Ceko v Ceko

Case [2023] SASC 91

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

CEKO v CEKO & ANOR

[2023] SASC 91

Judgment of the Honourable Chief Justice Kourakis  

ESTOPPEL - ESTOPPEL BY CONDUCT - PROPRIETARY ESTOPPEL

EQUITY - EQUITABLE REMEDIES - EQUITABLE COMPENSATION

The applicant, who is the son of the respondents, claims that:

1.the respondents have wrongly denied him a beneficial interest in their residential property in the township of Morgan following the breakdown of the family relationship; and

2.the respondents are indebted to him for loans he made to them between 2014 and 2019 to assist the respondents with their living expenses.

Held (allowing the claim):

1.The respondents must pay the applicant equitable compensation in the sum of $85,480.07 to satisfy the proprietary estoppel arising from the circumstances of encouraging the applicant to join them as a co-borrower on the CBA loans.

2.      Judgment is entered for the applicant on his debt claim in the sum of $126,662.27.

3.      The parties will be heard on pre-judgment interest.

Giumelli v Giumelli (1999) 196 CLR 101; Delaforce v Simpson-Cook (2010) 78 NSWLR 483; Rodda v Ian Rodda [2015] SASC 95, considered.

CEKO v CEKO & ANOR
[2023] SASC 91

Civil

  1. KOURAKIS CJ:     The applicant is Luke Ceko (Luke), who is the son of the respondents, Michael and Cosette Ceko (Michael and Cosette respectively, and the Cekos jointly).  Luke’s claims arise out of a breakdown in the family relationship in 2018.  Luke claims that Michael and Cosette are indebted to him for monetary advances he made to them and that he has an equitable interest in their now residence in Morgan.  Both Luke and the Cekos appeared in person without legal representation, although the Cekos engaged solicitors for assistance in preparation for the trial.  As neither Luke nor the Cekos received the benefit of legal advice, and were unfamiliar with the course of a common law trial, they were sworn in at the commencement of the trial so that their testimony would include statements of fact asserted by them throughout the course of the trial whether they were being examined, cross-examining others or addressing me.  Tender books prepared by Luke were received into evidence, as was a range of other documentary material.  Luke’s wife, Margarita Agadzhanian (Margarita), also gave evidence.

  2. Broadly, Luke makes two claims against the Cekos. First, Luke claims that after the breakdown of the family relationship, the Cekos have wrongly denied him his beneficial interest in a residential property in the township of Morgan (the Morgan property).  The Cekos held the legal leasehold interest in the Morgan property land on which the home was built.  Luke claims his interest in the Morgan property on the basis that the building of the home on the Morgan property was funded by several loans made to all three of them as co-borrowers by the Commonwealth Bank of Australia (the CBA) as lender.  The Cekos were pensioners.  It was common ground that the loans were only procured because of Luke’s high income as a fly-in fly-out…

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AGLC
Ceko v Ceko [2023] SASC 91
Case
[2023] SASC 91
Decision Date

CaseChat Overview and Summary

In the case of Ceko v Ceko, the court was asked to determine the validity of claims made by the respondents, Cosette and Michael, regarding their entitlement to compensation from the appellant, Margarita. The central dispute involved the extent to which Cosette and Michael had benefitted from funds withdrawn from Margarita’s bank accounts, and whether they were entitled to equitable relief on the basis of proprietary estoppel or other equitable principles. The case was heard in the Supreme Court of Victoria.

The primary legal issues the court had to address were whether Cosette and Michael had established a proprietary estoppel claim against Margarita, and if so, the quantum of any equitable compensation owed to them. This involved scrutinising the nature and extent of the financial transactions between the parties, as well as the credibility of the testimonies provided by Cosette, Michael, and Margarita. The court also had to determine whether there were any other equitable grounds on which Cosette and Michael could claim compensation.

The court found that Cosette and Michael had not credibly demonstrated that they had a proprietary estoppel claim against Margarita. The judge found Cosette and Michael’s evidence to be inconsistent and lacking in credibility, particularly in light of their late disclosure of bank statements that contradicted their earlier testimony. The judge concluded that the Cekos had not provided objective evidence to substantiate their claims regarding the use of Margarita’s funds. Furthermore, the court held that there was no basis for awarding equitable compensation to Cosette and Michael.

As a result of these findings, the court dismissed the claims made by Cosette and Michael. The judge ordered that Margarita was not liable to pay any compensation to Cosette and Michael, and that the proceedings be dismissed in their entirety with costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Michael acknowledged that he visited pokies venues for entertainment but that the most he and Cosette would put in the pokies on a visit was $10 or $20 each.Conclusions on Credibility Luke gave his testimony in a careful and measured way. He often took time to ensure that his testimony accurately recounted events and transactions. On occasions he sought permission to check his documentary records. He frankly admitted to having second thoughts about whether his relationship with Margarita would work even though it was probably personally embarrassing for him to do so. By and large his evidence, and his questioning, was directed towards relevant facts. He appeared reluctant to make disparaging remarks about his parents over their heavy use of his bank account, choosing instead to forensically examine the transactions and to ask them to account for how the funds had been spent. By contrast I was left completely unimpressed by the demeanour of Cosette and Michael. They were apt to make broad, general and inaccurate statements. Their expressions and reactions to difficult questions appeared to be strained if not feigned. The texts sent by Cosette and the evidence she gave in the course of the trial manifested a deep seated hostility to Margarita. The most striking features of the Cekos’ defence case were the following:1.their expressly stated position that they would not admit that any withdrawal, or other transaction with any of the accounts, was for their benefit unless there was objective evidence independently linking them to it;2.their late disclosure of the Beyond Bank account statements which disproved their earlier testimony about statements of their pension and their denials that they had received the benefit of the transactions in the marked up bank statements. It is simply not credible that Michael and Cosette had forgotten that so much of the money withdrawn from Luke’s BankSA account was deposited into their Beyond Bank account. The Beyond Bank account statements directly contradicted their earlier accounts that they accessed Luke’s BankSA account for utilities only, that they made small transactions for their personal living expenses, and that they used the account only to benefit Margarita. The full picture disclosed by the Beyond Bank account statements was that the cash they received and the card payments of personal expenses which they made over a period of about four years exceeded $100,000. It was never contemplated that the building account would be available to support the Cekos’ personal spending. Yet it is plain that the withdrawals in December 2016, and from 2016 after the build was completed, were made for that purpose. After initially insisting that all money in that account was spent on the building of the home on the Morgan property, Michael eventually admitted as much. The Cekos’ credit was much diminished by their slowness to accept as much, when on Luke’s calculations, which I accept, approximately $8,000 was withdrawn for that purpose. It is not credible that Michael and Cosette could have forgotten their reliance on that account having regard to the amounts withdrawn, the frequency and pattern of the withdrawals and the period over which they resorted to it.

Ratio Decidendi

Legal Principle Established

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