Kalenik v Apostolidis (No 2) - [2013] VSC 395

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

List B

S CI 7588 of 2000

ZORICA MIRIJANA KALENIK	Plaintiff
v
JOHN IOANNIS APOSTOLIDIS & ORS	Defendants

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JUDGE:	Judd J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 June 2013
DATE OF JUDGMENT:	8 August 2013
CASE MAY BE CITED AS:	Kalenik v Apostolidis & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 395

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PROPERTY – De facto partners – Adjustment of property interests under Part IX of the Property Law Act 1958 – Final order made for payment of an adjustment sum – Creditors exceed available assets – Application under s 291 of the Property Law Act 1958 for priority over other creditors and for security – Whether application merely in aid of enforcement – Whether Court functus officio – Application invited reconsideration of final orders – Issues not raised at trial or on appeal.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P H Solomon SC with Mr S W Stuckey	Dimos Lawyers
For the Defendants	Mr S K Wilson QC	David Tonkin & Associates
For Deputy Commissioner of Taxation	Mr A T Broadfoot	Australian Government Solicitors

HIS HONOUR:

Introduction

The proceeding before the Court was brought by summons dated 26 April 2013 in which the plaintiff, Zorica Kalenik, sought orders under Part IX of the Property Law Act 1958 (Vic) which, she contended, were in aid of enforcement of orders made by the Court of Appeal.[1]
[1][2011] VSCA 307.

The application followed a lengthy trial in early 2009.[2] At trial, Kalenik sought an order against Apostolidis, her de facto partner, for an adjustment of property under s 285 of the Act. She was awarded the sum of $500 000, plus interest and costs.
[2][2009] VSC 208.

There was an appeal and a cross‑appeal, and two later proceedings commenced in the Trial Division in which the defendants, John Ioannis Apostolidis and associated entities, sought the removal of caveats lodged by Kalenik[3] over titles to property owned by the defendants.
[3]Originating Motions filed 6 June 2012 [3230/2012] and 28 November 2012 [6648/2012] respectively.

The caveats lodged by Kalenik prior to the trial claimed an interest under a constructive trust. Apostolidis was the registered proprietor of a property at 11 Yarrabee Court, Mount Waverley. The second defendant, DSK Holdings Pty Ltd, was the registered proprietor of the property at 12 Yarrabee Court, Mount Waverley, and Unit 7, 200–206 Princes Highway, Dandenong. The third defendant, Azura Pty Ltd, was the registered proprietor of property at Unit 5, 200–206 Princes Highway, Dandenong. The caveat lodged over 11 Yarrabee Court and Unit 5 was dated 5 April 2000, and the caveat lodged over Unit 7 was dated 16 March 2001. The caveat lodged over 12 Yarrabee Court was dated 30 November 2007.

Following the trial, Kalenik lodged further caveats over the properties, claiming an equitable interest pursuant to orders of the Court. These caveats were all dated 1 April 2010. Further…

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: [2013] VSC 395
Decision Date: 8 August 2013

CaseChat Overview and Summary

In the matter of Kalenik v Apostolidis (No 2), the Supreme Court of Victoria addressed the complex issue of property adjustment between de facto partners, as mandated by Part IX of the Property Law Act 1958. The dispute arose from a final order that had been made for payment of an adjustment sum, which was subsequently found to exceed the available assets. The court was called upon to determine whether an application under section 291 of the Property Law Act 1958, for priority over other creditors and for security, could be entertained given that the available assets were insufficient to meet all creditors' claims.

The legal issues before the court centred on the interpretation and application of section 291 of the Property Law Act 1958. Specifically, the court had to consider whether the application for priority and security was merely an enforcement tool or if it had the potential to alter the final property adjustment orders. The court also needed to address whether it was functus officio, meaning that it had lost the power to reconsider the final orders once they had been made. Additionally, the court examined whether the application had the effect of inviting reconsideration of the final orders on the basis of issues that were not raised at the trial or on appeal.

In rendering its decision, the court held that the application for priority and security was not merely an enforcement measure but had the potential to alter the final orders. The court found that it was not functus officio and was able to reconsider the final orders. However, the application was deemed to be an attempt to reconsider the final orders on the basis of issues that were not raised at trial or on appeal, which the court found to be improper. Consequently, the court dismissed the application for priority and security, reaffirming the final property adjustment order as it stood. The court's decision underscored the importance of raising all relevant issues at the appropriate stage of the proceedings to avoid later challenges to the final orders.

Orders