Karastamatis v Tzanavaras - [2013] SASC 163

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KARASTAMATIS v TZANAVARAS
[2013] SASC 163
Reasons for Decision of The Honourable Justice Nicholson
1 November 2013
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS
SUCCESSION - PERSONAL REPRESENTATIVES - RIGHTS, POWERS AND DUTIES - GETTING IN AND REALISING ESTATE
EQUITY - EQUITABLE REMEDIES - ACCOUNTS AND INQUIRIES - SUMMARY ORDERS FOR ACCOUNTS
SUCCESSION - PERSONAL REPRESENTATIVES - PROCEEDINGS BY PERSONAL REPRESENTATIVES
The plaintiff is the sister of the defendant. They are the two surviving children of their father who died on 25 January 2008. On 5 February 2009, probate of the father’s will dated 30 August 2007 was granted to the defendant, he being one of two executors named in the will, but with leave reserved to the plaintiff, the other named executor. This litigation concerns a number of complaints raised by the plaintiff as to the defendant’s administration of the father’s estate which administration is not yet complete. The plaintiff has sought an order that the defendant provide a full accounting of his administration of the estate on a wilful default basis. She maintains that there are a number of estate assets that have not been properly managed or called in and accounted for. The plaintiff also complains of a failure by the defendant to properly account to her for rents received with respect to a house property at 97 Seventeenth Street, Renmark that was left to the plaintiff and the defendant jointly. This aspect of the plaintiff’s claim is directed at the defendant in his personal capacity. The plaintiff seeks an order that the defendant account for rents received and an order for a sale of the property with the net proceeds to be divided between them.
The parties are also in dispute over the proper construction and application of a clause in the father’s will purporting to grant the defendant the right to use (until his death unless earlier surrendered) and “at such times as he may wish” a granny flat which forms part of a house property at 57 Tapleys Hill Road, Glenelg North. The freehold of this property (but subject to this gift) was left to the plaintiff.
The defendant, in his defence and cross-claim, put in issue the plaintiff’s allegations of wrongdoing concerning his administration of the estate and his administration of the now jointly owned Seventeenth Street property. The defendant pressed a claim with respect to his “entitlement” to occupy the granny flat in the Glenelg North property. The defendant also claimed that the plaintiff wrongfully and for her own purposes withdrew money from their father’s Greek bank account at a time after the father’s death when both the plaintiff and the defendant were signatories to the account. He has sought an accounting in his favour. Various other complaints by each party directed to the conduct of the other are also dealt with in the judgment.
HELD: allowing the plaintiff’s claim in part and allowing the defendant’s cross-claim in part,
Order for account by the defendant on a wilful default basis
(1)    No basis for such an order has been made out and the plaintiff’s claim in this respect is to be dismissed.
97 Seventeenth Street
(2)    The issue of sale in lieu of partition is to be stood over until the parties have had time to consider these reasons and attempt to agree a regime for the sale of the plaintiff’s interest to the defendant. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
(3)    The defendant is to account to the plaintiff for the sum of $4,384.50 together with interest and subject to the question of set-off both of which issues are still to be finalised.
Greek real estate
(4)    Claim not pressed by the plaintiff and no orders to be made.
Greek pension moneys
(5)    Claim not pressed by the plaintiff and no orders to be made.
Farm tools, vehicle and machinery
(6)    Claim not pressed by the plaintiff and no orders to be made.
Westpac joint account
(7)    The defendant is to account to the plaintiff for the sum of $1,500 together with interest and subject to the question of set-off both of which issues are still to be finalised.
(8)    The defendant is to account to the plaintiff for the sum of $4,567.50 together with interest and subject to the question of set-off both of which issues are still to be finalised.
Rent payable with respect to Twenty Eighth Street property
(9)    The plaintiff’s claim in this respect is to be dismissed.
Residuary estate of the deceased – personal effects
(10) Further consideration stood over until the parties have had time to consider these reasons. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
Glenelg North property – clause 4 of the will
(11) Clause 4 operates as a condition subsequent to the devise of the freehold in favour of the plaintiff. Clause 4 is void for conceptual uncertainty with the consequence that the plaintiff takes the devise free of the condition. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
The Greek Millennium Bank account
(12) The plaintiff is to account to the defendant for the sum of $17,770.75 together with interest and subject to the question of set-off both of which issues are still to be finalised.
Claim for $25,000 for work done in 1992-1993 to improve Glenelg North
(13) The defendant's claim in this respect is to be dismissed.
Claim by defendant for repayment of loan of $28,500
(14) The defendant’s claim in this respect is to be dismissed.
Claim by defendant for personal property left in the granny flat
(15) Further consideration stood over until the parties have had time to consider these reasons. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
Law of Property Act 1936 (SA) s69, s70, s71; Stamp Duties Act 1923 s71CB; Real Property Act 1886 (SA) s57, s69, s71, s128, s191, Part 12; Williams on Wills, The Law of Wills 9th ed, Vol 1, (2008) Francis Barlow (consultant editor) et al., LexisNexis Butterworths; Registration of Deeds Act 1935 s5; Construction of Wills in Australia David M Haines QC, (2007) LexisNexis Butterworths at [41.3]; Supreme Court Act 1935 (SA) s30C, referred to.
Peck v Peck [1965] SASR 293; Pemberton v Barnes [1871] 6 Ch App 685; Giorginis v Kastrati (1988) 49 SASR 371; Morvatjou v Moradkhani [2013] NSWCA 157; Byrnes v Kendle (2011) 243 CLR 253; Juul v Northey [2010] NSWCA 211; Edgeworth v Edgeworth (1869) LR 4 HL 35; Yates v University College, London (1895) LR 7 HL 438; Re Greenwood, Goodhart v Woodhead [1983] 1 Ch 749; Sifton v Sifton [1938] AC 656; National Mutual Trustees v Gooding [1990] VR 791; Re Fry Dec [1945] 1 Ch 348; Re Tuck’s Settlement Trust, Public Trustee v Tuck [1978] 1 All ER 1047; Egerton v Earl Brownlow (1853) 4 HL Cas 1; Re Cuming [1943] SASR 336; Re Viscount Exmouth v Praed (1883) 23 Ch D 158; Re Jones deceased [1953] 1 Ch 125; Faith v Allen [1953] 1 Ch 810; Clayton v Ramsden [1943] AC 320; Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716; Re The Will of Bradley [1994] 2 Qd R 233; Lassence v Tierney (1849) 1 Mac & G 551, [1843-60] All ER Rep 47; Hancock v Watson [1902] AC 14; Public Trustee v Bennett [2004] NSWSC 955; Norton v Ellam (1837) 2 M&W 463; 150 ER 839; Young v Queensland Trustees Ltd (1956) 99 CLR 560, considered.

KARASTAMATIS v TZANAVARAS
[2013] SASC 163
Civil
NICHOLSON J.
Introduction

The plaintiff, Fotini Karastamatis (referred to from time to time in the evidence and in some of the documents as Foffy) is the sister of the defendant, Ioannis Tzanavaras (also known as John). They are the two surviving children of their father, Konstantinos Tzanavaras, who died on 25 January 2008. Another son and the wife of Konstantinos had predeceased him. Prior to the father’s death and sometime shortly before or during 2007, the plaintiff and defendant fell out and became somewhat estranged. They ceased to be on speaking terms (other than with respect to essential matters).[1]
[1] See the plaintiff’s evidence at T212.
On 5 February 2009, probate of the father’s will dated 30 August 2007 was granted to the defendant, he being one of two executors named in the will, but with leave reserved to the plaintiff, the other named executor. As at the date I reserved judgment in this matter, the plaintiff had not been included in the grant as an executor although I understand that an application to exercise the leave reserved to her had been made.
This litigation initially concerned a number of complaints raised by the plaintiff as to the defendant’s administration of the father’s estate which administration is not yet complete. However, other disputes emerged as a result of the defendant’s defence and cross-claim. The plaintiff, by her pleading, has sought an order that the defendant provide a full accounting of his administration of the estate of their father on a wilful default basis. She maintains that there are a number of estate assets that have not been properly managed or called in and accounted for.
The plaintiff also complains of a failure by the defendant to properly account to her for rents received with respect to a house property at 97 Seventeenth Street, Renmark (the “Seventeenth Street property”) that was left to the plaintiff and the defendant jointly. Title to this property has been registered, by way of transmission, in their joint names, as tenants in common, but the defendant has been managing it, ostensibly on their joint behalf. This aspect of the plaintiff’s claim is directed at the defendant in his personal capacity, not in his capacity as executor or administrator of the father’s estate. The plaintiff seeks an order that the defendant account for rents received and an order for a sale of the property with the net proceeds to be divided between them.
In addition, the parties are in dispute over the proper construction and application of a clause in the father’s will. By this clause the father purportedly granted the defendant the right to use (until his death unless earlier surrendered) and “at such times as he may wish” a granny flat which forms part of a house property at 57 Tapleys Hill Road, Glenelg North (the “Glenelg North property”). The freehold of this property (but subject to this gift) was left to the plaintiff.
The plaintiff maintains that, on the proper construction of the will and on a number of other alternative grounds, this purported gift to the defendant of a right to use the granny flat failed and that the freehold of the property has devolved to her free of any such restriction.
The defendant, in his defence and cross-claim, has put in issue the plaintiff’s allegations of wrongdoing concerning his administration of the estate and his administration of the now jointly owned Seventeenth Street property. The defendant presses a claim with respect to his “entitlement” to occupy the granny flat in the Glenelg North property. The defendant also claims that the plaintiff wrongfully and for her own purposes withdrew money from their father’s Greek bank account at a time after the father’s death when both the plaintiff and the defendant were signatories to the account. He seeks an accounting in his favour.
As far as the jointly held Seventeenth Street property is concerned, the defendant has indicated in his pleading that he desires to retain that property in his own name for sentimental reasons. However, he has not pleaded any basis that would permit this to occur (in the absence of him purchasing the plaintiff’s share). In addition, the defendant has sought the return of various personal belongings said still to be in the granny flat to which, according to the defendant, he has not been permitted access for quite some time since he and the plaintiff started to argue over the administration of the estate.
Under the heading “Relief Sought” in the cross-claim, the defendant seeks to recover from the plaintiff the sum of $25,000 said to have been “spent in 1992 or 1993 … by way of reimbursement of expenses paid by the defendant for improvements made by him to the granny flat”.
Other matters of complaint between the parties arose during the hearing of the evidence and, insofar as they ultimately assumed any relevance, I will refer to them later in these reasons. This is a matter where the reservoir of goodwill that each sibling might have had for the other appears to have been well and truly drained some time before the matter came to trial. Unfortunately, and as the trial developed, it would seem that the parties will have incurred very significant legal costs and devoted substantial energy to fighting over issues that might be seen as of modest financial value when viewed in the context of the estate as a whole.
A matter of real significance is the status of the granny flat bequest.[2] However, the chance of the defendant succeeding with this aspect of his cross‑claim was always low. I am afraid that the law is against him here even though he may point to some form of moral entitlement. That moral entitlement might have been offset, in part or in whole, against the value of the plaintiff’s interest in the jointly owned Seventeenth Street property (which, at the end of the day, itself, will be relatively modest) had there been any good will remaining between the parties. However, and notwithstanding various invitations from me during the trial, an overall resolution of the parties’ respective complaints has not eventuated.
[2] Given its uncertain nature it is difficult to know whether to characterise it as a bequest or a devise.
Nevertheless, some of the issues between the parties were either resolved during the trial or abandoned during the trial. In the result, the issues remaining between the parties have been reduced, in number at least.
Oral evidence was given by the plaintiff, her husband Panagiotis Karastamatis (also known as Peter) and the defendant. In addition to some separately tendered documentary exhibits, a three volume set of 75 tabbed documents, was before the Court. It was marked MFI P2. During the trial all of the tabs in MFI P2 were tendered with the exception of tabs 11, 12, 62 to 69 inclusive, 70, and 73 to 75 inclusive.[3]
[3] See Transcript at 277ff and at 445. The description of the exhibit as described at T279 line 1 is incorrect, given the concessions made by counsel for the plaintiff at T277ff and the additional tendered tabs at T445.
I now proposed to discuss in rather more detail the various disputes between the parties; those that have been resolved or abandoned and those that remain to be determined.
The plaintiff’s claims
97 Seventeenth Street, Renmark
This was the family home until about 1978 when the deceased purchased and the family moved to a “fruit block” on Twenty Eighth Street, Renmark (the “Twenty Eighth Street property”). Thereafter and during the deceased’s lifetime, the Seventeenth Street property provided a rental income to the deceased. It is common ground that for some time prior to and after the father’s death the Seventeenth Street property was rented at $320 per fortnight. Comprehensive records in this respect are not available. Whilst some of this rent received can be traced with the assistance of records relating to two bank accounts, the plaintiff alleges that the defendant has received other rents during the period after their father’s death for which he has not accounted. During the trial this dispute concerning the plaintiff’s claim that the defendant should (in his personal capacity rather than in his executorial capacity) account for any such rents received narrowed considerably. I will return to this issue in some detail shortly.
The second issue arising out of the parties’ joint ownership of the Seventeenth Street property is the plaintiff’s claim pursuant to s69 and s70 of the Law of Property Act 1936 (SA) for an order for sale and division of proceeds in lieu of partition. The relevant law is clear.
Section 69 of the Law of Property Act provides as follows.
(1) On any application for partition the court may order a partition of the said land or other property, and may give all necessary or proper consequential directions.
(2) On any such application if it appears to the court that, by reason of the nature of the property, or of the number of the parties interested or presumptively interested therein, or of the absence or disability of some of those parties, or of any other circumstance, a sale of the property and a distribution of the proceeds would be more beneficial for the parties interested than a division of the property between or among them, the court may, if it thinks fit, on the request of any of the parties interested, and notwithstanding the absence, dissent or disability of any others of them, direct a sale of the property accordingly, and may give all necessary or proper consequential directions.
Section 70 of the Law of Property Act provides as follows.
On any application for partition, if the party or parties interested individually or collectively, to the extent of one moiety or upwards in the property, request the court to direct a sale of the property and a distribution of the proceeds, instead of a division of the property between or among the parties interested, the court shall, unless it sees good reason to the contrary, direct a sale of the property accordingly, and shall give all necessary or proper consequential directions.
Each of the plaintiff and the defendant is interested in the property to the extent of a “moiety”.[4] The property is comprised of two separate titles of equal physical dimensions[5] and whilst there is a single house on the property it would appear to be partly on each of the two titles. In any event, even if the house were solely on one of the two titles it would not be convenient nor appropriate to deal with the two titles separately and to order a partition of the property. According to s70, in the circumstances where, as here, each of the plaintiff and the defendant co-owns each of the two titles, on the application of the plaintiff (as has occurred here) the court “shall” direct a sale of the property “unless it sees good reason to the contrary”. In Peck v Peck[6] Bright J said this.
In my opinion, therefore, partition proceedings are to be determined according to the strict legal rights of the parties. There are other procedures for varying rights in appropriate cases, but partition proceedings, … are not to be so classified.
.  .  .  .
Except therefore insofar as there is an ad misericordiam discretion to defer enforcement of an order, I would deal with partition proceedings between husband and wife in the same way as any other partition proceedings. I think, therefore, that Bray v Bray (1926) 36 CLR 542 is completely in point. There is an absolute right to partition, however inconvenient, unless, as a strict alternative, sale is ordered. The onus in the present case is on the wife who opposes sale.
[4]    That is, one half.
[5]    MFI P2, tabs 18 and 19.
[6] [1965] SASR 293 at 299-300.
The mere fact that one of the co-owners, in this case the defendant, objects to sale is not a good reason against an order for sale.[7] Here, the defendant opposes the sale of the property but has given no reason for that opposition other than he wishes to retain the property himself for sentimental reasons.[8]
[7] Pemberton v Barnes [1871] 6 Ch App 685 at 692-693 (Lord Hatherly LC).
[8] Paragraph 61 of the fourth amended defence.

The defendant has no defence to the plaintiff’s claim for sale in lieu of partition. Nevertheless, there are practical and discretionary considerations which will bear on the orders that might be made. The property is now in an extremely rundown state bordering on, if not, inhabitable.[9] There are a number of formal and informal[10] “valuations” extending over the 2008 to 2011 period in evidence.[11] For various reasons, none provides a satisfactory basis to permit the Court to ascertain a fair sale value as at the present time. It is not my task to determine a value for the property. Nevertheless, the proffered “valuations” vary between $90,000 and $150,000. The latter derives from a formal valuation provided in May 2009.[12] Since then the house building on the land appears to have deteriorated significantly.[13] The plaintiff and the defendant agree that significant money would need to be spent in renovating or refurbishing the fabric of the house building in order to maximise a sale price. Given the state of relations between the parties and the amount of money that would need to be expended, any hope of cooperation to this extent is completely forlorn. I am satisfied that any sale of the property in its present state would be unlikely to return much more than land value.
[9] The evidence of the plaintiff and the defendant was consistently to this effect and see the photographs in exhibit P9.
[10] Valuer General, water rate and council rate notices.
[11] MFI P2, tabs 19-26.
[12] MFI P2, tab 19.
[13] I infer this from a comparison of the valuer’s description of the property in May 2009 with the parties’ evidence given and photos taken this year.
The defendant has pleaded and restated in his evidence a desire to retain the property for sentimental reasons. In addition, the defendant lives (on the Twenty Eighth Street property) in Renmark and would be in a better position than the plaintiff (in Glenelg North) to make best use of the Seventeenth Street property. The plaintiff has no interest in this property and simply wants the money value of her half share. Section 71 of the Law of Property Act is in the following terms.
On any application for partition, if any party interested in the property requests the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property between or among the parties interested, the court may, if it thinks fit, unless the other parties interested in the property, or some of them, undertake to purchase the share of the party requesting a sale, direct a sale of the property, and give all necessary or proper consequential directions, and in case of such undertaking being given the court may order a valuation of the share of the party requesting a sale in such manner as the court thinks fit, and may give all necessary or proper consequential directions.
It is likely to be in the best interests of both parties if orders were fashioned to enable the defendant to purchase the plaintiff’s share at an appropriate value. At the very least, costs of sale (such as advertising and auction costs, agent’s commission and further valuation costs) might be reduced or even eliminated. The plaintiff should not be any worse off; she would have her sale at an appropriate price. Should the property go to public sale, a worst case scenario can be envisaged; significant costs jointly expended but with no sale eventuating. Fifty per cent of the value of this property after sale costs is not a large sum by todays standards. It should not be beyond these two parties to make such enquiries as are sufficient to enable them to identify and agree upon a fair price for the sale of the plaintiff’s share.
I will in due course make orders for the property to be sold by public auction and the proceeds divided with any necessary costs of sale to be shared by the parties, should this become necessary. However, in the first instance, I will give the parties time to reach an agreement as to the terms on which the plaintiff is prepared to sell and the defendant is prepared to buy the plaintiff’s interest in the property. If the parties are unable to reach agreement as to price but the defendant nevertheless gives the undertaking as envisaged in s71, I will proceed to make orders for a valuation of the plaintiff’s share, as envisaged by s71, and for sale of the plaintiff’s share to the defendant. If neither agreement as to price is reached nor a s71 undertaking provided within the further time to be allowed to the parties, I will make orders for public auction of the Seventeenth Street property. I will hear the parties further as to the amount of time to be allowed before making final orders with respect to a sale of either the plaintiff’s interest in or the whole of the Seventeenth Street property.
I return to the Seventeenth Street property rent issue. The plaintiff initially sought a full accounting by the defendant for rent (less outgoings) received following their father’s death. For a period after their father’s death and whilst the property continued to be tenanted at $320 per fortnight the defendant paid the rent into and withdrew money for the property expenses[14] from an account opened in the joint names of the plaintiff and the defendant for estate purposes. This was a Westpac Cash Manager Account (the “Westpac joint account”), a number of bank statements for which are in evidence.[15] After this account was closed on or about 25 September 2009, the defendant continued to receive some rents over which he personally retained control.
[14] Council rates, water rates, repairs and maintenance and the like.
[15] MFI P2, tab 55.
I will discuss in more detail various of the transactions on the Westpac joint account when I come to consider it as an aspect of the plaintiff’s claim for an enquiry into and account of the estate assets. For the present, it is sufficient to note that the Westpac joint account was initially used as the repository for rents received for the Seventeenth Street property by the defendant on behalf of the parties in their capacities as joint registered proprietors. In this respect, the defendant acted in clear breach of his duty as executor and administrator of his father’s estate by co-mingling estate funds and personal (his and the plaintiff’s) funds in the one bank account. However, at the end of the day, nothing would appear to turn on this breach of duty. Ultimately, the plaintiff abandoned any claim for an accounting with respect to the Westpac joint account, save for two withdrawals by the defendant, one for $3,000 and one for $9,135 to which I will return later in these reasons.
As a consequence, and as far as the Seventeenth Street property rents are concerned, the plaintiff also abandoned her claim for an accounting of rents received and paid into and expenses paid out of the Westpac joint account. The plaintiff restricted her claim in this respect to events which took place after that account was, effectively, closed.
The defendant’s evidence was to the effect that after the tenancy paying $320 per fortnight came to an end it became increasingly difficult to re-let the property because of its rundown condition. The defendant allowed various itinerants to stay from time to time from whom he received cash payments which he retained. Expenses, including rates and the like, continued to be incurred and were met by the defendant. In addition, breakages and other property damage were caused by these tenants from time to time. These also had to be paid for. According to the defendant, the Seventeenth Street property expenses paid for by him were not all recorded and would have been “roughly covered by” the cash income received from itinerants. The defendant did not keep any formal records of income received or expenses paid. However, he did produce to the Court during his cross-examination two scrappy pieces of paper[16] on which he had (apparently broadly contemporaneously) jotted down money received and expenses met.
[16] Exhibit D13, also to be found at MFI P2, tab 70, pp 316-317.
I am satisfied that at least some of the unaccounted for withdrawals by the defendant from the Westpac joint account (discussed further below) were directed at expenses incurred with respect to the Seventeenth Street property. In addition, the later two page record[17] shows an excess of income over expenses. There is also an absence of any documentary records which might support the defendant’s contention that, during the period that itinerants stayed in the property from time to time, expenses incurred exceeded or, at least, covered income received. Indeed the documentary records produced by the defendant, such as they are, indicate to the contrary. For these reasons I am satisfied that the defendant has received rent for the Seventeenth Street property in excess of expenses incurred which has not been accounted for to the plaintiff.
[17] Exhibit D13.
The plaintiff does not allege that the defendant did not properly comply with his implied obligation, as trustee of the Seventeenth Street property, on behalf of himself and the plaintiff, so as to fail to maximise the return on the property. There is no claim for rents that should have been obtained but were not. The plaintiff’s claim is only with respect to rents actually received (less expenses properly incurred) but not accounted for.
During final submissions[18] the plaintiff confined her claim in this respect to an account in her favour of the balance of rent received over expenses incurred as recorded on exhibit D13.Apart from this the plaintiff abandoned her claim that the defendant account generally for all rent received and expenses incurred with respect to the Seventeenth Street property. I am satisfied that, at the least, the defendant received and therefore held on trust for the plaintiff, one half of the rent received less expenses incurred as recorded on exhibit D13. I am also satisfied that this amount has not yet been accounted for in favour of the plaintiff. In this respect, one of the “expenses” claimed by the defendant is a “management fee” of approximately 10 per cent of rents collected in the amounts of $648 and $352. There was no agreement between the parties that the defendant was to be entitled to charge a management fee, nor did the defendant either in evidence or submissions establish any other lawful basis for claiming a management fee. These two claimed expenses of $648 and $352 are disallowed. Accordingly, the defendant must account to the plaintiff for one half of the nett amount of receipts less expenses as recorded on D13, being one half of $8,769, that is, $4,384.50.
[18] T519.
The deceased’s real estate holdings in Greece
The parties’ mother died in 1996. Thereafter until sometime in 2007, the father lived part of each year in the Twenty Eighth Street property and part of each year in Greece. Over the years he acquired parcels of real estate in Greece. It was common ground at the trial (but as to which I make no finding) and notwithstanding the plaintiff’s pleaded case[19] that the Greek real estate devolved to the parties jointly in accordance with Greek law irrespective of the terms of the Australian will. The plaintiff’s pleaded claim that the defendant had failed to disclose in his executor’s affidavit and account for the Greek real estate was abandoned during the plaintiff’s opening.[20]
[19] Fourth statement of claim at [6.5].
[20] T26.
The Greek pension
Whilst the deceased was alive he was in receipt of a modest Greek pension. This was paid to him in Greece. It is likely that some or all of it found its way into his Greek Millennium Bank account. The deceased was last in Greece in or about August 2007. The plaintiff has pleaded[21] and claimed at times throughout the trial that pension moneys that should have accrued to the deceased between this last visit to Greece and his death on 28 January 2008, amounting to approximately €2,000, have never been accounted for. In opening the plaintiff’s case, it was asserted by counsel that the defendant travelled to Greece in 2008 and collected these residual pension funds from his father-in-law, John Sarantaugas, who lives in Greece.[22]
[21] Fourth statement of claim at [9]. Whilst the pleading does not expressly refer to the Greek pension the evidence of the plaintiff was to the effect that this allegation that the defendant took €2,000 from estate funds for personal use was a reference to the pension dispute.
[22] Plaintiff’s opening at T61-62.
The defendant denied this and said, in evidence, that any such pension moneys had been given by the deceased to Mr Sarantaugas and that any arrangement entered into by these two was a matter for them. The defendant said that he had no influence over his father-in-law and was in no position to account for any such pension money. The evidence on both sides concerning the existence, likely amount and ultimate repository of any unaccounted for Greek pension money, if any, was quite unsatisfactory and did not provide a reliable basis for the making of any findings. During his closing address, counsel for the plaintiff abandoned any claim to Greek pension money or to an entitlement to an account by the defendant based on any wilful default in connection with the Greek pension.[23]
[23] T518.
Farm tools, vehicles and machinery
The plaintiff pleaded and alleged in her opening that the deceased had owned tools, farm machinery and motor vehicles that the defendant had not recorded in his executor’s affidavit nor accounted for during his unfinished administration of the estate.[24] During the trial it emerged that the farm tools, machinery and vehicles (or the bulk thereof) are likely to have been owned by a now de-registered company, TCM Peach Co Pty Ltd.[25]
[24] See the fourth statement of claim at [6.2], [6.3], [7], [11.5], T68-72.
[25] Exhibit D15.
TCM Peach Co Pty Ltd was the trustee of the Tzanavaras Family Trust of which the deceased had been the controlling mind. TCM Peach Co Pty Ltd had conducted (as a trust asset) the “deceased’s” fruit (and later grape) growing business from the Twenty Eighth Street property. Balance sheets for the trust[26] indicate that for each of the 2004 to 2007 financial years plant and equipment was “valued” at $60,325. It is likely therefore, that the tools, machinery and vehicles in question would not have directly fallen into the estate, although the deceased may have had some form of interest, as at death, either in the company or as beneficiary of the trust. It may be that the defendant has an obligation as executor (which would be shared by the plaintiff if she were to succeed with her application to the Probate Court and assume her role as co-executor) to unravel and account for such interest(s) as the deceased may have had in this respect.
[26] Exhibit P10.
Having noted these matters, it was again the case that the evidence from both parties on this topic was unsatisfactory. According to the defendant, the tools, machinery and vehicles had no commercial value, given their age and condition, apart from those that, according to the defendant were purchased from his father prior to death.[27] The cost and effort involved in unravelling this situation, where the documentary trail is as scant as it is, may exceed the value (and even practical usefulness) of the equipment in issue.
[27] Some time prior to 2003 the deceased retired from active farming. Whilst he remained living on the fruit block at Twenty Eighth Street he transferred the business to the defendant who also leased the Twenty eighth street property from his father for this purpose. The question of this lease is a particularly sore point between the parties and is considered further later in these reasons. Whether or not the father (as opposed to TCM Peach Co Pty Ltd) had the capacity/right to transfer the business and associated plant and equipment is not a matter that needs to be fully explored in these reasons.
During her counsel’s closing address, the plaintiff also abandoned any claim with respect to the farm tools, machinery and vehicles including any claim that the defendant should render an account of his estate administration in reliance on any wilful default with respect to this equipment.[28] In this respect, there is thus no lis between the parties and I therefore propose to make no orders.
[28] T518.
The Westpac joint account
The executor’s affidavit of assets[29] sworn by the defendant at the time probate was granted disclosed two bank accounts as assets of the estate. The first was a Westpac deeming account in the name of the deceased[30] about which the plaintiff makes no complaint. The one bank statement for this account that is in evidence also describes it as the “Rent Account”. This bank statement records two credits of $320 a fortnight apart, each with the descriptor “97 17^th”. As at 23 May 2008 (some four months after the father’s death) being the date on which the account was closed, it had a credit balance of $3,632.10. Following closure of this Westpac deeming account, this balance of $3,632.10 was transferred to the Westpac Cash Manager Account No 035-063-148301.[31] This was the Westpac joint account, opened by the parties in joint names for estate purposes to which I have earlier referred.
[29] MFI P2, tab 3.
[30] MFI P2, tabs 51-53.
[31] MFI P2, tabs 52 and 55.
The second bank account in the deceased’s name as disclosed in the executor’s affidavit was a Portfolio Cash Management Account with Bank SA.[32] This account was closed on or about 13 June 2008 with a closing balance of $27,007.83.[33] Again, the plaintiff has raised no specific complaint about the defendant’s management of this account. The closing balance of $27,007.83 was paid into the Westpac joint account, on 17 June 2008.[34]
[32] MFI P2, tab 54.
[33] MFI P2, tab 54 at p223.
[34] MFI P2, tab 55 at p226
The Westpac joint account was opened on 27 March 2008, after the father’s death but before probate was granted. It is the management of this account by the defendant about which the plaintiff does complain. The bank statements for this account which are in evidence cover the period from its opening on 27 March 2008 until its closure on 25 September 2009. Apart from the transfers of $3,632.10 and $27,007.83 just identified, the only credits to the account throughout the period it was open were a number of payments in of $320 which were fortnightly rent payments for the Seventeenth Street property, monthly bank interest payments of varying amounts and one unexplained deposit of $750.
This unexplained deposit of $750 was made at the Renmark branch of the bank.[35] The evidence of the plaintiff was to the effect that whenever she accessed the account (usually to withdraw money) she would do so from the Pirie Street, Adelaide branch of the bank. The evidence of the defendant was to the effect that he would access the account from the Renmark branch. The bank statements clearly indicate for each transaction whether it occurred at the Pirie Street or Renmark branch.[36] The defendant had no recollection of depositing $750 on 25 July 2008 and could offer no explanation for why he might have done so. Nonetheless, I am satisfied, on balance, that the defendant did effect this deposit. The issue is of no real significance because on that same day a corresponding withdrawal of $750 (from a Renmark “handybank”) was effected. There is nothing in the evidence to suggest that the estate was to expect a payment of this amount and it is the only credit to the Westpac joint account not explained as either rent or interest. In all the circumstances, I am satisfied that the payment in of $750 by the defendant was in error and immediately reversed. In any event, the plaintiff has not complained about these two contra transactions.
[35] MFI P2, tab 55 at p280.
[36] Except for the rent deposits of $320 which were all noted as “Deposit Netbank 97 17^th…”.

The bank statements for the Westpac joint account disclose a number of withdrawals from both the Pirie Street and Renmark branches. Initially the plaintiff complained of a failure by the defendant to properly account with respect to the Bank SA Portfolio Cash Management Account in the name of the father at his death.[37] However, ultimately, the plaintiff made no complaint concerning this account; she confined her complaint to various unexplained transactions on the Westpac joint account.
[37] Fourth statement of claim at [6.1].
In this respect, the plaintiff’s counsel took quite some time and effort, during his opening and through the evidence of the plaintiff with the assistance of a number of tendered documentary records forming part of MFI P2, to trace and identify the purpose of a considerable number of the withdrawals from the Westpac joint account. Ultimately, it became common ground (and which I am satisfied was justified on the basis of the oral and documentary evidence adduced by the plaintiff) that all but a small number of withdrawals were to be explained as legitimate estate expenses or expenses for which the parties were otherwise jointly responsible. A number of these withdrawals were undertaken by the plaintiff (Pirie Street withdrawals) and a number by the defendant (Renmark withdrawals).
Given that the parties are on common ground to this point, it is unnecessary that I identify and explain these various “legitimate” withdrawals. However, there were a relatively small number of withdrawals for which no explanation could be found in any of the documentary records in evidence. These all emanated from the Renmark branch and the plaintiff denied any knowledge of them. The defendant did not deny making these withdrawals but, apart from two of them, had no recollection of making them and could offer no specific explanation for them.
Ignoring, for the reasons earlier given, the withdrawal of $750 on 25 July 2008, these “unaccounted” for Renmark withdrawals comprised: $214.56 on 30 July 2008,[38] $1,248.75 on 26 August 2008,[39] $102.95 on 8 September 2008,[40] $205.10 on 12 September 2008,[41] $276 on 21 November 2008,[42] $317 on 31 July 2009,[43] $845.77 on 7 August 2009,[44] $3,000 on 26 August 2009[45] and $9,135 on 24 September 2009.[46] This last withdrawal left a balance in the account of 34 cents and the account was effectively closed.
[38] MFI P2, tab 55 at p231.
[39] MFI P2, tab 55 at p231.
[40] MFI P2, tab 55 at p231.
[41] MFI P2, tab 55 at p231.
[42] MFI P2, tab 55 at p232.
[43] MFI P2, tab 55 at p238.
[44] MFI P2, tab 55 at p238.
[45] MFI P2, tab 55 at p238.
[46] MFI P2, tab 55 at p238.
During closing submissions the plaintiff, through her counsel, abandoned any claim with respect to these Renmark withdrawals apart from the last two ($3,000 and $9,135). The earlier ones, each of lesser amount, total $3,210.13. Whilst the defendant in his evidence said he could not recall the reason for withdrawing these various amounts he maintained that they were not paid to or used by him in his personal capacity. The defendant said that all these withdrawals would have been for legitimate purposes, that is, to pay accounts concerning the estate or outgoings related to the Seventeenth Street property. The plaintiff does not now dispute this and has confined her claim to the last two withdrawals.[47]
[47] T518.
The defendant had explanations for the last two Renmark withdrawals but they were far from satisfactory. The amount of $3,000 was withdrawn on 26 August 2009 for the plaintiff’s personal use when making a trip to Greece. He said that he went to Greece for estate purposes although at no time did he discuss this with the plaintiff or seek her agreement to this expenditure. Precisely what “estate” business the defendant needed to conduct was not made clear. On a strict view there may have been no “estate” business open to being conducted. According to the agreed position of the parties the Greek assets – the Millennium Bank account and the real estate – automatically devolved to them jointly as next of kin according to Greek law and practice. The evidence does not permit me to make any findings in this respect nor have I been asked by the parties to do so. However, it may be that the defendant, qua executor with probate granted in South Australia as opposed to qua next of kin, had no role to play in connection with the Greek assets.
In any event, I do not regard the withdrawal of the $3,000 for the use to which it was put as appropriate or authorised. I have reviewed the defendant’s evidence in chief on this topic;[48] it does not provide a satisfactory explanation or justification. The withdrawal of the $3,000 was not authorised either expressly by the plaintiff or implicitly by virtue of the defendant’s position as executor. The defendant must account to the plaintiff for one half of the sum of $3,000 withdrawn on 26 August 2009 from the parties’ joint account (representing an admixture of estate and Seventeenth Street property funds) whether or not there has been a wilful default by the defendant (as to which I make no finding).
[48] T318-321.
I have reached the same conclusion with respect to the withdrawal of $9,135 on 24 September 2009. The defendant conceded in his evidence that this was withdrawn soon after he became aware that the plaintiff had withdrawn the Millennium Bank euros (discussed later in these reasons). There is no evidence from which it can be concluded that it was used for a proper estate purpose or an agreed joint purpose. Whether the withdrawal of $9,135 was some form of “tit for tat” or designed to secure the funds in case the plaintiff should try and take these as well as the Millennium Bank euros, matters not. The defendant must account to the plaintiff for one half of the sum of $9,135 withdrawn on 24 September 2009 from the parties’ joint account (representing an admixture of estate and Seventeenth Street property funds) whether or not there has been a wilful default by the defendant (as to which I make no finding).
Rent payable with respect to the Twenty Eighth Street fruit block
The Twenty Eighth Street property, which became the family home, was left in the will to the defendant. Title has now been transferred to and registered in his name. The property was purchased in or about 1978 and the father lived there until his death. At an early time the property was converted from a fruit block to grape production. Sometime prior to 2003 the father ceased actively working the property and the defendant took it over.[49]
[49] The defendant’s evidence (T404) was that he effectively ran the property from 1997 and see the plaintiff’s evidence at T94.
It is common ground that the father leased the property to the defendant for this purpose. A written lease pursuant to which an annual rent of $20,000 was payable was entered into.[50] It may be (although it is unnecessary to make a finding) that the lease was not actually signed until sometime in 2005 although, on its face, it purports to be an agreement made on 14 June 2003. Nevertheless, it is common ground that the commencement date of 1 July 2003 as recorded in clause 1 of the lease is correct.
[50] MFI P2, tab 5. The lease in evidence in unstamped. However, such a lease having commenced after 1 January 2002 with an annual rental less than $50,000 is not stampable in South Australia.
The plaintiff claims[51] that the defendant did not pay all of the rent due to their father pursuant to the lease, during the period 1 July 2003 (commencement of the lease) to 25 January 2008 (date of death) a period of four years, six months and 25 days. The total of the rent that should have been payable over that period is of the order of $91,350. The defendant in his evidence acknowledged the existence of the lease and the rental obligation of $20,000 per annum created thereby. However, he consistently maintained during his evidence that he had paid his father all of the rent that fell due before his father died.
[51] Fourth statement of claim at [6.4], [8] and [8A] to [8D].
The plaintiff bears the onus of proving that there was and remains a shortfall between rent paid by the defendant and the total rent due and payable over the relevant period and that the defendant has wilfully defaulted in his executorial obligation to call into the estate any such shortfall. If the plaintiff were to discharge her onus in this respect she would be entitled to an order for an account of the defendant’s stewardship of the estate on a wilful default basis. However, the plaintiff is only required to prove the existence of a shortfall not the extent of any shortfall; that would be the purpose of any accounting exercise that might be ordered.
The plaintiff herself has no direct knowledge of whether or not the defendant, in fact, paid all of the rent to his father. She offered some generalised evidence, essentially hearsay, as to her interpretation of her father’s position. This was to the effect that, in the period 2004 to 2005, she heard arguments between her father and the defendant about moneys not being paid and that her father never gave up pursuing the unpaid rent. However, I place no weight on this evidence. At the end of this passage of examination in chief[52] the following exchange with the plaintiff’s counsel occurred.[53]
HH:It’s the same question, you have an absence of knowledge of this witness of anything to do with payments under the lease.
Counsel:Yes, I accept that.
[52] At T155-160.
[53] At T160.23. See also the cross-examination of the plaintiff at T237.32-238.8.
The plaintiff’s positive case is based on:
(i)an inference to be drawn from certain correspondence apparently sent to the defendant by the Riverland firm of solicitors, Stuart Andrew, apparently on behalf of the father during the period January 2004 to March 2006;[54]
(ii)tax returns for the deceased for the financial years ending 30 June 2005, 2006, 2007 and 2008[55] which record rent income received with respect to the Seventeenth Street property and the Glenelg North property but not the Twenty Eighth Street property; and
(iii)the lack of reliable documentary evidence produced by the defendant in support of his contention that all of the rent had been paid.
In addition, the plaintiff submits that the defendant’s evidence that he has paid all that was due to his father (and more) should not be accepted.
[54] MFI P2, tabs 7 to 13.
[55] Exhibit P10.
The correspondence purportedly from the father’s solicitor, Stuart Andrew, to the defendant, expresses concerns about a delay by the defendant in executing the written lease and providing to the father a copy of the executed lease. It also contains allegations of shortfalls in rent payments and demands for payment with veiled and not so veiled threats to the effect that continued failure to pay might cause the father to terminate the lease and resume possession.
The only available versions of this correspondence between Stuart Andrew and the defendant are unsigned documents not on letterhead. The defendant could not remember receiving this correspondence although, during his cross-examination, he eventually conceded that he may have. His evidence was to the effect that this period of his father’s later years was a hectic period for the defendant. His father was living at the Twenty Eighth Street property with the defendant whilst he was running what had been the father’s property and business. The father was suffering increasingly from dementia, had developed a gambling (poker machine) addiction, was frequently angry and constantly making demands, including of a financial nature, on the defendant.
According to the defendant, if the Stuart Andrew correspondence had been received, it was simply part of a pattern of constant demands and complaints over many things. The defendant did not retain any such correspondence. Indeed, on the defendant’s own admission, he was an extremely poor record keeper generally. I accept this aspect of his evidence. There are many people who do not keep personal files or whose personal record keeping is far less than comprehensive and therefore unreliable. They are not to be judged in this respect against the standards of record keeping typically to be expected of businesses, government and trustee bodies. Unfortunately, after the father died and the defendant did assume trustee like obligations, his standard of record keeping did not improve.
I am satisfied that the copies of letters purporting to be Stuart Andrew correspondence directed to the defendant[56] represent file copies of that correspondence.[57] I am also satisfied that the originals were posted to and would have been received in the ordinary course of the mail at the address recorded on them “PO Box 835 Renmark SA 5341”. I am satisfied that this was, at the time, the defendant’s post office box: the defendant was extensively cross-examined on the correspondence and at no time did he suggest that it had been incorrectly addressed and the same postal address is recorded for the defendant on the lease.[58]
[56] MFI P2, tab 6-12.
[57] See MFI P2, tab 13 and 15.
[58] MFI P2, tab 5.
During the trial I admitted the letters as having been sent and received and in my view the defendant’s reluctance to readily acknowledge this did him no credit. However, I am not prepared to accept the correspondence for the truth of the assertions in it. I am satisfied that these demands were sent and received by the defendant. I am also prepared to infer that the content of the demands reflected the understanding by the Stuart Andrew employee who apparently drew and sent the letters, of the father’s instructions.
Furthermore, the letters of demand come to an abrupt end in March 2006. The evidence is unclear[59] but it may be that the father, at some point, realised that he was having to pay his solicitor for these letters and so stopped giving instructions. As I have indicated I am not willing to find that the content of the correspondence truly reflects the state of the rent account at the time it was sent.
[59] And, of course, there is no direct evidence from the father.
For the period of March 2006 until the father’s death in late January 2008 (approximately 22 months) there is no direct evidence of any continuing conflict between the two over the rent account. Certainly there is no evidence that any of the father’s threats to retake possession were acted upon. Furthermore, the Stuart Andrew correspondence does not present a clear picture, at all, of the father’s apparent understanding of the state of the rent account as at 2005 and 2006[60]
[60] The assertion in the letter of 3 March 2006 (MFI P2, tab 12) to the effect that “no (my emphasis) payments of rent have been made” would seem to be at odds with the assertions made in the earlier correspondence, unless it is directed at the position for the 2006 financial year in which case the implication is that rent had been paid for the 2005 financial year.
As far as the deceased’s tax returns are concerned it is true that there is no record of any rent for the Twenty Eighth Street property having been declared. This is to be considered against a background where the father was in the habit of declaring rent received from tenants in the Seventeenth Street property and the Glenelg North property, including from the plaintiff who moved from the granny flat into the main house in about 2005 after which she paid rent until the father’s death.[61]
[61] By inference, the Glenelg North rent declared in the father’s tax return for financial years ending 30 June 2006-2008 (P10) was rent received from the plaintiff.
The question arises whether it should be inferred from the tax returns for the financial years ending 30 June 2005 to 2008[62] that no rent for Twenty Eighth Street property was in fact received during these financial years. However, an immediate difficulty in drawing such an inference is that it would give rise to an apparent inconsistency in the father’s behaviour. According to the Stuart Andrew correspondence[63] it can be inferred that the father’s understanding was that at least some of the rent had been paid for 2005 financial year, yet nothing was declared in his 2005 financial year tax return.
[62] Exhibit P10.
[63] MFI P2, tabs 8, 9 and 10.
I will come to the defendant’s evidence that he was meeting his father’s incessant demands for payment of money by regularly giving him cash during his father’s last years, shortly. However, if this were to be so, I would not find it surprising had the father not declared those cash payments in his tax returns. Unlike the Glenelg North property which the father had a history of renting out, the Twenty Eighth Street property was the father’s principle place of residence.
I do not find the absence in the father’s tax returns of any declared income received from the defendant by way of rent for the Twenty Eighth Street property, to be of particular assistance on the question of whether such rent was in fact paid and received. In this respect, the approach often adopted by a court when pressed to reject a submission that a person’s tax returns do not accurately reflect the income in fact received by that person[64] does not apply where an inference is sought to be drawn against a party’s (here, the defendant’s) case based on the content of the tax returns of a third party (here, the father) who is deceased and has not given evidence.
[64] See for example Von Doussa J in Giorginis v Kastrati (1988) 49 SASR 371 at 375-376 but see also Morvatjou v Moradkhani [2013] NSWCA 157.
I turn to the failure by the defendant to produce reliable documentary evidence in support of his claim that all of the rent had been paid.
The defendant was pressed at length during cross-examination about the lack of documentary evidence to corroborate his claim that all rent due to his father had been paid. It is true that there is an absence of documentary support: no rent invoices prepared on behalf of the father, no receipts for rent payments made by the defendant, nothing in the father’s tax returns, no tax returns of the defendant claiming a deduction for rent paid, no identified transactions on bank account statements (for the father or the defendant) from which a supporting inference might be drawn. In her written submissions,[65] the defendant relied on the proposition that a court should resolve any doubts against an executor or trustee who fails to keep proper records, citing Byrnes v Kendle.[66]
The references to accounting by Mr Kendle as trustee indicate the several senses in which the term “duty to account” may be used, namely, (i) a duty to keep records, (ii) a duty to report to the beneficiaries or to the court concerning the administration of the trust, and (iii) a duty to pay amounts the trustee is obliged to pay to the beneficiaries.
With respect to (i) and (ii), and a matter of first principle, a trustee should gain no advantage by failure to keep proper records and the court will resolve doubts against a trustee who fails to do so. The nature of the principal complaint against Mr Kendle, of failure to obtain any rent in respect of Rachel Street over a long period, is such as to posit the taking of accounts on the basis of wilful neglect and default, in the sense described in Meehan v Glazier Holdings Pty Ltd.
[65] Paragraphs 250.4-252.
[66] (2011) 243 CLR 253 at [42]-[43] (Gummow and Hayne JJ). Footnotes omitted.
I make two observations with respect to this submission. The lack of documentation on this issue arises with respect to a period when the defendant was acting only in his capacity of son and tenant and not in his later assumed capacity of executor and trustee. The fact that no documentary record was brought into existence at the time any rent was paid (which is the effect of the defendant’s evidence) does not constitute the gaining of an advantage by the defendant by failing, as trustee, to keep proper records. By the time the defendant assumed the office of executor it was too late to create a documentary trail for the period prior to death if none had been in existence in the first place.

My second observation is to note (in light of the first observation) that it is important here not to reverse the onus of proof. It is the plaintiff that must establish that there was a shortfall in the payment of rent and that the defendant, as executor, has wilfully defaulted in calling in an estate debt, if an order for an account on a wilful default basis is to be made.
To make the estate’s representative account on the footing of a wilful default, the plaintiff must plead that assets might have been received but for the default of the representative and must prove at least one example of wilful default on the part of the defendant.
. . . .
Where a plaintiff seeks an order for accounting on a wilful default basis, the allegation of wilful default must be made good at the hearing and cannot be left for decision at some later stage of the action… The burden of proof lies on the plaintiff who “must show not only such a loss, but a loss under such circumstances as to show default on the part of the executor or administrator”… [I]t is for “the plaintiff to fix upon any item he pleases, and adduce proper evidence to shew that but for the wilful neglect or default of the defendant, it might have been received.”[67]
[67] Juul v Northey [2010] NSWCA 211 at [189]-[190]. Citations omitted.
The plaintiff in his evidence relies on two documents – both created well after the relevant events (in fact, as part of or during the litigation process). The first is a spreadsheet created by Mr Gaffney, the defendant’s book keeper.[68] This document was apparently based on a review of “financial statements and working payments”. Mr Gaffney was not called to give evidence and the source documents were not produced in Court. However, the plaintiff was willing to accept this document as recording some of the rent as having been paid.[69] During final submissions, counsel for the plaintiff indicated her willingness to limit the claim for an account under this heading to the full amount payable for the period 1 July 2003 until the father’s death, less the amounts paid in the 2004 and 2005 years according to the Gaffney document. On its face, this document lends no support to the defendant’s contention that all of the rent over the relevant period was, in fact, paid.
[68] MFI P2, tab 14.
[69] $15,600 in 2003, $15,600 in 2004 and $12,183 in 2005. The fact that the defendant paid rent in the 2003 financial year when the lease started 1 July 2003 was not explained. It may be that the written lease was a formalisation of an earlier practice or understanding.
The second document is a spreadsheet apparently prepared by a friend of the defendant, a Ms Dorothea Tamazis, on the instruction of the defendant.[70] Ms Tamazis also did not give evidence. The effect of the defendant’s evidence was that this document was prepared in accordance with his verbal instructions and not based on any contemporaneous documents. It is simply a recreation of the defendant’s instructions given out of court. I can place no weight on this document in support of the defendant’s contention.
[70] MFI P2, tab 70, p394.
Neither document constitutes an admission by the defendant that he failed to pay all of the rent before the father’s death. In particular, Mr Gaffney’s document is not such an admission because it only purports to rely on documents made available to him and the defendant, at all times, maintained that there had been no contemporaneous documentary record created for all of the payments many of which were in cash.
I turn then to the defendant’s evidence as to payment. The father was 83 when he died.[71] I have already referred to certain aspects of the father’s character and behaviour during his later years which were repeatedly asserted by the defendant in his evidence. There was nothing in the plaintiff’s evidence to contradict this. These characteristics of her father were not dealt with in her evidence in chief (understandably) and not put to her in cross-examination. Nevertheless, the plaintiff lived in Adelaide with her husband and daughter (born 1 September 2006) during this period and had much less day to day contact with the deceased than did the defendant. Indeed, the plaintiff ceased making weekend visits to the Riverland after the defendant married (in 2004).[72]
[71] Plaintiff’s evidence at T92.
[72] At T157.
The defendant said that he was always paying money, often in cash and by way of transfer of vintage payments, to his father during the last years. He entered into the lease agreement because his father was sick with diabetes and dementia and becoming more and more argumentative. He wanted a regular source of income. At times during his evidence (particularly on this topic) the defendant did appear to be evasive and unhelpful. He expressed moral outrage at any suggestion that he had taken advantage of his father or had acted dishonestly towards him at any time. In addition, the plaintiff in her written submissions has made a large number of criticisms of the defendant and his evidence bearing on its credibility and reliability. I accept that much of this criticism is soundly based and should be accorded significant weight. I have thought long and hard about which aspects of the defendant’s evidence I should accept and which I should not. I accept that the relationship between the father and the son was a complex one, that it must have been very difficult for the defendant having his father live with him while running the family business, that the father was very demanding and that the defendant routinely needed to appease and pacify him.
The defendant said on a number of occasions that he was always giving the father cash for his gambling and general living and that by this means he would have paid over more than the rent due each year. He kept no record of these cash payments. There was much to criticise about the defendant’s evidence and his approach to this litigation generally. However, the following passages of evidence, when considered against the background of the family member relationships as described by the plaintiff and the defendant, did have a ring of truth to them.[73]
[73] T398.1-398.20, 399.1-399.10.
QWell, no doubt if you were concerned that your father was denying receipt of rent you would have taken some precautions to prove that you paid the rent, is that right.
AHe was my father Mr Edmonds-Wilson and I did everything to try and pacify him at that point in time. When someone gets violent within two seconds flat from being placid and the veins on their neck are popping through no volition of their own, simply because they’re sick, I try and defuse that situation as quickly as I can and I don’t look at, you know, the possibility that my sister might come back to me in years to come and say what she’s saying. I was doing the right thing at that point in time and I believe that I had her support.
QYou didn’t ask your father to sign for receipt of payments in the same way that you did with your tenants at the Seventeenth Street property.
ANo I didn’t. He wanted it immediate and he wanted it now and I just had to give him whatever I could give him at that point in time.
. . . .
ANo I don’t recall this letter, but once again, I mean – my father had a kleptomaniac[74] condition as part of his illness and he would regularly suggest that something had been stolen and there were certain items that he eluded (sic) to all the time, jewellery and clothing, underwear, personal effects, his wallet several times and we changed locks on his bedroom, we did a whole range of things to try and appease him. It was a very very difficult period. And then other times he’d be lucid and he’d be fine.
[74] The defendant was not suggesting here that the father was a thief. He has used the term “kleptomaniac” incorrectly but his intent is explained by the content.
I accept the defendant’s evidence that, during the relevant period, he provided money to his father regularly and on demand by way of cash payments and, from time to time, by way of transfer of at least part of some vintage payments received. I am not able to determine how much was paid during the relevant period. However, I am not persuaded on the whole of the evidence before the Court, that the plaintiff, on whom the ultimate onus lies, has demonstrated that there was a shortfall as at the father’s death nor that the defendant was aware of any shortfall. The plaintiff has not proved that there was any debt (albeit only of an, as yet, indeterminate amount) due to the estate at death nor that there has been a wilful default by the defendant, qua executor, in failing to identify the amount of and to call in any such debt. The plaintiff’s claim for an account, based on the allegation of a wilful default concerning unpaid rent due by the defendant as at the date of death, fails.
Failure by the defendant to distribute the personal effects of the deceased forming part of the residuary estate
The father’s will provides for the residuary estate to be distributed equally between the plaintiff and the defendant. The plaintiff, both in her pleading and in her evidence, maintains that this has not occurred. In particular, in paragraph 11 of the fourth statement of claim she has alleged a failure to distribute in accordance with the terms of the will the following personal effects of the deceased forming part of the residuary estate:
(i)photographs;
(ii)silverware;
(iii)cookbooks;
(iv)firearms;
(v)Holden utility or Volvo motor vehicle;
(vi)cross-stitches;
(vii)video of the plaintiff’s 21^st birthday;
(viii)the original school case of the plaintiff; and
(ix)several toys of the late brother of the plaintiff and the defendant.
It would seem that some of these items such as, for example, item (vii) and item (viii) above might be regarded as owned by the plaintiff independently of any entitlement she might have as residuary beneficiary of the father’s estate. In any event, such of the items, as a identified above, and that remain in existence, should be collected or called in by the defendant and distributed to the plaintiff and the defendant in accordance with the terms of the will. To the extent that the defendant has failed to achieve this to this point he is in breach of his executorial duties. However, ultimately, the only practical resolution of this aspect of the plaintiff’s claim is for the parties to reach an accommodation. I will allow some time for the parties, through their legal representatives if necessary, to agree to a regime whereby the father’s residuary estate as identified above is to be distributed between the two parties. Failing any agreement being reached within a reasonable period of time, I will hear from the plaintiff further as to any orders that might be made.
The Glenelg North property devise – status of clause 4 of the will and the defendant’s registered caveat
Clause 4 of the father’s will is in the following terms.
I GIVE DEVISE AND BEQUEATH all my estate and interest in my property situate at 57 Tapleys Hill Road, Glenelg North in the State of South Australia to my daughter FOTINI KARASTAMATIS subject to her entering into a memorandum of encumbrance containing terms and conditions which secure the right for my son IOANNIS TZANAVARAS to use the granny flat on the premises at such time as he may wish. The encumbrance will note that my said son will be permitted to use the said granny flat on such occasions as he is visiting Adelaide but not on a permanent basis and shall terminate upon his surrendering the right to occupy the same or upon his death. All costs for the preparation and registration of the encumbrance are to be borne by my estate.
In her fourth statement of claim, the plaintiff has pleaded a number of grounds in support of her contention that the condition in favour of the defendant (the “encumbrance condition”) must be regarded as unenforceable against her. They include:
(i)that the encumbrance condition is void for uncertainty and is unenforceable;
(ii)that the encumbrance condition is to be construed as a condition subsequent to the gift of the Glenelg North property to the plaintiff and given that the condition is void for uncertainty and unenforceable, on the correct construction of the will, the plaintiff was entitled to take the devise of the Glenelg North property free of the condition subsequent;
(iii)that the encumbrance condition, by its terms, creates no interest in real property known to the law and is not capable of supporting an “encumbrance” capable of being registered on the title;
(iv)that on the proper construction of the encumbrance condition, the intention of the deceased was to afford the defendant a personal right of use of the granny flat which as an expression of intention is not binding on the plaintiff;
(v)that as a consequence of the Glenelg North property having been transferred by the defendant, in his capacity as executor, to the plaintiff by registered transfer and subsequently by the plaintiff to herself and her husband by registered transfer, without any encumbrance envisaged by clause 4 having been reserved or secured over the title, the plaintiff, in the first instance and the plaintiff and her husband, in the second instance, have obtained an absolute and indefeasible title to the Glenelg North property free of any claim by the defendant; and
(vi)that, for various reasons, as pleaded and disclosed in the evidence of the plaintiff, the defendant is estopped from enforcing the provisions of clause 4.[75]
[75] The estoppel plea is set out in paragraph [34] of the fourth statement of claim and is in the following terms:
34.In the alternative the defendant is estopped from enforcing the provisions of clause 4 of the Will to the extent that the will provides for the plaintiff to enter into a memorandum of encumbrance, on the basis that
34.1The plaintiff lived in the granny flat on the house property with the consent of the deceased from 2000 to December 2005 while the deceased was the registered proprietor of the house property.
34.2The plaintiff attended to the house property and the maintenance of the granny flat and the house property during the period that she resided in the granny flat, to the knowledge of and with the consent of the deceased.
34.3The plaintiff paid market rent to the deceased during the period she resided in the granny flat.
34.4The deceased represented to the plaintiff that the house property would vest in the plaintiff when the deceased died.
34.5With the consent of the deceased and in reliance on the representation made by the deceased, the plaintiff carried out improvements and renovations to the house property.
34.6With the consent of the deceased the plaintiff and her fiancé [now husband] moved into the house property and in reliance on the representation proceeded to make the house property their family home in anticipation of their marriage, including the performance of the improvements and renovations.
34.7The improvements and renovations performed by the plaintiff in reliance on the representations by the deceased were undertaken at substantial cost by the plaintiff.
34.8The plaintiff would not have carried out the improvements and renovations and would not have incurred the cost of the improvements and renovations but for the representation by the deceased that the house property would vest in the plaintiff once he had died.
34.9The plaintiff would not have carried out the improvements and renovations and would not have incurred the cost of the improvements and the renovations had the deceased said that the defendant was to have a right to the use of the granny flat.
34.10The plaintiff has acted to her detriment in reliance on the representation and the absence of any suggestion by the deceased that the defendant would have a right to the use of the granny flat.
34.11It would now be unconscionable for the deceased to require the plaintiff to enter into a memorandum of encumbrance for the defendant to have the use of the granny flat on the house property in view of the significant investment made by the plaintiff in making the property her family home.
As far as the indefeasibility of title issue is concerned, the following short chronology is relevant.[76]
(i)Probate of the father’s will dated 30 August 2007 was granted to the defendant, as one of the two executors, on 5 February 2009.
(ii)By memorandum of transfer dated 6 February 2009, executed by the defendant in his capacity as executor and registered at the Land Titles Registration Office of South Australia on 6 March 2009, the defendant, in the capacity of executor, transferred the unencumbered fee simple in the Glenelg North property to the plaintiff for a consideration described as “pursuant to the terms of the Will”.
(iii)By memorandum of transfer dated 16 February 2009, executed by the plaintiff as transferor and registered in the Land Titles Registration Office of South Australia on 11 March 2009, the plaintiff transferred to herself and to her husband, Panagiotis (Peter) Karastamatis, the unencumbered fee simple in the Glenelg North property for a consideration stated to be “pursuant to s71CB of the Stamp Duties Act 1923”.[77]
(iv)At a time after the Glenelg North property was transferred into the joint names of the plaintiff and her husband, the property was mortgaged in favour of the Bendigo and Adelaide Bank Ltd which mortgage is registered on the title and not expressed to be subject to any claim or interest of the defendant.
[76] See generally MFI P2, tabs 27, 28 and 29.
[77] Section 71CB of the Stamp Duties Act 1923 provides for an exemption from the payment of stamp duty in various circumstances including, subject to the terms of that section, transfers between spouses.
It is plain that both the plaintiff’s husband and the Bendigo and Adelaide Bank Ltd have a registered interest in the Glenelg North property which interest has not, to this point, been made subject to any registered encumbrance in favour of the defendant. As at the commencement of the trial and for sometime prior thereto, both these non-parties were to be seen as having had an interest in this aspect of the dispute between the defendant and the plaintiff. The matter was raised with counsel both before and during the trial. However, no application was brought on behalf of the defendant to join either the plaintiff’s husband or the Bendigo and Adelaide Bank Ltd. In my view, both would have been necessary parties to these proceedings before any relief which in any way affected the title or value of the Glenelg North property, could be contemplated.
In addition, the circumstances as set out in the brief chronology above are such that, on its face, s57 of the Real Property Act 1886 (SA) would seem to apply.[78] It would also seem that the plaintiff, in the first instance, and the plaintiff and her husband, in the second instance, received an absolute and indefeasible title to the Glenelg North property free of any claim by the defendant, whether in his capacity as executor or beneficiary, in accordance with s69 of the Real Property Act. Section 69, insofar as is material, provides:
The title of every reached proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be notified on the original certificate of such land, be absolute and indefeasible, subject only to the following qualifications: [thereafter follow a number of statutorily provided exceptions to this notion of indefeasibility of title].
[78] Section 57 is in these terms: “Every instrument shall, when registered, be deemed part of the register book, and shall have the effect of and be deemed and taken to be a deed duly executed by the parties who have signed the same”.

The plaintiff complains that clause 4 does not specify the “terms and conditions which [are to] secure the right for [the defendant] to use the granny flat”. Nor does clause 4 provide for a mechanism by which these terms and conditions are to be determined. In this respect, the plaintiff has identified a number of questions none of which can be answered by reference to clause 4.
Are the terms and conditions to be determined by the plaintiff alone? In other words, is the plaintiff to act unilaterally in determining the content of the proposed memorandum of encumbrance? If so, must the plaintiff act reasonably in determining the terms and conditions? May she include terms and conditions of her choice which in her opinion “secure the right”?
Are the terms and conditions to be determined by agreement between plaintiff and defendant? If so, by what mechanism is any non-agreement or dispute over proposed terms and conditions to be resolved? Is the plaintiff entitled to include terms and conditions to which the defendant does not consent provided that such terms and conditions, as a matter of objective fact, have the effect, or comply with the requirements, as described in clause 4?
With this fundamental issue of how the terms and conditions are to be arrived at in mind, there are a number of not unimportant issues upon which the parties might not readily agree. In this respect it must be borne in mind that, whilst in ordinary smooth functioning family relationships the issues identified below might not be of practical concern. Arrangements would be made in a way that respected each party’s position. However, clause 4 is intended to operate in all circumstances and must be construed in a way that renders it capable of operating in all circumstances. The issue is particularly acute in the present case because the parties have had a significant and, it would seem irretrievable, falling out. Accordingly, there being an absence of goodwill, clause 4 could only operate effectively if it were to clearly identify the nature of the parties’ relationship with respect to the granny flat.
(i)What does it mean for the defendant to be “permitted to use” the granny flat and what constraints, if any, are to be imposed upon such use?
(ii)What does it mean for the defendant to be permitted to use the granny flat “on such occasions as he is visiting Adelaide but not on a permanent basis”?
(iii)Is the granny flat to be dedicated to the defendant’s use albeit “not on a permanent basis” in the sense that he is to be entitled to furnish it as he wishes and to leave the furniture and other contents and his own personal possessions, clothing and the like, permanently in the granny flat in between “such occasions as he is visiting Adelaide”?
(iv)Alternatively, is he to keep the granny flat entirely free of any sense of his presence during those periods when he is not visiting Adelaide, so as to enable the plaintiff to make use of the granny flat as part of the Glenelg North property devised to her?
(v)Who is to furnish the granny flat? Who is to maintain at least the inside of the granny flat?
(vi)Who is to pay for the electricity, water and any other utilities referrable to the use of the granny flat?
(vii)Does the use of the granny flat entitle the defendant to park a motor vehicle on the premises?
(viii)How much use of the granny flat is the defendant to be entitled to before such use it to be construed as “on a permanent basis”?
(ix)Would it be sufficient to avoid a permanent basis “characterisation” by leaving the flat empty for one day every year or for one week every month?
(x)What does it meant for the defendant to “use the granny flat”? Is he entitled to occupy the granny flat together with his wife and children? Is he entitled to let his wife or his children occupy the granny flat on occasions when he is not there? Is the defendant to be restricted to a personal or residential use as opposed to a commercial or business use of the granny flat? If the defendant is entitled to use the granny flat in the company of his family, would it only be his immediate family? Would he be entitled to invite his parents-in-law or friends to stay with or without him in the flat for a weekend or even for an extended period of time provided there was no permanency?
(xi)Are there to be any restrictions on the number of casual visitors, if any, that the defendant would be entitled to bring to the flat?
(xii)Is the defendant to be entitled to use the flat with priority over or even to the exclusion of the plaintiff? This latter possibility would seem to be unlikely. The tenor of clause 4 suggests that the granny flat is to be available for use by the defendant but not that the plaintiff is to have no rights of her own over this part of the property the fee simple of which has been left to her.
(xiii)Is it that the defendant is to have a first claim to use the granny flat on any occasion he wishes to visit Adelaide, or is it to be by negotiation with the plaintiff? In either case, is there to be a form and period of notice to be provided by the defendant to the plaintiff so that she can order her affairs with respect to the granny flat (for example, refrain from inviting visitors to stay and so on) upon receipt of appropriate notice?
I agree with the plaintiff’s submission that the term “use” is not a concept of any fixed or definite meaning in the context employed in clause 4 and similarly the notion of “terms and conditions” inevitably will raise questions of degree and is not susceptible of any definite meaning. There are many shades of meaning for the term “use” of a granny flat and the question of whether or not a particular term or a condition in a memorandum of encumbrance is necessary to “secure” a right to “use” the flat will involve matters of degree and subjective judgment. This would be so even if some mechanism by which those terms and conditions might be identified had been provided for.
Clause 4 requires the plaintiff to enter into a memorandum of encumbrance of the type stated in clause 4. I agree with the plaintiff’s submission that it cannot be said with certainty whether or not any particular memorandum of encumbrance that the plaintiff might enter into would comply with and satisfy the requirements of clause 4, absent a consensual arrangement reached by the parties. It is not possible for her to know what form of encumbrance would satisfy the requirements of clause 4 prior to any posited form of encumbrance being challenged and tested in court.
Clause 4 is void for conceptual uncertainty.[97] The validity of clause 4 either stands or falls according to its terms. It is not appropriate for a court to imply further terms and conditions to render clause 4 more certain of meaning, nor is it permissible to remake the testator’s will in this respect. The task before the court is one of construction and interpretation only.[98]
[97] In my discussion on this topic I have been significantly assisted by most extensive written submissions provided by counsel for the plaintiff. Very little, if any, of this treatment in the plaintiff’s written outline of argument was challenged by the defendant. I found the whole of the plaintiff’s treatment of this issue to be highly persuasive and I mean no disrespect to counsel for having confined myself to only some of the essential aspects of that treatment.
[98] See generally David M Haines QC “Construction of Wills in Australia” (2007) LexisNexis Butterworths at [41.3] citations omitted, Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716 at 719 and Re The Will of Bradley [1994] 2 Qd R 233.
I have already indicated that I accept the plaintiff’s argument that the words used in clause 4 are not apt to be construed as to give rise to a trust in the plaintiff in favour of the defendant. They are to be construed as a condition subsequent which has failed as being void for conceptual uncertainty. As a consequence, the plaintiff as at the date of death of her father was entitled to take the devise of the Glenelg North property entirely free of the condition in clause 4.
However, and in any event, even if clause 4 were to be construed as disclosing an intention to provide for a trust, any such trust would also fail for the same reasons of conceptual uncertainty. To put it simply, there is no certainty as to the trust property, one of the essential aspects of a trust. As Mr DM Haines QC has observed in his work:[99]
Before considering whether words in respect of a trust are certain or otherwise, a basic principle of trust law must be addressed. A trust will not be created unless a testator has indicated his or her intentions with sufficient certainty. If the words seemingly creating a trust are too vague to enable a court to interpret them in such a way as to found a valid trust, the gift is void.
[99] Construction of Wills in Australia at [41.2].
In such a case, the rule in Lassence v Tierney,[100] as expressed by the Privy Counsel in Hancock v Watson,[101] will apply.
For, in my opinion, it is settled law that if you find an absolute gift to legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so as the trusts have failed to the exclusion of the residuary legatee or next of kin as the case may be.
The rule has been consistently applied in common law jurisdictions including in this country.[102]
[100] (1849) 1 Mac & G 551, [1843-60] All ER Rep 47.
[101] [1902] AC 14 at 22 (Lord Davey).
[102] See for example, Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716, Public Trustee v Bennett [2004] NSWSC 955 at [7].
My findings on this question of the construction of clause 4 are sufficient to support a dismissal of the defendant’s cross-claim seeking a remedy in reliance on clause 4 of the will. In addition, the plaintiff is entitled to a declaration to the effect that, by virtue of clause 4 of the will, the plaintiff was entitled as at the date of her father’s death to be registered as absolute owner of the Glenelg North property free of any interest or entitlement of the defendant. Strictly, such a declaration may now lack utility. Given my findings with respect to clause 4 and my rejection of any entitlement thereunder in the defendant, there would appear to be no basis upon which the Land Titles Office register, recording the transmission of the Glenelg North property into the name of the plaintiff and thereafter the registration of a transfer of the title into the joint names of the plaintiff and her husband, could be disturbed.
By the end of the trial the defendant had limited his claim with respect to clause 4 of the will to a claim for equitable compensation or damages. The defendant adduced no evidence sufficient to permit an assessment of any loss which he may have incurred through any failure of the plaintiff to comply with her asserted trust obligations under clause 4. For this reason alone, it is probable that the defendant’s claim would have to have been dismissed in this respect. In any event, a fundamental problem with any assessment exercise arises because of the uncertain content of the asserted trust obligations. To put it simply, the defendant has failed to establish what it is that he has lost. Even if I were to be wrong in concluding that the encumbrance condition fails for conceptual uncertainty, it could only be a matter of speculation as to how much “use” of the granny flat the defendant will have been deprived of by the plaintiff’s actions and as to what monetary value might be attributed to that loss of “use”.
The plaintiff also relies upon conduct of the father when he was alive and conduct of the defendant in his capacity as executor and/or beneficiary in order to argue that the defendant (in either or both of these capacities) is estopped from taking advantage of the encumbrance condition. The plaintiff’s estoppel contentions raise difficult questions of fact and law. It is not necessary to reach a conclusion about the estoppel claim. The defendant has abandoned any right to occupy the granny flat and, as such, it is probably not the case that the plaintiff and/or her husband will have suffered any irretrievable prejudice by proceeding in the way that they have under the belief that they either were to receive or had received an unencumbered title to the property. The defendant has limited his claim to a personal action against the plaintiff for equitable damages for her alleged failure to observe a trust obligation to allow the defendant to “use” the granny flat in accordance with the terms of clause 4 of the will. As I have indicated, this cause of action fails.
The defendant has registered a caveat on the title of the Glenelg North property ostensibly in accordance with the provisions of the Real Property Act and alleging an interest in the Glenelg North property pursuant to clause 4 of the will. The defendant has no such interest and, indeed, has abandoned any claim to any such interest in the property which might support the caveat. The plaintiff is entitled to an order pursuant to s191(d) of the Real Property Act that the defendant attend before the court and show cause why registered caveat no. 11414483 should not be removed. In practical terms, as a consequence of this trial and my rulings on the clause 4 question, the defendant is to be regarded as having had that opportunity and has failed to show cause. The plaintiff is entitled to an order pursuant to s191 of the Real Property Act that registered caveat no. 11414483 be removed by the Registrar General.
The defendant’s claims
The Millennium Bank account in Greece
The father, at the date of death, had funds deposited in an account with the Millennium Bank in Greece. In accordance with Greek law and requirements and following their father’s death the plaintiff and the defendant were recorded as joint signatories on the account with either to sign. It is common ground[103] that, on or about 25 August 2009 when in Greece, the plaintiff withdrew from the account €20,784.50 for her own purposes and that she is liable to account to the defendant for half that amount, €10,392.25.
[103] See P1 and P4.
The defendant maintains that he is entitled to be reimbursed in Australian dollars, calculated in accordance with the exchange rate as at 25 August 2009, and to be paid interest for the period during which he has been kept out of his money. These aspects of the defendant’s claim are not conceded by the plaintiff. The plaintiff maintains that this amount repayable by her should be set off against a much larger amount that she says is properly due from the defendant to her. As such, any question of interest should be dealt with in the context of any ultimate set off.
As to the exchange rate issue, I am satisfied that the defendant was entitled to his share of the Millennium Bank account balance converted into Australian dollars as at the time the plaintiff wrongfully appropriated it. The defendant said in evidence that had he had access to the money at the time he would then have repatriated it to Australia. There is no evidence from which a contrary inference might be drawn. I accept that evidence.
As at 25 August 2009, €1 was worth approximately $A1.71; therefore the sum of €10,392.25, at that time, was worth $A17,770.75. The defendant is entitled to an order that the plaintiff is to pay this amount to him but subject to questions of set-off and interest as dealt with later in these reasons.
Claim for $25,000 on account of work done by the defendant to improve Glenelg North in 1992-3
By paragraph 65 of his fourth amended defence and cross-claim, the defendant seeks the following relief.
That the plaintiff pay to the defendant the sum of $25,000 spent in 1992 or 1993 (at present date value) by way of reimbursement of expenses paid by the defendant for improvements made by him to the granny flat.
This relief sought appears to be connected with or a nod to paragraph 39 of the defence which is in the following terms.
In further answer to the claim of the plaintiff the defendant says he did occupy the granny flat regularly and frequently in the several years before and after the deceased (always with the knowledge and consent of the tenants when the house was rented out, parked his car on the premises, accommodated his immediate family, left clothing and other personal possessions in the granny flat (which is still there) and carried out significant improvements to it at his own expense to the garden, the fence, the pavers, ceilings and electrical works including the installation of an air conditioner, all without any objection by the plaintiff.
The defendant gave evidence to the effect that in or about the period 1992-1993 and not long after the Glenelg North property was first purchased by the father, the defendant committed his own physical labour and money to certain renovations and repairs to the property including, for example, the substantial amount of paving work done in the front yard and in the driveway. According to the defendant, all of this was done by agreement with the father and on the basis that the defendant could use the property from time to time when he came to visit Adelaide.
The evidence from the defendant as to how much of his own labour and how much of his own money was expended was unclear. Plainly, work was done on the property both inside and out which would have required contractors to be engaged and the defendant indicated that he organised and supervised any such work. However, as I have already said, the defendant’s evidence was not at all clear with respect to who paid for what aspects of the works done and he provided no documentary support. The defendant’s evidence in this respect was insufficient to support a finding that he had expended in the order of $25,000 (whether according to present day values as pleaded or otherwise).
In any event, the defendant’s claim that the plaintiff should reimburse him this or any amount on account of work done by him or monies expended by him with respect to the Glenelg North property in 1992 and 1993 is untenable. I make no findings on the question of whether or not the defendant might have had a claim against the father when he was alive or against the estate after the father’s death. However, any such a claim has not been pleaded nor argued for nor has the estate been added, in some way, as a party to these proceedings for this purpose. In 1992 and 1993 the plaintiff had no interest in the Glenelg North property and no capacity to enter into any arrangement with the defendant or to be bound by any arrangement that might have been entered into between the father and the defendant with respect to renovations to the Glenelg North property. The father was not to die until some 14 or so years later. Even if the defendant did have some sort of claim against the father which would survive his death (and ignoring for the present the inevitable problems the defendant would suffer with respect to limitation of actions) such a claim would need to be fully particularised and the estate made a party to any litigation before it could be considered. The defendant’s claim against the plaintiff under this heading fails.
Claim for recovery of $28,500 lent by defendant to plaintiff in 2005
There is no pleading in support of this claim. However, an email was sent on behalf of the defendant by his solicitor to the solicitors for the plaintiff on 21 June 2012 which was in the following terms.
It has come to my notice, on my client’s instructions, that there is another matter outstanding between our respective clients that should, logically, be tidied up.
My client loaned the sum of $28,500 to your client on 28 June 2005. He withdrew the monies from his NAB account walked across the road, and banked it into your client’s account.
A copy of the NAB account is attached.
My client requires the loan to be repaid, and demand is accordingly made.
Please advise when your client will make reimbursement.
At no time after sending this email, did the defendant bring any application or make any attempt to amend his cross-claim so as to include a claim for the recovery of any such money said to have been lent.

The NAB single page bank statement provided with the email and ultimately tendered[104] records that on 28 June 2005 the sum of $28,500 was withdrawn from the defendant’s “business cheque account”. It is not clear on the face of the bank statement whether that amount was withdrawn in cash as was asserted by the defendant in his evidence, or whether it was debited by way of a cheque, although it does seem to record what might typically be understood as a cheque number reference (005878) adjacent to the amount said to have been withdrawn.
[104] As exhibit D16.
I agree with the plaintiff’s submission that it would be unfair on and embarrassing to the plaintiff if the defendant were permitted to raise and rely upon such a claim at trial. The allegation has not been pleaded and properly particularised and as a result of this failure to plead, the defendant has not invoked in the plaintiff either an obligation or a need to investigate the documentary record and to make or obtain disclosure.
On the limited evidence that was given by the parties on this topic it is clear that they are in conflict over what occurred in 2005. The defendant insists that at the request of the plaintiff he withdrew cash in the amount of $28,500 and banked it into the plaintiff’s bank account by way of loan to enable her and her husband to undertake some form of investment. However, the defendant has produced no documentary evidence of this transaction other than the bank statement which shows a withdrawal of that sum of money, itself quite an equivocal record. At first blush, a claim that someone has lent cash in the amount of $28,500 with no documentary record of the arrangement or its terms and conditions seems somewhat incredulous.
The plaintiff and her husband maintain that at or about that time, the defendant himself invested a large sum of money in some form of pyramid scheme which ultimately failed.
In my view, the claim has not been properly pleaded and the plaintiff has not had a fair opportunity to undertake such investigations and enquiries as may be appropriate to enable her to defend the claim. Had the issue concerned a variation or additional component to an already pleaded claim the provision of informal notice by email rather than by an amended pleading might be treated more favourably. Ultimately, the matter would turn on the reasonableness of the approach adopted, in all the circumstances, and the potential for prejudice to the other side. However, here the defendant seeks to assert a new claim entirely separate from and unrelated to each party’s pleaded cases.
The defendant did not seek to amend his pleadings. Had there been such an application, I have little doubt it would have been opposed and at the very least the plaintiff would have been allowed time, perhaps considerable time, in order to pursue further enquiries, even to the extent of non-party discovery.
There is a further consideration. On the very limited information provided by the defendant it would seem that any loan, if made, was repayable at call or on demand. As such, by the time a demand was first made by the email of 21 June 2012, the debt would have been statute barred. A loan of money payable on request creates an immediate debt. In Norton v Ellam[105] Baron Parke said this.
It is the same as the case of money lent payable upon request, with interest, where no demand is necessary before bringing the action. There is no obligation in law to give any notice at all; if you choose to make it part of the contract that notice shall be given, you may do so. The debt which constitutes the cause of action arises instantly on the loan. Where money is lent, simply, it is not denied that the statute begins to run from the time of lending.
According to the High Court in Young v Queensland Trustees Ltd[106] this position was settled at the end of the 17^th century. If the defendant’s claim for the repayment of this alleged debt were to be dealt with, in the absence of any pleaded case, the defendant would be deprived of the opportunity to plead and have determined in an appropriate and timely way this potential limitation of actions question. Again, in my view, it is not appropriate that this should be allowed to take place in the context of this litigation without proper notice to the plaintiff.
[105] (1837) 2 M&W 463 at 464; 150 ER 839 at 840.
[106] (1956) 99 CLR 560 at [10].
In the circumstances, and insofar as this litigation is concerned, the defendant’s claim for repayment of a debt of $28,500 is dismissed. However, the dismissal is not based on a review of the merits but rather for the reason that the defendant is not to be permitted to raise the claim in this litigation in the manner and in the circumstances in which he has attempted so to do.
Claim for defendant’s personal items left in Glenelg North granny flat
The defendant maintains that for some time now he has been kept out of the Glenelg North property granny flat and that various of his possessions are still in that flat to which he has not been able to obtain access so as to repossess his own property. During the trial the plaintiff made it plain that upon appropriate arrangements being made the defendant would be permitted to come and collect his belongings. Again, the merits of the situation are plain enough but given the nature of the relationship of the two parties there would seen to have been to this point a practical impediment in the way of the defendant being able to repossess his property. I do not propose to make any orders at this stage. Again, in the time that will be made available to the parties to sort out other matters as already indicated in these reasons, I expect the parties to reach an accommodation here and to establish a regime or method by which the defendant can attend at the Glenelg North property, have access to, identify and repossess his property.
Conclusion and proposed orders
I am in a position now to identify a number of proposed orders. However I intend, as indicated, to give the parties some time to consider these reasons and for the plaintiff to prepare draft minutes of orders consistent with these reasons.
In summary the position reached is as follows.
Order for account by the defendant on a wilful default basis
(i)No basis for such an order has been made out and the plaintiff’s claim in this respect is to be dismissed.
97 Seventeenth Street
(ii)The issue of sale in lieu of partition is to be stood over until the parties have had time to consider these reasons and attempt to agree a regime for the sale of the plaintiff’s interest to the defendant. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
(iii)The defendant is to account to the plaintiff for the sum of $4,384.50 together with interest and subject to the question of set-off both of which issues are dealt with below.
Greek real estate
(iv)Claim not pressed by the plaintiff and no orders to be made.
Greek pension moneys
(v)Claim not pressed by the plaintiff and no orders to be made.
Farm tools, vehicle and machinery
(vi)Claim not pressed by the plaintiff and no orders to be made.
Westpac joint account
(vii)The defendant is to account to the plaintiff for the sum of $1,500 together with interest and subject to the question of set-off both of which issues are dealt with below.
(viii)The defendant is to account to the plaintiff for the sum of $4,567.50 together with interest and subject to the question of set-off both of which issues are dealt with below.
Rent payable with respect to Twenty Eighth Street property
(ix)The plaintiff’s claim in this respect is to be dismissed.
Residuary estate of the deceased – personal effects
(x)Further consideration stood over until the parties have had time to consider these reasons. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
Glenelg North property – clause 4 of the will
(xi)The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
The Greek Millennium Bank account
(xii)The plaintiff is to account to the defendant for the sum of $17,770.75 together with interest and subject to the question of set-off both of which issues are dealt with below.
Claim for $25,000 for work done in 1992-1993 to improve Glenelg North
(xiii)The defendant’s claim in this respect is to be dismissed.
Claim by defendant for repayment of loan of $28,500
(xiv)The defendant’s claim in this respect is to be dismissed.
Claim by defendant for personal property left in the granny flat
(xv)Further consideration stood over until the parties have had time to consider these reasons. The plaintiff is to prepare draft minutes of proposed orders consistent with my reasons on this issue.
Set-off and interest
The plaintiff owed the defendant the sum of $17,770.75 as at August 2009 ((xii) above). The defendant owed the plaintiff the sum of $6,067.50 as at August/September 2009 ((vii) and (viii) above). My initial position is that these two amounts should be set-off as at that time resulting in an amount due from the plaintiff to the defendant of $11,703.25. As such, this amount should carry interest until say March 2010 when the further amount of $4,384.50 due from the defendant to the plaintiff ((iii) above) should be set-off.[107] This would result in a final principal sum due from the plaintiff to the defendant of $7,318 (rounded down). This final amount should carry interest for the period March 2010 to judgment (end October 2013).
[107] March 2010 is the approximate midpoint of the time period over which the $4,384.50 payable by the defendant to the plaintiff on account of Seventeenth street property rent accrued.
Under s30C(3) of the Supreme Court Act 1935 I have a discretion to order interest by way of a lump sum without proceeding to a formal calculation of interest. I would propose to exercise this discretion and direct that lump sum interest in the amount of $400 for the period August 2009 to March 2010 and in the amount of $1,800 for the period March 2010 to judgment be paid by the plaintiff to the defendant.
On that basis, the total judgment sum due from the plaintiff to the defendant would be $9,518.[108] However, before making a final order to this effect I will hear such submissions as the parties might wish to make on the questions of the approach taken to the set-off of the principal amounts and the determination of lump sum interest.
[108] $7,318 + $400 + $1,800.
I will adjourn the matter for a period of time, to be discussed with counsel, and on the adjourned date I would expect to be in a position to enter final orders on the matters dealt with in these reasons and to hear the parties on the question of costs.