Karabagias v Katopodis

Case [2022] VSCA 191

SUPREME COURT OF VICTORIA

COURT OF APPEAL
S EAPCI 2021 0109
THEODORAS KARABAGIAS Applicant
v
GEORGIA KATOPODIS Respondent

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JUDGES: SIFRIS, KENNEDY and WALKER JJA
WHERE HELD: Melbourne
DATE OF HEARING: 9 August 2022 
DATE OF JUDGMENT: 8 September 2022
MEDIUM NEUTRAL CITATION: [2022] VSCA 191
JUDGMENT APPEALED FROM: [2021] VCC 1120 (Judge Burchell)

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PROPERTY, EQUITY AND TRUSTS – Alleged representations made to applicant by parents of ex-wife – Applicant expended majority of sole asset renovating parents’ property prior to separation from ex-wife – Judge held alleged representations not made and dismissed claim for constructive trust and equitable compensation – Whether judge gave sufficient reasons for finding that representations not made – Judge’s reasons do not reveal basis on which findings made – Reasons do not reveal why respondent’s evidence preferred over applicant’s – Hunter v Transport Accident Commission [2005] VSCA 1, applied – Appeal allowed – Matter remitted for rehearing.

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Counsel
Applicant: Mr JD McKay
Respondent: Mr RA Edmunds

Solicitors
Applicant: Lennon Lawyers
Respondent: Dimos Lawyers

SIFRIS JA
KENNEDY JA
WALKER JA:

Introduction and summary

  1. The applicant, Theodoras Karabagias (‘Theo’) claims he has an equitable interest in land in Kew (‘the Land’) owned by the respondent, Georgia Katopodis (‘Georgia’).[1] His claim is based on an allegation of proprietary estoppel or common intention constructive trust. There are two separate residences on the Land (Unit 1 and Unit 2), but the Land has never been subdivided.

    [1]Without any disrespect to the parties, first names are used because of the common surname of Georgia and her daughter Chrysoula.

  2. Georgia is the mother of Theo’s former wife, Chrysoula Katopodis (‘Chrysoula’ or ‘Sue’). Theo contended that he had a conversation with Georgia, her husband Petros (now deceased), and Chrysoula in mid-July 2012, during which a promise was made by Georgia and Petros to the effect that, if Theo and Chrysoula funded renovations to Unit 1, the unit would be theirs. Theo said that, in reliance on this promise, he withdrew the whole of his superannuation in the sum of $92,956.02 from his superannuation account (which was his only asset of substance) and expended a substantial part of that money — approximately $56,000 — on funding a renovation of Unit 1. Theo now has no assets and is on a disability pension.

  3. Georgia denied Theo’s allegations. Georgia’s and Chrysoula’s evidence was to the effect that no discussion took place with Theo in July 2012. Their evidence was that Georgia and Petros had told Chrysoula that she and Theo could live rent-free at Unit 1 for as long as they wanted, provided they paid the rates and outgoings for Unit 1. Georgia and Chrysoula also said that, in response to a request by Chrysoula that she and Theo be able to do some renovations, Petro and Georgia told Chrysoula that she and Theo could do so at their own cost. Georgia and Chrysoula denied that there was a promise to Theo to the effect that Theo and Chrysoula would own Unit 1 or…

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Karabagias v Katopodis [2022] VSCA 191
Case
[2022] VSCA 191
Decision Date

CaseChat Overview and Summary

Karabagias v Katopodis is an appeal concerning a property dispute. The applicant, Karabagias, alleged that his parents-in-law made representations to him that he would receive their property as part of the divorce settlement. In reliance on these representations, he spent most of his financial resources renovating their property. The respondent, Katopodis, denied the representations were made. The primary judge dismissed Karabagias's claims for a constructive trust and equitable compensation. The applicant appealed on the basis that the judge failed to provide sufficient reasons for finding that the representations were not made. He argued that the judge did not explain why the respondent's evidence was preferred over his own.

The legal issue before the court was whether the judge provided sufficient reasons for his findings, particularly in relation to the credibility of the evidence provided by the parties. The court considered whether the judge's reasons were sufficient to expose the path of reasoning that led to his findings, in accordance with the principles set out in Hunter v Transport Accident Commission. The court also considered whether the judge's reasons revealed why the respondent's evidence was preferred over the applicant's, as required by Kelso v Tatiara Meat Co Pty Ltd. The court found that the judge's reasons were insufficient because they did not reveal the basis on which the findings were made, nor did they explain why the respondent's evidence was preferred over the applicant's.

The court held that the appeal should be allowed and the matter remitted for rehearing. The court found that the judge's reasons did not meet the standard required by Hunter, as they did not reveal the basis on which the findings were made or why the respondent's evidence was preferred over the applicant's. The court held that the failure to provide sufficient reasons was an error of law. The court also noted that the hearing was conducted over Zoom and that the connection frequently froze and cut out, which may have affected the quality of the evidence presented. The court did not make any final orders but remitted the matter to the primary judge for rehearing.

In conclusion, the court found that the judge's reasons were insufficient and that the matter should be reheard. The court held that the judge's reasons did not meet the standard required by Hunter, as they did not reveal the basis on which the findings were made or why the respondent's evidence was preferred over the applicant's. The court did not make any final orders but remitted the matter to the primary judge for rehearing.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

However, as Nettle JA observed in Hunter v Transport Accident Commission, a ‘mere recitation of evidence followed by a statement of findings, without any commentary as to why the evidence is said to lead to the findings’, is inadequate.[13] In that case his Honour also observed the importance of exposing the ‘path of reasoning’ as follows: [W]hile the extent of the reasons will depend upon the circumstances of the case, the reasons should deal with the substantial points which have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those findings are based; and provide an intelligible explanation of the process of reasoning that has led the judge from the evidence to the findings and from the findings to the ultimate conclusion. It should also be understood that the requirement to refer to the evidence is not limited to the evidence that has been accepted and acted upon. If a party has relied on evidence or material which the judge has rejected, the judge should refer to that evidence or material and, in giving reasons which deal with the substantial points that have been raised, explain why that evidence or material has been rejected. There may be exceptions. But, ordinarily, where a judge rejects or excludes from consideration evidence or other material which is relevant and cogent, it is simply not possible to give fair and sensible reasons for the decision without adverting to and assigning reasons for the rejection or exclusion of that material. Similarly, while it is not incumbent upon the judge to deal with every argument and issue that might arise in the course of a case, where an argument is substantial or an issue is significant, it is necessary to refer to and assign reasons for the rejection of the argument or the resolution of the issue. Above all the judge should bear steadily in mind that reasons are not intelligible if they leave the reader to wonder which of a number of possible routes has been taken to the conclusion expressed. Failure to expose the path of reasoning is an error of law.[14][13][2005] VSCA 1, [28] (Batt and Vincent JJA agreeing at [1]–[4]) (‘Hunter’). [14][2005] VSCA 1, [21] (Batt and Vincent JJA agreeing at [1]–[4]) (emphasis added) (citations omitted). This includes an obligation to give a rational and analytical explanation for preferring one witness’s evidence over another’s where there is a conflict of evidence.[15][15]Kelso v Tatiara Meat Co Pty Ltd (2007) 17 VR 592, 628 [190] (Dodds-Streeton JA, with whom Buchanan, Nettle, Ashley and Kellam JJA agreed); [2007] VSCA 267 (‘Kelso’); Mutual Cleaning & Maintenance Pty Ltd v Stamboulakis (2007) 15 VR 649, 662 [51] (Neave JA, Maxwell P agreeing at 650 [1], Kellam AJA agreeing at 664 [59]); [2007] VSCA 46. The trial of this matter involved a hearing over three days. It was conducted using Zoom, and it is apparent from the transcript that the Zoom connection froze and cut out not infrequently. The witnesses gave evidence-in-chief in the form of their witness statements, which they adopted, supplemented by some additional oral evidence-in-chief; they were then cross-examined. Georgia gave evidence using an interpreter, although she occasionally answered questions directly herself, in terms not entirely consistent with the answers as interpreted. It was plainly a difficult hearing.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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