Donis v Donis
[2005] VSC 365
•16 September 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 7524 of 2001
| SUSIE DONIS | Plaintiff |
| v | |
| VICTOR DONIS & ORS | Defendants |
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JUDGE: | Hansen J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 March, 1, 4-8 April, 2-4 May 2005 | |
DATE OF JUDGMENT: | 16 September 2005 | |
CASE MAY BE CITED AS: | Donis v Donis | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 365 | |
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Equity – Estoppel – Promise to transfer interest in land on marriage – Reliance – Detriment - Relief
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R J Spicer | Pearce Webster Dugdales |
| For the Defendants | Mr P R Hayes Q.C. and Mr N Dragojlovic to 8 April 2005, then Mr P C Golombek and Mr N Dragojlovic | Victor C Andreou |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
Background concerning the parties and their families............................................................... 2
The Mernda Property........................................................................................................................ 5
Description................................................................................................................................. 5
Purchase of property................................................................................................................... 7
Use of the property...................................................................................................................... 8
Sale of the property..................................................................................................................... 9
Pleadings.............................................................................................................................................. 9
Statement of claim...................................................................................................................... 9
Defence and counterclaim........................................................................................................ 12
Reply and Defence to Counterclaim......................................................................................... 14
The trial.............................................................................................................................................. 14
Chronology........................................................................................................................................ 16
Evidence............................................................................................................................................. 20
Susie......................................................................................................................................... 21
Valentina.................................................................................................................................. 35
Vesna........................................................................................................................................ 48
Nikola....................................................................................................................................... 57
Nadezda.................................................................................................................................... 64
Defendants’ Evidence – Introduction....................................................................................... 69
Steven....................................................................................................................................... 70
Victor....................................................................................................................................... 79
Rosa.......................................................................................................................................... 83
Observations and findings on witnesses..................................................................................... 85
Steven..................................................................................................................................... 104
Victor..................................................................................................................................... 107
Rosa........................................................................................................................................ 117
Defendants’ witnesses............................................................................................................. 120
Senior Sergeant Horton.......................................................................................................... 120
Sotir Georgievski.................................................................................................................... 121
Jim Donis................................................................................................................................ 121
Jim Panovski........................................................................................................................... 123
George Donis.......................................................................................................................... 125
Mary Donis............................................................................................................................ 127
Michael Donis........................................................................................................................ 130
Contributions to the property...................................................................................................... 131
Decision............................................................................................................................................ 135
Relief................................................................................................................................................. 140
HIS HONOUR:
Introduction
Susie Stojanovska and Steven Victor Donis married on 16 February 1997 with every expectation of a happy future together, that expectation doubtless enhanced by her early pregnancy and the birth of their child Jamie Steven Donis on 10 November 1997. However, happiness eluded them and their differences became such that they separated in January 2000. Until then they lived at a house at 1575 Plenty Road, Mernda situated on a 40 acre rural property which Steven’s parents, Victor and Rosa Donis, purchased in 1995 and of which the parents were registered proprietors. There was a second, and older, house on the property the address of that house being 1565 Plenty Road. The question in this case is whether, as in essence Susie alleges, Victor, Rosa and Steven promised her that when she married Steven she would be made an owner with him of one half of the property, a promise which was repeated following the marriage, and that in reliance thereon she (and Steven) made financial and non-financial contributions to the house and its surrounds at 1575 Plenty Road. On that basis she claims to be entitled in equity to a one-quarter interest as tenant in common with Victor, Rosa and Steven in the whole 40 acre property. As, however, Victor and Rosa sold the property on 10 October 2002 she seeks, in addition to a declaration as to her right, an order for payment of the sum which represents the value of her interest or, alternatively, the amount otherwise determined as appropriate to be paid to her. Victor, Rosa and Steven, as the defendants, deny the making of any such promise, contending that Victor and Rosa did no more than offer Susie and Steven the right to live in the house at 1575 Plenty Road rent free to enable them to save money and establish themselves financially until they could afford to leave the property. They further deny that Susie has suffered any significant detriment.
No question of principle arises in the case, there being no dispute between counsel that the relevant principles are amply expressed and their application illustrated in Giumelli v Giumelli[1] and Flinn v Flinn[2]; see too my decision in Rogers v Rogers[3]. The case turns entirely on its facts or, to be more precise, on the facts as I find them to be. I put it that way because it is a case in which each side contends that the central evidence of the other is a lie.
[1](1998) 196 CLR 101.
[2][1999] 3 VR 712.
[3][2001] VSC 141.
Background concerning the parties and their families
I now set out certain facts by way of background. In doing so I state the facts as I find them to be.
The plaintiff, Susie Donis, was born on 17 March 1973 and was thus aged 23 when she married. She is the second of three children of Nikola and Nadezda Stojanovska, of Epping. The plaintiff has an older sister Vesna, a business analyst, and a younger sister Valentina, a solicitor. Vesna and Valentina live at the same address in Sydney. The plaintiff also now lives in Sydney with her child Jamie, although not at the same address as her sisters.
Susie completed her Year 12 studies at Thomastown Secondary College in 1990. She then undertook and in 1993 completed a Bachelor of Teaching and in 1995 a Bachelor of Education. During this time she lived at Thomastown with her parents and sisters. She met Steven in 1995 at the Bundoora factory of Melbourne Mushrooms where she undertook casual work.
Susie naturally aspired to a career as a teacher and worked as such after completing her qualification. Following the marriage she worked as a teacher at Thomastown Meadows Primary School. However, having become pregnant on their honeymoon Steven and his parents desired that she stay at home and look after the child (or children) and the house and support Steven, and she and Steven agreed that she would stop working as a teacher in order to devote herself to the care of their child, Steven and the house. She stopped work some months before Jamie was born, an additional factor in her deciding to do so being, she said, statements that there was no need for her to work as she and Steven owned half the land and the house. She did not resume work prior to their separation. She expressed concerns to Steven that ceasing to work as a teacher would affect her chances of working as a teacher when their child was older.
Mr and Mrs Stojanovska were born in Macedonia and long ago migrated to Australia. He was a factory worker. She worked at Melbourne Mushrooms as a mushroom picker. They have both retired. Although they have lived in Australia many years and have some understanding of the English language their language of use is Macedonian, and they gave evidence in that language through an interpreter. Their children were educated in and speak English well.
Mr and Mrs Stojanovska are Macedonian Orthodox. The observance of Macedonian traditions, and adherence to the Macedonian Orthodox Church, was and is important to them. As Macedonian Orthodox they would not attend a Greek Orthodox Church. They expected their children to follow Macedonian tradition. In relation to marriage there was the tradition of the man giving his word to his intended’s parents as to his intention to marry their daughter; this event was referred to in evidence as the giving of the word or The Word. The Word is a necessary precursor to the couple becoming engaged and married. Then, the marriage will take place in the Macedonian Orthodox Church.
Another Macedonian tradition, on the plaintiff’s case, but denied by the defendants, is that the father of the groom give the couple a house or land for a house.
Steven Victor Donis, who was born on 15 July 1972 and was thus aged 24 when he was married, is the eldest son of Victor and Rosa Donis. He has a younger brother Michael who was born in July 1976.
Victor and Rosa were born in areas that are now part of Macedonia. They describe themselves as Aegean Macedonian, and, as with some people from that area, are Greek Orthodox notwithstanding that they are Macedonian. They respectively migrated to Australia in the 1960s, each coming with their mother and siblings. They met in Melbourne and married at the Greek Orthodox Church on 15 August 1971. Steven was baptised in the Greek Orthodox Church at Preston. Victor and Rosa gave evidence in the English language exhibiting a good ability with that language. They also speak Macedonian. It was apparent also that Steven understands and can speak Macedonian.
Victor and Rosa both left school during their Form 2 year, Victor to commence an apprenticeship as a shoemaker and Rosa to commence employment as a garment cutter at a clothing factory. On their marriage they lived with her parents in Preston until 1973 when they purchased a house. In 1979 they purchased a block of land in Mill Park upon which they built a house completing it in 1981. In 1987 Victor and Rosa acquired and commenced to conduct a fish and chip shop business in Bundoora, and sold their house in Mill Park. In April 1987 Victor and Rosa bought an investment property at 1 Maywood Drive, Epping. In July 1987 they bought another house at 12 Manuka Court, Mill Park. By 1988 they had sold their Bundoora business and bought another fish and chip shop business in Epping which they sold in 1989. Victor then worked for food wholesalers until 1993. In February 1990 they bought an investment property at 14 Queen Street, Lalor. In 1993 they purchased a fish and chip shop business in Lalor. In July 1995 they purchased the Mernda property. In October 1995 they sold their house in Manuka Court, Mill Park and decided to sell their investment properties in Epping and Lalor to buy the 40 acre property at Mernda to which they moved with their sons in or shortly following November 1995[4]. On 4 April 1996 they sold the property at 1 Maywood Drive, Epping. On 2 July 1997 they sold 14 Queen Street, Lalor. In June 1999 they sold the fish and chip shop business.
[4]See Victor Donis outline of evidence, Exhibit 14, para 18.
After completing Year 12 at Reservoir High School in 1990 Steven commenced casual employment at Melbourne Mushrooms where Susie’s mother worked, and commenced a course at TAFE part-time in Information and Technology. In 1994 he undertook training at the Victoria Police Academy from which he graduated on 20 January 1995 as a Probationary Constable. He lived with his parents rent free at their home in Mill Park and, when they moved, at the Mernda property. Initially the family moved into the house at 1575 Plenty Road, which was newer and larger than the house at 1565 Plenty Road, but because of the distance of that house from the sheds and farming equipment at the property they all very soon moved into the latter house. However due to Steven’s sleeping habits as a result of working on night shift he, at the suggestion of his parents, moved back to the house at 1575 Plenty Road in late 1995 or early 1996 where he continued to live until he married Susie.
After three years on secondment to the Australian Federal Police, in March 2005 Steven took up full-time employment with that body as a technical service officer.
The marriage of Susie and Steven was dissolved by a decree nisi granted by the Family Court of Australia on 28 August 2002. Steven has remarried.
The Mernda Property
Description
The property at Mernda purchased by Victor and Rosa had been passed in at auction on 17 December 1994. The agent’s flyer for the auction went into evidence as Exhibit 3. In addition to the description contained in it, an aerial photograph of the property was tendered[5] and an overview sketch of the improvements and fencing on the land prepared by Steven was tendered[6].
[5]Exhibit 20.
[6]Exhibit 6.
In addition to a description of the property, the auction flyer bore photographs of the property and the two houses on it. The property was a “Prime Northern Edge Of Melbourne Investment” called “Bimbimbie” at Mernda and consisted of 40 acres or 15.89 hectares on Plenty Road and it was described as – “featuring two brick homes - lush pastures - excellent investment potential - 30 km Melb. zoning – ‘Urban Development’”. The property was approximately one km north of Mernda, 10 minutes south of Whittlesea and 30 km from Melbourne. Two named schools were only minutes away. As to the land itself, it was stated that there were two main paddocks which were suited to cattle and horses. There was shedding and stockyards. One home was eight years old with 18 squares of living space including three bedrooms, ensuite, lounge, dining room and with a second bathroom/spa bath. The second house was an “attractive older” brick veneer with three bedrooms and other facilities. The description of the land and the houses thus provided accords with the evidence.
The newer house referred to in the flyer was that at 1575 Plenty Road at which Susie and Steven resided, while the older house was that at 1565 at which Victor, Rosa and Michael resided. Both houses faced toward, and were entered from, Plenty Road, neither of them being set back far from that road. The aerial photograph shows trees on the property while that photograph and Steven’s sketch show the shedding and cattle yard.
The property is rectangular in shape and located on the western side of Plenty Road which runs in a north-south direction. The newer house at 1575 Plenty Road which Susie and Steven occupied was located in a fenced off area in the front north-east corner of the property. The house at 1565 Plenty Road was to the opposite south-east corner and was also fenced off. Each property was thus fenced to keep animals out. The farm shedding and cattle yard was within a further fenced area immediately behind 1565 Plenty Road. There was no farm shedding or cattle yard at 1575 Plenty Road, that was a stand alone house. There was vacant land between the two fenced house areas including the fenced area which contained the farm sheds and cattle yard.
I note that in the statement of claim and in a letter dated 2 February 2001 from an estate agent called The Professionals[7] the area thus enclosed at the 1575 Plenty Road house block is said to be approximately two acres. The defendants would have it that the area was in the order of three quarters of an acre, and Stephen sought to support that by stating the dimensions of the surrounding fence. I deal with Stephen’s credit below. For the moment I record that I do not accept his evidence. Apart from that, the rival views as to the area were assertion, although as an impression the area seems larger than three quarters of an acre. The parties did not establish the actual area in an accurate way. Steven’s sketch was not to scale, the auction flyer did not state the area, and if it could be satisfactorily done the parties did not put forward a measurement based on the aerial photograph.
[7]Exhibit 2.
A further and important matter concerning the fencing is this. The property was not divided in half by a fence. There was not a fence that ran down the mid point of the property from the eastern to the western rear boundary. Such a fence would have created two 20 acre paddocks, ignoring any other fencing and developments on the property, with one house on each paddock.
Purchase of property
It was not clear on Victor’s evidence when the property first came to his attention. He said that the property came to his attention when he and his wife saw the board on the property while they were driving one Sunday afternoon. They stopped, looked, got the number and rang the agent who came and saw them at their shop and they bought the property. The agent was Ken Buckland, not the firm whose name appeared on the auction flyer. He first contacted the agent “a very short time” before buying it. He inspected the property once. After they bought it and paid the deposit he consulted his solicitor John Collard of Collards. He was not sure on what bank account the deposit cheque was drawn.
The actual contract of sale was not produced at the trial. In place of that there was tendered the Particulars of Sale page from the contract and the instructions for settlement sheet prepared by Collards which lists the various cheques required at settlement[8]. What is disclosed is that the property was purchased for $350,000 payable as to $38,500 by way of deposit on the signing of the contract and the balance within 120 days, and that the day of the sale was 11 July 1995. It is seen that the deposit is more than 10 per cent; the explanation is that the contract had stated a selling price of $385,000 but Victor had offered only $350,000 which offer was accepted. While the purchase price was reduced to $350,000 Victor and Rosa yet agreed to pay a deposit of $38,500 which was the deposit stated in the contract and which had been calculated by reference to the price which the agent had sought. Victor and Rosa obtained a loan of $390,000 from the National Australia Bank Ltd (“the NAB”) to fund the purchase.[9] The loan was secured by a mortgage.
[8]Exhibit 5.
[9]Exhibit 16.
The contract settled on Friday, 10 November 1995, the NAB loan being drawn down. On 27 November 1995 the transfer to Victor and Rosa and the mortgage to the NAB were duly registered on title.
Use of the property
On settlement the defendants and Michael commenced to occupy the house at 1575 Plenty Road but, as mentioned earlier, for reasons of convenience to the sheds and farm facilities all of which were proximate to the house at 1565 Plenty Road and within the fenced off area connected to it, they moved to that house. (As also mentioned earlier, Steven soon moved back to 1575 Plenty Road.) As to the land generally, the defendants used it to fatten cattle and sheep which they bought and sold.
Until possession was given under the contract of sale entered into in 2002, Victor and Rosa resided at 1565 Plenty Road. At a time which Victor agreed was shortly after the separation and Steven said was around May, Steven resumed living at 1575 Plenty Road. He did so free of rent and his parents paid the rates and insurances. Steven remained living there until 2003 when he moved to Moonee Ponds. Subsequently Victor and Rosa duly gave possession under the contract following which, in late 2004[10], the purchaser demolished the houses.
[10]Transcript 532.
Sale of the property
By a contract of sale dated 10 October 2002 Victor and Rosa sold the Mernda property to Stockland (Constructors) Pty Ltd for $3,797,110 payable as to 10% by way of deposit and the residue by instalments stipulated in the contract. The settlement date, being the date on which possession was to be given, was on payment of half of the purchase price, which appears to be at the expiration of one year. The sale included specified chattels in particular “one colorbond fence and one garage door automatic opening system at 1575 Plenty Road Mernda and two security doors”. The deposit of $379,711 was paid to the agent who on 17 October 2002 accounted for it to Victor and Rosa. After allowing for commission, advertising and related expenses of the agent, the balance of the deposit payable to Victor and Rosa was $313,551.69. In addition there were legal costs on the sale[11] of $2,327.75.
[11]Exhibit 19.
The purchaser is a developer which at the same time acquired adjoining land with a view to sub-division. A rezoning permitted residential subdivision.
Subsequent to Susie and Steven separating and following proceedings in the Family Court Susie lodged a caveat claiming an equitable interest in fee simple on the ground that Victor and Rosa held the land for themselves and as trustee for her pursuant to a constructive trust. The caveat is dated 25 October 2000 and was lodged within a short time thereafter. The chronology provided by counsel gives the date of lodging as 15 November 2000.
In December 2002 the plaintiff withdrew her caveat in accordance with a without prejudice agreement made between the parties under which sums totalling $450,000 were required to be placed in a trust account[12]. The sale has proceeded.
[12]The agreement is referred to at transcript 809.
Pleadings
Statement of claim
In the further amended statement of claim dated 15 April 2003 (“statement of claim”) the plaintiff’s case is pleaded in the following way.
(a)Victor and Rosa were the registered proprietors of the 40 acre property known as 1565 Plenty Road, Mernda (called “the real property”).
(b)Within the real property was a house known as 1575 Plenty Road which was located within a fenced area of approximately two acres (called “the house property”).
(c)Throughout the marriage Susie and Steven lived in the residence on the house property until their separation on 1 February 2000.
(d) On occasions prior to the marriage the defendants told Susie that:
(i)Steven had purchased half the real property and Victor and Rosa the balance of the real property;
(ii)half the real property (including the house property) belonged to Steven, his name was on title as the registered proprietor in relation to that land and he was paying the mortgage on his half of the real property; and
(iii)half the real property (including the house property) would belong to Susie and Steven after their marriage, and this property would be theirs to do with as they liked once the mortgage had been fully paid.
(e) On occasions during the marriage the defendants told Susie that:
(i) the residence on the house property belonged to her and Steven;
(ii)half of the real property (including the house property) belonged to Susie and Steven;
(iii)Steven was paying the mortgage on half of the real property (including the house property) on behalf of Susie and himself;
(iv)Susie and Steven were on title as registered proprietors in relation to half the real property (including the house property).
(f)At all times until Susie and Steven separated the defendants acted as though half of the real property (including the house property) belonged to Susie and Steven.
(g)The statements and conduct of the defendants induced Susie to contribute financially to the real property with monies contributed jointly by her and Steven –
(x) in making payments on the mortgage on the property,
(y)towards the renovation, improvement, maintenance and conservation of the house property.
In particulars it is alleged that monies were contributed as follows:
· Prior to and during the marriage, Steven applied monies from bank accounts in his name or the joint names of Susie and himself in payment of the mortgage.
· Monies given to Susie and Steven as gifts for their engagement, wedding etc were used for renovation, improvement and maintenance of the house property.
· Approximately $9,000 given to Susie and Steven by her parents was used towards renovation and improvement of the house property.
Further particulars list 24 items on which the monies were expended together with the estimated cost.
(h)It is further alleged that the statements and conduct of the defendants induced Susie to contribute non-financially to the improvement, maintenance and conservation of the real property including the house property. Particulars are provided which state that much of the work on renovations and improvements (referred to in the above particulars) was done by Susie and Steven or her parents. It is further stated that Susie spent many hours per week prior to and during the marriage on a variety of tasks related to cleaning the house and outside area.
(i)By reason of the matters referred to in (g) and (h) above, the defendants are estopped from denying that the plaintiff had an interest in the real property to the extent of a moiety.
(j)Further, by reason of the matters referred to in (g) and (h) para above, the plaintiff “had an equitable interest in and over the real property and is entitled to an order that one-quarter of the net proceeds of the sale of the real property be paid over to her”.
(k)Further alternative pleas followed each claiming an interest in the real property.
(l)The prayer for relief sought relief to the effect of the above pleas.
Defence and counterclaim
The defendants filed a further amended defence and counterclaim (“defence and counterclaim”) dated 19 June 2003.
Concentrating on essential points I note that the defence denies the representations in the statement of claim and states (in para 8) that Victor and Rosa represented to Susie and Steven that they could occupy the residence upon the house property rent free for a period to help them save money and establish themselves financially in their marriage until such time as they could afford to leave the residence upon the house property. In particulars it is stated that the representation was oral and to be implied. Insofar as it was to be implied it was from the fact that Susie and Steven had very little money, the residence on the house property was furnished with furniture of Victor and Rosa and they permitted Susie and Steven to reside there while they and their younger son Michael resided in the other residence on the real property, and it would be expected they would afford Michael the same opportunity when he married. Elsewhere (in para 4) the defence did not admit the allegation that the fenced area of the house property consisted of approximately two acres, it being stated that the defendants had not made a precise measurement of the dimensions of the house property. It is alleged, in para 6, that Susie and Steven commenced to reside in the residence on the house property upon their return from their honeymoon, that in January 2000 Victor and Rosa served a notice on Susie and Steven demanding they vacate the residence on the house property, and that Susie and Steven vacated the house property. There is then, in paras 9 and 10, an extensive pleading as to the various items of financial and non-financial contribution alleged by Susie including particulars as to amounts and who paid for what. It is then, in para 11, alleged that if Susie performed any of the activities or made any of the contributions alleged by her such activities and/or contributions were not significant or substantial, and that Susie had not suffered any or any significant or substantial detriment by reason thereof.
The counterclaim consisted of two claims. First, if it was held that Susie or Steven held an interest in the real property, there should be a declaration that such interest was held by Steven alone, alternatively by Susie and Steven jointly. Secondly, damages were sought on the basis that Susie had removed certain items from the house property which were the property of Victor and Rosa and which, despite demand, she had not delivered up to them. The items were listed in particulars; there were 18 items or category of item commencing with “Gold coins and other jewellery” and concluding with “Car mats”. Victor and Rosa claimed the delivery up of the items or damages for their conversion or detention. The counterclaim did not include any particulars of value or damages. In particulars provided subsequently it was stated that Victor and Rosa were unable to specify the values of the items except to estimate the value of the gold coins and jewellery to be approximately $20,000 and the value of the other 17 items to be approximately $10,000.
Counsel for the defendants abandoned the counterclaim in the course of the trial. I became aware that it was abandoned when on the seventh day of the trial, while Steven was being cross-examined, I asked counsel for the defendant what was the status of the counterclaim. Counsel informed me, simply and blandly, that “it is not being pursued. There is no evidence about it”.
Reply and Defence to Counterclaim
The plaintiff filed a reply and defence to counterclaim dated 17 July 2003. Apart from some positive assertions this pleading essentially joined issue – including specific denials of the allegation that she had removed items of Victor and Rosa’s from the house property – on the defence and counterclaim and it is unnecessary to make further specific reference to it.
The trial
The Listing Master fixed the case for trial on an estimate of duration of four to five days. By her order, made on 25 July 2004, she required the filing of a court book containing the current pleadings and particulars and documents to be tendered in evidence, and required the parties to file “an outline of all the oral evidence” to be adduced at the trial and stating the substance of the evidence expected to be given by each witness.
At the trial it quickly became apparent that the estimate of duration was unrealistic having regard to the nature of the case which depended upon oral testimony and turned on the credit of witnesses, the number of witnesses and the overall poor standard of the outlines of evidence. Five witnesses gave evidence in the plaintiff’s case and ten in the defendants’ case. Unfortunately, but doubtless for financial reasons, the plaintiff’s outlines of evidence were prepared by the witnesses. They were neither drafted nor settled by the plaintiff’s solicitor or counsel. The statements reflect that omission. Nevertheless they were used, and tendered, as witness statements containing the evidence in chief of the witness; the same thing occurred with the statements of the defendants’ witnesses.
Counsel for the defendants took a general objection to the plaintiff’s witness statements to cover any ground of inadmissibility such as hearsay or other want of form. He did not seek a ruling, accepting, as is the case, that the case will not be decided on inadmissible material but not wanting to delay the trial. The same approach was taken by counsel for the plaintiff.
It was said by counsel for the defendants, or at least it seemed inferred, that Valentina, who is a solicitor and prepared her own outline, had a hand in the preparation of or oversaw some or all of the other statements of the plaintiff’s witnesses. I accept Valentina’s evidence on this and consider, further, that if her role had been as that of a solicitor responsible for preparation the outlines would have been of a higher professional standard. The truth is that they were prepared late by the witnesses when it was apparent the case was to proceed.
As for the defendants, what they provided in purported compliance with the order for outlines came either very late or during the trial and was not altogether satisfactory. In this and other respects it was evident during the trial that the defendants’ case suffered from a lack of timely and proper preparation, one aspect of which was an ongoing failure to make proper discovery or production of documents, a failure which in certain respects remained at the end of the trial, and another aspect of which was the failure to properly instruct counsel as to proceedings between Susie and Steven in the Family Court.
A court book was filed which included 168 pages of discovered documents none of which were tendered. The court book also included the pleadings and particulars and the plaintiff’s answers to interrogatories; one answer was tendered. Otherwise the documents and photographs tendered during the trial were not contained in the court book.
Whether or not as the product of these and other factors, but reflecting that in this case the credit of witnesses was vital, counsel engaged in some lengthy cross-examination. Susie, Steven and Victor were each cross-examined for over a day, Susie in an argumentative and confrontational style and Steven and Victor in a manner more steady and patient. The plaintiff’s other witnesses, and Rosa, were cross-examined for lesser periods but nevertheless in a rigorous and searching manner. The evidence of the other seven witnesses called by the defendants was brief, but that was all that was warranted, and in total occupied a little less than 70 pages of transcript. It was thus that the duration of the trial blew out to 10 days. But that only took the trial to the completion of evidence. It was then convenient, and suggested by counsel, that counsel provide written submissions and these were provided on a sequential basis with a view to resuming for oral argument on 30 May 2005. As it transpired, the written submissions were of such a standard and sufficiency that for that reason and to avoid the parties incurring unnecessary cost, I cancelled the hearing on 30 May and reserved my decision without requiring further attendance of the parties. Neither party objected to that course or said that they wished to be heard. In fact counsel had suggested this course in the discussion at the close of evidence.
Finally, while the trial took a long time the result was that I was able to observe the primary witnesses give their evidence over sustained periods. By primary witnesses I mean the plaintiff and her sisters and parents on the one hand, and the defendants on the other hand. I do not overlook the other witnesses called by the defendants. As to those other witnesses however their evidence was of relatively narrow compass and the time they spent giving evidence was sufficient opportunity to form an appreciation of them. As to the primary witnesses though, it was an advantage of inestimable benefit to be able to see them and observe both the manner in which they were cross-examined and their reactions and answers, and in light thereof to form an assessment of them and their evidence.
Chronology
At the end of the trial counsel agreed to provide me with a chronology of events. The chronology was provided with the defendants’ written submission. Counsel for the plaintiff accepts it as correct. It is convenient to incorporate the chronology in the judgment. It is a convenient reference point to relevant facts, and I will use it in that way when referring to what was said, or is alleged to have been said, on a particular occasion such as The Word, the engagement party, the wedding, the barbecue following the honeymoon and the Prviche. In the chronology the following letters and expressions have the following meaning –
P - The plaintiff D1 - Victor D2 - Rosa D3 - Steven The Word or the giving of the word - A Macedonian tradition, it is an occasion when the man gives his word to her parents of his intention to marry their daughter. This precedes, and is a necessary precursor to, the couple becoming engaged and married. Prviche - A Macedonian tradition, described by Nikola Stojanovski as a traditional lunch after a wedding. In this case the Prviche was held at Smorgy’s restaurant in March 1997 following the honeymoon. Shortly before that in March a barbecue was held at Victor and Rosa’s house – this was not the Prviche.
CHRONOLOGY
Very early 1995 P says she first met D3 [T194]. May 1995 D3 says he first met P [T440, 600 & Exhibit 8, para 10]. May 1995 D3 says he commenced work at Preston Police Station. [T599]. 11 July 1995 D1 & D2 execute contract of sale for Mernda property. [Exhibit 5]. 18 July 1995 P leaves for overseas holiday. 13 October 1995 P returns from overseas holiday. 13 November 1995 Settlement of Mernda property.
NAB loan drawdown $390,000.
D1 & D2 take possession of Mernda property.27 November 1995 D1 & D2 registered on title to Mernda property. 28 April 1996 The “Word” (initially at P’s parents house, then later at modern house in Mernda). 11 August 1996 Formal engagement party (at Gloria Receptions in Epping) and “after-party” (at P’s parents’ house). 16 February 1997 P & D3 wedding day. March 1997 P learns that she is pregnant.
P & D3 return from honeymoon.
BBQ at P & D3’s house.
The “Prviche” at Smorgy’s restaurant.4 August 1997 NAB loan fully repaid. [refer to Exhibit #16]. 10 November 1997 Son of P & D3 (Jamie) is born. 29 June 1999 D1 & D2 sell fish & chip shop business. [refer to Exhibit BB]. August 1999 P & D3 separate for approximately 2 weeks. 18 January 2000 Argument between P & D3. D3 vacates matrimonial home. End of cohabitation. 1 February 2000 D1 & D2 serve notice to P & D3 to vacate Mernda property. 5 February 2000 P vacates Mernda property. 17 August 2000 D3 files application in Family Court seeking child contact orders. 29 August 2000 P responds to D3’s application in Family Court and seeks: (1) residence (custody); (2) defined contact to D3; (3) spousal maintenance; and (4) property settlement of “such amount as this Honourable Court deems appropriate”. 7 September 2000 Affidavits relating to Family Court proceeding sworn by P and D3. [Exhibit 10]. 21 September 2000 Family Court orders D3 pay spousal maintenance to P of $150 per week. 15 October 2000 D3 commences 3 months unpaid leave from Victoria Police. 15 November 2000 P lodges caveat on title of Mernda property claiming “an equitable interest in fee simple” in whole property. 22 January 2001 D3’s solicitors send letter to P’s solicitors suggesting reconciliation between D3 & P. [Exhibit J].
CHRONOLOGY
2 February 200 Letter from Professionals to P regarding appraisal of house and 2 acres on Mernda property. [Exhibit 2]. 5 March 2001 P files application in Magistrates’ Court for intervention order against D3, and obtains an interim order against D3. 15 March 2001 Hearing of P’s application for intervention order against D3 is adjourned to 8 May 2001, interim order extended to same date. 8 May 2001 Hearing of P’s application for intervention order against D3 is adjourned to 14 June 2001, interim order extended to same date. 14 June 2001 Hearing of P’s application for intervention order against D3 is adjourned to 23 July 2001, interim order extended to same date. 23 July 2001 Hearing of P’s application for intervention order against D3 is adjourned to 21 March 2002, interim order extended to same date. 11 September 2001 P files writ and statement of claim in Supreme Court against D1 & D2. 3 December 2001 P files amended statement of claim in Supreme Court and joins D3 as a party. 21 December 2001 P files amended response to D3’s application in Family Court seeking: (1) D3 attend parenting and anger management courses;
(2) child to reside with P and D3 to have contact; and (3) permission for P to relocate to Sydney.17 January 2002 Family Court makes procedural orders regarding D3’s application and P’s response. 21 March 2002 Magistrates’ Court – orders made by consent that: (1) P’s application for intervention order against D3 is struck out; (2) interim order is discharged; and (3) no order as to costs. 10 April 2002 D3 files amended application to Family Court seeking: (1) detailed contact orders; (2) discharge of spousal maintenance order made on 21 September 2000; and (3) orders that spousal maintenance paid 15 October 2000 to 6 January 2001 be credited to D3 as child support. 1 May 2002 Family Court makes procedural orders for half-day trial dealing with relocation, children’s issues and spousal maintenance (but not property settlement) 16 July 2002 Family Court makes orders by consent that: (1) child reside with P; (2) detailed contact order for D3; (3) spousal maintenance order made on 21 September 2001 be discharged; and (4) D3 to pay $5000 lump sum maintenance to P within 14 days. Also noted: D3 to pay child support arrears to P within 21 days. 28 August 2002 Divorce – Decree Nisi. 10 October 2002 D1 & D2 execute contract for sale of Mernda property for $3.797M. [Exhibit X]. December 2002 P withdraws caveat over Mernda property pursuant to without prejudice agreement between the parties. 20 December 2002 P writes letters to Child Support Agency. [Exhibit 1]. 15 April 2003 P files further amended statement of claim in Supreme Court. Late 2004 Buildings on Mernda property are demolished. [T532].
Evidence
Evidence was given by the following witnesses:
(a) For the plaintiff, by herself and her sisters and parents.
(b) For the defendants, by themselves and the following persons:
(i)John Neil Horton, a Senior Sergeant of police stationed at Epping Police Station since 1994.
(ii)Sotir Georgievski, a brother of Rosa with whom he has a good relationship.
(iii)Jim Donis, a Protective Services Officer attached to the Victoria Police and a first cousin of Steven.
(iv)Jim Panovski, who is employed as a Chief Executive Purchaser for HLM Hotels and whose wife is a second cousin of Susie.
(v)George Donis, who is aged 67, is a pensioner and the oldest brother of Victor and the father of Jim Donis.
(vi)Mary Donis, who is employed as a teacher’s aide and has been married to Jim Donis for about 10 years.
(vii)Michael Donis, the 28 year old younger son of Victor and Rosa.
I now turn to summarise the evidence. It is unnecessary and impractical to set it all out. However, in preparing this judgment and reaching my conclusions I have reread and considered all of the evidence.
I shall first refer to the evidence of Susie and then to the witnesses in the order in which they gave evidence. While in the course of doing so I may make a finding I defer until later dealing with matters of credit and findings. I do however make this observation, that by the time of the trial many years have passed since the making of the oral statements in the 1995 to 1997 period which the plaintiff and her witnesses attested to, and which she relies upon, and which the defendants deny. Nothing is in writing. It is all recollection. I note too that in the evidence Steven is generally referred to as Steve.
Susie
Susie’s evidence in chief was largely contained in her witness statement[13]. This was supplemented by some oral evidence which mainly concerned her answer to statements in the witness statements of the defendants and Georgievski.
[13]Exhibit A.
Susie said that she met Steven very early in 1995 at Melbourne Mushrooms where she had casual employment. He had previously worked there and, having just graduated from the Police Academy, visited the premises in his police uniform to see former colleagues. They spoke and Steven asked her out. Susie said, and this was disputed by Steven, that almost immediately after they started going out they formed a very close relationship. Steven introduced her to his parents at their fish and chip shop during 1995 and she met them at the Mernda property around the end of 1995. She got on extremely well with Steven’s parents who made it clear that they liked her.
In her outline of evidence Susie recounted a number of occasions on which statements were made to her by Victor and Rosa, and Steven, as to her having or acquiring an interest in the Mernda land.
At the commencement of her statement, under the heading “The Agreement”, Susie referred to a Sunday afternoon when Rosa came over to “our house”, meaning the house at 1575 Plenty Road. This became known as the occasion of the snake incident. Although Susie could not recall the date when it occurred[14], her statement indicates that it was before the marriage. As to this occasion, Susie said that Rosa was upset saying she had nearly been bitten by a snake. Later that day Victor came over and Steven arrived home. In conversations about the state of the property Victor said words to the effect “Well, this house and half the land is yours, you can do whatever you like with it. We have no say in what you and Steve do. It’s not our property”. Victor said that Steven had been working since he was young and always wanted to save up for a property for when he got married. Susie said that she asked them “Whose name was on the title of our house”, and that they “told me that Steve’s name was on the title and that he [meaning Victor] specifically bought the house and 20 acres for Steve and I to live in and start our own family”. Victor said “Once you and Steve are married, we’ll make sure your name is on the title of the property. Plus when you’re married, it belongs to both of you anyway”. Victor said “There is no need to worry about these things since we all know it is your house and 20 acres belongs to you and Steve. We’ll never go against our word”. Rosa agreed with Victor and said “Trust me, we would never go against our word. We love you like a daughter and would do anything for you”. She said “We’re making sure you and Steve own your own property so you don’t have to worry about financial matters. You can start your own family and give us grandchildren sooner”. Rosa told her she should trust them. “They said that Steve paid money towards our property and that of course it was his, and now it was going to be mine too since we were getting married”. Susie said that she believed and trusted them. Susie said that it made sense as Steve had no assets other than his Holden Calais (which he said was his but after the fall-out said was in his parents’ name) and he told her he rarely went out and wasted money. He always said that he was saving for a large property on which to start his family.
[14]She was cross-examined as to this occasion and as to when it occurred. I refer to the cross-examination below.
Susie proceeded in her witness statement to statements made on other occasions. First, she referred to Steve having told her that “the house and 20 acres were his”. He was “always telling me before we got married, how he was always saving, so that he could buy a house on a large property for his wife and children [and] … now that he had me, he could concentrate on working hard and making money for our family. He would always say that we would save as much as we could and invest most of our money in our property, as that was the smartest and safest investment”.
Susie then referred to the occasion of The Word when the two families got together to celebrate Susie having accepted Steve’s proposal of marriage. Susie said that her father asked Victor and Rosa whose name was on the title “of Steve’s and my property (since it is custom to ensure that the parents of the groom do whatever they could to ensure their son and wife own their own property)” and that Victor and Rosa said that Steve’s name was on the title, and that when they married they would make sure Susie’s name was on the title too, although it did not really matter because the house and land was for Steve and Susie. They said not to worry, there was no doubt the property belonged to Steve and Susie, regardless of who was on title, but they would make sure Susie was too. Further on in her witness statement, Susie said that at The Word the defendants kept telling her family and her that the 20 acres of land which the house was on belonged to Steve and Susie, that they had heaps of land to do whatever they wanted to.
Susie then referred to statements made at the after party in the living room at her parents’ home following the formal engagement party at Gloria Reception. Victor and Rosa said in front of Susie and her parents and sisters that Susie would own the house and about 20 acres after the marriage. Rosa said that she and Victor would do anything they could and sacrifice whatever they had to ensure that Steve and Susie were financially set for life. Rosa said the newer of the two houses was for Steve and Susie since their happiness was more important than Victor’s and hers. She also said that since they would own their own property there was no need to wait to have kids. Victor said that half of the total property was Steve’s and Susie’s without a doubt. He said that Rosa and he were working all their lives for their kids, to set them up when they got married, so they could start their own families in their own home. Further on in her statement Susie said she recalled Valentina saying “So the house and 20 acres of land belongs to Steve and Susie” and that Rosa said it did, that Susie was like a daughter to her, that she loved her like she was her own and would do anything for her kids.
Susie went on in her witness statement to give further evidence of statements made to the above effect under the headings “Before The Marriage”, “Early Days After The Wedding”, and “Later, After the Marriage”. While I have regard to all of her evidence, I do not set it all out. What I have already set out records the substance of the statements that Susie relies upon. I therefore now refer as summarily as practicable to the balance of her evidence in chief.
Susie said it was custom in Macedonian culture for the wife to call her in-laws mum and dad and for her husband to call his in-laws grandmother and grandfather. That is what Steve and Susie did. A reason for the wife calling her in-laws mum and dad is because after the marriage she is considered to be a daughter to her husband’s parents and they are responsible for taking care of and supporting the wife, in addition to their son.
I now refer to statements and events Susie referred to under the heading “Before The Marriage”. On occasions prior to the marriage when they talked about their future and in particular about “our property”, Steve made statements as to the property, or 20 acres, belonging to them. On one of these occasions he said that he had put all his savings towards the purchase of the 20 acres. Susie said that when she said to Steve that she did not want “to live in an old, filthy and worn-out house on a farm, isolated and a fair distance from my parents and sisters, even if it had 20 acres of land”, Steve said it would take getting used to, and time and money to be properly fixed as they want it. He said it was the best investment they could make, bringing so much land, that the house may be old but they have 20 acres of land.
And before the engagement Victor and Rosa said on a number of occasions, especially when Susie discussed buying a new home, that the house on the property and half of the 40 acres was theirs and that she and Steve could renovate it and it would be like a new house. They said “You don’t need a new house, you can renovate the one you own and if you buy a new house, you won’t have anywhere near the 20 acres”.
Susie said that she wanted to buy a new home for their family but because of the assurance that the house and 20 acres was theirs, they did not buy a new one and they decided to use their money on fixing up the property. Victor and Rosa also said they should stay together as a family, the house being close to them, all Susie had to worry about was starting her family and giving them grandchildren.
Susie gave other instances of Victor and Rosa telling her that the house and 20 acres is hers and Steven’s, and as to starting a family right away because she would already own her own property and they will be living close by. Further, on many occasions while they were engaged Susie slept over at the house; on two such occasions Victor and Rosa came over to “our place” and said words to the effect of “why not move in since it was her house anyway”. Susie said that she completely believed and trusted the defendants that the property was going to be under Steve’s and her name.
Susie proceeded to refer to occasions following the marriage when Victor and Rosa, and Steven, repeated the substance of the statements as to she and Steven owning the house and 20 acres of the property. I mention one occasion because a deal of cross-examination was directed to Susie about it. It was an occasion shortly after the honeymoon when Victor and Rosa came over to the house after Susie had cleaned up the mess of a rat which Steven had killed. She told them she hated living in conditions where there were rats and she had to clean up their droppings, that they said in substance that that is what happens on a farm and that the upside was all the land you own. Susie said that in the discussions she asked Victor and Rosa if they had put her on the title of the house and 20 acres as they had promised, and that they said they had. In further comments Victor said they had taken care of everything for her, it was her property and she need not worry. She was not to worry about the mortgage, “that’s Steve’s job, Steve will take care of the financial side of things and you just worry about taking care of your family and your home”. Rosa said she was their daughter and having their grandchild, she can trust them, they would never lie or do anything to hurt her. Susie said they were very traditional in thinking that Steve should handle financial matters and be the only one working and that she should concentrate on child-rearing and home duties.
Steven too assured her after the marriage that the property was in their joint names. She was convinced by the defendants that her name was on the title and that Steven and she owned the house and 20 acres.
Susie gave a deal of evidence about renovations to their house. She said that they did not ask Victor and Rosa’s permission and that they complimented them on the work done.
At a time prior to the birth of Jamie and apropos of preparing the house for his arrival, Steven said he was putting in as much money from his pay as possible to pay off the mortgage so they could pay it off soon but at the same time their property needed major renovating. Steven often said the best thing about the property was the 20 acres and that was the main reason he bought the property, definitely not the house.
They worked out what needed to be done to the house and undertook works. Apart from those works, Susie spent a lot of time cleaning up the house and its surrounds. Susie said that if it were not for the reassurances and promises as to the property being hers and Steven’s she would not have agreed to the extensive renovations which were financed from their savings, or put in the effort to clean up and transform the house. Nor would she have given up her career. She said that her parents assisted greatly in the improvement and renovation of the house and land.
Susie then proceeded to refer to statements made by Victor and Rosa after the birth of Jamie. On two of the occasions there was reference to the mortgage on the property, Rosa saying that the mortgage will be paid off soon. Rosa also referred to them (Steven and Susie) paying off the mortgage on their half of the property. Susie said she did not ask for details as they always brushed her off and told her not to concern herself with financial details.
Susie said that Steven’s abusive behaviour towards her commenced shortly after they were married and increased over time. In August 1999 Steven left the home for about two weeks.
The final separation occurred on 18 January 2000 when Steven and Susie argued and he struck her to the face and Steven then left the home. When this happened Susie rang the Epping Police Station (where Steven was stationed) to report the incident and wanting police to come. She said she was scared and did not know what to do. I refer to and deal with this matter of contact with the police below in dealing with the evidence of Senior Sergeant Horton.
In the course of the argument on 18 January Steven told Susie “for the first time that the property was not ours”. He told her that his parents owned the whole 40 acre property and only their names were on the title. He told her to suffer, she would not get anything, he had no assets, he arranged it that way so she would not get anything if she left him.
I note that in her evidence Susie referred more fully to things that Steven said, just as Steven did in his evidence. So also was there such evidence from Victor and Rosa. I have regard to the evidence but find it unnecessary to set it out. This case is not to be determined on the assessment of abusive and point scoring comments made in the stressful circumstance of the collapse of a marriage with an infant involved.
After Steven had left the house on 18 January, Susie and Jamie were in the car when Victor and Rosa came over to the house. They told her that she would be financially worse off than before she married, that they were gaining at her expense and that she was losing everything. She was not on the title and would get nothing from them or Steve.
On or about 1 February 2000 she received a letter from Victor and Rosa addressed to Steven and herself that requested the premises at 1575 Plenty Road be vacated, and their Holden sedan be left at the home, by 4.00 pm on 31 February 2000 failing which the locks would be changed. One night a few days later when Susie was driving home she noticed many people in front of Victor and Rosa’s house and they were unloading from one of the cars. On arriving at her house she noticed that the house had been stripped bare[15]. On about 5 February, having no choice, she vacated the premises and with Jamie went to live with her parents at their home where her sisters also lived.
[15]As to Steven’s concessions as to the removal of items, see transcript 623-625. And see his evidence in re-examination at transcript 669.
Finally, in view of the way the case is put little need be said about the claim of non-financial contributions. It is sufficient to say, as I have already, that Susie and Steven worked hard to clean up and improve the house and its surrounds. I accept that Susie worked very hard indeed and that she received assistance from her family although in the case of her parents, having regard to their evidence, not to the full extent described.
Decision
As mentioned at the outset of this judgment, the case was run on the facts on the basis that the applicable legal principles were those stated in Giumelli v Giumelli[69] and Flinn v Flinn[70]. There was no debate as to those principles. I was left to resolve the facts and then apply the principles to the facts found. On that basis counsel submitted as follows on the ultimate disposition of the case.
[69](1999) 196 CLR 101.
[70][1999] 3 VR 712.
The Mernda property having been sold the relief sought by the plaintiff is that Victor and Rosa pay her a sum representing one-quarter of the net sale price of the property together with interest and costs. The property was sold on 10 October 2002 for $3,797,110 of which half has been paid and the remainder is due on or by 10 October 2006. It is agreed that the net proceeds of sale, after allowing for commission and GST, advertising and legal costs, is $3,728,640.94. A one-quarter share of this sum is $932,160.22.
To this the defendants submitted: first, that the case should be dismissed on the facts, the defendants’ evidence being preferred to that of the plaintiff and her witnesses or at least because the plaintiff had failed to establish her case on the balance of probabilities; but, secondly, if the plaintiff succeeded in establishing her case the appropriate relief was:
(a) one-quarter of the value of the improvements which –
(i) if $20,000 produced $5,000, or
(ii) if $60,000 produced $15,000, or
(iii) if $75,000 produced $18,750.
(b)alternatively, one-quarter of $350,000 being the value of the property at the time of making the alleged promise, namely $87,500.
It was submitted that an amount determined in accordance with (a) or (b) would be proportionate to, and constitute sufficient recompense in respect of, any detriment suffered by the plaintiff.
(c)alternatively, if the Court found the promise was of a half interest in the house and its surrounding area of three quarters of an acre, $34,956 being the value of half of three quarters of an acre calculated by reference to the net proceeds of sale.
I have referred to the fact that even if I did not accept the defendants’ evidence it would yet remain to decide whether the evidence in the plaintiff’s case was sufficient to establish her right to relief. In fact I have rejected the central plank of the defendants’ case that they made no such statements or promises as the plaintiff alleges. I have borne in mind in determining the issues concerning the witnesses and the conflicts in the evidence the submission of the defendants as to being satisfied on the balance of probabilities, and I do so in concluding, as I do, that I accept the evidence of the plaintiff and her witnesses as reflecting the substance of the statements made by the defendants. I find that statements to the effect pleaded were made to the plaintiff. I further find that acting reasonably she believed what she was told, that she acted on that basis and suffered detriment when the marriage collapsed and the essential promise of being made an owner with Steven of one half of the land had not been and was not honoured.
Counsel for the plaintiff conceded that there was no direct evidence as to why the defendants, in particular Victor and Rosa, made the promises alleged by the plaintiff and her witnesses. The reason, I find, lies in a combination of circumstances to which I now refer.
Victor and Rosa were parents in a close knit loving family and provided their sons with rent free accommodation and motor cars. When the plaintiff and Steven fell in love and she accepted his proposal Victor and Rosa were very pleased. Susie was very well educated, intelligent, articulate, a most attractive young woman with a pleasant personality who came from a good Macedonian family. She presented as an ideal partner for Steven, and Victor and Rosa liked her and developed a close and loving relationship with her.
At the time when Victor and Rosa were contemplating buying the Mernda property Steven had met Susie and a strong relationship had developed. In deciding to buy the Mernda property Victor and Rosa’s financial position was such that Steven would, in addition to living at the property, financially assist them with the burden of the mortgage. It is to be noted that according to Victor the decision to sell the investment properties was made subsequently. The presence of two houses on the property made it immediately apparent that if Steven’s relationship with Susie continued to develop to marriage that one of the houses offered the ideal and ready solution to their need for accommodation. It also readily provided a means by which Victor and Rosa would be able to assist their son and his wife in their marriage. Hence, I find, is to be understood the early statements as to purchasing the property with a house for Steven and Susie and further statements along the way in the development of the relationship. There was a mutuality in this from Victor and Rosa’s point of view, financial and in respect of assisting the young couple. Victor’s parents had assisted he and Rosa when they married and, it is to be noted, there was a pattern of assistance in the evidence of other witnesses. Apart from any supposed Macedonian tradition in this respect it was natural that Victor and Rosa would seek to advance the interests of Steven and having the house would make it easier for him to provide accommodation for Susie. The arrangement was also attractive to Victor and Rosa in that it would mean they were close to Steven and Susie and any grandchildren. Further, it would be expected that Steven and Susie would tend to the property and thus enhance the overall Mernda property more than a tenant might do so.
There were however other important circumstances. The Mernda property was out from the suburbs. From Susie’s point of view the property was remote. I find that she stated that she preferred that she and Steven purchase a home in the suburbs, rather than live at the house on the Mernda property. This, I find, was a factor leading to Victor and Rosa, and Steven, making the relevant statements relied on by Susie. Further, in accordance with Macedonian tradition it was to be expected that when they became engaged to marry Susie and Steven would be given, as they were, substantial amounts of cash which could be applied to the purchase of a home. And, Steven being a policeman and Susie a qualified teacher, they were set on careers. Thus by careful management it is reasonable to suppose they could have financed the purchase of their own home.
It is in this context of circumstances that the making by the defendants of the statements and promises, commencing on the occasion of The Word, is to be understood.
I find that the plaintiff believed what the defendants said and promised as indeed I find they intended her to do. Being made as early as they were at The Word, and the plaintiff believing them, the statements and promises had an effect on the subsequent course of events between Susie and Steven and decisions they made. Relevant in this context were the statements as to the future value of the property, as to Susie and Steven’s security, that there was no need for Susie to work, and that Susie should stay home and have children. All this was a pressure on her as a young woman in love. I find that the combined effect of all this was that Susie, believing in and relying on the truth of the promises, fell in with Steven as to living at the new house on the Mernda property, they married earlier than they might otherwise have done and Susie became pregnant as early as on their honeymoon. The result was that Susie did not set out on and establish herself in her chosen career, being able to do only a little amount of teaching before having to stop when about six months into her pregnancy. She did not thereafter work prior to the parties separating and she said in evidence she had found it difficult to get back into her career.
Then, insofar as the property itself was concerned, I find that it required much cleaning up, inside and out, and I have found that Susie and Steven worked hard in this respect. I also find that there was a problem with mice and rats which upset Susie. I find too that in carrying out improvements to the property Steven and Susie spent money of their own. It is not possible to find the actual amount but I find that it was substantial and the greater part of the cost of the improvements, and was sourced from gifts of money, Steven’s wage and Susie’s more modest savings and earnings. At the same time, as I have found, Steven also contributed to the mortgage, again to an extent I am unable to find.
Then, unfortunately, the marriage broke down and the plaintiff was told that the title was in Victor and Rosa’s name, and the parties separated.
The net result to the plaintiff may be summarised thus. She was led by the promises, which she reasonably believed to be true and would be acted upon, to marry earlier than she would have, to accept living at the Mernda property rather than purchase a home of their own in the closer in suburbs which was her preference, to spend their money on their Mernda house, and to have a child and stay at home rather than pursue her career. On the collapse of the marriage and the separation of the parties it could be seen that these decisions had disadvantaged the plaintiff. If she and Steven had taken the course of buying their own home and had applied their money on that home, or even saved it, she would have had an asset. And if she had delayed children and pursued her career she would have been in a much better position financially and generally. But those opportunities were lost when induced thereby she acted on the faith of the defendants’ statements and promises. I do not overlook that in the statement of claim the only detriment pleaded was the making of the contributions but all these other factors to which I have referred were raised in evidence and were readily apparent. It is clear, when the facts and circumstances are regarded overall, that the plaintiff’s detriment is not confined to the contributions.
To the above matters of detriment is to be added the further factor that shortly after separation the new house was “stripped” to use the plaintiff’s description. On her evidence little was left. As I said earlier, the plaintiff has received no recompense for the improvements effected to the house including fixed items left in it.
All told in my view the plaintiff has suffered substantial detriment as a result of relying on the defendants’ statements and promises.
I conclude in these circumstances that the elements of equitable estoppel are made out.
Relief
The question is, as Brooking JA stated in Flinn v Flinn[71] what is required to satisfy the equity that has arisen? In deciding this question regard must be had to the circumstances of the case[72]. As to this, and the scope of relief in equity, I have regard to the statements in Giumelli and Flynn, and Commonwealth of Australia v Verwayen[73].
[71][1999] 3 VR 712 at p 749 [118].
[72]Giumelli v Giumelli (1999) 196 CLR 101 at p 113 [10].
[73](1990) 170 CLR 394 in particular Deane J at 441-443.
The order sought by the plaintiff would in effect compel performance of the promise. That is, it would hold the plaintiff entitled to a full one-quarter interest in that which now represents the land. It would be the same as declaring a trust of a one-quarter interest in the land if it remained in the ownership of Victor and Rosa. Not only does the land not remain in their ownership, but that which will come to stand in its place on receiving the full net purchase price, is greater than it otherwise would have been as a result of the land having been rezoned and purchased along with adjoining land by a developer. This is a relevant circumstance.
The values of the property established by the evidence is $350,000 in July 1995 and $3,797,110 in October 2002. The only other indication of value is the appraisal in The Professionals letter dated 2 February 2001[74] of approximately $400,000 for the newer home stated in the letter to be on approximately two acres. There is no evidence of the value of the entire property or the newer house or whatever at any other time such as, for instance, the time of marriage, the date of separation or the date of sale in 2002 excluding the effect of the rezoning. Hence counsel’s submissions have addressed only the purchase price or the sale price.
[74]Exhibit 2.
It would not seem appropriate that the plaintiff receive the full benefit of the gain in the value of the land as rezoned. That is because the increase in value was in the nature of a windfall gain to the property owner, something which can happen but which in terms of identifying that which is appropriate to satisfy the plaintiff’s equity is another matter altogether. It would not be just as between the plaintiff and Victor and Rosa to award her the full benefit of that gain.
Equally, it might not seem just in satisfying the equity to award an amount based on the purchase price in July 1995. The value thus ascertained preceded the making of the promises, the marriage, and the incurring of the detriment the burden of which the plaintiff continues to bear. Of course, to an amount ascertained as the defendants would have it could be added an allowance for interest, but that would be to conclude on the appropriate allowance in ignorance of the value at, say, the date of marriage, the date of separation or the date of sale in October 2002 considering the value of the property at the latter date without the benefit of rezoning. Equipped with such evidence of value the Court would be better placed to determine what was required to satisfy the plaintiff’s equity. The Court would be better placed to settle on an amount, with such allowance for interest if any as may be appropriate, that accords with the justice of the case in light of the relevant principle.
It is important to bear in mind that in deciding on that which is appropriate to satisfy the equity the Court regards the matter at the present time, as Brooking JA pointed out in Flinn[75]. The approach of the plaintiff has the hint of enforcing a claim under a contract. But the present claim is not in contract, whether for performance of a promise or damages for breach. And, on the defendants’ side, the reliance on the 1995 purchase price predates by years the breaking of the promise. There is no reason to suppose that the value of the land at marriage or at separation when the promise was declared broken or in 2002 when the land was sold (but excluding the factor of rezoning) was the same as when the land was purchased in July 1995. Indeed there is every reason to suppose that the value had increased.
[75][1993] 3 VR 712 at p 752 [128].
It seems to me in these circumstances that further evidence is required to enable the amount that is appropriate to satisfy the equity to be ascertained. The appropriate course is to afford the parties an opportunity, having considered this judgment, to submit evidence on the value of the property as they may be advised. Accordingly I will stand the matter over for hearing on another day with such directions as may be appropriate.
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