Magri v Jovanovic
[2016] VCC 1480
•26 October 2016
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
COMMERCIAL DIVISON
GENERAL LIST
Case No. CI-16-00283
| KEVIN MAGRI | Plaintiff |
| v. | |
| JELENA JOVANOVIC | Defendant |
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JUDGE: | His Honour Judge Anderson | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 4 - 7, 10 and 11 October 2016 | |
DATE OF JUDGMENT: | 26 October 2016 | |
CASE MAY BE CITED AS: | Magri v. Jovanovic | |
MEDIUM NEUTRAL CITATION: | [2016] VCC 1480 | |
REASONS FOR JUDGMENT
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Catchwords: Advance of monies – Whether as loans or gifts – Onus of proof upon the plaintiff to establish the loans – Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd (1930) 45 CLR 111; Joaquin v Hall [1976] VR 788 applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Little of Counsel | MDG Lawyers |
| For the Defendant | Ms J. Jovanovic (in person) |
HIS HONOUR:
1Kevin Magri and Jelena Jovanovic commenced a friendship in early 2015. Over the following months, their relationship developed. Mr Magri said that they were never more than “just friends”. Ms Jovanovic said that they were much closer and had discussed marriage.
2In May 2015, Ms Jovanovic purchased a unit at Surfers Paradise. A deposit of $11,750 was paid on 6 May, and the further sum of $234,323.32 on 22 May 2015 to settle the purchase. Between June and October 2015 further payments were incurred to renovate the unit.
3All of the sums relating to the purchase and renovation of the unit were paid by Mr Magri, either directly or by allowing Ms Jovanovic to use his credit cards. Mr Magri claimed that each of the payments was a loan to Ms Jovanovic. She said that each payment was a gift to her.
4On 17 November 2015, Mr Magri lodged a caveat over the Surfers Paradise property to protect what he said was his interest in the property, pursuant to either a resulting or constructive trust.
5The issues for determination in the proceeding are:
a.were the payments made by Mr Magri to Ms Jovanovic in respect of the purchase and renovation of the Surfers Paradise unit a gift or a loan?
b.was a resulting or constructive trust in the Surfers Paradise unit created in favour of Mr Magri as a result of the payments made by Mr Magri being used by Ms Jovanovic for the purchase and renovation of the unit?
Witnesses
6Mr Magri’s counsel, Mr Little, called four witnesses, Mr Magri, Jelena Stechovich, Ivanka Marenjak and Mr Magri’s father, Phillip. Ms Jovanovic gave evidence herself and tendered affidavits from two witnesses, Monique Schumacher and Kristina Jukic, whom Mr Little indicated he did not wish to cross-examine.
7It has been very difficult to make an assessment of the witnesses. Each of them spoke plainly and directly from the witness box. However, the interpersonal relationships were complicated. Some had been close friends, and had fallen out. Some had similar ethnic and/or working backgrounds. Each of Mr Magri’s witnesses had a strong loyalty towards him.
8Ms Jovanovic is a capable, intelligent person. Her cross-examination was thoughtful and forthright. Frequently, however, she pursued questions which were simply argumentative or were seeking to persuade the witness of Ms Jovanovic’s version of an historic event, regardless of its relevance. For example, when questioning Ms Strechovich, Ms Jovanovic was concerned to suggest that she had not deliberately betrayed their former friendship by developing a relationship with Mr Magri. Or with Ms Marenjak, that whilst overseas in October and November 2015, she had regularly attempted to contact Mr Magri to keep him informed about her intended return date.
9Ms Jovanovic’s cross-examination of Mr Magri and his witnesses was hampered to a degree by her lack of fluency in the English language, rather than her native Serbian, and by her inexperience in questioning witnesses.
10Her cross-examination of witnesses was also characterised by:
a.attempts to shut witnesses down or deflect them when they started giving answers which were not to her liking;
b.making long, convoluted statements rather than asking straightforward questions;
c.seeking to argue the point rather than eliciting information;
d.not always putting to the witnesses the substance of the evidence she would give or adduce.
11The most significant example of the latter point was Ms Jovanovic’s attempt, after she had completed her oral evidence, to tender a document she said was signed by Mr Magri and had been given to her to submit to Centrelink to explain how she had “become the owner from the apartment which is paid in full”. Ms Jovanovic said the document was an admission by Mr Magri that he had bought the property for her as a gift. Later in evidence, Ms Jovanovic said that the document was first prepared as an authority given by Mr Magri to a finance broker and was only subsequently submitted by her to Centrelink. The document had not been put to Mr Magri in cross-examination and had not been referred to in her oral evidence. I shall return to this document in due course.
12The critical issue in the case was whether each of the sums advanced by Mr Magri to Ms Jovanovic was a loan or a gift. Mr Magri relied upon conversations and other evidence from which, it was said, the Court should conclude that it would be expected the money advanced would be repaid. On the other hand, Ms Jovanovic gave evidence of matters from which, it was suggested, showed the closeness of their relationship, and therefore the likelihood that Mr Magri would be generous towards her.
13It is this evidence that will decide the case. Often, however, the parties and the witnesses pursued peripheral issues and sought to justify the “rightness” of their conduct. For example, Ms Jovanovic spent almost one hour of her evidence, delivered as an uninterrupted monologue, describing the events before and after her return to Australia from Serbia in November 2015. This was apparently to explain how it was that Mr Magri found her at a hotel in Highett, which she had paid for on his credit card, when text messages from Ms Jovanovic at that time were suggesting that she was, or might be, delayed in leaving Serbia.
14I record these matters, not so much because they have been in any particular way determinative of my final decision, but simply to demonstrate the limitations in the trial process and my ability to evaluate the evidence of the witnesses. I shall recite the critical evidence in a moment. I have not, however, accepted the oral evidence of any of the witnesses without considering whether it gains support from the contemporaneous documents and the general chronology of events.
15I considered that each witness lacked credibility. Mr Magri’s evidence seemed to be a prepared story and, at times, he responded too quickly during cross-examination, imagining that his answers supported the story but without much awareness as to whether or not they did. His other witnesses were very loyal to him and antagonistic towards Ms Jovanovic. Ms Jovanovic’s version of events seemed to develop during the course of the trial.
16I have not referred to certain aspects of the evidence. This has included evidence about the intimate areas of the relationships between Mr Magri and Ms Jovanovic and between him and Ms Strechovich and the details of the women’s employment. These matters have had no bearing on the decision I have reached in the proceeding. There was, in fact, much common ground between the witnesses. However, it was difficult from the oral evidence I heard to be confident the witnesses were telling the truth. It was certainly not the whole truth.
Evidence
17Mr Magri believed he had been in a personal relationship with Ms Strechovich. In early 2015, he thought that Ms Strechovich was unhappy. He decided to talk to her work colleague, Ms Jovanovic. He obtained her telephone number and phoned her. Eventually they met in a cafe behind Luna Park in St Kilda in early March 2015.
18During the meeting, Mr Magri agreed that Ms Jovanovic told him of her “dream” to buy a unit on Queensland’s Gold Coast and to both live and work there. Soon after, Mr Magri suggested they go to the Gold Coast together so that Ms Jovanovic could look at units with a view to purchase.
19They exchanged text messages during this period from which it is apparent that they had commenced a relationship which was more than a friendship. They sent messages in affectionate terms, discussed how Mr Magri might inform Ms Strechovich that his relationship with her was over and made plans for their own future.
20One message from Mr Magri read, “You know how much I feel for you and I will make your dreams come true”. It is likely that this refers to Ms Jovanovic’s “dream” of buying a unit on the Gold Coast. Immediately following this message, there are others discussing arrangements for them to travel to the Gold Coast. Mr Magri wrote, “Hun its your birthday and you deserve to go away and be spoil[e]d”.
21On 18 March 2015, Ms Jovanovic posted on Facebook photos of the new iPhone Mr Magri had given her as a present. Mr Magri said he gave the phone to Ms Jovanovic in advance of her birthday on 10 May.
22On 3 May 2015, Mr Magri and Ms Jovanovic flew to the Gold Coast. They looked at a number of units and on 5 May 2015 Ms Jovanovic purchased a unit at Surfers Paradise. She signed a written contract dated 6 May 2015. The purchase price was $235,000, with a deposit of $11,750.
23Mr Magri paid the deposit on 6 May 2015, apparently by a bank transfer after his return to Melbourne. Mr Magri’s evidence of how he came to make the payment was as follows:
“Jelena came to my house, I’m pretty sure, and she – she told me she needed the money of the deposit. She goes, ‘Can you pay me – can you pay the deposit into this bank account, to this BSB number, and put the deposit in my name for the property?’ And I asked her, ‘Well I thought you were going to pay for this property?’ And she said, ‘No, my home loan hasn’t been approved yet.’ And I said, ‘Fair enough.’ And being – I did. I went to the bank, I took some money out of my CBA account, went to the ANZ Bank, made a cheque out, and deposited the money in Sunshine – I think it was a NAB bank in Sunshine – under Jelena Jovanovic’s name”.
24Mr Magri’s counsel, Mr Little, submitted that Mr Magri’s version is supported by an email from HomeHippo.com to Ms Jovanovic dated 22 April 2015, which reads as follows:
“Hello Jelena, You will be contacted shortly by one of our Mortgage experts to get started in your mortgage pre-approval process. Meanwhile, please find attached our eBook: Save money on your mortgage by knowing the facts. We hope you find it useful. Thank you for using HomeHippo.com”.
25Ms Jovanovic said that, the email from HomeHippo was only advertising material and “nothing to do with application”. She said that, in Queensland, whilst she and Mr Magri were looking at the first apartment, he said to her, “Princess, pick anything up to 300,000. Anything over 300,000, I will take the loan. If it’s up to 300,000, we – I pay cash”.
26Ms Jovanovic produced a Facebook entry on 3 May 2015 which read, “My miracle 31st birthday 300 hiljada / 48 sati biranja aparutmana”. She said the Serbian words translated as “[thousand] / 48 hours to pick”.
27Ms Jovanovic said that after she had selected the unit she wished to purchase, Mr Magri was involved in the “paperwork” for the purchase. He told her, “Princess, everything under control. I know what she’s talking about”, referring to the agent. Ms Jovanovic said, “Kevin paid the deposit, Kevin paid the apartment. He was dealing with all the payments and everything”. Ms Jovanovic said that, when the unit was purchased, “We already spoke about marriage by then, we already spoke about living together by then”.
28Ms Kristina Jukic is a solicitor with MacGregor O’Reilly solicitors of Surfers Paradise. She acted as Ms Jovanovic’s solicitor in the purchase of the unit. She swore an affidavit on 21 September 2016 at the request of Ms Jovanovic. The affidavit included the following statements:
a.on 5 May 2015, Ms Jovanovic and Mr Magri came to the solicitor’s office “to discuss her purchase”;
b.Mr Magri “introduced himself as Jelena’s boyfriend”;
c.Ms Jukic gave advice about certain matters in response to questions from Ms Jovanovic;
d.Ms Jukic told Ms Jovanovic and Mr Magri “that Jelena would be the sole purchaser and sole owner of the property as only her name was noted on the contract as buyer”;
e.“Jelena advised me that Kevin was purchasing the property for her as a birthday present”;
f.“Kevin did not object to the property being purchased and owned solely by Jelena”.
29On 22 May 2015, the purchase of the unit was settled by Mr Magri paying the balance of the purchase money and the associated costs and expenses, totalling $234,323.32. Mr Magri said that, “After paying the deposit I haven’t seen nothing, I’ve heard nothing. But when it come to the main one she showed me something on the phone, a Home Hippo home loan and she had a letter from her employer that she could earn two/two and a half grand a week and she said she submitted that to the home loan and it was going to be a piece of cake”.
30Mr Magri said that when Ms Jovanovic wanted to settle the purchase, “I asked about the home loan and she said it hasn’t been approved and somewhere along the line I see this before that. So, she goes ‘Can you go write the cheque out just so I don’t lose my deposit?’ and some words like that”.
31Mr Magri said he went to his bank where he “had a few term deposits. Basically, my life savings”. Mr Magri said he “shuffled some money around” and sent a cheque “in from my name to O’Reilly MacGregor”. He said that Ms Jovanovic had wanted him “to send the money to the same place but in her name [however] I said no – I actually thought about it. I said no, if she doesn’t ever pay me back again at least I’ve got some proof that the cheque was send from my bankbook, from my account, from my name, that’s why this cheque was sent in from my name to O’Reilly MacGregor. I should’ve probably went to a solicitor, got something drawn up but I was in good faith that she’s going to pay me back”.
32Mr Little referred to a “reconciliation statement” prepared by the solicitors MacGregor O’Reilly and an attached record of trust account transactions, as supporting Mr Magri’s evidence. The “reconciliation statement” records, “amount received from you [the “purchaser: Jelena Jovanovic”] on account of balance purchase monies and anticipated costs and outlays”. The trust account listing of transactions recorded, “26/05/2015 TR 18794 Purchase monies, Stamp Duty, Costs & Outlays received from Kevin Magri for Jelena Jovanovic $234,323.32”.
33Ms Jovanovic said that usually she would have needed to wait “for a month for the settlement”. However in the initial discussion with the solicitor Ms Jukic at the time of the purchase, they were asked, “‘How you paying’, and Kevin said, ‘I’m paying in cash for her’, and they said, ‘That’s why we can go ahead with the settlement within’ – I think two weeks. That’s why our settlement happened quicker, because…Kevin said I’m paying with cash”. According to Ms Jovanovic, the solicitor said to them that “when you are doing on trust account the full amount, and you make sure two ways of paying”. Ms Jovanovic said, “The 22 May is the settlement and that’s when Kevin send me with my father to go to the Gold Coast on the settlement day, to be there”.
34At the end of her evidence in chief, and after the intervention of the weekend, I asked Ms Jovanovic, “Are there other things that you want to give evidence about?” She replied, “Yes. Also I didn’t mention the very important thing to this…When was apartment about to happen, I did ask Kevin, ‘Kevin, what’s going to happen if you and me don’t end up together. What’s going to happen with apartment?” He told me, “Princess, at least you not going to end up with nothing like you end up with the loser…you been six years with him…You are not going back to work and we are planning to get married…but one thing you promise me, if we don’t stay together, there is no other man down the track going to take or get involved with that [i.e., the unit]. That’s going to go to your little one [Ms Jovanovic’s son] even you with me a year or two or three…You didn’t waste your time, you could have been working, you didn’t, so you and your boy are settled’”.
35The unit purchased was “dual occupancy” with 2 bedrooms and 2 bathrooms and an internal door separating them. Mr Magri said that after settlement, “Jelena wanted to start renovating one of the apartments straight away”. Mr Magri said, “No, why don’t we just rent the two apartments so we start getting some money back?”
36Mr Magri said that Ms Jovanovic’s idea was to renovate one of the parts of the unit as a “honeymoon suite”. She insisted that they would make more money if the renovation was done. Mr Magri agreed but was concerned that the renovations were “done by a proper builder so we get insurance” and “if I want to sell the apartments again it comes with a warranty and…I can recoup my money back”. Mr Magri said that Ms Jovanovic “had nothing to put into it, and I just said, ‘All right, I’ll pay for it’, but at least, if it’s done properly and it all turns pear-shaped, I could sell it, and…get my money back”.
37A builder, Hasl Haus, was engaged. A quotation was received on about 16 June 2015 for works to the unit, including a new bathroom. On 28 June 2015, Mr Magri and Ms Jovanovic flew to the Gold Coast. Mr Magri said that he wanted to meet the builder and to see the materials the builder was going to use. Mr Magri met the builder and selected materials. He also suffered a fall and flew home by himself.
38Mr Magri was asked about “the payment for the renovations”. He said that, “Jelena just kept wanting money to pay for the apartment, and I said, ‘No, no, no, I’ll give you my credit card, use my credit card, so at least I’ve got outlay where the money went and where it was spent’. So at a later date, if it had to be sold, I know where the money went”.
39Copies of the bank statements for Mr Magri’s MasterCard and American Express credit cards are in evidence. The statements show that Ms Jovanovic used the MasterCard, and perhaps also the American Express card, to pay for a number of expenses associated with the renovations, including:
Date Expenses Amount 28 June 2015 Jetstar $295.90 3 July 2015 Jetstar $401.40 3 July 2015 Hasl Haus $711.00 6 July 2015 Hasl Haus $2,000.00 17 July 2015 Hasl Haus $2,000.00 4 August 2015 Jetstar $267.90 11 August 2015 Ledinthebox $120.89 13 August 2015 Cash withdrawals $1,600.00
40One of the units “was rented out from the start”. However, Mr Magri said that he had “received nothing”. He said that one day, “after the renovation”, Ms Jovanovic was at his house and he “asked her, ‘when am I going to start getting some money back, what’s happening with your home loan?’ She told me that – was sitting on the sofa. She told me her home loan got disapproved because it was – it wasn’t a home loan. She wanted to use it as a building – as a business purpose and I was shocked, I didn’t know what to say. And I asked, ‘How am I to get my money back’, and she got up and walked. As she’s walking out of the room, she said, ‘It looks like we’re business partners’”.
41Ms Jovanovic did not agree that this conversation had occurred although she agreed that, at some stage, she had asked whether Ms Marenjak would prepare a website to advertise the “honeymoon” apartment.
42It appears that partway through the renovations, Ms Jovanovic terminated the services of the builder and employed someone else to complete the works. It was unclear whether this person was qualified to do the work.
43Ms Jovanovic went to Serbia on 22 October 2015 and returned to Australia on about 26 November 2015. On 17 November 2015, upon Mr Magri’s instructions, a caveat was placed on the title to the unit. It is clear that by this stage the relationship between Mr Magri and Ms Jovanovic had broken down. The reason for this is unclear. During this period, Ms Marenjak had at Mr Magri’s request used her knowledge of Ms Jovanovic’s email password to access Ms Jovanovic’s emails and provide copies of them to Mr Magri. Mr Magri said that Ms Marenjak had accessed for him a copy of the Home Hippo email before Ms Jovanovic went to Serbia. Ms Marenjak said that Mr Magri asked her to access that email in November.
44There are a number of issues which were referred to in the evidence dealing with the second half of 2015 which are very difficult to unravel. They include:
a.whether Mr Mehdy Asady, a finance broker and the husband of a friend of Ms Jovanovic on the Gold Coast, was authorised by Mr Magri to seek finance in relation to the Gold Coast unit in about early July 2015. The authority is handwritten and purports to be signed by Mr Magri. The document reads as follows, “I Kevin Magri of [address omitted] wish to finance of gold coast apartment in mantra Legends hotel to the sole owner of Jelena Jovanovic of [address omitted], Thanking you [signed]. P.S. feel free to call me on [phone number omitted]”.
Mr Magri denied that he had signed or handwritten the document. The phone number in the letter is one digit different from Mr Magri’s. The document was only produced by Ms Jovanovic at the conclusion of her evidence. Although Mr Little indicated that his client may have the document examined by a handwriting expert, this was not done. Mr Magri gave evidence that the signature on the document was not his usual signature which contained the abbreviation of his first name, “Kev”. This led Mr Magri to assert that copies of signatures from his affidavit of documents and the overarching obligations certificate in the proceeding were not his;
b.whether Mr Magri’s father gave Ms Jovanovic one of his late wife’s rings. Ms Jovanovic had produced the ring as evidence of the closeness of the relationship she had with Mr Magri. Mr Phillip Magri denied the ring was his wife’s or had been given by him to Ms Jovanovic. This denial came almost before the question had been put to him and in circumstances where Mr Phillip Magri’s ability to distinguish the features of the ring without his spectacles cast at least some doubt on the veracity of this evidence.
45Apart from matters relating to the payments for the purchase and renovation of the units, the other critical issue dealt with in evidence was the relationship between Mr Magri and Ms Jovanovic. There is ample evidence that the relationship between Mr Magri and Ms Jovanovic was more than a casual friendship. There is evidence of:
a.the contact between them, at each other’s homes, including socially with friends, their respective parents and Ms Jovanovic’s young son;
b.their trips together to the Gold Coast;
c.Mr Magri’s generosity towards Ms Jovanovic;
d.the affectionate text messages between them;
e.the numerous photographs taken of them as a couple and together at social functions, and taken by each of them of the other;
f.Mr Magri introducing himself to Ms Jukic as Ms Jovanovic’s “boyfriend” and the impression given to others that they were a “couple”. The letter from Hasl Haus dated 29 June 2015 records that Ms Jovanovic “told us that your husband was ill”;
g.Ms Jovanovic intimated to those present at Mr Magri’s birthday celebration in September 2015, that they would be married by “this time next year”.
46The witnesses called on Mr Magri’s behalf downplayed the relationship. In view of the objective evidence I have referred, I do not accept the accuracy of the evidence of Mr Magri’s witnesses. Apart from her own evidence, Ms Jovanovic called no witnesses, apart from the Queensland witnesses who swore affidavits on limited matters. The absence of witnesses which might have been expected to have been called by Ms Jovanovic about her relationship with Mr Magri has not, however, caused me to accept the evidence of Mr Magri’s witnesses.
Onus of proof
47It has long been settled law in Australia that where a plaintiff “sues for money lent and money received by the defendant as trustee … the burden of proving the facts in support of either one or other cause of action lies on the plaintiff” and the fact that “the defendant denied these allegations and said the money was given to her as a gift [does not mean] that the onus of proving there had been a gift lay on the defendant” (Heydon v Perpetual Executors Trustees and Agency Co. (WA) Limited (1930) 45 CLR 111 at 113 per Gavan Duffy CJ with whom Rich, Starke and Dixon JJ agreed). A later decision to the contrary of the English Court of Appeal in Seldon vDavidson [1968] 1 WLR 1083 to the effect that, “the burden of proof lay upon the defendant of proving that the money was given and not lent”, does not represent the law in Australia.
48As Jenkinson J said in Joaquin v Hall [1976] VR 788 at 789, the decision in Seldon v Davidson “is contradicted by the decision of the High Court in Heydon v Perpetual Executors Trustees and Agency Co. (WA) Limited (1930) 45 CLR 111; [1931] ALR 65. The authorities to which the Court of Appeal were referred had been considered by the High Court but other authorities to which reference was made in the High Court do not appear to have been cited in the Court of Appeal. Nor does it appear that recourse was had in the Court of Appeal to the principles of pleading which the High Court applied in resolution of another question of onus of proof in Young v Queensland Trustees Limited (1956) 99 CLR 560; [1956] ALR 939”.
Assessment of the evidence
49I make the following findings in relation to the evidence:
a.I accept that Mr Magri and Ms Jovanovic had a relationship which was closer than Mr Magri and other witnesses suggested. There is no dispute that Mr Magri was prepared to advance substantial sums to Ms Jovanovic (he said, his “life savings”) within a short time after they established a friendship. In addition, Mr Magri entrusted Ms Jovanovic with his credit cards, not only to use for the renovations to the unit but also for private expenses. This generosity went far beyond the loans he had made to Ms Strechovich, Ms Marenjak and, in the initial stages of their relationship, to Ms Jovanovic;
b.I accept, from the Facebook post made by Ms Jovanovic on 3 May 2015, that it is likely Mr Magri encouraged Ms Jovanovic to look for a unit to purchase on the Gold Coast and had set a limit of $300,000 as the amount he would advance for the purchase from his own resources. I consider, however, that this conclusion is not inconsistent with Mr Magri being prepared to advance the purchase price by way of a loan rather than as a gift;
c.I accept that Ms Jovanovic had, prior to going to the Gold Coast with a view to purchasing a unit, made enquiries from Home Hippo with a view to obtaining finance for the purchase. The wording of the email to Ms Jovanovic from HomeHippo.com dated 22 April 2015 does not simply suggest the forwarding of marketing material. Accordingly, the evidence of Mr Magri that Ms Jovanovic showed him the email on her phone might be accepted as indicating that Ms Jovanovic was only seeking short term finance from Mr Magri until her own borrowings were in place;
d.I do not accept Ms Jovanovic’s evidence that Mr Magri offered her the purchase price of the unit as security for her and her son in the future, if the relationship with Mr Magri did not result in marriage or to be for the long term. This suggestion only came late in the hearing and was never put to Mr Magri during cross-examination. It also seems inconsistent with the evidence of Ms Jovanovic about the closeness of the relationship and their discussions about their future together as a couple and family unit;
e.the evidence of Ms Jovanovic, supported by the affidavit of Ms Jukic and correspondence from Hasl Haus, that Mr Magri presented as Ms Jovanovic’s husband, partner or boyfriend provides some support for the closeness of the relationship suggested by Ms Jovanovic, but no real assistance in determining the basis upon which the purchase price for the unit was advanced by Mr Magri;
f.I accept that Mr Magri had some familiarity with the purchase of real estate, as a property owner himself. The settlement of the purchase of the unit was effected very quickly – the contract of sale is dated 6 May and settlement occurred on 22 May. It is likely, as Ms Jovanovic suggested and from the presence of Mr Magri at the initial discussions with the estate agent and solicitor, that he was fully aware of what was required to settle the purchase and, from a very early stage, had been prepared to take the necessary steps to facilitate the settlement;
g.I do not accept Mr Magri’s evidence that he had reservations when he advanced the balance of the purchase money and sought to protect himself by providing a cheque in his name, so that there would be a record if something went wrong. This evidence makes little sense as it is difficult to see how Mr Magri might have paid such a substantial sum without the payment being traced back to him as the source of funds. If he had reservations, there were other simpler and more effective ways of recording the payment as a loan and not a gift.
50Three possible alternatives, open on the evidence, are that –
a.Mr Magri purchased the unit as a gift for Ms Jovanovic;
b.the purchase was a loan, but whether repayment would be required was contingent upon the continuation of the relationship with Ms Jovanovic;
c.the monies advanced were to be repaid when Ms Jovanovic received her home loan.
51The second alternative was not advanced by either party, and I will not consider it further. The first alternative seems unlikely when one has regard to:
a.the length of the relationship between Mr Magri and Ms Jovanovic;
b.the limited independent evidence that the relationship would lead to marriage or something similar;
c.Mr Magri had a history of generosity by making loans to female friends in need, including with Mr Strechovich and Ms Marenjak and with his initial advance of $5,000 to Ms Jovanovic.
52Notwithstanding these matters, the suggestion that the advances were simply loans is inconsistent with other evidence:
a.Mr Magri was prepared to advance substantial sums to Ms Jovanovic without any adequate record that the advances were intended to be repaid;
b.it is not at all clear how Mr Magri anticipated the advances would be repaid. Mr Magri was prepared to advance the entire cost of the purchase, including all costs and expenses. It was obvious that Ms Jovanovic had no money. He said he had about two months earlier lent her $5,000 because she was ill and could not work. Her employment was irregular with none of the protections of an ordinary job. Even if she were to obtain a home loan, it was unlikely that it would be for more than a percentage of the value of the unit. In these circumstances, Mr Magri must have expected that any shortfall, of at least 25% of the purchase price (about $60,000), would remain outstanding for a substantial period;
c.in his statement of claim, which remained unamended until application was made by counsel on the first day of the trial, Mr Magri claimed that Ms Jovanovic had “represented to [him] she will transfer the property to [him] at settlement”, on the basis of which he was “induced thereby [to] lend the purchase price and the repair costs to [Ms Jovanovic]”. This was an allegation that Ms Jovanovic was required to meet at trial. The uncontested evidence of the Gold Coast solicitor, Ms Jukic, was that she made it clear to both Mr Magri and Ms Jovanovic that she would be the sole purchaser noted on the contract.
53Taking all matters into account, I have concluded that Mr Magri and Ms Jovanovic both intended that the advances were made by way of loan and not as a gift. At some stage the advances were to be repaid by Ms Jovanovic, or might in the future be forgiven by Mr Magri, if he decided it was appropriate to do so.
54I am primarily persuaded by the evidence of the approach by Ms Jovanovic to Home Hippo loan and the likelihood she told Mr Magri that she had done so.
55I consider also that the purchase of a substantial asset, such as the Gold Coast unit, was a significantly different transaction than the advances he made to Ms Jovanovic to tide her over during her illness in March or April 2015 or for her travel to Serbia in October 2015. I consider that the evidence that there was any expectation that those other advances would need to be repaid is far less compelling. I would not be satisfied that Mr Magri had established on the balance of probabilities that those advances were to ever be repaid.
56As no agreement was reached by Mr Magri and Ms Jovanovic as to the terms upon which the advances for the purchase of the unit were to be repaid, the total amount was payable on demand. Mr Magri’s solicitors demanded the repayment of these sums by letter dated 18 January 2016.
57I consider that the conclusion I have reached in relation to the advances to pay the deposit and the balance of purchase price for the unit, totalling $246,073.32, does not apply to the other advances made to Ms Jovanovic, including:
a.the sum of $5,000 in March or April 2015 and the sum of $18,000 in about October 2015;
b.the payments made by Ms Jovanovic’s use of Mr Magri’s credit cards between June and October 2015, whether used for the renovation of the unit or other purposes.
58Mr Magri authorised Ms Jovanovic to use his credit cards at a time when it appears that he knew that Ms Jovanovic had no money herself and had no intention and no real means of borrowing money for purposes related to the unit. There is no satisfactory evidence from which it might be concluded that Mr Magri allowed payments to be made for the renovations of the units, or for associated expenses including travel for Ms Jovanovic and himself to and from the Gold Coast, in the expectation that each payment constituted a loan which Ms Jovanovic was required to repay.
59There are other inferences open upon the following uncontroverted facts:
a.Mr Magri had encouraged, and participated in, the purchase of the unit;
b.Mr Magri and Ms Jovanovic’s relationship which involved them keeping company at each other’s home and in public at social occasions together with members of their respective families and their friends;
c.Mr Magri’s involvement in decisions regarding the renovations to the unit;
d.the discussion of a “business relationship” between them which, to some extent, is supported by his involvement in the decision making;
e.Mr Magri’s preparedness to let Ms Jovanovic use his credit cards for both the renovations and for other purposes, including for his personal benefit (his travel costs and for his birthday party).
60It is impossible to say that these matters do not as likely lead to a conclusion that these payments, insofar as Ms Jovanovic was the sole beneficiary, were not incidental to their relationship, either as it then was or as it might have become.
Resulting or constructive trust
61In his final submissions, Mr Little did not refer to any matters which would justify the retention of the caveat placed over the property on Mr Magri’s behalf in November 2015. In my view, there is no basis for the existence of a resulting or constructive trust. Even in relation to the advances for the purchase of the unit, the borrowings were unsecured and no date was fixed for repayment.
62The law will often impose a constructive trust where a person contributes to the acquisition and maintenance of properties acquired by another person with whom they are in a joint personal relationship or endeavour characterised by a pooling of assets or resources. In Cressy v. Johnson [2009] VSC 52, Kaye J analysed the relevant High Court decisions. At paragraph 187, Kaye J noted that the decisions “emphasised that the law does not impose a constructive trust in accordance with ‘idiosyncratic notions of what is just and fair’. Rather, the existence of a constructive trust, and its content, will only be recognised to the extent necessary to prevent conduct regarded as unconscionable, pursuant to equitable principles, upon the failure of a relationship between two parties”.
63Justice Kaye referred to the judgment of Deane J in Muschinki v. Dodds (1986) 160 CLR 583 at 621 where Deane J stated that the “rationale and operation” of the relevant equitable principles “is to prevent wrongful and undue advantage being taken by one party of a benefit derived at the expense of the other party in the special circumstances of the unforseen and premature collapse of a joint relationship or endeavour”.
64However, Mr Magri did not assert that the advances he made to Ms Jovanovic were in the nature of the “pooling” of assets as a consequence of their personal relationship. Mr Magri withdrew the allegation that Ms Jovanovic had represented that she would “transfer the property to [him] at settlement”. In my view, no trust arises in these circumstances which would have justified the lodging of the caveat.
Orders
65Mr Magri is entitled to judgment against Ms Jovanovic that she pay to him the sum of $246,073.32. The plaintiff’s claim will otherwise be dismissed. I will hear further from the parties on questions of interest and costs.
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Certificate
I certify that these 17 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 26 October 2016.
Dated: 26 October 2016
Carla Cianfaglione
Associate to His Honour Judge Anderson
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