Waterson v Wallader[2022] QCAT 175

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

What is this application about?

1. [1]
   On 15 March 2004, the respondents paid $25,000 to their daughter, the applicant, and her then husband. On 27 October 2021, the respondents filed an application for a minor civil dispute – minor debt^[1] seeking to recover the money from the applicant as a repayable loan.  In Wallader & Anor v Waterson^[2] – a decision given contemporaneously with this decision - I dismissed the respondents’ claim against the applicant, finding that the advance of $25,000 to her was a gift and not a loan, noting further that even if the advance was a loan, the application to recover it was brought well out of time. 
2. [2]
   However, in 2021, the applicant had received a terminal cancer prognosis with the consequence that her life insurance paid out in the sum of $340,000, which she paid to the respondents for safe keeping.  When the time came to return the insurance proceeds to the applicant, the respondents repaid most of the proceeds, but withheld the sum of $25,000, pending the outcome of the application referred to at [1] above.
3. [3]
   This application was brought by the applicant to recover the retained $25,000 from her parents as a minor debt, and it was heard and has been decided with her parents’ application.  The two matters are inextricably linked, and the decisions should be read together.

Procedural matters

4. [4]
   I previously^[3] observed the hardships each party faces, in addition to the seemingly irretrievable breakdown of their familial relationship. The respondents are in financial hardship, Mr Wallader is undergoing treatment for bowel cancer, and Mrs Wallader has ongoing heart troubles. Ms Waterson is battling a terminal cancer, is undergoing chemotherapy and is attempting to arrange her financial affairs to benefit her three children.
5. [5]
   Given the hardships each party faced, and the treatments currently being undertaken, at the conclusion of the hearing I gave the parties an opportunity to take time after the hearing to make written submissions, and reply submissions on their respective cases, but they each declined to do so, expressing that they were happy to rest on their cases as presented, and that they preferred closure to the dispute.

The detailed factual background to the claim

6. [6]
   My decision in Wallader & Anor v Waterson^[4] details the factual background to the respondents’ claim against the applicant.
7. [7]
   For present purposes, it is not disputed that:

   1. (a)
      between May and June 2021, on account of her terminal cancer diagnosis, the applicant received two insurance payouts, totalling $340,000;
   2. (b)
      the applicant paid the sum of $340,000 to a joint account of the respondents on or shortly after 28 June 2021;^[5]
   3. (c)
      the respondents repaid $290,891.36 to the applicant on 17 September 2021;
   4. (d)
      the respondents repaid $24,108.64 to the applicant’s solicitor’s trust account on 27 October 2021; and
   5. (e)
      the respondents have withheld $25,000 in their joint account pending the outcome of these proceedings.
8. [8]
   The circumstances in which the initial payment of $340,000 was made are disputed.
9. [9]
   The applicant says that, although she had not disclosed her receipt of the payouts to her estranged husband, someone had – she says it was the respondents, but they deny that - and Mr Waterson had made remarks about his entitlement or his intention to claim the funds.
10. [10]
    Ms Waterson says that when she received the funds, she was in a state of distress over Mr Waterson’s claims, and that she was quite unwell whilst undergoing chemotherapy.  She says Mr Wallader then suggested that he and Mrs Wallader would “keep the money safe” for her if she transferred it to them until she was able to take legal advice about what to do.
11. [11]
    Ms Waterson says that whilst she trusted her parents to safe-keep the funds, she did ask that an account be set up as a trust account - which the parties also referred to throughout their evidence as a “Christmas account”.
12. [12]
    For the respondents’ part, they say the applicant asked them to hold the funds in order to “hide” them from Mr Waterson and/or from the Federal government.  They say that once they satisfied themselves the transaction was not “fraudulent”, they agreed to hold the money and attempted in branch to open a trust account in their daughter’s name for that purpose, but due to banking regulations, they were unable to do so. 
13. [13]
    They were also concerned that a “Christmas account” could only be drawn down between 1 November and 31 December in any given year which would have restricted Ms Waterson’s timely access to it. Therefore, the respondents opened a new joint account in their own names to receive the money and to keep it quarantined from their other funds and accounts.
14. [14]
    When the payment was transferred to them by their daughter, there was no discussion whatsoever of the $25,000 “loan” or of its repayment. It was understood that upon request, Ms Waterson would receive back all the money transferred to and held in her parents’ account plus interest earned on it, less any deposits the respondents had to make from their own funds to open and maintain the account.
15. [15]
    When asked when the decision was made to retain $25,000, Mrs Wallader said that the decision was made after her daughter was “abusive” to the respondents.
16. [16]
    She explained that Ms Waterson became upset upon discovering that the money was neither in a trust account or a “Christmas account” and asked for all the money to be transferred back immediately, but this was not possible as banks had by then closed for the day. By this time, the parties had already fallen out over other issues and Ms Waterson had already demanded that the money be returned.
17. [17]
    In Wallader & Anor v Waterson^[6] I detailed several text messages exchanged between the applicant and Mr Wallader on 16 September 2021 and 17 September 2021.
18. [18]
    To the extent the content is relevant to these proceedings, they included the following on 16 September 2021 (my emphasis added):

Mr Wallader (DW) 3.33pm:

We do not have the details of where to send the money on my phone or Mums so how we can send it and I leaving for my work – typical – expect everyone to bow down to you and Lord Peter Keep away from our address as I have spoken to the police on your demands^[7] –

Ms Waterson (VW) in reply:

You are a lier I want my money and my things  

That is not your money

That account is [bank details provided]

That my money not yours

DW:

To bad you are to late for today to transfer it – my work is more important and I am leaving now – do not come near our house today or tonight – there will be trouble Vicki…  The money will be transferred in the morning less the amount we had to put into open the account and the monthly figure we had to pay to maintain the account. We will be placing a report to the authorities on why we held the money ‘in trust’ as it is presently held – you are so cruel Vicki Waterson thank God your name is not Wallader… Just Go you thief. You and Peter owe us well over $70,000-00 do you want me to deduct that amount before I attend to the transfer – I have the legal right.

VW:

I don’t owe you that money we’re is that coming from I want my $340000 back with the interest made that is not your money…

I want all my money by 9,30 tomorrow all $340,000 and the interest on which was made each month, I don’t owe you any money that my cancer money not any one else’s

DW (5.33pm):

You are still married to Peter take it up with him – it will be held in trust pending legal advice

I will work it out tonight – have all the figures and dates principal and interest

VW (9.39pm): 

You but all my money into my account as well as the interest that has been made that is my Cancer money not yours and there is know principal interest just interest on my money if it not all back in by 11am I will take this further

This money is in account to make interest for me. There no principal interest it is not a loan

19. [19]
    The following messages were exchanged on the morning of 17 September 2021:

VW (11.07am):

You transfer all $340000

DW:

That will not happen Vicki and do not order me again…

VW:

I want money back the $340000 that is my cancer money

DW:

I want our money owed since 2004 – go get from your friend Peter

Not cancer money – life insurance money

VW:

That is cancer and my life insurance money

It is my life insurance money not yours

DW:

Did not say it was mine but I have the very right to collect money owing to us irrespective of where it comes from. It is held in trust pending legal advice and possible action – held as assurance of your and Peter’s dishonesty. got it!

20. [20]
    On 17 September 2021 Mr Wallader wrote to Ms Waterson as follows (my emphasis added):

On the Heritage Bank opening time, funds will be transferred to an account as nominated by you…

The amount being transferred is the full amount less what we were expected to place into the account to open and maintain the account and less the amount, plus interest, you and Peter owe us since 2014.

…

The balance remains in the nominated joint account in trust pending legal clarification of my figures and interest charges that are based on a margin over the Reserve Bank base rate for an unsecured loan offered over the period in time; a loan paid and accepted by you both Peter Alan Waterson and Vicki Maye Dora Waterson as a commitment to be repaid jointly and/or severally.

You both have openly stated several times you both do not owe the funds which you both know is incorrect and as adults endeavour to push aside to honour the commitment to we as parents by nominating on several occasions over the time you do not owe the funds.

We have proof of the payment to you both, there is no proof of any repayment and I ask you to provide such proof for consideration.

21. [21]
    On 20 October 2021 Ms Waterson’s solicitors wrote to the respondents made the following statement (among other things, my emphasis added):

We have been instructed by our client that with your consent she transferred to your joint account an amount of $340,000 under an express and/or implied trust that you would return that amount to account upon demand.

22. [22]
    In a reply letter to this correspondence sent the same day, Mr Wallader said (among other things, my emphasis added):

Funds transferred to a new account from Vicki Maye Dora Waterson were funds transferred at her request for the purpose of attempting to hide, as I am advised by Vicki Waterson to ‘hide’ funds from her husband Peter Alan Waterson and possibly the Government for the purpose of continual payments to herself. What those payments were; were of no concern to myself or my wife however we did obtain sufficient information the funds were not of a fraudulent nature. Funds were to be held unconditionally and not in a designated trust account and when opening the account, the Bank would not open a designated trust account without the production of a trust deed.

23. [23]
    Mr Wallader transferred the withheld interest to Ms Waterson’s solicitor on 27 October 2021 and commenced Tribunal proceedings the same day.
24. [24]
    The respondents continue to hold the sum of $25,000 in their joint account pending the outcome of Tribunal proceedings.

What is the legislative framework?

Is this claim within the Tribunal’s jurisdiction?

25. [25]
    Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) describes a minor civil dispute, amongst other things, as “a claim to recover a debt or liquidated demand of money, of up to the prescribed amount”, which is currently $25,000.00, excluding interest and costs. 
26. [26]
    A debt or liquidated demand has been described as a sum of money that can be calculated by reference to a formula, schedule or some other yardstick by which the debt or sum payable can be readily calculated.^[8]  A debt can arise between two parties in several ways.
27. [27]
    A debt arising pursuant to the express or implied terms of a contract falls clearly within the Tribunal’s minor civil dispute (“MCD”) - minor debt jurisdiction.
28. [28]
    It also appears to now be well established that a liquidated claim in restitution will also fall within the MCD jurisdiction: 

    1. (a)
       In Davis v Gray^[9] the Appeal Tribunal held that restitution claim for an ascertained amount based on unjust enrichment did “appear to fall within the jurisdiction exercised by the tribunal in MCDs as a liquidated demand of money”.  Ms Davis engaged a building company to do some building and car park renovation for a commercial property she owned. Contracts were entered into and both provided for regular payments by Ms Davis to the building company. In June 2014, Mr Gray, sole director and shareholder of the building company, asked for payments to be made to him, rather than the company Ms Davis complied but the building work was never completed, and she pursued a claim against Mr Gray for the return of her money. Having found that the contracts were between Ms Davis and the building company, the Tribunal had to consider whether Mr Gray was liable to return the overpayment.
    2. (b)
       Ritson v Ryan^[10] concerned up-front payments for a pilot training course.  The Appeal Tribunal said:

[73] In this appeal it would be right to consider whether on any other grounds, the claim for the refund was within the tribunal’s jurisdiction as a claim for recovery of a debt or liquidated demand of money. In this respect, the available authorities picked out from what is now extensive tribunal case law on the subject, tend to show that the claim was within jurisdiction.

3. (c)
   In Bradshaw v Whitcombe^[11] Justice Carmody remitted a claim for a contribution on the principle of restitution, seemingly on the basis that it was a claim to recover a debt or liquidated demand of money.
4. (d)
   In Yang & Anor v Wellcamp Properties Pty Ltd^[12] Member Roney QC accepted jurisdiction when considering a claim concerning an ascertained amount of money improperly dealt with out of a trust account.^[13]

29. [29]
    For similar reasons I am satisfied that a claim arising from an express, implied or resulting trust, for restitution or in equity can be dealt with in the tribunal’s minor debt jurisdiction as a liquidated claim. 
30. [30]
    Accepting jurisdiction, I now turn to the merits of the applicant’s claim.
31. [31]
    The requisite standard of proof is the balance of probabilities, albeit to a sliding scale.  According to Justice Dixon in Briginshaw v Briginshaw:^[14]

The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding, are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.  In such matters “reasonable satisfaction” should not be provided by inexact proofs, indefinite testimony, or indirect references.

Did the parties enter into a contract?

32. [32]
    A legally enforceable agreement (contract) requires an offer, acceptance of that offer, consideration for the promises made and an intention to create legal relations.^[15] The terms must be certain, and the parties must have capacity to contract. 
33. [33]
    Most contracts need not be in writing, with some exceptions, including section 11 of the Property Law Act 1974 (Qld) (“PLA 1974”) that requires an agreement creating an “interest in land” to be in writing.
34. [34]
    The agreement between the applicant and the respondents – for the respondents to hold the sum of $340,000 was not reduced to writing or otherwise formalised in any way.
35. [35]
    The agreement lacks elements of a contract in two important respects:

    1. (a)
       no consideration moved from the respondents in exchange for their promise to safe keep the applicant’s money; and
    2. (b)
       there is no obvious intention on the part of the respondents to create legal relations.
36. [36]
    In Currie v Misa,^[16] Lush J defined consideration as follows:

…some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

37. [37]
    In Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd^[17] Lord Dunedin described consideration as:

an act or forbearance of one party, or the promise thereof.

38. [38]
    In other words, for a contract to be enforceable, there must be a payment or benefit of some sort for what is being provided: if someone promises to provide something to another person gratuitously, and then fails to do so, there can be no legal enforcement of that promise, because no consideration was given.
39. [39]
    There was no promise made by the applicant in exchange for the promise given by the respondents, and no other evidence of consideration for that promise.
40. [40]
    Additionally, where an arrangement is based upon a social, family or domestic relationship, there is a presumption that the parties do not intend their agreement to have any legal consequences if it is not performed,^[18] and the onus is upon the plaintiff to provide evidence that a binding agreement was intended.^[19]
41. [41]
    The presumption has been rebutted in cases where:

    1. (a)
       there is a written agreement between the parties;^[20]
    2. (b)
       the agreement was made after the social/family/domestic relationship ended;^[21] and
    3. (c)
       where there was a third party to the agreement.^[22]
42. [42]
    The applicant did not lead any evidence to rebut the presumption that the parties did not intend to create legal relations when the applicant paid the disputed money to the respondents.
43. [43]
    To the extent the applicant’s case relies upon a contractual argument, it necessarily fails. 

Do the respondents hold the money on trust?

44. [44]
    Solicitors for the applicant asserted that the $340,000 was transferred by the applicant to the respondents pursuant to an “express and/or implied trust”.
45. [45]
    Australian authorities recognise that a trust arises in circumstances involving a transfer of title where the recipient was not intended to benefit from the title received. One example is the imposition of a resulting trust which is imposed by law where an attempt to create an express trust fails. The transferor does not intend to create a trust in favour of himself or herself, but a trust ‘automatically’ arises because of the lack of intention on the part of the transferor to benefit the recipient.^[23]
46. [46]
    Trusts have also been imposed upon the receipt of legal title by a recipient where the transfer of title to them occurs in circumstances about which the transferor was entirely unaware. These trusts are imposed as a legal response to prevent the recipient having the use and enjoyment of rights for his or her own benefit where that use and enjoyment was not intended.^[24]
47. [47]
    The existence of a trust and the beneficial interest to which parties are entitled under that trust must be determined at the date on which it is alleged that the trust is created,^[25] or “so immediately afterwards as to constitute part of the transaction”.^[26]
48. [48]
    In my view, the circumstances of the transfer clearly gave rise to a trust because:

    1. (a)
       at the time funds were transferred there was an undisputed common intention that the respondents would hold the funds for the sole use and benefit of the applicant and on the applicant’s behalf - there was no discussion or expectation of either party that when the payment was made by the applicant to the respondents that the respondents could have recourse to the funds for their own use;
    2. (b)
       there was a common intention to set up the bank account to hold the funds as a “trust” account, and I infer that the respondents agreed to do so because they said they attended upon the bank for that purpose, but the bank refused to set up an account of that nature without a “trust deed”;
    3. (c)
       discussions of opening a “Christmas account” are further evidence that the parties intended the sum to be protected from withdrawal, as it would have been in a Christmas account, rather than readily available as it would otherwise be in a regular bank account, but the respondents decided that the limited withdrawal window would not suit the applicant’s needs;
    4. (d)
       when the applicant first requested return of the funds there was still no thought of the respondents having use of the funds for their own benefit, and the respondents expressed their intention to transfer the full amount held back to the applicant;
    5. (e)
       the respondents’ idea of withholding funds from the applicant only occurred to the respondents after a falling out and during the exchange of text messages on 16 September 2021 when the applicant – in the words of Mrs Wallader – “abused us”; and
    6. (f)
       importantly, the trust is expressly admitted by the respondents throughout their communications with the applicant and her solicitor and implied from their conduct in offering to pay the withheld sum to court. 
49. [49]
    The respondents clearly hold the disputed funds in trust for the benefit of the applicant in those circumstances.

Does the applicant have a restitutionary entitlement to the money?

50. [50]
    The objects of the QCAT Act are to have the tribunal deal with matters in a way that is “accessible, fair, just, economical, informal and quick”^[27] and, in minor civil dispute matters, the Tribunal must make orders that it considers “fair and equitable to the parties to the proceeding in order to resolve the dispute”^[28] although how to achieve such fairness and equity still requires a cause of action and jurisdiction.
51. [51]
    Concepts of fairness and justice are not new. Relevant to the applicant’s claim, the classical period of Roman law recognised an obligation arising quasi ex-contractu, namely, obligations which cannot strictly be seen as arising from contract but which, because they do not owe their existence to wrongdoing, are said to arise as though from a contract.^[29]  These obligations were recognised to ensure that “no man be made richer through another man’s loss”.^[30]
52. [52]
    Assumpsit developed in the 14^th century as the general form by which contracts not under seal could be enforced by an action for damages, beginning as an action in tort (where a defendant undertook to do something and injured the plaintiff by doing it badly) and evolving to where the action became an action for a contractual undertaking (where a defendant undertook to do something and failed to do it).
53. [53]
    By the 16^th century, the King's Bench began to allow a debt without a later express promise to found assumpsit, implying the promise from the existence of the debt. Following the decision in Slades case^[31] assumpsit became dominant in the recovery of liquidated sums.
54. [54]
    Over a century later, Lord Mansfield in Moses v Macferlan^[32] said:

If the defendant to be under an obligation, from the ties of natural justice to refund; the law implies a debt, and given this action, founded in the equity of the plaintiff’s case, as it were upon a contract (or ‘quasi ex contractu’ as the Roman law expresses it).

55. [55]
    Lord Mansfield drew a distinction between the species of assumpsit (for money had and received to the plaintiff’s use) that is recoverable in an equitable action because it “ought not in justice be kept”,^[33] and money paid by in circumstances where the receiving party may keep it “with a safe conscience” even if the receiver had no enforceable claim to it in a court of law.^[34] 
56. [56]
    From the 1930’s, restitution as a cause of action began to be considered as not limited to situations of quasi-contract, but to extend to circumstances of unjust enrichment.^[35]
57. [57]
    In 1987, the High Court of Australia recognised the principle of unjust enrichment in Pavey & Matthews Pty Ltd v Paul^[36], a case which concerned a builder's claim to recover restitution for the fair value of work done under a contract rendered unenforceable by statute.  This decision rejected the implied contract theory of quasi-contract in favour of restitutionary recovery in Australia.
58. [58]
    In 1994, Mason CJ said in Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd^[37] that (my emphasis added):

Restitutionary relief, as it has developed to this point in our law, does not seek to provide compensation for loss. Instead, it operates to restore to the plaintiff what has been transferred from the plaintiff to the defendant whereby the defendant has been unjustly enriched. As in the action for money had and received, the defendant comes under an obligation to account to the plaintiff for money which the defendant has received for the use of the plaintiff. The subtraction from the plaintiff's wealth enables one to say that the defendant's unjust enrichment has been 'at the expense of the plaintiff'...

59. [59]
    In 2005 Chief Justice Allsop AO observed^[38]:

The action of restitution as the descendant of the common law action for "money had and received" has matured in Australia, based on the informing principle of the prevention and reversal of unjust enrichment.

60. [60]
    His Honour identified^[39] at least three features governing the Australian law of restitution for unjust enrichment:

    1. (a)
       “unjust enrichment” is not the statement of a premise or principle of recovery, but rather it is an informing principle or unifying or organising concept;^[40]
    2. (b)
       a two-stage approach is to be adopted requiring:

       1. identifying an unjust or qualifying or vitiating factor that causes enrichment such as mistake, duress, conditionality of payment, request, failure of consideration; and
       2. establishing that the defendant has no juristic reason entitling retention of the enrichment;^[41] and
    3. (c)
       there is an explicit recognition of the equitable character of the action by the application of equitable principles in ascertaining who should properly bear the loss and why.^[42]
61. [61]
    Therefore, the questions to be answered are:

    1. (a)
       Were the respondents were enriched?
    2. (b)
       Was the enrichment at the applicant’s expense?
    3. (c)
       Was the enrichment unjust?
    4. (d)
       Are there any defences or vitiating factors that would deny the applicant her remedy?

Were the respondents were enriched?

62. [62]
    It is not disputed – in fact it is specifically pleaded by the respondents – that the respondents hold $25,000 in trust, paid to them by the applicant, pending the outcome of these proceedings. The funds are not protected in any way, but, rather, sitting in a joint account in the respondents’ names.  The applicant is not a named account-holder or a signatory to the account.  The respondents have clearly been enriched by the payment of $25,000.

Was the enrichment at the applicant’s expense?

63. [63]
    It is not disputed, and bank records establish in any event, that the funds held by the respondents were paid by the applicant from funds she had received from the payout of her insurance policies. The respondents did not contribute in any way to the accumulation of the funds currently held and the funds sit in a joint account in the respondents’ names.  
64. [64]
    There is no question that the respondents have been enriched at the applicant’s expense.

Was the enrichment unjust?

65. [65]
    As I have decided that the $25,000 paid by the respondents to the applicant in 2004 was by way of gift and not a repayable loan, there is no argument that the respondents should retain the funds on the grounds that the sum is owed to them by the applicant for an outstanding loan, even if juristic recovery of the loan is time-barred.
66. [66]
    The enrichment of the respondents is, in all the circumstances unjust because:

    1. (a)
       the respondents did not contribute to the $25,000;
    2. (b)
       there was no consideration passing from the respondents to the applicant in exchange for the payment;
    3. (c)
       the respondents expressly promised to hold the funds on the applicant’s behalf and that promise was relied upon by the applicant in making the payment; and
    4. (d)
       there is no debt owed by the applicant to the respondents (enforceable or otherwise) that would entitle them to retain the enrichment. 

Should the applicant be denied relief for a want of “clean hands” or otherwise on public policy grounds?

67. [67]
    The respondents accused the applicant of transferring the money to them for improper purposes, namely, to “hide” them from Mr Waterson and/or from the Federal government.  Do these accusations, if founded, disentitle Ms Waterson to her claim that the money be returned to her?

Clean hands

68. [68]
    "He who comes into equity must come with clean hands" is an equitable maxim which prevents those who have acted improperly in some way relating to the matter at hand from seeking a remedy or relief.   The maxim was applied in Harrigan v Brown^[43] to deny the plaintiff manager of a pop band from an injunction preventing the band from engaging another manager because he had failed to keep proper accounting standards in managing the band’s affairs.
69. [69]
    The defendant has the burden of proof to show the plaintiff is not acting in good faith.

Public Policy

70. [70]
    Neither will the courts enforce a right which would otherwise be enforceable if the right arises out of an act committed by the person asserting it in circumstances that are “sufficiently anti-social” or contrary to public policy.^[44]
71. [71]
    Acts contrary to public policy vary over time “according to the state and development of society and conditions of life in a community”.^[45]
72. [72]
    In Re Morris (deceased),^[46] Jordan CJ considered the notion of ‘public policy’ in determining the validity of a deed by which a widower had, prior to marriage, purportedly promised not to make any claim on the deceased’s estate. His Honour stated:^[47]

The phrase ‘public policy’ appears to mean the ideas which for the time being prevail in a community as to the conditions necessary to ensure its welfare; so that anything is treated as against public policy if it is generally regarded as injurious to the public interest.

... Public policy is not, however, fixed and stable. From generation to generation ideas change as to what is necessary or injurious, so that ‘public policy is a variable thing. It must fluctuate with the circumstances of the time’...

73. [73]
    In Nelson v Nelson^[48] Deane and Gummow JJ observed that:

[83] The intersection between the institution of the resulting trust and the principles of illegality is identified by Scott as follows:^[49]

Although a resulting trust ordinarily arises where A purchases property and takes title in the name of B, A may be precluded from enforcing the resulting trust because of the illegality of his purpose. If A cannot recover the property, B keeps it and is thereby enriched. The question in each case is whether the policy against the unjust enrichment of the grantee is outweighed by the policy against giving relief to the payor who has entered into an illegal transaction.

[84] …where the illegality flows from statute…, it is a question of the impact of the statute itself upon the institution of the resulting trust. As the matter is put by White and Tudor^[50] in their notes to Dyer v Dyer:^[51]

There will be no resulting trust if the policy of an Act of Parliament would be thereby defeated.

74. [74]
    In other words, interests of public policy must also be balanced against the public policy of “preventing injustice... [by] the enrichment of one party at the expense of [another]”.^[52] 
75. [75]
    The source of the alleged illegal purpose or wrongdoing in the current proceedings is in statute, rather than from the acts of opening the bank account and depositing funds to it themselves.
76. [76]
    In short, the question in these proceedings is not whether the agreement between the applicant and the respondents involved illegality, but rather whether the applicant is coming to the Tribunal with “clean hands”.
77. [77]
    The respondents say the applicant sought to “hide” the disputed funds from Mr Waterson and/or from the Federal government by paying them to the respondents in the first place.
78. [78]
    In relation to Mr Waterson, the respondents agreed that Mr Waterson knew about the fact of the payout before the funds were paid to them by the applicant.  Mrs Waterson gave evidence that the transfer of funds to her parents was intended to be temporary, to protect them from being claimed or spent until she was well enough to obtain legal advice. I have no reason to disbelieve her testimony in circumstances where, at the time of the payment, she had been separated from Mr Waterson for three years, was terminally ill and undergoing chemotherapy and was in the process of attempting to arrange her financial affairs. 
79. [79]
    In any event, parties to a matrimonial property dispute have a general duty of disclosure whereby each party must provide the other all information relevant to an issue in the case, including information that the other party may not know about. The duty starts with the pre-action procedure before the matter is before the family law courts and continues until the case is finalised. Parties must provide updated disclosure as circumstances change or more documents are created or come into the party’s possession, power or control.^[53]  In financial cases, disclosure must be of the party’s total direct and indirect financial circumstances.^[54]
80. [80]
    Given the evidence of each party is that Mr Waterson knew of the payment prior to the transfer to the applicants, there can be no suggestion that the payment denied him a claim to the funds by denying him knowledge of them. His rights and remedies in a financial case under the Family Law Act 1975 (Cth), if they existed before the payment continued to exist after it.  If anything, his rights, if they need protecting, are better protected by an order returning them to the applicant than an order that retains them in the respondents’ account. 
81. [81]
    With respect to the accusation about hiding funds from the “Government” and “authorities” – these allegations were made by the respondents in text messages exchanged when Ms Waterson demanded repayment of the money and there is simply no evidence before the Tribunal to substantiate the allegations.
82. [82]
    Australian taxpayers have an obligation to declare all the income received from employment, pensions, annuities, government payments, investments, business and foreign income and “other income” including compensation payments, for each financial year on their annual tax return.^[55]  However, between May 2021 and June 2021 when the funds were received by the applicant and paid to the respondents, no such disclosure obligations can have arisen. Further, the transfer of funds to the respondent did not defeat or exclude the applicant from making any requisite income declarations to the Australian Tax Office when that obligation eventually arose.  
83. [83]
    Similarly, recipients of social security payments and the holders of concession cards have a statutory obligation to disclose to Services Australia an event of change of circumstances that might affect the payment of that social security or qualification to hold a concession card.^[56]  These obligations are not defeated or impacted by the transfer of funds between the applicant and the respondents. The funds were originally paid to the applicant by her insurers and her receipt of the funds was, therefore, not hidden.
84. [84]
    In any event, Ms Waterson seeks an order that the funds be returned to her. This is contrary to the act of hiding the funds.  An order that the funds be paid to her better protects the funds for authorities than an order that they remain with the respondent.
85. [85]
    For those reasons, nothing in the circumstances or the conduct of Ms Waterson disentitles her to the relief she seeks.

Decision

86. [86]
    For the reasons given, I find that the respondents are indebted to the applicant in the sum of $25,000 and that they must repay it to her.

Interest

87. [87]
    It is appropriate that I award the applicant interest on the outstanding sum pursuant to section 14 of the QCAT, which I calculate to be the sum of $564.45 at the Tribunal scale from 17 September 2021 to the hearing date.

Costs

88. [88]
    It is also appropriate that the applicant be recompensed for her filing fee as she has been wholly successful in her claim and I am satisfied the interests of justice require it.  I award the amount of $358.00 to the applicant, being the filing fee paid on the application, pursuant to section 102 of the QCAT Act.    

Orders

By 6 May 2022 the Respondents must pay the Applicant the sum of $25,922.45 comprising:

1. (a)
   Claim of $25,000.00; plus

2. (b)
   Filing fee of $358.00; plus

3. (c)
   Interest of $564.45.