Cacas v Megameg

[2018] SADC 127

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

CACAS & ANOR v MEGAMEG & ANOR

[2018] SADC 127

Judgment of His Honour Judge Slattery

30 November 2018

EVIDENCE - ADMISSIBILITY - HEARSAY - GENERALLY

EVIDENCE - WITNESSES - SWEARING AND OATHS - CAPACITY IN GENERAL

EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS - GENERALLY

EQUITY - TRUSTS AND TRUSTEES - EXPRESS TRUSTS CONSTITUTED INTER VIVOS - DECLARATION OF TRUST - WHAT IS SUFFICIENT

ESTOPPEL - ESTOPPEL BY CONDUCT - PROPRIETARY ESTOPPEL

EQUITY - TRUSTS AND TRUSTEES - GENERALLY

LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - FORMAL VALIDITY

The plaintiffs claim for declarations that the defendant Megameg Pty Ltd (Megameg) holds the property at 127 and 127A Hindley Street (the Property) on trust initially for Donald George Cacas (deceased) (Tony) and, since his death on 13 June 2012, for the plaintiff Maria-Mandy Cacas in her own right after 15 June 2012 or alternatively Poppy Cacas in her capacity as an Executor of the deceased estate of Tony Cacas. The plaintiffs seek ancillary orders and declarations connected with the execution of documents necessary to perfect the benefits sought under the various declarations and ancillary thereto.

Tony and Michael Cacas (Michael) were brothers. Tony was a pharmacist and Michael was a medical practitioner. In 1978, Tony was in the midst of a dissolution of his partnership with his brother Jimmy, who was also a pharmacist, the business of which included a number of pharmacies and other business assets. One of the assets of the partnership was a pharmacy business conducted from the Property.

In 1978, Michael conducted his medical practice from premises at 129 Hindley Street Adelaide, having previously conducted that practice from the Property.

During 1978, and whilst Tony was overseas with Poppy, Michael caused Mageca Pty Ltd (Mageca), a company controlled by him in its capacity as Trustee of the MG Cacas Family Settlement, to purchase the freehold of the Property. Upon settlement, a bank became first registered mortgagee on the Certificate of Title of the Property.

At the time of the purchase, the partnership operated a pharmacy from 127 Hindley Street and the space in 127A Hindley Street, immediately above 127 Hindley Street, was vacant.

In 1978 and after their return from overseas, Poppy commenced proceedings in the Family Court against Tony for injunctive orders that were granted by consent and that were ancillary to an application by Poppy for the dissolution of her marriage to Tony.

Prior to the commencement by Poppy of the Family Court proceedings, Jimmy Cacas commenced Supreme Court proceedings for the appointment of a receiver to the partnership and for orders for the winding up of the partnership business. The partnership dispute was resolved and Tony was left with the pharmacy business at the Property and a small payment from the sale of a farm, an asset of the former partnership.

The plaintiffs contend and the defendants deny that an understanding was reached in or about 1978 that Michael had purchased the Property for the benefit of Tony without Tony having made any financial contribution to the purchase price or having made himself responsible to repay any secured creditor and from that time, only intermittently paying rent and outgoings. Tony did not ever call for a transfer to him of the legal and beneficial interest in the Property.

Following the share market crash of 1987 and the property market crash of 1989-1981, both Tony and Michael were forced to reorganise their own financial affairs. A receiver was appointed to the affairs of Mageca and FH Faulding and Co (Faulding), as the holder of a bill of sale over the assets of the pharmacy, and other creditors of Tony, including secured creditors, pressed for payment of debts.

As a result, Mageca placed the property and the premises situated at 129 Hindley Street on the open market for sale. Mageca then sold the land on which it conducted a nursing home managed by Evelyn Cacas (Evelyn), the wife of Michael, to the brother of Evelyn and so avoided the necessity to sell the Property and the property at 129 Hindley Street. Tony was forced to sell the whole of his property holdings in Queensland and at 141 Hindley Street, and to renegotiate the terms of the financing for his home property. Tony was left with his home and the pharmacy business.

In 1993, Michael and Evelyn, Mageca, Tony and his family appointed Mr Dean Crook of the firm of accountants Horwath and Horwath as their accountant. Mr Crook became familiar with the asset and liability position of each of Michael, Tony and their associated entities and trusts. On his advice, and in order to avoid the stigma of the receivership of Mageca, that company retired as Trustee of the MG Cacas Family Settlement and Megameg Pty Ltd (Megameg) was appointed Trustee in its stead. Evelyn and Michael were the directors and shareholders of Megameg in its capacity as Trustee of the Family Settlement.

After 1992, Tony paid some rent and some outgoings attributable to the Property. Payments were spasmodic and by 1999, the pharmacy business was incapable of paying a commercial rent, for outgoings or to pay a full equivalent salary for a resident pharmacist.

By 2001, the pharmacy was in debt to Faulding in an amount in excess of $300,000 and that creditor pressed Tony for payment by liquidating his assets, including his house property.

In 2002, Tony met with Michael as well as Jimmy Cacas, from whom he had been estranged for about 25 years, at the office of his solicitor, Mr Christou, in an attempt to create a plan to assist Tony in dealing with the debt owed to Faulding. Through a third party, Tony reached a compromise of the Faulding debt, the whole of which was borrowed by him.

In 1999, Tony was diagnosed with Parkinson’s disease. By 2001, he was physically incapable of operating the pharmacy and by 2002, he allowed his daughter Maria-Mandy to act as the resident pharmacist. In the following years, Tony suffered two strokes and by 2006 he was legally blind, immobile, unable to eat anything except liquefied, processed food and he could only speak monosyllabically. He also suffered dual incontinence.

Despite the recommendations of a number of health professionals, Poppy Cacas did not make structural adjustments to the living arrangements in their home in order to assist in the necessary care of Tony due to their impecunious state.

Since no later than 1995, the pharmacy conducted at the Property did not generate sufficient income to pay a commercial rate of rent, to pay a full pharmacist’s salary or to fully pay outgoings connected with the pharmacy premises.

The plaintiffs allege that in 2006 Tony and Michael purported to make the agreement contained within Exhibit P13, which was allegedly signed by them in the presence of a Mrs Athas. This document purported to record that the Property belonged to Tony because Michael had been paid in full for the Property, that the Certificate of Title had already reflected this change of registered proprietors, that if something happened to them (Tony and Michael), the Property would transfer to Maria-Mandy Cacas and that this arrangement had already been documented and discussed with a third party, Mr Tom Forde, known to both of them. Then the agreement purports to record a debt of $300,000 owing by Michael to Tony.

Once allegedly signed, the original of the agreement was never seen again and a copy of it was found by accident 10 years later and some four years after the death of Tony, it having never been mentioned during that time. On a date unknown, but allegedly in or about 2008, Michael purported to sign a document (Exhibit P14) which allegedly recorded that he owed the sum of $331,420.22 to the pharmacy. This debt is said to have arisen as a result of a failure by him to pay for pharmaceuticals and other products that he took from the pharmacy over a period since 1980.

Exhibit P14 was prepared by Tom Forde; it is allegedly signed by Michael and Poppy Cacas but it is not dated and then was never seen again for at least five years.

The plaintiffs allege that they were always aware of the debt owed by Michael Cacas to the pharmacy, but it was never claimed from him and no steps were ever taken for its collection.

In 2009, Michael Cacas gave an undertaking to the South Australia Medical Board not to practise medicine. This undertaking was given contemporaneously with the conduct of serious criminal charges brought against him alleging offences said to have occurred in the period between 2006 and 2009. Michael was assessed by a neurologist and a neuropsychologist in the period between 2009 and 2013 for the purposes of s269H of the Criminal Law Consolidation Act 1935. A decision was made in 2013 not to continue with the prosecution.

Tony died in 2012 and probate of his deceased estate was granted to the second plaintiff, Poppy, in her capacity as Executor and the first plaintiff, Maria-Mandy, then became the owner of the pharmacy business under the terms of her father’s Will. Up to and including 2014, the plaintiffs paid $780 and some outgoings on the Property on a monthly basis to Megameg as rent. In 2014, Megameg demanded the formalisation of a lease agreement with Maria-Mandy for the Property. During 2014 and 2015, negotiations occurred between those parties. Those negotiations failed.

In proceedings that were then issued, Megameg sought vacant possession of the Property. A mediation was held and a settlement document purporting to record the parties’ bargain was executed. There was a form of recording of the agreement which required a formal lease to be prepared, agreed and executed. No lease was signed between the parties despite the exchanges of draft leases.  During these negotiations neither of the plaintiffs contended that Michael was indebted to the pharmacy in the sum of $300,000 or that Tony was the beneficiary of a trust, the subject of which was the Property.

The plaintiffs have remained in possession of the ground floor of the Property. The plaintiffs further contend that the first plaintiff has the benefit of a five-year lease under s20B of the Retail and Commercial Leases Act. The plaintiffs further contend that the plaintiffs have a right under a lease executed by them in 2007 and they continue to be bound by that lease. Alternatively, the plaintiffs contend that they are entitled to a declaration that Megameg holds the Property under an express trust or alternatively a constructive trust. In the further alternative, the plaintiffs claim that Megameg is estopped from denying the existence of the proprietary rights of the first plaintiff in the Property. The plaintiffs further contend that as a result of the failure to call Michael Cacas in evidence, a presumption should be drawn that his evidence would not have assisted the defendants’ case.

Held:

1. The evidence satisfies the Court that from no later than 2012, Michael was mentally unfit to give evidence and that there had been no improvement or change in his mental state since that time and that his mental state has deteriorated. No presumption adverse to the defendants may be drawn as the result of the failure to call Michael in evidence.

2. There was no extant debt owed by Michael to the pharmacy in the amount claimed or any amount and Exhibit P14 is not a document which binds the defendants.

3. The document Exhibit P13 does not bind the defendants in any contractual or other way for the following reasons:

3.1 The document purports to record a debt in the sum of $300,000 as being owing by Michael to Tony when there was no extant debt in that amount or any amount so owed;

3.2 No payments had been made by Tony or any of the plaintiffs to Michael or to Megameg of a capital nature for the Property and, apart from lump sum amounts paid in the period of 1993 to 1999, the only regular rent payments were made from about 2003 onwards. Those rent payments were well below the market rate for the rental of the Property. There were also some payments made for outgoings but not the full outgoings payable by a tenant of the Property;

3.3 It purports to record that a form of conveyance to Tony had been registered on the original Certificate of Title of the Property, but no such conveyance had been registered, prepared, executed or lodged;

3.4 The document purports to have been signed by Tony in his usual signature. At the time, Tony was blind, was suffering the physical effects associated with end-stage Parkinson’s disease, was immobile and he could not speak except monosyllabically, and therefore could not give any clear instructions to any person and he could not properly hold a pen to write;

3.5 The document purports to record that a transfer of the Property has been documented when there is no evidence that such a document exists; and

3.6 The legal owner of the Property was Megameg in its capacity as Trustee for the MG Cacas Family Settlement. Michael was only one of the directors of the Trustee and, in 2006, he had not been clothed with authority to bind the Trustee. The Trustee did not stand by and knowingly allow Michael to hold himself out as having authority to bind the Trustee and so, in turn, to affect the rights of the beneficiaries to require the due administration of the Trust estate, the Trust and its assets.

4. In light of the findings about Exhibit P13, there is no evidence justifying any declaration that Megameg held the Property on an express or any form of trust.

5. There is no evidence of any unconscionable conduct on the part of Megameg and any action or forbearance by the plaintiffs to their detriment as a basis justifying a grant of a declaration of a constructive trust, or that Megameg is estopped from denying the entitlement of Maria-Mandy Cacas to become a registered proprietor of the Property.

6. The content of Exhibit P13 does not amount to an actionable misrepresentation by Megameg which induced Tony or the plaintiffs to act to their detriment.

7. There is no basis in law or in equity entitling the plaintiffs to call for a transfer to them of the Property.

8. The plaintiff Maria-Mandy Cacas is not entitled to a declaration that she has the benefit of a five-year lease ending in 2019. She took her interest in the pharmacy business and its right of tenure as an heir of Tony Cacas and, for s20B of the Retail and Commercial Leases Act, her interest could be no greater than the interest formerly enjoyed by Tony at the date of his death and in respect of which the five-year period for that section had been exhausted.

8. At the time of the mediation and subsequently, there were at least three and possibly four different expressions of what the parties considered to be their settlement bargain. There was no consistent expression of one of the essential terms of the proposed lease, namely rent. In the absence of a clear, verifiable agreement on such an essential term, there was no contract of lease formed that is specifically enforceable at the suit of any of the defendants.

9. Maria-Mandy Cacas is a tenant at will of Megameg in relation to the Property.

10. The Court will hear the parties as to ancillary orders including in relation to extant injunctions and costs.

Criminal Law Consolidation Act 1935 (SA) s269H, 269M; Trade Practices Act 1974 (Cth) s52, 53A; Fair Trading Act 1987 (SA) s56, 59; Real Property Act 1936 (SA) s19; Retail and Commercial Leases Act 1995 (SA) s20B, 3(1) "lessee"; Corporations Act 2001 (Cth) s126, 127, 128, 129CA; Bankruptcy Act 1966 (Cth) s121(1), referred to.
Re Cummins Deceased, Cummins v Thompson & Ors [1972] Ch 62, distinguished.
Henningsen & Anor v Nolan (2004) 88 SASR 214; Shepherd v Doolan [2005] NSWSC 42; Plimmer v Mayor of Wellington (1884) 9 App Cas 699; Olsson v Dyson (1969) 120 CLR 365; Secretary, Department of Social Security v Agnew [2000] FCA 59; (2000) 96 FCR 357; Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505; Trustees of the Property of Cummins v Cummings & Another (2006) 227 CLR 278; Davies & Another v The National Trustees Executor and Agency Co of Australasia Limited (1912) VR 397; Rasmussen v Rasmussen [1995] 1 VLR 613; Evans v Braddock [2015] NSWSC 249, discussed.
Subramaniam v Public Prosecutor [1956] 1 WLR 965; Masters v Cameron (1954) 91 CLR 353; Snook v London and West Riding Investments Ltd [1967] 2 QB 786; NZI Insurance Australia v Baryzcka (2003) 85 SASR 497; Beer v Bowden [1981] 1 All ER 1070; King’s Motors (Oxford) Ltd v Lax [1969] 3 All ER 665; Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd (2015) 47 WAR 547; Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353; Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123; Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd (2014) 251 CLR 640; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622; Landsmiths Pty Ltd v Hall [1999] NSWSC 735; Long v Piper [2001] NSWCA 342; Lighting by Design (Aus) Pty Ltd v Cannington Nominees Pty Ltd (2008) 35 WAR 520; Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V Conv R 54-620; One Stop Lighting (Qld) v Lifestyle Property Developments Pty Ltd (1999) Q Conv R 54-527; Bannon v The Queen [1995] HCA 27; (1995) 185 CLR 1; Baker v The Queen [2012] HCA 27; (2012) 245 CLR 632; Shephard v Cartwright [1955] AC 431; [1954] 3 All ER 649; Kuhl v Zurich Financial Services Ltd [2011] HCA 11; Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8; Sinclair v R [1946] HCA 55; (1946) 73 CLR 316; R v Hill (1851) 2 Den 254; 169 ER 495; Knight v Knight (1840) 3 Beav 148; 49 ER 58; Davis v Richards and Wallington Ltd [1990] 1 WLR 1511; Allen v Snyder [1977] 2 NSWLR 685; Cambouya Pty Ltd v Buchanan [2005] NSWSC 743; Grant v Edwards [1986] Ch 638; Dillwyn v Llewelyn (1862) 4 De GF and J 517; Saunders v Vautier (1841) 4 Beav 115; 49 ER 272; Briginshaw v Briginshaw (1938) 60 CLR 336; Macks v Viscariello [2017] SASCFC 172; Junker v Hepburn [2010] NSWSC 88; Donis v Donis [2007] VSCA 89; (2007) 19 VR 577; Giumelli v Giumelli (1999) 196 CLR 101; Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 333 ALR 384; McNab v Graham [2017] VSCA 352; In re Hodgson (1886) 31 Ch D 177; Calverley v Green (1984) 155 CLR 242; Gillett v Holt [2001] Ch 210; Foran v Wight (1989) 168 CLR 385; Evans v Braddock [2015] NSWSC 249; Rodda v Ian Rodda Pty Ltd [2015] SASC 95; Carter v Brine [2015] SASC 204, considered.

CACAS & ANOR v MEGAMEG & ANOR
[2018] SADC 127

Table of Contents

Table of Contents

OVERVIEW

THE PLEADINGS

The parties

127 Hindley Street

The legal positions

PLAINTIFFS’ EVIDENCE

Zacharoula Elizabeth Athas

Maria-Mandy Cacas

Reverend Father Peter Photakis

Poppy Cacas

Purchase of the property

Admissibility of hearsay evidence

Gordana Cicak

The evolution of the plaintiffs’ case: a summary

DEFENDANTS’ EVIDENCE

Inability of Michael Cacas to give evidence

Dr Wood

Dr Burrow

Issues raised by the plaintiffs

Further report of Dr Wood

Assessment of this evidence

Evelyn Cacas

Anthony Cacas

Dean Crook

Laz Christou

Michael Anthony King

Ed Lomax

Trent Basley

THE LEGAL PRINCIPLES

Express trust

Constructive trust

Proprietary estoppel

EXHIBIT P13

Some further background

The alleged debt

Ownership of 127 Hindley Street

Alleged payments from Tony to Michael

ASSESSMENT OF EXHIBIT P13

Recorded representation by Michael Cacas

Express trust

Tony’s financial difficulties

Plaintiffs’ changing positions

Financial records

Lease agreements

Failure to call for the trust to be perfected

ASSESSMENT OF THE ISSUES

Is Megameg bound by P13?

Constructive trust and estoppel

Plaintiffs’ authorities on trust and estoppel

Conclusions on trusts and estoppel

The mediation and whether an enforceable contract was formed

Retail and Commercial Leases Act

ORDERS

OVERVIEW

1. In this action there are two plaintiffs, Maria-Mandy Cacas in her own right and her mother, Poppy Cacas, in her capacity as the executor of the estate of her husband Donald George Cacas. For ease of reference, and in those capacities, they will be hereafter referred to as Maria-Mandy and Poppy. There are two named defendants, Megameg Pty Ltd (hereinafter called Megameg) in its capacity as the Trustee of the MG Cacas Trust, and Michael George Cacas by his litigation guardian, his wife, Evelyn Cacas. Throughout these proceedings Michael George Cacas was referred to in evidence as Mickey (hereinafter called Michael). His wife will be described as Evelyn. Megameg is registered as the proprietor of the whole of the land described in Certificate of Title Register Book Volume 6073 Folio 192 more commonly known as 127 and 127A Hindley Street Adelaide.

2. This property was purchased in 1978, originally in the name of Mageca Pty Ltd (hereinafter called Mageca) in its capacity as the Trustee of the MG Cacas Trust. In 1978 and thereafter until recently Michael was the controller of the Trustee of the Trust and Michael’s family and greater issue were within the range of beneficiaries of the Trust. These Trust arrangements were always associated with the family of Michael Cacas.

3. The premises at 127 Hindley Street are disposed as a pharmacy shop, a pharmacy dispensary, office and storeroom. The premises at 127A Hindley Street, which is upstairs and immediately above number 127, are disposed as a large open area with some adjacent toilet and kitchen facilities. At the rear of 127/127A Hindley Street there is a car parking space and toilets. The adjoining premises at 129 Hindley Street are disposed as a surgery reception area, doctors’ rooms and associated paramedical facilities from which at all material times Michael conducted his medical practice. The Court took a view of the premises at 127/127A Hindley Street. It was apparent during that view that historically there have been connecting doors between 127 and 129 Hindley Street but it appears that those connecting doors have been sealed closed for a long time.

4. The plaintiffs’ claim initially was that from 1978 there was an arrangement, agreement or understanding made between Donald George Cacas (hereinafter called Tony) and Michael under which Michael would purchase the property at 127 Hindley Street and to personally hold the legal interest in the property beneficially for Tony. It was also alleged that, over time, Tony would make payments to Michael sufficient to perfect his interest in the property. The case was not put on the basis of a purchase obligation but a payment arrangement under which Tony Cacas would perfect his beneficial interest in the property sufficient for him to be entitled to call upon Michael Cacas to transfer the Hindley Street property to him. The plaintiffs also claim that an obligation fell upon Michael Cacas to transfer the property to Maria-Mandy upon the death of Tony, if Tony should predecease Michael.

5. The plaintiffs ultimately disavowed the contention that the obligation upon Michael to hold the property in trust for Tony Cacas arose in 1978. The plaintiffs’ final position was the obligation upon Michael Cacas devolved over time such that as at 2006 and thereafter, there was an entitlement in Tony Cacas to call for a transfer of the legal and beneficial interest to him for no consideration, he having arranged for payment to Michael Cacas for the property prior to that time. The argument as it developed was that this was an equitable interest held by Tony Cacas in the property arising over time and as a result of arrangements made between Tony Cacas and Michael Cacas.

6. Ultimately the plaintiffs’ case relied largely upon a document (Exhibit P13) dated 16 March 2006. The document is in the handwriting of a Mrs Zacharoula Athas, a personal friend of Tony and a person known to Michael.

7. I will discuss this document in detail later, but its purported effect is that Michael confirms that Tony is the owner of the property at Hindley Street, he having paid Michael in full for the property and that there was no need to engage a lawyer in respect of the conveyance because the Certificate of Title had been changed to reflect this fact. Secondly, a long overdue debt owed by Michael to Tony as the proprietor of the business of Cacas Chemists at Hindley Street in the amount of $300,000 is acknowledged and will be paid in full by 30 June 2012. In relation to each obligation, to both transfer the property and pay the debt, the document acknowledges that in the event that Tony predeceases Michael, then the beneficiary of the transfer of the property would be Maria-Mandy and that the debt would be paid to Poppy and Maria-Mandy. This document is the axis about which the whole of the plaintiffs’ claim now revolves. Counsel for the plaintiffs described it as the evidence of the declaration of trust which is at the heart of the plaintiffs’ claim and it is the contractual basis upon which a claim may be made for the repayment of the debt owed of $300,000.

8. The defendants deny the efficacy of the document, deny that any obligation arises under it, challenge the provenance of the document and contend that the document has no effect in law or in equity.

9. At one level, the plaintiffs contend that Exhibit P13 is the beginning and end of the argument because it records the intentions of the parties and it is not necessary to look behind the document or at the factual substratum of the parties’ relationships. The defendants point to the fact that Exhibit P13 was allegedly brought into existence on 16 March 2006 but was not seen again until 2016 when it was accidentally discovered. It was forgotten. It was apparently signed on 16 March 2006 and then put away. A similar situation pertains to the alleged debt of $300,000 referred to in Exhibit P13.

10. Exhibit P14 is a document said to have been prepared by a Mr Tom Forde (now deceased) and purports to calculate the total owing as at 31 December 2008 by Michael to Cacas Chemists. The total sum described on the face of this document is $331,420.22. The plaintiffs contend and the defendants deny that this document, signed by Michael Cacas and Poppy Cacas is evidence of acknowledgement by Michael of the debt owed by him to Cacas Chemists (Tony Cacas).

11. The defendants’ defence to the plaintiffs’ case revolves around several principal issues. In no particular order they are:

    ·That the evidence cannot support any contention for the enforceability of the documents;

    ·The evidence surrounding the execution of the documents places doubt upon the capacity of either Michael or Tony to execute any document having regard to their lack of capacity;

    ·The relationship between the parties and the surrounding evidence cannot sustain any suggestion of any ongoing debt owed by Michael to Tony.

12. There are a number of real difficulties associated with the cases put by both parties because the two main participants in all of these events, Tony and Michael, did not give evidence before me. Tony died in 2012 after suffering a number of debilitating conditions associated with Parkinson’s disease that was first diagnosed in 1999.

13. Michael is still alive but, for reasons which I later set out in detail, I find he is incapable of giving evidence because he suffers dementia, loss of memory, ischaemic brain disease associated with strokes that he has suffered and a series of other maladies. He spends his days in a nursing home environment. As I explain later, many of the problems suffered by Michael first manifested themselves as early as 2006. Part of his condition involves an inability to control his impulses, his anger, to exercise judgement and to understand and hold information and then the consequences of his actions. In 2009 Michael was charged with very serious criminal offences of a sexual nature against men greater than 60 years of age. Eventually the neuropsychologist Dr Wood and the neurologist Dr Burrow prepared reports for the purpose of s269H of the Criminal Law Consolidation Act 1935 (SA). Soon after, the charges did not proceed. At that time, in 2009, Michael gave an undertaking to the Medical Board not to practice as a general medical practitioner.

14. As a result, it has become necessary to consider the whole of the evidence led in this case and especially the documentary evidence and to then assess where necessary, the inferences that do (or do not) arise from that evidence in light of the available direct evidence on the relevant topics. That task requires me to consider the whole of the evidence led in this trial, to then identify the inferences that I am prepared to draw from it and then the findings that I am prepared to make. In doing so I will make assessments of the evidence that inform my final judgement in this matter. Regrettably that process, in a small way, requires me to assess the credit-worthiness of some of the viva voce evidence. That is usually not my preferred approach, however some of the events about which evidence has been given relate back to 1978 and many participants are dead or disabled. It is impossible to do more than to assess the evidence given by the witnesses, the documents, the inferences and then make findings. Insofar as I do make credit findings they are largely informed by other surrounding evidence. My task is also complicated by the presentation in evidence of documents that appear on their face to have a commercial purpose but are not implemented for that purpose. One possible inference that arises is that these documents were prepared for quite a different purpose known only to the participants who cannot now give evidence. Other documents, such as from arm’s-length credit providers, are enforceable according to their terms and so present a stark juxtaposition in this evidentiary process. A further category of evidence involves accommodations provided on the basis of familial considerations that are always complex, are never straight-forward nor properly understood by, for example, other family members.

15. These are only some of the considerations that have required decisions in the process of reaching my judgement. This process necessarily requires that I consider all of the relevant evidence based upon the parties’ pleaded cases. It is to that topic that I first turn.

    THE PLEADINGS

    The parties

16. The first plaintiff, Maria-Mandy, is the daughter of Tony, deceased, and of the second plaintiff Poppy. Her father had commenced work as a pharmacist in the late 1950s[1] and Maria-Mandy commenced working in the pharmacy at 127 Hindley Street, formerly operated by her father, as an intern under the supervision of a pharmacist manager in 2001. She was then appointed a pharmacist manager by Tony in 2002. Since 1 December 2014 she has owned and operated the pharmacy and held all of the relevant approvals to carry out that task.

    [1]    Although the evidence is a little scant, it seems that Tony Cacas operated a number of chemist shops in partnership with his brother Jim Cacas until a very bitter partnership dissolution in 1978.

17. The plaintiffs allege that Tony Cacas established the pharmacy in about 1958. The defendants allege that Jim Cacas, another brother, set up the pharmacy and Tony joined Jim at 155 Hindley Street and later at 127 Hindley Street. It is almost impossible to know the precise facts. It is known that Tony worked in a number of pharmacies in the area leading up to 1978. The pharmacy at 127 Hindley Street only operated from the ground floor. The plaintiffs allege that in the 1960s, Tony renovated, refurbished, fitted out and leased the premises at 129 Hindley Street to enable Michael Cacas to operate a general medical practice. The defendants denied this allegation and say the premises at 129 Hindley Street were already operating as a medical rooms. The evidence discloses that these pleadings of the plaintiffs are incorrect factually.

18. The parties agree that Tony and Jim ceased partnership in 1978 well before any involvement by the first plaintiff (who was not born until 1979).

19. Megameg is the Trustee of the Cacas Family Settlement established by a deed of settlement dated 20 July 1978 and is the registered proprietor of 127 Hindley Street Adelaide. Michael and Evelyn are the registered proprietors in their capacities as Trustees for the Megameg Superannuation Fund of the property at 129 Hindley Street. The first proprietor of 127 Hindley Street was Mageca. Initially the directors of Mageca were Michael and Evelyn but since 21 October 2015 their son Anthony Cacas has become a director in place of Michael. When Michael commenced medical practice in the late 1960s, he first commenced practice at 127A Hindley Street and then moved to 129 Hindley Street. He ceased medical practice in about 2009. Michael was at all material times the appointor of the Cacas Family Settlement.

20. Although the plaintiffs allege that Tony gave substantial financial support to Michael in regards to his education and setting up his medical practice, the defendants allege that Tony did not support Michael financially. In the operation of the pharmacy and the medical practice, there was a quid pro quo between Tony and Michael and they sent customers and patients to each other. Scripts by Michael were sent down to the pharmacy to be filled and there was a cross referral to each other. Michael allowed Tony to maintain the chemist shop until the transfer of the legal interest in the property to Megameg without any payment of rent. It is also known that Michael did not press for payment of rent when Tony had creditor problems in the late 1980s and early 1990s.

21. The defendants contend that Michael took advantage of his Greek heritage by building his medical practice through his reputation. Michael knew that Jim and Tony were in dispute in their pharmacy partnership and therefore he purchased 127 Hindley Street in order to preserve it for one of them to carry on the pharmacy practice. Michael also shared his medical rooms with other doctors and practised in conjunction with them.

22. The plaintiffs allege and the defendants deny that from time to time Michael routinely acquired medical supplies including prescription medications from the pharmacy. The defendants allege that he either paid for whatever he received or otherwise he used samples. Although it is plain enough that if medical supplies were needed by Michael they would be obtained from the chemist shop, one issue for my determination is whether I am able to find that Tony allowed Michael to become a debtor of the shop in an amount of greater than $300,000 or any amount.

    127 Hindley Street

23. The plaintiffs say that in mid-1978 Michael caused Mageca to be established to act as Trustee of the Cacas Family Settlement and to acquire 127 Hindley Street. The defendants say that Mageca was initially appointed Trustee of the Settlement on 20 July 1978 and at that time Tony and Poppy were having marital issues. Mageca became the registered proprietor of the premises and provided all of the funding for the purchase. The plaintiffs allege that at the time of the acquisition, Poppy and Tony were overseas. Following that time, Tony commenced to make cash payments to Mageca and then to Megameg in respect of those premises. Those payments were made by an established electronic bank transfer arrangement from 2004. The defendants say that Tony made no capital contribution and that the first rental payment was received on 16 June 2003, the second on 30 June 2003, the third on 17 July 2003. From 2004, $780 has been paid on a monthly basis but from 1978 no rent was paid. The plaintiffs allege that the amount paid per month was $780 and the defendants deny that this could be treated as a payment of rent.

24. The plaintiffs plead that in mid-1978, 127/127A Hindley Street was placed on the market for sale and, by an arrangement between Tony and Michael, words were said which induced Tony to believe that Michael was promising that he would ask the vendor to delay selling the premises until Tony returned from overseas. Tony intended to acquire the property. This allegation is denied and the defendants assert that there was real uncertainty about the status of Tony, his marriage and his ability to carry on the pharmacy business. The decision was made by Michael, upon advice, for Mageca as Trustee to purchase the property through funds provided by Michael. The defendants deny that during the course of the conversations between Michael and Tony, something was said by Michael to the effect that he agreed and accepted that he would ask the vendors to delay sale.

25. The defendants also deny that the property was purchased whilst Tony was overseas and without any advice to him and it is positively alleged that Michael told Tony of his intentions.

26. The plaintiffs allege and the defendants deny that upon the return of Tony to Adelaide and about the time that there was settlement of the purchase of the property, Michael on his own behalf and on behalf of Mageca made statements to Tony to the effect that he acquired 127 Hindley Street to ensure that the pharmacy could continue to operate and that the premises would be held for the benefit of Tony subject to Tony repaying Michael for the costs of acquiring the premises. The plaintiffs no longer contend for this case.

27. The plaintiffs allege and the defendants deny that during the course of those conversations Michael said words to the effect that he agreed with that course of action. The plaintiffs allege that in accordance with those arrangements, Mageca continued to hold the premises as registered proprietor (and Trustee) and Tony made payments from time to time to Mageca. The defendants say that no capital payments were made by Tony as alleged or at all. The plaintiffs also then pleaded that in 1993, the property was transferred to Megameg as Trustee and between 1993 and 2006 Tony continued to make some payments for rent. The defendants say that all that had occurred was that on 25 October 1993, Megameg was appointed Trustee of the Trust, the appointment was noted on the Certificate of Title and the only payments made were for rent. The plaintiffs allege that in reliance upon the representations of Michael, Tony continued to operate the pharmacy business from 127 Hindley Street and made payments. It is then alleged that Tony forewent any opportunity to purchase alternative premises for the pharmacy but there is no particularity of that pleading and no case on this allegation was presented in evidence.

28. The plaintiffs say that upon his death in 2012, Tony bequeathed the pharmacy to Maria-Mandy including all debts and receivables in connection with the pharmacy. The defendants acknowledged that the terms of the lease passed an interest only in the pharmacy business and not in the real estate upon which the pharmacy business was operated.

29. The plaintiffs say that on 23 April 2014, the first defendant by its agent Commercial SA offered to lease the premises to the first plaintiff on a five-year term with one right of renewal at an annual rental of $26,000. The plaintiffs allege and the defendants deny that by a deed executed in about May 2014, Poppy formally agreed that the terms of the transfer of the pharmacy to the first plaintiff and settlement on that transfer occurred in 2014. The defendants also say that if such a transfer took place, it would have been necessary to obtain the consent of the landlord which was not obtained.

30. The plaintiffs say that since 1 December 2014 Maria-Mandy has made monthly payments to the first defendant of $780. The defendants say this amount was credited to a notional rent account so the only matter involved was this payment, which was really in part payment of rent.

31. The plaintiffs plead that by letter dated 18 December 2014 Commercial SA on behalf of the first defendant offered to lease the premises to the first plaintiff on a term of one year at an annual rental of $36,400. By a further letter dated 24 February 2015, Commercial SA gave notice to the first plaintiff to vacate the premises within six months. The defendants say that Maria-Mandy was operating the pharmacy but without any current lease and the only lease that did exist was a 1993 lease for five years. After Tony’s death, Megameg agreed for the pharmacy business to continue but no agreement could be reached about the tenancy and so the first plaintiff was always a tenant at will. After that notice, there was a further offer of a lease on 25 June 2015. The offer was for a term of one year only at an annual rent of $36,400 plus outgoings and GST.

    The legal positions

1. It is alleged that on 16 March 2006 Tony and Michael orally agreed and then recorded an agreement in writing (Exhibit P13) that Tony had paid sufficient money to Michael to have paid for the premises in full; that Tony was the beneficial owner of the premises whilst he was alive; that upon the death of Tony, beneficial ownership of the premises would pass to Maria-Mandy and that Megameg and Michael warranted that the Certificate of Title had been changed to reflect Tony’s ownership of the premises; and that ownership would automatically transfer to Maria-Mandy in the event of the death of Tony. The second defendant in the same document acknowledged that he was indebted to the defendant in the amount of $300,000. He agreed to pay that amount over six years until 30 June 2012.

2. The defendants say that the document was never executed by Tony; it is not a genuine document because there was no $300,000 debt; at the time that it was executed, Michael was suffering from a brain injury which led to him suffering cognitive impairment; and Tony had Parkinson’s disease, diabetes, poor vision and was also suffering the effects of a stroke and he was therefore not of full legal capacity. Tony had executed medical Powers of Attorney and enduring Powers of Attorney on 17 October 2000.

3. The defendants also say that the plaintiffs are estopped from relying on the 2006 document because in 2007 Poppy sought to enter into a written lease agreement with the defendants and all that has occurred is that Tony and Maria-Mandy had paid rent, they made no payments of capital and in respect of any alleged debt between Tony and Michael, the defendants say no payments were made because there was no such debt. In any event, any such agreement if executed could not bind the Trustee and it was not raised later when issues arose in relation to the ownership of the property. The defendants allege that there was waiver of any rights by the plaintiffs and in any event the 2006 document was not intended to create legal relations.

4. The plaintiffs then plead that from at least 1993 and earlier to 1978, Mageca and Megameg were aware through their directors and therefore the guiding hands and minds of those companies, that it was the common intention for Tony, Mageca and Megameg to fulfil these assumptions and expectations. If they were not fulfilled, detriment would be suffered because Tony would have no interest in the premises and he would lose the benefit of all of the payments he had made since 1978. The defendants say that there is no such assumption, all payments were for rent and in any event the plaintiffs are guilty of laches. The defendants deny any representations were made, assert that none of the plaintiffs or Tony have or have had any interest in the premises, Megameg holds the premises as Trustee for the beneficiaries of the Cacas Family Settlement and so therefore nothing done by Megameg could amount to a resiling from a purported representation.

5. The plaintiffs allege that it would be unconscionable for the defendants to resile from the representations and they are therefore estopped and precluded from doing so. The plaintiffs plead that the defendants are required to transfer to the first plaintiff or the estate of the deceased the premises at 127 Hindley Street and the first defendant as Trustee holds the premises on constructive trust for the first plaintiff or alternatively the estate of Tony. Alternatively, the plaintiffs plead that the first plaintiff or alternatively the estate of Tony is entitled to such other remedies as may be determined by the Court. In the further alternative, the plaintiffs plead that pursuant to the 2006 handwritten agreement, Michael declared and therefore bound Megameg, that the premises were held on trust for Tony for his life and then for Maria-Mandy Cacas.

6. The plaintiffs allege that the 2006 handwritten agreement represented to Tony that he was the sole beneficial owner of the premises, that the Certificate of Title had been changed into his name and that the beneficial ownership of the premises would automatically transfer to the first plaintiff. The defendants respond that it does not bind Megameg and any representations made in the document, if they were made, are representations of law or conclusions of law and so Tony could not rely on anything said in the document; they were also made at a time when Tony knew that they were incorrect. The plaintiffs allege reliance upon the document and in particular that he not consult lawyers to formalise things. The defendants deny that Michael told Tony that he did not need to see a lawyer and in any event Tony knew that in order to effect the transfer then there would be need to sign documentation. None was signed and therefore there was no reliance.

7. The plaintiffs allege misleading conduct and the defendants plead that in order to bind the registered proprietor it would have been necessary for that company to have signed the document. That did not occur. The defendants also deny that any representations were made in trade and commerce and anything said contravened s52 Trade Practices Act 1974 (Cth) (TPA), s53A TPA or s56 and s59 Fair Trading Act 1987 (SA) (FTA). This is for the same reasons. The plaintiffs plead and the defendants deny that the plaintiffs would suffer loss and damage and the defendants also say that any claim is statute barred. The defendants allege generally that any claim under the TPA or FTA is statute barred in any event. Any claims for compensation are therefore denied.

8. The plaintiffs then allege that in about 2007 Megameg and Poppy entered into a memorandum of lease for the premises showing a rent of $780 per month for six years with two rights of renewal of six years. At the funeral of Tony in 2012 and on other occasions, Michael on behalf of the defendants agreed that the existing lease arrangements over the premises would continue. The defendants respond that any occupation was not pursuant to a formal lease and it was only because the defendants were content to allow existing arrangements to continue until such time as matters were resolved. Therefore any conversations were not such and could not be understood to be such as to effect a change in existing legal relations.

9. The plaintiffs allege alternatively that s20B of the Retail and Commercial Lease Act 1995 (SA) applies to the current arrangements for the plaintiff Maria-Mandy and that she is entitled to a five year lease.

10. The plaintiffs seek orders for the setting aside of the Heads of Agreement entered into on 11 November 2015 following a mediation. The plaintiffs allege that the Heads of Agreement were executed whilst the plaintiffs were labouring under a mistake of fact due to the absence of knowledge about the 2006 agreement. It is void on that basis or alternatively void on the basis of unilateral mistake. Alternatively if it is not void because it is only an agreement to enter into further negotiations.

11. The plaintiffs also claim for the debt allegedly due and owing under the 2006 document. The defendants deny the allegations, deny any liability and in any event plead that it is necessary for the plaintiffs to obtain an extension of time for bringing the proceedings which extension should not in the circumstances be granted.

    PLAINTIFFS’ EVIDENCE

12. The plaintiffs called in evidence the following witnesses: Zacharoula Elizabeth Athas, Maria-Mandy Cacas, Peter Photakis, Poppy Cacas and Gordana Cicak. The defendants called in evidence Evelyn Cacas, Anthony Michael Cacas, Trent John Basley, Edwin George Lomax, Dean Brian Crook, Lazaros Peter Christou, Dr Michael Wood, Dr Donald Deane Burrow, Michael Anthony King and the solicitor Michael Alexander Fotheringham.

13. In accordance with my earlier comments, I will consider the evidence of each witness separately. Because of the nature of this case, it is necessary that I canvass those aspects of the evidence of the witnesses that I consider relevant. I will also at the same time make those findings which I see fit in relation to the evidence given by each witness.

    Zacharoula Elizabeth Athas

14. Zacharoula Elizabeth Athas was a friend of Tony. He was a friend of her husband prior to their marriage. They were friends through the chemist shop of Tony, as well as the Greek Orthodox Church. Her husband, George, was a travel agent with premises in Hindley Street, not far from the chemist shop. Her husband passed away in November 2005. He had ceased being a travel agent in 1992.[2]

    [2]    T61-62.

15. Mrs Athas knew something of Michael, she knew he was a doctor and that his rooms were next-door to the chemist shop.[3]

    [3]    T63.3-16.

16. After her husband had a stroke in 2001, she recalls that she saw Tony at the same hospital as her husband. At the time, Tony was being treated for a myriad of illnesses including severe diabetes, the effect of a stroke and for her, most importantly, for Parkinson’s disease. Mrs Athas was aware that Tony Cacas was suffering the effects of progressively worsening Parkinson’s disease at least from 2001.

17. Mrs Athas visited Tony Cacas on 16 March 2006 at his home. She had not seen him since 2001. It was not explained why, if she had not seen Tony for five years, that she then chose to visit him at home. She recalls that she had not seen him since he was sick, and, therefore, made arrangements to go and see him. This was some time after her husband died.[4]

    [4]    T64.19.

18. She went to the home of Tony and Poppy and both of them were at home. She went and sat with Tony and told Poppy that she would be okay with Tony. A short time later, there was a knock on the door and Michael came in. She was the person who answered the door. Michael came into the same room where Tony was sitting and there was a general conversation.[5]

    [5]    T64.26-65.17.

19. After some time, she became aware that Michael and Tony started talking about business and she felt a little bit uncomfortable and volunteered that she would go home. She stood up to leave. She was told by both of them to stay, to sit down and, on a second occasion when she got up to leave, she said that the conversation was getting very personal and she would not stay. She told Tony that she would come and see him another time. Michael insisted that she stay.[6]

    [6]    T65.20.

20. The discussion about their personal business affairs continued. She can recall that Tony said that he wanted to get a lawyer and Michael responding that there was no need for a lawyer. After a further conversation, she recalls that Michael turned to her and asked her whether she could write down what they were discussing. She told Michael that she had no legal experience and certainly no experience as a recorder of legal affairs. She did not have anything to write on. It was then that Michael told her to go and get Poppy to ‘give you some pen and paper’.[7] When she got a pen and paper, she asked Michael what she was required to do. She said that she could not do legal documents and Michael assured her that it would be fine. He would tell her what to write and she had to make sure that she did not make any mistakes. It was then that they started talking and then told her what to write down.[8]

    [7]    T66.10.

    [8]    T66.31-66.38.

21. Her recollection is that Michael did most of the talking. She said Tony did speak on occasions. The method she adopted was that she would clarify what Michael was saying and she would then ask for clarification about what she was to write. She had no idea that anything that she was writing would become a legal document.[9]

    [9]    T67.8-24.

22. When she finished writing the document, Michael said that they were both going to sign it. She became concerned, particularly when she was told that they would both sign it and she would sign it as well.[10] She witnessed the signature of both Michael and Tony on the document. Before that occurred, she offered to take the document away and have it typed up and she was told that her writing was quite legible. She was then asked to get a photocopy done, which she did, and it was brought back and Michael took the original document.[11]

    [10]   T67.30.

    [11]   T68.3-68.27.

23. When all of these conversations were occurring, she did not notice anything out of the ordinary about Tony or about Michael’s appearance. She apparently did not notice that by that time, Tony, who died in 2012, was debilitated by Parkinson’s disease and a number of other ailments. Other evidence before the Court discloses that at that time his speech was slurred, he could not speak in anything except mono-syllables and he was unable to easily move. At the time he was legally blind and there is significant doubt, on the evidence, that he could read anything. I accept the evidence that Tony could not form sentences and spoke in mono-syllabic terms and he could not see to read or to sign a document using a pen. I am unable to accept this evidence from Mrs Athas to the extent it purports to prove any capacity of Tony at the time.

24. After that date, the first she heard of the document being discussed was some time in about the Greek Easter of 2016. It was at that time that she heard from either Maria-Mandy or Poppy Cacas. Other than that, she had had very little to do with them.[12] The document that she signed is Exhibit P13.

    [12]   T71.17-72.16.

25. In cross-examination, Mrs Athas said that she read the document P13 out to both Michael and Tony twice before they signed it. She did not know whether Tony could read. I am satisfied that at the time in 2006 he could not read. He could not speak except mono-syllabically and he could not walk. All she recalls is that Tony appeared to read it.[13] I am satisfied from the other evidence led in this trial, including contemporaneous observations by para medical personnel that he could not read this document or anything else. She knew that Tony had low vision, but she does not recall him having any difficulties at the time and she does not recall Tony having any trouble talking. Based on the evidence of Mr Basley and Mr Lomax which I accept, I do not accept that Tony could read, understand or express his views about such a document at that time.  In cross-examination she confirmed that she would pause when she was recording the discussion and ask them to confirm that this is what she was supposed to write.[14] She also agreed that there were some words that she might have put in herself. For example, where it is recorded that ‘Michael continued to say that if something happens to Don or Michael ...’ that she probably put in the word ‘continued’ herself.[15] However, this was to make better sense grammatically of the document.

    [13]   T75.16-24.

    [14]   T79.38-80.9.

    [15]   T84.32.

26. At the time she was aware Tony had some mobility issues. She was not aware of any particular restrictions and she recalls him getting up when she was leaving. She has a clear recollection of Tony signing the document and she saw him sign it.[16] I do not accept this evidence for the same reasons.

    [16]   T96.28; T102.4.

27. In cross-examination, inter alia, she was asked to try and remember the arrangements that existed for the signing of the document. She thought that she might have used a phone book to lean on when writing the document. She could not recall what hand Tony used to sign the document and, when asked about the signature, she recalled that she thought Tony was a bit slow in signing. He did not appear to have any difficulty using the pen. His hand was not shaking and she thought that his Parkinson’s disease was under control, but she was not aware that Tony was unable to feed himself.[17] She was not aware that Tony was unable to use a pen or form a signature in 2006. I think that Mrs Athas is quite wrong in her recollection. Tony was suffering end stage Parkinson’s disease. He was very ill.

    [17]   T91.17-98.15.

28. In cross-examination, the proposition was put to Mrs Athas that there was never an admission of a $300,000 debt, the document was never produced in the way that she described, the signatures were not affixed in the way that she had described, and that her evidence was a tissue of lies. It is not necessary for me to make any finding based upon these contentions of the defendants. This is because I am satisfied from the evidence of other trained objective observers that Tony was incapable of doing the things that Mrs Athas says that she can now recall. I think that her memory is unreliable at least to that extent. This may be easily explained. She had just lost her husband and was confronted by the condition of Tony which she may well have minimized in her mind. Regardless, I am satisfied Tony could not see the writing on the page of Exhibit P13, nor could he sign it; he was incapable of holding a pen and appending such a signature as appears on that document. The only other person in the room was Michael.

29. The evidence of Mrs Athas concerning this document, in my view, rises no higher than the fact that she was present when two people were having a discussion and asked her to write down a document. The evidence will later disclose that those two persons were, in all likelihood, unable to write the document themselves because of their physical disabilities. Tony suffered from Parkinson’s disease and Michael suffered a range of ailments which at that time had yet to be properly diagnosed. The evidence discloses that there was a real doubt about their level of cognition at the time that they signed the document. The evidence of Mrs Athas is that she read the document out and Tony then purported to sign it. I do not accept that evidence. She may well have read the document out to them but that does not in any way minimise the other very important matters upon which I have made findings.

    Maria-Mandy Cacas

30. Maria-Mandy Cacas was born on 30 November 1979 and completed her Bachelor of Pharmacy, honours, in 2000. She completed a traineeship at Cacas Chemists in 2001 and she was supervised by Mr John Meyers, who was the pharmacy manager at the time.

31. She gave a history of her memories about the chemist shop. As a child, she worked in the shop during school holidays. As she got older, she did different types of work. When she was in primary school, she helped fill shelves and, when she was in high school, she did more front-of-shop work.[18]

    [18]   T116-117.9.

32. She recalls her father developing symptoms of his illness in the 1990s. She thinks he was diagnosed with Parkinson’s disease sometime in the mid-1990s, but she cannot be sure of that. Prior to that time, he had been working in the pharmacy up to seven days per week and, in the 1990s in particular, they were open until 9.00 pm and all day Saturday and Sunday. She thinks they were open 24 hours a day in the 1980s, or at least until after midnight.[19]

    [19]   T118.11-118.22.

33. After her father’s diagnosis, he started cutting down his hours of work. Her memory was that towards the end of the 1990s he would do the late shift from 3.00 pm until 7.00 pm, and when she began her internship in 2001, he was not coming in every day but would only come in on the odd day. He was not the pharmacist on duty and would often come in on a Saturday or weekday and just sit in the dispensary. Maria-Mandy gave evidence that Tony was still involved in the decision-making processes, but not the day‑to-day running of the business.[20] I have significant doubt about this evidence. The medical evidence discloses that about 2003-2004, Tony was severely debilitated by the progression of his Parkinson’s disease. The same medical evidence discloses that Tony had significant cognition problems as a result of that disease and a number of other ailments. I would not accept the assertion by Maria-Mandy that from 2001 to 2002 Tony was involved in decision-making processes of the businesses because that task fell to the pharmacist employed there and then later to Maria-Mandy.

    [20]   T119.7.

34. Maria-Mandy became the pharmacy manager in 2002. I consider that from that time, any involvement by Tony in that business was tangential. At that time, there was staff for the front of shop and a pharmacist would fill in for her on her day off. That lasted until a couple of years ago, but now she no longer has a pharmacist come into the shop, she works fulltime without a day off, and the only person assisting in the shop is her mother.[21] Maria-Mandy could not give evidence of the state of the finances of the chemist shop at the stage before she became the pharmacy manager. Even so and as I develop below, I am satisfied that she had at least some grasp of its financial position. For example, she has never been able to draw the full salary of a pharmacy manager. This was the position from the outset. The documentary evidence discloses that the turnover of the chemist shop business was not generating a profit sufficient to pay a full wage to a pharmacy manager. At least from 2000, if a proper salary for a pharmacy manager was taken into account in the profit and loss and cash statements of the business, it was trading at a loss. I am also satisfied on the evidence from these facts alone that Maria-Mandy had some awareness of the parlous financial position of the chemist shop business. The reasons are obvious enough. She was not being paid a proper salary for her work as a pharmacist. The only staff in the shop was her mother who was not paid. Later, the rent paid to a landlord was $780 per month which was well below commercial rates for a tenancy of that size. Only some outgoings were paid. I am satisfied from the evidence of the accountant, Mr Crook, which I accept, that at least from the year 2000, the business was unsustainable.

    [21]   T119.16-120.1.

1. Maria-Mandy said that she has vivid memories of her Uncle Michael coming to visit the shop quite regularly. He would often come and pick up her father to do various things, and he would also come to their house at Christmas time. I am satisfied that Michael was doing these things for his brother to ensure that everything could be done for him to make him as comfortable as possible and to give him whatever assistance could possibly be given him. At the time, Michael was running a successful medical practice. In contrast, the documentary evidence shows that the business of the chemist shop was either insolvent or near insolvency. It had been in a parlous position since at least 1992/1993 and rarely made a profit sufficient to pay a full salary to a pharmacist. This evidence also overlooks the obvious strain and breakdown in the family. The wives of Tony and Michael, Poppy and Evelyn, rarely spoke or saw each other. The families did not socialise and they were quite estranged. There had been a severe breakdown in that relationship in the early 1980s.

2. Maria-Mandy knows that Michael, whom she called Mickey, is married to Evelyn and that they have three children. She did not see the children or Evelyn much whilst growing up. The reason why she did not see much of her cousin or her Aunt Evelyn when she was growing up (and only saw Michael at the pharmacy) was because of a significant falling out between her mother Poppy and Evelyn. This had been a difficulty of long standing. She had almost no contact with her cousins, the children of Michael and Evelyn. She had almost no contact with Evelyn and although she lived in the very near vicinity of the home of Michael and Evelyn in Springfield, she rarely, if ever, went to their home. Maria-Mandy recalls speaking to Evelyn on the phone, but did not see her very much. She had more to do with Evelyn after she took over as the pharmacy manager. She also saw her at her father’s funeral and memorials.[22]

   [22]   T120.25-121.12.

3. From the time that she started working at the pharmacy, she knew that she would see Michael from time to time. She said that they had a good working relationship. He would give prescriptions to his patients, and most of those scripts would be filled at the chemist shop. She recalls he would also come and get stock or for a prescription. He would always say at that time that they should put it on his bill.

4. Every doctor working in the medical surgery next-door at number 129 had accounts which they would pay monthly. There were invoices kept recording each doctor’s account and separate books were kept for each doctor. If the staff were busy, an item would be marked on a piece of paper and would be transferred to the book on a later occasion. She can recall recording that her Uncle Michael got stock at least weekly.[23]

   [23]   T123.5-124.33.

5. I have reviewed the accounting records of the business. Any debt payable would, in the ordinary course of day to day accounting, be carried forward as an asset called ‘debtors’. Generally, debtors are only to be reported as an asset in the profit and loss and cash statements of a business if the debtor is collectable. If the debtor is not collectable, then some provision needs to be made or the debt is written off. In the financial records of the business that I have perused,[24] there is no evidence of any substantial debtor being carried forward in the business of this chemist shop. To the contrary, the only debtor of any substance, and this was not a large amount, was the Public Benefit Scheme for prescriptions that were filled and to be paid for under that scheme. This largely was a timing issue as opposed to a collection issue. There is no evidence in any accounting record that is before the Court, of any debt owed in the amount of $300,000 or anything like it by Michael or anyone connected with him to the chemist shop business. The evidence discloses a series of payments made regularly by Michael to the chemist shop business on account as expenses and these payments were treated as expenses outgoing by the accountant, Mr Crook, when he prepared the financial statements for Michael’s medical practice. After 2003, the pharmacy made a regular payment to Mageca/Megameg in the amount of $780. This amount was charged as an expense for rent (in the pharmacy financial records) and was accounted for as a rent receipt in the same way by Michael.

   [24]   Exhibit P1 Tabs, 108, 109, 110, 111, 112, 113, 114, 115, 116, 120, 130 131 (see also Exhibit D58),      132, 136, 137, 138, 140, 149, 151, 152, 160, 162, 163, 168, 179, 180, 181, 182, 183.

6. Maria-Mandy said that she questioned her father on a number of occasions in the 1990s and perhaps in the 2000s, about when this account would be paid.[25] She always received an assurance from her father that it would be paid. However, if it was to be suggested that there was a large outstanding debtor, then I would expect that debtor to be recorded in the books of account of the partnership. No such debtor was ever recorded. Maria-Mandy could not identify such a record. There is no evidence that Maria-Mandy placed a document such as an aged debtor list in front of her father and asked for an explanation. I do not accept the evidence of Maria-Mandy that she questioned her father about these matters. There is no evidence to suggest that all of the arrangements with the doctors were handled other than in the same way; the doctors took product and then paid on a monthly account by one means or another.

   [25]   T125.3.

7. Maria-Mandy gave evidence that the pharmacy does not now have a complete record of all of these transactions. There have been floods that have destroyed a number of their records. She has been able to retrieve some of them, and they are Exhibits P8 and P9. She recalls that the ‘current’ book would be kept on a shelf in the dispensary and the older ones were kept in a back room. Exhibits P8 and P9 were the only ones that could be found.[26] A close review of these documents discloses many anomalies. On most of the pages of each of the exhibits the words ‘Dr M Cacas’ is written. The handwriting is generally the same for each of those entries. That handwriting belongs to her mother Poppy. The documents on Exhibit P8 commence from 30 May 1996 and end on an undisclosed date. The front page of P8 suggests that the books are for the period 1994 to 1996 and that at least 13 books are missing. How it could be assessed that 13 books are missing is not clear to me. How also it could be said that 10 or more years after the event, anyone on the plaintiffs’ side could identify that these books had any connection to Michael is also not clear on the evidence. Similar sentiments apply to the content of Exhibit P9 and in relation to both exhibits, there is no evidence identifying whether any payments were made in relation to any of these entries. It is also apparent, for example on the front page of Exhibit P8 that some dates have been inserted, all in the same hand. The date range is 6 July 1996-28 July 1996. There is no evidence to indicate how it would be that those dates have been determined. I have very grave doubts about the provenance of Exhibits P8 and P9. Maria-Mandy and Poppy were both closely cross-examined in relation to these matters. I have serious misgivings about their evidence arising from with that cross-examination.

   [26]   T125.19-126.4.

8. When she became pharmacy manager, Maria-Mandy did not know how much Michael owed to the pharmacy business. She thought it was significant, however she was not able to inform me how it could be that she could form a view that it was significant. There is no evidence before the Court that any running totals were available in 2001 on up to and including 31 December 2008.[27] I am unable to obtain any assistance from the suggestion from Maria-Mandy that she thought the debt was significant because there is no basis for her to have formed any view at all. She said that she did not become aware of how much was owed until recently. She saw the ledger, Exhibit P14, when a search was done of the dispensary. She recognises her father’s signature and her uncle’s signature on the document.[28] Notwithstanding that Maria-Mandy purported to identify her father’s signature upon Exhibit P14, later evidence[29] discloses that the second signature upon the document belongs to her mother Poppy. Other evidence also discloses that there is significant doubt whether on 31 December 2008 Michael would have fully comprehended the content of the document Exhibit P14.

   [27]   Cf p14.

   [28]   T132.12.

   [29]   T1040.37.

9. On a number of occasions in the 1990s, she had conversations with her father about who owned the building. He told her that the pharmacy and the upstairs was owned by him, and Michael owned the surgery part of the building. However, at no time has Tony been the registered proprietor of those properties.  She thinks that those discussions came up in circumstances where they were discussing the repairs that were needed for upstairs and, on those occasions, her father would say that he owned the property. Another occasion was when the occupant of the upstairs area came down and asked them to fix something that needed repairs. She challenged her father about why they would be dealing with upstairs people, and he said that he owned the building. On one occasion, someone who had a query about the upstairs area had been referred to Tony by Michael. However, there was no explanation as to why that person would have gone to see Michael first.[30]

   [30]   T130.12-136.10.

10. Maria-Mandy can recall that again the topic of ownership of the building came up when accounts had to be paid in relation to the upstairs area as well as the pharmacy downstairs. Another occasion was when she spoke to her father about doing pharmacy. This was when she was at high school in the 1990s. Her father said to her that he did not want to push her into it, but if she would like to take over the shop, the place is yours. She said that she had a similar conversation with Michael. He was very encouraging of her in that regard.[31] I am unable to ascertain how the reference to Maria-Mandy taking over her father’s business can somehow be translated to any statement by her father Tony that he was the owner of 127 and 127A Hindley Street. A reference to a takeover of the shop, ‘the place is yours’, is more a reference to the conduct of the business within the building then the building itself. On balance, it is more likely in my view to be a reference to the shop itself which is the business. If it were otherwise, and if such statements were made by Tony as the beneficial owner of the property, there is no reasonable or rational explanation why he had not perfected that title by calling for a transfer by the legal owner of the proprietary interest in the property to him as beneficial owner. There is also no explanation why, for example, Poppy whose evidence indicates that she was aware of the financial position of the family would not have caused or taken some steps to cause Tony to call for a transfer of the property to him. There are therefore a number of irreconcilable inconsistencies between this stated position of Maria-Mandy and the way in which the matter evolved over time.

    [31]   T137.9.

11. Maria-Mandy can recall one formal conversation with Michael on a particular day when he came into the dispensary. This conversation has to have occurred in the 1990s before she had commenced studying pharmacy. She thinks she was in about Year 11. Michael asked her whether she had decided what she wanted to do and said that she should not feel pressured but, if she was looking at doing pharmacy, it would be great for her because she could take over the building and have security in the premises. The place was established and there was a doctor’s surgery next-door. He would want her to continue in the same relationship that he had with her father. He said that ‘the place (the pharmacy) is yours for as long as you want to be here. You’ve got that security’.[32] Again, this statement is as consistent with or perhaps more consistent with Michael talking about security of tenure within the shop premises to enable Maria-Mandy to continue in the business as the pharmacist. At that time, Michael inferentially would have given no thought to his own longevity. These are statements made commonly enough in family situations. In my view, to give them any greater significance than that is to fall into error.

    [32]   T136.28-137.36.

12. Michael Cacas was equally delighted when she took over as pharmacy manager and said that it was great that she should take over and ‘the place is yours’.[33] Similarly, to make a suggestion that a ‘…place is yours…’ is no more than saying that his attitude was that she would have tenure for as long as she wanted. The evidence of Mr Crook, which I accept, is that for a very long period rent payments were spasmodic and, later, a very low amount of rent was paid. The financial records of the business disclose that it was not generating sufficient income to pay for staff, to pay the proper salary of a resident pharmacist and to pay for rent. In that sense, it was a gift of a right of occupation of the premises.

    [33]   T139.6.

13. Maria-Mandy Cacas knows that between 2002 and 2005 her father’s mobility was affected by Parkinson’s disease but he was able to walk. She knew that he had diabetes and low vision, which became worse over time. She does not recall him actually being blind, but he could watch the television. She saw him reading with the assistance of a magnifying glass but cannot specify a time when she thought that he had stopped reading. He certainly was not coming into the pharmacy in 2009, and that could have been from as early as 2007. She recalls that in 2006 he was coming to the pharmacy almost every Saturday, and occasionally during the week, for visits lasting about two to three hours.[34] In light of other independent objective evidence of the physical state of Tony Cacas, I do not accept this evidence. I consider that evidence shows that from between 2002 to 2004, Tony was incapable of attending the pharmacy. By 2006 his dual incontinence meant that his attendance there was at best problematic and realistically it was not physically sustainable. The Court has viewed the premises. It had steps, cramped spaces and had not been structurally modified and so is totally unsuitable for someone in such a condition.

    [34]   T139.6-140.25.

14. Mr Tom Forde was an insurance broker and friend of both Tony and Michael Cacas. He spoke to Maria-Mandy Cacas about taking over the business in the presence of her father. She thinks this would have been in about 2004-2005 and she recalls that Mr Forde said that he would instruct a solicitor and get advice. Her father’s accountant, Mr Dean Crook, was also assisting her and her father in a professional capacity. There were a number of conversations at the time and she cannot recall whether her mother was present at any of those conversations.[35]

    [35]   T140.25-142.28.

15. After the discussions between her father and Tom Forde, a solicitor called Stephen McNamara was retained. He suggested that the best way to transfer the pharmacy would be through her father’s will. She thinks this advice came in about 2008. She thought that Mr Forde introduced McNamara to them in order to deal with Tony’s will and the best way to transfer the business. He suggested that a lease be done in her name and her mother’s name. He drafted up that lease. She saw one of the drafts and then made some edits. She recalls that after this editing process, a copy was brought down to her and she signed the document.

16. Maria-Mandy gave evidence that Michael Cacas said to her that she did not need a lease, whereas McNamara told her that he thought it was a good idea just to have it as a safety net. Michael’s attitude in the end was that ‘you don’t need a lease but you can draw one up if you want to.’[36]

    [36]   T143.10-144.19.

17. She can recall the execution of a lease. She knows that McNamara, Dean Crook and Forde were at the pharmacy premises as well as her mother. She and Dean Crook went to the front room of the premises of Dr Michael Cacas. They signed the lease and Forde witnessed it. There was a short discussion about where the lease would be kept and the decision was made that Mr Crook would take it as it was quite common for Mr Crook to keep originals of documents in his safe at his accountancy practice.[37] She recognises her Uncle Michael’s signature on Exhibit P1 Vol 5 Tab 24 pp 5-82. She thought that Tab 26 of Exhibit P1 Vol 5 was the draft that she saw and, eventually, the one that she signed looked like Tab 28.[38] Maria-Mandy Cacas can recall that the negotiations leading to the execution of the lease took quite some time. She was not involved in the drafting and organisation of the lease, and she does not really know when the process started. She recalls that whatever lease she signed, it was backdated to 2007. She did not discuss it with Michael before her father passed away in 2012.[39]

    [37]   T145.5.

    [38]   T145.29-146.26.

    [39]   T147.7-148.21.

18. There are a number of anomalies about this evidence. None of the copies of the memorandum of lease are executed. The lessee is described as being Poppy Cacas and Maria-Mandy Cacas. There is no mention that Tony Cacas should be a lessee of the premises. It is quite peculiar that Maria-Mandy would be a lessee, she not having yet succeeded to the tenure of the chemist shop from her father Tony. She was only the manager. However, Tony was still the beneficial owner of the chemist shop business. There had been no transfer of the interest in that business by July of 2007. And there is no evidence to suggest that Tony Cacas was prepared to transfer any interest in the chemist shop business to his wife Poppy Cacas. It was very unlikely that he would do so because Poppy Cacas was not a qualified pharmacist and therefore could not operate the pharmacy business. She would need to employ a qualified pharmacist, logically Maria-Mandy.

19. There is a further significant anomaly. The date for the proposed commencement of the lease was 1 July 2007. The evidence is that the negotiation for the terms of the lease occurred over a term leading up to that date. This negotiation would have occurred within a year of the execution of P13 and soon after the execution of D14. The rent payable under the lease reflected near to the amount that was being paid monthly by the chemist shop. It is very difficult to understand why it would be that Megameg, the alleged legal owner of the property (127 and 127A Hindley Street) would be granting a lease to the persons who are allegedly the beneficial owners of the property and who could, at that time or at any time, call for a conveyance of the property under the terms of the alleged equitable estate. If it was the case that both Michael Cacas and Tony Cacas were lucid and in charge of their faculties in that period (as is the case on the plaintiffs’ version), there is no explanation why anyone would propose this lease as a matter of a ‘safety net’. These contentions cannot sit logically with the version of events put forward by the plaintiffs.

20. Maria-Mandy Cacas became aware that her father was making payments to Michael Cacas from time to time. She said she became aware of this from the time that she was a small child working in the chemist shop filling shelves. On occasions, she would see her father take money from the till or go out the back and get some cash from the cash bag and give it to her uncle. These events occurred during the 1980s and 1990s. She saw this a couple of times and she knew that they would talk to each other at the time, but she did not hear the conversations.[40] On one occasion, she did ask her father what the money was about and he said that it was for the building. At the time this evidence was given, there was a substantial objection to its content. Having regard to the view that I have formed, it is not necessary to canvass in any detail the objections raised by the defendants to the receipt of this evidence. I have decided not to accept the evidence but in the view that I have formed, it does not assist the plaintiffs’ case for the reasons which follow. I am of the view that any reference to a payment for the building does not take the plaintiffs case any further than a payment by Tony Cacas for the right to remain within the building. That is a payment of rent or its equivalent. There are a number of bases upon which I have formed that view. The first is that in the books of account of the first defendant prepared by Mr Crook[41] there is a reference to rent receivable. The rent figure is in the amount of $22,650,[42] however that amount was not being paid. That was an assessment of the liability for rent. The importance of the entry is that from the period through the 1980s and the 1990s the obligation to pay (as lessee) and to receive (as lessor) rent was recognised within the profit and loss accounts and cash statements of the businesses of Michael. Thus, based upon the records associated with Michael, Mageca and then Megameg, it was a liability (receipted by the recipient as rent income) in the form of an outgoing in the usual course of Tony’s business. Conversely, there is no record of an asset of any interest in property within the business accounts of Tony and the pharmacy. When he was giving evidence Mr Crook agreed with the proposition that I put to him that if there was a proprietary interest in the property, the balance sheet of the pharmacy business would have looked completely different. Thus, having now fully canvassed this evidence and most importantly the documentary evidence, I am of the view that it does not assist the plaintiffs’ case for the reasons that I have explained. The evidence has no probative effect, has no evidentiary weight, is inconsistent with other accepted evidence and is not accepted by me. There may have been another occasion when Maria-Mandy asked her father about this topic, but not later than 2001.[43] Again, I am not assisted by this evidence for the same reason.

    [40]   T148.26.

    [41]   Exhibit P1 Vol 8 pp8-1 to 8-339 inclusive.

    [42]   Exhibit P1 Vol 9 pp9-83.

    [43]   T149.180-156.5.

1. The defendants stipulated for the management fee to be a part of the rental obligation. The lease in that form provided by the defendants’ solicitors to the plaintiffs’ solicitors also included an obligation to pay rental arrears. That was consistent with a number of the drafts of the terms discussed between the parties. It was not reflected in the terms recorded by the judge.

2. On 17 December 2015 the solicitors for the plaintiffs responded to the solicitors for the defendants.[792] The letter sets out requests for deletions in relation to relevant clauses or parts of clauses. Air conditioning remained a contentious issue as did signage on the first floor balcony, entry onto the premises, removal of a Power of Attorney clause and a limitation of damages amendment. Then in respect of outstanding rent it reads as follows:

   With respect to outstanding rent pursuant to clause 18.1, we consider that that it is the Lessor’s obligation to advise the amount that it considers to be outstanding, having regard to the rent that was payable from 1 September 2015 and the actual rent that has been paid during that period.

   Please amend the clause to provide that the rent differential will be paid within seven (7) days of the execution of the Lease (a similar amendment will be required to Item 7 of the Schedule.

   The clause should also be amended to note that Outgoings are not payable during that period. This amendment which was agreed in previous correspondence. 

   [792] Exhibit P1 Vol 6 pp74-76.

3. It is apparent that the calculation and then the timing of the payment of outstanding rent from 1 September 2015 remained a contentious issue between the parties.

4. The letter then goes on to ask for a specific clause indicating that the Lessee, the plaintiffs, would not have any make good obligations, that there needs to be a proper definition of the leased area, a proper delineation of charges for the ground floor area as opposed to the first floor area, a requirement for separate metering for all utilities, a refusal to pay management fees in the first year and a fixing on management fees for a second year and finally the provision of waivers and releases.

5. That letter is responded to by a letter from the defendants’ solicitors dated 23 December 2015.[793] The first paragraph is instructive and reads as follows:

   My frustration and disappointment regarding the progress of this matter has been previously articulated. Your email dated 17 December 2015 forwarded at 4:08pm further amplifies your client’s attitude towards this matter …

   [793] Exhibit P1 Vol 6 pp77-8.

6. There is then a rejection of a number of items raised by the plaintiffs in their solicitors’ letter. The first relates to air conditioning, which, it was said, was canvassed during the mediation and it is asserted that Maria-Mandy Cacas expressly decided that she would prefer to pay a lower rent than have a new air conditioner installed.

7. In relation to signage, it is contended that this issue was also canvassed during the mediation and the terms as recorded by the judge specifically deal with that matter. There is then a refusal to amend or delete a number of clauses as requested by the plaintiffs’ solicitors and an agreement to make some of the amendments as requested. In respect of outstanding rent, clause 16 of the letter reads as follows:

   16.     In respect of outstanding rent in clause 18.1 I confirm that I have provided you with written advice regarding outstanding rental and nothing further needs to be done. I see no reason for amending this clause. Your client is under a legal obligation to pay the agreed rental as from 1 September 2015 and she is currently in default.

   The clause will not be amended to note that outgoings are not payable during that period. The terms of the Order expressly provided for the payment of outgoings and it is incorrect to say that this issue “was agreed in previous correspondence”.

8. In clause 22 of the document, the issue of management fees is again addressed. It reads:

   22.     The issue of management fees has been canvassed ad nauseum (sic). I have previously amended the clause to provide that the tenant will pay reasonable management fees. The issue of management fees was specifically canvassed and the terms of settlement recorded this. There is no reason why your client should expect to pay anything other than management fees at a commercial rate.

9. Only some of the forms of the documents of settlement recorded that the plaintiffs should pay management fees.

10. Following the letter from the defendants’ solicitors of 23 December 2015, those solicitors forwarded to the solicitors for the plaintiffs a further amended draft of the lease. The relevant portions of the email attaching the draft memorandum of lease read as follows:

    I attach a further amended draft of the Lease. This is the fourth draft that I have provided. It represents what the Lessor’s final position as to what was agreed between the parties. It is the Lessor’s intention that in the event that your client does not accept the terms of this draft that the Court be invited to settle the terms of the Lease.

    You will note from the enclosed draft that it reflects the advices in my letter dated 23 December 2015 and in response to your client’s proposal as set out in your email dated 17 December 2015.

    In that email you indicated that your client “reserves all rights pursuant to the Lease and at law, including the right to seek further amendments to the Lease documents as required”.  In my view this position is untenable. The matter needs to be finalised.

11. There was no resolution of this issue. The next communication between solicitors was of 15 June 2016 by letter from WBH Legal addressed to the defendants’ solicitors concerning the painting of the pharmacy building above the first floor verandah.

12. In its submissions, the defendants refer to the well-known judgment of the High Court in Masters v Cameron.[794] It is not necessary that I repeat the content of the three very well-known categories of case there discussed by the High Court. The defendants contend[795] that the Lease was

    … to be prepared incorporating the terms as expressly agreed and terms involving the usual covenants. It is clear that whether the agreement reached and the settlement for a lease to be issued actually stipulates for usual covenants or not, the law implies that the usual covenants shall be inserted. (Authorities omitted).

    [794] [1954] HCA 72; (1954) 91 CLR 353.

    [795] Defendants’ Submissions para 271.

13. The defendants then correctly contend that the question has become whether or not a proposed lease contains or is to contain specific terms ‘… which have either been expressly agreed which come within this concept.’ The defendants contend that the problem with the matters raised by the plaintiffs in this action as, for example, in their solicitors’ email of 17 December 2015, is that those matters either raise additional substantive matters both not agreed and not covered within the concept of ‘usual covenants’ or they are irrelevant or meaningless.[796]

    [796] Defendants’ Submissions para 272.

14. The difficulty I have with this submission is that the alleged agreement between the parties is to be found in three and perhaps four slightly different versions of documents all of which were formulated by the parties at or about the same time. In the period between 6 November 2015 and 11 December 2015, there was a Heads of Agreement executed, there was a handwritten document executed, there was then a formulation of those two documents which was apparently read out to the judge and then there was a formulation of the terms of the Orders made by the judge, all of which are slightly inconsistent with each other, particularly on the calculation of rent payable.

15. Although I accept the substantive arguments raised by the defendants in para 273 of their Submissions and the application and the meaning of the relevant authorities to which they have referred, I am of the view that there was a prior step for consideration which has not been resolved on the evidence or on the facts of this matter. If it were the case that there was sufficient evidence of a meeting of the minds in relation to the terms of the lease, the area to be leased, the rent to be paid and the parties to the lease, then my view would be different. However, it was clear from the outset that there was no ad idem agreement about all of those matters, most particularly the rent. It is quite possible that one party or the other purported to take advantage of what might have been a minor inconsistency or a slip of the pen. That is not a matter upon which I can express any view all of these years later. The essential feature is that at the time that these matters were recorded, there was not complete certainty about the essential integers of the agreement sufficient to place it within the first or second limb of the decision of the High Court in Masters v Cameron. That being so, even though I accept the application of the principles described by the defendants and their submissions, I am unable to agree with the propositions they put that the agreement for which they contend was settled between the parties sufficient to attract the application of those principles.

16. I consider that on a proper consideration of all of the evidence in this matter the parties’ positions are not materially different to the position in the NZI case. I find that in the absence of proof of the certainty of agreement of the four essential integers on the matters identified by the learned authors, there was no binding lease operating between the parties and there was no agreement that was specifically enforceable at the suit of a party.

17. Some submissions were made indirectly that if the plaintiffs had been aware of Exhibit P13 at the time of the mediation then the ‘legal landscape’ would have looked very different. Such a contention raises a myriad of legal issues but in light of my decision on this topic, I need not consider them further.

    Retail and Commercial Leases Act

18. In these reasons, I have earlier dealt with the contest in the evidence about which lease may have been applicable at any particular time. There is evidence of the 1993 lease, the 2007 lease, the 2009 lease and others. I accept the evidence of Mr Crook that the so called 2007 and 2009 leases were never executed due to ongoing disputes between the parties. I reject any contention of the plaintiffs there is any such lease or leases operating between the parties. There is also evidence of the payment of rent in the amount of $780 per month that was uncommercial and which Evelyn Cacas wished to increase to an amount of say, $500 per week. She did not wish for there to be too great an increase in rent in one step.

19. A 2005 lease was prepared and it prescribed a rental figure of $8,400 per annum and later $9,600. There was apparently no discernment at the time that there was an internal logical inconsistency in Tony being entitled to claim ownership of the property at 127 Hindley Street (as they allegedly believed) and their agreement to pay rent to the registered proprietor Megameg. There is no evidence of the execution of any form of such a lease.

20. I consider that the discovery of Exhibit P13 in 2016 does not lessen this inconsistency. Both Maria-Mandy and Poppy claimed to have had a consistent understanding of the universal agreement that Tony was the owner of No 127. That understanding (and the absence of the taking of any steps to assert such rights) is inconsistent with the agreement to pay, and then the payment of rent. This finding places in context the tenancy position as it existed from at least 1997, the date of the commencement of s20B of the Retail and Commercial Leases Act 1995 (SA) (the R&CL Act).

21. It is to the operation of that provision and the arguments of the parties to which I now turn.

22. It is not in dispute that the chemist shop constitutes a retail shop for the purposes of the R&LC Act. The defendants pleaded but no longer appear to contend that the operative lease between the parties was the 1993 lease which the plaintiffs contend was a sham. I have earlier dealt with these contentions of the plaintiffs. I have found that whatever may have been the parties’ intentions over time, that lease was not a sham in the strictly legal sense. I have also found that the lease was not relied upon by the parties to govern their ongoing relationships concerning the property. It is one of a number of documents that were prepared by or for the parties, executed and then forgotten.

23. In the case of the 1993 lease, Tony Cacas was incapable financially of paying the rent prescribed from turnover or by drawing upon capital reserves. The year of 1993 was a financial and commercial nadir for Tony Cacas and his family from which no real recovery was ever made. The 1993 lease became inutile as a result.

24. I have already found that the payments of $780 per month were treated by the payee as rent. The financial records of the plaintiffs after 1999 show that the plaintiffs accounted for these payments in the same fashion. There is no formal lease document which reflects this arrangement. I find that this arrangement existed through the good graces of Michael Cacas and was part of the ongoing assistance that he provided to Tony Cacas and his family as part of that filial relationship.

25. The plaintiffs contend that from at least 1997, the time of the commencement of s20B of the R&CL Act[797] that section had operation to the tenancy at will arrangements between Tony Cacas and Megameg. The plaintiffs further contend that because of the ongoing occupation by Tony Cacas of the pharmacy, there was an implied agreement under which Mageca or Megameg granted to Tony Cacas for value a right to occupy that was, in effect, a retail shop lease under s20B of the R&CL Act. Because no relevant exclusion applied, there was automatically a five-year term that expired no later than 6 October 2002. The plaintiffs contend that this tenancy expired upon the death of Tony Cacas. The argument of the plaintiffs appears to follow that whatever came after the arrangements with Tony, then those arrangements had to be new arrangements and so attracted the benefit of a five-year term under the operation of s20B(1), (2) and (3). Although not conceded by the plaintiffs, the logical extension of this argument is that after Tony’s death and before the conveyance of the business to Maria-Mandy, Poppy Cacas was the proprietor of the chemist shop business. The plaintiffs do not contend that Poppy Cacas, as Executor, took the chemist shop business without any rights of tenure but she enjoyed none greater than those enjoyed by Tony Cacas. In light of the arguments put to me, the decided authorities and my decision in this matter, it is not necessary to resolve that issue.

    [797]      20B—Minimum 5 year term

    (1) The term for which a retail shop lease is entered into must be at least five years.

    The term of a retail shop lease is worked out under this section on the assumption that any right or option of renewal or extension under the lease or a collateral agreement will in fact be exercised. However, a right or option of renewal or extension will not be taken into account if it is given after the lease is entered into.

    (2) A lease is not invalidated by contravention of this section but the term of the lease is extended to bring the term (or aggregate term) to five years.

    Example—

    If a lease is entered into for a term of three years, its term is extended by two years to five years. If a lease is entered into for a term of two years with an option for a further one year after that initial two years, the term of the lease is extended to four years (with the option for a further one year after that initial four years).

    (3) This section does not apply to a lease if—

    (a) the lease is a short-term lease (ie a lease entered into for a fixed term of 6 months or less); or

    (b) the lease arises when the lessee holds over after the termination of an earlier lease with the consent of the lessor and the period of holding over does not exceed 6 months; or

    (c) the lease contains a certified exclusionary clause; or

    (d) the lessee has been in possession of the retail shop premises for at least 5 years; or

    (e) in the case of a retail shop lease that is a sublease—the term of the retail shop lease is as long as the term of the head lease allows; or

    (f) the lease is of a class excluded by regulation from the ambit of this Division.

26. Before considering the plaintiffs arguments further, it is appropriate to reiterate that there is an identifiable connection between the operation of the pharmacy through a registered pharmacist and occupation of the premises in which the pharmacy business is conducted. If for example Tony Cacas, as a registered pharmacist, was not present, it was necessary for another qualified registered pharmacist to be present during the operation of the pharmacy. There is thus a connection between the demise and the conduct of the business. In short, without a pharmacist, there is no pharmacy business and the premises are no more than an incidental shop. Thus, Poppy Cacas could not, as an unqualified person, operate the pharmacy. She was obliged to ensure that a registered qualified pharmacist was always present during the opening hours of the pharmacy. Even so, it is not clear why it would be said that she stood in any different position to Tony, having assumed those responsibilities in her role as Executor. I will also leave that issue to one side.

27. On the assumption that there was a connection between the demise and the conduct of the business, there is necessarily a sharpening of the focus upon the nature of the relationship under consideration here in the background of the uncommercial rent being paid agreement.

28. The plaintiffs assert that upon the death of Tony in 2012, the tenancy at will that had subsisted since 2002 came to an end. The plaintiffs also appear to further recognise that based upon the method of reasoning of the Full Court of the Supreme Court of South Australia, (under a different statutory regime) in NZI Insurance Ltd v Baryzcka[798] and the decision of Gray J in Henningsen & Anor v Nolan,[799] the operation of s20B of the R&CL Act provides for only one term of five years for a tenant such as Tony Cacas in the absence of other terms.

    [798] (2003) 85 SASR 497 at [40] et seq.

    [799] (2004) 88 SASR 214 at [32] et seq.

29. The only tenancy that could have continued after the death of Tony Cacas was the monthly tenancy which he had enjoyed since 2002. Thus, Poppy Cacas could only have operated the pharmacy through a qualified pharmacist in her capacity as Executor under such an arrangement; Maria-Mandy Cacas was a qualified pharmacist. The plaintiffs accept that no further five-year term was created under the arrangement apropos Tony and Poppy Cacas because under the R&CL Act the ‘lessee’ is defined to be the person who has the right to occupy a retail shop under a retail shop lease and includes a sublessee and a prospective or former lessee.

30. A concession is made by the plaintiffs that as an Executor, Poppy has no right to claim a fresh five-year lease. The plaintiffs then contend that, in contrast to the position of Poppy, Maria-Mandy Cacas as the beneficiary under a will must stand in a different position. In making that contention, the plaintiffs appear to rely, in part, upon the decision of Gray J in Henningsen at para [33] where his Honour said:

    The statutory definition of ‘lessee’ does not refer to a particular person. The definition includes not only the person to whom the lease is granted but may also include such other persons as ‘heirs, executors, administrators, successors and permitted assigns’. The language of the statutory definition is broad enough to encompass those standing in the position of ‘the lessee’ to ‘the landlord’. Such an interpretation accords with the earlier reference to a balance being struck by the legislature. This interpretation is in accord with the definition of ‘lessee’ appearing in the 1995 lease. That definition as earlier noted included permitted assigns. The assignee, Mr Nolan, became the lessor of a lease with a five year term. Mr Nolan in his capacity as lessee of the 1995 lease was a party to a lease that continued for five years. The lessee of the 1995 lease remained in occupation of the premises for five years. Mr Nolan was that lessee.

1. It is first necessary to identify a number of features of the facts of that case. Mr Nolan, the respondent to the appeal, came into possession of shop premises under the deed of assignment which apparently occurred with the consent of the lessors. When Nolan came into possession of the shop premises, a five-year lease subsisted and he had the benefit of a further period of tenancy under that lease. After the expiration of that period and of the lease (which was not renewed), he continued in possession with the consent of the then landlord as a holding-over tenant. He did so for a period of about two years.[800]

   [800] Cf s20B(3) R&CL Act.

2. The Henningsens purchased the land in 2003 when Nolan was in possession. As the assigned lease under which Nolan first took possession commenced in 1995 and ended on 30 November 2000, Nolan was in possession as a tenant at will and the registered proprietors were not bound by any prior unregistered estate under the Real Property Act.

3. The issue for determination was whether Nolan could, as an assignee, obtain a further five-year term after holding over for a period of two years after the expiration of the lease.

4. Gray J identified that his decision turned on a proper consideration of s20B(3)(b) and (d) the R&CL Act. Those sub-paragraphs are set out above. After discussing the principles concerning holding over and the well settled common law principles that an assignment of a lease does not create a new lease,[801] Gray J turned his attention to the question of the meaning of ‘lessee’ under the Act.[802] In the lease which was entered into with the assignor to Nolan, the term ‘lessee’ was defined to mean: ‘… the defined parties and their heirs, executors, administrators and assigns.’

   [801] Or that, subject to contract, an assignor remains as liable as an assignee to perform the covenants under a lease in accordance with its terms.

   [802] 3—Interpretation

   (1) In this Act, unless the contrary intention appears—

   …

   lessee means the person who has the right to occupy a retail shop under a retail shop lease, and includes—

   (a) a sublessee; and

   (b) a prospective lessee or a former lessee …

5. His Honour confirmed that under common law principles, an assignment of a chose of this type does not create a new retail shop lease. The assignee takes under the existing arrangement. The claims of the assignee can rise no higher than the chose assigned by the assignor. All of these principles are so well settled that no authority need be cited for them.

6. Gray J then concluded (at [33]) that under the statutory definition of lessee as I have set out above, there is included the persons to whom the lease is granted but may also include: ‘… heirs, executors, administrators and assigns …’ in those roles because such persons may, at some point, stand in the shoes of the deceased or the assignor as ‘… lessee to a landlord …’ In so finding, Gray J matched the definition of lessee in the lease that was assigned to Nolan under consideration in Henningsen to the broader meaning of the statutory definition in s3(1) of the R&CL Act. In so doing, Gray J was not seeking to broaden the statutory definition. To the contrary, his Honour recognised that a person who takes under, for example, a will, may stand as lessee in no different position than the deceased testator. Similarly, an executor or administrator may, in the absence of other steps available to them, be responsible to cause the deceased’s estate to honour the lease obligations as ‘a lessee to a landlord’.

7. Thus, the proper focus here is upon the position of Maria-Mandy Cacas as an heir or a successor. Gray J held at [35] – [36] that:

   The language of s3(1) of the Retail and Commercial Leases Act expressly includes ‘prospective’ and ‘former’ lessees. These inclusions support the conclusion that the lease continues for five years regardless of a change in the particular person leasing the property. Even if the term ‘lessee’ is to be treated as a reference to a particular person in occupation the reference in s3(1) to ‘former lessee’ picks up the original lessee in the present case. The requirement that a retail shop lease continues for 5 years is not frustrated by an assignment or sub-lease.

   The ‘lessee’ of the 1995 lease included the lessee by assignment. The 1995 lease was a five year lease which complied with s 20B(1). The assignment did not affect the term of the 1995 lease. The lessee had been in possession for at least five years [and] s 20B(3)(d) operated.

8. The plaintiffs argue that Maria-Mandy Cacas went into possession of the premises in which the pharmacy business was conducted but without inheriting any legal rights of Tony Cacas as to possession of the premises upon which the pharmacy business was conducted. On this argument, she was then not the same lessee as Tony Cacas in the way that, for example, Poppy Cacas was.

9. I am unable to accept this submission for a number of reasons. First, in his judgment in Henningsen at [33], Gray J made no distinction between heirs, executors, administrators, successors and permitted assigns. Those persons fall within the definition of lessee to a landlord under s3(1) of the R &CL Act. If the deceased testator had enjoyed a five-year period of tenancy, then the requirements of s20B(1) and (3) of the R &CL Act have been satisfied.

10. The only interest (in the pharmacy business) obtained by Maria-Mandy was as a beneficiary-heir to the deceased estate of Tony Cacas and so she obtained under his will. No distinction could be made between the pharmacy business that she inherited and, intrinsically, the place where it was conducted. It was not an amorphous mass of a business that could simply be conducted from any place as and when it pleased her. If she chose she could move the business to other premises but that is not a consideration here. The ‘premises’ informs the conduct of this ‘business’. I earlier described that there is an intrinsic, indelible connection between the pharmacy business and the place where it was conducted. Similarly, when Maria-Mandy Cacas inherited the business and became its proprietor, she at least notionally became a lessee of the premises in the same fashion as Tony Cacas had been a lessee. In that fashion her interest as lessee could have been no more or less than the interest of her deceased father.

11. That form of reasoning is entirely consistent with the reasoning of Gray J at [33] – [35] in Henningsen that an heir may stand in the position of a ‘lessee’ to a ‘landlord’ in the context of the definition of lessee in s3(1) of the R &CL Act. In the result, as Tony Cacas has already enjoyed the five-year term and, as the rights obtained by Maria-Mandy in relation to tenure can rise no higher than those enjoyed by Tony Cacas, Maria-Mandy Cacas has no right to a further five-year lease. She is a tenant at will of Megameg under the operation of s20B(3)(b) and (d) of the R & CL Act. The claims that have been brought by her in file AMCCI-17-1527 and are now to be identified as those claims in file DCCIV-17-1527 which have now been called up by me should be dismissed.

    ORDERS

12. I address first the claims of the plaintiffs as described in Part 3 of the Third Statement of Claim. I make the following orders:

    1Judgment for the Defendants.

    2Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, 13, 14, 15 and 16 in Part 3 of the Plaintiffs’ claim for relief be dismissed.

    3A declaration that the terms of the Heads of Agreement executed following the Mediation in this Court and dated 11 November 2005 do not bind the Plaintiffs.

    4The Plaintiffs’ claim in Action Number DCCIV-17-1527 be dismissed.

    5A declaration that the First Defendant is the registered proprietor of the premises more commonly known as 127/127A Hindley Street, Adelaide, being the land comprised in Certificate of Title Registered Book Volume 6073 Folio 192 (the Premises).

    6A declaration that the First Plaintiff’s interest in the chemist shop premises more commonly known as 127 Hindley Street, Adelaide, being a portion of the land described in Order 5 hereof is that of a tenant at will to the registered proprietor of the land.

    7Paragraphs 2.2 and 3 of Part 3 of the Defendants’ Fourth Defence be dismissed. 

    8Paragraphs 1, 2, 3 and 4 in Part 3 of the First Defendants Counterclaim be dismissed.

    9The monies paid into Court by the First Plaintiff be paid to the First Defendant forthwith.

    10Within seven (7) days the First Plaintiff at her sole cost cause caveat number 12547777 to be removed from the Premises.

    11The undertakings given by the First Defendant through its solicitor on 26 August 2015 and 20 October 2015 not to enforce its eviction notice are discharged.

    12The costs of this action be reserved.

    13Certificate for counsel including senior counsel.

    
    

A person is mentally unfit to stand trial on a charge of an offence if the person's mental processes are so disordered or impaired that the person is—

          (a)     unable to understand, or to respond rationally to, the charge or the allegations on which the charge is based; or

          (b)     unable to exercise (or to give rational instructions about the exercise of) procedural rights (such as, for example, the right to challenge jurors); or

          (c)     unable to understand the nature of the proceedings, or to follow the evidence or the course of the proceedings.