George Stefanovski v Draga Stefanovski

[2009] NSWSC 1404

CITATION:	George Stefanovski & Anor v Draga Stefanovski [2009] NSWSC 1404
HEARING DATE(S):	07/12/09, 08/12/09, 09/12/09, 10/12/09, 11/12/09
JUDGMENT DATE :	18 December 2009
JURISDICTION:	Equity
JUDGMENT OF:	Forster J at 1
DECISION:	See paragraphs 138 to 141 of judgment.
CATCHWORDS:	Agreement between family members - consisted only of agreement to swap properties - did not also include other terms relating to leaving the parents' assets to son by will - agreement given effect to. - Allegation that parents contributed towards purchase price of property purchased by son and daughter-in-law - allegation is not made out - even if allegation had been made out, presumption of advancement not rebutted.
LEGISLATION CITED:	Conveyancing Act 1919
CATEGORY:	Principal judgment
CASES CITED:	Brown v Brown (1993) 31 NSWLR 582 Jones v Dunkel (1959) 101 CLR 298
PARTIES:	Plaintiffs: George Stefanovski and Sonia Stefanovski Defendant: Draga Stefanovski
FILE NUMBER(S):	SC 4098/2007
COUNSEL:	Plaintiffs: M.B. Evans Defendant: A.S. McGrath, G. Ng
SOLICITORS:	Plaintiffs/Cross-Defendants: John Michael Whitfield, Whitfields Defendant/Cross-Claimant: Haley Cathryn McEwen, Henry Davis York Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

FORSTER J

FRIDAY, 18 DECEMBER 2009

4098/07 GEORGE STEFANOVSKI & ANOR v DRAGA STEFANOVSKI

JUDGMENT

1 HIS HONOUR: These proceedings arise out of a most unfortunate set of disputes between, on the one hand, George Stefanovski and his wife Sonia, who are the plaintiffs and Mr Stefanovski’s mother, Draga Stefanovski, who is the defendant. As the parties and a number of the other persons involved in the disputes are members of the same family, I propose, without meaning any disrespect, to refer to each of them by their first names.

2 The disputes are now restricted to two properties, namely:

(a) the property situated at 86 Sylvan Ridge Road, Illawong (“the Illawong Property”) which is registered in the names of George and Sonia as joint tenants as to 52/100 ^th share as tenants in common with Draga, who is registered as owning 48/100 ^th share. Draga seeks a declaration that she is the legal and beneficial holder of a 48 per cent interest in that property and an order for the appointment of trustees for sale pursuant to section 66G of the Conveyancing Act 1919. By contrast, George and Sonia seek a declaration that the interest of Draga in the Illawong Property is limited to an equitable license entitling her to reside in the property for life or until such time as she may elect to live elsewhere, whereupon the whole of the equitable interest in the property vests in George and Sonia. They also seek consequential orders for the transfer to them by Draga of the legal title to the 48/100 ^th share of the Illawong Property;

(b) the property situated at 6/10 Austral Street, Penshurst (“the Penshurst Property”) which is registered in the name of George and Sonia as joint tenants. Draga seeks a declaration that she has an equitable interest in the Penshurst Property and seeks an order for the appointment of trustees for its sale as well. Draga’s claim is based on an interest she claims she had in a property located at 29 Hawtin Street, Templestowe, in the State of Victoria (“the Templestowe Property”) of which at all relevant times the registered proprietors were George and Sonia as joint tenants, and from the proceeds of whose sale the Penshurst Property was purchased. George and Sonia deny that Draga has any interest in the Penshurst Property or that she is entitled to an order for the appointment of trustees for its sale.

3 Until this aspect of her claim was abandoned in the course of final addresses, Draga had also claimed an interest in the property situated at Shop 6, 5-9 Belgrave Street, Kogarah (“the Kogarah Property”), the registered proprietors of which are George and Sonia as joint tenants. Draga’s claim that she has an equitable interest in the Kogarah Property was based on the grounds that it had been purchased by George and Sonia from the proceeds of sale of a property, in which she had had an interest, namely the property located at 56 Mill Street, Carlton (“the Carlton Property”). That property had formerly been owned by Draga and her now deceased husband, Krste, but had been transferred to George and Sonia in 1989. However, this aspect of her claim is no longer being pursued.

Background facts

4 Before dealing with the various contested issues, I record certain facts which are not substantially in dispute. In any event, I find them to be as follows.

Family background

5 Krste was born in Macedonia in 1922. Draga was also born in that country in 1933. They were married in 1950. They had four children, one of whom, a boy, sadly died at a very early age. Milica, their first daughter was born in 1951, Nada, their second daughter in 1952 and George in 1957.

6 In 1965 Krste came to Australia and was joined in 1971 by Draga, Nada and George. Milica remained in Macedonia to finish her university course. She subsequently married in Macedonia and also migrated with her husband to Australia in 1987 and has at all times since then lived in Melbourne.

7 Nada married Dimitri Stefanov (“Dimitri”) in 1973. They have two children, Jane (now Jane Stefanov-Trgetaric) and Stephen. Sonia and George became engaged in February 1982 and married on 30 January 1983. They have two children, Christopher (born May 1984) and Stephanie (born August 1987). Milica and her family have no direct role in this dispute.

8 Krste died in 2002.

The Carlton Property

9 The Carlton Property was purchased in 1971 by Krste and Draga as joint tenants. They financed the purchase partly using funds that Krste had saved during his years working in Australia, and the balance using the proceeds of a loan from the Commonwealth Savings Bank. The property was mortgaged to the bank and but the loan was repaid in about 1974. Notwithstanding the repayment of the loan, the discharge of the mortgage was not registered until March 1989. In circumstances with which I deal below, by Transfer dated 1 May 1989 the Carlton Property was transferred by Krste and Draga to George and Sonia as joint tenants for a stated consideration of $195,000. It is common ground that no actual funds passed hands.

10 The Carlton Property was ultimately sold by George and Sonia by contract dated 26 November 2002, which sale was completed on 20 December 2002. The proceeds of its sale were subsequently invested by George and Sonia in a property at Kogarah, but which is no longer the subject of any claim by Draga.

11 Immediately upon its purchase, the family, then consisting of Krste, Draga, Nada and George, moved into the Carlton Property. Nada moved out upon her marriage to Dimitri in August 1973, although their two children, Jane and Stephen, lived with Krste, Draga and George in the Carlton Property between 1977 and 1981 in the case of Jane, and between 1979 and 1981, in the case of Stephen. This arrangement enabled Nada and Dimitri to more efficiently operate their business in Melbourne.

12 Sonia moved into the Carlton Property upon her engagement to George in February 1982, and continued to live there with Krste, Draga and George until 23 December 1988, when the whole family moved from the Carlton Property to the Illawong Property. By then, George and Sonia had had two children, namely Christopher and Stephanie, who, as I have already recorded, were born in May 1984 and August 1987, respectively.

13 Apart from a short period of time when the family moved to Melbourne, the Carlton Property was their family home.

The Illawong Property

14 The Illawong Property is the principal subject of the dispute between the parties. It had been acquired on 24 January 1986 by George and Sonia as joint tenants for the sum of $57,000. At the time, it was a vacant block of land. The purchase was financed in part by a loan from the St George Building Society in the sum of $30,000, which loan was secured by mortgage. The mortgage was discharged in May 1987, that is to say about 16 months later.

15 A house was then built on the Illawong Property, a loan in the sum of $80,000 having been arranged through the Commonwealth Savings Bank in early 1988. The loan was secured by a mortgage registered in March 1988. Once the building was completed, the whole Stefanovski family moved from the Carlton Property to the Illawong Property on 23 December 1988. The mortgage on the Illawong Property was subsequently paid off and discharged in March 1989, that is to say about 12 months after it was registered.

16 By Transfer dated 1 May 1989, George and Sonia transferred their interest in the Illawong Property as to a 52/100^th share to themselves as joint tenants and as to a 48/100^th share to Krste and Draga as joint tenants, the two joint tenancies being registered as tenants in common between them.

17 The family continued to reside in the Illawong Property. After Krste’s death in 2002, Draga continued to live there with George, Sonia and their two children until October 2006, when she was admitted to hospital for elective knee surgery. For reasons which are in dispute between the parties, she has not returned to the Illawong Property, and has since been living with her granddaughter Jane, and her family. George, Sonia and their children continue to reside at the Illawong Property to the present day.

The Templestowe Property and the Penshurst Property

18 In the meantime, the Templestowe Property had been purchased in August 1983 for the sum of $57,000. It was registered in the names of George and Sonia as joint tenants. There is a dispute between the parties as to whether, and if so to what extent, Draga and Krste contributed to its purchase price. On Draga’s behalf, it is claimed that she and her late husband contributed somewhere between $35,000 and $50,000. George and Sonia deny that allegation.

19 The Templestowe Property has at all times been rented out, the rent being paid to George and Sonia. It was sold in March 1997 for the sum of $122,000, the net return of $117,968.02 having been deposited by George and Sonia to the credit of their account with the Commonwealth Bank.

20 By contract dated 13 May 1997 George and Sonia agreed to purchase the Penshurst Property. That purchase was completed on 26 June 1997. There is no dispute that the purchase was funded out of the proceeds of the sale of the Templestowe Property.

21 As I have already noted, Draga claims that she is entitled to an interest in the Penshurst Property and seeks to have trustees appointed for its sale.

The issues

22 As I see it, the principal issues that fall to be decided are the following:

(a) First : On what terms was the 48/100 ^th share in the Illawong Property transferred to Krste and Draga?

(b) Secondly : Were the conditions (if any) included in the terms on which the 48/100 ^th share in the Illawong Property was transferred satisfied?

(c) Thirdly : How much, if anything, did Krste and Draga contribute to the purchase price of the Templestowe Property?

(d) Fourthly : What consequences flow from any contribution made by Krste and Draga towards the purchase price of the Templestowe Property?

23 Before turning to dealing with those disputed issues, I must first say something about the witnesses.

The witnesses

24 The plaintiffs, namely George and Sonia, relied on affidavits sworn by themselves and on affidavits sworn by Mr Hristo Curlinovski and Mr Vasko Todorovski. The defendant, Draga, relied on affidavits sworn by herself, her daughter Nada, her son-in-law Dimitri and her grand-daughter, Jane. All of those witnesses were cross-examined. The only other persons who have sworn affidavits were the various interpreters, none of whom were cross-examined.

25 I propose to say something about each of the witnesses.

George

26 I did not find George to be a reliable witness. He was prone to making absolute statements and unqualified exaggerations in circumstances where they were clearly unjustified. In the course of Draga’s submissions, Mr McGrath of Counsel, who with Mr Ng appeared for her, provided me with a detailed list of the many matters in respect of which George had consistently overstated his evidence, or had refused to acknowledge matters which were abundantly clear.

27 Examples included his evidence that he paid for all of his parents’ clothes, bedding and linen, footwear, and optical, dental and doctors’ expenses, that he took his parents to all of their medical appointments, that he paid $10,000 in respect of Draga’s knee replacement and $30,000 for his father’s funeral expenses. All of this evidence was shown to be incorrect. There were many other examples given. In particular, in a somewhat bizarre fashion, George denied that his parents played any, or at least any significant, role in looking after his infant children while he and Sonia were working. I reject that evidence, as George’s parents clearly played an important role in looking after their grandchildren.

28 I also found a lot of the other evidence he gave, for example in relation to discussions he claimed he had with his mother in 2007, to be inaccurate and its timing wrong. I was left with the impression that both his affidavits and his oral evidence reflected a careless and bombastic approach to giving evidence.

29 Like many of the other members of the family, I found that George sees everything in terms of black and white. He is convinced that his views are correct and cannot see how conflicting views might also be held.

30 However, I did not gain the impression that he was intentionally telling untruths, although at times he came close. Mostly, I came to the view that he had persuaded himself of the overall righteousness of his position and stated matters in absolute terms, having also persuaded himself that any qualifications to those absolute terms were minor and therefore irrelevant.

31 For those reasons, I have treated his evidence with care.

Sonia

32 Sonia’s role in the matters the subject of these disputes was more limited than that of George, to whom Sonia left all business decisions. I found her to be a more careful witness than George, and as being more willing to make concessions where concessions were called for. I gained the impression that, except in one respect, she was trying to tell the truth, at least as she saw it. Overall, subject to treating it with care, I am prepared to accept her evidence.

33 The one area where I found her evidence to be suspect was in relation to her and George’s relationship with Draga, particularly after Krste’s death in 2002. She attempted to give the impression that the relationship, particularly between her and Draga, was totally trouble free, without any tension, argument or harsh words.

34 I found her description of that totally harmonious relationship between her and her mother-in-law to be exaggerated. I accept that there was a great deal of affection between the two, particularly in the early years when Draga acted as a surrogate mother to Sonia, and when Sonia greatly appreciated that role and reciprocated that affection. However, I accept the evidence of Draga and her various witnesses that over time, there developed a degree of friction between the two women.

35 My finding of the existence of such friction is not to be taken as a criticism of either Sonia or Draga. Some degree of friction seems inevitable between two people who share a home for over 24 years. The respect in which I am critical of Sonia’s credit is that she denied the existence of any such friction.

Hristo Curlinovski and Vasko Todorovski

36 Mr Curlinovski witnessed the transfers of the Carlton Property by Krste and Draga to George and Sonia and the transfer of the 48/100^th share of the Illawong Property by George and Sonia to Krste and Draga. Mr Todorovski witnessed Draga Stefanovski’s will of 25 May 1989. Although Mr Curlinovski became totally confused in the witness box and departed from the contents of his affidavit, I do not attribute such departure to any dishonesty on his part. I found that both he and Mr Todorovski were attempting to tell the truth. However, their recollections of the circumstances were particularly limited and their preference for George and Sonia’s case was obvious.

Draga

37 Draga is a lady of 76 years of age with multiple illnesses. She presents as someone who is not at all well and is rather confused. However, she holds very firm views about her son, and particularly about Sonia. I gained the impression that so far as she is concerned, everything that has gone wrong in the relationship is the result of Sonia’s conduct.

38 So far as her substantive evidence is concerned, I do not regard it as particularly reliable. She has a very poor recollection of events and I am left with the impression that I cannot rely too heavily on the detailed narration of events contained in her affidavits. Again I did not consider that she was intentionally telling untruths, but her strong views and prejudices, as well as her anger at George and Sonia (whether or not objectively justified) was such as to cast serious doubt on her reliability as a witness.

Nada

39 Likewise I did not consider Nada to be a particularly reliable witness. She was also particularly hostile towards her brother George and even more so towards Sonia. She clearly blames them for the unhappiness and stress inflicted on her mother, towards whom she is very protective.

40 I found her to be quite outspoken and robust in her views and opinions, and she left me with the impression that she would do or say anything to assist her mother in these proceedings. I do not consider that she was intentionally lying, but she, like most of the other witnesses, had convinced herself of the righteousness of the position that she had taken, and her evidence was coloured accordingly.

Dimitri

41 The comments I make of Nada also apply to Dimitri. He too has taken a very firm dislike towards George, whom he blames for excluding Draga from the Illawong Property. The further impression I gained was that there had been ill feelings between Dimitri and George quite possibly for some time.

42 Dimitri was not able to give any direct evidence in relation to the circumstances leading to the break up of the relationship between Draga and George and Sonia, but simply adopted a very negative view of George and Sonia and concluded that George and Sonia were at fault in that break-up. Again, I must consider his evidence in the light of his antagonism towards George.

Jane

43 Draga has been living with Jane and her husband and young family since Draga came out of hospital in the latter part of October 2006. Like her mother and father, Jane has formed a very adverse view of George and Sonia, whom she blames for not taking Draga back to the Illawong Property.

44 Despite her strong views, I found Jane to be a reliable witness, who was willing to answer questions truthfully and to the best of her knowledge.

45 My only qualification to the foregoing is that she, like her mother and father, kept repeating the mantra that the reason why Draga had not returned to live at the Illawong Property was that George did not come to collect her. Yet the evidence is clear that George did ask Draga on a number of occasions to return to the Illawong Property, but it seems that Jane, like her parents, considered that George had to do something more. I am not sure whether there was some formality that Draga and Nada’s side of the family expected George to observe or whether there was some other, unexplained reason why Draga declined to return to the Illawong Property. Most probably it was simply her antagonism towards Sonia. In any event, I found that particular aspect of Jane’s evidence to be somewhat puzzling. Otherwise, I am prepared to accept the balance of the evidence that she gave.

Adequacy of Witnesses

46 Mr McGrath submitted that I should draw a Jones v Dunkel inference from the fact that neither Christopher nor Stephanie, George and Sonia’s children, were called by them as witnesses. Christopher is now 25 years old and his sister Stephanie is 22. Both are perfectly capable of giving evidence. He submitted that they could have given evidence about the relationship between Krste and Draga on the one hand and George and Sonia on the other, and that I should infer that their evidence would not have assisted George and Sonia’s case.

47 Mr Evans of Counsel, who appeared for George and Sonia submitted that I should draw no such inference particularly having regard to the fact that these are family disputes and George and Sonia’s reluctance to draw their children into a partisan position relating to their grandmother would have been unnecessary and indeed unfortunate.

48 I accept Mr Evans’ submission. As far as I can tell, there is still a great deal of affection between Draga and George and Sonia’s children. Indeed, there is some evidence to suggest that Draga has changed her will so as to leave her estate to Christopher and Stephanie.

49 In any event, the central issues in this case, as will appear below, relate to events that took place in 1983 and 1984 (in relation to the Templestowe Property) and to the events of 1986 to 1989 (in relation to the Illawong Property). At those times, Christopher and Stephanie had either not yet been born, or were very young children. They could not have been able to give evidence about those events for either party. True it is that they might have been able to give evidence relating to the events of more recent times, but I do not consider that those matters were of such importance as would justify my drawing the inference sought.

50 Even if I were to draw any inference, such inference could only relate to the events of the past few years, not in relation to the events that took place earlier.

The first issue: On what terms was the 48/100 ^th share in the Illawong Property transferred to Krste and Draga?

51 As I have already recorded, Krste, Draga, George and Sonia executed two transfers in the presence of the same witness, presumably on the same occasion. Those transfers, both of which now bear date 1 May 1989, were as follows. By one transfer, Krste and Draga transferred the Carlton Property to George and Sonia as joint tenants for the stated consideration of $195,000. By the other transfer, George and Sonia transferred the Illawong Property to Krste and Draga as to a 48/100^th share as joint tenants and to George and Sonia as to a 52/100^th share as joint tenants, all as tenants in common. The consideration was likewise stated to be $195,000.

52 The uncontroverted evidence is that George and Sonia paid the stamp duty on both of the two transfers, being $5,378.00 on each, and that no actual monetary amounts changed hands.

53 It is also clear that on 25 May 1989, that is to say shortly after the date which the transfers bear, both Krste and Draga executed wills in which they left the whole of their estates to George and appointed him as their executor. Nevertheless, when Krste died in 2002, George did not receive Krste’s interest in the Illawong Property. This is because, as Krste and Draga held their undivided 48/100^th share as joint tenants, Krste’s share passed to Draga by her survivorship, independently of the terms of the will. Accordingly, the title to the Illawong Property is presently held as to a 52/100^th share by George and Sonia as joint tenants, who hold that interest as tenants in common with Draga, who holds the outstanding 48/100^th share.

54 The Carlton Property contained three bedrooms. One bedroom was occupied by George and Sonia, another by Krste and Draga. Initially, when George and Sonia’s children were very young, at Draga’s insistence they slept in their grandparents’ room. George and Sonia were not terribly pleased with this idea, but acceded to Draga’s request, although it must have been clear to them (if not also to Draga and Krste) that this situation would have to be temporary. Clearly Christopher could not sleep with his grandparents once he became older. Also by 1986 or thereabouts I expect that Sonia and George had started thinking of increasing their own family, as the birth of Stephanie in August 1987 demonstrated.

55 As I have earlier noted, George and Sonia purchased the Illawong Property in 1986, when it was still a vacant block. Their plan was to build a larger house on it, one that could comfortably accommodate not only George, Sonia and their growing family, but also Krste and Draga. There is no doubt that George and Sonia wanted Draga and Krste to move with them to the Illawong Property. Krste was initially not keen to make the move to Illawong, having lived in the Carlton Property for over 15 years and having become comfortable with his surroundings. Draga however was far more willing to move, given that such a move meant that she would be continuing to live with her family, especially her grandchildren. However, there was never any serious doubt that the family unit, consisting of Krste, Draga, George, Sonia and their children, would move together into their new home.

56 I should also say something about the evidence relating to Macedonian customs. There was quite a volume of evidence given on this subject matter, much of it conflicting. I was unable to draw any firm conclusion on what those customs are and the extent to which they were observed by this particular family, who had to some extent left their Macedonian roots behind, and had been living in Australia for some considerable time.

57 Nevertheless, I was able to draw the conclusion that certainly as at 1989 and at all times before then, it was assumed by each of Krste, Draga, George and Sonia that Krste and Draga would live as part of George and Sonia’s family for the whole of their lives. It was also assumed that the family members would be of mutual assistance to each other. Perhaps more in accordance with the traditions of Macedonia than those of contemporary Australia, it was assumed that the grandparents would assist in looking after the children, and would thereby free up the parents to earn a living and provide for the grandparents for the rest of their lives.

58 It was certainly assumed by Krste and Draga that George and Sonia would look after them and it was equally assumed by George and Sonia that Krste and Draga would leave all of their assets to George upon the death of the survivor of them. I accept the evidence given by George that both Krste and Draga had said to him several times prior to the building of the house at Illawong words to the following effect:

“Son you are looking after us so everything that we own will be yours in return.”

59 Draga’s evidence is much to the same effect, although her evidence has a slightly different emphasis. According to her, from time to time Krste and she had said words to the following effect:

“Son, if you always look after us, everything will be yours in return.”

60 George accepted that words to that effect were also said.

61 On an analysis of the two versions, the difference between them is that according to Draga, the statement that Krste and Draga would leave all of their assets to George was always conditional upon George looking after them. According to George’s primary evidence, his parents’ promise was unconditional. However, the actual words used in the two versions are very similar. In my opinion, it is unrealistic to attempt to distinguish between them in any practical sense, given that all parties always assumed both that George and Sonia would look after his parents and that they would leave all of their estate to George. In other words, given the assumptions made by all parties, the distinction between the evidence given by the two witnesses is largely a distinction without a difference.

62 It was in that context that the discussions relating to the Illawong Property took place between the parties. In my view, it was unnecessary for them to attempt to tie into the proposed real estate transaction anything about George and Sonia looking after George’s parents or of George’s parents leaving everything to George. It was at all times assumed that all of that would happen. There was no need for the parties to take those matters into account when dealing with the Carlton and the Illawong Properties.

63 While the family had been living in the Carlton Property, which was registered in the names of Krste and Draga, it was believed by all parties that Krste and Draga’s entitlement to the pension was not affected by their ownership of the house in which they lived. Whether, as Draga recalls, it was George who first raised the issue of the potential loss of pension, or whether, as George recalls, it was his father who did so, it is clear that the family came to believe that if they moved to the Illawong Property, which was registered in the names of George and Sonia, and if the parents retained ownership of the Carlton Property, Krste and Draga’s entitlement to the pension would be seriously jeopardised. On the other hand, they also came to believe that if Krste and Draga lived in a property of which they were either wholly or in part the registered proprietors, the problem with their entitlement to the pension would not arise.

64 In that respect, I prefer the evidence of Draga to the effect that it was George who raised the issue of the risk to Krste and Draga’s pension. I accept Draga’s evidence that George had frequently said to Krste and herself words to the following effect:

“ You shouldn’t have property in your name. It would be better if you transferred everything to me so that you can keep your pension; otherwise it will be cut back if the government knows you own property but don’t live there.”

65 In my view, George was much more likely to be aware of matters such as his parents’ entitlement to pensions than was Krste, whose ability to speak and read English was very limited, and who was financially less sophisticated than his son. Further, George is much more likely than Krste to have raised the suggestion that the Carlton Property be transferred to him and Sonia.

66 Having made the decision that the family would move from the Carlton Property to the Illawong Property, a solution had to be found to avoid this problem. However, the central issue calling for my determination is the basis upon which the 48/100^th share in the Illawong Property came to be transferred to Krste and Draga. According to Draga, it was the solicitor arranging the transfer of the Carlton Property who suggested the transfer of a share of the Illawong Property to Krste and Draga. According to Draga, in or about late April 1989 she, Krste, George and Sonia attended at a solicitor’s office at Kogarah, at which the following words were said:

George (to the solicitor): “Mum and dad are going to give Carlton to me so that they can keep their pension and we can look after them so they won’t have to worry.”

Solicitor: “George, you’ve been given everything, your parents are really helping you out a lot. It would be much better if you gave them something and included them in your Illawong property. Since they live there, it won’t affect their pension. You’ll say that you like them, but you don’t know whether your wife will continue to like them. Maybe she’ll want them out and they’ll have nothing. It’s not fair to do that.”

[Emphasis added]

67 According to George, the concept of transferring a share of the Illawong Property to Krste and Draga was first raised in or about 1987. According to George part of a conversation that took place in 1987 were in the words to the following effect:

Krste: “This house (meaning the house at 56 Mill Street, Carlton) is going to be yours eventually anyway because you are looking after us and that can be your entitlement after I die. We may as well transfer it now whilst I still have my wits about me so you do not lose any benefits.”
George: “If that is what you want. I’ll will (sic) sign half of the house that I am going to build to you and mum so you do not feel deceived or mislead (sic) .”

68 George went on to say in his affidavit that he arranged for his parents to hold a 48/100^th share of the Illawong Property because he wanted them “to regard my home as their home and I felt that if they had a share in the house they would feel more comfortable living in our house” [Emphasis added].

69 In his subsequent affidavit George deposed that his father had prior to 1989 told him that he wanted to transfer the Carlton Property to George and Sonia before they moved into the new home. George also deposed that he had decided that he wanted “to pass half of the new home to dad and mum”. He says that although his father told him that there was no need for him to do so, he had replied to his father in words to the following effect:

“ I want to give you half of the new household shares Dad, so you will know in your heart that you deserve my continual respect for your self-worth and Mums.”
[Emphasis added]

70 In his evidence, George claimed that his reason for doing so was that he wanted his parents to feel comfortable that they had an interest in the property where they lived.

71 In my opinion it was no coincidence that the consideration stated in both transfers was exactly the same, namely $195,000, and that no monetary consideration changed hands. According to the evidence given by George (which I accept) he obtained appraisals from real estate agents as to the values both of the Carlton Property and the Illawong Property. He was informed that the Carlton Property had a value of about $195,000 and that the Illawong Property a value of about $500,000. There were, however, two sets of stamp duty to pay as well as legal fees and other expenses. I find that the 48/100^th share was calculated to reflect the value of the Carlton Property as a proportion of the value of the Illawong Property, after taking these expenses into account.

72 In my opinion, the transfer of the 48/100^th share in the Illawong Property was the result of discussions between Krste on behalf of himself and Draga, and George on behalf of himself and Sonia. It was not raised ad hoc by the solicitor handling the transaction. Draga’s ability to understand English leaves me in considerable doubt about her evidence. More likely, the issue had been given previous thought.

73 First, given George’s firm belief that his parents would leave him all of their property upon their deaths, and his enthusiasm for having the Carlton Property transferred to him, I do not accept that George would have volunteered to transfer what was a very sizeable interest in the Illawong Property to his parents, unless he had to do so. Such transfer was clearly not required in order to protect his parents’ pension entitlement. That was taken care of by their transfer to him and to Sonia of the Carlton Property. Nor was it necessary simply to make his parents comfortable or secure in the Illawong Property. The family had lived together as such and in harmony for many years and as at 1989, there was no suggestion that that state of affairs would not continue until his parents’ death.

74 Secondly, the transfer of the Illawong Property resulted in a liability to stamp duty in a further amount of $5,315.00. George did not strike me as the sort of person who would lightly part with such a large sum of money when he had no need to do so.

75 Thirdly, Krste had worked hard all of his life and had lived in the most parsimonious manner. However, as at 1989 or thereabouts, he had little to show for it. Apart from whatever savings he and Draga might have accumulated they had nothing other than the Carlton Property. Although he had a great deal of affection for his son and assumed that he and his wife would always be looked after by George and Sonia, I doubt that he would have been prepared to cause Draga and himself to give away their one and only substantial asset for nothing more than George and Sonia promising to do what they had always promised to do, namely to look after them into their old age.

76 Fourthly, I find it puzzling why the interest in the Illawong Property transferred to George’s parents had been so carefully calculated. If the purpose of the transfer was purely to provide George’s parents with some form of emotional protection or comfort, it would not have been necessary for the percentage to reflect, with some obvious degree of precision, the same percentage as the adjusted value of the Carlton Property bore to the value of the Illawong Property. A transfer of, say a 10 per cent interest would probably have provided his parents with the same feeling of comfort as a transfer of a 48 per cent interest, but at a much lower cost so far as stamp duty was concerned. Alternatively, a 50/100^th share might have given them greater psychological comfort. Why then the arithmetical precision, if it was not to reflect the values of the assets exchanged?

77 Fifthly, the language utilised by the parties, whoever’s version is accepted, was always in terms of giving, passing or transferring a share in the Illawong Property to Krste and Draga. It is nowhere suggested that the transfer is to be anything less than a complete and effective transfer in fee simple.

78 Finally, there would have been no reason why George would have resisted any request that Krste may have made for the transfer to him and Draga of a share of the Illawong Property that reflected the value of the Carlton Property. George must have assumed that in due course all of his parents’ property would be left to him. It probably did not cross his mind that any other outcome was possible. In my judgment, that is why it was only in early 2007, when for the first time he became concerned that Draga may not leave all of her property to him after all, that he requested his mother to transfer into his name and that of Sonia her interest in the Illawong Property. It was not until then that he considered even as a possibility that all of her property would not ultimately be left to him.

79 For those reasons, I find that the transfer of the 48/100^th share in the Illawong Property was transferred by George and Sonia to Krste and Draga in consideration of the transfer by Krste and Draga to George and Sonia of their interest in the Carlton Property. At all times after the exchange, George and Sonia have enjoyed and have received the income from the Carlton Property and from the Kogarah Property which they acquired from the proceeds of the sale of the Carlton Property. They became the absolute owners, both at law and in equity of the Carlton Property. In my view, Krste and Draga likewise became the absolute owners, both at law and in equity, of the 48/100^th share in the Illawong Property.

80 Mr Evans conceded in his opening that his client’s case turned on whether or not there was an agreement between the parties that Krste and Draga would leave all of their assets to George and Sonia. He submitted that I should not treat the agreement between the parties relating to the transfer of the two properties as standing alone. He submitted that the agreement between the parties also included a number of other terms including that Krste and Draga would be entitled to live with George and Sonia in the Illawong Property for the balance of their lives, that they would be entitled to be looked after and taken care of throughout that time, and that George and Sonia, by way of assurance to Krste and Draga of their said obligations, but only for that purpose, would transfer the 48/100^th share of the Illawong Property to Krste and Draga. Mr Evans submitted that it was also a term of the agreement that Krste and Draga would leave their whole estate to George. He submitted that this agreement was carried into effect and remained in effect until early 2007 when Draga sought to resile from it by moving out of the Illawong Property, and I presume also by making a will in favour of someone other than George.

81 With respect, I do not accept Mr Evans’ submission. In my opinion, the agreement reached between the parties and given effect to by the execution of the two transfers was limited to the agreement to exchange the Carlton Property for an interest in the Illawong Property in order to enable Krste and Draga to continue to draw their pensions notwithstanding their move to the Illawong Property. As I have said earlier, it was always the assumption of all parties that Krste and Draga would continue to live with, and be cared for by, George and Sonia for the rest of their lives, and that they would leave their assets to George. It was therefore not necessary to include in the agreement between the parties any terms relating to that aspect of their relationship. It was an assumption which they all made, but which was not directly related to the more limited agreement relating only to the exchange of interest in the two properties. In the same way as George and Sonia obtained an absolute interest in the Carlton Property, so Krste and Draga obtained an absolute interest in the 48/100^th share in the Illawong Property.

82 I do not consider that the interest so obtained by Krste and Draga was subject to any trust in favour of George and Sonia. Nor do I consider that there was any binding agreement between the parties to the effect that George and Sonia would permit Krste and Draga to live with them for the whole of their lives, to be looked after by George and Sonia in consideration for any agreement by Krste and Draga to leave their assets to George and Sonia. While, as I have said before, it was the expectation of all parties that all of this would happen, that is entirely different from there being a contractually binding agreement to the same effect. Accordingly, Draga’s claim to a 48/100^th share in the Illawong Property succeeds.

83 In reaching this conclusion, I have not overlooked the fact that Krste and Draga made wills in favour of George on 25 May 1989, a few days after the date that the transfers bear. However, there is no evidence before me as to what their previous wills provided (if indeed they had made wills previously). Also, their visit to the solicitor may have been the impetus to review their testamentary intentions, and in any event, making wills to that effect is as consistent with the expectations and assumptions of all of the parties as it is with compliance with their contractual obligations as contended for by George and Sonia.

The second issue: Were the conditions (if any) included in the terms on which the 48/100 ^th share in the Illawong Property was transferred satisfied?

84 Having regard to the conclusion I have reached above, this issue does not arise. However, should this matter go further, I should record my findings on this second issue as well.

85 If, contrary to my findings, there was in force an agreement between the parties that required Draga to leave her interest in the Illawong Property to George and Sonia provided that they continued to permit her to live there and to look after her for the rest of her life, the question that the parties addressed before me was whether George and Sonia have met those conditions so as to entitle them to having Draga leave all of her assets to them on her death.

86 There was a great deal of evidence given in relation to the events following Draga’s knee replacement in early October 2006. I find that what occurred was that at the time Draga went into hospital for her knee replacement, George and Sonia had commenced to effect renovations to the Illawong Property, including renovations to the upstairs bathroom which Draga had been using. According to George and Sonia the renovations were undertaken to make it more convenient for Draga to use that bathroom. According to Draga and Nada’s side of the family, the renovations were undertaken so as to improve the Illawong Property and hence to increase its value.

87 I find that both factors were present in the minds of George and Sonia when deciding to effect those renovations. They were intended both to assist Draga and to improve the property and thereby to increase its value. They were certainly not undertaken with a view to making life more difficult for Draga, even if on an interim basis that was their effect.

88 After about a week in hospital following her knee replacement, Draga went into another facility for the purposes of rehabilitation. That rehabilitation took another five days or so. At the conclusion of that rehabilitation, she was ready to leave hospital, having been told by the medical staff that she should do so, as her chances of infection were increased by staying. At that stage, the renovations on the Illawong Property had still not been completed. Also Draga had been vomiting and was otherwise unwell. In the circumstances, it was decided that she would stay with her granddaughter, Jane and her family until the renovations had been completed. At that stage, it was thought that the renovations would be completed within the next few weeks.

89 In any event, as Jane is a physiotherapist, she was in a position to give her grandmother treatment on her knee for the next little while to assist the healing process.

90 For the next two weeks or so after Draga left hospital, George and Sonia visited her at Jane’s home most days. Thereafter the frequency of their visits decreased.

91 It is not clear on the evidence why Draga’s attitude to George and Sonia cooled so markedly from about that time. Perhaps it was a function of her age; perhaps it was the result of some offence taken to something said by George or Sonia. There is no doubt that some friction had arisen between Draga and Sonia, and by the time she came to give evidence, Draga’s anger was directed principally at Sonia. For whatever reason, Draga refused to return to the Illawong Property notwithstanding what I find were invitations extended by George and Sonia that she do so. Those invitations remained on foot at all times, and I accept George and Sonia’s evidence to the effect that she is still welcome to come back at any time.

92 The reasons advanced on behalf of Draga for her refusal to return do not strike me as reasonable. Draga was clearly upset at having to go to Jane’s home after her stay in hospital. She also became angry and upset at George and Sonia for showing her wedding photographs and movies of one of Milica’s daughters, Emily, who was at the time terminally ill. For some reason that I do not fully understand, Draga blamed George and Sonia for her not having been invited to the wedding. Draga was also very upset at George for not attending at the cemetery on Memorial Saturday, on 26 May 2007, when it had been customary for him to attend in honour of his late father. She was even more upset when, on the way back from the cemetery, she, Nada and Jane stopped by at the Illawong Property only to find that Draga’s key did not open the front door. She considered this to be an intentional exclusion of her from the Illawong Property, and has been unable or unwilling to accept the explanation given by George and Sonia (which I accept) to the effect that the lock had been changed because the key had broken into it.

93 Despite this perfectly credible explanation, Draga continues to consider that event to be an indication that she is no longer welcome in the Illawong Property. I do not accept that this was George and Sonia’s intention, and I place no significance on the fact that they had not given her a key by the time she came by, unannounced and unanticipated, on Memorial Saturday.

94 Admittedly, George did not improve matters when he and Sonia took his mother out to lunch on Mother’s Day on 13 May 2007, and he asked her to transfer all of her assets to him. Nor did George endear himself to his mother by causing, quite unexpectedly, letters to be written to Draga by his solicitors, demanding the transfer of her interest in the Illawong Property, and subsequently threatening legal proceedings if she continued to refuse to do so.

95 I consider that the demand for the transfer of Draga’s interest in the Illawong Property, as well as his giving instructions to his solicitors to write those letters, reflect a precipitate emotional reaction from George, which is consistent with his mercurial and emotional personality. He maintained in the witness box that his purpose in causing those letters to be written was to provoke some sort of dialogue with his mother, which he had been unable to effect. He says, and I accept, that he has been attempting to make contact with his mother since that time, but that she has refused to have any contact with him.

96 I accept that George and Sonia are prepared to have Draga back in their home. I also accept that after what has happened, Draga is not prepared to take up that invitation. However, I do not consider, contrary to the submissions made on behalf of Draga, that she has been excluded from the Illawong Property, or that she has been refused being looked after for the rest of her life.

97 In other words, in my opinion, if there were conditions imposed on Draga having to leave the Illawong Property to George and Sonia, then those conditions have, at least so far, been satisfied.

98 Even in that case, however, I would not be prepared to grant the relief sought by George and Sonia. On their own case, the agreement for which they contend is not at an end. They are prepared to have Draga back. The highest they can put their claim is that Draga’s obligation is to leave her assets to George upon her death. Although Draga has apparently now made a will in favour of someone other than George, she is of course free at any time to revoke that will and to provide for her assets to be left to George in accordance with the agreement contended for by George and Sonia. The agreement between the parties, even as advanced by George and Sonia, does not require Draga to live with George and Sonia in the Illawong Property. It merely entitles her to do so. Even if George and Sonia leave open the invitation for her to return, Draga is entitled to choose not to do so. She would only be in breach of her obligations under the agreement contended for by George and Sonia if she died without leaving her assets to George. Until that time, she would not be in breach of her obligations under the agreement. It might have been otherwise if she had indicated, unequivocally, that she would not leave her assets to George. There might then be a case of an anticipatory breach of contract which constituted a repudiation. However, there is no evidence before me that Draga has done that. Indeed, there is no direct evidence before me that she has in fact changed her will in favour of Christopher and Stephanie, and even if she has done so, she has given no unequivocal indication that she does not propose to change it back so as to leave everything to George.

99 Thus even accepting the form of the agreement contended for on behalf of George and Sonia, I would not be prepared at this stage to grant the relief sought by them.

The third issue: How much, if anything, did Krste and Draga contribute to the purchase price of the Templestowe Property?

100 The evidence relating the circumstances giving rise to the purchase of the Templestowe Property is very limited. In some ways that is not surprising, given that it occurred over a quarter of a century ago in August 1983. Not only that, but I am informed by Counsel for the parties that much of the documentation, including the records of Victoria’s Registrar of Titles, have been lost or destroyed by fire. Records of the relevant solicitor and financing institution have also been destroyed in the normal course of their respective practices.

101 According to Draga, at some time prior to August 1983, Krste said to George, while holding out his passbook, words to the effect of:

“Here’s some money to buy a house in Melbourne. You can take it, we trust you. We can have a property in Melbourne so if Sonia wants to live down there, we can all go there.”

102 Draga added in her affidavit that she intended that she and Krste would be joint tenants with George and Sonia in any house acquired in Melbourne.

103 In her oral evidence, Draga had very limited recollection of those events. She said that she could not remember whether there had been any withdrawals from the bank account in which there had been between $35,000 and $50,000.

104 That is hardly surprising, given that Draga left financial matters to Krste, and her own memory was clearly not as good as it once must have been.

105 Dimitri also gave evidence concerning the purchase of the Templestowe Property. He recalls a discussion involving Krste, Draga, George, Sonia, Nada and himself in the course of which Krste said words to the effect of:

“We’ll buy a house then. I’ll put it in George’s name and we can all live in Melbourne .”

106 According to Dimitri, on a subsequent occasion Krste produced his bank book and said:

“We’ve saved this much money. ”

107 He also said that at one point of time, after the Templestowe Property had been identified, George had said words to the effect of:

“My father’s given me the money. Now we need to get a loan.”

108 He also gave evidence that he visited the bank and the solicitor’s office with George, that he witnessed the mortgage for George and Sonia at the solicitor’s office and that “it was $10,000 or less”.

109 Nada gave evidence much to the same effect. She also recalls a conversation involving the whole family in about 1982 in the course of which Krste said to George words to the effect of:

“Here’s the money. Go and buy the property in Melbourne so that the family can be all together.”

110 She also gave evidence that on another day in or about 1982 she was speaking to her father on the telephone on which occasion she asked him how much money was in the bank. She said that Krste told her that there was either about $34,000 or $36,000 (Nada could not remember which).

111 She also gave evidence that after the Templestowe Property had been located, George said to her words to the following effect:

“Father is giving me the bank book to buy the property .”

112 Finally, she also said that she heard George speaking with the real estate agent to whom George said:

“That’s my father’s money, and the rest I have to borrow.”

113 George has denied the evidence given by Draga and her witnesses. He has maintained that the Templestowe Property was purchased with funds of $15,000 which he had saved in his Commonwealth Bank account, $4,000 that he and Sonia had received in wedding gifts, $2,500 that they had received on their engagement and a grant of $1,600, they being first home buyers. According to the evidence given by George, the balance of the $57,000 purchase price was borrowed by Sonia and himself from the Commonwealth Savings Bank, which had given them a facility of $40,000, but of which they only utilised $35,000.

114 As I have said, there are no documentary materials available to verify either version of events.

115 The only objective evidence that is available is that the loan to the Commonwealth Savings Bank was repaid by 5 December 1984, that is to say about 17 months after the loan was drawn down. The mortgage over the Templestowe Property was then discharged.

116 It is important to note that it is not contended by Draga that she and Krste assisted in the repayment of any loan taken out with the Commonwealth Bank. The case put on her behalf is limited to the contention that the contribution made by her and Krste was made at the time of the purchase of the Templestowe Property directly towards the purchase price.

117 Mr McGrath submitted that George’s evidence should be rejected and the evidence of Draga and her witnesses should be accepted and that I should find that an amount of somewhere between $35,000 and $50,000 was paid by Krste and Draga towards the purchase price of the Templestowe Property. He submitted that George was an unsatisfactory witness and his evidence should not be accepted. He specifically disputed George’s evidence that he and Sonia had savings in the amount claimed and pointed to evidence suggesting that in his youth, George had not been a person likely to save money, but was more likely to spend whatever he earned. He also pointed to evidence to the effect that for a considerable part of the 1970s, George was required to give all of his earnings to his father in exchange for only a small amount of pocket money.

118 Mr McGrath placed emphasis on George’s evidence that loan repayments “were monthly were (sic) $600.00 per month”. He also placed particular emphasis on the fact that the loan had been repaid in a period of some 17 months between August 1983 and December 1984, and submitted that in 17 months, the $600.00 monthly loan repayments would have amounted only to $10,200, which was close to the amount recalled by Dimitri as the amount borrowed by George from the Commonwealth Bank. He drew attention to the difference between that amount and the amount of $35,000 that George claimed had been drawn down for the purchase.

119 Mr McGrath submitted that in light of the foregoing matters, I should reject George’s evidence and find that Krste and Draga contributed the major part of the purchase price of the Templestowe Property.

120 However, despite those submissions, I am not satisfied that Krste and Draga contributed to the purchase price of the Templestowe Property.

121 First, I start with the state of the register. It was George and Sonia who became the registered proprietors of the Templestowe Property, indicating, at least on a prima facie basis, that they were the owners not only at law but also in equity. Although Krste trusted George by and large, I consider he would have been likely to require to have himself and his wife shown on title if he and Draga had contributed the substantial part of the purchase price.

122 Secondly, there is no direct evidence that Krste and Draga’s funds were in fact used to purchase the Templestowe Property. While I accept that there were substantial funds in their bank account, and brave words were said to impress members of the family of Krste’s willingness to spend their money, the making of such statements does not establish that those funds were in fact paid towards the purchase price. It is not clear what mechanisms were used to withdraw those funds from a bank book maintained presumably at a Sydney branch, to fund a purchase in Melbourne. For example, presumably withdrawal forms had to be signed by Krste and Draga. There is no evidence of their doing so at any time.

123 Thirdly, there is no rational explanation as to why it would have been necessary to borrow an amount of less than $10,000 (as Dimitri recalls) if there was available an amount of between $35,000 and $50,000 in Krste and Draga’s bank account, and if George and Sonia had about $23,000 of their own funds available. I might add that I am somewhat sceptical about Dimitri’s evidence in this respect. Even now, his command of English is limited. He had to give his evidence through an interpreter. I suspect that in 1983, it was even more limited. He may have seen a figure that he now recalls was less than $10,000, but he may not have understood the context in which that figure appeared. Furthermore, if the loan was in the form of a housing or investment loan (as may well have been the case in relation to a loan from the Commonwealth Savings Bank) the mortgage might well have been an “all moneys” mortgage, with the principal sum not shown on the front page.

124 Fourthly, I accept George’s evidence that substantial amounts of $1,500 to $2,000 per month were repaid by him and Sonia during the period that the loan was outstanding. Strange as this may sound with most other people, the Stefanovski family appears to have been particularly averse to paying interest and went to extraordinary lengths to repay in the fastest possible way any loans taken out by them. That is what Krste and Draga did in relation to the loan they initially took out on the Carlton Property in 1971, which loan they repaid in about 1974. That is also what George and Sonia subsequently came to do in relation to the Illawong Property, in respect of which they repaid the sum of $30,000 to the St George Building Society in 16 or so months, and subsequently repaid the sum of $80,000 in about 12 months. In that light, the repayment of $35,000 in 17 months is by no means beyond the realms of possibility.

125 Fifthly, this conclusion is supported by noting the family’s activities during that 17 month period. George had started selling flowers by no later than 1982 and possibly earlier. Sonia also began to help him not long after their engagement. Draga had retired around 1975 and Krste did the same in 1979. Each was receiving a pension. That, however, did not stop Krste and Draga helping their son with his flower selling business. I find that both of them did so for some or all of the 17 month period in question. They were very hard-working people and I cannot imagine that they just sat in their house at Carlton at that stage of their lives while George and Sonia were out selling flowers.

126 Further, they were not a family that sought payment from each other. My impression is, and indeed I find, that whatever help Krste and Draga gave George in relation to his flower selling business, they did without receiving any remuneration.

127 In those circumstances, with all four members of the household working at the flower selling business, I find it perfectly credible that the sum of $35,000 would have been repaid in the 17 month period.

128 Sixthly, as Mr Evans pointed out, if the loan was in the nature of a long term housing loan for an amount of $10,000, the monthly repayments would have been significantly less than $600 per month, unless it was a loan fixed for 17 months or so. It is unlikely that George and Sonia would have favoured such a fixed term loan, given their preference for repaying loans early.

129 Finally, and perhaps most significantly, there is nothing in the evidence to suggest that at any time prior to the filing of the cross-claim in these proceedings, it has ever been asserted by or on behalf of Krste or Draga that either of them had any interest in the Templestowe Property, the proceeds of its sale, or in the property that was acquired from the proceeds of its sale. I would have thought that if Krste or Draga intended to share in the ownership of the Templestowe Property, this would have been raised at a much earlier point of time. I think it far more likely that Krste and Draga were encouraging George, who had just become engaged, to purchase a property for himself and his future bride and that they assisted George by selling flowers for him so as to enable him to accelerate the repayment of the loan as soon as possible so as to avoid paying unnecessary interest. That was the culture of the Stefanovski family back in those early, happier days.

130 For those reasons, I am not satisfied that Krste and Draga contributed any funds at the time the Templestowe Property was acquired. As I have already noted, no claim is made in respect of any subsequent contributions they may have made towards the repayment of the loan. In those circumstances, I am not satisfied that any contributions were made by Krste and Draga towards the purchase price of the Templestowe Property.

The fourth issue: What consequences flow from any contribution made by Krste and Draga towards the purchase price of the Templestowe Property?

131 Having regard to my findings in relation to the third issue, this fourth issue does not arise. However, particularly as the parties have addressed this issue in their submissions, I should say something about it should this matter go further.

132 It is now well established that where a father, and now also a mother (Brown v Brown (1993) 31 NSWLR 582) contribute towards the acquisition of property by their child, they are presumed to have intended to make such contribution by way of a gift for the advancement of that child. This presumption is capable of being rebutted by establishing a contrary intent on the part of the parent or parents making such contribution.

133 In the present case, assuming, contrary to my findings, that Krste and Draga contributed funds towards the acquisition of the Templestowe Property the presumption from which I start is that it was intended to benefit George and Sonia. The question that arises is whether that presumption has been rebutted. As I have recorded above, according to Draga, Krste had said to George words to the effect of:

“Here’s some money to buy a house in Melbourne. You can take it, we trust you. We can have a property in Melbourne so if Sonia wants to live down there, we can all go there.”

134 According to Dimitri, what Krste said was to the following effect:

“We’ll buy a house then. I’ll put it in George’s name and we can all live in Melbourne.”

135 According to Nada, Krste had said to George:

“Here’s the money. Go and buy the property in Melbourne so the family can be all together.”

136 In my opinion, statements to that effect, even if made, do not have the effect of rebutting the presumption of advancement. What I draw from those statements is that Krste’s intention was for George to buy a house in Melbourne for the whole family to live in. I do not consider that those statements convey an intention that the house to be purchased in Melbourne would be the property of Krste and Draga or that the beneficial interest in the property would reflect their respective contributions to the purchase price.

137 Particularly having regard to the close family relationship, as well as the mutually shared expectation that eventually all of Krste and Draga’s assets would pass to George upon their death, those statements in my opinion go no further than to support the proposition that the property should be purchased by George and Sonia so that the family could come and live with them in the same way as they had all been living together in the Carlton Property. This view is particularly supported by the absence of any claim by Krste or Draga in relation to the Templestowe Property prior to the filing of the cross-claim.

138 Accordingly, I do not consider that the evidence rises to a point where the presumption of advancement is rebutted. Accordingly, even if my conclusions in relation to the first issue are found to be in error, these matters would be sufficient to dismiss Draga’s cross-claim in respect of the Templestowe and the Penshurst Properties.

Conclusions and orders

139 For the foregoing reasons, the declarations and orders that as presently advised I propose to make are as follows:

(1) Order that the Amended Statement of Claim be dismissed.

(2) Declaration that the cross-claimant is the legal and beneficial holder of a 48/100 ^th share in the real property described as lot 48 in deposited plan 711830, being the land situated at and known as 86 Sylvan Ridge Road, Illawong.

(3) Order that trustees be appointed for the sale of the said property pursuant to section 66G of the Conveyancing Act 1919, and that the said property vest in such trustees subject to any encumbrances affecting the entirety of the said property but free from encumbrances, if any, affecting any undivided share or shares therein, to be held by such trustees upon the statutory trusts for sale under Division 6 of Part IV of the Conveyancing Act 1919.

(4) Order that the net proceeds of sale be distributed to the cross-claimant and the cross-defendants in the proportions of their respective interests therein.

(5) Order that any of the cross-claimant and the cross-defendants may purchase the property at auction or in such other manner as the Court may hereafter permit.

(6) Order that the cross-claim be otherwise dismissed.

(7) Order that the plaintiffs pay one half of the defendant’s costs of the proceedings, including the cross-claim.

140 However, as I have not heard submissions in relation to the form of those declarations and orders, or in relation to costs, and as the parties may wish to avoid orders in terms of paragraphs (3) to (5) above, I do not intend to make those orders as yet. I consider that the parties should have an opportunity, having been made aware of the conclusions that I have reached, to consider whether a more practical approach may be available as to how the Illawong Property should be dealt with without George and Sonia and their family having first to vacate it. Accordingly, the only orders that I presently make are as follows:

(1) I direct the parties to provide to my Associate by 3 February 2010 the form of declarations and orders that they may have agreed on to dispose of these proceedings.

(2) If the parties have not been able to agree upon any such form of declarations and orders, I direct them to provide to my Associate by Wednesday 10 February 2010 and to serve on each other by that time the form of the declarations and orders for which they each contend, together with their submissions in support.

141 If the parties are able to agree, I expect to be able to make those declarations and orders in Chambers without the need for any further attendances in Court.

142 If the parties are unable to so agree, I presently propose to determine the form of those declarations and orders on the papers. However, if I consider it appropriate to hear further oral submissions, I will have my Associate contact Counsel to fix a suitable date for that purpose.

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