Liristis & Ors v Danic

[2008] NSWSC 1314

CITATION:	Liristis & Ors v Danic [2008] NSWSC 1314
HEARING DATE(S):	4 and 5 December 2008
JUDGMENT DATE :	5 December 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	5 December 2008
DECISION:	Judgment for Defendant on Statement of Claim; judgment for Cross Claimant on Cross Claim.
CATCHWORDS:	CONTRACT – SPECIFIC PERFORMANCE – Whether Defendant signed alleged contract for sale of land – whether purchaser able to complete contract. - HELD: Plaintiffs’ claims fail on facts.
CATEGORY:	Principal judgment
PARTIES:	Tony Liristis (First Plaintiff) T&M Holdings Group Pty Ltd (Second Plaintiff) The Trustee for the Serenity Service Trust (sic) (Third Plaintiff) Gabriel Danic (Defendant)
FILE NUMBER(S):	SC 5907/07
COUNSEL:	In person (Plaintiffs) P.P. O’Loughlin (Defendant)
SOLICITORS:	In person (Plaintiffs) Redmond Hale Simpson (Defendant)

5907/07 Liristis & Ors v Danic

JUDGMENT – Ex tempore
5 December, 2008

Introduction

1    The Plaintiffs seek an order for specific performance of an alleged contract for sale of commercial premises in Kingsgrove Road, Kingsgrove (“the Property”). The Defendant, Mr Danic, is the registered proprietor of the Property. 2    The case on behalf of the Plaintiffs is conducted by the First Plaintiff, Mr Liristis, in person. The Third Plaintiff, although not expressly named in the Statement of Claim, is, apparently, Serenity Holdings Pty Limited (“Serenity”). Serenity is apparently controlled by Mr Liristis. 3    I will use the word “apparently” rather often in this judgment because the evidence in many respects is unclear and unsatisfactory. This is not due merely to the fact that Mr Liristis is not a lawyer. To my perception he is highly intelligent and obviously well versed in Court procedures, in the rudiments of the law of evidence and in the legal issues relating to his case. So well is he versed in the procedure of the Court that at the conclusion of his cross examination he reminded me that he had a right to give further evidence on oath by way of re-examination. So well versed in the law is he that he referred accurately, if I may say so, in his final submissions to the principles of unjust enrichment in support of his case, although a claim founded on unjust enrichment was not pleaded in his Statement of Claim. 4    In short, this case is highly unusual in that a litigant in person, not a lawyer, has conducted it as effectively as if he were a lawyer. A perusal of the transcript will show that Mr Liristis frequently and accurately employs the terms of art of advocacy. 5    I make these observations to underline that, in so far as Mr Liristis has not adduced evidence on behalf of the Plaintiffs satisfactorily, I have formed the conclusion that he has done so deliberately rather than by lack of familiarity with the procedure of the law and the principles of law which are relevant to these proceedings. 6    As I have noted, Serenity seeks an order that Mr Danic specifically perform an alleged contract in writing dated 3 May 2006 whereby Mr Danic agreed to sell the Property to the Third Plaintiff for a price of $1.8M. The contract is allegedly signed by Mr Danic. 7    Mr Liristis says that the original of the contract has been lost, in circumstances to which I will come. He produces a photocopy of the front page of the contract which apparently bears the signature of Mr Danic. Mr Danic says that the photocopy signature looks like his, but he resolutely denies signing the original document or, indeed, any contract for sale to Mr Liristis or any of his companies. Further, Mr Danic says that even if there was a contract for sale to Serenity, neither Serenity nor Mr Liristis nor any of his companies is, or ever was, in a financial position to complete that contract, so that specific performance should not be ordered. 8    By a Cross Claim, Mr Danic seeks an order for vacant possession of the Property. The Second Plaintiff, T&M Holdings (“T&M”), a company apparently controlled by Mr Liristis, was the lessee of the Property under a lease commencing on 1 April 2003 for a term of six years. 9    There is incontrovertible evidence that T&M has frequently been in default of payment of rent under the lease and that Mr Liristis has frequently promised to pay arrears of rent. There is incontrovertible evidence that those promises were largely unfulfilled. Mr Liristis admits frankly that when he commenced these proceedings, in circumstances to which I will come, T&M owed rent under the lease. He concedes that although T&M remains in occupation of the Property it has not paid rent since December 2007. Accordingly, on any view of it and regardless of the particular quantum of rent now outstanding, it is incontrovertible that T&M is in substantial breach of the lease, as the rental is in the region of $11,000 a month. 10    The issues are straightforward: – did Mr Danic sign the alleged contract for sale dated 3 May 2006; – if a valid contract for sale exists, should an order for specific performance be made in light of the Defendant's contention that Serenity, Mr Liristis and his companies are financially unable to complete; – if there is no valid and enforceable contract for which specific performance should be ordered, is Mr Danic entitled to succeed in his Cross Claim for an order for possession of the Property and for judgment in the amount of rent which he claims.


Whether Mr Danic signed a contract

11    Mr Liristis says that in 2005 he entered into negotiations with Mr Danic for the purchase of the Property. As I have recounted, his company, T&M, had been the lessee of the Property since 2003. Mr Liristis wished to construct a commercial car washing operation on the site, which had formerly been a petrol station. He obtained permission from Mr Danic in 2005 to commence alterations to the Property which would convert its operation to a car wash. This was done at a time well before Mr Liristis asserts that any binding contract for the purchase of the Property was entered into. The consent of Mr Danic was given in circumstances which, in summary, allowed T&M to have an abatement of rent while the premises were being altered in order to assist T&M and Mr Liristis to complete the construction of the new project and to get the business up and running. 12    Discussions continued between Mr Danic and Mr Liristis for the purchase of the Property in late 2005. At one stage Mr Danic said that he would sell the Property to Mr Liristis for a sum of $2M. Mr Liristis had a solicitor assisting him in these negotiations, a Mr Orford. In late October, Mr Orford prepared a draft contract for sale from Mr Danic to Serenity Holdings at a price of $1.8M. He sent that contract by Document Exchange to Mr Danic's solicitors. Mr Liristis says that he continued to discuss with Mr Danic the possibility of purchasing the site and that the price discussed was $1.8M, with a two year deferred settlement. 13    Mr Liristis' evidence is that on 3 May 2006 Mr Danic came to his office, which is on the Property. He says that Mr Danic came alone and that, after some little discussion, Mr Danic signed the contract for sale at $1.8M which Mr Orford had prepared and which Mr Liristis says he had with him there in the office. 14    According to Mr Liristis' evidence, Mr Danic’s signature on the Contract for Sale was witnessed by a Ms Chloe Burgess who was Mr Liristis' personal assistant. A signature, apparently that of Ms Burgess, appears on the photocopy of the first page of the contract. At the same time, Mr Liristis says, Mr Danic signed another document, which is headed Amendment of Lease and Option to Purchase. That document, he says, was witnessed by himself, his father and also himself on behalf of T&M Holdings. In short, according to the case presented by Mr Liristis, the contract for sale to Serenity was signed by Mr Danic in the presence of Ms Burgess, himself and his father. 15    Mr Liristis says that he sent the original of the contract signed by Mr Danic to Mr Orford. He says that he later discussed the contract with a solicitor who was employed by Mr Orford at the time. He says that the employed solicitor had the signed contract in his possession. He says that the employed solicitor has since ceased practice and no-one can find him. He says there is no trace of the contract in Mr Orford's office. 16    Mr Danic gives an entirely different account of the events of 3 May 2006. He says that he and his brother, Milan, arrived at the office of Mr Liristis on the promise that $20,000 would be paid by Mr Liristis on account of outstanding rent under the lease to T&M. He says that he, his brother Milan, and Mr Liristis were the only people present and participating in the discussions that day. He denies that Mr Liristis' father and that Ms Burgess were present and participated in the discussions. Mr Danic says that he was given $5,000 in cash on account of rent, and that he signed a receipt for that $5,000 on that day. He said that he and his brother then left without signing or discussing any other document or any other transaction. 17    There is thus a stark conflict between the evidence of Mr Liristis and the evidence of Mr Danic as to what occurred on 3 May 2006. In support of his version of events, Mr Liristis called his father, who said that he was present in the office on 3 May 2006 and saw Mr Danic sign the contract for sale. Mr Liristis also tendered an affidavit of Ms Chloe Burgess, which deposed that she witnessed the signatures on the contract for sale. 18    The solicitors for Mr Danic gave notice requiring Ms Burgess for cross examination. Mr Liristis said at the commencement of the trial yesterday that Ms Burgess had gone to Queensland for medical treatment for her pregnancy and could not come back. He requested that her affidavit be read and accepted without cross examination. That was opposed and I declined to permit the affidavit to be read without cross examination. I offered the court's video link facility for Ms Burgess's cross examination. Mr Liristis then said that he had spoken to Ms Burgess and that she was willing to come back to Sydney to give evidence this morning. This morning Mr Liristis said that Ms Burgess was unable to come to Sydney to give evidence because she had lost her baby. No medical or other corroborative evidence was tendered in support of Ms Burgess' unavailability and I therefore declined to permit the affidavit to be read. 19    Mr Liristis Snr gave evidence in an affidavit and was cross examined. It emerged from his cross examination that he did not read English. Although his English was somewhat fractured, he was still able to understand and deal with questions in cross examination. It was apparent from the cross examination that Mr Liristis Snr had had an affidavit prepared for him by his son and had simply signed the affidavit without being able to read or understand it. But Mr Liristis Snr was firm in his evidence that he was present in the office of his son on 3 May 2006 and saw Mr Danic sign the contract for sale. 20    I say at once that I have grave doubts about the reliability of this evidence. If Mr Liristis Snr cannot read English it is difficult to accept that, even if he had been present and had seen some document signed, he could have read it, understood it and could now affirm that the document which he had seen Mr Danic sign is the contract for sale. I am of the view that Mr Liristis Snr is disposed to support uncritically whatever version of events his son wishes to put forward. 21    However, there are other matters to which I will come in the evidence which induce me without hesitation to come to the conclusion that there was no contract signed by Mr Danic on 3 May 2006, or at all. 22    As I have said, Mr Liristis says that he cannot now produce the original of the contract signed by Mr Danic because he sent the original to Mr Orford's office and it now cannot be located. Mr Orford was called to give evidence. I accept his evidence without reservation. 23    Mr Orford says that he had prepared the draft contract and sent it to Mr Danic's solicitor in 2005. He said he never saw any copy of that contract again and he certainly did not see any original of that contract signed by Mr Danic. He says that if the signed contract had been sent to his office, as Mr Liristis says it was, for the conveyancing transaction to proceed, then it is most probable that he, and not his employed solicitor, would have handled the transaction. He says that he would have opened a file, or if the employed solicitor had handled the matter, the employed solicitor would have opened a file. Mr Orford says no file for the transaction was ever opened in his office. Mr Liristis says that he discussed the contract with the employed solicitor. Mr Orford says that if the employed solicitor had, indeed, had the original contract and was undertaking the transaction on behalf of Mr Liristis or his company, he would have expected the employed solicitor not only to have opened a file but to have discussed it with him, that is, Mr Orford, when the employed solicitor left the firm. He says that this did not happen. 24    In short, it is quite clear that it is highly unlikely, to the point of complete improbability, that an original contract signed by Mr Danic was ever received into the office of Mr Orford. I regard the evidence of Mr Orford as highly significant in this regard. 25    There are other important features of the evidence of Mr Liristis which induce me to say that I do not accept it. 26    First, when Mr Liristis applied on 7 December 2007 for an injunction restraining Mr Danic from entering into possession of the Property he swore an affidavit of that date which briefly stated that he had agreed to purchase the Property. The alleged contract of 3 May 2006 was not annexed, nor was it even referred to. When cross examined about this failure, Mr Liristis was unable to explain why he did not attach, annex or refer to the 3 May 2006 contract. 27    Next, the transcript of the proceedings before White J on 7 December 2008 discloses that, when his Honour asked when the proposed contract for purchase was to be settled, Mr Liristis responded that it was due to be settled on 30 March 2008. The contract, of course, on its first page requires settlement on 30 May 2008. This may, or may not, be a discrepancy due to simple mistake. 28    However, of more significance is a letter sent by Mr Liristis' solicitors to Mr Danic's solicitors on 27 April 2007. The letter was in response to a letter of 5 April 2007 alleging substantial breaches of the obligation of T&M to pay rent amounting to some $110,000 and giving T&M until 1 May 2007 to remedy the breach. 29    The response of Mr Liristis' solicitors to the letter was full and careful. It referred to the fact that clause 21 of the lease contained an option to purchase the premises. It referred to an offer from a third party to purchase the premises. Paragraph 8 is in the following terms:
“On or about May 2006, your client had an offer from a third party to purchase the Premises. At this time your client offered the sale to our client and our client agreed to the following:

a. Purchase price $1,800,000.00;
b. Settlement to take place within two (2) years;
c. The Landlord must consent to the Lessee’s works conducted on the Premises;
d. The Lessee would continue to pay rent until settlement.


…

Our clients agreed that if our client paid your client $30,000.00, it would settle the purchase of the Premises on or before 25 June 2007 and our client would not be required to pay rent until settlement at which time all unpaid rent would be adjusted in favour of the Lessor. In accordance with this Agreement, our client paid your client the sum of $30,000.00 in cash.

Despite the contents of paragraph six (6) of your letter, on 3 May 2006, our client paid your client the sum of $5,000.00 as an option fee to exercise the option to purchase the premises on the above terms.”
30    It is remarkable that in that letter, drafted carefully upon instructions, there was no reference made at all to a contract for sale which had allegedly been signed on 3 May 2007. It is also remarkable that the letter states that on 3 May 2006 Mr Liristis paid a sum of $5,000 "as an option fee to exercise the option to purchase the premises" . That is remarkable because the alleged contract for sale, which is dated 3 May 2006, refers to a sum of $5,000 as having been paid by way of deposit on the contract. Also it is notable that there is in evidence a document prepared by Mr Liristis and signed by Mr Danic and Mr Liristis dated 3 May 2006 which states that Mr Danic acknowledges receipt of "rent in cash of $5,000" from Mr Liristis' company. 31    It t is clear that Mr Liristis gave explicit instructions to his solicitors as to what had happened on 3 May 2006. The receipt dated 3 May 2006 is totally inconsistent with Mr Liristis' account that the sum of $5,000 was paid by way of deposit on the contract on 3 May 2006 and it is inconsistent with the assertion in his solicitor's letter of 27 April that the sum of $5,000 was by way of a fee for an option to purchase. Mr Liristis, in cross examination, could give no satisfactory explanation for these inconsistencies. 32    On 1 May 2007, Mr Liristis' solicitors wrote again to Mr Danic's solicitors in connection with an offer by Mr Liristis to pay a certain sum towards outstanding rent. Again, there is a reference in the letter to payment of outstanding rent upon settlement of a purchase of the freehold. However, there is no reference at all in that letter to the alleged contract of 3 May 2006. 33    Mr Liristis gave in evidence an explanation that his solicitor had told him that the $5,000 deposit referred to in the contract for sale should not be described thus in the correspondence, but should rather be described as an option fee. I regard that explanation as totally unconvincing and making no sense whatsoever. 34    There are so many inconsistencies and improbabilities in Mr Liristis' account of events on 3 May 2006 that I am unable to accept it on the basis that it is inherently improbable. It requires me to accept, amongst other things, that an employed solicitor in Mr Orford’s office deliberately suppressed, and then made away with, the original contract for sale signed by Mr Danic. There is not the slightest evidence supporting that supposition. 35    On the other hand, the evidence given by Mr Gabriel Danic and Mr Milan Danic was clear, consistent and convincing. They were firm and unshaken that they had attended the premises on 3 May 2006, that all that had been transacted was a payment of $5,000 in cash, for which Mr Gabriel Danic signed a receipt, and that nothing further was discussed or signed. In view of the manifest improbabilities and inconsistencies in the evidence of Mr Liristis to which I have referred and in view of the clear way in which Messrs Gabriel and Milan Danic gave their evidence, I accept their evidence in preference to that of Mr Liristis and of his father. 36    It follows that, for these reasons, the Plaintiffs have failed to establish that there was a contract for sale of the subject Property entered into by Mr Danic on 3 May 2006.


Whether Serenity able to complete

37    In case I am wrong in this conclusion, I should make some brief remarks about whether Mr Liristis or his companies are in a position financially to complete the purchase. 38    Mr Liristis called a finance broker, Mr Latash, to prove that Serenity was in a financial position to complete the contract at the appointed time, that is, in May this year. Mr Latash was a totally unsatisfactory witness. He is self-employed and has no staff. He had written a letter in February 2008 confirming that finance was available to Mr Liristis to complete the purchase at $1.8M. He said, however, that the lender was a lady who had come into his office. He identified her firstly by the name Betty and had difficulty in recollecting her surname. He said subsequently it was “Daoud”. He did not know anything about Ms Daoud. He did not know her address, other than that she lived somewhere in Parramatta. He did not know anything about her financial circumstances or even whether she was married. He said that as far as he knew Ms Daoud did not have the money to advance, although he said that she had readily agreed to advance $2.4M to Mr Liristis to complete this purchase. Mr Latash said that Ms Daoud had people overseas who would provide her with the money. In short, the evidence of Mr Latash was so general and so grossly improbable that I discount it entirely. I think that it reflects upon Mr Liristis' case generally that he should have adduced such unacceptable evidence. 39    Mr Liristis then called Mr Banzato, an officer of a finance broker, Balmain Commercial. Mr Banzato said that he had obtained an approval in principle for a loan of in excess of $2 million to complete the purchase. The loan appeared to be from a reputable lender. However, Mr Banzato said the loan was subject to a number of conditions which had yet to be fulfilled. One of the conditions was the production of a signed contract in favour of the purchaser. 40    It is to be noted that the borrower in the loan application is a company called Mega Projects. The relationship between that company and the purchaser described in the contract for sale, Serenity Holdings, has not been explained. Also, the loan seems to have been approved upon the basis of a guarantee to be given by a person apparently not related to Mr Liristis, whose means have not been the subject of any evidence. 41    I would need a great deal more precise evidence explaining and substantiating the borrowing transaction arranged through Balmain Commercial before I were persuaded that the present purchaser, that is, Serenity Holdings, is in a financial position to complete the purchase. Accordingly, even if there were a valid contract for purchase I would decline to make an order for specific performance.

The Cross Claim

42    The Cross Claim seeks an order for possession of the Property and judgment for arrears of rent. 43    As I have said, Mr Liristis does not dispute that no rent has been paid almost for a year and that even at the end of last year there was a substantial amount of rent outstanding. It is clear that T&M has been in default in payment of rent for a substantial period of time. 44    I am satisfied that a Notice to Quit was served on the registered office of T&M on 11 February 2008. I am satisfied that it was served appropriately by being left in a prominent position at the registered office of the company. Mr Liristis says that it did not come to his attention. I am not prepared to accept Mr Liristis' assertion in that regard. 45    I am satisfied that the lease has been validly terminated and the Notice to Quit validly served so that Mr Danic is entitled to an order for immediate possession of the land. 46    Mr Liristis acknowledges, as I have said, that T&M owes a substantial amount of arrears of rent. However, he disputes the amount of rent claimed by Mr Danic. He says that he has paid substantial amounts in cash to Mr Danic which have not been taken into accounted. 47    Mr Danic has produced his bank books, which disclosed the rent received into his bank account. He has acknowledged that there were three payments of cash made by Mr Liristis, one for $10,000 and two for $5,000. One of those payments of $5,000 was the payment made on 3 May 2006. Mr Danic says that he has taken those cash payments into account in the calculations of rent. 48    Mr Liristis says that he does not accept Mr Danic’s calculation of rent and requires to be satisfied that it is accurate. However, he himself has not undertaken the task of demonstrating any inaccuracy in the calculation of the figures, other than by saying that there have been other amounts of cash paid in reduction of rent. He does not produce any documentary evidence supporting those cash payments. Mr Liristis has been aware from the commencement of these proceedings that the non-payment of rent was an issue. 49    I am satisfied by the affidavit of Mr Danic's solicitor that the Cross Claim was validly served on Mr Liristis. Again, I do not accept Mr Liristis' assertion that he did not receive the Cross Claim. It has been a common feature of Mr Liristis' evidence that he does not receive documents which are validly served or sent in a manner calculated to draw them to his attention. 50    For those reasons, I am satisfied that the calculation of outstanding rent put forward by Mr Danic has been proved. I am satisfied from the affidavit evidence of Mr Danic of 6 November 2008 and the calculation of rent which he has provided, which takes into account the cash payments which he admits, that the amount presently outstanding for arrears of rent is $315,080.80.


Orders

51    The orders of the Court are as follows:


(1) Judgment for the Defendant on the Plaintiffs’ Statement of Claim.

(2) Order that the Plaintiffs pay the Defendant’s costs of the Statement of Claim.

(3) Order on the Cross Claim that the Cross Claimant be granted immediate possession of the land described as 191 Kingsgrove Road, Kingsgrove.

(4) Grant leave to the Cross Claimant to issue a writ of possession forthwith.

(5) Judgment for the Cross Claimant for arrears of rent for $315,080.80.

(6) Order the Second Plaintiff, T&M Holdings Group Pty Limited, to pay the Cross Claimant's costs of the Cross Claim

(7) The costs orders are to include reserved costs of both Statement of Claim and Cross Claim.

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