Katelis v Tsiamparlis
[2000] VSC 386
•28 September 2000
| SUPREME COURT OF VICTORIA AT MELBOURNE | |
| COMMERCIAL AND EQUITY DIVISION | Not Restricted |
No. 6172 of 1998
| GEORGE KATELIS | Plaintiff |
| v | |
| HELEN TSIAMPARLIS | Defendant |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15, 18,19 and 20 September 2000 | |
DATE OF JUDGMENT: | 28 September 2000 | |
CASE MAY BE CITED AS: | Katelis v Tsiamparlis | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 386 | |
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Trusts – sale of land – land purchased in name of engaged woman – whether intention to hold in trust for her fiancé and herself – whether declaration of trust.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr P.J. Pickering | Barretts |
| For the Defendant | Mr R. Greenberger | Joseph Rose |
HIS HONOUR:
By contract of sale dated 1 February 1996 the plaintiff, George Katelis, and the defendant, Helen Tsiamparlis, who were then recently engaged to be married, agreed to purchase a residential property for $218,000. The property is the land situate at and known as 15 O’Loughlan Street, Ormond and being the land more particularly described in Certificate of Title Volume 6410 Folio 825. On or about 4 April 1996 in circumstances which I shall describe, this contract of sale was cancelled and a second contract of sale entered into on the same terms but showing Ms Tsiamparlis alone as purchaser. The second contract of sale was completed on 4 April 1996 and on 3 May 1996 she became registered as the proprietor of the land.
On 13 January 1998, following the termination of their engagement, Mr Katelis lodged a caveat on the title. He did this, he said, without legal assistance. The caveat as lodged asserts an entitlement to “all estate in fee simple” in the land on the following grounds:
“Pursuant to the Agreement dated 4 April 1996 and the attached copy of Contract of Sale dated 1st February 1996 between the Caveator and Helen Tsiamparlis, the proprietor of the above land.”
On 21 April 1998, in circumstances which were not disclosed, these grounds were amended by replacing them with the following simple ground of claim:
“A resulting, implied and/or constructive trust.”
This proceeding was commenced by originating motion filed on 17 June 1998 in response to a notice from the Registrar of Titles given pursuant to s. 89A(3) of the Transfer of Land Act 1958.
Before I go further, I should record some unusual features of the trial which will explain certain procedural matters which might otherwise seem puzzling. The proceeding was commenced, as I have mentioned, by originating motion supported, as the rules provide, by an affidavit sworn by Mr Katelis on 11 June 1998. The answering affidavit of Ms Tsiamparlis was sworn on 2 July 1998 and an affidavit in reply from Mr Katelis sworn on 2 July 1998. On 3 July 1998 the Master directed that the proceeding continue as if it had been commenced by writ and that there be pleadings and discovery. These steps were completed by the end of 1998. The proceeding then seems to have gone to sleep for about a year until January 2000. In March 2000 it was set down for trial and on 2 May it was fixed by the Listing Master for hearing commencing on 15 September 2000 with an estimated duration of three days. The Master also directed that the affidavits filed be treated as evidence-in-chief of the witnesses.
When the case was called on before me, the plaintiff sought an order adjourning the trial for six weeks because, he said, he had only recently been briefed, he had not been retained previously and that in his opinion the case was not ready for trial. He spoke of calling three extra witnesses who had not been proofed and from whom affidavits had not been obtained. The application was opposed and I refused it. In the event, two of the three extra witnesses mentioned by counsel for the plaintiff were in fact called by the defendant.
Having heard what was said on the adjournment application, it became apparent that the case would turn on disputed conversations. The affidavits as to these conversations were not in the appropriate form to stand as evidence-in-chief and I directed that evidence be given viva voce. The affidavits were therefore discarded, except, of course, insofar as a party wished to tender some part of them in cross-examination of the deponent.
Following the opening, it then appeared that the statement of claim also did not bear much relationship to the plaintiff’s case and that it probably did not disclose a cause of action. The case of the plaintiff, as opened, appeared to depend upon the fact that the land had been purchased with the actual intent of the couple that they would hold it collectively and that, on that basis, Mr Katelis had made contributions towards its improvement in 1996 and 1997. In the document dated 4 April 1996, referred to in the unamended caveat, the defendant acknowledged that she held the property on trust for herself and Mr Katelis. It was put that it would be unconscionable for the defendant to resile from this understanding. The defence, largely due to the inadequacy in the statement of claim, was little more helpful for my purposes. The pleadings, therefore, were also discarded and the case proceeded on the basis of the opening. At the end of day 1, I directed that counsel for the defendant should set out his client’s position on the 4 April document. This he did and I tried the case on the basis of that document and the evidence as it emerged.
The position of the defendant was that she never intended her fiancé to have an interest in the property, alternatively that her intention was that such interest should arise only when they married. Alternatively, if such an interest existed in April 1996, it was forfeited or otherwise terminated upon the failure of the parties to marry. She acknowledged that she signed the 4 April document but said, first, that it was not effective to dispose of any interest in the property and, second, that it was made in contemplation of and conditional upon the subsequent marriage of the plaintiff and herself.
The engagement of Mr Katelis and Ms Tsiamparlis dates from Christmas 1995 when their families formally met and exchanged presents. She worked for Telecom as a clerk and he ran his own business as proprietor of the Chief’s Pizza shop in Murray Road, Ormond.
Shortly thereafter, Mr Katelis became aware that a residential property at 15 O’Loughlan Street, Ormond was on the market and he negotiated its purchase for $218,000. On 1 February 1996 the first contract of sale was entered into with the couple as purchasers, for the agreed price, payable by a 10 percent deposit with the balance payable on settlement, which was to occur on 2 April 1996.
Ms Tsiamparlis said, and I accept, that the purchase was decided upon between her fiancé and herself on the basis that each would contribute equally to it. At this stage, Mr Katelis did not have sufficient available money for his share of the $21,800 deposit and she obtained this from her father, George Tsiamparlis. Her father, or a company under his control, paid this deposit and she, in turn, repaid to him $10,000 from her own money. Mr Katelis was to pay his share to his future father-in-law at some indefinite time in the future.
The balance of the purchase price was therefore of the order of $196,200. As things turned out, it was provided by a loan from the Advance Bank in the sum of $140,000 and the remainder by Mr Tsiamparlis and his wife from funds which they had overseas. The bank loan was obtained by Ms Tsiamparlis and her father and the property was transferred into her name alone upon settlement, which took place on the afternoon on 4 April 1996. The settlement statement shows that, in addition to the deposit, the purchaser paid $66,580.02. This sum passed through the bank account of Ms Tsiamparlis although it appears that the funds were provided to her by her parents. Her father also paid $372.50, the conveyancing costs of the purchase. So much was not in dispute.
What was in dispute was how this came to pass. Mr Katelis said that it became apparent at an early stage that Mr and Mrs Tsiamparlis had about $70,000 in an account overseas which they were prepared to lend the young couple on the basis that they would, at some unspecified time, repay it with interest at 10%. When pressed as to whether this agreement was made before the first contract of sale was signed and whether it meant that he would not be personally called upon to contribute any part of the price, Mr Katelis was evasive. The version of Ms Tsiamparlis was that they signed the first contract on the basis that he would provide one half of the funds required after the bank loan was obtained. This, including the share of the deposit, would require him to provide about $39,000. She said that later in February 1996 he told her that he did not have the money. They talked about it and he suggested that his name be removed from the contract. She spoke with her parents and they agreed that, rather than lose the house completely, they would provide the funds to help their daughter so that she would buy it in her own name. The date of this was uncertain but it must have occurred before 12 March 1996, for it was on that day that the solicitors, Rudstein Kron, commenced acting for the purchaser. Zelma Rudstein of that firm told me that the file was opened in the name of Ms Tsiamparlis alone and that her first instructions were to have the contract of sale amended to remove Mr Katelis as purchaser.
The version of Mr Katelis was rather different. He told me that his fiancée's parents had funds available for the purchase and, at an early stage, these were to be used rather than his own money. He said that in early or mid-March he and his fiancée went to the Advance Bank for a loan. He spoke to a bank officer called John Rosso. Mr Rosso was not called as a witness. Mr Rosso, he said, required him to produce financial accounts to support his loan application but he, Katelis, was not in a position to do so. The witness told me that Mr Rosso suggested that the difficulty could be overcome by withdrawing his name from the contract of sale and the loan application and that this was what was done.
I prefer the evidence of Ms Tsiamparlis on this issue, as I do generally, to that of Mr Katelis. I do so because he was an evasive and unimpressive witness. His version of the arrangement is inherently improbable. Finally, it is inconsistent with the 4 April document to which I now turn. Mr Katelis said that on the day of the settlement of the second contract of sale on 4 April 1996, but after settlement, he asked his fiancée to sign a document which he had previously prepared. The document is in the following terms:
“ Agreement
I, Helen Tsiamparlis of 12 Telopea Place, East Burwood hereby state that the property situated at 15 O’Loughlan Street, Ormond, Victoria Certificate of Title Volume 6410 Folio 825 was originally purchased in the names of Helen Tsiamparlis and George Katelis, however, George Katelis personally requested that he be omitted from the original Contract of Sale dated 1st February 1996 as the deposit monies were provided by me. However, the abovenamed property was purchased for us both for our future together. Attached is a copy of the original Contract of Sale.
Even though I am registered as the sole proprietor of the abovenamed property, George Katelis has an interest as he is the one who will make the enquiries as to the Lease of the property and drawing plans for the proposed two units which we intend to build on the land together.
Dated 4 April 1996”
He said that this request was made at his pizza shop. He showed her the document and she just signed it. He, too, signed his name under her signature. She said that she acknowledged the document bore her signature but she did not remember when and in what circumstances she signed it. She said that she first saw the document some time in early 1998 after the caveat had been lodged. It was suggested that the document was prepared and executed some time afterwards and there is some internal evidence to support this. It is, however, not necessary that I express any view on this matter. The uncontradicted evidence of Mr Katelis was that it was signed late on 4 April 1996 and I proceed on that basis.
It will be recalled that the trial proceeded without pleadings and that, at the end of day 1, I directed that counsel for the defendant provide a statement of his client’s position as to this document. This statement is as follows:
“The defendant says:
1.She denies that on a proper construction of its terms, the document dated 4 April 1996 signed by the plaintiff and the defendant constitutes a declaration of trust in respect of any interest in the property situated at 15 O’Loughlan Street, Ormond (‘the property’).
2.In the alternative, if the document dated 4 April 1996 signed by her and the plaintiff constitutes a declaration of trust in respect of any interest in the property, which is denied, then –
(a)such declaration of trust was conditional upon, or in contemplation of, marriage; and
(b)the plaintiff and the defendant never married –
and in the premises, any beneficial interest conferred upon the plaintiff by the said document has lapsed, or has been forfeited by the plaintiff, or alternatively, is held by the plaintiff on a resulting trust in favour of the defendant.”
The case then proceeded on the basis that these were the only issues with respect to the document.
Returning to the evidence, Mr Katelis said this in response to a question as to his reason for drawing up this document.
A.Well, one, it was to enable me to continue with works that had to be carried out with the plans that we had made as far as town planning and all the rest of it, just in case I needed to sign some sort of a landlord paperwork or I don’t know what I was – or what I had to sign. Plus, it was like an acknowledgment that, yes, we did borrow x amount of dollars from her parents, so that no bad vibes were – so it was to business.
The terms of the document and this answer cause me to be distrustful of the evidence of Mr Katelis on this matter. In the document, which he said he actually typed himself, he offers as a reason for removing his name from the contract the very reason which his fiancée gave and which he now disputes. His answer which I have set out above, inasmuch as it speaks of an intention to provide an acknowledgment of a loan from Mr and Mrs Tsiamparlis, is unconvincing. The document makes no mention of this and he did not provide them with a copy of this acknowledgment or even discuss it with them.
It was evidently the intention of the couple at the time of purchase that the land was bought for their future. It provided them with the prospect of a home to live in. It provided them, also, with the prospect of rental income in the meantime and, assuming development of the site was possible, rental from or a sale price of the units to be constructed.
The engagement was publicly announced in June 1996 and in due course the wedding date was fixed for 26 October 1997. During the period 1996 to 1997 the property was cleaned up and let. Rental was applied in payment of mortgage instalments and outgoings. Ms Tsiamparlis had a bank account and it is possible to see that she paid from this source the first instalment to the Advance Bank of $1,062 on 2 May 1996. She said that she also paid $410.00 to the bank on 10 January 1997. She said, too, that on 10 January 1997 she withdrew from her account $2,500 to pay an account of town planning consultants, S Custance & Associates. Selwyn Custance of that firm acknowledged that he received this money. Mr Katelis said, however, that he reimbursed her in cash for one half of this payment. She denied this. I accept her evidence. In February 1997 it was necessary to pay one half of the architect’s fee. This payment of $2,000 was also made by Ms Tsiamparlis by withdrawal from her account on 28 February 1997. She produced also a number of receipted accounts which she said she had paid. These were nine South East Water accounts totalling $1,360.36, five City of Glen Eira Rate Notices totalling $812.75 and two insurance certificates totalling $386.80. The total of these contributions is $8,531.91.
I do accept that Mr Katelis arranged for the letting of the property, at least until mid-1997, that he did painting, floor sanding and general cleaning-up work on the property. She assisted, but he had more free time and perhaps more energy and expertise in these matters. It was he who set about the task of obtaining planning permission to build two units at the rear of the house, a task which would have been considerable and which commenced at the beginning of 1997 and continued until the permit finally issued in December of that year. He produced receipts showing the following payments:
13/02/96 For paint $59.85 27/03/96 For sander hire $40.50 27/03/96 For Wood Stop $8.60 08/04/97 To City of Glen Eira for Application Fee $262.00 08/04/97 To City of Glen Eira for advertising $30.00 30/05/97 To S. Custance & Associates $200.00 23/08/97 For mulching branches $100.00 $700.95
Mr Katelis did not operate a bank account in these years and so it may be difficult for him to provide documentary evidence of the expenses paid by him up to the end of 1997. He told me that he spent in all, $20,000 to $25,000 but I do not accept that his contributions totalled anything like that sum.
In August or September 1997 the engagement was terminated by Mr Katelis. I am not concerned with the reasons for this nor the rights or wrongs of it. No evidence of this was led and I make no findings upon it. It is sufficient that I find that the wedding did not take place.
Notwithstanding this, the planning application continued to pass through the appeal process in October 1997 and the permit was granted in December of that year.
On 18 November 1997 the couple met to distribute and return their gifts. According to Mr Katelis he then raised the question of the property and Ms Tsiamparlis told him that he was entitled to nothing. She denied that the matter was raised, and said that he became interested in the property only when the permit had been obtained. I do not think that this matters. He lodged his caveat on 13 January 1998.
For completeness, I should add that on 29 January 1998 Mr Katelis paid to S. Custance & Associates, or to the City of Glen Eira, or perhaps to both, a further sum of $285.30, for the Council’s planning appeal costs, and on 11 February 1998 to the architect $2,000, as the balance of his fee.
I am satisfied that on or about 4 April 1996 when the second contract of sale was entered into and on that date when the transaction was settled, the actual intention of each of the engaged couple was that the property be bought in her name alone. I find also that a reasonable bystander would infer such an intention from the overt acts of the parties at this time. Doubtless, they had in mind that, when they married, her property, like his pizza business, would be a benefit for them both.
Having made the purchase, Ms Tsiamparlis signed the agreement dated 4 April 1996 which had been prepared by her fiancé. It was prepared by a non-lawyer and must be interpreted in no strictly technical way.
It was suggested that the document was a declaration by her that she held the property in trust for them both. Such a trust would be voluntary, for no consideration moved from Mr Katelis. There is no presumption of advancement. Having reflected upon this, I am not satisfied that this document should be construed as a disposition of or as evidence of a disposition of an equitable estate in the property. I have found that she then had no intention to transfer any interest to her fiancé. The statement in the first paragraph of the document that the property “was purchased for us both for our future together” is merely a statement of the reason for the purchase. The second paragraph is directed to authorising Mr Katelis to perform acts with respect to the letting and development of the property. The use of the word “interest” in line 2 refers to his evident commercial interest, as a prospective husband, in the prosperity of his wife-to-be. Seen in this way, the first paragraph merely sets out, in a little detail and for the benefit of those with whom he expected to deal, just how it was that Mr Katelis, as the non-owner of the property, came to be acting with respect to it.
It follows from this that Mr Katelis has not demonstrated that he has any equitable interest in the property. There was no common intention of the two engaged persons that they purchased the property otherwise than as signified in the second contract of sale. Nor has he shown that she thereafter created a trust in the property in his favour. It was not suggested that any interest arises from his mere contributions to the property, monetary or otherwise. His claim must, therefore, fail.
I propose, therefore, the following orders:
1.Declare that the plaintiff has no equitable interest in the land more particularly described in Certificate of Title Volume 6410 Folio 825.
2.Direct that the caveat lodged by the plaintiff over the title to the said land in dealing No. V199443Y be removed.
3.The costs of the defendant of the proceeding including reserved costs and the costs of transcript be paid by the plaintiff.
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