Foundas v Arambatzis (No 3)

[2023] NSWSC 1513

Supreme Court

New South Wales

Medium Neutral Citation:

Foundas v Arambatzis (No 3) [2023] NSWSC 1513

Hearing dates:

6 – 10 November 2023; last submissions 5 December 2023

Date of orders:

6 December 2023

Decision date:

06 December 2023

Jurisdiction:

Equity - Real Property List

Before:

Rees J

Decision:

Summons dismissed with costs

Catchwords:

CIVIL PROCEDURE — application to set aside judgment obtained by fraud — r 36.15(1) UCPR — principles at [98]-[101] — brother and sister buy two properties — bank sells one property, with surplus paid to the sister rather than equally to both — brother obtains orders in 2018 to sell remaining property and judgment for his share of proceeds of sale — sister applies to set aside judgment and orders — orders for possession made in 2019 — sister appeals — Court of Appeal makes orders for possession in 2020 — eviction notice — one week before eviction, sister produces deed said to have been executed by brother in 2013, disclaiming his interest in the properties — deed is a forgery — Prothonotary to refer matter to relevant law enforcement authorities.

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW) r 36.15

Cases Cited:

McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529

Poulos v Commonwealth Bank of Australia Ltd [2019] NSWCA 241

Spalla v St George Motor Finance Ltd (No 5) [2004] FCA 1262

Toubia v Schwenk (2002) 54 NSWLR 46; [2002] NSWCA 34

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

Category:

Principal judgment

Parties:

Cassini Foundas (Plaintiff)
Peter Arambatzis (First Defendant)
Sean Wengel (Second Defendant)
Robert Whitton (Third Defendant)

Representation:

Counsel:
Mr D Barlin / Ms T Harris-Roxas (First Defendant)

Solicitors:
Plaintiff in person
Cutri & Associates (First Defendant)
William Robert Lawyers (Second and Third Defendants)

File Number(s):

2021/297960

JUDGMENT

1. HER HONOUR: The plaintiff, Cassini Foundas (the sister), seeks to set aside judgment and orders made in earlier proceedings brought in 2018 by the first defendant, Peter Arambatzis (the brother), under rule 36.15(1) of the Uniform Civil Procedure Rules 2005 (NSW) as having been entered irregularly, illegally or against good faith, or obtained by fraud.

2. In the earlier proceedings, the Court appointed the second and third defendants, Sean Wengel and Robert Whitton (the Trustees), to sell a property in Magee Street, Ashcroft and distribute the proceeds equally between the sister and brother. Judgment was also entered against the sister for some $109,000 (later reduced by the Court of Appeal to some $104,000), being the brother’s share of the proceeds of sale of a property in Stanwell Crescent, Ashcroft.

3. The sister contends that, when judgment and orders were made on 15 October 2018, a Deed of Acknowledgment was in existence which had been executed by herself and the brother in 2013, in which the brother disclaimed any interest in the properties. In the result, I am satisfied that there has been a fraud, but it is not by the brother. The Deed of Acknowledgment is a forgery. By these means, the sister has delayed her eviction from the Magee Street property for almost three years.

Witnesses and documents

4. The sister was unrepresented at the hearing. Her domestic partner, Bill Foundas, assisted her as a McKenzie friend. The sister gave evidence and also relied on the evidence of Kristine Cox, whose name and signature appear on the Deed of Acknowledgment as the witness for the sister and brother. Both the sister and Ms Cox were cross examined.

5. Ms Cox is a pleasant woman, now retired, who has been a Justice of the Peace for some 20 years. No issues of credit arose. I accept her evidence, as far as it went. Ms Cox was not told by Ms Foundas that the authenticity of the deed was in question in these proceedings. Ms Cox was simply told that “no-one would acknowledge I’m who I am and that was my signature. So I offered to do a stat dec to confirm that that was my signature.” After being taken through the report of forensIc document examiner, Melanie Holt, however, Ms Cox did not voice disagreement with Ms Holt’s conclusion, “I can only agree that they look like my signature and that’s it, that’s all I was saying that yeah, that’s my signature.”

6. The sister was an evasive, guarded and non-responsive witness who declined to engage with some fairly obvious propositions that were put to her repeatedly. The sister disclaimed having seen many key documents before. The sister blamed difficulties encountered during cross-examination, variously, on the fact that she was self-represented or on the apparently unauthorised actions of her previous solicitors. I accept that, as a self-represented litigant, it must be difficult to move from the bar table to the witness box and back. By the conclusion of the sister’s cross-examination, however, I was sufficiently disquieted by her repeated failure to squarely answer questions put to her, and the answers ultimately given, that I have attached no weight to her evidence unless it is corroborated by a reliable source, such as a contemporaneous document or the evidence of a credible witness.

7. As for contemporaneous documents, the sister was served with a notice to produce for inspection seeking, in short, all documents in relation to the deed. No documents were produced. During the course of the hearing, however, some documents emerged. The Court was variously informed that the documents covered by the notice were privileged, then informed that there were no documents at all, then informed that the sister held documents “in a file that I didn’t know of and I have since located,” then informed that the document located was “in an archive, we’ve got several other documents we’d like to go through and we’d some time to do that,” then told there were no further documents. I have no confidence that the documents before the Court were the universe of material in the sister’s possession in relation to the deed.

8. The brother gave evidence and also relied on the expert evidence of forensic document examiner, Ms Holt. Both were cross examined. Ms Holt was an impressive witness whose opinion I accept.

9. The brother is younger than the sister. He is a disability pensioner who lives in public housing. The brother said his memory was poor: “I have schizophrenia, I have … so much sicknesses and I cannot remember what I ate yesterday and you’re asking me ten years ago.” The brother did appear to suffer from an intellectual impairment. His speech was slightly slurred, either consistent with that impairment or perhaps the medication taken for the conditions he mentioned.

10. The brother gave fair answers which were, on occasion, against his own interests. When asked whether he recalled signing the deed he said, “Could have been, could have been not, I don’t know. … Like I said, I don’t remember what I ate yesterday.” The brother was also asked whether he agreed with the contents of the deed, and he said yes, but it was unclear in the context of the line of questioning precisely what that answer meant. When asked whether he remembered conversations with his father referred to in an affidavit of April 2018 at the time when he swore that affidavit, the brother said, “I remember them a little bit, not much,” then “No, I don’t remember nothing.” I comfortably prefer the evidence of the brother to the sister, where there is a conflict between them.

Events leading to earlier proceedings

11. In 1999, the sister (then known as Kessie Arambatzis) and brother bought a property in Stanwell Crescent, Ashcroft for $119,000 as tenants in common in equal shares. The purchase was funded by a loan from the Commonwealth Bank of Australia for $108,000; a mortgage was registered on title.

12. In 2001, the sister and brother sought finance from the bank to buy another investment property in Magee Street, Ashcroft. According to the application form, the sister and brother were then living together in Mount Pritchard. On 28 August 2001, they both signed a loan agreement with the bank. The brother’s signature on this document gained prominence, where Ms Holt is of the view that his signature on this document was ‘cut and paste’ onto the Deed of Acknowledgement.

13. In September 2001, the sister and brother exchanged contracts to buy the Magee Street, Ashcroft property for $181,500. They also executed a mortgage in favour of the bank to secure a $180,000 loan. In October 2001, the purchase was completed; the sister and brother became registered proprietors as tenants in common in equal shares.

14. Both properties were rented out. The brother declared half of the rental income in his tax returns in the years which followed.

15. The sister formed a relationship with Mr Foundas and they became engaged. The sister changed her name to Cassini Foundas, albeit she is not married to Mr Foundas. The relationship appears to have caused difficulties in the sister’s relationship with her family. In December 2008, her father wrote expressing concern about her recent operation of a joint bank account held with the brother, said to have resulted in the unauthorised withdrawal of $22,000, “I believe your husband … is controlling your life and your actions. We never had a problem between us until you became engaged … Do you really want to totally isolate yourself from your loving family.” The father asked the sister to contact him and advise what she wanted to do with respect to the properties, “If you do not want to see me or talk to me in person, you can send a letter … or … go through a lawyer and he can advise you what to do.”

16. By December 2010, the loan in respect of the Magee Street, Ashcroft property was in default. The sister retained a solicitor, who wrote to the brother suggesting how the default should be remedied, failing which the sister intended to approach the Court for orders against him. In January 2011, the father replied on behalf of the brother, describing efforts to resolve their disagreements as to what should be done with the properties and again expressing concerns about Mr Foundas’ “complete control” over the sister. The father proposed that the properties be sold with the proceeds divided equally, after allowing for the unauthorised withdrawals from the joint account, now said to be some $26,000 “as related by the police.”

17. In January 2013, the bank issued a notice of default. In March 2013, the bank commenced proceedings against the sister and brother, seeking orders for possession of both properties. On 4 September 2013, the sister lodged a caveat over both properties. The caveat was prepared by Mr Foundas under a power of attorney.

Text messages

18. The brother recalled that he and his sister were having many fights about the properties. Their fights, and the legal proceedings brought by the bank, were causing him a lot of stress and he wanted an end to the constant battles regarding the properties. He became so sick of the fighting that he sent a text message telling his sister that she could have the properties.

19. The sister produced ‘typed up’ text messages exchanged with her brother on 10 and 13 November 2013, as follows:

Brother   The houses are yours when you Wanna go to the solicitor

Sister   Explain yourself. What you mean? Both houses?? You want nothing from them and nothing for them? Is this right??

Brother   Yes

Sister   Please send me a letter that this is what u wish to do. With ur full name address and signature verified by a jp. …

Brother   No letter just by solicitor change the paperwork and that’s it

20. Whilst the brother did not recall whether he sent these particular texts, and no long had access to his telephone texts from that time, he agreed that he could have sent the texts set out by his sister. The brother agreed that he did say to his sister that he would give her the house, “But, that was out of anger. Yeah. I had enough. I’m fed up.”

21. Mr Foundas promptly contacted the Solicitor Referral Service of the Law Society of New South Wales and was provided with the names of local solicitors who may be able to assist. On Friday 15 November 2013, a Sydney solicitor, Navado Lawyers & Solicitors, emailed Mr Foundas, confirming an initial consultation at 2pm on 18 November 2013 in the city. Later that day, a Parramatta solicitor, Currie & Cabarrus, also emailed Mr Foundas in respect of “Proposed sales at Ashcroft,” inviting him to make an appointment to discuss the matter “at no cost or obligation.”

22. On 18 November 2013, the Law Society sent a referral letter to Mr Foundas, confirming the details of the firms who may be able to assist him. Solicitor Don Currie saw the sister and Mr Foundas and was provided with information and documents.

Draft deed of acknowledgement

23. On 3 December 2013, Currie & Cabarrus emailed Mr Foundas and the sister a letter, attaching a draft deed which it was proposed to send to the brother. Mr Foundas and the sister were asked to contact the solicitor if they had any queries or wished to amend the document before sending it.

24. The draft deed, entitled Deed of Acknowledgement, was dated 3 December 2013 and to be entered into by the sister and the brother. The recitals noted that the sister and brother were registered proprietors as tenants-in-common in equal shares of the Stanmore Crescent and Magee Street properties. Further:

B.   The properties were purchased solely by Cassiani and Peter contributed no money towards the acquisition;

C.   Both properties are mortgaged to the Commonwealth Bank and Cassiani has been paying the mortgage debts to the said bank without any contribution by Peter;

D.   Peter has agreed to enter into this Deed to clarify and confirm he has no financial or beneficial interest in the properties.

25. Whether the recitals were accurate or, at least, uncontroversial between the proposed parties to the deed is not known. In any event, the operative provisions of the draft deed provided:

1.   Peter hereby acknowledges and agrees that he has no beneficial interest in the properties.

2.   Peter shall do all things necessary and sign all relevant documents as Required by Cassiani to enable her ownership of the properties.

26. The sister said that the Deed of Acknowledgement was executed by herself and the brother on the date it bears, to which I will return at [82].

27. On 9 December 2013, Currie & Cabarrus emailed Mr Foundas and the sister again:

In relation to the draft Deed of Acknowledgement, I believe that Peter will either sign the Deed or refuse to sign the Deed. He has that choice. He is still registered as the owner of a half share in each of the properties.

I suggest that the Deed be forwarded to Peter without delay with a request that it be executed by him and returned to this office as quickly as possible.

28. Mr Currie also advised that, although the first consultation was free, the solicitor had since incurred some $337.08 in costs in drafting the deed and obtaining title searches. Any further work would be charged at $330 plus GST an hour. There matters lay.

Sale of Stanwell Crescent property

29. In March 2014, the bank took possession of the Stanwell Crescent property, which was sold for $510,000. After repayment of the bank’s loan and legal costs, a surplus was expected.

30. The sister was then represented by a second firm, Wright Lawyers & Associates, in Drummoyne. On 25 September 2014, the sister’s solicitor wrote to the brother’s solicitor, claiming to be entitled to more than half of the properties and the resulting surplus. The solicitor observed, “Peter has sent a message to Cassiani indicating he is willing to divest his respective interest in both properties.” I take this to be a reference to the text messages set out at [19]. Noteworthy, the sister’s solicitor did not refer to any Deed of Acknowledgment.

31. The sister said that, when the Stanwell Crescent property was being sold, she mentioned the deed to her solicitor, who said he would be in talks with the brother’s solicitor. If the sister had done so, it is likely that the solicitor would have raised the matter, as such a document would have supported the sister’s right to the whole of both properties and all of the surplus on sale of the Stanwell Crescent property. The fact that this matter was not raised by her solicitor at the time points to the fact that the sister, contrary to her evidence, did not mention the Deed of Acknowledgement to the solicitor.

32. On 2 October 2014, the bank sought instructions from the sister and brother about distribution of the surplus, failing which the moneys would be paid into Court. On 18 November 2014, the bank transferred $220,647.85 to the trust account of Leader Law Group in Sutherland in the name of the sister, with the notation “Proceeds held in trust during dispute resolution and mediation.” This was done with the consent of the brother.

33. An informal settlement conference was arranged between the parties on 5 February 2015. However, on 2 February 2015, the brother’s solicitor advised that such a conference was considered premature. The brother sought further details of the basis on which the sister claimed to be entitled to a greater share of the surplus, where the text messages were said not to provide a sufficient basis. Further, rent from the Stanwell Crescent property was said to have been paid by the tenant into a different bank account at the direction of Mr Foundas. This was said to have had the consequence that the brother did not receive his share of the rent and nor was the bank paid. It was said that this had led to the default and, ultimately, the sale of the property. Given an irretrievable breakdown in the relationship between the siblings, consent was sought to sell the Magee Street property and divide the proceeds equally. In the absence of consent, the brother intended to commence proceedings seeking the appointment of a trustee under section 66G of the Conveyancing Act 1919 (NSW).

34. On 13 February 2015, the sister’s solicitor replied that an application to the Court was premature “specifically in circumstances when in very recent times our client has taken occupancy and is residing in the address … caring for her disabled and ill husband.” On 10 March 2013, the brother’s solicitor replied that his client was unaware that the sister now lived at the Magee Street property and requested that she vacate or pay an occupation fee. An application under section 66G of the Conveyancing Act 1919 was said to be the only course open to the brother.

35. The sister then retained a third firm, McLaughlin & Riordan, in the city. In October 2015, this firm wrote the brother’s solicitors advising that the sister was interested in commencing proceedings in the District Court of New South Wales seeking orders that the brother held his interest in the property on trust for her on the following basis:

We have been instructed that during the 16 year period that our respective clients owned the two properties, your client has never contributed to either the purchase or any of the outgoings or cost of upkeep.

Our client and her husband have lived in the current property for the past 12 months and continue to maintain the property and pay municipal rates, water rates, insurance etc.

Again, there was no mention of the Deed of Acknowledgment.

36. The brother’s solicitor replied, denying the claim and advising that the time had come to sell the Magee Street property, either by agreement or by a trustee appointed under section 66G of the Conveyancing Act 1919. There the matter lay for a further three years.

37. On 30 November 2015, a manager was appointed to Leader Law Group, which was holding the surplus from the sale of the Stanwell Crescent property. In 2016, the manager disbursed the money to the sister, although it was something of a mystery as to how this happened. This matter is not in issue in these proceedings. It is sufficient to note that White JA later inferred that the moneys were disbursed on the direction of the sister or her agent: Foundas v Arambatzis [2020] NSWCA 47 at [40].

36. The brother said he has not received his share of the proceeds of sale of the Stanmore Crescent property but owes money to the Australia Taxation Office for the capital gains on the sale. He lives on a disability support pension and is unable to work. The brother has no other sources of income. He is not able to pay his debt to the ATO until he has received his share of the sales proceeds from the Stanwell Crescent property. The brother added in cross-examination:

… we’ve fighting for ten years now. It’s been a long time and you’re living in rent free but I have to pay rent. I have to pay to live. I have to pay to eat and you’re okay. You got rent free. Your life is much easier than what mine is. No one’s helping me. No one’s putting food on my table. I have to put food on my table. I have to put the banana in the bowl. No one’s doing that for me. No one’s controlling my mental health. Nobody is thing. I got workers that are helping me. Now, thank God to that.

Earlier proceedings

39. On 14 June 2018, the brother commenced proceedings No 2018/184682 in this Court against the sister, seeking an order under section 66G of the Conveyancing Act 1919 to appoint the Trustees for the sale of the Magee Street property. In support of his application, the brother swore an affidavit setting out, in detail, the circumstances surrounding the purchase of both properties, including the contributions made by himself, the sister and other family members.

40. On 10 August 2018, the Court made orders for substituted service in respect of the sister. In September 2018, the brother swore a second affidavit, deposing that he had not received any portion of the proceeds of sale of the Stanwell Crescent property.

41. On 15 October 2018, the matter was heard by Darke J. There was no appearance by the sister. According to the transcript of the hearing, the brother read the affidavits which had been relied on in support of the order for substituted service, together with affidavits of service and the brother’s two substantive affidavits.

42. While Darke J observed that there was “no doubt” that it was appropriate to appoint the Trustees, his Honour queried a proposed order that the Trustees pay the brother’s half-share of the proceeds of sale of the Stanwell Crescent property out of the proceeds of sale of the Magee Street property. His Honour declined to make a freezing order in respect of the proceeds of sale on the basis of the material then before the Court. His Honour made orders which the sister now seeks to have set aside in these proceedings, being:

The Court:

1. Orders pursuant to s 66G of the Conveyancing Act 1919 (NSW) (“the Conveyancing Act”) that [the Trustees] be appointed jointly and severally as trustees for the sale of … Magee Street, Ashcroft, in the State of New South Wales, 2168 (“the Property”);

2. Orders that the Property be vested in the Trustees on the statutory trust for sale under Division 6 of Part IV of the Conveyancing Act.

3.   Orders that upon completion of the sale of the Property pursuant to order 2 the Trustees distribute the proceeds in the following manner:

(a)   in payment of the Trustees’ commission and costs for time in attendance up to completion of the sales on an indemnity basis, including (and without any limitation intended), costs for seeking vacant possession of the Property and dealing with any caveats or other registered dealings over the Property;

(b)   in payment of the other costs of sale including, but not limited to legal costs, advertising costs and agent’s commission;

(c)   in payment of expenses incurred by the Trustees for the purpose of bringing the Property up to a condition which would facilitate sale;

(d)   in payment of all rates, taxes and insurances and other outgoings on the Property;

(e)   in payment of the plaintiff’s costs of the proceedings as agreed or assessed; and

(f)   the balance to be paid half each to the Plaintiff and the Defendant.

4.   Orders that the Trustees shall be at liberty to execute any and all necessary conveyance or other documents and to do all such things as are necessary in relation to the performance of these orders;

5. Orders that judgment be entered for the plaintiff against the defendant in respect of the proceeds of sale of … Stanwell Crescent, Ashcroft, in the State of New South Wales in the sum of $108,983.93 together with interest under s 100 of the Civil Procedure Act from 12 August 2016.

6.    Grants liberty to the Trustees to apply.

43. On 9 November 2018, the sister emailed the Registry of this Court, enquiring what she could do in respect of the orders which had been made. The sister retained a fourth firm, Watson & Watson, which rendered an invoice for “General Advice” on 23 November 2018.

Application to set aside judgment and orders

44. On 21 December 2018, the sister swore an affidavit but was then unrepresented. The affidavit addressed the sister’s personal circumstances and the reasons why it was said that the proceedings had not come to her attention. It would appear that the sister sought a fee waiver from the Registry to file a motion to set aside the default judgment.

45. On 23 April 2019, the sister appeared in person before the Duty Judge, Kunc J. The sister informed the Court that she wished to set aside the default judgment and endeavoured to explain why no motion had been brought in the six months since judgment had been entered. The transcript records:

HIS HONOUR: Well, what was your defence? What would your defence be?

DEFENDANT: Well, my defence would be – I mean, I’m not stating per se because I have to get advice if I can – but it would be that I initially purchased the property, so I don’t believe the – it’s 50/50 at the moment per equity, so joint in –

HIS HONOUR: Are you joint tenants?

DEFENDANT: Yes. Or is it joint –

HIS HONOUR: Did you pay for the whole of the property?

DEFENDANT: I paid for everything. He, the plaintiff, hasn’t put any valuable defence proof otherwise, but I can prove that I’ve put in the money. I actually did all the maintenance and have maintained the property. I’ve been the real – the discussions with the real estates over the years. This is a very – a matter that’s been going on for a very long time, and I’ve been maintaining it, putting out costs, putting insurance on the property. For a while it was rented, so I was maintaining it with the tenants in there, maintaining it with the agent.

So I’ve been doing everything and the plaintiff has done nothing over the years.

… the initial purchase was made by me. I put in the deposit I put in the stamp duty. I paid the solicitor’s costs to purchase the property. I did take out a loan – we did take out a loan with the CBA initially when we purchased the property because I couldn’t afford the full amount.

46. No mention was made of the Deed of Acknowledgement.

47. On 24 April 2019, the sister filed a motion to set aside default judgment, supported by her affidavit of 21 December 2018. On 9 May 2019, the sister made a second affidavit, setting out why she had not filed a defence but otherwise not embarking on the substance of her defence. On 10 May 2019, the sister appeared before Darke J for directions in respect of her application to set aside the default judgment. Directions were made for the parties to file further evidence in respect of the motion. On 31 May 2019, the sister made a third affidavit, which touched on the difficulties in her relations with her family but made no mention of the Deed of Acknowledgement.

48. On 27 June 2019, the sister made a fourth affidavit, which mentioned her defence as follows:

My defence has merit.

… The plaintiff has to date not even bothered to deal with any accounts nor maintenance. But, I have to pay for everything. When is his responsibility starting? …

Since 2001, contributing to the upkeep and maintaining of this property without any intervention from the plaintiff in writing or verbally or financially so I took that as a form of TRUST given the status of the property.

In short, the sister described a defence along the lines mentioned to Kunc J. No mention was made of the Deed of Acknowledgement.

49. On 28 June 2019, the sister appeared before Darke J on the hearing of her application to set aside the default judgment. According to the transcript, the sister’s fourth affidavit had only just been served and the brother wished to file evidence in response. In this context, the brother’s counsel enquired whether the text messages formed part of the defence. Darke J sought to elicit the nature of the defence on which the sister wished to rely if the judgment and orders were set aside:

DEFENDANT: Yes, your Honour. I do have more of a defence to put forward, but.

HIS HONOUR: You need to put it forward now.

DEFENDANT: I need more time to request documents from organisations.

HIS HONOUR: What is your defence, in short, that you claim you might have had to these proceedings?

DEFENDANT: Well if my motion is granted, and I’m able to put a defence forward, I’d need to get some more legal advice in regards to what my stance would be, but I definitely would state that I would be stating indefinitely that I would have put more of a contribution towards the property.

50. His Honour explained that the sister needed to identify a reasonably arguable defence and gave her four weeks to put on further evidence in this regard. The application to set aside the judgment and orders was stood over to 16 August 2019. The matter was re-listed on 2 August 2019, as the sister had not filed the further affidavits within the required timeframe and needed more time to obtain documents from third parties. Darke J enquired:

HIS HONOUR: What is the nature of the evidence that you don’t have that you seek to obtain?

DEFENDANT: Your Honour, several organisation I wish to obtain information from, there’s several listed there: The Commonwealth Bank, the New South Wales Police, the real estate, the Local Council, utilities receipts that I have over the 18 year period.

HIS HONOUR: What are you hoping to establish by these documents?

DEFENDANT: I’m hoping to establish a lot of things: Payments or receipts for payments, character references. There’s a lot of people mentioned on that defence affidavits, so I need to contact a lot of those people as well and get some information there. Also the Council.

HIS HONOUR: In broad terms, what is the nature of the defence that you say you could have raised in opposition to the plaintiff’s section 66G case?

DEFENDANT: As mentioned previously, and in my affidavits as well, I believe that I have contributed financially and I should own more than 50% share of the property.

… Peter Arambatzis hasn’t contributed one cent to that property, nor has he taken any responsibility or concern for the property in the 18 years that it has been acquired, and initially when it was acquired, it was acquired without my consent.

… my father went to the solicitor and put my brother’s name on the property without my consent and there is a document of sale that crosses out and Puts Peter Arambatzis on the sale.

… I can add additional information to that to prove that, but I need time. All these requests from organisations, Government departments, they all have time frames … I’m limited by other organisations and Government departments and procedural fairness…

51. Darke J gave the sister further time to put on her affidavits and stood over the application to set aside the judgment and orders until a later hearing date.

52. On 23 August 2019, the sister made a fifth affidavit. The affidavit was directed to family history, the circumstances in which the properties were acquired and various other subjects. No mention was made of a Deed of Acknowledgment. Annexed to this affidavit, however, was a copy of the loan agreement with the bank in respect of the Magee Street property: see [12]. As mentioned, Ms Holt is of the view that the brother’s signature on this document was ‘cut and paste’ onto the Deed of Acknowledgement. The document was then clearly in the sister’s possession, having been annexed to her affidavit.

53. On 3 September 2019, the sister made a sixth affidavit, addressing her financial contributions to Magee Street property in more recent times. No mention was made of a Deed of Acknowledgment. The sister also served written submissions, which referred to the text messages, but not to a Deed of Acknowledgement.

54. On 6 September 2019, Darke J heard the application to set aside the default judgment and orders. The sister submitted that an order should not be made under section 66G of the Conveyancing Act 1919, essentially based on the matters set out in her affidavits, in particular, her financial contributions to the property. The transcript records no reference to a Deed of Acknowledgment.

55. In Arambatzis v Foundas (Unreported, New South Wales Supreme Court, Darke J, 6 September 2019) Darke J observed, “Whilst the defendant states that she wants to “file a defence” it must be said that she has produced scant evidence of the existence of any reasonably arguable defence to any of the plaintiff’s claims”: at page 4. His Honour proceeded to analyse the evidence relied upon by the sister in respect of her suggested greater financial contribution to the acquisition of the properties and upkeep. His Honour then referred to the text messages (at page 7):

These text messages do seem to indicate that at that time the plaintiff may have been willing to transfer his interests in the properties to the defendant. However, the text messages go no further than to say that any such transfer would be effected by solicitors changing the paperwork. There is no evidence that solicitors were subsequently engaged to effect any such transfer, and it moreover appears that any such transfer would be voluntary. In the circumstances, I do not think this evidence goes any distance towards undermining the plaintiff’s title as a co-owner of either of the properties.

56. Darke J concluded that the evidence did not disclose a reasonably arguable defence to the claim for relief under section 66G, dismissed the sister’s motion with costs, ordered that her caveat be withdrawn and made orders for possession of the Magee Street property.

Appeal proceedings

57. In November 2019, the sister filed a Notice of Appeal in the Court of Appeal together with a motion seeking an urgent stay. The Notice of Appeal made no reference to a Deed of Acknowledgment.

58. In January 2020, the sister filed submissions in the Court of Appeal proceedings. The submissions made no reference to a Deed of Acknowledgment but did refer to the text messages, “He even sent me the SMS’s that he didn’t want the properties. Yet, that means nothing because according to Justice Darke he never followed through.” Such a submission is at odds with the sister’s position in these proceedings, being that the brother did follow through by executing the deed.

59. The appeal was heard by Bell P (as the Chief Justice then was), Basten and White JJA on 13 March 2020. Mr Foundas spoke on behalf of the plaintiff, focusing on the contributions made by the plaintiff to the property. No reference was made to the Deed of Acknowledgment.

60. On 24 March 2020, the sister’s appeal was allowed in part, where the amount of the judgment concerning the brother’s share in the proceeds of sale of the Stanwell Crescent property was reduced by some $5,000. Otherwise, the appeal was dismissed with costs: Foundas v Arambatzis [2020] NSWCA 47. In respect of the sister’s suggestion that the brother had agreed to give the properties to her by text message, White JA (with whom Bell P and Basten JA agreed) observed at [32]:

These text messages demonstrate that at that time the respondent was content to make a gift of his interest in the properties to the appellant. But nothing was done to give effect to that intention. The appellant’s response to the respondent’s first statement is inconsistent with her believing that she was the beneficial owner of the whole of either property.

61. The sister was ordered to give possession of the Magee Street property in 28 days. The sister filed a motion in the Court of Appeal proceedings, seeking an indefinite extension of the order for possession given the COVID-19 pandemic. The Court made directions for the Trustee to advise their attitude: Foundas v Arambatzis(No 2) [2020] NSWCA 51. On 2 April 2020, the sister filed submissions opposing the Trustees’ application for payment of an occupation fee. No reference was made to the Deed of Acknowledgment.

62. On 7 May 2020, the Court of Appeal held that the sister was obliged to pay an occupation fee: Foundas v Arambatzis (No 3) [2020] NSWCA 87 (White JA, Bell P and Basten JA agreeing). Directions were made in the event that the sister sought any further stay of the orders for possession. On 28 May 2020, the Court of Appeal refused any further stay of the orders for possession by reason of the COVID-19 pandemic: Foundas v Arambatzis (No 4) [2020] NSWCA 100 (White JA, Bell P and Basten JA agreeing).

63. The sister did not give possession of the Magee Street property. On 25 October 2020, the Trustees became the registered proprietors of the Magee Street property as joint tenants. On 24 December 2020, the Trustees applied to the Court for the issue of a writ of possession. An order was made for issue of a writ for possession on 7 January 2021. The Sheriff issued notices to vacate dated 21 January 2021, appointing 2 March 2021 as the time for eviction.

‘Signed’ deed of acknowledgement

64. A week before the eviction date, on 23 February 2021, the sister filed an “urgent” motion in the earlier proceedings, seeking to set aside a notice to vacate issued by the Sheriff of New South Wales, together with the stay of the judgment and orders made by Darke J on 15 October 2018, including on the following basis:

I seek an URGENT Order of LEAVE so I am able to place further new evidential material against the Judgement dated 15 October 2018 …

65. In support of the motion, the sister made an affidavit attaching the Deed of Acknowledgement, now executed by herself and the brother, each witnessed by Ms Cox. The sister stated that the brother had signed the document on or about 3 December 2013. The sister stated that, having obtained the Deed of Acknowledgement from Currie & Cabarrus, she contacted the brother to see if he still wanted to proceed with the deed. The brother was said to have replied, “Yes, I just want this to end.” The sister described the events which followed:

I then proceeded to say to the First Defendant words to the effect of ‘we need to both sign and it has to be witnessed.’ He replied ‘we can go to a chemist or medical centre and they should be able to witness it’.

We then both walked into the centre and signed the Deed of Acknowledgement.

Order to produce original deed

66. On 25 February 2021, the sister also filed a motion in the Court of Appeal proceedings. Both motions were heard by Brereton JA on 1 March 2021. In an ex tempore judgment, his Honour traversed the history of the proceedings, noting that the Deed of Acknowledgement had not been raised by the sister on the occasions on which the matter had been before Darke J or the Court of Appeal: Arambatzis v Foundas [2021] NSWCA 78. His Honour also observed that the defendants’ legal representatives “have had very limited opportunity to consider this evidence and obtain instructions on this. … It does, however, bear some indicia of authenticity, from its apparently accompanying the covering letter from Currie & Cabarrus, and also from the circumstance that it appears that Mr and Mrs Foundas were referred to Currie & Cabarrus by the Law Society on 18 November 2013 for assistance: Arambatzis v Foundas at [13].

67. Brereton JA observed that a comparison of the sister and brother’s signatures on the deed with their signatures in court documents “does not suggest any prima facie reason to doubt the authenticity of the signatures that appear on the dead of acknowledgement”: Arambatzis v Foundas at [13]. His Honour observed that, if authentic, the deed would cast serious doubt on the orders that had been previously been made. Notwithstanding the very late stage at which the matter had been raised, Brereton JA considered that the balance of justice required that an opportunity be afforded to explore the matters raised by the Deed of Acknowledgement, and that the sister be provided with pro bono legal assistance: Arambatzis v Foundas at [18]. Execution of the writ for possession was stayed until 2 June 2021.

66. His Honour’s judgment then records at [23]-[24]:

[Counsel applied for an order for production of the original document.]

The Court further orders that the defendant Cassiani Foundas produce to the Registrar by 18 March 2021 the original of the documents which comprise pages 1 through 7 of annexure A to her affidavit of 23 February 2021.

69. The documents referred to comprised the text messages, Mr Currie’s email of 15 November 2013, the letter from the Law Society of 18 November 2018, Mr Currie’s letter of 3 December 2013 and the Deed of Acknowledgement dated 3 December 2013 executed by the sister and brother and witnessed by Ms Cox.

70. On 18 March 2021, the Court received documents from the sister. On 3 May 2021, the Registrar of the Court of Appeal emailed the parties to confirm what had been received: (emphasis added)

Following on from the direction hearing this morning, the Registry has located the following documents received on 18 March 2021:

•   Original letter from Solicitor Referral Service of Law Society dated 18 November 2013

•   Proposed sales at Ashcroft – Currie & Cabarrus Lawyers – undated (appears to be a copy)

•   Letter from Currie & Cabarrus Lawyers dated 3 December 2013 (appears to be a copy)

•   Deed of Acknowledgement dated 3 December 2013 (appears to be a copy)

•   Document starting Peter Arambatzis … 10/11/2013 2:10:34 PM (appears to be a copy).

71. It will be immediately noted that the Registrar recorded having received one original document, being the letter from the Law Society, whilst the balance of the material received, including the Deed of Acknowledgement “appears to be a copy.”

72. The matter came before Brereton JA again on 1 June 2021. The brother’s counsel raised a concern that the original Deed of Acknowledgement had not been delivered to the Court, but only a copy. The transcript records the following exchange between Brereton JA and the sister: (emphasis added)

HIS HONOUR: What about the deed. It is said that what was sent in was a copy, not the original.

APPLICANT: No, I believe that I was advised to send the original. I have sent the original for what I used as the basis to scan and send to the Court. So from my perspective, that is an original. May I know –

HIS HONOUR: Do you have the original document with the original signature on it?

APPLICANT: That is what I have. I’ve sent the original that I obtained in my possession. Now one could say what is an original, what is deemed as an original, and also under the Evidence Act of 1995, s 51 the original, that rule has been abolished. Nobody has to provide a so-called original anymore.

HIS HONOUR: Mrs Foundas, that is absolute nonsense. You were ordered to produce the original of the document, and you can be required to produce the original of the document.

APPLICANT: I have produced the original. That is what I relied on to go to the Court. So, therefore, that is what I have made.

HIS HONOUR: Do you have a more original document than the one that you produced?

APPLICANT: That is the only copy I have. I believe that that is the original document. That is the original document I have and that’s what I’ve provided to the Court as requested. I’ve got advice by the—

HIS HONOUR: I’m sorry?

APPLICANT: I got some free advice from Law Access and they told me that that would suffice. So I don’t know—

HIS HONOUR: I’m sorry, Mrs Foundas, but I made an order that you produce the original document. So either you tell me that the original document doesn’t exist or you don’t have it or you produce the original document. You don’t go off to Law Access and get told you can produce something else. The Court is bending over backwards to help you and expects a little bit of cooperation from you. Where is the original document?

APPLICANT: As far as I’m – that is what the original document I have in my possession.

HIS HONOUR: Does it have your original signature on it?

APPLICANT: Yes.

HIS HONOUR: Does it have Mr Arambatzis’s original signature on it?

APPLICANT: Yes.

HIS HONOUR: Not copy, an original signature in ink?

APPLICANT: That’s the original.

HIS HONOUR: And that’s the document you say you’ve sent to the Court.

APPLICANT: Yes.

HIS HONOUR: I want to be quite clear about this: do you or do you not have an originally signed copy of the deed of acknowledgement?

APPLICANT: I have provided the Court what I believe to be the original.

HIS HONOUR: Is the document you provided the Court originally signed in ink, or is it an electronic or photocopy of a signature?

APPLICANT: Ink.

73. His Honour extended the stay of execution for one month and made a further referral for pro bono assistance: Arambatzis v Foundas (No 2) [2021] NSWCA 125. Brereton JA also noted that an issue had arisen as to whether the sister had produced the original Deed of Acknowledgement, or only a copy. At [8]:

She informs me that the document that she has sent to the Court is originally signed. I am not in a position at present to adjudge whether or not that is so. In any event, as I understand what she says, she confirms that the document that she has sent to the Court is the original in her possession, and if it is not the ultimate original, that is because the ultimate original is not in her possession.

74. The matter came before Brereton JA again on 16 August 2021, who made directions for the parties to file further evidence in respect of the sister’s motion to, effectively, set aside the judgment and orders made on 15 October 2018. The writ for possession was stayed until 11 October 2021. The sister’s motion was transferred to the Court of Appeal. On 24 September 2021, the sister filed submissions in support of her motion. These submissions were now prepared by pro bono counsel.

75. On 19 November 2021, the sister filed an amended summons seeking leave to appeal. The amended summons and the motion filed in the earlier proceedings were heard by the Court of Appeal on 24 May 2022. Judgment was delivered on 1 July 2022: Foundas v Arambatzis (No 5) [2022] NSWCA 113. The Court (White JA, Bell CJ and Basten AJA agreeing) concluded that the Court did not have power to reopen the earlier appeal or set aside its orders. As such, the sister was obliged to commence fresh proceedings.

These proceedings

76. On 20 October 2021, the sister commenced these proceedings by Summons. On 15 August 2022, the sister filed a statement of claim, alleging that the brother had executed the Deed of Acknowledgement on or about 3 December 2013. On 29 September 2022, the brother filed a defence, contending that he did not sign the deed and had never seen the deed prior to 26 February 2022. Further, the signature that purported to be his signature on the deed was not his signature. The brother alleged that the deed was a forgery.

77. On 28 November 2022, the sister made an affidavit in these proceedings, setting out the circumstances in which she had obtained a draft Deed of Acknowledgement from Currie & Cabarrus and then contacted her brother to execute the document, being in similar terms to her affidavit of 23 February 2021: see [65]. The sister proceeded to describe the circumstances in which the deed was executed, in terms different to her earlier affidavit. Specifically:

I arranged to meet with the First Defendant on the afternoon of 3 December 2013 in Sydney City to sign the Deed.

On or around the afternoon of 3 December 2013, I met with the First Defendant in a building which was being renovated on Macquarie Street, Sydney.

I asked an employee of this building to witness us signing the Deed. I do not recall the location of this building or the company name.

78. In addition to the sister’s affidavit, her then solicitor, Caitlin Cleary, made an affidavit. (Ms Cleary had since ceased to act for the sister; Ms Cleary’s affidavit was tendered by the brother). Ms Cleary set out her efforts to obtain records in relation to the deed from Currie & Cabarrus. In short, Mr Currie had since retired. The firm no longer retained any papers. Mr Currie emailed Ms Clearly, “Unfortunately I have no recollection of this matter nor of the parties involved.” Ms Cleary had no success in obtaining an affidavit from anyone at the firm, nor the contact details for Ms Cox.

Requesting production of the original

79. On 26 July 2022, the brother’s solicitor advised that the solicitor would be inspecting the court file to have the original deed examined by a handwriting expert. On 12 December 2022, the brother’s solicitor wrote again, noting that the court file had been inspected on 20 September 2022: the original deed had not been produced, despite a previous court order to do so. The brother requested that the sister produce the original deed. The brother also requested that Ms Cox be called by the sister as a witness at trial and made available for cross-examination.

80. The sister’s solicitor responded that they had been instructed that the original deed was provided to the Court by the sister, and they were making enquiries of their client. On 16 January 2023, the sister’s solicitor advised that they understood that the original of the deed was presently on the court file “and we are attempting to make enquiries of our own to verify this.” The sister’s solicitor also advised that, despite their reasonable enquiries, they had not been able to locate Ms Cox. The sister’s solicitor ceased to act in April 2023.

81. Notwithstanding a guillotine order made by the Registrar on 27 February 2023, on Friday afternoon, 3 November 2023, the sister filed two further affidavits by herself, the first attaching a statutory declaration by Ms Cox and the second affidavit making corrections to her previous affidavit. The hearing began on 6 November 2023.

Authenticity of the deed

82. The evidence to be considered comprises lay and expert evidence. It is convenient to consider the expert evidence first. It may assist in what follows to set out the execution portion of the deed:

83. On 18 January 2023, Ms Holt attended the Registry together with the brother’s solicitor and examined the Deed of Acknowledgement on the court file. Ms Holt brought an eyepiece which provided ten times magnification, together with a digital microscope which provided 100 times magnification. Ms Holt observed that the document was not an original.

84. Further, Ms Holt is of the opinion that it is extremely likely that no original of the deed exists at all, by reason of two matters. First, the brother’s signature likely came from the Commonwealth Bank document and was ‘cut and paste’, either using a photocopier or computer imaging software, onto the deed. Ms Holt was able to overlay the brother’s signature on the Commonwealth Bank document onto the deed by reducing the image by 5%. The only real difference between the two signatures was that the brother’s signature on the deed was slightly shorter, having likely been ‘cut off’ during the copying process.

85. Ms Holt observed that no two naturally written signatures or handwritten entries will overlay each other to such an extent that, for all intents and purposes, they are identical and superimposable. This is because humans cannot write with machine-like repetition and two signature or entries naturally written by the same person will exhibit an observable degree of variation. Ms Holt was of the view that the brother’s two signatures shared a common source. Where the brother’s signature on the Commonwealth Bank document was executed in 2001, that is, some 12 years before the deed and witnessed by a bank employee, the brother’s signature on this document was likely the source of the signature on the deed. This was further corroborated by the fact that the brother’s signature was taken from a signature box in the Commonwealth Bank document, resulting in the letter forms being cut off and shortened during that process.

86. Second, while the signatures of the witness, Ms Cox, show some variation between them, the handwriting of the witness’ name “Kristine Cox” does not. Rather, the two handwritten names are, for all intents and purposes, identical and superimposable. Ms Holt was able to overlay one “Kristine Cox” onto the other. Any divergence between the images was likely do to with the reproduction quality of the deed, which appeared to be at least a copy of a copy. Ms Holt concluded that the two handwritten entries “Kristine Cox” shared a common source, that is, one of the entries was the source of the other or, more likely, both entries came from another document not provided to Ms Holt.

87. Ms Holt concluded that neither the brother nor Ms Cox completed their entries in the usual, normal manner but that their entries had been cut and paste onto the deed from other source documents. Ms Holt is of the view that the deed is a composite document made up of entries sourced from other documents. Ms Holt concluded, “These observations very strongly suggest that no original of the questioned deed exists at all.”

88. Next, it is convenient to consider the evidence of the witness, Ms Cox. In the statutory declaration, Ms Cox declared that, on or around 4 December 2013, she witnessed the Deed of Acknowledgement for the sister and brother “in the area of Liverpool.” In cross-examination, Ms Cox said she recognised both witness signatures on the document, as well as the handwriting of her name “Kristine Cox”, as hers. Ms Cox had no independent recollection of having witnessed the signatures on the deed, where she sometimes witnessed 2,000 and 3,000 documents per month. While Ms Cox did keep a register of appointments, she no longer had the register given the passage of time. Ms Cox said “My recollection is knowing that that’s my signature, not the actual date. I mean, it’s 10 years ago. … I just know that that’s my signature.”

89. As to when Ms Cox witnessed the signatures, Ms Cox agreed that the document could have been signed on a date other than 3 December 2013, where the page containing the execution clause did not have a date, “all I know is that that’s my signature. There was no place to put a date.” Ms Cox agreed that she could not definitively tell the Court that she witnessed the document on or about 4 December 2013, nor that the document was witnessed in 2013, “where I witnessed it there’s no date to say that that’s when I did it.”

90. As to where Ms Cox witnessed the signatures, in December 2013, Ms Cox was working for an electronics company in Eastern Creek. Ms Cox agreed that she could not definitively tell the Court that she witnessed the document near Liverpool. Nor could Ms Cox say whether the signature or her name were placed on the document at one or more locations, “All I can agree to is yes, they are my signature and that is my name.”

91. As to whether Ms Cox witnessed both signatures on the same occasion, Ms Cox could not say whether she witnessed both signatures at the same time. On occasion, she witnessed a document signed by only one party. However, Ms Cox was confident that she had witnessed both signatures on the deed “because they’re both my signature.” Ms Cox also said that she would have seen the original document on the day of signing, “I do not sign photocopies unless it has been stamped by another JP to say it’s a copy of an original.”

92. Turning, then, to the evidence of the parties to the Deed of Acknowledgement, the sister maintained that Ms Cox witnessed the execution of the deed on or about 3 December 2013, including the brother’s signature. The sister maintained that she saw her brother sign the document. The sister variously said that she gave a copy of the deed to the brother, then said he "didn't want a copy." The sister denied cutting and pasting her brother’s signature from the Commonwealth Bank loan agreement to the deed. The sister denied that the deed came into existence long after 3 December 2013.

93. The brother said he had no documentary proof of his whereabouts on 3 December 2013, “You’re asking ten years ago. … When she left the house she took all the documents with her. All the paperwork, everything, was cleared out of the filing cabinet that we used to keep at home. Even my father’s records.” He accepted that his signature appeared on the execution page, “But then my signature was on a lot of things which was not meant to be, because I didn’t sign them.” The brother said the first time he saw the Deed of Acknowledgement was when his solicitor showed it to him attached to the sister’s 23 February 2021 affidavit. The brother said he did not place his signature on the deed and does not know who Ms Cox is. He has never signed any document at any time that looks like the Deed of Acknowledgement. The brother maintained that he did not sign any deed.

Submissions

94. The sister submitted that the brother was not a credible witness. He was aware of the deed but chose to ignore it by running the earlier proceedings and also made sure that she was not present when the orders were made, so that the Deed of Acknowledgement was not placed before the Court. The sister maintained that the brother signed the deed and said it was “my bad” for not following up on taking the deed to the Land Titles Office, or ensuring that Mr Currie did so.

95. As for Ms Holt, the sister submitted that the expert report was not based on scientific method and was biased in favour of what the client wanted. Where the signatures were superimposed using “Photoshop”, this was hardly scientific. Further, it was suggested that Ms Holt had herself engaged in fraudulent conduct by superimposing the same signature on itself, being the brother’s signature on the deed. (This allegation was not put to Ms Holt in cross examination. The submission also does not account for the fact that the signature on the deed is ‘cut off’ and is the same as the signature on the Commonwealth Bank document). The sister added, “they will come after me to get money. Sorry but, that isn’t happening.”

96. The brother submitted that there were a number of circumstances which raise questions as to the authenticity of the deed and give rise to an inference that the deed was created long after the date on it bears. The sister did not refer to or produce the deed until 23 February 2021. There is no credible explanation was to why the sister did not produce it earlier, or even refer to it. The sister has failed to produce the original deed, despite being ordered to do so by Brereton JA on 1 March 2021. Ms Holt’s expert evidence was compelling and ought be accepted: the brother’s signature on the deed was cut and paste from the Commonwealth Bank document. The Court ought conclude that the Deed is a false document which does not contain a true signature of the brother. In any event, it could not be said that the brother had obtained a judgment by fraud in the relevant sense where the sister knew about the deed and had intimate knowledge of the very subject of the brother’s alleged fraudulent or dishonest conduct: Nadinic v Drinkwater [2017] NSWCA 114; (2017) 94 NSWLR 518 at [22]; Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 at [114].

97. The Trustees took no position on the allegations made by the sister. The Trustees submitted to the orders of the Court save as to costs, remuneration, charges, fees and expenses; save as to the trustees' indemnity as applicable; and save as to any ancillary orders that may be required following the Court's determination of the sister's claim. Where the Trustees are currently the registered proprietors of the Magee Street property, ancillary matters may include potential responsibility for tax resulting from any transfers or transactions, or any tax rulings or otherwise that might be required that may potentially arise from any orders made. The Trustees would seek to address these issues, if needed, following the determination of the dispute between the sister and brother.

Principles

98. Rule 36.15 of the UCPR confers on the court, upon sufficient cause being shown, a power to set aside a judgment if it was made irregularly, illegally or against good faith. One basis for setting aside a judgment under this provision is that the judgment was obtained by fraud.

98. In Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, Kirby P discussed the principles guiding the determination of an application to set aside a judgment on the basis that it was obtained by fraud: at 538. These principles were usefully summarised by French J (as his Honour then was) in Spalla v St George Motor Finance Ltd (No 5) [2004] FCA 1262 at [60]: (emphasis added)

1.   The essence of the action is fraud and particulars of the fraud claimed must be exactly given and the allegations established by the strict proof which such a charge requires.

2.   It must be shown by the party asserting that the judgment was procured by fraud that there has been a new discovery of something material in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment.

3.    Mere suspicion of fraud raised by fresh facts later discovered will not be sufficient to secure relief.

4.   Although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud and although there may be exceptional cases where such proof of perjury would suffice, without more to warrant relief of this kind, the mere allegation or even the proof of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment.

5.   It must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge.

6.   The burden of establishing the components necessary to warrant the drastic step of setting aside a judgment allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly.

100. The threshold to have a judgment set aside on the basis that it was obtained by fraud is high. This is warranted having regard to the public interest in finality of public litigation: Poulos v Commonwealth Bank of Australia Ltd [2019] NSWCA 241 at [29] (Payne and Brereton JJA).

101. Of particular importance in this case is the requirement that the evidence of the fraud is ‘fresh’, that is, something that has come to the applicant’s attention after the judgment and orders were made: McDonald v McDonald [1965] HCA 45; (1965) 113 CLR 529 at 533 (per Barwick CJ). The applicant does not need to show, however, that the fresh evidence could not have been discovered by the exercise of due diligence before the orders were made: Toubia v Schwenk (2002) 54 NSWLR 46; [2002] NSWCA 34 at [37]-[45] (per Handley JA, Heydon and Hodgson JJA agreeing).

Consideration

102. I am not satisfied that the judgment and orders obtained by the brother on 15 October 2018 should not be set aside. Assuming for the moment that the Deed of Acknowledgement was executed on 3 December 2013, then this evidence is not ‘fresh’ as, on the sister’s version of events, she was aware of the document before the judgment and orders were made: McDonald v McDonald at 533 (per Barwick CJ). Indeed, on the sister’s version of events, she was aware of this evidence for almost five years before the judgment and orders were entered.

103. Further, I am satisfied that the Deed of Acknowledgement is a forgery, having regard to six pieces of evidence.

104. First, although the sister maintains that the deed was executed on 3 or 4 December 2013, it is unlikely that the deed was executed then, where Mr Currie continued to correspond with the sister on 9 December 2013 on the basis that the deed had not been executed: see [27].

105. Second, the sister did not mention the existence of the Deed of Acknowledgement in the ensuing seven years, until the week before the date for eviction from the Magee Street property.

106. The sister did not mention the deed to Wright Lawyers in September 2014 (see [30]) or McLaughlin & Riordan in October 2015 (see [35]), when the sister asserted through these solicitors that she was entitled to more than a half-share in the properties and the surplus on sale of the Stanwell Crescent property. The sister then asserted that her entitlement arose from her greater contribution to the acquisition and maintenance of the properties.

107. Nor did the sister mention the deed when asked by Kunc J in April 2019 what her defence to the brother’s claim might be: at [45]. Nor did she mention it when asked the same question by Darke J in June 2019, August 2019 or September 2019: at [49], [50], [54]. No mention was made of the existence of the deed in her six affidavits made in support of the application to set aside the orders made by Darke J on 15 October 2018, in particular, in her affidavit made on 27 June 2019, where she set out the nature of her defence: see [48].

108. Nor did the sister mention the Deed of Acknowledgement in the Court of Appeal proceedings, either in the Notice of Appeal, her written submissions, or at the hearing of the appeal. Indeed, her submissions were at odds with what is now sought to be advanced: see [58].

109. As to why the sister did not produce the Deed of Acknowledgement until 23 February 2021, the sister said that she could not find the deed when the matter was before the Court of Appeal in March 2020 “and I knew that I was just going to be ignored, even if I did mention it. … I’m always ignored because I’m self-represented or they don’t want to hear me.” Although her brother had put forward his affidavit of 3 April 2018 and “No proof was given,” the sister said, “My story always has to be proven; I always have to put in evidence to back my story otherwise I just get ignored. So there’s no point in just saying frivolous shit without having the evidence to produce it. I’m sorry about the language. But in layman’s terms, that’s my … reasoning.” The sister said that she found the deed while she was trying to pack her possessions “because I was going to get evicted”.

110. This explanation was not given in her affidavits filed in these proceedings, the first affidavit having been prepared when the sister was legally represented. The explanation was only proffered from the witness box at trial. This reduces the weight I am prepared to attach to the sister’s evidence.

111. The explanation also does not bear scrutiny. The sister’s affidavits filed in the earlier and Court of Appeal proceedings up to 23 February 2021 were replete with allegations unsupported by documentary corroboration. Two examples suffice. First, the sister stated in her affidavit of 27 June 2019 that she had to pay for everything in relation to the Magee Street property and, since 2001, had contributed to the upkeep and maintenance of the property without any assistance from the brother. No documents were attached in support of this contention. Second, in the sister’s affidavit of 23 August 2019, she said that her father arrived at the Magee Street property in June 2017 and cited two police reports in respect of the incident, noting that she needed time to obtain the police reports under a Freedom of Information application. That is, the fact that the sister did not then have a document in her possession did not prevent her from referring to the import of the document or its existence.

112. The sister also had no difficulty informing the Court that she hoped to obtain documents which she anticipated would support her defence, but which she did not have when the submission was made: see the transcripts of the hearings before Darke J on 28 June 2019 (at [49]) and Darke J on 2 August 2019 (at [50]).

113. Third, Ms Holt’s expert evidence is compelling. Nor does Ms Cox’s evidence does not detract from the expert’s opinion. It is not in issue that Ms Cox’s two signatures on the deed are authentic. Nor is it in issue that Ms Cox’s handwritten name on the deed is also hers; the point made by Ms Holt is that the two handwritten names are precisely the same and at least one had been ‘cut and paste’ from the other. Nor is it in issue that the sister executed the document, or that her signature was witnessed by Ms Cox. What is in issue is whether the second signature witnessed by Ms Cox was that of the brother.

114. Ms Holt concluded that the brother’s signature was been ‘cut and paste’ onto the deed from the Commonwealth Bank document. That document was in the sister’s possession, having been annexed to her affidavit made on 23 August 2019: see [52]. Whosever signature Ms Cox may have witnessed, it was not the brother’s. Had it been, there would have been no need to ‘cut and paste’ his signature from another document.

115. Fourth, although the sister was ordered to produce the original of the Deed of Acknowledgement to the Court, the sister failed to do so. The fact that the deed which the sister sent to the Court was not the original, but a copy, is confirmed by the Registrar’s email of 3 May 2021 (see [70]) and Ms Holt’s inspection of the document on 18 January 2023. Indeed, by reason of the ‘cut and paste’ of the brother’s signature and Ms Cox’s handwritten name on the document, Ms Holt is of the view that no original of the questioned deed exists at all.

116. The sister’s explanation to Brereton JA as to whether she had an original of the deed or not, and whether she had sent it to the Court, remained obscure in these proceedings. The sister said, variously, “I know I sent an original copy to the courts”, “What’s to say what’s an original?” and sought to distinguish an original copy from “an original, like as in the one, the only original.” The sister maintained that she had delivered the original to the Court.

117. The sister also submitted “no one said that I must produce an original a copy would suffice. I produced my original that is a copy”. The sister relied on sections 48 and 51 of the Evidence Act 1995 (NSW). I understood this to be a reference to section 48(1)(b), which enables a party to adduce evidence of the contents of a document by tendering a copy of the document in question, where the copy has been produced by a device that reproduces the contents of documents. These sections are no answer to an order “that the defendant Cassiani Foundas produce to the Registrar by 18 March 2021 the original …”. To use Brereton JA’s words, the sister’s evidence and explanation as to whether there was an original and whether she was obliged to, or has, produced it to the Court was “absolute nonsense”: see [74].

118. Fifth, the sister’s description of the circumstances in which the deed was executed by the brother materially changed, without adequate explanation. In the sister’s first affidavit made on 28 November 2022 in these proceedings, the deed was still said to have been executed on 3 December 2013 but the place where the document was said to have been executed was different from that described in her affidavit of 23 February 2021. Gone is the chemist or medical centre. The siblings are now in Sydney CBD on Macquarie Street, at a building which is being renovated. The witness is now a building employee. I note in passing that there is no suggestion that Ms Cox worked at a chemist or medical centre and nor was she employed at a building in Macquarie Street, Sydney.

119. In the sister’s last affidavit, she said that the reference in her affidavit of 28 November 2022 to “Sydney City” was an oversight and should refer to Liverpool. The address of Macquarie Street in Sydney should read Macquarie Street in Liverpool. In cross-examination, the sister was unable to explain the significant changes between her affidavits, “it was in Sydney, but it was in Liverpool, specifically. Because when you state "Sydney", there's many suburbs in Sydney, as you well know. So, I had to be more specific. I tried to help by being more specific rather than being broad.” This explanation was difficult to accept and I do not accept it. Fairly obviously, the sister was trying to align her affidavit with Ms Cox’s statutory declaration.

120. Finally, I prefer the evidence of the brother to the sister as to whether or not the brother signed the deed.

Orders

121. For these reasons, I make the following orders:

1. Dismiss Prayers 1 to 7 of the Summons.

2. Order the plaintiff to pay the defendants’ costs of the proceedings.

3. In the event that any party seeks a special costs order, a specified gross sum under section 94(4)(c) of the Civil Procedure Act 2005 (NSW) or any ancillary order as referred to in the Trustees’ closing submissions:

1. the party seeking such an order is to notify the other parties and the associate to Rees J within seven days of any orders sought, supported by any affidavits and submissions (limited to three pages);

2. any party against whom such an order is sought is to provide any affidavits and submissions in reply (limited to three pages) within seven days thereafter;

3. such application to be determined on the papers.

4. Direct the Prothonotary to refer this matter to the relevant law enforcement authorities.

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Decision last updated: 06 December 2023