D'Auria v D'Auria
[2023] VSC 533
•8 September 2023 (First Revision 18 September 2023)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 03117
| DIEGO D’AURIA | Plaintiff/First Defendant by Counterclaim |
| v | |
| HELEN D’AURIA & ORS (according to the attached schedule) | Defendants/Plaintiffs by Counterclaim |
---
JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18, 19, 20, 21, 24 and 26 July 2023 |
DATE OF JUDGMENT: | 8 September 2023 (First Revision 18 September 2023) |
CASE MAY BE CITED AS: | D’Auria v D’Auria |
MEDIUM NEUTRAL CITATION: | [2023] VSC 533 |
---
PROPERTY – Resulting trusts – Presumption of advancement – Where purchaser’s sons own property as tenants in common – Whether presumption is rebutted.
PROPERTY – Proprietary estoppel – Estoppel by representation – Estoppel by acquiescence – Where plaintiff is the registered proprietor and defendants claim beneficial ownership of house – Whether defendants acted in reliance on representations made by the plaintiff that the defendants would own the house – Where defendants allege that improvements were made on the assumption that they were the owners of the house – Where defendants allege that plaintiff acquiesced in their improvements and expenditure of the house on their assumption of ownership of the house.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff / First Defendant by Counterclaim | Mr M Black | Natoli Howell Lawyers |
| For the Defendants / Plaintiffs by Counterclaim | Mr P D Reynolds | Elvin Lawyers |
TABLE OF CONTENTS
A. Introduction.................................................................................................................................. 1
A.1Overview................................................................................................................................ 1
A.2The shop and the claims made in respect of it.................................................................. 1
A.3The house and the claims made in respect of it................................................................ 2
B. Is Diego the beneficial owner of the shop?............................................................................. 4
C. Does Helen have an equitable interest in the house?........................................................... 7
C.1The primary case: Did Renato work full-time in the business in reliance on representations made by Diego that the house would be his?................................................................. 7
C.1.1 Difficulties with accepting Helen’s evidence........................................................ 9
C.1.2Ada’s and Salvatore’s evidence on the circumstances in which Renato and Helen moved into the house............................................................................................ 13
C.1.3The inherent likelihood of the representations being made............................. 14
C.1.4 The payment of rates and utility bills................................................................... 17
C.1.5Diego’s evidence..................................................................................................... 18
C.1.6Did Renato work full-time in Diego’s business?................................................ 19
C.1.6.1 Corroborating evidence.......................................................................... 19
C.1.6.2 Conclusions.............................................................................................. 24
C.2The secondary case: the expenditure of money on the house...................................... 25
C.2.1The improvements to the house and the gift of a car........................................ 26
C.2.2The alleged ongoing representations................................................................... 29
C.2.3 Conclusion: were the expenditures made in reliance on ongoing representations?.................................................................................................................................. 32
C.3Acquiescence by Diego....................................................................................................... 35
D. Disposition.................................................................................................................................. 40
HIS HONOUR:
A. Introduction
A.1 Overview
This proceeding concerns the beneficial ownership of a property at 229 Elizabeth Street, Coburg (‘the house’) and of a property at 221 Elizabeth Street, Coburg (‘the shop’). Both were bought and paid for by Diego D’Auria. Diego D’Auria is now 78 years old and worked as a printer after his immigration to Australia in 1971 until his retirement in recent years. He had three children: Renato, who died in December 2019, Ada and Salvatore. Helen D’Auria is Renato’s widow. Without meaning any disrespect, I will hereafter refer to the various persons involved by their first names.
The shop was registered in the names of Diego’s two sons, Renato and Salvatore, and is now registered in the names of Salvatore and Helen in her capacity as the administrator of Renato’s estate. Helen, as administrator of Renato’s estate, is seeking to have the shop sold and to obtain half the proceeds. Diego asserts that he is the beneficial owner of the shop.
The house is registered in Diego’s name. Helen is living at the house and has lived there since 1995 or 1996. Diego is trying to recover possession of the house. Helen asserts that she has the right to remain there and that she or her children are the beneficial owners of the house.[1]
A.2 The shop and the claims made in respect of it
[1]Diego’s application for possession of the house is made against Helen and her two children and all are defendants to the proceeding (although one child is a minor and has a litigation guardian). Similarly, all three are plaintiffs in the counterclaim by which they assert an equitable interest in the house. Helen and her children had the same legal representation. It is convenient to refer to Helen, rather than throughout, to ‘Helen and her children’ when describing their position and arguments in relation to the house.
Diego’s printing business was originally based in Fitzroy. In 1998, he purchased the shop as a place to store stock, but, at some time in the early 2000s, he moved his business there. The property was ‘put in the names of’ Renato and Salvatore as tenants in common. There is no dispute that Diego arranged for the purchase of the shop, paid for it, made the decision to put it in the names of Renato and Salvatore, used it for his business for many years, and has met all the outgoings associated with its ownership. Helen is seeking, by a counterclaim, an order that the shop be sold and the proceeds be divided between Renato’s estate and Salvatore.[2]
[2]The counterclaim was expressed to be made pursuant to s 228 in Part IV of the Property Law Act 1958 (Vic). That section gives jurisdiction to the Victorian Civil and Administrative Tribunal to make an order for the just and fair sale or division of land on the application of a ‘co-owner’. Where the Victorian Civil and Administrative Tribunal has jurisdiction, s 234C denies jurisdiction to this Court to make such an order unless various exceptions apply. It seems likely that Renato (and now Helen) and Salvatore are co-owners as defined in s 222 of the Property Law Act 1958 (Vic) of the shop because they are registered as tenants in common. How and whether Part IV of the Property Law Act 1958 (Vic) deals with the existence of equitable interests is not straightforward, as to which see Garnett v Jessop [2012] VCAT 156 and Graham v McNab [2015] VCAT 353. These matters were not explored in argument. However, s 234C(4) of the Property Law Act 1958 (Vic) gives this Court jurisdiction if it is of the opinion that special circumstances exist which justify the Court in hearing the application made under Part IV. In my view, special circumstances would exist in this case by reason of the evidentiary connections between the claims in relation to the house and the claims in relation to the shop. Further, it may well be that, at the very least, Helen could have sought declaratory relief. I am prepared to assume, for the purpose of these reasons, that the Court has jurisdiction.
Where one party pays for a property but it is put in the name of another, the usual position is that the registered proprietor holds the property on a resulting trust for the person who paid for it because that is their assumed intention. However, where the purchaser puts the property in the names of their children, there is a presumption that the purchaser is gifting the property to their children — the ‘presumption of advancement’. That presumption is rebuttable. Diego and Salvatore[3] contend that discussions at the time of purchase, and the parties’ conduct thereafter, rebut that presumption and reveal an intention instead that Diego was to be the true owner.
A.3 The house and the claims made in respect of it
[3]Both of whom are defendants to the counterclaim to a moiety of the shop brought by Helen in her capacity as administrator of Renato’s estate.
The house was the family home of Diego, his first wife, and their three children. In 1981, Diego’s first wife died. His children were then approximately twelve, nine and three. In 1988, Diego married his second and current wife and moved, with his children, to live with her and her children in Lalor. The house was informally let to friends or acquaintances for nominal payment until Ada and her husband moved in or around 1992. In late 1995 or early 1996, Ada and her husband moved out, and Renato and Helen moved in. Renato lived at the house until he died on 30 December 2019. Helen and her children still live there. They have never paid any rent.
Helen contends that Diego no longer has any beneficial interest in the property, that she is entitled to occupy the property until Diego dies, and that on his death the beneficial interest in the property passes to her two children. Helen’s principal case, based in proprietary estoppel, is that:
(a) Renato at all relevant times prior to 1995 or 1996 worked full-time in Diego’s printing business without being recorded as an employee and for cash payments that were significantly below what he was entitled to for his work;
(b) She and Renato wished to buy their own property. In 1995 or 1996,[4] they asked Diego to record Renato as an employee of his business so that they could get a loan. Diego instead told them to ‘kick Ada out’ of the house and that the house would be theirs, or, as it was sometimes put, that they would be able to remain at the house until Diego’s death and that Diego would leave the house to Renato in his will;
[4]Helen initially thought this happened in 1998, but when shown evidence of when Ada purchased her house, accepted that she and Renato moved in in 1996.
(c) Relying on that representation, which they say was repeated or confirmed in subsequent years and included a promise made when Renato’s health declined that the house would be left by Diego to Renato’s children:
(i) Instead of leaving and obtaining another job elsewhere, Renato continued to work full-time in Diego’s business for only small cash payments until he became too unwell to continue to work in late 2015;
(ii) Associated with the above, they did not obtain a loan and purchase their own home but instead moved into the house; and
(iii) They spent considerable sums of money maintaining and improving the house and even bought Diego a car which, Helen says, they would not have bought for Diego if he had not promised to gift Renato and his family the house; and
(d) It would be unconscionable for Diego to be allowed to resile from the representations that he made and so he should be estopped from doing so.[5]
[5]See, eg, Giumelli v Giumelli (1999) 196 CLR 101, 112-113 [6]-[7] (Gleeson CJ, McHugh, Gummow and Callinan JJ).
In the alternative, she contends that Diego knew that she and Renato believed that the house would be theirs and that Diego acquiesced in their spending money on the house for that reason in circumstances where he should now be estopped from denying that they have an equitable interest in the house.
Diego, on the other hand, denies that he made the representations alleged, says that Renato only occasionally worked in his printing business and was always asking him for money, that he let Renato and Helen occupy the house rent-free for years as an act of generosity and not in exchange for unpaid labour by Renato, and that he never encouraged them to spend money on the house and indeed, if anything, discouraged them from doing so.
B. Is Diego the beneficial owner of the shop?
It is undisputed that Diego arranged for the purchase of the shop and paid for it (by borrowing money to do so and then, over time, repaying that loan). The issue is whether the intention was that he retain true ownership of the shop or whether the shop was, in effect, intended as a gift to his two sons. The presumption that because Diego paid for the shop he intended to own it does not apply because it was placed in the names of his children.[6]
[6]The ‘presumption of advancement’ — which is not a presumption as such but rather a circumstance in which it is not presumed that the person paying intended to retain ownership notwithstanding that the property was placed in the names of others: Bosanac v Commissioner of Taxation (2022) 405 ALR 424, 428 [15] (Kiefel CJ and Gleeson J), 438 [65] (Gageler J), 448-449 [115] (Gordon and Edelman JJ).
Diego said that he did not intend to gift the beneficial interest in the shop to his two sons. He said that he put the shop in their names because he had recently remarried, his children did not always get along with his wife’s children, and he wanted to ensure as best as he could that if the marriage broke down it could not be said that the assets associated with his business were available in a property settlement. On the other hand, Helen said that Renato ‘always told me he owned half’[7] and that after he died ‘it goes to his kids, or I was next of kin’. This evidence amounted, in effect, to an assertion by Renato that Diego had gifted the shop to Renato and Salvatore. It was, necessarily, hearsay. Helen had not herself had any discussions with Diego about why he put the property in Renato’s and Salvatore’s names.
[7]Hearsay evidence was led, without objection, of statements that Renato was said to have made because he was not available to give evidence in accordance with s 63 of the Evidence Act 2008 (Vic). No application was made to preclude it under s 135 of the Evidence Act 2008 (Vic).
Salvatore agreed with Diego. He said:
Dad just said ‘I’ll buy the factory, I’ll get the loan, but I’ll just put … the names in your names (sic), but the factory … its only as a trust. So if anything ever happens, … my new wife can’t take the factory’. But he always said that ‘The factory is still mine’, and we agreed. Me and my brother always said the factory is his.
The theoretical underpinnings of the law surrounding the creation of resulting trusts and the presumptions that apply is not straightforward. In the situation where one person pays for a property that is placed in the name of another, there is some room to argue whether the focus should be on the intention of the purchaser or on the intention of the registered proprietor or whether there must be a common intention,[8] and, perhaps, whether the subjective intention can matter or only the manifest intention is relevant.[9] It is not necessary for me to attempt to resolve these issues, however, because, for the reasons set out below, I accept the evidence of Diego and Salvatore on this issue. I am satisfied that at or around the time the shop was purchased there were discussions between Diego, Renato and Salvatore about the purchase and that it was intended by them, and made clear in those discussions, that Diego was to be the ‘true owner’ of the shop.
[8]That is, is the question whether the person who paid intended to gift the property to the registered proprietor, or whether the registered proprietor intended to hold it on trust, or whether there was some agreement between them. In Calverley v Green (1984) 155 CLR 242 Gibbs J stated at 251 that it is the intention of the purchaser — the person who pays for the property — that matters: ‘Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained’. In Bosanac v Commissioner of Taxation (2022) 405 ALR 424, Kiefel CJ and Gleeson J stated at 428 [13] that a resulting trust cannot result ‘over the actual intention of the party paying the purchase price’. Probably, their Honours meant an actual intention as objectively ascertained. Gageler J said at 434 [44] that the relevant intention for a resulting trust was ‘an objectively manifested intention that property be held in whole or in part for the benefit of another’, and at 439 [67] that the presumptions will only be ‘of practical significance ... where the totality of the evidence is incapable of supporting the drawing of an inference ... about what the contributors and purchasers actually intended’. Gordon and Edelman JJ at 446 [104] analysed the issue in terms of whether there has been ‘a declaration of trust by the person who ... pays the whole or part of the purchase price’, which seems surprising as it might be thought that any declaration of trust must be made instead by the person in whose name the property is placed. Cf the analyses in: Buffrey v Buffrey (2006) 12 BPR 23,619, 23,621-23,623 [14] (Palmer J); Anderson v McPherson (No 2) (2012) 8 ASTLR 321, 337 [98] (Edelman J); Carter v Brine [2015] SASC 204, [300], [304] (Blue J); Canaccord Genuity (Australia) Ltd v Allen [2022] VSC 631, [115], [161] (M Osborne J).
Salvatore and Diego gave their evidence on this point in a straightforward and persuasive way. Diego’s explanation was plausible, notwithstanding that there was at the time no suggestion that the marriage was in trouble, and notwithstanding that the asset would only be protected from a claim by Diego’s second wife or her children if Diego were later prepared to assert that he did not have a beneficial interest in the property. Salvatore’s and Diego’s evidence that Diego was always to be the true owner is also consistent with the fact that Diego operated his business at the shop for decades as if he were the owner of the property: Diego paid all the rates and other outgoings with the shop, made some changes to the shop without, it seems, any suggestion that he needed permission, and Renato and Salvatore never sought nor were paid any rent for the shop. There was no suggestion that Diego ever had to seek the permission of Renato or Salvatore to occupy the shop.
Diego’s evidence is also consistent with my impression that Diego intended to treat his children equally. A 2008 will was produced that provided that his interest in the printing business would go to Salvatore (who completed a printing apprenticeship and worked full-time in the business with his father for many years), that any interest in the Lalor property and his furniture and household chattels would go to his wife,[10] and otherwise that his personal belongings and ‘the balance of [his] personal estate and the balance of [his] real estate whatsoever and wheresoever’ would go equally to his three children. The parties agreed that the house and the shop are Diego’s only substantial assets. For Diego to have gifted the shop to Renato and Salvatore would have had the effect of leaving his daughter, Ada, out of a significant part of the asset pool that he acquired over his lifetime of work.
[10]Presumably, this was because, before or when he moved into his second wife’s property in Lalor, Diego arranged for some further work to be done there.
Salvatore’s evidence that the question of the true ownership of the shop was discussed at the time is also consistent with Diego’s evidence that initially Renato and Salvatore were themselves going to pay for the shop, but that the bank would not lend to them, and so Diego borrowed the money and paid for it. This supports Salvatore’s evidence that the matter was the subject of some discussion between them, rather than, for example, Diego just putting the shop in their name without their involvement. It also explains, were any explanation necessary, why the shop was put in their names and not, for example, also in Ada’s name. The fact that it was initially intended that Salvatore and Renato were going to pay for the shop also supports the view that Diego was not intending to gift them the shop. It makes sense that Diego wanted use of the shop for his business but did not want it in his name, that at first Renato and Salvatore were going to purchase and to own the shop, but, when it was clear that this was not possible, that Diego would purchase and own the shop himself but, for the reasons discussed, place it in Renato’s and Salvatore’s names.
For the above reasons, I conclude that the shop is held by Salvatore and Helen in her capacity as administrator of Renato’s estate on a resulting trust for Diego.
C. Does Helen have an equitable interest in the house?
C.1 The primary case: Did Renato work full-time in the business in reliance on representations made by Diego that the house would be his?
As noted above Helen contends that when she and Renato wished to buy their own property in 1995 or 1996, they asked Diego to record Renato as an employee of his business so that they could get a loan. Helen contends that Diego instead told them that they could move into the house and that it would be theirs, or, as it was sometimes put, that they would be able to remain at the house until Diego’s death and that Diego would leave the house to Renato in his will, and that Renato continued to work full-time in the business for modest cash payments on that basis. Diego denies that he said any such thing or that Renato worked full-time in the business. His position is that Renato did little work in the business and that he permitted Renato to live in the house rent-free.
In order for Helen to succeed, she has to persuade me, among other things, that these representations were made and that Renato worked full-time in the business. There is nothing in writing that confirms that the representations were made and their making was denied by Diego. There is also nothing in writing that confirms that Renato worked full-time in the business. Renato, of course, has died and is unable to give evidence.
The following events put the allegations in context:
(a) The house was, prior to Diego’s second marriage, the family home;
(b) In 1992, Ada and her husband moved, with Diego’s permission, into the house so that they could save for a deposit for their own home. They lived there rent-free, but paid the rates and utility bills, until late 1995 or early 1996, at which time she and her husband moved into their own home. Other than by providing those years of rent-free accommodation, Diego did not give Ada money towards her own home;
(c) Renato and Helen were married in 1993 and moved into rented accommodation. From that time, Salvatore lived both with Renato and Helen and at the Lalor property with his father. In late 1995 or early 1996, on the same day that Ada moved out of the house, Renato and his wife, and Salvatore, moved into the house. They lived there rent-free. Diego paid the rates and utility bills;
(d) In 2003, Salvatore purchased his own home and moved into it with his wife. Other than providing some years of rent-free accommodation and paying the bills over that time, Diego did not give Salvatore money towards his home;
(e) Diego continued to pay the rates and utility bills until or about 2010, after which time Renato and Helen took over those expenses. Diego said that this happened because he could no longer afford to meet those expenses due to a downturn in his business; and
(f) Renato and Helen remained in the house, rent-free, until Renato’s death in late 2019. Helen still lives there. She has now lived there, without paying rent, for more than 25 years.
I am not satisfied, on the balance of probabilities, that Diego made the representations alleged or that Renato worked full-time in the business. Indeed, in my view it is probable that, although Diego clearly gave his permission for Helen and Renato to move into the house, he did not assure them that they could stay there for as long as he was alive, or that if Renato worked full-time for him for low pay the house would be left to Renato only in his will. I also consider it probable that although Renato did perform some work in the business, for which he received cash payments, he did not do so on a full-time basis.
I have reached these conclusions because of my concerns about the reliability of Helen’s evidence and the evidence called by her, my assessment of the inherent unlikelihood that statements in the terms she alleged were in fact made and the evidence of Diego. I expand on these matters below. It is necessary to consider these matters consecutively. But in reality, the different concerns and views I express intertwine and my lack of satisfaction as to Helen’s case remains after a consideration of these various matters as a whole. I have not relied, in this respect, on the evidence given by Mr Adamopoulos and Ms Zisimatos referred to in para 73 below. I also have not relied on the evidence given by Ada’s daughter Lena, which revealed that there was a time when Helen and Renato had marital difficulties: this evidence was not, as I see it, relevant to the issues that arose.
C.1.1 Difficulties with accepting Helen’s evidence
Helen said that Renato was working full-time in the business for only modest cash payments. The payments he did receive were in cash and were never declared by Renato to the tax office. More significantly, though, on Helen’s case, whilst Renato was working in the business from about eight o’clock in the morning until three or four o’clock in the afternoon or later, on five and sometimes six days a week, he was also receiving unemployment benefits or, for much or a considerable part of the time, a disability support pension.[11] I take judicial notice of the fact that for a person to obtain unemployment benefits for an extended period it is necessary for that person to assert to the relevant authorities that he or she is not working, and that to obtain a disability support pension for an extended period of time it is necessary for that person to assert to the relevant authorities, and to a doctor or doctors, that he or she is not capable of working. The inevitable conclusion is that either Renato was not capable of working and did not work in the business in the manner described by Helen, or Renato was and did and that he, with Helen’s knowledge, defrauded social security for something like 20 years.
[11]Save for some periods between where he worked as a security guard that were demonstrated by extracts from his tax returns.
Further, while they were living at the house and not paying any rent, Renato and Helen also obtained rent assistance.[12] I take judicial notice of the fact that for a person to obtain rent assistance, that person must assert to the relevant authorities that he or she is, in fact, paying rent. This reveals that Renato and Helen were, at least in this respect, prepared to assert a falsehood over an extended period for the purpose of financial gain.
[12]Evidence to this effect was given by Anastasia Zisimatos. Helen, when asked about this, refused to answer any questions on the grounds that her answers may incriminate her.
Another difficulty Helen faces is that, I am satisfied that on 22 March 2022 she, or her daughter Maddalena under her direction, dishonestly attempted to have the council put the rates notices for the house in her name. On that day, a letter was emailed from Maddalena’s email address to the council for the purposes of having the council put the rates notice back in Helen’s name. The letter purported to have been handwritten by Diego and to have been signed by him. Diego did not, in fact, write, sign or authorise the letter. Helen has faced charges, or some form of legal proceedings, in relation to the sending of the letter. The precise status of those charges or proceedings was not made clear. Helen objected to answering questions on this point on the grounds that her answers might tend to prove that she had committed an offence but willingly gave evidence with the protection of a certificate that I granted under s 128 of the Evidence Act 2008.[13] She accepted that she had written the letter and had affixed a cut-out of Diego’s signature to it, but asserted that Diego had earlier, himself, cut out his signature, given the cut-out signature to her daughter Maddalena in Helen’s presence, and told Helen that she could use it at any time for anything to do with the house. This was not put to Diego when he was cross-examined. I reject it as an explanation. In any event, the letter was sent the day after a mediation of this proceeding and at a time when Helen and Maddalena, I am satisfied, well knew that Diego would not have consented to having the rates notices put back in Helen’s name or to her affixing his signature to a letter asking that that be done. The sending of the letter was, in my view, a deliberate and dishonest act done because Helen thought it would increase her prospects of succeeding in this proceeding.
[13]That section provides that evidence given in such circumstances may not be used in another proceeding against that person.
The manner in which Helen responded to her cross-examination on this issue also caused me to doubt her reliability as a witness. The letter was emailed at 2:10pm. At 2:32pm, the council responded seeking confirmation that Diego had in fact signed the letter because ‘it is considered as fraud if he didn’t’. Then, at 2:46pm, from the same email address but sent from a Galaxy mobile phone, was the email:
Soo Sorry My daughter Wasn’t Suppose to Send It That to U As I Spoke to My Lawyer Soo Sorry
The evidence surrounding the sending of this email was unsatisfactory. Its terms were in conflict with Helen’s evidence that she had Diego’s authority to send the letter and she did not at the time appreciate that she was doing the wrong thing. Further, Helen initially said that she was out shopping when the first email to the council was sent by Maddalena and she did not hear about the issue that had arisen until an hour and a half to two hours after it happened and that Maddalena (not her) had written the 2:46pm email quoted above. When queried about the fact that the 2:46pm email was expressed as if it were written by her, Helen said ‘well, I was there’. When it was pointed out that the email was sent only 14 minutes after the email from the council, she said that ‘I seriously don’t remember.’ She then said that she rushed home because she was ‘just around the corner’ and that she was ‘just starting to remember’ and that she did in fact send that email. It was surprising, given the nature of the communications, the fact that they took place only last year, and that there has been police involvement, that Helen would be as confused as her evidence suggested as to where she was and whether she or Maddalena sent the various communications. I formed the view that Helen was saying what she felt, at the time, was the best thing for her to say rather than attempting to give honest answers.
Maddalena, who was in Court when this evidence was being given, said that she had typed it out and that Helen had only said that she (Helen) had typed it out because Helen ‘got confused ... because [of] the way that you [counsel] were speaking to her’. I do not accept Maddalena’s assertion that the confusion on Helen’s part arose because of the way that she was questioned.
Maddalena also said that she and Helen had been given the cutout signature some time earlier by Diego and that they had ‘permission’ to use it. Maddalena agreed that after receiving the email from the council querying whether there was fraud she called Anastasia Zisimatos, who was then a friend of Helen’s. Ms Zisimatos said that when Maddalena called her she was ‘frantic’ and ‘freaking out’ that ‘they were going to put her in prison because Helen used her email address’ to email the letter to the council. I accept that evidence. Maddalena stated that she then typed out the 2:46pm email because she had panicked and that her mother was not home at the time. The email does not seem to be expressed in the way that a young woman of Maddalena’s age, used to social media, might be expected to express it. And of course if Maddalena did compose that email, she did so pretending to be her mother.
Maddalena rejected the suggestion put to her that she was panicking because she knew that she had done the wrong thing by sending the letter as it were from and signed by Diego. Her explanation for her panic was, as I understood it, because she did not understand what the word ‘fraud’ meant in the response from the council. There was, however, in my view, no plausible reason for which she would have been ‘panicking’ other than her appreciation that her mother, or she and her mother, had acted dishonestly and that dishonesty had been or would now be discovered. I formed the view that she, too, perhaps understandably in the circumstances, was giving the answers that she thought would help in this case, rather than attempting to give accurate answers.
C.1.2 Ada’s and Salvatore’s evidence on the circumstances in which Renato and Helen moved into the house
Renato and Helen moved into the house the same day that Ada and her husband moved out. Ada said that Renato conveyed to her that he had moved into the house for the same reason that she had, that is, to save money. She said that Renato was unhealthy and not working and that she encouraged him to ‘look after himself, save some money, go out to work, instead of staying home all day and making himself feel sick.’ She also said that she discouraged him from spending money on the house because ‘at the end of the day the house would be sold’ and divided between the three children, and that Renato indicated that he understood that this was the case. Salvatore said he did not discuss the terms on which Helen and Renato were living at the property with Diego and it was not suggested that he ever spoke to Helen or Renato about it.
Ada’s evidence was given in a straightforward and apparently honest manner. However, it was put to her that she had, after this dispute had arisen, approached Iolanda Mennillo and criticised her for agreeing to give evidence in support of Helen. Ms Mennillo said that Ada came to her house and ‘abused’ her, and told her not to say that she was Ada’s mother’s friend, for agreeing to help Helen. Ada denied that this was so. I prefer Ms Mennillo’s evidence on this point. However, approaching Ms Mennillo and expressing anger at her does not suggest that Ada’s evidence as to what Renato said and did is false; indeed, it would be consistent with Ada feeling that Ms Mennillo was assisting an unmeritorious claim. But the fact that Ada denied approaching Ms Mennillo means that Ada’s evidence cannot be unquestioningly accepted.
That said, I accept Ada’s evidence that she spoke to Renato about the circumstances in which he was occupying the house and that he did not say to her that he was doing so pursuant to representations made by their father that the house would one day be his alone. But I am not prepared to accept Ada’s evidence that Renato, positively, conveyed to her that he was living there to save money because he would not be paying rent. I accept that Ada drew that conclusion, if only because that was the reason for which she and Salvatore had lived there and because he was saving money by not paying rent, but I do not accept that Renato expressly said as much to her. Even so, the failure of Renato to tell Ada or Salvatore that Diego had, in effect, given him the house in exchange for his working in the business does tell against Helen’s contentions. If that is what Renato had been told by Diego, I would have expected that to have been mentioned by him, at some stage, to Ada and to Salvatore. It is to be remembered that Helen’s case is that Renato was working full-time in the business for little pay because of the assurances given and there was no suggestion that the alleged arrangement was meant to be a secret.
C.1.3 The inherent likelihood of the representations being made
When Helen was first asked about the conversation in which Diego said Renato could have the house, at which conversation she said she was present, Helen said:
In that conversation … he [Renato] asked his dad to move into Coburg. And ... his dad told my husband to kick his sister out.
She then said:
Well, we were going to buy a house, because we found a house in Epping, and his dad turned around and said, ‘you don’t need to buy a house, you don’t need to get registered, but you can have the house in Coburg.’
And:
He just said, ‘Tell your sister to get out, get her husband to buy a house, and the house is yours.’
Helen, on other occasions, added that Diego also said that they could live in the house ‘as long as [Renato] works for him’ and that he would leave the house to Renato in his will.
There are a number of issues with this evidence. First, Helen’s evidence that Diego told Renato to ‘kick Ada out’ does not sit easily with Ada’s evidence. Ada said that she moved out because she and her husband had purchased a home. She and her husband became the registered proprietors of their home in February 1996. That was consistent with them having purchased their own home in late 1995. I accept Ada’s evidence that she and her husband moved out because they had purchased a home, and not because they were ‘kicked out’ by Diego or Renato. It is much more likely, then, that the decision to let Renato and Helen live at the house was made by Diego because Ada and her husband had purchased a property and were planning to vacate it, than that Diego wanted to have Ada ‘kicked out’. It is noteworthy that, in cross-examination, Helen agreed, contrary to her evidence in chief set out above, that Renato knew that Ada was moving out and then went to Diego and asked to move in because it was their ‘turn’.
Further, the fact that Renato and Helen moved in on the day that Ada moved out and into their new home is really only consistent with Renato and Helen ‘kicking them out’ if the statements made by Diego to Renato took place sometime well before Ada and her husband purchased their own home and that they purchased their home because they were to be ‘kicked out’ of the house. But Helen’s evidence did not suggest that. Indeed, she was initially quite certain that the conversations happened in 1998, only accepting that it must have been in 1995 or 1996 when she was confronted with the evidence of the date of purchase of Ada’s house. Beforehand, when it was put to her that Ada moved out and she moved in 1995, Helen answered:
No it’s not. I was renting the years before; how do I not know.
Seen in that context, Helen’s dogmatic assertion that Diego told Renato (and her) to ‘kick Ada out’, together with her definite assertion, later retracted, that it could not have happened in 1996, causes me, again, to approach Helen’s evidence with caution. Indeed, I consider that her recollection and evidence now of the detail of the conversation that Diego had with Renato in 1995 or 1996 prior to and causative of them moving into the house is unreliable.
Second, the evidence that Renato and Helen had found a house to purchase and that they asked to have Renato’s employment ‘registered’ for that purpose was not compelling. Helen’s case was that Renato was already working full-time but was not being properly paid. No reason was identified, if this were so, why Renato was not being paid a fair sum, even if in cash, prior to his moving into the house, for the work he was doing. But assuming that he was working full-time for only modest cash payments, if Renato and Helen were to purchase a house they would have needed Renato both to be ‘registered’ as an employee so that he could obtain a loan and for him to be paid properly for the work he was doing so that he could repay the loan. Helen’s evidence did not deal with this second aspect. She focused only on Renato being ‘registered’ so that he could prove that he had a job so that he could obtain a loan. She also said that Renato ‘always’ asked Diego to be registered even after 1995. However, when it was pointed out to her that this would have had the effect, after 1995, of meaning Renato would not have been able to continue to receive his social welfare benefits, she, in my view, tried to evade the question by saying instead ‘in the early days, yeah’ and, when it was suggested that this was contrary to her earlier evidence, she said ‘Not recently’ and ‘my husband was sick’. Finally, Helen did not identify any reason for which Diego (rather than Renato) would benefit from keeping Renato ‘unregistered’. Diego would presumably have obtained a tax deduction if he were to pay Renato other than in cash. There was no suggestion that his other son, Salvatore, who worked in the business from in or about 2004, was not ‘registered’.
Third, the representations alleged are of a nature that would be surprising were they made. The house under consideration was the old family home to which each child would likely have had some emotional connection and it does not seem likely that Diego would, in 1995 or 1996, promise to leave it in his will to just one of his three children in exchange for Renato working in his business without there being some real discussion as to the obligations in that regard that Renato would be assuming. What would have happened, for example, if Renato had died in 1997 or 1998? Also, according to Helen, the far-reaching representations by Diego that the house would be theirs was made immediately by Diego after Renato approached him asking to have his employment registered so that they could purchase their own home without Diego taking any time for reflection. It seems to me much more in accordance with expected behaviour, or common experience, and the family dynamic having regard to the history of the house, that Diego would have conveyed to Renato that Ada was vacating the house and that Renato could move in instead of buying his own house if that is what he wanted to do, but that there was no promise or representation made as to the period of time for which Renato could live there or what would happen to the house after Diego died. It was probably understood, in the circumstances, that Diego would not charge Renato and Helen any rent, as he had not charged Ada or Salvatore rent. In that context, Diego may well have used words such as ‘the house can be yours’ in order to convey that he was giving permission for Diego and Helen to live at the house, but that would not in this context amount to a representation (and would not convey to a reasonable person) that Renato and Helen could live there for as long as Diego was alive or that he would leave it to Renato in his will.
Finally, it was accepted that Diego’s only assets of substance were the house and the shop. On Helen’s case, Diego gifted Renato half the shop and promised him the whole of the house. That would have had the effect of transferring a very unequal share of Diego’s accumulated assets to Renato at the expense of Ada and Salvatore. This seems inherently unlikely and is contrary to the evidence given by Diego in the witness box, which I accept, that his wish was, at least at that time, to leave these real estate assets to be shared equally among his children.
C.1.4 The payment of rates and utility bills
As noted above, Diego paid the rates, utility bills and insurance at the house until 2009 or 2010. He said that the change came about because he suffered a downturn in his printing business and that he could no longer afford to make those payments. Diego’s evidence on this point was given in a straightforward manner and made sense. Helen denied this and said that Renato had them put in his name because he ‘didn’t trust his brother and sister’. I accept Diego’s evidence and reject Helen’s evidence on this point. I do not share Helen’s apparent belief that the name of the family member to whom the rates are sent is of weight in determining who is the true owner of the property. Given that Helen and Renato were living in the house without paying rent and they were the ones using the gas and electricity, it would be entirely unsurprising that they took over the payment of the rates, utility bills and insurance (which, I assume, covered their contents, not just the building) and their doing so would not, in the circumstances, indicate that they were the ‘true owners’.
C.1.5 Diego’s evidence
Diego gave his evidence in a straightforward matter but was not always easy to understand. There were, however, some aspects of his evidence that caused me some concern. He tended to make absolute statements that he later qualified. For example, he initially said that Renato did not work for the business, before readily accepting that he would sometimes answer phone calls or make deliveries or the like. Also, when he was asked about communications between Renato and Brendan McGrath, a graphic designer who provided designs for Diego’s business, and shown an email that indicated that there had been some communication between them, Diego said that Mr McGrath was a ‘friend’ of Renato’s and that they ‘talk all of the time’ for matters not related to the business. I am prepared to assume, too, that when he gave this evidence he was aware that Maddalena was going to give evidence that she regularly heard her father speak to ‘Brendan’ on the phone. Mr McGrath did not give evidence to the effect that he had multiple social calls with Renato. However, Mr McGrath said his communications with Renato were limited to business communications and neither party asked him, in terms, whether or the extent to which he spoke to Renato on matters not related to the business. In those circumstances, I do not consider that Mr McGrath’s evidence undermined Diego’s reliability. That said, and although I formed the view that Diego was an essentially honest person who was giving essentially honest evidence, I concluded that he was prepared to exaggerate and to make absolute assertions when they were not warranted.
Those matters, however, do not cause me to treat as dishonest his evidence that he did not promise the house to Renato, or represent that he would leave it only to him in his will. I accept that he did not intend to promise the house to Renato or to represent that he would leave it only to him in his will and, as I noted in para 43 above, that he intended instead to leave the house to all his children. This makes it considerably less likely that he made the representations that Helen alleges but, because it is what Diego said rather than what he meant that matters, is not conclusive on the point.
C.1.6 Did Renato work full-time in Diego’s business?
The assertion that Renato worked full-time in Diego’s business for less than a proper wage is fundamental to Helen’s argument for at least two reasons. First, it explains why Diego would have promised Renato the house and allowed them to live there rent-free for so long: Diego was to receive, and did receive, in exchange, labour for which he did not have to pay. Second, it is a significant part of the detriment that, Helen says, they suffered in reliance on Diego’s promises (or representations): Renato continued to work for his father for low payment rather than finding another job and purchasing another home.
Diego, Ada and Salvatore disputed Helen’s evidence that Renato worked full-time in the business. Ada said she ‘knew’ that neither Renato nor Helen worked because ‘they were always home’ and that she encouraged Renato to increase his health and obtain a job rather than ‘stay home all day’, to which he responded ‘oh, well’. Diego and Salvatore said that although Renato would visit and occasionally help out in some ways he did not work regularly in the business. Both contended, in general terms, that Renato was not interested in working. Salvatore did his printing apprenticeship, worked elsewhere for a few years, and then worked for his father from about 2004. Diego said that Renato would also regularly ask him for money, which he would often give. The evidence that Renato worked full-time in the business simply cannot be reconciled with the evidence of Ada, Diego and Salvatore that he did not. Any conclusion that Renato was working full-time in the business would also, of course, conflict with his receipt throughout the relevant period of social security benefits premised on the fact that he was not working and, for at least some of the time, was incapable of working.
C.1.6.1 Corroborating evidence
Helen’s evidence that Renato worked at the shop was supported by the evidence of her daughter, Maddalena, the evidence of her mother, Maria Hadzifotis, the evidence of Fiorella Baseggio, who worked at Giannarelli Funerals which was for a time a customer of the business, and, to a lesser extent, the evidence of Ms Mennillo, a family friend whose husband was a customer of the business. Helen also relied on certain documentary evidence such as the cheque butts that had been completed by Renato or utility bills for the shop that had been addressed to him or had his name on them.
Maddalena gave evidence that she would go with her father to the shop at six or six-thirty each weekday morning and some Saturdays and Sundays and that they would open up the shop and then have breakfast. She would wait there while he worked. On a school day, she would be there until she had to start school and then as soon as school finished she would ‘literally run back to the shop’. If it were the holidays or not a school day, or in the days when she was too young for school, she would be at the shop ‘all day’. She purported to have strong and clear memories of attending the shop, ‘all day’ every day, including from when she was too young for school, that is, from when she was three or four years old. She had a phone from when she was in early high school. It was put to her that her memories of constant attendance at the shop were wrong and that she had elevated memories of occasions when she had attended the shop with her father into evidence that she had done so every day, which she denied. It was put to her that she did not have any photographs, or social media posts, of her spending time at the shop, to which she replied ‘I’m not sure’ and that she only started using social media in her adult life. No photos were produced.
Maddalena’s evidence as to the time spent with her father at the shop was given in a fluent and confident manner. I formed the view, however, that it was probably exaggerated. It is inherently implausible that someone would have the level of recall of events that she claimed from when she was three or four years old. It is more likely, it seems to me, that she would have fleeting memories of those times, and of her early primary years. Her unwillingness to acknowledge this caused me concern. This, coupled with my conclusion that she was prepared, with her mother, to send what she must have known was a dishonest communication to the council for her own purposes, means that her evidence cannot be unquestionably accepted.
Ms Baseggio worked in administration at Giannarelli Funerals between about 1995 and 2007. Diego’s business was their main supplier of printed matter for their funerals and she dealt with them daily. When asked whom she contacted, she said:
Oh, with Diego, with Renato ... and, not to a great extent, but there is another son, Sam [Salvatore]. I had a little bit of dealing with him, but it was mainly Diego and Renato.
She clarified that orders would be sent by fax, when there were issues or variations she would phone and usually speak to either Diego and Renato, and that the product would be delivered most of the time by Renato but also by Diego. Diego accepted that ‘sometimes’ Renato would deliver products to Giannarelli.
Ms Hadzifotis said that Renato worked for Diego, but did not specify the extent to which he did so.
Ms Mennillo was the wife of a man whose business was a client of Diego’s business. She said that Diego’s business supplied their ‘book’, which meant the invoice books. Diego accepted that this was so, but said that one order of books and cards would last for one or two years. Ms Mennillo’s husband was not called.
Helen also called Mr McGrath. In her written opening, Helen said that Mr McGrath supplied services to the business between 2012 and 2016 ‘generally communicating with Renato by telephone and email’. In fact, when he gave evidence, Mr McGrath estimated that he provided art files to the business on average about 12 times a month from about 2002 to 2014 or 2015 with the number reducing over the subsequent years, he would usually have contact with Diego or Salvatore, and that he only spoke to Renato about work ‘at the most a dozen times over the 18 years’ and that he ‘only ever heard from Renato if [Salvatore] was out of action.’ His evidence was indirectly supported by documentary evidence. He had produced in answer to a subpoena all emails that came from Renato or that had Renato in their body over the period between 2011 and 2015. There were only five emails produced and four of them were sent in August 2014. Salvatore gave evidence, which I accept, that he was in hospital having brain surgery at this time and that Renato was at that time doing some work at the business at his request.
Helen also said that Diego could not handle the business without Renato’s assistance. I do not accept that to be the case.
Helen applied for leave to cross-examine Mr McGrath (whom she had called).[14] By the time that the application was made, Mr McGrath had left the Court building. Helen’s counsel advised me that he wanted to put to Mr McGrath that he was ‘effectively in cahoots with’ Diego and Salvatore and that he ‘has been setup to give favourable evidence to them in this proceeding’. At the same time, in answer to a question from me, he informed me that nothing that Mr McGrath had said in evidence was inconsistent with anything he had told him or his instructing solicitor prior to the case. The basis of the suggestion that Mr McGrath was ‘in cahoots’ and had been ‘setup to give favourable evidence’ was the way he was said to have behaved as he left the Court building. I permitted him to call Maddalena in support of the application. Maddalena gave evidence that as Mr McGrath left the Court room after giving evidence he walked towards Salvatore, looked at him, and raised his eyebrows at him. In answer to questioning from me, Maddalena stated that she had not seen Salvatore’s reaction and that Mr McGrath otherwise proceeded straight out the building. Counsel also informed me that he wished to put to Mr McGrath evidence given by Diego that Renato was often on the phone to Mr McGrath but ‘as friends’ and by Maddalena that Renato would often speak to ‘Brendan’.
[14]See Evidence Act 2008 (Vic) s 38.
I granted Helen leave to cross-examine Mr McGrath but not because of the evidence about the eyebrow raise, which was, it seemed to me, insufficient to justify a conclusion of collusion given that Mr McGrath had known and worked with Salvatore for many years and Mr McGrath’s simplest path out of the courtroom from the witness box was down an aisle where he would walk directly past where Salvatore and Diego were sitting. I permitted the cross-examination because I considered that Mr McGrath’s evidence was unfavourable to Helen’s case, and accepted that it would be appropriate for her counsel to put to Mr McGrath evidence that was led that was contrary to his. When Mr McGrath was recalled, I advised Helen’s counsel that I would not prevent him from putting to Mr McGrath that his evidence was false and, in that context, his conduct as he left the courtroom. In cross-examination, Mr McGrath accepted that he was ‘friendly, in a professional sense’ with Renato, but denied that they had spoken daily or at least once a week. It was not, ultimately, suggested to him that he was deliberately giving false evidence as part of some arrangement with Diego or Salvatore.
Helen also relied on the facts that:
(a) Five cheque butts on the business’s bank account had been completed by Renato. Two of those were for the payment of rates in 1999, one was for some painting in March 2001, and one was for paint in September 2003. It is not clear what the fifth, dated March 2004, is for; and
(b) Electricity accounts addressed to 221 Elizabeth St (being the shop) had Renato’s name on them from February 2015 until his death. From February 2015 to July 2018 they were in the name of the business, with Renato’s name under the business name. Thereafter, they were in Renato’s name alone.
The numbers on the cheque butts indicate that there were many other cheques written that, on the evidence, were not, or may not, have been completed by Renato. In my view, this evidence establishes that there were some occasions when Renato drew a cheque on the business chequing account, but they do not support a conclusion that he was working full-time in the business. There was no evidence that the utility bills prior to February 2015 were in Renato’s name. The reason for which the electricity bills after that date were in Renato’s name remains somewhat of a mystery. Salvatore maintained, and I have no reason to doubt, that Diego in fact paid those bills. The fact that the bills had Renato’s name on them support, again, the fact that Renato had some involvement with the business, but does not establish that he worked full-time in the business.
C.1.6.2 Conclusions
Mr McGrath gave his evidence in a straightforward and persuasive manner and his evidence was also supported by the email evidence, or at least was consistent with the email evidence. Mr McGrath’s evidence was also supported by the fact that a testimonial on his website was from ‘Diego & Sam D’Auria’ rather than Renato, and that one of the jobs he performed, for which an email was produced, was a private job for Renato for Maddalena’s communion. I consider Mr McGrath to be a truthful witness. The evidence given by Diego and Maddalena that they had heard Renato speaking to Mr McGrath on the telephone is, to some extent, able to be reconciled with his evidence that he spoke to Renato at most a dozen times over eighteen years because that answer was directed only at conversations about work, and it seems that, when he was recalled, he was, again, considering work conversations. I accept the evidence of Mr McGrath. Accordingly, I conclude that Renato did not have any significant role in the business’s dealings with Mr McGrath’s design business.
Ms Baseggio also gave her evidence in straightforward manner and I consider her to have been an honest witness. Ms Baseggio’s evidence was to the effect that in the ordinary course Giannarelli Funerals would place an order by fax, and the cards would be delivered in the mornings usually by Renato, that this would happen most days, but that she would only phone ‘sometimes’. Ms Baseggio was vague about the years to which her evidence related, which was understandable given that she was giving her evidence about events of long ago unassisted by any records. In light of her evidence, I accept that for about twelve years before from sometime in the 1990s until sometime in the 2000s, Renato had a significant role in the business’s dealings with Giannarelli Funerals; that is, that he did more in the business than Diego now accepts.
Salvatore also gave his evidence in a straightforward manner. I considered him to be a basically honest witness, although I consider that his evidence to the effect that Renato did no real work in the business but merely sat on the computers playing games when he was at the office was an exaggeration.
Considering the evidence as a whole, I am not satisfied that Renato worked full-time in Diego’s business or, if he did so, that he did so over the period of time that Helen alleges and did so without being properly remunerated. In my assessment, Renato probably attended the shop often. Given that he lived only a few houses away and had no other regular employment,[15] it would make sense that he would regularly attend if only to visit his father. I consider it likely that while he was there, or if asked to do so, he would assist with part of the work. Probably, the amount of work he performed, particularly in terms of deliveries, reduced after Salvatore started because Diego was not then otherwise on his own. This would explain Ms Baseggio’s evidence that Renato would often make the deliveries when she was dealing with the business. Probably, Renato was paid cash, including by cash cheque, on an ad hoc basis for the work he did. He also benefitted, of course, from living in rent-free accommodation and having his father pay for some time the rates and utilities bills. But in light of the lack of documentary evidence, the receipt of social security payments throughout, the problems with Helen’s and Maddalena’s reliability, and Salvatore’s and Diego’s evidence, I am not satisfied of Helen’s case that Renato worked full-time in the business until 2015 without proper remuneration.
[15]Except for periods between 2005 and 2008 when he did some work as a security guard.
For the above reasons, Helen’s primary case fails.
C.2 The secondary case: the expenditure of money on the house
Helen and Renato spent considerable sums maintaining or improving the house. Some of that money was provided by Helen’s mother, Ms Hadzifotis. Some of it was from a disability payment of $85,556 that Renato received in 2019 from a superannuation fund. Helen relies on their expenditure to demonstrate the genuineness of her and Renato’s belief that the house was, or would be, theirs. But she also contends that this money was spent as a result of various representations made by Diego after they had moved in that the house was Renato’s or that he would leave it to Renato (or to Renato’s children) in his will. She also contends, in the alternative, that even if Diego did not make these representations, he nonetheless acquiesced in their expenditure of the money and that is sufficient to give them an equitable interest in the property.
Renato also, in 2019, gave his father a Holden Barina (with personalised plates) that cost $10,000. Helen said that Renato told Diego, as was the case, that the car was given as thanks for Diego giving them the house. Diego said that he did not know why Renato gave him the car (and that he already had one and did not ask for a new one).
C.2.1 The improvements to the house and the gift of a car
Many of the improvements I consider to be of no real consequence bearing in mind that Helen and Renato occupied the house for about 25 years prior to Renato’s death in December 2019. For example, Helen said that they replaced carpets,[16] replaced a laundry basin, installed an alarm system and a CCTV system, replaced damaged parts of the fence (mostly paid for by insurance), replaced a damaged garage door (using insurance), replaced the exterior doors with security mesh doors, replaced some internal doors, installed a split system air conditioner and installed a planter box in the back yard. Those are all, in my view, maintenance or improvements that could not sensibly, given their long occupation, indicate that Helen and Renato must have believed that the house was theirs or would be left to them in Diego’s will. More significantly, however, Helen also said or alleged[17] that:
[16]Receipts were tendered showing a payment of $255 for carpets in March 2007 and $1,100 in August 2019.
[17]Some of the allegations were admitted, and so Helen did not need to lead evidence in respect of them.
(a) She painted the house in about 2005, 2008 or 2009, and in 2018, later said to be 2019;
(b) In about 2004 or 2005, they rendered the outside of the house;
(c) In about 2005, they installed ducted heating;
(d) In 2008 or 2009, they installed solar panels, taking advantage of a government grant. Ms Hadzifotis also loaned Helen and Renato some money to pay for the solar panels;
(e) In about 2011, they installed ducted evaporative cooling;
(f) In April 2019, they paid $8,000 to concrete the area at the front of the house;
(g) In May 2019, Helen replaced tiles in the house in May 2019 at a cost of $6,200;
(h) They renovated the kitchen twice, the first time paid for by Ms Hadzifotis, and the second time, where they ‘replaced everything’, Renato using his disability payout. Helen produced an invoice dated 12 June 2019 for work done on the kitchen totalling $5,600 (which, she said, her mother paid for), referred to an invoice in April or May 2019 for a dishwasher for $595,[18] produced an invoice dated 29 October 2019 for a new stove for $1,550, and said that they paid almost $7,000 to have installed some new cabinets and tiles and benchtop and sink and tapware and lights. She produced some photos of the finished kitchen;
[18]Helen was taken to this invoice and she gave evidence in relation to it but it was not tendered.
(i) In 2018 or 2019, Helen installed built in wardrobes paid for by Ms Hadzifotis;
(j) In June 2019, they paid $1,400 to plaster the garage;
(k) In July 2019, they paid $1,500 to improve the veranda at the front;
(l) In August 2019, Ms Hadzifotis paid one or two thousand dollars for some roller blinds;
(m) At a time that I could not ascertain, but I assume was in or about 2019, they installed LED lighting; and
(n) In 2019, they replaced some tiles and capping and painted the roof.
Diego admitted that Helen and Renato repainted the house ‘on several occasions’ but says that he paid for the paint. In general terms, he said that he did not encourage the expenditure on the house, and, indeed, that he discouraged it: to him, the house did not need improving and he did not understand why they spent the money on it that they did.
The precise level of the amount spent was not identified. As noted above, in April 2018 Renato received a disability payment of $85,556 and Helen said that that money was spent on the house and the car. Ms Hadzifotis asserted that she spent $60,000 of her own money on the house. Payment by her of that amount was not established by documentary evidence. Later she said that she had paid ‘nearly’ $60,000, and that figure, it seems, may have included a gift of $10,000 to her grandchildren. Be that as it may, I accept that a substantial sum was spent by Helen and Renato, contributed to by Ms Hadzifotis, on improvements to the house particularly in 2018 and 2019.
I do not consider that the purchase of the car to be of any great relevance. It was a generous gift. However, the fact that Renato used part of his disability payment to buy his father a car does not, to my mind, make it more likely that Diego promised him the house. It is to be recalled that, on Helen’s case, Renato had been working full-time without proper payment in Diego’s business and the house was in that sense ‘earned’ by Renato. But in any event, the gift is just as explicable as being an expression of thanks for many years of generosity by Diego.
Diego called two people who had befriended Helen after Renato’s death, but who were no longer her friends:
(a) The first, Anastasia Zisimatos, said that Helen had told her that the house ‘belonged to her father-in-law, and he let them stay in there until they got on their feet’, that she was ‘fully aware’ that ‘the house did not belong to her’, that she was ‘there for a short time, not forever’ and that ‘she was gonna tell people that he promised her the home’. Ms Zisimatos accepted that Helen did not say to her whether that was true. She said that Helen told her that she ‘wanted to destroy [Diego and his family] and take everything from them’. I accept the tenor of her evidence that Helen told her that she had formed a dislike of Diego and his family and that she was intending to do what it required to obtain the house. The dislike that Helen now feels for Diego and his family was also apparent when she was in the witness box. It was, to some extent, reciprocated. But I do not consider that Ms Zisimatos’s evidence is a proper basis to conclude that Helen admitted that she was engaging in some kind of fraud by making the claims she was making. Diego is the registered proprietor of the house, and in that simple sense he is ‘the owner’ of the property. Helen might well have said that Diego was the owner of the house without that statement indicating that she knew that she had no equitable claim to it. It is just as likely that Helen was conveying to Ms Zisimatos that Diego owned the house on paper but that it had been promised to Renato and her in a manner that meant that she had a legal right to it and that she was going to do whatever it took to establish that right.
(b) The second, Milton Adamopoulos, said that Helen had admitted to him that the house ‘was her father-in-law’s property’ and that ‘it was her home to live in for the period that she was married’ that ‘the actual property belonged to her father-in-law’ and that ‘it will be eventually be sold’. He also said that Helen told him that Diego’s family were ‘losers’ and that she was going ‘to destroy them‘. The observations made above in relation to Ms Zisimatos’s evidence equally apply to that evidence. Significantly, however, Mr Adamopoulos also said that Helen told her that:
‘Well, if I do renovations ... in the house, it’s going to prove that this house is mine’, when all – in fact she knew that the house wasn’t hers from the start. She knew that it was going to be sold.
This evidence is significant because, if true, it provides a reason for which Helen spent money on the house other than a genuine belief on her part that she would be able to stay in the house and that it would be left to her children.
C.2.2 The alleged ongoing representations
Helen said, in addition to the statements made before they moved in, that:
(a) At some time between 2002[19] and 2005,[20] which was prior to them starting to fix up the house and taking over the payment of the rates, Diego represented that the house was Helen and Renato’s and would be left to Renato or his children in Diego’s will;
[19]That is, after Maddalena was born.
[20]That is, before their second child, Diego Jnr, was born.
(b) In 2005, Diego told them that they could do whatever they wanted with the house because it was their house;
(c) At another time, Diego said to Renato at the shop, in answer to a query from Renato and in the presence of Helen and Maddalena, that the house was his house and that if he died the house would go ‘to your [Renato’s] kids, Maddalena and Diego’. Helen’s evidence did not clearly establish when this was said to have happened. Initially she seemed to suggest that it was after Renato had become unwell, not long before his death, but before his April 2019 disability payment. At one stage she said it was in the early 2000s, and then, when it was pointed out that Maddalena was not born until 2002, she said it took place after 2010. She then said that ‘twice it’s happened’, and that the other occasion, also in the shop and with Maddalena present, was in 2019. Maddalena also said that she was present when Diego said that the house was Renato’s and that if anything were to happen it would go to her and her brother;
(d) Diego conveyed to Ms Hadzifotis, in Helen’s presence, that the house was theirs, in the context of Ms Hadzifotis offering to pay for some work at the house. It was not clear when this was said, although Helen thought it was in the middle of the 2000s;
(e) Just before Renato died in December 2019, in the hospital, Renato asked to have his name put on the title, and Diego said that he couldn’t find the title.
Maddalena said that at one stage Diego told her that she would need a pre-nuptial agreement if she were to get married so no one could ever take the house off her, and that shortly after her father had died at the end of 2019, she herself asked Diego whether he would stand by his promise that the house would go to her, and he said that he would, that it was ‘all in the will’, and that she should keep the receipts.
Ms Hadzifotis said that Diego said ‘a few times’ or ‘many times’ that the house was left to Renato and to her grandchildren. She later said that he did not mention her grandchildren but that he did say that it would be left to Renato. She was unable to be precise about the details save that she says that the comments were made at family gatherings where many people were present. She also said that she gave her daughter Helen money to fix the house because the house was ‘terrible’ and ‘disgusting’.
Diego denied that he ever promised the house to Renato (or to Maddalena). He contended that he told Renato ‘many times’ that, as was the case, he intended to leave the house to his three children.
I found Ms Hadzifotis’s evidence unsatisfactory. She was unable to be precise as to when things were said or what was said. Further, it was apparent that she had a real dislike of Diego and his family and was motivated by a sense that Diego had not been fair towards her daughter and grandchildren. It seems that she assumed that Diego was a wealthy man who had a moral obligation as a father-in-law and grandfather to leave the house to Helen. Ms Hadzifotis said, for example, of Diego, angrily, after suggesting that he was not a good grandfather, and emphasising the last sentence:
Him have money, have everything. One house, just one house.
It was accepted that I could proceed on the basis that Diego has only two substantial assets: the shop and the house. Contrary to Ms Hadzifotis’s apparent belief, in my view, giving the house to Helen as the widow of Renato would not rectify some objective imbalance or unfairness but would result in Helen, as the widow of Renato, receiving more than an equal share of the assets that Diego had paid for.
Ms Mennillo said that, at Renato’s funeral, at the cemetery, she, in the presence of her husband, asked Diego ‘to look after the kids now that Renato is not there’, and Diego replied that he would look after them and ‘the grandchildren’s got a house’. Diego at first said that it was possible that he spoke to Ms Mennillo at the funeral, but then denied that she spoke to him in a context where it was being put that she spoke to him about the house. Salvatore said that he remained by his father’s side that day and that Ms Mennillo had not spoken to Diego at the funeral. I consider that Salvatore is mistaken on this point. It is, to my mind, more likely that Ms Mennillo, as a family friend, did speak to Diego at the funeral and that Salvatore is now unable to recall that she did so. There would be no reason for her not to speak to Diego at the funeral, and every reason for Diego and Salvatore now not to be able to remember her doing so. Equally, however, I am not satisfied that whatever Diego said at that time amounted to a representation that he would give, or had given, the house to Renato’s children. It is equally consistent with him pointing out that he had been providing them with a house rent-free and that he had no immediate intention to cease doing so. In any event, it is not said that the statements Diego made to Ms Mennillo at the funeral were relied on by Helen when the decision was made to spend money on the house.
Salvatore also said that in 2015, at a time when Renato was in hospital and Helen had left him for a short time, he and Diego cleaned the house and made some improvements in the kitchen.
C.2.3 Conclusion: were the expenditures made in reliance on ongoing representations?
I conclude that Diego did not subjectively intend ever to promise to Helen or Ms Hadzifotis or to Maddalena, or say to Ms Mennillo, that the house would be left to Renato or to his children in his will. I consider it more likely that he considered the house still to be his and that he was free to deal with it, and that he intended to deal with it, in his will. Further, I conclude that Diego’s intention at all relevant times, at least up until the dispute arose in July 2021, was to leave the house to his three children equally and, after Renato’s death, for Renato’s children to receive what would have been Renato’s one-third share. That is not just consistent with his oral evidence but is also consistent with the wills he executed in August 2008 and December 2020, and, in light of my rejection of the contention that Renato was working full-time for reduced remuneration in Diego’s business, a general sense of fairness.
Although my finding as to Diego’s subjective intention is relevant in the sense that it touches upon what Diego might have said, the question in the case is not what Diego thought, but what he, objectively, represented and caused Helen and Renato reasonably to think. For Helen to succeed, I must be reasonably satisfied, that is, have an ‘actual persuasion’ that, on the balance of probabilities, the representations were made and that she expended the money in reliance on them.[21]
[21]See: Rhesa Shipping Co v Edmunds ('The Popi M') [1985] 2 All ER 712, 714 (Lord Brandon of Oakbrook); Briginshaw v Briginshaw (1938) 60 CLR 336, 361 (Dixon J); Kuligowski v Metrobus (2004) 220 CLR 363, 385-386 [60] (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ); Strong v Woolworths Ltd (2012) 246 CLR 182, 211-212 [76] (Heydon J); NOM v Director of Public Prosecutions (2012) 38 VR 618, 651 [105], 653 [112], 655-656 [123]-[124] (Redlich and Harper JJA and Curtain AJA); Eumeralla Estate Pty Ltd v Chen [2022] VSCA 78, [52], [55] (Maxwell P, Kennedy and Walker JJA).
The fact that considerable sums of money were spent on the house certainly increases the likelihood that Diego made the representations that Helen alleges and that she believed that he would honour them. However, it is not conclusive. It is to be recalled that Renato and Helen lived in the house, rent-free, for something like 25 years. It had become their family home in which they were bringing up their children and no one was suggesting that they would have to move out. It is not surprising that they should pay for some improvements from which they would benefit. It is possible that Diego and Helen improved the house, and Ms Hadzifotis contributed money to allow that to happen, because they wanted to make the house better to live in without having had any assurance that the house would one day be Renato’s or Renato’s children’s. That would be consistent with Ms Hadzifotis’s characterisation of the house as inadequate prior to the work being done on it. It is conceivable that persons in their position might improve the house, even knowing it was not theirs, in gratitude to the owner for having permitted them to live there for so long. Equally, the money may have been spent in the expectation or hope that they would be permitted to live there in years to come, and perhaps also in the hope if they spent money on the house Diego would be less likely to ask them to leave.
Further, there is room for misunderstanding in this case. The house was where Renato was living and had been living since 1995 or 1996. Diego may well have, from time to time, described the house as Renato’s house; indeed, it would have been surprising had he not done so. Equally, in circumstances where he had no immediate intention of asking Renato to leave but was instead content for him to remain there for the time being, it would be understandable that he would make statements to the effect that Renato could stay there. He may also have said that he would look after Renato’s children after his death.[22] But comments to these effects do not amount to representations that he would never ask Renato to leave, that Renato could stay there for as long as Diego was alive, or that he would leave the house to Renato (or to Renato’s children) in his will. They would not reasonably be so understood, in circumstances where the house formed more than half of Diego’s asset pool and where Renato was one of three children. As noted above, I have not accepted that Renato was working full-time in the business for little payment as some form of consideration for the making of such a promise.
[22]Which he did, to the extent that Helen and her children were not asked to leave the house, and continued to occupy it without paying rent, until July 2021, which was two and a half years after Renato’s death, and, in his 15 December 2020 will (since revoked), he left one-third of the house to Renato’s children. Also in July 2021, Helen sought to have the shop sold and to have half of the proceeds paid to her. It was not established, and it does not strictly matter, whether Diego asked Helen to vacate the house before or after Helen asserted ownership of half the shop.
It may be that Helen and Maddalena, with hindsight and as people whose personal interests are affected and are in litigation, have now come to believe that what was said amounted to definite representations or assurances that the house was theirs or would be left to Renato or his children in Diego’s will. As McLelland CJ said in Watson v Foxman,[23] recently quoted by Besanko J in Roberts-Smith v Fairfax Medial Publications Pty Ltd (No 41):[24]
Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.[25]
[23](1995) 49 NSWLR 315, 319.
[24][2023] FCA 555.
[25]Ibid [164].
The question, however, is not what Helen and Maddalena, or Ms Hadzifotis, have now come to believe, but whether, objectively, Diego made representations that the house would be left to Renato upon which Renato and Helen were entitled to and did rely such that it would be unconscionable now for Diego to resile from them.
I am not so satisfied. As noted above, I am satisfied that Diego did not intend to make such representations, and the evidence that he did so is insufficiently reliable, or precise, in the circumstances of this case to cause in me a reasonable satisfaction that representations of that type and quality were made. For the reasons set out above, I have concerns about the reliability of Helen’s and Maddalena’s and Ms Hadzifotis’s evidence, there are other plausible explanations for which the money may have been salspent, the making of such a promise in the absence of Renato working full-time for low reward seems inherently unlikely in the circumstances, and there is every likelihood that words were said that did not amount to representations of the type alleged but are now wrongly recalled by Helen and Maddalena, and Ms Hadzifotis, as having done so. I remain unpersuaded that Diego made the representations that were alleged and that, if he did, Helen and Diego spent money on the house in reliance on them. I am not concluding that Helen, Maddalena or Mr Hadzifotis were deliberately giving false evidence in relation to Diego’s alleged representations. Rather, I am left in a state of real uncertainty.[26] I consider that it is just as likely that Diego said words that were entirely consistent with him retaining the right ultimately to dispose of the house as he saw fit and that and would reasonably have been so understood, and that Helen and Maddalena and Ms Hadzifotis have since, wrongly, come to believe that Diego said something more. In these circumstances, Helen has not discharged the onus of proof, and her claim must fail.
C.3 Acquiescence by Diego
[26]See, eg, Roberts-Smith v Fairfax Medial Publications Pty Ltd (No 41) [2023] FCA 555, [117] (Besanko J).
Helen also contends that even if Diego did not make the representations alleged, she or her children have an equitable interest in the house because Diego stood by while she and Renato spent money on the property in the assumption, known to Diego, that the property is or would be theirs.[27]
[27]Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247, 269 [109]; Priestley v Priestley [2017] NSWCA 155, [5]; Q (a pseudonym) v E Co (a pseudonym) (2020) 383 ALR 469, 476–477 [16]–[17].
I am not satisfied that the money was spent in the assumption that the house is or would be Renato’s or his children’s. I do not accept Helen’s or Ms Hadzifotis’s evidence on this point. As noted above, I do not consider them to be reliable witnesses. In my view it is equally likely that the money was spent in the hope that by spending the money they would improve the house in which they were living and decrease the likelihood that Diego would one day ask them to leave it. Further, if the moneys were spent in the assumption that the house is or would be Renato’s or his children’s, I am not satisfied that Diego ‘stood by’ in circumstances that would make it unconscionable for him now to assert his ownership of the house. I accept Diego’s evidence that he did not encourage the expenditure and indeed questioned it. Also, he had provided the house, that he had paid for, to Renato and Helen rent-free for many years, which came at a considerable financial disadvantage to himself, and in my view it was not unconscionable for him to have asked them to leave when he did.
I do not consider that the purchase of the Barina, also out of the payout, is relevant on this point. Even accepting that Renato told Diego when he gave it to him that it was ‘for the house’, that is equally consistent with it being a gift for the years of rent-free accommodation.
I do, however, accept that Renato and Helen, probably, spent the money, or part of the money, that Renato received as a disability payment on 15 April 2019 on the house in the belief that Diego would not ask Helen to give up possession of the house shortly — in the sense of within a number of years and while the children were still young — in the event that Renato were to die. I also accept that, in the circumstances of this case, Diego probably knew that Helen was spending the money on the house because she had that belief. I have reached these conclusions, notwithstanding my concerns about the reliability of Helen’s evidence, because of the following circumstances:
(a) Helen and Renato had, by the time that Renato received his disability payment, lived in the house continuously for about 25 years;
(b) No one had suggested to them at that time that they might be asked to leave the house at any particular time;
(c) Renato was, by this time very unwell and, I am prepared to assume, it was understood by Diego and Helen that Renato may die in the near future (as indeed he did later that year). He, of course, rather than Helen, was Diego’s child. If Renato were to die, then Helen would be left as a widow with two children still at school, the youngest still in primary school, and with nowhere else to live;
(d) The money spent was a lump sum received as a disability payment; and
(e) The money was spent by them in the final period of Renato’s life on the house, and not on, for example, a ‘bucket-list’ holiday or the like. This indicates that the money was probably being spent for the purpose of improving the house and therefore the environment in which his widow and children would live after his death; and finally
(f) Diego was and was known to be fond of his grandchildren.
I have concluded that Helen spent this money for that reason, and that Diego knew or ought to have known that she was spending the money for that reason, notwithstanding the evidence of Mr Adamopoulos that Helen said to him that: ‘if I do renovations … in the house, it’s going to prove that this house is mine’. The discussion with Mr Adamopoulos took place after she had already spent the money. It is possible that Helen spoke to Mr Adamopoulos about the fact that she had spent the money and that she would be relying on that expenditure to assert an interest in the house, and that was misinterpreted by Mr Adamopoulos as her saying that she was dishonestly making a claim that she knew was false. Also, the expenditure of that amount of money for the purpose of setting up a proprietary estoppel claim would be risky and require a degree of legal sophistication that Helen did not appear to me to have. There was no suggestion that she had consulted lawyers prior to spending the money.
I also accept that Diego did not expressly inform Helen or Renato that he reserved the right to ask them to vacate the house at any time (or words to that effect) when he became aware that they were spending a significant part of Renato’s disability payout on the house. In circumstances where, I have concluded, Diego was on notice, by reason of the matters set out in para 93 above, of the fact that Renato and Helen were at that time spending Renato’s disability payment on the house on the assumption that Diego would permit Helen and the grandchildren to remain at the house for a time if Renato were to die, I consider that Diego ought to have done so; or, more precisely, having not done so, and instead acquiesced in Helen and Renato’s expenditure of those moneys on that assumption, it would be unconscionable for Diego now to enforce his legal right (without acknowledging an interest of theirs in the property) if its enforcement were inconsistent with the assumption.[28]
[28]See, eg, Thompson v Palmer (1933) 49 CLR 507, 547 (Dixon J); Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674-675. See also Carter v Brine [2015] SASC 204, [327].
However, it is now some three and a half years since Renato died. Helen’s youngest child is now 12 years old, and Maddalena is 21. I am not satisfied that Diego should have been aware of, and obliged by his silence to honour, an assumption that Helen would be able to continue to reside at the house for more than the three and a half years that Helen and her children have since lived at the house. I am not satisfied that, by reason of Diego’s silence while Helen and Renato spent part of the disability payment on the house in 2019, it is unconscionable for him now, in 2023, to seek to enforce his legal right to possession of his house.
That is sufficient reason to dispose of the claim based on estoppel by acquiescence.
If, contrary to my conclusions, Helen did spend the disability payment on the assumption that she would be entitled to remain at the house after Renato’s death for a period that has not yet expired, such as, for example, until both her children had finished school, I would not have concluded that Diego was or ought reasonably to have known that she was spending the money on that assumption. Further, if I had drawn that conclusion, I would have ordered equitable compensation rather than declare that Diego held the property on trust with Helen having a right, acknowledged in equity, to remain in possession. The relationship between the parties is now toxic, and to require Diego to permit Helen to continue to reside in his house, against his will, would ‘exceed what could be justified by the requirements of conscientious conduct’ and would be unjust to Diego.[29] Put another way, to impose a trust by which Helen was permitted to reside in the house until her children had left school, or for some other imprecisely-defined period, would be disproportionate to the detriment that Helen has suffered and to the unconscientiousness of Diego’s conduct in asserting his legal right to possession of his house and would be ‘inequitably harsh’.[30] In my view, any injustice to Helen would be appropriately remedied instead by awarding her equitable compensation.[31]
[29]Giumelli v Giumelli (1991) 196 CLR 101, 126 [56].
[30]Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 443, 445-446 (Deane J).
[31]‘Before a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust.’ Giumelli v Giumelli (1991) 196 CLR 101, 113-114 [10] (Gleeson CJ, McHugh, Gummow and Callinan JJ). See also: Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 445-446 (Deane J), 500 (McHugh J); Commonwealth v Verwayen (1990) 170 CLR 394, 411-413 (Mason CJ); 487, 489 (Gaudron J).
In the circumstances of this case, the measure of equitable compensation would start with the value of the moneys that Helen and Renato spent out of Renato’s payment, rather than by some attempt to put a value on the assumed possessory right. That is the method of assessment that, in my view, would best achieve justice between the parties.[32]
[32]See, eg: Walton Stores v Maher (1988) 164 CLR 387, 405; Commonwealth v Verwayen (1990) 170 CLR 394, 415-416 (Mason CJ), 429 (Brennan J).
The payout was $85,556. About $10,500 was spent on the Barina with customised numberplates, leaving approximately $75,000. I am not satisfied that all of this money was spent on the house, but I am satisfied that all their expenditure on the house after 15 April 2019 came out of this payment. Helen established this by producing invoices or receipts that in the period after 15 April 2019:[33] on 25 April 2019, she spent $595 on a new dishwasher; on 14 May 2019, she spent $6,200 on tiles; on 28 May 2019, she spent $400 on security doors; on 12 June 2019, she spent $5,600 on the kitchen; on 16 June 2019, she spent $1,400 on the garage; on 21 July 2019, she spent $1,500 on the veranda; on 21 August 2019, she spent $1,100 on new carpets; on 30 August 2019, she spent $1,800 installing roller blinds; on 25 September 2019, she spent $880 on a new gate; on 29 October 2019, she spent $1,550 on a new oven; and she spent $650 on new interior doors. She gave oral evidence that in 2019, without specifying when or the cost: she replaced roof tiles and capping and repainted the roof; she repainted the house inside and out; she changed the tiles and repainted in the bathroom; and she updated the plumbing and electricals, retiled the house, and installed LED lighting. She also, while fixing the kitchen, paid an additional $7,000 in cash replacing the cabinets, benchtops, tapware, lights and the like, and in about July 2019 she landscaped outside by laying new concrete. The cost of this was not identified.
Helen indicated that some of the payments referred to above were in fact made by her mother. Doing the best I can,[34] and having regard to the expenditure by Helen of a significant part of the disability payment, and taking into account the fact that she has remained in the house since rent-free, I would have concluded that it was not unconscionable for Diego to have enforced his right to possession of the house on condition that it be recognised that Helen has an interest quantified at $40,000 and would have ordered equitable compensation in that amount.
D. Disposition
[34]And I note that Helen’s counsel sought ‘impressionistic’ figures and accepted that it was not ‘a mechanical calculation’.
I will dismiss Helen’s claim for a declaration that Diego holds his interest in the house on trust and her alternative claim for equitable compensation. I will make an order that Helen (and her children) give possession of the house to Diego. I will dismiss Helen’s claim for an order that the shop be sold and the proceeds of sale be divided between Renato’s estate and Salvatore and will make a declaration that the shop is held on trust for Diego.
In his statement of claim, Diego also claims mesne profits from 1998 to the date upon which he recovers possession of the house. Diego did not lead any evidence or make any submissions on that aspect of his claim. Accordingly, I will dismiss the claim for mesne profits.
I will hear from the parties on the precise form of order and on costs.
SCHEDULE OF PARTIES
S ECI 2021 03117
DIEGO D’AURIA Plaintiff -and- HELEN D’AURIA First Defendant MADDALENA D’AURIA Second Defendant DIEGO ENRICO D’AURIA (by his Litigation Guardian, HELEN D’AURIA) Third Defendant AND BETWEEN: HELEN D’AURIA First Plaintiff by First Counterclaim MADDALENA D’AURIA Second Plaintiff by First Counterclaim DIEGO ENRICO D’AURIA (by his Litigation Guardian, HELEN D’AURIA) Third Plaintiff by First Counterclaim -and- DIEGO D’AURIA First Defendant by First Counterclaim SALVATORE D’AURIA Second Defendant by First Counterclaim
0
23
4