promises and covenants hereinafter set forth, the Parties agree as follows: 1. That Steve do all acts and things and execute all documents, instruments and writings necessary to transfer to Charlene all Steve's right title and interest in the property known as 14 Mailey Circuit, Rouse Hill being the whole of the land comprised in Certificate of Title Folio Identifier [redacted]. 3. The Parties agree that this Agreement is a Financial Agreement made pursuant to Section 90C of the Family Law Act (1975) as currently in force or subsequently varied or amended. 4. This Agreement expresses the entire agreement between the parties and shall bind and inure to the benefit of the parties, their respective heirs, executors and administrators. This Agreement and the rights arising under it are not assignable in whole or in part. If any provision of this Agreement shall be declared invalid or unenforceable, the remainder of the Agreement shall continue to have full force and effect. 5. Each party shall bear their own legal costs in connection with the preparation and execution of this Agreement. 6. Each party agrees to be bound by the terms of this Agreement and further agrees that this Agreement may only be varied or is rescinded by a written agreement of both parties. 7. Each party covenants that his or her decision to enter into this Agreement was in no way brought about by any representation of whatsoever nature or kind made either directly or indirectly by or on behalf of the other party or as a result of any influence asserted either directly or indirectly by or on behalf of the other party. … 14. Executed on the day, month and year first shown above. (d) A signature appears over the name "first party" but it is not witnessed. A signature appears over the name "second party" and it appears to be witnessed by Philip Bell. (e) There is then a page headed "Statement Pursuant to Section 90G 1(b) of the Family Law Act 1975" with a signature above the words "STEVEN WATTON" and "14-9-06" above the word "Date". The text of the page is as follows: I, STEVEN WATTON of 14 Mailey Circuit, Rouse Hill state as follow: I have been provided with independent legal advice with respect to the attached Financial Agreement, as certified by the Certificate of Independent Legal Advice attached hereto. My solicitor has provided me with legal advice with respect to the following issues (as specified in detail in the attached Certificate of Independent Legal Advice): (a) the effect of the Financial Agreement on my rights pursuant to the Family Law Act 1975; (b) the effect of the Financial Agreement on my financial circumstances in the event of a marriage breakdown; (c) the fairness and reasonableness of the Financial Agreement both at the time the agreement is signed and in the event of a marriage breakdown in the future. (f) There is then a page headed "Certificate of Independent Legal Advice" for the purposes of s 90G of the Family Law Act in relation to advice given to Steven. It is not completed with the name or address of a solicitor and it is not signed or dated. (g) There is then a page headed "Statement Pursuant to Section 90G 1(b) of the Family Law Act 1975" relating to Charlene; it appears to be signed by her but it is undated. (h) There is then a page headed "Certificate of Independent Legal Advice" for the purposes of s 90G of the Family Law Act relating to advice given to Charlene. It is undated but completed with the name Philip Bell, an address in Rouse Hill, and there is a signature "Philip Bell". 31 There is no evidence that Steven ever signed a transfer form with respect to the Rouse Hill property in favour of Charlene. 32 Charlene deposed that: (a) The marriage broke down irretrievably and she and Steven separated in September 2006, when Steven left the Rouse Hill property to reside with his grandmother. (b) She remained in the house on the Rouse Hill property and paid the mortgage on it from January 2007 until July 2016 when Steven resumed residence and responsibility for the mortgage over it; (c) She attributed the marriage breakdown to various factors: Steven's mental health issues and outlook after learning of his infertility, the resulting disappointment affecting their relationship, personality differences and work pressures resulting from the exponential growth of the scaffolding business; (d) In relation to the Proposed BFA: 16. … We approached Mr Bell to effect a Binding Financial Agreement ('BFA'), which I understand is something that could be done under the Family Law Act 1975. To the best of my recollection, Steven and I met with Mr Bell on two (2) occasions and at those meetings we discussed the division of Steven and I's marital assets. Due to the passage of time, I no longer have any specific recollection of what was discussed at those meetings. 17. As a result of those meetings, Mr Bell prepared a document in the form annexed hereto and marked "CLW6". 18. Due to the passage of time, I no longer have any specific recollection of signing the BFA, but believe I attended Mr Bell's office in September 2006 and signed the document in front of him. I also believe that Steven was present and signed the document at the same time. 19. While there is no reference to the Oakville property in the BFA, it was always my understanding that the Oakville Property would remain with Steven and he would be responsible for repaying the loan associated with that property. This was what I understood to be the division of assets between myself and Steven, as our intention was that we would separate, and have a property each. 20. On my part, the Rouse Hill property was to be transferred to me and I would become responsible for repaying the loan associated with that property (see below). 21. At the time of entering into the BFA, I had a discussion with Mr Bell, during which words to the following effect were said: Me: "What are the next steps to having the Rouse Hill property in my name?" Mr Bell: "You will need to have the Rouse Hill property transferred in your name. However, you may have to pay the fees associated on the transfer and it is not a necessity for you to do that now because you don't have the funds. So, you can just sit on it for now." 22. Subsequent to the discussion with Mr Bell in September 2006, I put the transfer of the title to the Rouse Hill property to the back of my mind and, indeed, I forgot about it. As at the date of swearing this affidavit, I have been unable to and I am yet to transfer the Rouse Hill property to my name. …. 60 I deny any allegation that I was aware of, or had any basis for inferring, that Steven was intending to defeat his creditors by means of the BFA. Indeed, I do not believe that this was Steven's purpose in the BFA at all. The purpose of the BFA was to finalise our marriage. The circumstances leading to the irretrievable break down of our marriage have been summarised above. At the time of the BFA, I had no knowledge of any potential for Steven to become a bankrupt. 61. It was my idea that Steven and I enter into the BFA, in part because of Steven's mental health issues and the breakdown of our marriage, but also so that my interests in the properties, and my contributions towards the upkeep, repayments and maintenance of same were protected moving forward. 62. At no point did I reasonably believe that Steven and his companies would ultimately be found to be insolvent, as it was always my impression that Steven was successful and solvent in his operations. His scaffolding business had been very busy and grew faster than he could ultimately deal with. His workload meant that he could not take any personal leave, to the extent that, after our marriage in September 2005, we had no honeymoon. 33 In cross-examination, Charlene gave the following evidence: (a) She retained Mr Bell for business purposes from time to time. That was some time "between 2005 and maybe 2008". Mr Bell was her solicitor, not Steven's. She did not recall that Mr Bell had been retained by Steven in relation to his bankruptcy; (b) In relation to the question of whether she could recall attending Mr Bell's office in September 2006, she said that "I couldn't answer that specifically in terms of the timing" but she did "recall attending his office at times and having dealings with him". She recalled attending Mr Bell's office with Steven at some point. In response to a question of whether that was for the purpose of signing the Purported BFA, Charlene responded that "we either attended for that specific reason or we've attended for some other legal advice pertaining to whatever we were there for at the time". She confirmed that it was her recollection that, as deposed, "Steven was present and signed the document at the same time"; and (c) Charlene confirmed that she understood from September 2006 onwards that she was responsible for paying whatever fees, most likely stamp duty, for the transfer of the Rouse Hill property to her and that she was not in a position financially to pay those fees. Charlene's knowledge in September 2006 34 In cross-examination, Charlene gave evidence of her role in the business in 2006: (a) She sometimes did and sometimes did not have insight into the financial position of the business and Steven during 2006 and 2007; (b) She occasionally saw bank statements, an email or overheard a phone conversation; (c) She took care of administration. She agreed that she managed bookkeeping, invoicing and payroll and sometimes cash receipts and she wrote letters, emails and made telephone calls on the business' behalf. She raised payslips derived from employee's timesheets (to the extent the business had employees), but Steven was the one who transferred money. She opened mail addressed to the Rouse Hill property at times. She did not recall paying bills but would have made Steven aware when they were due. She agreed that she would have been aware when workers compensation bills fell due, she prepared business activity statements for Combined Scaffolds and would have been aware of its income and collated information for the statements. She accepted that she would have been aware of receivables and cash receipts of its business "if [she] had all of the knowledge". (d) She agreed that Steven was "not very good" with computers or emails and he was "very disorganised". She said that he was "not very good with personal record-keeping" and that she "did a lot of that". (e) She was aware of all of his borrowings (in the order of $1,388,000), commenting that "Yes. The kid like[d] to borrow". 35 Charlene agreed that in September 2006 she knew that: (a) Workers compensation premiums could not be paid on time and GIO had served a statutory demand on Combined Scaffolds for $74,781; (b) The Lawteal Seconds loan matured in October 2006 and there were no refinancing arrangement in place. That evidence is consistent with contemporaneous documents shown to Charlene after her earlier evidence given in cross-examination that "we were already in discussions at that point, as you can see by the mortgage statements, that that was going to be handled"; (c) There was an ongoing dispute with Instant Access Australia Pty Ltd, a supplier of scaffolding to Combined Scaffolds, although she did not know the detail and Steven's position was either that Instant Access owed Combined Scaffolds money or that Combined Scaffolds did not owe the amount claimed. She now thinks the amount in dispute was approximately $200,000 but she did "not necessarily" know that in September 2006; it was a situation she did not have much to do with; and (d) All borrowings were in Steven's name and the income recorded in his PAYG summary was not sufficient to support his mortgage obligations. Charlene said that "obviously the loans were getting paid so he was getting the money from somewhere". 36 It was put to Charlene on a number of occasions that she knew that Combined Scaffolds was in "severe financial distress" in September 2006. She did not answer the question directly but conceded that it was a time when there was "a lot going on" and Steven "was juggling a lot of balls" but said that she did not know at all times exactly the extent of the pressures that he was under. She said that there was "a lot of concealing going on", "a lot of deception in multiple forms" and Steven would just not tell her things that he did not want her to know. She accepted that Combined Scaffolds was a company that often had difficulties but it "had a tendency to … fall on its bum, so to speak, and then next week pick up and everything was good again". 37 In relation to her evidence given in her affidavit that she was aware from "at least" February 2007 that Steven and his business was not successful in the Instant Access litigation but prior to that she was not aware that Steven was in financial difficulty and she had no reason to believe that he might be or become insolvent, Charlene said: I had no reason to believe that there was – that he wouldn't bounce back from whatever troubles he was in. You know? Either the severity of what was going on was played down or I was always under the impression that it's not that big of a deal. Looking at it now – there's, obviously, big dollars thrown around. There's all of this borrowing going on. As I said, I was young. I honestly thought that he wasn't leading me down a garden path that was going to put me in any sort of financial trouble the way that it ended up doing. So I believed him, and I honestly just tried to see the good in what was going to happen or believe that what he was telling – I wanted to believe – sorry. I'm losing my way a little bit. … Mrs Watton, I just want to be clear, though, and I understand what you're saying about how you were given promises that things would improve and so on?---Yes. That's my words. But where you say in your affidavit that – Prior to February 2007 I was not aware that Steven was in any financial difficulty. You have to accept - - -?---Yes. That, probably, could have been worded better. Well, that's true at least. But you have to accept that that evidence is not correct?---You've said that a few times, but I think perception of my evidence needs to be taken into account. When I give an answer, I can give it off my perception at the time or my perception now. But what my perception at the time was versus what actually appeared to be happening can be two different things. Well, you said here – this is you speaking in May 2018. In May 2018 you said: Prior to February 2007 I was not aware that Steven was in any financial difficulty. ?---Yes. Now, you have to accept now based on all the documents we've just been through that that evidence is not correct. … Yes. What I, probably – how I, probably, should have worded it was that any financial stress that Steven had put himself in or was under – the business was under – was always my impression, given the history that had already taken place, that it was nothing that couldn't be solved, was nothing that couldn't be traded out of or – not going to lead to, essentially, really bad things happening, it was always going to be – "Yes. No. It will be fine. We will be right. It's all good." I'm like "What about this, this, this?". And he will just like "No. It's fine. It's all good". And then next minute litigation has been dropped, or invoices have been paid, or we've bought more scaffold. So, essentially, when I was really concerned about things happening, sometimes there would be – the opposite of that would happen, what I would expect didn't actually happen, and we would go on to trade and go on to have lots of new commercial business. So I guess in effect any fears that I had or any knowledge of things that were financially serious didn't always play out to be something that ended in turmoil. Sometimes it was just like a bad period of time. So I was naïve in thinking that was always going to be the case, that there would always be an answer or a situation where, you know, it didn't end up playing out to be something that wasn't good. GIO winding up application 38 On 5 October 2006, GIO notified ASIC that it had filed an application to wind up Combined Scaffolds in the Supreme Court of New South Wales on that date. By a letter dated 8 December 2006 from Turks Legal on behalf of the workers compensation nominal insurer (GIO) to the "Manager" of Combined Scaffolds at the Rouse Hill property, Turks Legal referred to a conversation with Charlene and confirmed the payment of outstanding amounts between 20 October 2006 and 28 November 2006 in full satisfaction of the statutory demand dated 6 July 2006 and that the winding up application had been withdrawn on 1 December 2006. Lawteal Seconds loan matures 39 The Lawteal Seconds loan matured on 17 October 2006 but it remained outstanding until 19 January 2007 when it was paid out of the Liberty Financial loan referred to below. Liberty Financial loan 40 By a loan application form which indicates that it was signed on 15 November 2006 by Steven and Charlene, they jointly applied for a consumer loan of $460,000 from Liberty Financial Pty Ltd and provided the following information. (a) The "primary residence" and "current home address" given for Charlene and Steven was the Rouse Hill property; (b) They owned the Rouse Hill property and the Oakville property in 50/50 shares and they had both resided at the Rouse Hill property since 1998; (c) The Rouse Hill property was said to be valued at $500,000 and the Oakville property at $1,100,000; (d) Charlene's brother, John Bonner, was said to reside at the Oakville property; (e) The purpose of the loan was said to be refinancing of a loan from St George Bank of $295,000 and the Lawteal Seconds loan of $136,400, both of which were secured over the Rouse Hill property. The amount said to be owing to ING Bank in relation to the Oakville property was $844,900; (f) The requirement to pay $11,000 in relation to costs of the winding up (which I take to be in respect of GIO's winding up application) by 30 November 2006 was acknowledged; and (g) The section of the form headed "Current PAYG Employment" was completed for Steven and Charlene (respectively described as "managing director/scaffolder" and "office manager") as employees of Combined Scaffolds with annual gross income of $50,000 each. That information was struck through and instead the section of the form headed "Current Self-Employment" was completed with respect to Steven for Combined Scaffolding's business. It stated that there was a pre-tax profit for the current financial year of $328,399 and $48,611 for the prior year and Steven had a salary of $40,900 for the current year and $50,000 for the prior year. 41 In relation to the material noted at [40(a) and (d)] above, Charlene gave the following evidence in cross-examination: And do you see there that both you and Steven describe your current home address as 14 Mailey Crescent, Rouse Hill. Do you see that?---Yes. That is inconsistent with your evidence in this court, isn't it? … I didn't – this doesn't look like my handwriting. I didn't fill this form in, but, at the end of the day, you know, if he hasn't changed his address, then I don't see what the huge deal is. Perhaps it was going off - - Well, you signed this document?---Well, but that's in regards to his details, not my details. Ms Watton, you signed this document, didn't you?---Yes. And you knew, didn't you, it was important to give correct information to the lender. You've already said that?---Yes. And you would have read the document before you signed it?---I would have read the document, yes. And if there was any material inaccuracy in the document, you would have pointed that out, wouldn't you?---Yes. So isn't it likely that, as at November 2006, when you signed this document, you saw that Steven had listed his address, his current home address, as being the same as yours?---Mmm. And you said nothing about it at the time?---Well, we would have had to have supplied documentary evidence, like a driver's licence or, you know, some sort of identification with an address on it. If the address that he has listed or has had on there wasn't accurate or up to date at that time - - - I suggest to you, madam, that the reason that you said nothing about it at the time is because it was, in fact, true that you were both living at 14 Mailey Crescent, Rouse Hill, at the time?---I disagree. … Do you see that, on page 204, you have given, as the nearest relative not living with you, the name John Bonner?---Yes. And that's your brother?---Mmm. And he's living at 1 Menin Road, Oakville, at that time; is that right?---Yes. And that's the Oakville property that is in issue in these proceedings?---Mmm. And that's the property which you say was to go to Steven after your separation, correct?---Yes. So why was your brother living in the property as at November 2006?---My brother needed somewhere to live, and he purchased a caravan and was living on the property with his fiancée at the time. 42 On 17 November 2006, a facsimile was sent under the name "Steven Watton" to one Joe Logue but initialled by Charlene over Steven's name. The fax advised that the winding up notice came about because several of Combined Scaffolds' customers had been "unable to pay their instalments on time, if at all" and as a result the company "not having enough available funds to pay it's own debts". On 29 November 2006, again by a fax sent over Steven's name but signed by Charlene, Mr Logue was advised that all payments had been made and the winding up notice would be removed from Baycorp's report. A number of documents in the Court Book indicate that Charlene conducted the correspondence with the mortgage brokers. 43 A valuation obtained by Liberty Financial indicated that as at 8 December 2006, the Rouse Hill property had a market value of $490,000. 44 Charlene deposed that: (a) She was not able to obtain a loan solely in her own name at the time, however, she had "been responsible" for repaying the Liberty Financial loan from January 2007 to July 2016; (b) She continuously resided at the Rouse Hill property from 2001 to July 2016. She made all repayments on the Liberty Financial loan and paid all utilities, rates and expenses associated with the Rouse Hill property from 2007 until July 2016 and Steven made none. (c) From January to April 2007, she made repayments from her business account and thereafter she made payments from her personal account. She made repayments totalling $496,015.49 in relation to which she relied on a statement from Liberty Financial dated 14 October 2015 which related to repayments in an aggregate amount of $466,198.12. She also relies on her solicitor's email dated 20 July 2017 to the solicitors to the trustee indicating that she had paid a further $29,817.37 to 13 July 2016 and would obtain a statement from Liberty Financial to substantiate that claim. 45 The evidence discloses that: (a) Steven and Charlene jointly obtained a consumer loan from Secure Funding Pty Ltd (which trades as Liberty Financial) for an amount of $460,000 under a letter of offer dated 28 December 2006 (Liberty Financial loan). The loan was to be repayable in 360 monthly instalments of $4,294.01 each. The loan was secured by a mortgage over the Rouse Hill property signed by Steven. Existing mortgages over the Property were paid out; (b) Steven (and only Steven) executed an undated direct debit request in favour of Secure Funding in relation to the Liberty Financial loan; and (c) By a letter dated 19 January 2007 addressed to Charlene at the Rouse Hill property, Charlene was advised that the Liberty Financial loan had been settled on 19 January 2007 and listed the direct debit details as being from Steven's account. The attached disbursement authority advice records disbursement of $460,000 with payments to St George Bank of $294,000.05 and Lawteal Seconds of $144,235.37. 46 In cross-examination Charlene ultimately accepted that she started making payments in April 2007 and that repayments made prior to that date were deducted from Steven's account. That occurred after Charlene was taken to the Liberty Financial letter dated 19 January 2007 where the following exchanges occurred: … My question was do you accept that you must have told Liberty Financial to direct debit Steven's account?---Yes. There was obviously some reason behind that and, after giving it some consideration, it would have more than likely have been, again, cash flow at that point in time. So obviously there was a lot of money that would have needed to be put towards refinancing the mortgage and all of the application fees and things like that, so there has obviously been a period of several weeks where the mortgage repayment has been paid by Steve. And what I'm suggesting to you is that that is not consistent with your account of the deal that you struck with Steve in 2006?---Well, I – this is coming up a few times that what's consistent with something that happens in September is inconsistent with something that happens six months later. That's just what happens, you know? Things change. Situations might need to be altered – or, like, periodically or semi-permanently or intermittently to suit the situation. So yes, I admit that my – there are inconsistencies with a couple of months with respect to the many years that I've been paying for this mortgage. All right. Now, I showed you a document yesterday – I can get it for you again, if you like – this was the document where you had said in November 2007 … … And do you see in the – do you see in the middle of the page it says: We separated earlier this year and I have been making these repayments for this loan since April. ?---Mmm. You recall I showed you that document yesterday?---Yes. … In April 2007, liquidators were appointed to Combined Scaffolds?---Mm. … Prior to April 2007, Steven had been making the repayments on the Rouse Hill property?---Prior to April 2007, yes. So between January and April. … Then in April 2007, liquidators were appointed to Combined Scaffolds, and you said before that thereafter, the Combined Scaffolds business was effectively run through Elite Equipment?---Yes. And as at April 2007, you assume the responsibility for making these payments, you say?---Yes. What I want to suggest to you is that the reason that that occurred – namely, that you began to make the repayments – is not because of any agreement that you say you struck in September 2007 [sic 2006], but instead is because of the situation that Combined Scaffolds was in, namely, that it had gone into liquidation. You understand?---Yes. I'm entirely inclined to disagree with that coincidence, simply on the merit that I now have a mortgage in my name – or in joint names, but it's most certainly in my name, and it's a responsibility that I'm required to pay. So I don't think there's any coincidence in the fact that I'm now making mortgage repayments against a mortgage that I have. 47 On 7 March 2007, Watton Equipment changed its name to Elite Equipment Pty Ltd. Combined Scaffolds is wound up 48 On 30 March 2007, Ozem Azzam Kassem and Deryk Rowan Andrew were appointed as liquidators of Combined Scaffold on the petition of Instant Access. 49 Combined Scaffolds' liquidators issued a report to creditors dated 9 July 2007 which indicates that Combined Scaffolds had a deficit of $228,266 before administration expenses. It also stated that the liquidators were aware that shortly before and after their appointment, $290,000 worth of equipment was transferred to a "related party". Steven's act of bankruptcy and sequestration order 50 On 11 September 2007, Steven committed an act of bankruptcy when he failed to comply with a bankruptcy notice issued at the request of Instant Access for an amount of $213,019.91 51 On 12 November 2007, a sequestration order was made against Steven's estate on the application of Instant Access and the respondent was appointed as trustee of the bankrupt estate. Shortly thereafter, the trustee lodged a caveat over the Rouse Hill property citing "statutory vesting pursuant to section 58(1)(a) of the Bankruptcy Act 1966". Correspondence from November 2007 to late 2009 52 On 20 November 2007, Steven called Lawler Partners (the trustee's firm) and spoke with Senray Loy, who made a file note of the conversation. The file note records that Steven advised that: (a) The Oakville property was currently being rented out to his "Ex-wife's business Elite Equipment" and his "Ex-wife has been making the repayments on the property for approx. the past 8 months". (b) His "wife is renting [the Rouse Hill property] out personally". (c) There was "little or no equity on either property" – there may be $5,000 equity in the Rouse Hill property but it would be eaten up by selling costs. He was willing to assist and be co-operative. (d) He was currently residing at his grandmother's place in Rouse Hill. 53 On 21 November 2007, the trustee wrote to Charlene at Elite Equipment at the Rouse Hill property and said: I have been advised Mr Watton is employed by your office. Accordingly, I request that you forward details of Mr Watton's employment contract, remuneration as well as the nature of the work completed by him. Mr Watton advises you currently occupy two (2) real properties located at 14 Mailey Court, Rouse Hill and I Menin Road, Oakville, both of which are registered under his name. I request that you provide details of the lease/rental agreement entered between your office and Mr Watton. 54 On 22 November 2007, on Elite Equipment letterhead, Charlene advised Liberty Financial that (emphasis added): This is a joint loan between Steven Watton and myself. We separated earlier this year and I have been making these repayments for this loan since April. There is no equity in the home, therefore it's not likely that the trustee will be interested in it. I will to continue to make repayments as usual as I wish to remain a resident of this address. 55 On 28 November 2007, Charlene wrote to the trustee on Elite Equipment letterhead as follows (emphasis added): Re: Bankrupt Estate of Steven Leonard Watton I am the Managing director of Elite Equipment Pty Ltd. In response to your letter dated 21 November 2007, I would like to respond as follows:- Mr Watton is employed by Elite Equipment as a full time Basic Scaffolder. His employment commenced on the 11th of February 2006. His Salary is $45,448 per annum not including superannuation. The Rouse Hill property is occupied by me. I have been personally making the weekly mortgage repayments since early this year. Elite Equipment requires the use of the Oakville property for business purposes. The company has occupied the Oakville premises since early this year. Elite Equipment has paid the monthly mortgage repayments directly to ING Bank all year. Elite Equipment has agreed to continue to make these repayments until such time as the property is sold and in doing so establishing an equity in the property. Elite is effectively purchasing the property from Mr Watton by way of installment payments in paying the mortgage. 56 After being taken to the trustee's letter dated 21 November 2007, Charlene gave the following evidence: If it were the case in September 2006 that you and Steven had come to some agreement whereby you were to keep the Rouse Hill property and he were to keep the Oakville property, then you would have told the trustee that in response to his letter on 21 November 2007?---Yes. I don't recall. The fact that you didn't tell the trustee of this so-called arrangement which you claim to have entered into suggests that there was no such arrangement in September 2006; do you understand?---Yes. Is there anything you wish to say about that?---Yes. This letter from the trustee isn't overly detailed in terms of the information that it's requesting. It's very minor in terms of detail and specifics and, essentially, I haven't gone into a great detail in my response. I've answered questions. I've provided information, but I haven't been asked to give my life story or the life story of what, you know, is the intent of, you know, where this whole matter is heading. I've given information. I've answered questions. I don't think that there's a whole lot of, you know, mal-intent in there. If you've finished giving your answer?---Yes. There's not – there's not a great detail in terms of what has been requested. I've offered up information. I've given specifics. If there was anything more that was a grey area or further information required, I'm sure it would have been asked of me. Well, you said before that you got legal advice – you likely would have got legal advice in responding to this letter; do you recall that answer?---I likely had – I had legal advice all the time. I possibly would have had legal advice in response to this letter. Later, Charlene said: Because you see there, Ms Watton, that in the larger paragraph beginning "Elite Equipment requires" – you see that paragraph?---Yes. In the third line you say, at the end: …and, in doing so, establishing an equity in the property. ?---Yes. Elite is effectively purchasing the property from Mr Watton by way of instalment payments .... paying the mortgage?---Mmm. And so that concept was something that you understood at the time?---I believe so. It was obviously not something that played out in the end. I think that, you know, my understanding of this email is (a) to give facts but also (b) to, I guess, indicate my intention at that time. Your intention in relation to the Oakville property?---Yes. But - - -?---My intention at that time was to continue to rent it. Obviously, I was making mortgage repayments at that point. But – yes, obviously, it was never going to be a decision that or a capacity that I could keep up or that a company – my company could keep up. It was – I guess it was just a means to an end at that point. But this concept of effectively purchasing the property by way of instalment payments is not something you said at the time about the Rouse Hill property?---No. And do you have any explanation for that?---Well, at the end of the day, the mortgage was in my name for the Rouse Hill property. So, you know, I had no interest really, personally, in the Oakville property. I was never on board with the idea of it. It was a demonstrable headache from whoa to go, and it was something that I continued to sort of pay for at times when it suited me because I had scaffolding and I needed somewhere to put it. So it was, again, a situation that sort of required some back scratching. But – yes, ultimately, it was never really something that I considered having be a permanent thing that I was going to service and look after, and I guess I didn't – just didn't mention the Rouse Hill property in that nature because I thought of the two things completely differently. 57 Steven gave a statement of affairs to the trustee dated 28 November 2007. The form was completed relevantly as follows: (a) His solicitor was Philip Bell. (b) He responded yes to the question of whether he had been a party to a family law property or spousal maintenance order or agreement and provided the date "14/9/06". (c) He said that his employer was Elite Equipment and he expected that company to be his employer for the next 12 months. (d) He gave his residential address at Billabong Place, Rouse Hill. In relation to his previous address, being the Rouse Hill property, he indicated that he did own or was buying that property and under the box "date sold" he wrote "Divorce/Separation". In answer to a question concerning real estate, Steven said that the other owner of the Rouse Hill property is Charlene, its estimated value was $460,000 and $455,000 was owed on it. In relation to secured creditors he said that he owed: (i) Liberty Financial $455,000 pursuant to a mortgage said to have been given on 1 October 2005 over the Rouse Hill property which had an estimated value of $460,000; (ii) ING Bank $850,000 secured by a mortgage said to have been given on "20 January 2007" [sic October 2005] over the Oakville property which had an estimated value of $800,000; and (iii) John J Payne Ross & Co $42,000 secured by a second mortgage over the Oakville property said to have been given on 1 October 2005. (e) He advised that he first had difficulty in paying his debts in 2005. 58 On 11 April 2008, Charlene had a conversation with an employee of Lawler Partners in which she asked whether there were any issues concerning Steven travelling overseas as the "trip had already been paid for and friends were travelling with them". 59 On 14 April 2008, the trustee wrote to Charlene and said, among other things: I note the bankrupt is the sole joint registered owner of two properties located at Rouse Hill and Oakville in New South Wales. The bankrupt has provided an undated Financial Agreement between himself and you. It is noted you were married on or around 24 September 2005 and that the bankrupt appears to have executed this Agreement on 14 September 2006. I note however you advise that the bankrupt is currently employed by Elite Equipment Pty Ltd, a company of which you are a director, and that you are currently seeking to reconcile your differences. The Financial Agreement purports to transfer the bankrupt's 100% ownership of the Rouse Hill property to you. …. Based on my investigations into the bankrupt's affairs, I am of the opinion the purported transfer of the bankrupt's 100% share interest in the Rouse Hill property is a voidable transaction under Section 120 of the Bankruptcy Act 1966 ("the Act") or alternatively, Section 121 of the Act. … … The bankrupt purchased the Rouse Hill property in April 1998 and since then it has been registered solely in his name. Since April 1998, the bankrupt has made considerable contributions towards the property and a summary follows: Date Contribution $ 06.08.1998 Purchase Price of land and additional borrowings to build a house – financed through Aboriginal & Torres Strait Islander Commission ("ATSIC") 205,000 10.09.2003 Refinance with St George Bank Ltd. ATSIC paid out and St George Bank Ltd becomes first mortgagor 312,000 11.10.2005 Second mortgage with Lawteal Seconds Pty Ltd 136,400 22.01.2007 Refinance with Secure Funding Pty Ltd. St George Bank Ltd and Lawteal Seconds Pty Ltd paid out. Secure Funding Pty Ltd becomes first mortgagor. Total mortgage - $460,000 Unknown Total Contributions Toward Rouse Hill Property, excluding mortgage repayments and interest, exceeds 460,000 The bankrupt's entitlement to the property is 100% by virtue of his contributions and as evidenced on title. 60 On 16 April 2008, the trustee wrote to Charlene indicating that he had received a drive by valuation of the Rouse Hill property of at least $520,000 and that, taking into account the loans secured on the Property, there was an equity of around $70,000 in it. He advised that he planned to sell the Property and offered Charlene the opportunity to purchase it and if she made an acceptable offer, he would execute a transfer which would be for her to lodge. 61 On 23 April 2008, Charlene responded to the trustee and explained: Reasons for the non registration of the Transfer At the time the Binding Financial Agreement was entered into both Steven and I intended to sell the subject property and so the production of the title deed by the mortgagee would have required us to incur further expense when shortly thereafter the sale would have made the registration unnecessary. In any event after some time we decided not to sell and simply failed to lodge. … Inconsistent advice in my letter dated 28/11/08 Claims that my mortgage repayments are reflective of rental payments in relation to my occupation. I am unsure what you mean by inconsistent advice. As noted in my letter I advised that the Rouse Hill property is occupied by me and indeed, my name is on the mortgage as mortgagor. It is my residential address. In your letter you fail to acknowledge that the mortgage payments since 22 January 2007, have been made by me and you make no reference of the fact that I am also a mortgagor. I operate Elite Equipment's office from my home and have all mail correspondence sent here. Claims that I am making weekly rental payments in regards to my occupation are false. I am paying my mortgage. As such I am not required to may "so called" weekly rental payments to you and will continue to make mortgage payments as I am required to do under my mortgage. Charlene went on to note that quotes she had received from local agents valued the Rouse Hill property at between $440,000 and $480,000 against a mortgage liability of approximately $455,000. In relation to the Oakville property, she noted that Steven had had it on the market since 2007 and offers for it had been for $750,000 and $850,000 while the mortgagees were owed $907,000. She said that Elite Equipment would cease making mortgage repayments on the Oakville property and would remove scaffolding and was looking to vacate all of Elite Equipment's materials from that property "in the near future". 62 On 9 May 2008, Mr Loy of the Lawler Partners made an assessment based on this information and costs incurred in selling the properties and found that, based on both optimistic and pessimistic scenarios, it was likely that sale would result in deficiencies at that time and recommended that the properties not be sold. A later assessment dated 10 July 2008 came to the same conclusion. CSW Group and Elite Equipment Australia 63 On 4 December 2009: (a) CSW Group Pty Ltd was incorporated with Charlene as the sole director and sole holder of 10 shares which were said to be beneficially owned. The registered office and principal place of business was the Rouse Hill property. (b) Elite Equipment Australia Pty Ltd was incorporated with 100 shares held by CSW Group which were said not to be beneficially owned and Mr Bonner was the sole director and secretary. The registered office and principal place of business was the Rouse Hill property. 64 On 22 December 2009, Bruce Gleeson was appointed as liquidator of Elite Equipment by resolution of its member, Charlene. Creditors confirmed that appointment on 11 January 2010. In his report dated 24 March 2011 the liquidator said: My discussions with the company's director indicates that the main reason for the company's failure and my appointment as Liquidator was due to the Liquidator of a related company, Combined Scaffolds Pty Ltd ("Combined Scaffolds"), commencing legal action against the company with respect to a transfer of Combined Scaffold's plant and equipment to the company which the Liquidator has deemed voidable. The company simply did not have the funds to defend the legal proceedings commenced by the Liquidator of Combined and as a result, the director resolved to place the company into voluntary liquidation. Based on my review of the company's records and in particular its financial position, the comments by the director appear to be true insofar that the company did not have sufficient funds available to defend such an action or meet other outstanding liabilities. … My investigations have revealed that the company may have traded while insolvent since 1 July 2009. My reasons for this are as follows: Upon review of the company's records, the company appears to have been trading profitably for the years ended 30 June 2008 and 30 June 2009, achieving net profits of $98,184.10 and $66,600.83 respectively. However, for the period 1 July 2009 to the date of the Liquidation (i.e. 22 December 2009), the company incurred a net loss of $57,477.49. The company experienced a decline in its net asset position from 30 June 2009 to the date of Liquidation (from $234,392.16 to $176,914.67). Steven's discharge from bankruptcy 65 Steven was automatically discharged from bankruptcy on 4 December 2010 under s 149 of the Bankruptcy Act. Correspondence with the trustee from 2011 66 On 24 February 2011, Consolidated Lawyers (who stated that they were acting for Charlene) wrote to the trustee asserting that the Rouse Hill property does not form part of the bankrupt estate and requesting its transfer to her. Among other things it asserted that the Rouse Hill property "was purchased by our client and the Bankrupt and was registered in the name of the Bankrupt". 67 On 17 March 2011, the trustee (now on William Buck letterhead) responded to Consolidated Lawyers to similar effect to the letter the trustee sent to Charlene on 14 April 2008 (see [59] above). The letter notified Consolidated Lawyers of the trustee's intention to sell the Rouse Hill property and advised that if Charlene wished to make an offer she should do so by 28 March 2011. 68 On 28 March 2011, Consolidated Lawyers wrote to William Buck with reference to the trustee's letter dated 17 March 2011 and among other things said: Our client did not attend to the lodgement of the Transfer with the [as] now known, Land and Property Management Authority as she was experiencing some financial difficulty and was unable to pay the lodgement fees. She was advised at the time that lodgement costs were "a couple of thousand" and she was not in a position to pay this expense at the time or subsequently. 69 On 4 April 2011, Consolidated Lawyers wrote to William Buck. Among other things, the letter asserted that Charlene and Steven had been in a de facto relationship between 2000 and September 2005 when they married and they separated in about June-July 2006. It asserted that, in lieu of a property and financial settlement, they agreed to keep one property each and that constituted valuable consideration for the purposes of s 120(5) of the Bankruptcy Act. The letter also made assertions concerning available defences under s 121(4). It denied that Steven's advice to the trustee that he had difficulty paying debts in 2005 indicated that he was then insolvent. It advised that Charlene was not in a position to purchase the property. 70 On 5 May 2011, Consolidated Lawyers lodged a caveat over the Rouse Hill property on Charlene's behalf, claiming that she had an equitable interest by reason of paying monthly repayments to Secure Funding since March 2007. 71 On 30 May 2011, Steven became the sole director and secretary of Elite Equipment Australia and Mr Bonner resigned those positions. Steven's residential address recorded in an ASIC search was the Rouse Hill property. 72 On 4 August 2015, the trustee registered a Bankruptcy Application to transfer the Rouse Hill property to his name. Residence at the Rouse Hill property from July 2016 73 Charlene deposed as follows: From around March 2016, I began frequently spending time living away from the Rouse Hill Property, during which time I had been visiting and staying with my mother, who resides in Port Macquarie NSW, and occasionally staying with friends. The property was generally vacant during that time. In around July 2016, Steven informed me that his living arrangements with his mother had changed and he was needing to find alternative accommodation. Because I was not regularly living at the Rouse Hill Property at that time and the property was unused, I reached an agreement with Steven that he could stay at the property from July 2016, until such time as he could find suitable alternative living arrangements. Steven has been staying at the Rouse Hill Property from that time and has been repaying the Liberty Financial loan from his scaffolding business in lieu of rent. I do not live at the Rouse Hill property anymore. Winding up of Elite Equipment Australia and incorporation of Elite Scaffold Australia 74 On 19 September 2017, Elite Scaffold Australia Pty Ltd was incorporated as a wholly owned subsidiary of CSW Group with Steven as its director and secretary and he gave his address as the Rouse Hill property. 75 On 4 October 2017, in proceedings NSD1177/2017, this Court ordered Elite Equipment Australia be wound up. 76 In her affidavit affirmed on 31 May 2018, Charlene deposed that she worked as an office manager for Elite Scaffold Australia. In cross examination she said: When did you cease working for Elite Scaffold Australia?---May [2019]. All right. And, as at 2017, did you work for Elite Scaffold Australia?---Yes. Okay. Now, as at 2017 – or throughout 2017, were you the office manager of Elite Scaffold Australia?---At times I was. There were times when I was on leave, so I wasn't working there full – well, in – for the entirety of that year. All right. So, save for the periods when you were on leave, you were the office manager at Elite Scaffold Australia?---Yes. And your job title didn't otherwise change during that year, did it?---Not really. Okay. Now, you worked then in 2017 and, may we take it, up until May 2019 in business effectively with Steven?---Mmm. … So, just to be clear – so, up until May 2019, you were in business together effectively with Steven?---I was working for the business. For the business?---As an employee. But you own the company, Elite Scaffold Australia, don't you?---No. You own the company called CSW Pty Limited, don't you?---It's, I think, like a trustee company. It was set up a long time ago. I don't really recall the details. Well, I can tell you it was set up in 2009, and I can tell you that there's a single share and it's owned by you; does that sound strange to you?---No. And CSW Pty Limited stands for Charlene and Steven Watton, does it?---No. I don't know what it stands for essentially. It was just the name given to the trust. Well, you're aware, aren't you, that CSW is the parent company of Elite Scaffold Australia?---I wasn't aware of that.. Charlene and Steven's relationship between 2006 and 2019 77 Charlene deposed that her marriage with Steven broke down irretrievably in September 2006. She said: … I confirm that, although Steven and I are yet to formalise our divorce, we have been separated and, I consider, effectively divorced, since on or about the time of entering into the [Purported] BFA. Although Steven and I consider ourselves as being divorced, and have been separated, we continued from time to time to cohabitate the Rouse Hill Property, although throughout those times we maintained separate rooms. At the time of lodging my 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2014 tax returns, Steven has been listed as my spouse, and it is my understanding that I am also listed as Steven's spouse on some of his tax returns. It was my understanding, that as we are yet to formalise our divorce, Steven would still be formally recognised as my spouse, and that it would be a necessary requirement for me to disclose this information to the ATO. …. I deny any allegation that I was aware of, or had any basis for inferring, that Steven was intending to defeat his creditors by means of the BFA. Indeed, I do not believe that this was Steven's purpose in the BFA at all. The purpose of the BFA was to finalise our marriage. The circumstances leading to the irretrievable break down of our marriage have been summarised above. At the time of the BFA, I had no knowledge of any potential for Steven to become a bankrupt. 78 In cross examination: (a) The following exchanges occurred in relation to Charlene's evidence that the marriage breakdown in 2006 was "irretrievable": Do you remember saying that?---Yes. And is that true?---Yes. It proved to be irretrievable. Well, was it true as at September 2006?---Yes. Well, why did you say before that "it proved to be irretrievable"?---Well, you know, at times we definitely tried to reconcile and ultimately it was never – never came to fruition. So can we take it from that answer that, after September 2006, there were periods where you were together?---There were periods where we attempted to reconcile. … After September 2006, did you resume living as man and wife?---No. Did you, for example, travel together?---Yes. In attempts to - - - When did you travel together?---I don't recall exact timeframes, but there were periods – I think, perhaps, maybe 2007, 2008, possibly later, here – like, here and there. … And how sure are you that this irretrievable breakdown in your relationship occurred in September 2006?---At the time, it was – it felt very irretrievable and we took steps and measures based on the fact that we believed it was irretrievable at that time. Did you, afterwards, form a different view?---I guess given that we worked together and we spent a great deal of time together professionally, at times, those lines could be considered blurred. Do you still spend a great deal of time together?---No. As at – is that a recent thing?---Yes. And so, in 2018, for example, did you spend a lot of time together?---Professionally, yes. Up until May 2019, the fact is, isn't it, that you saw each other or spoke to each other several times a day?---Yes. … (b) Charlene denied that she and Steven were in a relationship when they travelled together in 2007, 2008. (c) In relation to her description of Steven as her spouse in tax returns and otherwise after September 2006, Charlene said that she referred to him that way because he was "until he wasn't", that is, until they divorced. She said: … I referred to him as my husband in all instances, you know, down to trivial – down to significant unless it was, for some reason, complicating the issue, you know. Everybody doesn't need, like, some detailed back story about what I refer to myself as or, "Is he your ex-husband, or your current husband or a spouse, not a spouse." I kept – you know, I have my last name as my last name. I refer to him as my husband. There's nothing really more to it than that. Well, it's a bit odd, isn't it, that you would describe somebody as your husband who you say you haven't been in any kind of relationship with since September 2006?---Am I going to go into a detailed discussion with anybody that I meet about my personal circumstances with him, or I'm just going to go, "This is Steve, my husband." So you're saying you socially introduced yourself as Steve's wife and Steve as your husband?---At times, but then if somebody – you know, if somebody incorrectly referred to me as something, it would really depend on the instance as to whether or not I corrected them. It was a sort of a trivial formality. Well, many people in this country don't regard the status of marriage as being trivial and - - -?---It wasn't so much the status of marriage, it was - - -… - - - the status of what I called myself, or how I refer to myself, or how I refer to him. But it is the case, I think, from what you've been saying, that you and Steven, after September 2006, presented yourself as married socially?---After 2006? After September 2006?---I have referred to him as my husband and other people have referred to me as his wife at times after 2006. (d) In relation to the fact that Steven's home address on the application for the Liberty Financial loan was the Rouse Hill property, Charlene said that she did not recognise the handwriting on the application but confirmed that she read it and signed it. When asked about why the address given for Steven was the Rouse Hill property, she said that "at the end of the day, you know, if he hasn't changed his address, then I don't see what the huge deal is". When pressed she suggested that this was because of the address on drivers' licences was needed to verify their identity and disagreed that it was because he lived there then. (e) When asked to explain why her brother's residence was recorded on the application for the Liberty Financial loan as being at the Oakville property, which she said was to go to Steven under the claimed contract, she said that her brother needed to have somewhere to live with his partner and he had a caravan on the Oakville property. (f) She had no explanation for why the fax she sent to Liberty Financial on 22 November 2007 (see [54] above) stated that they "separated earlier this year". She said that the statement that she had made payments since April 2007 (rather than January 2007 as asserted in her affidavit) was "an error" made in the fax. In later cross-examination, Charlene accepted that Steven had made repayments on the Liberty Financial loan up until April 2007. Business continuity 79 In relation to her role in the business, Charlene gave the following evidence in addition to that set out at [76] above: - - - but in May 2018, you were an office manager. And who did you work for then?---Elite Scaffold. When you say "Elite Scaffold", are you describing a company name?---Yes. What is the full company name?---Elite Scaffold Australia. 80 In later cross-examination in relation to her role in the business, Charlene said: But between 2007 and May 2019 you had more or less the same job?---More or less the same job. I would definitely say that, as I mentioned yesterday, there were periods of time where I was probably more involved and more of a, I guess – I wouldn't say able to make too many decisions on my own. But I guess I had a bit more leeway and a bit more freedom to kind of be my role, I suppose; whereas, as, you know, the last few years definitely I took a much more reserved approach. And I took steps back, and – yes, I wouldn't say that my role was the same as it was, like, all the way through. I understand. And in the last few years I think you said your role was more reserved and it has changed somewhat?---Mmm. And what was the catalyst for that?---Well, Steve and I were having a lot of differing opinions at that point. Our relationship was deteriorating further. I guess he was professionally moving in a direction at times that I didn't agree with or making decisions that I didn't agree with, and we would butt heads over things and ways to handle, you know, particular comings and goings of the business. So at that point, you know, there were times when I sort of threw my hands in the air and essentially quit, and I guess there were situations that we sort of didn't really recover from in that sense. So I would come back at times and perform, I guess, a less-involved role. And I recall yesterday you saying that – I think you said after – and please correct me if I get this wrong. But I think you said after July 2016 when you weren't living in the property you felt like a bit of a vagrant. I think that was your word yesterday?---Mmm. And so my question is does this change – in the relationship that you've been describing, does that more or less coincide with you moving out of the property in July 2016?---God. I guess. Yes, I suppose you would say that. Because the business was, up until July 2016, and still is, since July 2016, run out of this property. Is that correct?---Yes. There were – it's not – wasn't solely run out of the property. There were rental properties where he would store scaffolding, and there would be offices at times that he would run from there or – yes, it wasn't solely always run out of the Rouse Hill property. Like, the registered address was there and things like that. But - - - I understand?---Sorry. Yes. No. No, it's helpful because the sense that I was getting through some of your answers yesterday and through what you've been describing this morning is that it was, for a large period of time – and we will be more precise in a moment – very much a joint endeavour, this business between the two of you?---The businesses were always, I think, in some part, you know, periodically joint endeavours. They would be – we would run things quite well together, and things would work out well for a period of time. And then at other times they weren't working well, and we would sort of have blow ups. And we would go our separate ways, and, you know, he would do his thing and conduct things his way. And I would do my thing and conduct things my way, and – yes, it was a real sort of to and fro a lot of the time. And July 2016 is one of the times where it was a fro, if you like. That was a point at which you went your own way?---Yes, probably earlier than that. But I think at that point, like, for me the business relationship was beyond repair or beyond, you know, my capacity to function in every day with him, and then certainly any – sorry, certainly any prospects that I thought that perhaps a relationship – a personal relationship with him could be salvaged then, you know, around that time it was just like – to me it was just not going to work. I sort of gave up. … I wasn't meaning to ask you about who was pulling more weight or anything in the nature. I was really just looking for a – to understand whether the nature of the tasks that you were performing compared to the nature of the tasks that he was performing remained more or less the same during the time that you worked together?---Yes. Again, there were, you know – there's obviously a lot of opportunity here for me to really kind of go into the nature of Steve and what working with him was like. But there were definitely times where he was just mentally unmotivated and incapable of committing, I think, for months and months at a time. I think he sort of bit off more than he could chew a lot of the time and had a lot of balls in the air, and I think a lot of that pressure came down on me to keep things running, keep operational and try and keep him sort of doing what he needed to do. And so – yes, at times I think it was unfairly weighted in that sense. I was more the consistent one, and he was more the one that threw everything at the situation periodically and then would retreat into nothingness. I understand. But, if I could put it this way, you never went out and got the required certificates and passes so that you could install scaffolding?---No, that wasn't necessary. Steve had the necessary qualifications, and anybody that we hired, whether it be subcontractors or employees – they were all required to have, you know, working at heights licenses and high-risk licenses and things like that. So it wasn't a requirement for me specifically to have those. No. And, likewise, he never got better at record keeping or learned how to do the bookkeeping or - - -?---He did. He did because there were definitely periods in time where I sort of told him to jump and he could handle it all on his own. So he had to learn how to do things. 81 In cross-examination, Charlene gave the following evidence: Now, you said before – you used the word businesses before. You said the businesses were – I was asking you whether the business was a joint endeavour, and you then used the term businesses. Do you mean to indicate by that that there were different businesses?---There was, I think, only at ever one time two operating businesses operating simultaneously. The rest of the time it would be one. … Well, I just mean that there was, at one time, two different companies operating side by side, your company Elite Equipment and the company Combined Scaffolds?---Yes. Combined Scaffolds then was wound up?---Yes. And Elite Equipment was left alone for a while. Later on – and we will go through the sequence of this – another company was incorporated, I think called Elite Equipment Australia?---Yes. And my question is although they were companies operating in a strict legal sense – different companies operating it was, at all times, the same business, the same endeavour?---Yes. Yes. All right?---Whether that be an endeavour that was operated off my back of Steve's back or my brother was invested for a while there before he moved. So - - - I understand?---Yes. We were really trying to, I guess, make a success story out of working in a family-operated situation. … Then in April 2007, liquidators were appointed to Combined Scaffolds, and you said before that thereafter, the Combined Scaffolds business was effectively run through Elite Equipment?---Yes. … After April 2007, Steven commenced working for your company, Elite Equipment, and he worked for Elite Equipment, didn't he, until that company was wound up, effectively?---I believe he worked for that company for – whether it was entirely for every single month of those years, I don't recall, but he definitely worked for the company. Elite Equipment then had a year of trading profitably in 2008. Does that sound right?---I guess so. And another year of trading profitably in 2009?---Mm. But on 22 December 2009, a liquidator was appointed to Elite Equipment?---Yes. And that was a result of the dispute about this transfer of scaffolding equipment that we were talking about before?---Yes, that's right. I took steps to put the company into voluntary liquidation, I think it's called. And prior to doing that – you can take it from me that occurred on 22 December 2009. Prior to doing that, on 4 December 2009, you incorporated the company called CSW Group Proprietary Limited. Does that sound right?---Yes. And the same day, also on 4 December 2009, a company called Elite Equipment Australia Proprietary Limited was also incorporated. Does that sound right?---Yes. It was incorporated by John Bonner, your brother. You recall that?---Yes. Why was that done?---That was under professional advice, again, that I received with this situation. I had legal advice pertaining to the proceedings that were to do with the transaction, as I discussed, the $290,000 transaction. So I went to solicitors and I got advice with respect to the situation, and when it was established that putting the company into voluntary liquidation was the best course of action, that was what I did. And, again, there was – it meant that there was a situation that there was employees to look after and works in progress, and it was, you know, a situation where my brother then decided he would step up and have a go at it. He was a very competent scaffolder and a leading hand, and he was very good at his job, so he wanted to try and make something of it as well. The solicitor that you went to see at around this time, was it also Philip Bell?---No. In July 2017, the Commissioner petitioned for the winding up of Elite Equipment Australia?---Yes. And is that because of unpaid tax debts?---I believe so. And shortly thereafter, in September 2017, a new company was incorporated by Steven this time, called Elite Scaffold Australia Proprietary Limited. Do you recall that?---Just – yes. I would like to state, though, that during 2016 there was, you know, a period – 2016, 2017, there were period of time that I was not working as an employee for that company. For several years, I would have deemed myself an employee, as I've said before, but, again, the daily operations and the company's goings were all Steven's responsibility. He was the director. He's the director of Elite Scaffold Australia. He proceeded to continue to operate, and it's really got nothing to do with me any more. Tax returns and responses to trustee's income questionnaires 82 Steven's tax returns for the years ended in 30 June in 2004-2006 and 2008-2010 are in evidence; the return for the year ending 30 June 2007 is not in evidence. All returns indicate that his "home address" was the Rouse Hill property. Charlene is named as his spouse in the 2008-2010 returns. He declared as follows: (a) In the 2004 financial year: his stated occupation is "company director", his total income was said to be $55,322 of which $50,000 was said to be wages paid by Combined Scaffolds and the balance was interest from a St George Bank account. (b) In the 2005 financial year: his stated occupation is "company director", his total income was said to be $40,900 all of which was said to be wages paid by Combined Scaffolds. (c) In the 2006 financial year: his stated occupation is "company director". He said he was paid wages by Combined Scaffolds ($24,125) and Elite Equipment ($3,800), interest ($7,266) and a distribution from the Watton Family Trust ($8,806). He claimed to have received rent of $36,000 and interest deductions of $53,745 with other rental deductions of $15,540 in respect of the Oakville property. There is no declaration concerning a spouse and the form does not require it. (d) In the 2008 financial year: his stated occupation is "company director". He said he was paid wages by Elite Equipment ($45,268) but that his taxable income was $40,139. (e) In the 2009 financial year: his stated occupation is "crane operator". He said he was paid wages by Elite Equipment ($46,322). (f) In the 2010 financial year: his stated occupation is "crane operator". He said he was paid a total of $50,465 in wages by Elite Equipment ($21,850) and Elite Equipment Australia ($24,966) with a taxable income of $50,000. 83 In Steven's responses to income questionnaires provided to the trustee for the periods November 2007/2008 and 2008/2009 (curiously, both appearing to be signed on 23 January 2009) he indicated that he was employed by Elite Equipment as a scaffolder for wages of $45,268 per annum and use of a 2004 Ford Falcon ute, that he lived at Billabong Place, his wife was Charlene (with whom he did not reside) who was described as an "office manager", and his lawyer was Hills Legal (the firm with which Mr Bell is associated). 84 In an income questionnaire, also said to be for the period of November 2008/2009, dated as signed on 4 November 2010, Steven indicates that: He lived at Billabong Place and/or the Rouse Hill property. He answered "no" to being married or living in a de facto relationship. He said he was employed as a scaffolder and earned $45,448. He was employed by Elite Equipment from 20 February 2007 to 8 December 2009 and by Elite Equipment Australia from 20 December 2009. He had the use of the same Ford Falcon Ute as previously, then provided by Elite Equipment Australia. He paid $300/week to Charlene for room and board. His lawyers were nominated as Consolidated Lawyers. They are the same lawyers as those employed by Charlene in correspondence with the trustee. 85 Charlene's tax returns indicated that: (a) For the years ended 30 June in 2004 and 2005 Charlene's occupation was said to be "bookkeeper" employed by Combined Scaffolds and she was paid wages of $50,000 (2004) and $19,798 (2005). (b) In the 2006 financial year, Charlene's occupation was said to be "bookkeeper", her total income was said to be $21,600 including wages paid by Combined Scaffolds ($11,400) and Watton Equipment ($8,263) and a distribution from the Watton Family Trust ($790). (c) In 2007, Charlene's occupation was said to be "bookkeeper" and her total income was $69,098 including wages paid by Watton Equipment ($39,811), and QBE Insurance ($1,456) and a distribution from the Watton Family Trust ($27,146). There is no declaration concerning a spouse and the form does not appear to require it. (d) In 2008, Charlene's occupation was said to be "manager", her total income was said to be $49,162 including wages paid by Elite Equipment ($27,664) and a distribution from the Watton Family Trust ($20,683). Steven's taxable income for the 2007-2008 year was said to be $43,591. (e) In 2009, Charlene's occupation was said to be "manager - office", her total income was said to be $77,694 including wages paid by Elite Equipment ($28,196) and a distribution from the Watton Family Trust ($48,624). Steven's taxable income for the 2008-2009 year was said to be $45,857. (f) In 2010, Charlene's occupation was said to be "manager - office", her total income was $67,757 which included wages paid by Elite Equipment ($13,300), wages paid by Elite Equipment Australia ($14,384) and a distribution from the Watton Family Trust ($39,635). Steven's taxable income for the 2009-2010 year was said to be $46,341. (g) In 2011, Charlene's occupation was said to be "manager-other practice", her total income was $64,436 which included wages of $27,757 and "allowances, earnings, tips, director's fees" of $35,720 paid by Elite Equipment Australia. Steven's taxable income for 2010-2011 was said to be $49,685. (h) In 2012, Charlene's occupation was said to be "administrator – office", her total income was $28,205 of which $27,132 was said to be wages paid by Elite Equipment Australia. She said that Steven's income for that year was $50,887. (i) In 2013, Charlene's occupation was said to be "administrator – office", her total income of $32,628 of which Elite Equipment Australia paid wages of $32,000 and the Watton Family Trust paid a distribution of $72. Steven's taxable income for the 2012-2013 year was said to be $31,725. (j) In 2014, Charlene's occupation was said to be "administrator – office", her total income was said to be $20,591 of which Elite Equipment Australia paid wages of $20,500. She said that Steven's taxable income for 2013-2014 was $20,350. 86 Curiously, neither of Charlene or the trustee addressed the meaning of income received by Charlene from the Watton Family Trust but it may be observed that it was first paid in the financial year ended 30 June 2006 and it was last paid in the financial year ended 30 June 2013. The correct inference might be that Watton Equipment and its successor companies which conducted the business were trustees of a trading trust, having regard to Charlene's evidence concerning CSW Group given in cross examination but that issue was not explored. Claimed contract Charlene's submissions 87 Counsel for Charlene submitted that the Court should find that the claimed contract was a valid and binding contract because: (a) The terms are clear and rational; (b) There is significant corroborating documentary evidence; he says the Purported BFA is entirely supportive of the existence of the claimed contract; (c) Charlene gave valuable consideration for the agreement; (d) Charlene acted in accordance with the terms of the claimed contract; and (e) While the arrangements between Steven and Charlene are "somewhat unusual", they are explained in a cogent and logical manner. 88 Charlene submitted that: The approach to determining whether a contract has come into existence is an objective one: see Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [25] and Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165. It is not reliant on subjective intentions; what matters is what the words or conduct of each party would have led a reasonable person in the position of the other party to believe: Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 at [59] (Sackville AJA, Macfarlan and Gleeson JJA agreeing). To find the existence and terms of a contract, post-contractual conduct can be admissible and relevant on the question of whether a contract was formed: Mushroom Composters v IS & DE Robertson Family Trust [2014] NSWSC 164 at [127]-[131] (McDougall J). The fact that Steven and Charlene signed the Purported BFA is significant (see Toll at [42]), even though it is not a "financial agreement" for the purposes of the Family Law Act. Charlene's credit 89 In circumstances where the Rouse Hill property was acquired by Steven in 1998, before he met Charlene in 2000 and title to it remained registered in his name until August 2015 when the trustee filed a bankruptcy application, it is clearly for Charlene to establish her claim to the Property. 90 Charlene's case relies to a significant extent on her credit, since it is agreed that the Purported BFA is not a "financial agreement" for the purposes of the Family Law Act and it is a flawed document in significant respects discussed below. 91 Counsel for Charlene submitted that she was an unsophisticated witness with a limited understanding of the legalities of the events in question who answered questions to the best of her ability and in a frank and forthright manner. He submitted that her evidence was generally corroborated by the documentary record with some lack of recall being understandable given that her evidence related to events in 2006 and 2007. I do not accept that assessment. 92 It is true that Charlene presents as a down to earth and forthright woman and she has a neatly presented "girl-next-door" quality rather than the highly polished dress and demeanour sometimes associated with women who work in the big end of town. However: (a) She is plainly an intelligent, articulate woman; (b) She has over fifteen years' experience as a bookkeeper and office manager in scaffolding and related labour hire businesses; and (c) It is her evidence that she took legal and accounting advice at relevant times, including in relation to entry into a binding financial agreement, the transfer of plant and equipment to Elite Equipment upon the liquidation of Combined Scaffolds and the incorporation of new entities following the liquidation of entities through which the business was previously conducted. In my view she has a strong understanding of the central issues in this case. 93 It is also true that at the time Charlene gave her evidence important events in 2006 and 2007 had occurred up to 13 years previously and some allowance must be made for that. However, the distance of time does not explain fundamental inconsistency between the documentary evidence and Charlene's evidence concerning when she and Steven separated, the terms of the claimed contract and when she says it was entered into. Explanations offered were not satisfactory. The following are instances of some relevant inconsistencies: (a) The fact that the Liberty Financial loan application, which was signed by both Steven and Charlene on 15 November 2006, stated that Steven resided at the Rouse Hill property and they each had a 50% interest in the Rouse Hill property and the Oakville property (see [40(a)-(b)] above). Charlene's explanation for the form being completed with Steven's residential address as the Rouse Hill address (see [41] above) is neither satisfactory nor convincing. Even if that were an adequate explanation, it does not explain why the proportions in which they were said to own the properties is inconsistent with the claimed contract; (b) The fact that it was Steven's bank account from which repayments of the Liberty Financial loan were to be debited from the outset in accordance with instructions in a direct debit form signed by Steven as confirmed in the letter dated 19 January 2007 which Liberty Financial sent to Charlene (see [45(c)] above) and payments were in fact made from that account until April 2007, shortly after Combined Scaffolds went into liquidation. Charlene's explanation (set out at [46] above) is insufficient. If it was necessary to fund application fees and the monthly repayments from Steven's account in January 2007 for reasons of "cash flow at that point of time" as Charlene said in cross-examination, it is not credible that she and Steven agreed in September 2006 that she would undertake responsibility for the loans secured on the Rouse Hill property; (c) Her advice to Liberty Financial in November 2007 that she and Steven separated "earlier this year" and she made repayments since April 2007 (see [54] above). Charlene ultimately accepted that this advice was correct in relation to the time she commenced making repayments; (d) Steven's characterisation of her (and Elite Equipment's) occupation of the Rouse Hill property in his first conversation with an employee of the trustee on 20 November 2007 which led the trustee to seek the lease/rental agreements under which they occupied the Property on 21 November 2007 (see [52] and [53] above); (e) Her failure to claim ownership of the Rouse Hill property in her communications with the trustee and Liberty Financial in November 2007 (see [53]-[55] above). I do not accept as an adequate explanation that Charlene was responding to specific questions asked in the trustee's 21 November 2007 letter. That she owned the Rouse Hill property and was not a tenant was the obvious response if that is what she thought to be true. That is especially so since it is her evidence that Mr Bell gave her advice concerning the content of the letter dated 28 November 2007; and (f) Steven's statement of affairs dated 28 November 2007 (see [57] above) suggests that he and Charlene were co-owners of the Rouse Hill property as a result of the Purported BFA. 94 Further, Charlene's failure to give evidence in chief concerning the financial pressure that Steven was under in late 2006 and the reluctance with which she came to admit its existence, although she was plainly emotionally affected by the recollection, undermines her credibility significantly (see [37] above). 95 I have formed the view that Charlene's evidence is reliable only to the extent that it is corroborated by contemporaneous documents. Jones v Dunkel inferences 96 The trustee submitted that the Court should draw the inference that Steven's evidence would not have helped Charlene arising from her failure to adduce evidence from him (at least as at early 2018) or to call him to give evidence. In November 2018, the Wattons' divorce became final and it is Charlene's evidence that she no longer works with Steven. In those circumstances I can understand that Steven might be inclined to assist Charlene or expose himself to being required to answer questions. I have not found it necessary to draw inferences from Steven's failure to give evidence, even though I have noted its absence in some case because there are undoubted gaps arising from the absence of his evidence. No inferences should be drawn from the trustee's failure to call Steven, since the trustee has provided evidence that Steven evaded service by the trustee. Did Steven and Charlene enter into the claimed contract 97 In my view, they did not. I do not accept Charlene's submissions set out at [87] above. 98 First, the inconsistencies in the documents identified at [93] above are incompatible with a finding that the claimed contract was entered into in September 2006. The Liberty Financial loan application was made two months after the time at which Charlene says the claimed contract was made. The November 2007 communications between Charlene and the trustee or Liberty Financial were made only a year later. 99 Second, the evidence does not establish that the Purported BFA was executed in September 2006 and there is no explanation for why the Purported BFA does not accurately reflect the claimed contract in the circumstances which Charlene says existed in September 2006. 100 Charlene's evidence is that she and Steven met with Mr Bell on two occasions in September 2006 to discuss the split of their marital assets and "as a result of those meetings" Mr Bell prepared the Purported BFA: see [32(d)] above. Yet: (a) The recitals of the Purported BFA say that the Rouse Hill property is owned by them both, but that was never true on Charlene's evidence: Steven had acquired it before they met and made loan repayments and paid interest on it: see the table set out in the letter to Charlene dated 14 April 2008 set out at [59] above; and (b) The Purported BFA does not contain any reference at all to who will be responsible for mortgages on either the Rouse Hill property or the Oakville property and the Oakville property is not mentioned at all. 101 I do not accept that these inconsistencies between the Purported BFA and Charlene's evidence can all be laid at the feet of Mr Bell on the basis that he "failed Ms Watton on numerous occasions in the history of this matter", as submitted by counsel for Charlene in closing submissions. 102 The only thing that Charlene says she can remember in any detail that was said at the meetings with Mr Bell is advice concerning the fees associated with any transfer relating to the Property and that she did not need to address that issue at the time as she could not afford it. That is not credible if she and Steven came to an arrangement to the effect of the claimed contract at the meetings with Mr Bell as stated in Charlene's affidavit at [16] (see [32(d)] above). It is notable that Charlene gave no evidence of any other conversation with Steven concerning the claimed contract. 103 If the claimed contract were agreed by Steven and Charlene in their meeting with Mr Bell, it is not credible that there would not have been some memorable discussion of how a bookkeeper whose declared earnings in the preceding financial year were $21,600 might be able to meet responsibility for loans of around $450,000. That is circumstances where: (a) One of the loans, for $136,400, was falling due for payment the next month; (b) The property over which the loans were secured was not registered in her name and she could not afford to pay stamp duty on the transfer of the Property to her so that it could be registered in her name such that Steven would continue to be required to be liable under any mortgage over the Rouse Hill property; and (c) She does not claim to have other assets of substance. 104 Moreover, it is inexplicable why Steven would agree to transfer to Charlene the asset of primary value to him and his business at that time. The marriage had not reached its first anniversary. Steven had acquired the Rouse Hill property in 1998, built a home on it and established Combined Scaffolds' business on it before they met. He had been responsible for the loans secured over it since 1998. All of that would be lost if Charlene were to default on the loan. The Oakville property was subject to a mortgage to secure a loan likely at least equal to its market value at that time and it was vacant land: Steven would have to start again with it. 105 Counsel for Charlene submitted that the terms of the claimed contract are clear and rational but Charlene's evidence in chief did not address any rationale for the split of assets. Having regard to the factors mentioned in the previous two paragraphs, I do not accept that that is true. While the concept of one property each might be neat, in the circumstances it was not rational unless there was a motivation to distance the Rouse Hill property from the reach of Steven's creditors so as to preserve the continuity of the scaffolding business; that would be a rational but vitiating explanation for entering into the claimed contract in September 2006. 106 Counsel also submitted that Charlene's evidence should be accepted because the fact of the meetings with Mr Bell had not been challenged. However, it was Charlene's evidence that she could not, as at May 2018 or October 2019, recall when she went to Mr Bell's office or even that she went with the purpose of signing the Purported BFA; she only "believes" that it was in September 2006 (see [32]-[33] above). In any event, whether Steven and Charlene separated irretrievably in September 2006 and the existence and terms of the claimed contract were challenged. In that regard: (a) The fact that the Purported BFA does not refer to Charlene undertaking liability for the loans over the Rouse Hill property and does not mention some arrangement about the Oakville property is strong evidence that the claimed contract was not reached at the time the Purported BFA was drawn up and there is no contention that it was reached after the Purported BFA was drawn up in light of Charlene's evidence that her conversations with Steven in this regard took place at the meetings with Mr Bell; and (b) I am not satisfied that the marriage broke down irretrievably in September 2006. While I accept that Charlene and Steven may have had difficulties in their relationship, especially having regard to the financial pressure which arose from time to time, nonetheless: (i) No steps were taken by either of them to divorce before 2018. There is a notable gap in Charlene's evidence on the topic of whether either of them took another partner; (ii) While Charlene denies that she and Steven lived as husband and wife after September 2006, all of the contemporary evidence is that they both resided at the Rouse Hill in 2006; (iii) It is her evidence that they were "working in a family-operated situation" in conducting a scaffolding business from at least 2005 until May 2019 at the Rouse Hill property and other locations; (iv) Her tax returns indicate that Charlene received distributions from the Watton Family Trust from the financial year ended 30 June 2006 to the financial year ended 2013 and such evidence as she gave about trust arrangements would suggest that she was not the instigator of the trust (see [79] and [85] above); (v) They travelled together for pleasure with friends in 2007 and 2008 and possibly after; and (vi) They presented themselves socially as husband and wife, not friendly ex-husband and ex-wife. 107 The Purported BFA is undated and Steven's signature is not witnessed. While it might be inferred that Mr Bell would not witness Steven's signature because he gave advice to Charlene, that Steven signed the Purported BFA in the presence of Charlene and Mr Bell is uncorroborated. I am not satisfied that the appearance of Steven's signature and a date on a statement said to be pursuant to s 90G(1)(b) of the Family Law Act accompanying the Purported BFA establishes that that was when signatures were affixed to the Purported BFA and related documents. The statement attests to Steven having received independent legal advice but there is no certificate by a lawyer either signed or dated to that effect. There is no evidence that he ever received such advice or when he signed the Purported BFA, except for Charlene's evidence that she "believes" he signed it when she signed it in Mr Bell's presence. While Charlene's signature appears on the Purported BFA and her statement, and Mr Bell witnessed Charlene's signature on the Purported BFA and signed a certificate that she had been given independent legal advice, no date appears on any of those documents. No explanation has been advanced for why that would be so if the document was signed by Steven and Charlene and Mr Bell witnessed Charlene's signature on the same occasion in September 2006. 108 It is notable that the first mention of the Purported BFA in any document appears to be in Steven's statement of affairs dated 28 November 2007 (see [57] above) but in that document, he suggests that the Rouse Hill property is owned by them both. The first mention that Charlene was Steven's "ex-wife" was in his telephone conversation with an employee of the trustee on 20 November 2007, but Steven made no mention of the Purported BFA or that Charlene was the true owner of the Rouse Hill property and what he said led the trustee to believe that Charlene and Elite Equipment were tenants on the Rouse Hill property and Elite Equipment was a tenant on the Oakville property. 109 Third, I do not accept that Charlene gave valuable consideration for the transfer of the Rouse Hill property to her. 110 Counsel for Charlene submitted that she relinquished her rights to any and all claims against Steven arising by reason of their marriage and that was valuable consideration. I do not accept that as: (a) While the Purported BFA recites that the intent is to promote harmony and reduce the possibility of litigation, there is no operative clause stating that Charlene relinquished rights to sue in relation to marital property and it is not a "financial agreement" for the purposes of s 90C of the Family Law Act; (b) Charlene gave no evidence that she had relinquished all claims and there is no documentary evidence that Steven understood such a promise to have been made; (c) There is no evidence that Charlene ever commenced or contemplated suit: see the Full Court's decision Official Trustee in Bankruptcy v Lopatinsky [2003] FCAFC 109; (2003) 129 FCR 234 at [103]-[104] (Whitlam and Jacobson JJ); (d) The fact that Charlene has not sued is not evidence of forbearance consistent with any such claim: the evidence suggests that Steven and Charlene had few other assets other than the Oakville property which was Steven's and it appears to have been mortgaged to secure loans equal to or greater than its market value; (e) The trustee relied on the decisions of the Full Court of the Family Court of Australia in In Marriage of Woodcock (1997) 137 FLR 14 (Murray, Baker and Kay JJ) and Lopatinsky at [108] and the decision of Cronin J in Chen v Chen [2016] FamCA 758 at [13] for the proposition that a wife cannot, by entering into an agreement with her husband, preclude herself later from applying to that Court for an order for maintenance or property adjustment and the Family Court's jurisdiction in that regard cannot be ousted. Counsel for Charlene did not identify any contrary authority; and (f) In relation to the Oakville property, for reasons previously given, I do not accept that Charlene and Steven entered into a verbal contract relating to the Oakville property in September 2006 so as to constitute valuable consideration and Charlene's position is that she never had an interest in that property 111 Fourth, counsel for Charlene appears to have vacillated as to whether she relies on a claim of part performance by reason of having made payments in respect of the Liberty Financial loan between 2007 and 2016 and maintenance of the Property, seeking to reinstate the argument in supplementary submissions dated 12 December 2019 following an earlier argument based on part performance which he abandoned at the hearing on 4 December 2019. Suffice it to say, that in my view any payments Charlene made are properly characterised as fulfilment of her obligations under the Liberty Financial loan and in the nature of rent. The evidence reveals that the modus operandi in relation to the scaffolding business conducted by various entities between 2006 and 2019 and the utilisation of assets (including the Rouse Hill property and the Oakville property) was that money was paid from whatever source currently had access to cash and/or mortgage payments and those payments were characterised as "rent" in relation to current occupation. This and the very existence of that loan (under which Steven had obligations) is inconsistent with the claimed contract or any contract of the nature alleged. I do not accept that Charlene's payments under the loan or in maintenance of the Property were referable to the claimed contract or any transaction of the same nature. As such, any argument of part performance falls away: see Pipikos v Trayans [2018] HCA 39; (2018) 265 CLR 522 [49]-[54] (Kiefel CJ, Bell, Gageler and Keane JJ). 112 Having found that the claimed contract did not exist, it is unnecessary to address supplementary submissions filed by the parties in relation to whether s 90DA of the Family Law Act has application to a partly written/partly oral contract. 113 It is also unnecessary to consider whether ss 120 or 121 of the Bankruptcy Act apply to the transfer of the Rouse Hill property to Charlene. Conclusion 114 Charlene's application should be dismissed. The trustee is entitled to orders concerning vacation of the Rouse Hill property and facilitating its sale. Subject to contrary submissions, the applicant should pay the trustee's costs as agreed or taxed. The parties should provide draft orders addressing the relief which flows from these reasons and as to resolving the issue of costs. I certify that the preceding one hundred and fourteen (114) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Farrell. Associate: Dated: 22 July 2021