Hatziminas v Hatziminas
[2024] VSC 513
•28 August 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2023 01556
| Kiki Hatziminas (according to the attached schedule) | Plaintiff |
| v | |
| Maria Hatziminas & Anor (according to the attached schedule) | Defendants |
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JUDGE: | Quigley J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19–22, 25 March 2024 and 17 April 2024 |
DATE OF JUDGMENT: | 28 August 2024 |
CASE MAY BE CITED AS: | Hatziminas v Hatziminas |
MEDIUM NEUTRAL CITATION: | [2024] VSC 513 |
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EQUITY— Estoppel — Proprietary estoppel — Whether promise made of gift of real estate — Whether initial promise to transfer real estate made to plaintiff’s son — Whether later amended to son and daughter-in-law — Representation by words or conduct — Characterisation of representation — Reliance — Whether reliance was reasonable — Knowledge of reliance on representation — Detriment if plaintiff resiled from promise or representation — Estoppel established — Equitable compensation awarded.
EQUITY — Constructive trust — Common intention constructive trust — Whether there was an actual or inferred common intention as to the beneficial ownership of property — Joint endeavour constructive trust — Whether there was a joint relationship or endeavour — No constructive trust established.
PLEADINGS — Amendment of pleadings after commencement of trial — Facts found supportive of case not developed at trial — Failure to amend not precluding judgement on facts as emerged — Donis v Donis (2007) 19 VR 577 referred to.
EQUITY — Remedy — Prima facie entitlement to transfer of property — Lesser relief of equitable compensation as appropriate remedy — Measure of equitable compensation referable to payments made for renovations — Equitable compensation awarded — Donis v Donis (2007) 19 VR 577 and Giumelli v Giumelli (1996) 196 CLR 101 applied.
EVIDENCE — Certificate granted — Evidence Act 2008 (Vic), s 128.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr H. Forrester | Randles Cooper Lawyers |
| For the Defendants | Mr N. McOmish | Peter G. Arnheim & Associates |
TABLE OF CONTENTS
Introduction
Procedural issues
Further Amendment to Pleadings
Ruling on Amendment to Pleading
Certificate under Evidence Act
Key issues and findings
Agreed Statement of Facts
The respective claims
Maria’s Counterclaim as pleaded
Constructive trust claim
Estoppel claim
Maria’s counterclaim at trial
Estoppel claim
Constructive trust claim
Kiki’s claim for possession
Legal principles to be applied
Proprietary estoppel
Constructive trust
Common intention constructive trust
Joint endeavour constructive trust
Equitable compensation, charge or lien
Fact finding principles
The evidence considered
The Initial Gift
Evidence relating to the Initial Gift
Conclusion as to the Initial Gift
Amended Gift
Oral representation of the gift of Cornwall Street as a wedding present
Circumstances of moving into Cornwall Street and the First Renovation
The payment of $40,000 for the transfer of the title to Cornwall Street
Breakdown of the relationship between Minas and Maria.
Payment of outgoings
‘Life tenant’ notation in Cornwall Street water account
The Second Renovation
Why was the Second Renovation undertaken?
Who had the carriage of the Second Renovation and how was it paid for?
Events following the Second Renovation
Kiki’s deteriorating financial situation
Kiki’s action to recover possession of Cornwall Street
Does Maria have an equitable interest in Cornwall Street arising from the Second Renovation?
Kiki’s acquiescence to the Second Renovation
Summary of conclusions
Remedy or relief
HER HONOUR:
INTRODUCTION
This proceeding involves a poignantly sad, but acrimonious dispute between the elderly widowed plaintiff, Kiki Hatziminas (‘Kiki’), and the defendant, her widowed daughter-in-law, Maria Hatziminas (‘Maria’),[1] about the beneficial ownership of a residential property in which Maria has lived for more than 28 years but which is owned by Kiki. The property is at 23 Cornwall Street, Brunswick West (‘Cornwall Street’).[2]
[1]Given the commonality of surnames, and without any disrespect to any party, throughout the decision when reference is made to a member of the Hatziminas family, I refer to that party by using their first name.
[2]Certificate of Title, Volume 5106 Folio 133.
The story of Kiki and her late husband, Alexis Hatziminas (‘Alexis’), is a not an uncommon one amongst the wave of European migrants who, with little education and much endeavour, made a life for themselves in Australia in the second half of the 20th century. Kiki and Alexis, after migrating from Greece, settled in Melbourne and worked in blue collar jobs throughout their working lives. They had two children, Minas Hatziminas (‘Minas’) born in 1970, and Peter Hatziminas (‘Peter’) born in 1973. Kiki and Alexis were hard working and frugal, buying their own house at 14 Straw Street, Brunswick West (‘Straw Street’)[3] in 1974.[4]
[3]Certificate of Title, Volume 6539 Folio 738.
[4]Straw Street was initially purchased by Kiki and Alexis with Kiki’s brother in 1972, but was transferred to Kiki and Alexis as joint tenants in 1974.
Kiki and Alexis have been astute in terms of property investment over their lives, albeit on a relatively modest scale. Having bought Straw Street in 1974, they purchased Cornwall Street, their first investment property, in January 1987. At that time, their two children were minors. Cornwall Street was registered in Alexis and Kiki’s joint names.
In 1993, Kiki and Alexis purchased a second investment property at 48 Melville Road, Pascoe Vale South (‘Melville Road’).[5] Whilst the title to Melville Road was registered in the names of Alexis, Minas and Peter as joint tenants, the mortgage for the property was taken out in the names of Alexis, Minas and Peter as well as Kiki.
[5]Certificate of Title, Volume 6120 Folio 980.
Maria married Minas in 1995 in a registry office civil ceremony. That Minas and Maria chose a civil marriage ceremony was the cause of some disappointment to Minas’ parents. A second, traditional Greek ceremony and a large reception took place in 1996.[6] Initially after their marriage, Minas and Maria lived with Maria’s mother, before moving into Cornwall Street in around 1996. The circumstances and basis of their initial occupation with Maria’s mother, and the basis of their residency at Cornwall Street was contested.
[6]Maria gave evidence that the traditional Greek wedding reception had over 400 guests and was paid for by Minas and Maria’s parents. See Transcript of Proceedings, Hatziminas v Hatziminas (S ECI 2023 01556, Supreme Court of Victoria, Quigley J, 19–22, 25 March and 17 April 2024), 40–2 (‘Transcript’).
Maria separated from Minas in September 2004 and divorced in September 2005. They resumed cohabitation sometime around 2011,[7] although the timing and circumstances of this resumption is contested. In 2014, Minas was diagnosed with multiple myeloma. Initially, he responded well to treatment but unfortunately deteriorated rapidly in late 2016 and passed away in February 2017.
[7]The date of the resumption of the relationship was variously provided as 2010 or 2011 through to 2014. 2010 is the earliest date given in Maria’s oral evidence at Transcript, 63. However, correspondence from her solicitor to Kiki’s solicitor on 24 November 2022 states that the date of resuming cohabitation was 2014; see Court Book (filed 27 February 2024 in S ECI 2023 01556, Supreme Court of Victoria), 576–7. (‘Court Book’).
Apart from a period when a significant renovation was undertaken in 2016 and the period of marital separation,[8] Maria and Minas lived at Cornwall Street, rent free, from approximately 1996. Maria’s three children, Alex born in October 1997, Andreana born in February 2001, and Keyra born in November 2005, lived and continue to live at Cornwall Street.
[8]Maria gave evidence that Minas was also not permanently a resident at Cornwall Street during their marriage separation. See Transcript, 59–60.
On Alexis’ death in August 2014, by survivorship, his interest in Straw Street and Cornwall Street passed to Kiki, who now holds the legal title of both properties as the sole registered proprietor.
Also by survivorship, Melville Street was then held by Minas and Peter as joint tenants. Upon Minas’ death, Peter became the sole registered proprietor by survivorship.
By the time of Alexis’ death, Kiki and Alexis were both retired and receiving a pension. On Alexis’ death, Kiki’s pension was reduced to a single person’s pension. She became aware that with Cornwall Street held beneficially in her name, her pension could be further reduced.
After Minas’ death, and Kiki’s change in pension circumstances, Kiki approached Maria seeking a small monthly payment of $150 per month.[9] This was rejected by Maria. Kiki issued Maria a notice to vacate Cornwall Street on 14 July 2017 using the standard form prescribed by the Residential Tenancies Act 1997, but took no further legal action until Maria lodged a caveat on the Cornwall Street title on 13 July 2022 on the basis that Cornwall Street was held by Kiki for her benefit based on a constructive, resulting or implied trust.[10] By way of letter from her lawyer to Maria’s lawyer, Kiki gave further notice to vacate on 28 February 2023.[11]
[9]Transcript, 338.
[10]Registered Instrument AV851171U, dated 13 July 2022.
[11]Court Book, 578–81.
By this time, Kiki had decided to sell Cornwall Street as she had lost her pension entitlement and needed to fund her retirement. She had incurred a debt to the bank of more than $95,000 with no capacity to repay it.[12]
[12]Commonwealth Bank Equity Loan for Seniors referred to at Court Book, 579; CBA Account ending 6468 balance as at 30 June 2017, $95,848.68 at Court Book, 386–87.
By her writ and statement of claim issued on 19 April 2023, Kiki sought possession of Cornwall Street and mesne profits until the delivery up of possession. The claim for mesne profits was not pursued at trial.
By her defence and counterclaim, Maria alleged she was not required to vacate and deliver possession of Cornwall Street because she has an equitable interest in the entire property. She claims that Cornwall Street was gifted to Minas in 1987 (referred to as the ‘Initial Gift’), and on his death his interest in the property transferred to her. Separately, or alternatively, she claims that Cornwall Street was gifted to her and Minas jointly as a wedding gift in 1996 (referred to as the ‘Amended Gift’). She resists the orders sought by Kiki on the basis of equitable estoppel. Alternatively, she relies on a common intention or joint endeavour constructive trust, or equitable compensation.
The relief Maria’s seeks is:
(a) a declaration that Kiki holds Cornwall Street on constructive trust for her and/or the estate of Minas;
(b) an order that Kiki transfer Cornwall Street to her and/or the estate of Minas;
(c) alternatively, a declaration that Kiki is estopped from denying Maria and/or the estate of Minas is beneficially entitled to Cornwall Street, selling or disposing of the property or acting in a manner inconsistent with the assumption or expectation that Maria and/or the estate of Minas is beneficially entitled to the property; and
(d) such orders this Court considers just and equitable, including equitable compensation and/or an equitable charge and/or equitable lien.
Kiki joins issue with Maria on the whole of her defence and, whilst she admits some contributions by Maria and Minas to some outgoings in respect of Cornwall Street, she denies any other contributions made to the renovation or maintenance of Cornwall Street by Maria or Minas.
On 8 December 2023, probate of Minas’ estate was granted to Maria as his domestic partner and the sole beneficiary of his estate, and the pleadings were amended accordingly.[13]
[13]Defendant, ‘Amended Defence and Counterclaim’, Submission in Hatziminas v Hatziminas, S ECI 2023 01556, Supreme Court of Victoria, dated 19 February 2024 (‘Amended Defence and Counterclaim’), amended the pleadings to add Maria’s capacity as executor of Minas’ estate as well as in her personal capacity.
PROCEDURAL ISSUES
Two procedural issues arose during the trial which required resolution. The first was an application by the defendant to file a further amended defence and counterclaim. The second was an application by the parties for a certificate under s 128 of the Evidence Act 2008.
Further Amendment to Pleadings
At the commencement of the hearing, objection was taken on behalf of Kiki to the opening submission made on behalf of Maria alleging that the submissions did not reflect the pleaded case. The next day, an application was made to file a further amended defence and counterclaim to add the following allegations:
(a) that there was a common intention that the equitable owner of Cornwall Street was Minas and that family members would, if required, pool their resources in respect of family property (at [13]);
(b) Minas and Maria conducted their affairs in reliance on the ‘Initial Gift’[14] and the ‘Amended Gift’[15] (at [15]);
(c) that Kiki and Alexis contributed about $20,000 towards the costs of the 1996 renovation (at [16]); and
(d) adding a reference to the notice to vacate issued on 17 September 2017 (at [23], particulars).
[14]Described as the common intention that the equitable owner of Cornwall Street was Minas.
[15]Described as the gifting by Kiki, Alexis and Minas of any interest they had in Cornwall Street to Minas and Maria jointly as a wedding gift.
It was submitted by Maria’s counsel that the amendments sought were modest, caused no prejudice, did not raise a new cause of action, provided some particularity, and were contained in the opening submissions filed prior to the first day of hearing, thus notice of them had been given. It was argued they were effectively in the nature of housekeeping.
The amendments were opposed by the plaintiff.
Ruling on Amendment to Pleading
The amendments sought to the pleadings were argued to be ‘very modest’ and were sought to avoid any ambiguity. The principles which apply to amendment of pleadings under r 36.01(1) of the Supreme Court (General Civil Procedure) Rules 2015 are well established. Considerations relevant to the exercise of discretion include substantial delay, wasted costs, potential for unfair prejudice, case management concerns (including adjournment), reduction in public confidence and the reasons for the delay.[16]
[16]See discussion in Business Service Brokers v Optus Mobile Pty Ltd (No 3) [2022] VSC 283, [23]–[31].
Whilst it is highly undesirable to be amending pleadings after the trial has commenced, I concluded that the proposed amendments should be allowed. I was satisfied for the following reasons:
(a) the absence of strong objection by the plaintiff;
(b) the plaintiff’s express view that she was content to proceed and did not seek an adjournment;
(c) the identification of the matters which were the basis of the amendments sought had been notified to the plaintiff in the written opening submissions previously provided; and
(d) the fact that no new cause of action is identified by the amendments.
Certificate under Evidence Act
The nature of some of the financial information which was elicited from Maria during her evidence led to an application being made in respect of s 128 of the Evidence Act 2008 by counsel on her behalf. Whilst the seriousness of the behaviour and practices admitted to are not to be condoned and do not bear well on her character and integrity, I was prepared in all of the circumstances to grant the certificate in order for her evidence to be able to be fairly and fully given.
KEY ISSUES AND FINDINGS
In seeking possession of Cornwall Street, Kiki relies on her legal entitlement as sole registered proprietor. There is no dispute that Kiki is on title as the sole registered proprietor.
There is considerable overlap in the causes of action pleaded by Maria. In substance, they are reliant on the establishment of a promise made to Minas and/or Maria and Minas that Cornwall Street was gifted to them. Whether it be by proprietary estoppel or constructive trust (either joint endeavour or common purpose), the burden is on Maria to prove her case on the balance of probabilities.
The key and determining facts in this proceeding involve the alleged representation(s); whether Kiki, either by her words or conduct, knowingly induced Minas and/or Maria that they/she would obtain a beneficial interest in the property and that Minas and/or Maria reasonably relied on those words or conduct to their/her detriment. Absent cogent and reliable proof of representations by Kiki that she gifted Cornwall Street to Minas and Maria, proved to the reasonable satisfaction of the Court such that the Court must feel an actual persuasion of its occurrence or existence, the claim will fail.
For the reasons which follow, I am not satisfied on the evidence that either the Initial Gift nor the Amended Gift promises were made in the terms contended by Maria. Consequently, I am not satisfied that the defence and counterclaim based on proprietary estoppel or constructive trust for the whole interest in Cornwall Street is established.
I am satisfied however, that there was a promise which was made and which can be inferred from the actions and behaviour of Kiki and Alexis and Minas and Maria that Maria and Minas could continue to live at Cornwall Street rent free subject to the need for Kiki’s[17] financial security to be maintained. This finding arises from the circumstances related to the renovation of Cornwall Street which was undertaken between 2015 to 2017.
[17]In this I also include Alexis whilst he was alive.
Further, I am satisfied that the appropriate relief in the circumstances is by way of equitable damages and not the transfer of the whole of the estate to Maria or Minas’ estate.
AGREED STATEMENT OF FACTS
The parties provided the Court with a statement of agreed facts and issues.
There was agreement as to the following facts:
(a) Kiki is the sole registered proprietor of Straw Street where she lives with her son, Peter.
(b) Straw Street was purchased in July 1974 by Kiki and her late husband Alexis, secured by a mortgage to the Commonwealth Bank of Australia (‘CBA’) which was discharged in September 1985.
(c) Cornwall Street was registered in the names of Kiki and Alexis in 1987. The purchase was financed with savings and money borrowed from CBA, secured by a mortgage which was discharged in November 1993.
(d) In October 1993, Melville Road was purchased using money borrowed from CBA and secured by a mortgage over Cornwall Street and Melville Road. The loan was in the joint names of Kiki, Alexis, Minas and Peter. Melville Road was registered in the joint names of Alexis, Minas and Peter.
(e) Maria was married to Kiki’s son, Minas, from October 1995 until 5 September 2005, when they divorced.
(f) In October 2004, there was a refinancing of the mortgage over Melville Road, which was discharged in favour of a new mortgage to Adelaide Bank Ltd.
(g) In November 2006, there was a further refinancing of the mortgage over Melville Road, which was discharged in favour of a new mortgage to CBA.
(h) Alexis died in August 2014 and both Straw Street and Cornwall Street were transferred into Kiki’s sole name on survivorship. The mortgages were discharged in 2014.
(i) In mid-2014, Minas was diagnosed with cancer.
(j) Melville Road was transferred into the names of Peter and Minas in early 2015 following a survivorship application.
(k) In December 2015, Kiki received a certificate of consent to act as ‘Owner Builder’.
(l) Minas died of cancer in February 2017.
(m) On or around 7 July 2017, Maria received a notice to vacate Cornwall Street.
(n) On 28 February 2023, Kiki sent Maria a further notice to vacate.
(o) The estimated value of Cornwall Street is between $1.8 and $2.3 million.
(p) The estimated rental for Cornwall Street between 2017 and 2024 is between $800 to $1,200 per week.
There was much in dispute, not all of which was particularly useful in the determining of the legal issues, but was argued by both parties to go to the credit of the other, or to the credit of the witnesses called on both sides.
THE RESPECTIVE CLAIMS
Given the burden is on Maria to establish her claim, it is logical to deal first with Maria’s counterclaim first before turning to Kiki’s claim for possession of Cornwall Street, and any appropriate relief.
Maria’s Counterclaim as pleaded
Constructive trust claim
Maria’s counterclaim to Kiki’s claim for possession of Cornwall Street was pleaded primarily on the basis of a constructive trust. In particular, she alleged that there was a common intention that the equitable owner of the property was to be Minas upon its initial acquisition by Kiki and Alexis (referred to as the ‘Initial Gift’) and that family members would, if required, pool their resources in respect of family property.
It was alleged that Kiki and Alexis bought a property for each of their children to set them up in life and also in part payment for work they were required to carry out. It was alleged that Cornwall Street was purchased for Minas but he could not hold it in his name as he was a minor at that time and instead it was registered jointly in the names of Alexis and Kiki.
It was further alleged that in 1993 when Melville Road was purchased, it was purchased and registered jointly in the names of Alexis, Peter and Minas. As a result of survivorship, it became solely registered in Peter’s name. Upon Maria and Minas’ marriage in October 1995, it was pleaded that Kiki, Alexis and Minas gifted any interest they had in Cornwall Street to Maria and Minas jointly as a wedding gift (referred to as the ‘Amended Gift’).
In reliance on the Initial Gift and the Amended Gift, it was alleged that Maria and Minas conducted their affairs in the following manner:
(a) In 1996, Maria and Minas renovated Cornwall Street (the ‘First Renovation’), converting it from two bedrooms into four bedrooms with a new bathroom and open plan living area and kitchen. Maria and Minas paid $50,000 towards the renovation, being $25,000 from wedding gifts and around $25,000 from their own savings. It was acknowledged in the pleadings that Kiki and Alexis contributed around $20,000 towards the cost of the First Renovation.
(b) Upon completion of the First Renovation, Maria and Minas moved into Cornwall Street and continued to reside there.
(c) From 1996 to 2008, Minas and Maria paid the outgoings including council rates, repairs and maintenance.
(d) In 2005, Kiki and Alexis agreed to transfer the legal title to Minas and Maria. Minas and Maria transferred $40,000 to them to fund the costs associated with the transfer of the title to Cornwall Street. The source of these funds was alleged to have been a loan, with $40,000 transferred directly into Kiki’s bank account.
(e) Between 2015 and 2017, Minas and Maria renovated Cornwall Street a second time (the ‘Second Renovation’). This extension was extensive, with the rear of the property being demolished and a new rear extension and second floor added. As pleaded, Minas and Maria alleged that they paid around $413,815 towards the works, with the source of funds primarily being Minas’ superannuation and life insurance benefits and money from Maria’s bank account as follows:[18]
AMP Super $159,552.03
NFS Super $77,354.82
Australian Super $67,587
Maria’s bank account $70,725
[18]These amounts are set out in the particulars to paragraph [23] of the Amended Defence and Counterclaim and which total $375,218.85.
Maria alleges that when Minas died on 8 February 2017, his interest in Cornwall Street passed to her by survivorship.
It was pleaded that, in the circumstances (including the Initial Gift, the Amended Gift, payment of outgoings, the First Renovation, the payment of $40,000 to Kiki and Alexis and the Second Renovation), it would be inequitable for Kiki to rely upon her legal title in order to deny Maria or the estate of Minas the beneficial interest in Cornwall Street by way of constructive trust.
Estoppel claim
As an alternative to the constructive trust argument set out above, Maria also pleaded proprietary estoppel. It was alleged that Maria and Minas assumed that Kiki and Alexis were legally bound to an obligation to give effect to the representation that Cornwall Street had been gifted to them. The expectation was alleged to have been created by the Initial Gift and the Amended Gift, the allegation that in 2005 they were told by Kiki and Alexis that Cornwall Street had been transferred to them.
It was alleged that Maria and Minas were induced by these representations, and allowed to move in and reside at Cornwall Street from 1996 to the present. It was alleged that Kiki and Alexis encouraged and/or acquiesced as Maria and Minas made payment of outgoings, completed the First Renovation, paid $40,000 for the transfer and completed the Second Renovation, forgoing opportunities to purchase an alternative home.
It was alleged that Maria and Minas acted in reliance on the representations by these actions and that Kiki and Alexis knew or intended that Minas and Maria would act in reliance upon those representations. It was alleged that Kiki and Alexis’ knowledge or intention that Maria and Minas would act in reliance of this expectation could be inferred from their knowledge of these events.
It was alleged that the detriment to Maria and/or Minas’ estate is that they will not receive their equitable interest in Cornwall Street and Maria will lose her home.
It was pleaded that Kiki had denied the obligation to fulfil the promises as:
(a) Cornwall Street was transferred to Kiki by survivorship instead of being transferred to Minas and Maria upon Alexis’ death in 2014;
(b) on 14 July 2017, Kiki issued a notice to vacate the property to Maria; and
(c) on 19 April 2023, Kiki filed a written statement of claim seeking inter alia possession of Cornwall Street.
Maria’s counterclaim at trial
Estoppel claim
Despite these pleadings, the case for Maria was primarily argued on the basis of the estoppel claim. It was alleged in closing submissions that the Court ought to be comfortably satisfied that Maria has made out her case on the following basis:
(a) the estoppel promise(s) was/were made in 1987 to Minas when Cornwall Street was purchased and repeated to Maria in 1994 when she first met Minas;
(b) the estoppel promise(s) was/were made and varied to include Maria at the engagement party in 1994 and repeated in 1996 at the wedding; and
(c) in 2004, Kiki told Minas and Maria not to worry as Cornwall Street was theirs and, in 2015 Kiki said ‘the house is yours’ and it ‘would be nice for Minas and the children once complete’.
The reliance claimed was said to be:
(a) Minas left school and contributed his wages on the basis of the promise(s);
(b) in 1996, Minas and Maria renovated Cornwall Street because they thought it was theirs;
(c) in 2005, Minas and Maria transferred $40,000 to Kiki and Alexis as they thought the property was being transferred into their names; and
(d) in 2016, Minas and Maria renovated Cornwall Street as they were told it was theirs.
It was alleged that Minas and Maria’s conduct was reasonable given that:
(a) the promises were made and repeated over decades;
(b) there were no inconsistent statements from Alexis and Kiki;
(c) they were allowed to live at Cornwall Street over decades and treat the property as their own;
(d) they saw their equitable interest documented with Yarra Valley Water; and
(e) they were encouraged by Kiki to spend all of Minas’ superannuation and Maria’s savings on the Second Renovation.
The knowledge of reliance was said to be the promises Alexis and Kiki made, standing by or encouraging them to treat Cornwall Street as their own. In this they must have known that Minas and Maria were relying on their promises.
The alleged detriment was said to be:
(a) Minas left school early, thereby being denied educational opportunities;
(b) Minas contributed his wages between 1987 and 1994;
(c) Minas and Maria spent $50,000 and contributed their labour to the First Renovation in 1996;
(d) Minas and Maria did not purchase a house and land package;
(e) Minas and Maria did not save a deposit and they could not borrow money as Minas was a mortgagor/guarantor for Melville Road;
(f) Minas and Maria paid all outgoings over decades including council rates; water rates and land tax;
(g) Minas and Maria paid $40,000 to Kiki and Alexis to have the property title transferred in 2004;
(h) Minas and Maria spent around $350,000 and contributed their labour for the Second Renovation in 2015;
(i) Minas and Maria put all their financial ‘eggs’ in one basket by investing in Cornwall Street; and
(j) Maria will not receive her full equitable interest in the property, leaving her homeless in her mid-50s.
Maria submitted that Kiki has denied her beneficial interest by bringing this proceeding and enforcing her legal interest in the property.
Constructive trust claim
In respect of the common intention constructive trust or the joint endeavour constructive trust, Maria’s final submissions to the Court were that the common intention was that each child was to be given a property and the family would pool resources to help each other.
She relied on the same detriment and reliance as set out in respect of the estoppel case.
The equitable fraud claimed to result included the following:
(a) Minas and Maria, being promised Cornwall Street consistently over the decades, invested heavily in Cornwall Street, making those investments with Kiki’s encouragement;
(b) Minas and Maria assisted the family, including Maria looking after Alexis and Minas;
(c) Minas acting as mortgagor to purchase Melville Road;
(d) Minas and Maria not making alternative plans in life such as buying another home;
(e) Maria being left homeless in her mid-50s; and
(f) Kiki receiving the benefit of Minas’ superannuation and Maria’s savings.
In respect of the joint endeavour constructive trust, Maria’s closing submissions were that the joint endeavour was that each child was to be given a property and the family would pool resources to help each other. The substratum was removed when Minas died.
The benefit of Minas’ and Maria’s contribution, including the cost of the two renovations, Maria looking after her family and her parents-in-law, would be enjoyed by Kiki and Peter as they plan to sell Cornwall Street and use the proceeds for themselves.
It was alleged that it was intended that Minas and Maria would own Cornwall Street and stay there for the rest of their lives. It was not intended that Kiki and Peter enjoy the benefit of the property. There was an assumption that Minas and Maria would outlive their parents.
As to unconscionability, the same matters referred to above were relied upon.
Kiki’s claim for possession
In opposing Maria’s counterclaim on any of the bases outlined above, Kiki pleaded that there was no promise to gift Cornwall Street either to Minas or to Minas and Maria. She denied that the First Renovation of Cornwall Street was paid for by Minas and Maria. She also denied that the Second Renovation was paid for by Minas and Maria, save to the extent of $50,000 paid by Minas. She said that, in doing so, the payments were made not based on any representation by her and was significantly less than the benefit obtained by Minas and Maria and their children, who resided in Cornwall Street from around 1997.
Kiki admitted that Minas and Maria contributed to payment of utilities but that Kiki, Alexis and Peter assisted them with household expenses because they were low income earners. She denied that Minas and Maria paid council rates, insurances and repairs.
She admitted that she allowed Maria and the children to move back into Cornwall Street after the Second Renovation.
In Kiki’s final submissions, it was submitted that the orders sought by Kiki for the possession of Cornwall Street ought be made as Maria had not discharged the burden of proof that underpinned her claim, being that there was ever any promise to Minas in 1987 or to Maria and Minas in 1994 to 1996 that Cornwall Street was gifted to them. The further representation, that in 2005 Cornwall Street had been transferred to them, was also not proved to the requisite standard.
Kiki maintained that the purchase of Cornwall Street was always an investment property belonging to her and Alexis to provide for their retirement. She maintained that the offer made to Maria and Minas was for them to move into Cornwall Street rent free for them to save to buy their own house. Kiki now needed to sell Cornwall Street to fund her retirement.
Kiki also denied that she received $40,000 in 2004 to pay for the costs associated with transferring the title to Cornwall Street to Maria and Minas and that the bank records did not corroborate this allegation.
The key material facts that required proof, being the representations alleged to have been made by Kiki and Alexis that Cornwall Street was gifted to Maria and Minas, were required to be proved to the reasonable satisfaction of the Court. If the Court were not persuaded, that is feel an actual persuasion of the occurrence or existence of these facts, Maria’s claim must fail.
Further, it was submitted that the Court ought not be persuaded that:
(a) Maria and Minas paid for the First Renovation of Cornwall Street;
(b) Maria and Minas gave Kiki and Alexis $40,000 (or any amount) in consideration for the transfer of the title to Cornwall Street; and
(c) Maria did not contribute any of her own funds to the Second Renovation.
At best, Minas’ estate can point to certain monies being spent on the Second Renovation, which prima facie might have entitled the estate to repayment of those amounts had there been representations and detrimental reliance proven. However, it was argued that the benefit of living rent free at Cornwall Street for 28 years demonstrates there was no detriment suffered.
LEGAL PRINCIPLES TO BE APPLIED
Proprietary estoppel
As noted above, Maria’s core claim is that she is entitled to full fee simple ownership of Cornwall Street on the grounds of proprietary estoppel.
Proprietary estoppel applies where a person creates, or lends force to, an assumption by another that the other has, or will, obtain an interest in the first person’s property on the basis of which assumption the other person alters their position or acts to their detriment. In such a case, the doctrine may bring into existence an equity in favour of that other person, the nature and extent of which depends on the circumstances.[19]
[19]Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (‘Waltons Stores’), 404 (Mason CJ and Wilson J); Giumelli v Giumelli (1999) 196 CLR 101, 112 (Gleeson CJ) (‘Giumelli’).
Proprietary estoppel is the doctrine by which a court of equity intervenes to redress the unconscionable conduct of a promisor departing from a promise which has induced another to change their position to their detriment.[20]
[20]Harrison v Harrison [2011] VSC 459, [369] (‘Harrison’).
In Laird v Vallance,[21] the Court of Appeal summarised the elements of proprietary estoppel. In summary, a plaintiff must establish as follows:
[21][2023] VSCA 138, [51].
(a) A representation was made by the defendant that the defendant would confer on the plaintiff an interest in property.
(b) The plaintiff acted in reliance on that promise.
(c) The plaintiff acted reasonably in relying on the promise made by the defendant.
(d) The defendant knew or intended the plaintiff would rely on the promise.
(e) The plaintiff has suffered detriment as a consequence of the failure by the defendant to adhere to the promise.
The representation may be inferred by conduct, and whilst the representation must be clear in its terms, the test is less strict than required for a representation in contract law.[22] The question of uncertainty or ambiguity of a promise is relevant to the issues relating to reliance, the reasonableness of the reliance, the nature and expectations of the promise, the awareness of the promisor on the reliance of the promisee, and the nature of the detriment sustained by the promisee if the promise is not adhered to. The terms in which the promise was expressed may bear on the question that, in all the circumstances, it would be unconscionable for the defendant not to adhere to the promise found by the court.[23]
[22]Flinn v Flinn [1999] 3 VR 712, [95], Brooking JA (‘Flinn’); Harrison, [374]; Harris v Harris [2020] VSC 256, [175] (‘Harris’); Laird v Laird [2021] VSC 352, [17]; McDonald v Dunscombe [2018] VSC 283, [17]; Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1, [36] (French CJ, Kiefel and Bell JJ).
[23]Harrison, [384]–[385].
The inducement may arise from positive representations, express or implied by words or conduct, or a combination of both;[24] it may arise by omission where the defendant, knowing the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation under which the plaintiff is conducting their affairs.[25]
[24]Legione v Hateley (1983) 152 CLR 406, 438–9 (Mason and Deane JJ).
[25]Waltons Stores, 429 (Brennan J).
The plaintiff must show that there was reliance on the assumed state of affairs. Reliance is a fact to be found and not imputed on the basis of evidence which falls short of the proof of fact.[26] The question is whether the promisee was so influenced by the promise that it would be unconscionable for the promisor to resile from the promise, and the promise being a ‘significant factor’ which the promisee took into account when deciding to act as they did.[27] The question was framed by Gageler J in Sidhu at [93] as:
Despite any other contributing factors, would the party seeking to establish the estoppel have adopted a different course (of either action or refraining from action) to that which [the party] did had the relevant assumption not been induced?
[26]Sidhu v Van Dyke (2014) 251 CLR 505, [58] (‘Sidhu’).
[27]Sidhu, [73] citing Steria Ltd v Hutchison [2007] ICR 445, [117].
The assumption must be a reasonable one. That is, the plaintiff must have acted reasonably in adopting the assumption.[28] The question of whether reliance was reasonable encompasses both the reasonableness of adopting the representation in the circumstances and that of taking the relevant actions.[29] The claim will fail if the plaintiff knows that the representation was not true or that the representor lacked authority to make it.[30]
[28]Crown Melbourne [35] (French CJ, Kiefel and Bell JJ), [160] (Keane J).
[29]Harris, [173]; Laird [20].
[30]Standard Chartered Bank Aust Ltd v Bank of China (1991) 23 NSWLR 164, 180–1; State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170.
Detriment is not confined to financial loss and may consist of the loss of opportunity to protect or advance one’s position.[31] Detriment is not to be approached in a narrow, technical sense and need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial.[32] It must be such that it binds the conscience of the party being estopped. It is approached as part of the broad enquiry as to whether departure from the promise would be unconscionable in all the circumstances.[33]
[31]Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524, 540; Foran v Wight (1989) 168 CLR 385, 436–7 (Deane J), 431–7 (Brennan J), 454 (Dawson J).
[32] Donis v Donis (2007) 19 VR 577, [20] (‘Donis’).
[33]Donis, [20].
The promisee is prima facie entitled to have the promisor held to the promise or expectation. However, the court will then consider all the circumstances to determine whether it is necessary to modify the relief to avoid going beyond what is required for conscientious conduct or to avoid injustice to others. The equity may be satisfied in another more limited way where the plaintiff’s expectation or assumption is uncertain, or extravagant, or out of all proportion to the detriment suffered.[34] Proportionality is a relevant consideration but not a necessary constitutive element to be proved by the party seeking relief.
[34]Donis, [41]; Crown Melbourne, [222] (Nettle J), referring to Jennings v Rice [2003] 1 P & CR 100.
Whilst the character of the detriment is a relevant consideration, the exercise is not one of weighing detriment too minutely in order that it be converted into some equivalent of cash or kind. Nor does it require substantial correspondence between the expectation and the monetary value of the detriment.[35] The detriment should also not be treated as consideration for the proprietary interest.[36]
[35]Donis, [20].
[36]Donis, [19]–[20]; Giumelli, [42], [50]; Sidhu, [85] (French CJ, Kiefel, Bell and Keane JJ.
Estoppel in equity may not entitle the plaintiff to the full benefit of the assumption upon which he relied.[37] As put by Brennan J in Waltons Stores at 423:
[t]he object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid detriment which, if the assumption or expectation goes unfulfilled will be suffered by the party who has been induced to act or abstain from acting thereon.
[37]Waltons Stores, 404–5 (Mason CJ and Wilson J), 423 (Brennan J).
Constructive trust
Alternatively, Maria’s claim for the full fee simple interest in Cornwall Street relied on a claim made pursuant to a constructive trust. The claim was put on the alternative bases of a common intention or a joint endeavour constructive trust.
Common intention constructive trust
A common intention constructive trust is a trust which is ‘construed’ or ‘constructed’ by a court to give effect to the common intent of the parties. The elements of a common intention constructive trust are very similar to that required for establishing proprietary estoppel such that its establishment as a class of constructive trust has been called in to question.[38]
[38]Gurrappaji, [177]; Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336, [119]; Zekry v Zekry [2020] VSCA 336, [76]; Clayton v Clayton [2023] NSWSC 399, [534]; Grant v Edwards [1986] Ch 638, 656–7.
A common intention constructive trust may arise from an agreement or common intention arsing after acquisition of the relevant property. The common intention constructive trust creates substantive rights and is not merely a remedy arising when a court makes a declaration to that effect.
In Iman Ali Islamic Centre v Iman Ali Islamic Centre Inc,[39] at [402]–[405] McMillan J set out the following elements which are needed to establish a constructive trust:
[39][2018] VSC 413 (‘Iman Ali Islamic Centre’).
(a) there is an actual or inferred common intention of the parties as to their beneficial interest in a property;
(b) there has been detrimental reliance on that common intention by the plaintiff; and
(c) it would be an equitable fraud on the plaintiff to deny their beneficial interest in the property.
The onus of proof of such a trust lies on the party asserting the beneficial interest against the legal owner.
The parties’ intentions can be inferred from a party’s contemporaneous words or conduct having regard to the surrounding circumstances and context in which they were made or performed. The relevant intention may arise after the property was acquired.[40] The intention does not need to designate a specific share of the property; it is sufficient that the plaintiff should have a beneficial interest.
[40]DPP v Ali (No 2) [2010] VSC 503, [75].
Joint endeavour constructive trust
A joint endeavour constructive trust may be imposed on parties to reflect an equitable interest that is not otherwise reflected in their legal interest arising from the way in which those parties conducted their personal relationship. The equitable interest is protected by the imposition of a constructive trust where the plaintiff establishes that:[41]
[41]Galati v Deans [2021] NSWSC 1094, [913].
(a) the parties shared a joint endeavour or relationship in which effort and expenditure were shared;
(b) the substratum of the joint endeavour or relationship is removed without blame; and
(c) it is unconscionable for one party to retain as against the other party contributions made to the joint endeavour.
The principle as originally expressed by Deane J in Mushinski v Dodds is oft quoted:
the principal operates where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit the other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.[42]
[42](1985) 160 CLR 583, 620.
Baumgartner v Baumgartner[43] extended these principles to circumstances where there is no initial common intent. Contributions are ascertained by looking at the whole of the relationship and are not confined to direct financial contributions but to other arrangements in the relationship that contribute to the maintenance or improvement of property.
[43](1987) 164 CLR 137.
Cressy v Johnson (No 3)[44] involved a domestic relationship where the parties, whilst not pooling finances in a literal sense, had an arrangement of combining their joint financial resources where one party undertook parenting and homemaking duties and paid housekeeping expenses from her wage, thus permitting her partner to focus his finances on the acquisition of properties. Kaye J said in respect of the remedy of a constructive trust that:
[t]he remedy of a constructive trust is not a response by equity to a perceived unfairness where, on termination of a personal relationship, the legal arrangements between the parties do not reflect the commitment and contribution of each party to the relationship. Rather the equitable remedy of a constructive trust is available to adjust the legal interests in property of a party or parties to a relationship, where, during and on the basis of the continuation of the relationship, one party has made a contribution to the acquisition, maintenance or improvement of the property, such that it would be unconscionable for the other party, on the failure of the relationship, to insist strictly on his (or her) legal rights without an appropriate adjustment commensurate with the contribution made by the former party to the property. Accordingly, in order to be entitled to an interest under a constructive trust, the plaintiff must establish that the contribution which she relies, was not simply directed to advancing the welfare of the defendant … Rather, the contribution of the plaintiff, on which the constructive trust is to be based, must have been directed to the acquisition and maintenance of the assets in respect of which the plaintiff claims an interest under the constructive trust.[45]
[44][2009] VSC 52 [197], (‘Cressy v Johnson (No 3)’).
[45]Cressy v Johnson (No 3), [197].
The elements of a joint endeavour constructive trust are fact sensitive such that it can be difficult to set out precisely isolated factual criteria.
Equitable compensation, charge or lien
Finally, the relief sought also claimed as a final option, equitable compensation.
A court of equity has an inherent jurisdiction to award compensation for a breach of an equitable obligation. It may also make orders giving effect to an equitable charge or lien.
Whilst these alternative forms of remedy were raised by the relief sought in Maria’s counterclaim, they were not developed at the trial. However, when counsel was directly questioned in final submissions about these potential courses being open to the Court, they were not resiled from as a possible form of relief.[46]
[46]Transcript, 527-29.
In any event, the Court may award equitable compensation as the appropriate remedy where it would disproportionate to a claimant’s outlay in reliance of the expectation created or induced by the representor’s conduct.[47]
[47]Donis, [20], Nettle JA.
FACT FINDING PRINCIPLES
Much of the factual contest between the parties centres on evidence of conversations, some of which took place with people who have passed away, and of documentary evidence which was inconsistent, or incomplete. The task was not straight forward, given the passage of time and by reason of neither party presenting a comprehensive and consistent narrative. This is not an unknown circumstance in proceedings such as these.[48] In this context, the principles by which the Court approaches the fact-finding exercise, in particular with regard to the oral evidence in such a proceeding, bear articulating.
[48]I note a similar observation as to the approach to evidence was remarked upon by Forbes J in Gurappajiv Duncan [2023] VSC 558, [227]–[229] (‘Gurappaji’).
The often quoted observations of McLelland J in Watson v Foxman[49] sets out the difficulty generally with evidence of recollection of spoken words:
In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen as a relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.[50]
[49](1995) 49 NSWLR 315 (‘Watson’).
[50]Watson, 318–19.
In the context of evidence where credit is in issue, the principles which apply have been conveniently summarised by Forbes J in Gurappajiv Duncan[51] (referencing Hallen J in Pollock v New South Wales Trustee & Guardian[52]) as including:
[51][2023] VSC 558, [229]–[230] (‘Gurappaji’) (footnotes omitted).
[52][2022] NSWSC 923, [73]–[93] (‘Pollock’).
(a) Proof of a fact requires the court to feel actual persuasion of the existence of that fact, not simply a mechanical comparison of probability.
(b) The credibility, veracity or motives of the witness may be tested by reference to objective facts proved independently of the oral evidence given and in particular by reference to documents.
(c) Evidence of the words and actions of the person subsequently deceased, given by those who carry the onus of proof, should be treated with ‘suspicion’. In this context, ‘suspicion’ means the evidence is approached with great care and scrutiny such that ‘the evidence ought be thoroughly sifted, and in the mind of any judge who hears it ought to be, first of all, in a state of suspicion; but if in the end the truthfulness of the witness is made perfectly clear and apparent’ and the court believes their evidence, then it may act on that evidence.
(d) In particular, evidence of conversations with a deceased is treated with care given the deceased is not available to confirm or deny, or to expand or explain the conversations. Memories of such conversations deteriorate with time. Additional caution is needed and the expectation that independent evidence of such conversation, where available, is led.
(e) In relation to such conversations, there is a significant risk of reconstruction, and the process of litigation itself subjects memories to powerful biases. The prospect not only of unconscious reconstruction, but of a self-interest to give evidence favourable to one’s case, requires a court to proceed with caution.
(f) As a result of the cautions attaching to present recollection of words in conversations, greater weight is usually accorded to contemporaneous documents as the ‘safer repository of reliable fact’, subject to consideration of who has prepared those documents. This is not to discount recollection but to assess it in ‘its proper place alongside contemporaneous documentary evidence and other evidence upon which undoubted or probable reliance can be placed’.
I observe that the Court is not bound to make findings of fact on the basis of one party’s version of events.[53]
[53]Roberts-Smith v Fairfax Media Publications Pty Ltd(No 41) [2023] FCA 555.
It is in accordance with these principles that I have reached the conclusions on the evidence and found the material facts set out below.
THE EVIDENCE CONSIDERED
The Court had the opportunity to observe and assess the oral evidence of Kiki and Peter, the opposing evidence from Maria, and a number of other witnesses called to support Maria’s claim.[54]
[54]The witnesses called were Helen Georgiou, Olga Haziathanasiou, Angela Palamaras, Poppy Katsianos, Christopher Tsementzis and Alex Hatziminas.
The opportunity to test the plausibility of the material allegations made by reference to the documentary evidence was hampered by that evidence being incomplete and somewhat disorganised.
Overall, I have some reservations about the reliability of the evidence of each of the key witnesses: Kiki, Peter and Maria. Consequently, as the burden of proof lies with Maria to establish any equitable claim, I have not been persuaded that burden has been discharged on her primary case as pleaded.
I also did not find the other witnesses called by Maria to be particularly compelling in providing useful corroborative evidence.
Alex Hatziminas, Maria’s son, gave evidence and I am sure he believed that Cornwall Street belonged to his parents and he was steadfast in his support for her, as is to be expected from a devoted son. However, his version of events, for example of the relationship between his parents which omitted the fact that they were divorced and his evidence being that his father was always living at Cornwall Street, does not ring true.
Christopher Tsementzis was a partisan witness who, under cross examination when challenged about the nature of his relationship with Maria, explained that he was supporting Maria (financially) in the litigation because what was being done ‘was not right’. He did not give the evidence that he observed the supervision of the renovation in detail (which was foreshadowed in the defendant’s witness outlines[55]). He had only been to the work site a couple of times over the period of the renovation. He was complimentary about the quality of the carpenter’s work.
[55]Defendant’s Witness Outlines (filed 4 March 2024 in S ECI 2023 01556, Supreme Court of Victoria).
Four other witnesses were called to support Maria’s claim that Cornwall Street was promised to her and Minas, that Maria understood the property belonged to her and Minas, that she arranged and supervised the renovations, and that she is a hard working wife and mother. I have no doubt that each of these witnesses honestly believed the evidence they gave. However, all were unable to give any definitive evidence of the promise made or the admission by Kiki or Alexis as to the promise and they came across as devoted and loyal friends of Maria.
As discussed below at [136]–[137], only Ms Katsianos’ evidence touched on the subject of the promise of a gift. For the reasons given below, I am of the view that this evidence was equivocal on the question of whether there was a gift by Kiki and Alexis or just the expectation that, one day in the ordinary course of events, there was a property which would be inherited by their children.
As well-meaning and personally supportive of Maria as they no doubt intended to be, their evidence was peripheral to say the least. In some respects, it appeared to be coloured by self-interest or loyalty. I have not given the evidence, in particular of Alex Haziminas and Chris Tsementzis, any weight.
There is no direct corroborating evidence that was called by Maria to establish the claims of either the Initial Gift, or the Amended Gift. Essentially, what is relied upon is a course of conduct she says established that the representations of the gifts were made. There is no compelling documentary evidence which assists in establishing either the Initial Gift or the Amended Gift.
The bank records, as they relate to the borrowings for Cornwall Street, show that there were no payments made by Minas or Maria to the acquisition or maintenance of the mortgage payments.
What is relied upon is the alleged conduct and circumstances of the move into Cornwall Street, the payment of outgoings, an alleged title transfer payment of $40,000 in 2004 or 2005, and the Second Renovation decision and expenditure.
I will deal with each of the matters which are relevant to the parties’ claims in turn.
THE INITIAL GIFT
Evidence relating to the Initial Gift
Maria gave oral evidence that when she met Minas in 1994 he told her that Cornwall Street was his property. Minas told her that he was contributing to the property ‘to pay the property off’ by the wages he earned at Hilton Hosiery where he and Kiki worked.[56] Maria was unable to say how much he contributed. She said that he told her he was contributing to the property ‘because it was going to be his.’[57]
[56]Transcript, 36.
[57]Transcript, 36–7.
She acknowledged in her evidence that in 1994 Cornwall Street was tenanted, that Minas was living at Straw Street with his parents and that she knew that Minas was not on the title to Cornwall Street.[58]
[58]Transcript, 37.
Kiki’s evidence was that there was never any promise to Minas that Cornwall Street was his. She also strongly denied that he made any financial contribution to the purchase, mortgage payments or family finances when he lived at Straw Street (or later) in respect of Cornwall Street (and later in respect of the purchase and maintenance of Melville Road).
Her evidence in this respect was supported by Peter, although his evidence was of limited utility given his age and involvement in family financial affairs in 1987.[59] Peter’s evidence was that neither Cornwall Street was purchased as a gift for Minas nor Melville Road as a gift for himself.[60]
[59]Peter was 14 years old and still attending high school when Cornwall Street was purchased; Transcript, 409.
[60]Transcript, 365.
In respect of Melville Road, it was Maria’s evidence that Minas had told her that in 1993 a second investment property was purchased and that: ‘because they were all working they put their names on the title. Yeah, the whole family was on the title and that was supposed to be Peter’s home’.[61]
[61]Transcript, 37.
Maria said that Minas told her ‘that Cornwall Street was his home and there was one for Peter, but they had them both for investments and whoever was working at the time contributed to both properties.’[62] She explained that she understood that Minas’ name was on the title to Melville Road because ‘they needed — I think they put all their names on there to borrow money’.[63]
[62]Transcript, 37.
[63]Transcript, 37.
This state of affairs is not consistent with the title being in the name of only the three men and not Kiki, notwithstanding Kiki was also a mortgagor or guarantor. She was also working at the time.
The evidence of the arrangements and motivation for the purchase of Cornwall Street (and Melville Road) was strongly contested by Kiki. She said she bought Cornwall Street with her husband: ‘[w]e were both working and we bought it.’[64] She said they borrowed money[65] and that the reason for purchasing Cornwall Street was for her ‘aged retirement’.[66] Kiki was vehement in denying Cornwall Street was bought as a gift for Minas.[67] Kiki’s reason for Alexis, Minas and Peter’s names being on the title was that it was consistent with accounting or tax advice she and Alexis received at the time.
[64]Transcript, 280.
[65]Kiki’s evidence was that the loans were paid by her; Transcript, 282.
[66]Transcript, 280.
[67]Transcript, 280. Kiki’s reply to this proposition when put to her by counsel was a very firm ‘never’.
The documentary evidence shows that Cornwall Street was bought by Kiki and Alexis with a loan from CBA with Straw Street as security. There are no banking records to show how the mortgage was paid but that mortgage was discharged in 1993.[68]
[68]CBA mortgage discharged 17 October 1993, Court Book, 406; also see ‘Statement of Agreed Facts and Issues’, Submissions in Hatziminas v Hatziminas, S ECI 2023 01556, Supreme Court of Victoria, undated, [4] (‘Statement of Agreed Facts’).
Maria conceded that she was aware that Cornwall Street was purchased as an investment.[69]
[69]Transcript, 37.
Conclusion as to the Initial Gift
I am not satisfied there is persuasive evidence which supports the Initial Gift representation as claimed by Maria. I do not accept that there was a gift or promise of a gift to Minas of Cornwall Street upon its purchase as alleged. The evidence relied upon by Maria was what she said she had been told by Minas. There was no other direct or indirect oral evidence to corroborate this assertion. If the real reason to omit Minas’ name on the title was his minority, there is no reason why the title change did not occur upon his majority. Rather, the title remained in Kiki and Alexis’ names, consistent with Kiki’s evidence that the intention was the property was an investment for their retirement. A different approach was taken to whose names were on the title in respect to Melville Road.
Rather, the oral evidence of Kiki (and of Peter, to the extent that it added anything useful given his age at the time of the purchase of Cornwall Street and Melville Road) was directly to the contrary.
The only documentary evidence relating to the purchase of Cornwall Street are the title documents, which show Kiki and Alexis as registered proprietors.
Insofar as the purchase of Melville Road is said to support this promise or reflect the underpinning of a joint endeavour or common purpose constructive trust, the documentary evidence shows that the title was put in the names of Alexis, Minas and Peter as joint tenants and that the mortgage was secured in their names and that of Kiki. This documentary evidence was in existence commensurate with the time Maria says Minas told her of the promise to him of the beneficial ownership of Cornwall Street.
Kiki’s evidence was that she knew she was guaranteeing the mortgage. She strongly denied that either of the two sons paid any part of the mortgage for either Cornwall Street or Melville Road at this time. Maria’s explanation as to why Alexis, Minas and Peter’s names were on the title and bank documents was that Minas’ name was required because he was working, and had a regular income. This was disputed by Kiki, who criticised Minas’ work ethic and work consistency.
The alternative explanation given as to the title arrangements was that Kiki and Alexis had received tax advice to that effect.
From this evidence, I find that it is inherently improbable that Kiki and Alexis, hardworking but not prosperous people, would make a gift in 1987 to one son. Rather, in 1987, given their relatively modest means and income and their desire to build their wealth for their own financial security in retirement, any promise (if one were made at all) was made in an informal familial context. Minas was a minor, had a tentative work record, and there was a lack of any persuasive evidence of contribution by him to the family coffers. There was certainly no persuasive evidence of direct payments to the mortgage on Cornwall Street by him. If there were any financial contributions to the family finances, I am of the view that they would be made in a commonplace familial setting and not directed to a formal legal arrangement by which Minas was to be the beneficial owner of Cornwall Street.
I accept that Cornwall Street was purchased as an investment for Alexis and Kiki’s long term financial security. They rented it out, paid off the mortgage and the property remained in their names accordingly.
That one day, in the ordinary course of life, the property, if still retained by them on their passing, might be inherited by Minas and/or his brother is a commonplace expectation, but the evidence led by Maria does not support the alleged Initial Gift.
I am not persuaded on the evidence that Maria’s equitable claim based on proprietary estoppel or constructive trust is established based on the Initial Gift representation, either by words or conduct. The Initial Gift representation not being established as a fact, it is unnecessary to deal with the other elements which are needed to make out the proprietary estoppel or constructive trust claims in respect of the Initial Gift.
AMENDED GIFT
Oral representation of the gift of Cornwall Street as a wedding present
Maria gave evidence that Kiki and Alexis both said to a gathering of people[70] at the engagement party held for Maria and Minas at Maria’s family’s home in December 1994 that ‘they were gifting us the house and we were going to move to, and [sic] the address.’[71] When pushed on the exact words, Maria said this was ‘[w]hat I could vaguely remember because it was constantly mentioned all the time, and not only at the engagement but a lot of times after that.’[72] She said further that:
[t]hey were talking to my parents saying that, you know, we’ve got a home they can renovate, they can move in. It will be Minas’, at the time. One each for the kids when they get married or, you know, for now it is an investment but now they are married they can move in. That’s when we decided to renovate.[73]
[70]Including Maria’s parents and other guests.
[71]Transcript, 39.
[72]Transcript, 39.
[73]Transcript, 39.
Maria and Minas were married at a wedding ceremony in the registry office on 1 October 1995. She said that when they married in 1995, the promise was reiterated by Kiki and that they were encouraged ‘to renovate the house, it’s going to be ours, we gift it to you, its for the wedding, and then we went along with the next wedding.’[74] The next wedding was a traditional Greek wedding which occurred on 17 September 1996 which was attended by about 450 guests.
[74]Transcript, 41.
There was no corroborating evidence of Kiki’s alleged representation, notwithstanding several other witnesses were called on behalf of Maria to support her version of events, including that they believed what Maria had told them as to the promise made and that they believed Cornwall Street was Maria’s house. None of this evidence was of probative value. It was given by supportive and loyal friends of Maria’s. None of these witnesses gave evidence that they were at the engagement party or the registry wedding. In fact, tellingly, no one at all who was at the engagement party or the wedding was called to confirm the representation, including any member of Maria’s family. Nor was anyone called to give evidence of the representation being ‘constantly mentioned all the time’ as Maria alleged.
Ms Katsianos’ evidence was the only evidence which came close to any useful corroboration. This evidence was of a conversation which occurred well after the alleged promise was made. Ms Katsianos said that Kiki told her she should save money and buy a house, and that ‘that’s what I’ve done with my two boys when they were working. From young I used to take a commission of their wages so that’s how we’ve got all these properties now for the kids and everything’.[75] Ms Katsianos was forthright in her evidence. However, her evidence was imprecise as to detail. She was unable to be specific as to her recollection. She was unable to say that what Kiki actually said to her was that Cornwall Street was Maria and Minas’ property. Her evidence was equally able to be interpreted as being consistent with Kiki’s version of the arrangement and Kiki’s sentiment that a home of one’s own was what one should aspire to and that it is a good thing for parents to help their children if they are able to do so. It is also consistent with the usual expectation that, in the ordinary course, assets of one’s parents would be inherited one day by the next generation.
[75]Transcript, 357.
I also note that Ms Katsianos’ allegation was not put to Kiki in cross examination so the evidence was not able to be tested.
There was also no useful evidence given by the other witnesses called by Maria on this issue.
There is no direct contemporaneous corroborating evidence given by any person to support Maria’s version of the Amended Gift.
On Maria’s own evidence, there is an acknowledgement that Cornwall Street was bought as an investment and rented out. In my view, it is difficult to reconcile her acceptance that Kiki and Alexis owned Cornwall Street and that it was initially bought as an investment with her allegation and stated belief that the property was gifted to her and Minas.
There was also an acknowledgement by Maria that no mortgage payments were made by her or Minas to Cornwall Street. There were some ongoing costs which were paid, such as council rates, water rates and some land tax, and these payments were borne out by the bank statements produced. I note that no council rates have been paid since mid-2017.[76]
[76]Plaintiff, ‘Opening Submissions’, Submissions in Hatziminas v Hatziminas, S ECI 2023 01556, Supreme Court of Victoria, 2 March 2024, [29] (‘Plaintiff’s Opening Submissions’); Court Book, 398, see Council Valuation and Rate Notice stating $11,673.34 owing in arrears.
Maria’s evidence of the Amended Gift is based on her oral evidence of what she alleged was said by Kiki and Alexis to her and Minas. As two key people in these alleged conversations (Alexis and Minas) are now deceased, the evidence in this regard must be treated with caution.
Kiki’s evidence was definitive that there was never a gift of Cornwall Street to Minas and Maria. She maintained the offer to Minas and Maria was for them to live rent free at Cornwall Street so they could save to buy their own home.[77] She maintained Cornwall Street was purchased by Alexis and herself to provide financial security for their retirement.[78]
[77]Transcript, 304.
[78]Transcript, 319, 334.
Whilst I have gone on to consider below the evidence relied upon by Maria in respect of the circumstances and events said to be corroborative of the Amended Gift, I am satisfied on the balance of the evidence that Cornwall Street was purchased as an investment to provide for Kiki and Alexis’ retirement. I am also satisfied that, in the natural order of things, there was an expectation that if Cornwall Street was still held by Kiki and Alexis upon them passing away, Maria and Minas would inherit it. While that is a reasonable expectation for Maria and Minas to hold, that circumstance does not amount to proof of a representation or promise that can found proprietary estoppel or impose a constructive trust over the whole of Cornwall Street as claimed.
However, as I explain later, in my view the change in circumstances and events which lead to the Second Renovation changes the position of the parties.
Circumstances of moving into Cornwall Street and the First Renovation
In support of the contention that there was a promise of the gift of Cornwall Street to Maria and Minas and their actions in reliance of that representation, Maria gave evidence of the circumstances which she said led to them moving into Cornwall Street.
The evidence in relation to the First Renovation of Cornwall Street in or around 1996-7 was disputed. Maria claimed that she and Minas paid for the renovation as they had been gifted the property. Her response to the question of whose idea it was to renovate the property was that ‘I think it was a mutual one because the property was really trashed’.[79]
[79]Transcript, 43–4.
Maria’s evidence was that, despite not wanting to move into Cornwall Street, and preferring a new house and land package, she was persuaded to renovate Cornwall Street and move in there based on the promise of the house being theirs. Maria agreed that in 1994 Cornwall Street was tenanted. She said that she went to see the property in 1994 with Peter. It had been left in a damaged state by the tenants.[80] She described the house as a ‘two bedroomed little shack’, ‘like a maze walking in’, with a ‘tiny kitchen with ‘two [sic] little cupboard space’ and ‘grass at the back’.[81] Maria gave evidence that in 1996, after they were married, she, Minas and Peter started renovating Cornwall Street.[82]
[80]Maria described it as having no back door, broken windows and doors, hanging light fittings, and the flooring soaked with alcohol; see Transcript, 40.
[81]Transcript, 39–40.
[82]After the second wedding ceremony; Transcript, 41–2.
Kiki strongly disputed that Cornwall Street was given to Minas and Maria as a wedding gift.[83] Rather, she was adamant that the offer to move into Cornwall Street was made so they could save for a deposit and purchase their own house.[84] Kiki’s evidence was that Cornwall Street had been tenanted, left damaged and was renovated by her and Alexis at her and Alexis’ expense. She said that she and Alexis took out a loan of $30,000 to pay for the renovations and that Minas and Maria did not pay for the renovation.[85] Kiki’s evidence was that it was after the work was done to repair Cornwall Street that Minas asked if he and Maria could move into the property and this request from Minas came after the couple were married and had been living with Maria’s mother for some time.[86]
[83]Transcript, 283, 281, 300.
[84]Transcript, 304.
[85]Transcript, 302–3.
[86]Transcript, 303.
I accept that it seems that until sometime between 1994 and 1996, Cornwall Street was tenanted and, when the last tenants vacated the premises, the property was left in a very poor state of repair. There is no clear evidence about the cost of the repairs and upgrading of Cornwall Street. However, there is sufficient consistency in the evidence of Maria, Peter and Kiki to conclude that there was cooperation between them all to undertake the work at Cornwall Street.
Maria’s evidence was that the renovation cost around $50,000 and the funds came from her and Minas’ savings and from $25,000 they received in wedding gifts.[87] She accepted that approximately $20,000 was contributed to the renovation by Kiki and Alexis.[88]
[87]Transcript, 43.
[88]Transcript, 43.
Maria also gave evidence that the work done on the First Renovation was physically undertaken by herself, Minas and Peter. She said that two bedrooms were added and an open plan living area and a new kitchen was put in before they moved in.[89] Maria denied that she was ever told that their occupation was short term. She maintained that her understanding was that Cornwall Street ‘was gifted to us so that’s why we renovated it, otherwise I would have spent that money on a house and land package.’[90] She said the basis of her belief that Cornwall Street was theirs was ‘because it was constantly mentioned all the time’ by Kiki and Alexis.[91] She said she would not have put her money into Cornwall Street otherwise.
[89]Transcript, 42.
[90]Transcript, 43–4. Maria alleged she did not want to renovate Cornwall Street but preferred a new house like her sister had bought in Roxburgh Park.
[91]Transcript, 39.
Neither party could give precise evidence about the timing of when Minas and Maria moved into Cornwall Street. Given the length of time which has passed, this is not surprising. Maria gave evidence that she was living at Cornwall Street in its renovated state when her first child as born in October 1997. The only other independent evidence is that the mortgage taken out over Straw Street by Alexis and Kiki, which was said to be the funding source for the renovation, was taken out in August 1997.[92] The First Renovation was undertaken over a lengthy period according to Peter’s evidence.
[92]Court Book, 418–20, 437.
The amount spent on the First Renovation was not clear. Maria’s evidence would suggest a total amount of $70,000, being $20,000 she conceded came from Kiki and Alexis and the $50,000 she claimed she and Minas had between them. As against this, the mortgage over Straw Street was around $30,000.[93]
[93]Court Book, 437.
I am not persuaded that the representation as alleged by Maria led to Minas and Maria expending $50,000 of their own money to renovate Cornwall Street in or around 1996 is made out. Firstly, I do not accept that they had $50,000 between them at this time. They were on modest salaries and there is no independent corroboration or documentation which establishes that they had saved or acquired such an amount. It is Maria’s oral evidence alone.
In particular, I am not persuaded nor believe it is plausible that they received $25,000 in wedding money. Again, there is no corroborating evidence of this amount. It is notable that no member of Maria’s family was called to support this allegation. As against this, Kiki and Peter both said the amount was much less than this at around $8,000 or $9,000, recognising they were repeating what they say they were told by Maria’s mother, or by Minas. Kiki’s evidence was that Minas and Maria had debts and Minas asked Kiki to allow them to move into Cornwall Street after it had been renovated.
Whilst Maria might have hoped for a new house, my conclusion on the available evidence is that their prospects of having sufficient financial means to achieve that option were unrealistic at that time and, as events transpired, this is confirmed by Minas’ modest salary and Maria being a fulltime mother at home for much of the first decade of their marriage.
In any event, Maria’s income was less than modest, being derived from dog breeding and some ‘at-home salon’ hairdressing. No tax returns were discovered. That Maria was in receipt of Centrelink benefits for a substantial period of time underlines this low level of independent financial stability. Save for her oral evidence that in 2016 she had $40,000 of undeclared income ‘in my wardrobe’, her capacity to fund alternative accommodation would appear to be extremely limited. The option of moving into Cornwall Street rent free in order to save money provided them with a generous start in their married life.
I am not persuaded that the reason for moving into Cornwall Street was motivated by the promise of ownership. Rather, their circumstances suggest to me that it was because, as Kiki maintained, an option available to them so they could save money to purchase their own home. Their financial prospects were not rosy and whilst I accept that Minas was in work, that work was not high paying nor it would appear, given their lifestyle, regular. In addition, Maria and Minas started a family within the year of moving into Cornwall Street, limiting her personal income earning capacity.
Maria’s evidence was that, notwithstanding the fact she had received the notice to vacate in 2017, she ordered and installed drapes at the house.[169] She was questioned about what she thought at this time and her response was:
I don’t know, [Kiki] was angry with something, I don’t know what I thought. Because Peter had kept coming and going. He was alright, he’s saying, ‘don’t worry it will be fine, don’t worry about it, she’s probably just angry’ and all these excuses. But then he would turn on us. So I didn’t know what was going on and I actually thought he [sic] was still my – Minas and I’s property when they passed away and my kids.
…
It was still our property because obviously I spent all that much [sic] money, I didn’t expect this. And [Kiki] didn’t come back after that to tell me to leave again. So then I put up the blinds[170]
[169]Transcript, 115–16. This assertion was supported by an invoice addressed to Maria from Venus Drapes Pty Ltd dated 3 October 2017 for an amount of $2,100. A further invoice from the same company was addressed to Maria dated 19 December 2017 for an amount of $ 1,350; Court Book 751–2.
[170]Transcript, 116–17.
Peter’s evidence was that the 14 July 2017 notice to vacate was given by Kiki to Maria after the Second Renovation was completed. He explained that Kiki had no money and was desperate to sell Cornwall Street. He said he did not know much at this time but he talked to Maria to try to calm down the situation. He said that he did not want Maria and the children to leave Cornwall Street and he tried to look after them as much as he could.[171]
[171]Transcript, 397.
Peter’s evidence was that, more recently in 2022, he went to Cornwall Street to remove some of his belongings as well as removing the front security door, repairing fly screens on one of the windows and installing new front security cameras. By this time, Maria had put her caveat on the house and the police ‘got involved’.[172]
[172]Transcript, 397–8.
Peter said that he was supporting his mother financially and that she still owed around $100,000 to the bank which he was paying off. Peter said that he had started assisting Kiki with financial affairs in 2006, eight years prior to Alexis passing away.[173]
[173]Transcript, 407.
I conclude from this evidence that Kiki was seeking to assert her legal title to Cornwall Street for the very purpose she and Alexis had intended, for her financial security in her retirement. However, I am satisfied that the conduct of the parties following from the decision to renovate Cornwall Street in 2015 has altered the respective interests of Maria and Kiki for the reasons which follow in the next section.
Does Maria have an equitable interest in Cornwall Street arising from the Second Renovation?
As previously noted, I am of the view that the elements of proprietary estoppel or constructive trust are not borne out by reason of the alleged Initial Gift or Amended Gift.
However, I am satisfied that there is a representation which can be inferred from the conduct and behaviour of Kiki in 2015 when the decision was made by Minas and Maria, with Kiki’s consent, to undertake the Second Renovation pursuant to which Minas and Maria expended significant sums of money from Minas’ superannuation and life insurance payout. I have concluded there has been conduct or acquiescence on the part of Kiki which would found an equitable interest which would prevent Kiki from asserting of her legal rights against the interest of Maria and Minas’ estate.
Kiki’s acquiescence to the Second Renovation
Whilst Kiki submitted that the reason for the Second Renovation was to improve Cornwall Street for sale and that the renovation cost was around $100,000, this claim is not borne out by her bank records or those of Peter, Minas or Maria. Nor is it plausible that an elderly retired woman in receipt of a pension (which is likely to be cut off entirely) would be able to fund an extensive renovation which, whilst the final cost is not certain, was at minimum likely to be around $250,000 according to the permit application lodged.
Further, the evidence of the design and specifications demonstrates that it was designed to suit Maria and Minas’ family. The evidence from Peter was that Maria was ‘rapt’ upon hearing of the proposed renovation and that Kiki agreed that the renovation should take place. Maria’s evidence was that Kiki was encouraging of her and Minas to renovate and gave evidence that Kiki was impressed by the renovation, praising her and that Kiki said it would be ‘nice for them’ and that ‘it will be a nice big home’.[174] Maria also said there was no discussion about the ownership of Cornwall Street and that she and the children moved back there after Minas died and the renovation work was finished.[175]
[174]Transcript, 70–1.
[175]Transcript, 71.
I am satisfied that the circumstances around the decision to undertake the Second Renovation, the management of the project, the contributions by Minas and Maria and Kiki’s conduct in, at minimum, acquiescing to the expenditure and allowing Maria and the children to return to live at Cornwall Street supports the equitable interest in Cornwall Street in Maria’s favour.
Maria has participated to her financial detriment in improving Cornwall Street, albeit mistakenly, in the belief that she would receive an interest in it. Kiki has encouraged this expenditure by positive actions or, at minimum, by not taking action to dissuade Maria from this course. Kiki is aware of this mistaken assumption and has not taken steps to correct the mistaken assumption until well after the renovations were complete. It would be unconscionable for Kiki to rely on her legal interest and receive the benefit of Maria and Minas’ contribution in these circumstances.
As I do not accept the proposition that there was a gift of Cornwall Street to Minas and Maria in the first place, it follows that I do not accept the submission that Kiki changed her mind about gifting Cornwall Street after her pension was cut off. It seems to be accepted by Maria that Kiki was under some financial pressure.[176] I conclude that Kiki was seeking to realise the financial interest she had in the property that she and her husband had invested in some time before. Kiki first sought modest financial payment from Maria of $150 per month and, when that was not forthcoming, she took the only other option available to her which was to trigger the sale of Cornwall Street.
[176]Defendant’s Closing Submissions, [18].
I am not persuaded that Kiki agreed to the Second Renovation solely on the basis that it would improve the resale value of Cornwall Street. Kiki’s evidence overall, in particular her limited ‘hands on’ role in the project, indicates to me an acquiescence to the plans of Minas and Maria to undertake an extensive renovation to meet their needs. Given Peter’s evidence that when the prospect of the renovation was discussed with Maria ‘she was rapt’, it is inconceivable to me that she would be enthusiastic to do a renovation of the scale and design undertaken only to then to be moved out.
There is no evidence from either party of a further discussion about the legal title to Cornwall Street after the alleged discussion about the transfer of title in 2005. That of itself is not enough to dissuade me from reaching my conclusion that Kiki’s actions and conduct induced Maria and Minas to expend a significant amount of funds in the belief that Cornwall Street was or would be their property.
I have formed the view that Kiki’s acquiescence to Minas and Maria’s decision to undertake the Second Renovation led Maria and Minas to spend the entirety of their recently acquired windfall from Minas’ superannuation life insurance into Cornwall Street. There is no credible evidence that Kiki did anything to dissuade Maria and Minas from this course. Rather, objectively, the evidence is to the contrary. Maria’s evidence was that Kiki said that the renovations would be a positive thing for Minas and the children. Kiki took a hands off approach during the Second Renovation. Kiki’s evidence was that, after the Second Renovation was complete, she allowed Maria and her children to return to Cornwall Street.
In my view, there is compelling evidence that Maria and Minas believed, mistakenly, by reason of the Second Renovation, that they would have an interest in Cornwall Street. That is by reason of Maria and Minas expending substantial funds from Minas’ superannuation and insurance payout on the Second Renovation in the belief that the upgraded dwelling would be for Maria and their children’s benefit.
In my view, Kiki’s knowledge and acquiescence to Maria and Minas’ significant expenditure in the substantial renovation of Cornwall Street, in circumstances where it was clear that Maria believed that the house was to be hers, creates an equity in favour of Maria which would be unconscionable for Kiki to reject.
Kiki complained that there was an inconsistency between the claim as argued by Maria from that which was articulated in the pleadings. However, there is clear authority that a failure to amend the pleadings to include non-pleaded elements does not necessarily preclude a judgment upon the facts that have emerged at trial.[177] It is necessary to look at the actual conduct of the case to see whether the point was taken at trial. In my view, it is plain that the matters now in issue arising from the evidence were squarely in issue throughout the trial. Whilst complaints were raised by counsel for Kiki both after the opening and again in closing submissions, the actions of the parties and matters of reliance and detriment, in particular, were subject to cross examination and dealt with in final submissions.
[177]Donis, [60]–[61].
SUMMARY OF CONCLUSIONS
As set out at [132], I am not persuaded that there was a gift of Cornwall Street to Minas in 1996, nor an intention to gift the property to him. There was no persuasive evidence that Cornwall Street was ever intended to be transferred to Minas when he came of age, nor did this ever occur. I have found that this proposition was inherently improbable.
I reject Maria’s allegation as to the Initial Gift.
I also find that it implausible that Kiki and Alexis gifted the beneficial ownership to Minas and Maria as claimed by the alleged Amended Gift. I am persuaded that the evidence demonstrates to the requisite level of satisfaction that the gift given was not the beneficial interest in the property but the use and possession of Cornwall Street so that Minas and Maria could save to buy a home of their own. The representation was that they could live there rent free and that the right to occupy Cornwall Street was always intended to be subject to Kiki and Alexis’ financial security in retirement.
Such an arrangement is commonplace in a familial situation where parents, or grandparents, acting out of natural love and affection for their children and a desire to enable them to get on their feet financially, provide some financial support in this manner. That one day the property might be inherited by Minas (and Maria, if she was still part of the family unit), is not an unreasonable nor uncommon expectation in the ordinary course of life. However, this is not the same as gifting the beneficial interest to them as is alleged by Maria. I am not satisfied that any promise made was any more than a limited and non-binding one and certainly not one which created a legal liability or relationship which would support a beneficial interest of the property over that of Kiki’s legal entitlement. I am not satisfied that Minas and Maria would or should have had any expectation greater than that possessed by any other child in relation to the assets accumulated by their parents.
Rather, the language used by Maria was consistent with a different version of events and one more consistent with Kiki’s denial that there was ever a gift of the property to Minas and Maria, but rather that she agreed the couple could live rent free at Cornwall Street until they saved enough money for their own home and the property was intended to benefit Kiki and Alexis in their retirement.
I have not given weight to the evidence given by the other witnesses called on Maria’s behalf as I found their evidence to have no forensic utility.
Accordingly, I find that the clear and natural inference to be drawn is that there was a promise or representation made to them by Kiki and Alexis that Maria and Minas could occupy Cornwall Street rent free until they saved for their own home.
The evidence, however, is that they did not save and that they were never financially well off during the course of their marriage. It was only at the point of Minas’ untimely illness that they had significant resources at their disposal. Despite Maria’s evidence that in the early days of their marriage she wanted to purchase a house and land package, the evidence was that the resources available to them in 1996 to 1997 were modest and that their prospects of achieving this goal was uncertain. The offer to live in a house owned by Minas’ parents rent free was a generously provided benefit to them in the early days of their relationship.
Being given permission to occupy Cornwall Street for the longer term is not the same as being gifted the property at law. It is a gift of sorts, but not of the calibre of a gift of the estate at law or in equity in my view. The reference to the Yarra Valley Water account identifying Maria as ‘life tenant’ does not prove an interest in the property. I accept that, as the correspondence with Yarra Valley Water disclosed, it was done so that Maria could claim a rebate.
It is also not uncommon in a family situation that a member of a family, usually a child or grandchild, will be gifted the use of a property for a period of time and even have the legal owner’s permission to change it, provide for the upkeep and pay outgoings, renovate it and treat it as if it was theirs. That they do work on the property, make it better for themselves to enjoy and more comfortable does not automatically create an interest in the property. They will enjoy the substantial financial benefit of living there rent free, just as Maria and Minas did. In the natural order of things, it would be a reasonable expectation that Cornwall Street would be theirs one day when the legal owner passed on. That time has not come.
However, I am satisfied that the circumstances surrounding the decision to undertake the substantial Second Renovation and who paid for it created a situation whereby Maria and Minas were encouraged, or at last at minimum with Kiki’s acquiesce, to expend substantial monies on Cornwall Street in the belief that they would benefit from that investment in the property. It would be unconscionable in these circumstances for the benefit of the improvements to Cornwall Street to be kept by Kiki as the legal owner. In equity, compensation or accounting for this expenditure is required.
Finally, whilst the documentation and the oral evidence of the parties made the task challenging, I am satisfied that the amount contributed to the Second Renovation by Minas and Maria was $284,905.69. Kiki contributed $55,000 and Peter contributed $85,500. I note that the total of these amounts is $425,405.69 which, on all of the evidence, would coincide with the realistic amount expended on the Second Renovation.
REMEDY OR RELIEF
I am satisfied that Kiki’s acquiescence of allowing Maria and Minas to remain in occupation and her encouragement and/or acquiescence in Maria and Minas’ expenditure of a substantial sum of money in the Second Renovation created an interest in Cornwall Street which, in equity, needs to be brought into account. Kiki’s conduct in the circumstances of the Second Renovation, the reliance on her permission by Minas and Maria which encouraged them to spend substantial funds on the property, and the financial detriment suffered as a consequence of Kiki’s claim for possession and intended sale of the property requires a financial remedy.
The conduct of Kiki’s acquiescence to the Second Renovation raised an equity in favour of Minas and Maria which is not of a kind which would justify a declaration of trust or proprietary estoppel over part or whole of the property in their favour. The prima facie relief of transfer of whole or part of the property would be disproportionate, taking into account all of the circumstances, and would go beyond what is required for conscientious conduct. Rather, the appropriate remedy is a monetary award of equitable compensation.
As the Court of Appeal stated in Donis,[178] the effect of Giumelli is that, assuming the promise and detriment have been established (as I have found here), the promisee is prima facie entitled to have the promisor held to the promise, and the court then considers all the circumstances of the case in order to determine whether it is necessary to mould or modify the relief to avoid going beyond what is required for conscientious conduct.
[178]Donis, [32].
Consequently, I have concluded that the appropriate remedy in equity is not the transfer of the whole of the interest claimed in Cornwall Street, but an award of equitable compensation to Maria and Minas’ estate to the extent which represents the financial contribution made for the Second Renovation. I have so concluded primarily on the basis of the circumstances of the purchase of Cornwall Street, the intention that I have concluded remained extant throughout (being that of Kiki’s financial security in retirement) that the consequent detriment which would be suffered by her in the transfer of the whole of the property in the circumstances warrants a more limited remedy. The benefits that have been conveyed to Maria and Minas over the past 28 years have been extensive and I do not consider that more than the contribution to the Second Renovation is required to meet the requirements of contentious conduct by Kiki.
The manner in which the case was run before me sought to demonstrate a significant sum paid by Maria and Minas in the improvement of Cornwall Street in undertaking the Second Renovation. The documentary evidence of costs expended is not agreed, although the amounts alleged to have been spent (as opposed to the documentary proof to the same extent) suggests an amount in the vicinity of $400,000. As noted earlier, I am satisfied that the expenditure by Maria and Minas was $284,905.69. Given the position taken by Maria in the forensic decision as to how her case was to be run,[179] I will award Maria and Minas’ estate this amount by way of equitable compensation.
[179]On the final day of the trial, I gave counsel for Maria the opportunity to make submissions as to how Maria’s equitable interest should be calculated. Whilst counsel for Maria indicated that Maria’s claim included a claim for equitable compensation, counsel insisted that Maria’s claim was for the full interest in Cornwall Street and did not make submissions on how equitable compensation should be calculated. See Transcript, 527–9.
I will otherwise dismiss the counterclaim and order that the caveat lodged by Maria be removed forthwith. I will make an order for possession of Cornwall Street to Kiki subject to the payment of the equitable compensation ordered.
I will allow the parties an opportunity to make written submissions on the final form of the orders and as to costs.
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SCHEDULE OF PARTIES
S ECI 2023 01556
BETWEEN:
| Kiki Hatziminas | Plaintiff |
| - and - | |
| Maria Hatziminas | First Defendant |
| Maria Hatziminas as Administrator for the estate of the Late Minas Hatziminas | Second Defendant |
| Maria Hatziminas (both personally and as executor of the estate of Minas Hatziminas, deceased) | Plaintiff by Counterclaim |
| - and - | |
| Kiki Hatziminas | Defendant by Counterclaim |
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