Hellenic Property Holdings Pty Ltd v Makaritis - [2025] NSWCA 13

Court of Appeal
Supreme Court

New South Wales

Case Name:	Hellenic Property Holdings Pty Ltd v Makaritis
Medium Neutral Citation:	[2025] NSWCA 13
Hearing Date(s):	25 September 2024
Date of Orders:	14 February 2025
Decision Date:	14 February 2025
Before:	Mitchelmore JA at [1]; Basten AJA at [111]; Griffiths AJA at [116]
Decision:	(1) Appeal dismissed. (2) The appellant is to pay the respondent’s costs of the appeal.
Catchwords:	EQUITY – trusts and trustees – constructive trusts – property owned by respondent sold to the appellant trustee company controlled by respondent’s son – whether joint endeavour between respondent and son pursuant to which respondent could continue to reside at property after sale – where following sale respondent provided funds to cover costs associated with property and renovations – application of principles in Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 – challenges to findings as to existence of joint endeavour and end of joint endeavour without attributable blame of respondent EQUITY – remedies – constructive trust on basis of failed joint endeavour – constructive trust for sale of property and division of net proceeds – form of declaration – return of contributions – sharing of surplus
Legislation Cited:	Supreme Court Act 1970 (NSW)
Cases Cited:	Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45; [1968] HCA 91 Kramer v Stone (2023) 112 NSWLR 564; [2023] NSWCA 270 McGuirk v University of New South Wales (2009) 75 NSWLR 224; [2009] NSWCA 321 McKay v McKay [2008] NSWSC 177 McKinlay v Woods [2024] NSWCA 122 McNab v Director of Public Prosecutions (NSW) (2021) 106 NSWLR 430; [2021] NSWCA 298 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 NSW Trustee and Guardian v Togias (2002) 110 NSWLR 86; [2022] NSWCA 225 Pavlis v Pavlis [2022] NSWCA 281 Willis v Western Australia (No 3) [2010] WASCA 56; 4 ASTLR 359 Woods v McKinlay (No 2) [2021] NSWSC 1510 Zhang v Metcalf [2020] NSWCA 228
Category:	Principal judgment
Parties:	Hellenic Property Holdings Pty Ltd ACN 632 448 241 (Appellant) Bill Makaritis (Respondent)
Representation:	Counsel: M Condon (Appellant) J Mack/B Smith (Respondent) Solicitors: Gregory & Austin Lawyers (Appellant) Cogent Lawyers (Respondent)
File Number(s):	2023/00156720
Publication Restriction:	Nil
Decision under appeal:
Court or Tribunal:	Supreme Court
Jurisdiction:	Equity
Citation:	Makaritis v Makaritis (No 2) [2022] NSWSC 1690; Makaritis v Makaritis (No 3) [2023] NSWSC 409
Date of Decision:	9 December 2022; 20 April 2023
Before:	Parker J
File Number(s):	2020/221695

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE

[This…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NSWCA 13
Decision Date: 14 February 2025

CaseChat Overview and Summary

The case of *Hellenic Property Holdings Pty Ltd v Makaritis* involved a dispute between Hellenic Property Holdings Pty Ltd (HPH), a company controlled by Luke Makaritis, and Bill Makaritis, Luke's father. The core of the dispute concerned the beneficial ownership of a property that had been sold to HPH. Bill Makaritis contended that there was a joint endeavour between himself and his son, Luke, pursuant to which he was entitled to continue residing at the property after its sale to HPH. He further argued that he had provided funds towards the property's costs and renovations, and that the principles established in *Baumgartner v Baumgartner* were applicable. HPH challenged the findings regarding the existence and termination of this alleged joint endeavour, particularly concerning whether Bill's departure from the property was without attributable blame. The matter was heard in the Court of Appeal of New South Wales.

The legal issues before the court included whether a constructive trust should be imposed on the property in favour of Bill Makaritis based on a failed joint endeavour. Specifically, the court was required to determine if the evidence supported the existence of a joint endeavour between Bill and Luke, and if so, whether that endeavour had ended without blame attributable to Bill. If a constructive trust was found to exist, the court also had to consider the appropriate form of that trust, including whether it should be for sale with a division of net proceeds, the return of contributions, and the sharing of any surplus.

The Court of Appeal dismissed the appeal, upholding the primary judge's findings. The court applied the principles from *Baumgartner v Baumgartner*, which allows for the imposition of a constructive trust where contributions are made to property in furtherance of a joint endeavour, and that endeavour is later dissolved without attributable blame to one party. The court found that the evidence supported the existence of a joint endeavour between Bill and Luke concerning the property, and that Bill's departure from the property was not due to any fault on his part. Consequently, the court affirmed the imposition of a constructive trust for the sale of the property and the division of the net proceeds, taking into account contributions made by Bill.

The orders of the court were that the appeal be dismissed, and that Hellenic Property Holdings Pty Ltd pay the respondent's costs of the appeal.

Orders

Orders of the court

(1) Appeal dismissed.

(2) The appellant is to pay the respondent’s costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Also on 18 March 2019, Bill approached ANZ and spoke with Dinesh Jayasuriya, Branch Manager at the Newcastle West Branch. In email correspondence between Mr Jayasuriya, Bill and Luke over the course of 18 March and 19 March 2019:(1)Mr Jayasuriya initially indicated that Bill could borrow an amount of about $215,000 on his own and then a further $50,000 could be borrowed jointly by Bill and Luke, although he foreshadowed that it would be difficult to convince a loans assessor that Luke would get a benefit from being a co-borrower on the smaller joint loan. (2)Mr Jayasuriya stated that if they set up a trust, “as long as the Trust has powers to borrow funds, etc – with a company as corporate trustee, we should be able to consider the Director[‘]s income and borrow funds”. (3)Luke provided Mr Jayasuriya with home loan applications from Bill, and from him and Bill as “co-borrowers”.(4)Mr Jayasuriya responded, stating that upon review, neither the amount that Bill could borrow on his own nor the amount that Luke and Bill could borrow jointly would be enough for their requirements. (5)After some confusion regarding whether it was necessary to make a rental allowance in the application for Luke, Luke clarified that the “current idea” was that “the trust (through my dad and I as joint trustees) raise a mortgage to buy the property at Maryland, we then build a 3 bedroom granny flat and live there at Maryland in the granny flat renting the house out for $500pw”. (6)On that basis, Mr Jayasuriya indicated that if Luke could get his personal loans and credit card paid off and cancelled, the trust could borrow about $298,000. Application to Pepper Money and incorporation of HPH On 19 March 2019, Luke also approached John Carey, a lending specialist at Pepper Group Ltd (Pepper Money), to refinance the Property and to fund construction of a granny flat. In an email from Luke to Mr Carey dated 21 March 2019, which was copied to Bill, Luke wrote: “I’ve spoken to dad about the various options (he is cc’d into this email) and he has decided that the way we should proceed is as follows:He understands that the Lender will require that it be shown my name is attached to the property in some capacity showing legal interest. He prefers that we borrow enough now to cover stamp duty also so that we can set up a company in which both dad and I are co-directors and shareholders. After speaking to dad, he does not want to go down any other path. He prefers we have a company as legal owner for taxation reasons – so that any rental income earned from the property will be tax payable by the company and will not affect either his or my own existing taxation arrangements.…Can you please therefore process the loan application on the basis of the primary lender [sic] being Hellenic Property Holdings Pty Ltd with William Makaritis and Luke William Makaritis as guarantors.As for the loan amount, having discussed matters with dad further, we now have a preference to borrow enough money to cover the stamp duty and transfer for conveying the property into the Legal Title of [HPH].Therefore, we wish to request the following amount:1. $265,261 - Pursuant to Court Orders for Property Settlement with dad’s ex-partner;2. $119,000 - Granny flat construction …;3. $42,000 - to discharge the existing mortgage with the ANZ Bank;4. $28,500 - to satisfy my personal car loan;5. $16,000 - to cover stamp duty and transfer of house to the company.________________$470,781Is it possible to proceed on this basis? If so, and if you believe the loan application and serviceability is fine having considered everything we discussed in addition to the above, then we would like to proceed on that basis. We will not establish the company until such time as you confirm the loan is serviceable and pre-approval likely.”Mr Carey gave an early indication that same afternoon that the loan could be approved, subject to a credit assessment.