Marinos v Mellissinos
[2024] VSC 642
•23 October 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
S ECI 2024 05415
| KALLIOPI MARINOS | Plaintiff |
| - and - | |
| DESPINA MELLISSINOS | First Defendant |
| - and - | |
| GEORGE MELLISSINOS | Second Defendant |
| - and - | |
| EMMANUEL MELLISSINOS | Third Defendant |
| - and - | |
| PANAGIOTIS MARINOS | Fourth Defendant |
| - and - | |
| ALICE YANG | Fifth Defendant |
| - and - | |
| REGISTRAR OF TITLES VICTORIA | Sixth Defendant |
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JUDGE: | O’Meara J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18 October 2024 |
DATE OF JUDGMENT: | 23 October 2024 |
CASE MAY BE CITED AS: | Marinos v Mellissinos & Ors |
MEDIUM NEUTRAL CITATION: | [2024] VSC 642 |
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PROPERTY – Caveats – Plaintiff registered proprietor of residential property since 2008 – Family dispute – ‘Refinancing’ in 2018 – Allegations of fraud and financial abuse – Plaintiff and defendants resident at the property until shortly prior to the hearing – Plaintiff listed property for sale – First defendant lodged caveat claiming ‘Implied, Resulting or Constructive Trust’ – Property sold and date of settlement extended on several occasions – First defendant claims common intention constructive trust – Onus – Whether prima facie case shown – Balance of convenience – Transfer of Land Act 1958 (Vic) s 90(3) – Piroshenko v Grojsman (2010) 27 VR 489, Hatziminas v Hatziminas [2024] VSC 513 and Blatch v Archer (1774) 98 ER 969, considered – Caveat removed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | CJ Twidale | Pentana Stanton Lawyers |
| For the First Defendant | A Felkel | Themida Legal |
| For the Second Defendant | No appearance | |
| For the Third Defendant | No appearance | |
| For the Fourth Defendant | No appearance | |
| For the Fifth Defendant | No appearance | |
| For the Sixth Defendant | No appearance |
HIS HONOUR:
The plaintiff commenced proceedings by originating motion filed on Thursday, 10 October 2024.
By summons of the same date, the plaintiff seeks the removal of a caveat lodged by the first defendant on the title of a residential property located at 18 Cuthbert Road, Reservoir (‘property’). The first defendant is the plaintiff’s mother.
The plaintiff and defendants are members of, in essence, a family group that has been resident at the property until recently. The second defendant is the plaintiff’s brother and the first defendant’s son.
The plaintiff’s application is supported by an initial affidavit sworn on 10 October 2024, as well as more limited further affidavits sworn on 16 October 2024 and 18 October 2024. I will refer to those as the plaintiff’s first, second and third affidavits respectively.
The application was made returnable before me in the Practice Court at 10:30am on Friday, 18 October 2024.
The originating motion, summons and plaintiff’s first affidavit were served on the first defendant’s solicitor by email on the morning of Monday, 14 October 2024.
The following morning, the solicitor was informed of the hearing date. The second defendant was personally served with the material on the morning of Wednesday,
16 October 2024.
On Thursday, 17 October 2024 at 4.29pm, the first defendant filed an affidavit in response to the application, together with written submissions. That material seems to have been served on the solicitor for the plaintiff even later, at 4:48pm. No explanation was proffered for the late service of the first defendant’s material.
No material was filed and served by any other defendant, including the second defendant.
It seems plain that prior to the late filing and service of the first defendant’s material, the plaintiff was assuming that her application would not be vigorously opposed.
I would not have considered that to be an unreasonable assumption. However, it proved to be wrong.
The plaintiff’s third affidavit is a limited response to the late served affidavit of the first defendant. In particular, the plaintiff deposes that –
The late service has resulted in my not having the opportunity to respond to each allegation made in her [the first defendant’s] affidavit, which has disadvantaged me. My failure to respond to her allegation in this affidavit should not be deemed as an admission by me however for the avoidance of doubt, I do not agree that she has any interest in the property as she alleges.
I accept that the plaintiff has been disadvantaged by the late service of the first defendant’s material.
No party sought that either deponent be required for cross-examination.
In written submissions, the first defendant contended, among other things, that –
(a) she has an equitable interest in the property by way of common intention constructive trust;
(b) there is ‘uncontradicted evidence’ that when the plaintiff purchased the property from the first defendant and her husband, John (in February 2008) –
… the parties agreed that the Property would belong to Despina [the first defendant] and John, the family would continue to live at the Property, her son George [the second defendant] would pay the mortgage on behalf of her and her late husband John, and that she and John would be responsible for all other expenses (including rates, insurance and maintenance).
(c) the basis of the first defendant’s equitable interest in the property was ‘fully articulated’ in a solicitor’s letter sent to the plaintiff’s solicitor on 25 September 2024;
(d) ‘evidence’ of the plaintiff to the Australian Financial Complaints Authority (‘AFCA’) ‘wholly supports’ the first defendant’s version of events;
(e) in the circumstances, the first defendant has demonstrated a prima facie interest in the property; and
(f) while ordinarily the balance of convenience would be satisfied by the parties agreeing to hold the sale proceeds in a solicitor’s trust account pending resolution of the dispute, the competing priorities between the first defendant’s equity and the caveats placed on title by the former and present solicitors for the plaintiff are such that the balance of convenience favours maintaining the first defendant’s caveat.
Owing to the circumstances in which the first defendant’s affidavit and written submissions came to be served, the substance of the plaintiff’s submissions in response came to be articulated by counsel at the hearing. In particular, counsel for the plaintiff submitted that –
(a) the plaintiff seeks removal of the caveat and, to the extent necessary, an order restraining the defendants from lodging any further caveat;
(b) the first defendant appeared to be submitting that the caveat should be maintained with no conditions – which is contrary to the position adopted by the first defendant in her solicitor’s letter dated 25 September 2024;
(c) the ‘agreement’ deposed to by the first defendant is a ‘strange position’, in that –
… to say that both parents … are the registered proprietors of the property, consideration is paid … and notwithstanding that, my client [the plaintiff] has no interest in the land thereafter. It’s a strange proposition to put.[1]
[1]Transcript (‘T’) 4.
(d) in any event, that evidence should be afforded very little weight because it speaks only of an ‘understanding’ without identifying the foundation for the belief and would not be admissible as evidence at a trial;
(e) by letter dated 16 October 2024, the current mortgagor, Pepper Finance, had written to the plaintiff to confirm the outstanding amounts owed on the mortgage as well as an increase in the applicable monthly payments, and the plaintiff had deposed that she is unable to service such payments;
(f) it follows that if the caveat were to remain, any equity in the property would be eroded to the benefit of no party to the dispute;
(g) the property is now vacant, as the defendants have moved elsewhere;
(h) the first defendant acknowledges that she obtained $220,000 as a part of the ‘refinancing’ with Pepper Finance, in which the second defendant was implicated, and even if the payments referred to in the documents exhibited to her affidavit should be or were taken into account, that would not get to $10,000, let alone $220,000;
(i) in connection with the payments sought to be relied upon by the first defendant, the second defendant has given no supportive or explanatory evidence; and
(j) more broadly, and particularly in respect of the balance of convenience –
We don’t have an undertaking to make such a claim of whatever form within a reasonable period of time … There’s no undertaking to pay my client damages to the purchaser if we don’t complete by 31 October. There’s no undertaking to pay the mortgage and to pay those outgoing mortgage payments of Pepper Finance, being the $20,000 in their letter … and the $2,600 or thereabouts [monthly] thereafter. My client is the one who has to pay that, according to them, but they should have a caveat indefinitely.[2]
[2]T18.
I should add that counsel referred to the fact that the plaintiff had deposed that the caveats of the former and present solicitors would be discharged at settlement, should that occur.
In response, counsel for the first defendant submitted that –
(a) the first defendant would be ‘happy’ to remove the caveat if ‘all the funds of the sale were quarantined and … neither of the lawyers had access to those funds’;[3]
[3]T19.
(b) the sum of the fees sought to be recovered by the plaintiff’s former solicitor spoke of ‘sharp practice’ and the priorities in equity were also relevant;
(c) while the evidence led in respect of payments made by the second defendant was ‘slim’, the determination of AFCA was said to be consistent with the ‘arrangement’ that the second defendant was paying those amounts;
(d) that was said to be ‘clear evidence’ that the plaintiff was not making the payments and so was said to be consistent with ‘what we say is the agreement between the parties’ – which counsel described as being ‘the crux of the matter’;[4]
[4]T23-24.
(e) similarly, it was said that the plaintiff’s ‘own evidence is that she hasn’t made a single payment’ towards the mortgage; [5]
(f) the existence of a trust was probably ‘better articulated’ in the written submissions, but the substance of the first defendant’s position was also articulated in the solicitor’s letter dated 25 September 2024 – which, it was said, the plaintiff had not addressed; and
(g) the ‘second best position’ of the first defendant would be that the former solicitor be ‘paid’ and ‘the balance of the sale [proceeds go] … to my solicitor’s trust account’ so that ‘we can argue’ about the fees of the present solicitor and the priority of any competing claims in equity ‘later on’.[6]
[5]T23.
[6]T26-28.
In reply, counsel for the plaintiff spoke of unfairness in the submissions of the first defendant and indicated that the plaintiff did not accept that she had paid ‘zero dollars of the mortgage’, nor that her evidence amounted to such.[7]
[7]T30.
In respect of the balance of convenience, in particular, counsel for the plaintiff emphasised –
Where’s the statement of claim? Where’s the undertaking to pay the damages occasioned by my client not having those funds? Where’s the undertaking to file a claim within a period of time? There’s nothing.[8]
[8]T31-32.
In brief further response, among other things, counsel for the first defendant stated –
In terms of moving forward, we would propose to file a statement of claim outlining our interest in the property within four weeks …[9]
[9]T32.
The principles relating to common intention constructive trusts are not in dispute. Recently, in Hatziminas v Hatziminas,[10] Quigley J stated –
[10][2024] VSC 513 (‘Hatziminas’).
81A common intention constructive trust is a trust which is ‘construed’ or ‘constructed’ by a court to give effect to the common intent of the parties. The elements of a common intention constructive trust are very similar to that required for establishing proprietary estoppel such that its establishment as a class of constructive trust has been called into question.
82A common intention constructive trust may arise from an agreement or common intention arising after acquisition of the relevant property. The common intention constructive trust creates substantive rights and is not merely a remedy arising when a court makes a declaration to that effect.
83In Iman Ali Islamic Centre v Iman Ali Islamic Centre Inc, at [402]–[405] McMillan J set out the following elements which are needed to establish a constructive trust:
(a)there is an actual or inferred common intention of the parties as to their beneficial interest in a property;
(b)there has been detrimental reliance on that common intention by the plaintiff; and
(c)it would be an equitable fraud on the plaintiff to deny their beneficial interest in the property.
84 The onus of proof of such a trust lies on the party asserting the beneficial interest against the legal owner.
85 The parties’ intentions can be inferred from a party’s contemporaneous words or conduct having regard to the surrounding circumstances and context in which they were made or performed. The relevant intention may arise after the property was acquired. The intention does not need to designate a specific share of the property; it is sufficient that the plaintiff should have a beneficial interest.[11]
[11]Hatziminas (n 10) (citations omitted).
In written argument, counsel for the first defendant referred to the elements stated by McMillan J in Iman Ali Islamic Centre v Iman Ali Islamic Centre Inc[12] and, as I have earlier noted, submitted that, in the present instance, an ‘agreement’ made in February 2008 and implemented thereafter had given rise to a common intention constructive trust.
[12][2018] VSC 413.
As to the removal of caveats, both parties referred to Piroshenko v Grojsman,[13] in which Warren CJ stated that –
[13](2010) 27 VR 489 (‘Piroshenko’).
(a) section 90(3) of the Transfer of Land Act 1958 (Vic) allows a court to ‘make such order as the court thinks fit’;
(b) caveats under the Torrens system are treated as analogous to applications for interlocutory injunctive relief;
(c) the answer to the statutory question may be informed by a ‘two-stage test’;
(d) as to establishing a prima facie case, the caveator must satisfy the court that there is a probability, on the evidence, that he or she will be found to have the asserted equitable rights or interest, and that probability is sufficient to justify the practical effect which the caveat has on the ability of the registered proprietor to deal with the property;[14]
[14]Ibid [18].
(e) that standard is higher than simply showing that there is a serious question to be tried;[15]
[15]Ibid [21].
(f) any assessment of the first limb of the test depends, in part, upon a consideration of the practical consequences likely to flow from the maintenance of the caveat, and so must introduce some consideration of the balance of convenience;
(g) in respect of the balance of convenience, the court should make whichever course appears to carry the lower risk of injustice; and
(h) the onus must be discharged by the caveator.[16]
[16]Ibid [23].
Whatever else might be said about the circumstances in which the present application has come to be heard, it appears to be common ground, or at least not heavily in dispute, that –
(a) the plaintiff and first defendant are adult daughter and mother, and the other defendants are, in effect, other family members who resided at the property until recently;
(b) the property was purchased in about 1987 by the first defendant and her then husband, John, now deceased;
(c) there were some twists and turns relating to the financing and occupancy of the property and, in February 2008, the property was purchased by the plaintiff for the sum of $450,000 – which is not suggested to have been other than an appropriate price; nor is it suggested that the money was not received by the first defendant and her husband;
(d) part of the reason for the purchase seems to have related to the plaintiff’s brother, the second defendant, intermingling his finances with his parents’ and thereby placing the ‘the house … at risk’;[17]
[17]T22.
(e) in connection with the purchase, the plaintiff took out a mortgage with Citigroup;
(f) the first defendant and her husband thereafter lived at the property until his death in 2012;
(g) other members of the family have also lived at the property, including the plaintiff and the second defendant;
(h) in about 2018, the mortgage was ‘refinanced’ with Pepper Finance for $648,000;
(i) the second defendant seems to have had a hand in that transaction – which the plaintiff claims to have had no knowledge of until 2021, and not to have benefited from;
(j) in that regard, the plaintiff said that her brother, the second defendant, conspired with others to obtain the refinancing and drew down $220,000 ostensibly for the mother [the first defendant];
(k) for her part, the first defendant deposes that she was ‘not aware of the circumstances of the refinance’, albeit that she acknowledges receiving a cheque for $220,000 – which she says she gave to her son, the second defendant;
(l) when she found out about the ‘refinancing’, the plaintiff complained to AFCA;
(m) AFCA determined that there were ‘process errors’ that should have resulted the loan not being refinanced, as a consequence of which –
… it [the financial firm] is required to reduce the complainant’s debt to the amount of $383,688, adjust the rate of interest payable on this amount to 5.67% and make any necessary adjustments to her credit file.
(n) that event seems to have led to great familial unhappiness and the making, at various times, of family violence intervention orders – at least one of which remains in force as between the plaintiff and her mother, the first defendant;
(o) in March 2024, the plaintiff placed the property on the market;
(p) on 5 March 2024, the plaintiff advised the first defendant that the property would be placed on the market and the following day, 6 March 2024, the first defendant, via her then solicitors, lodged a caveat on title claiming an interest in the freehold estate as a consequence of an ‘Implied, Resulting or Constructive Trust’;
(q) the plaintiff sold the property to a third party on 10 May 2024 and settlement was originally due to take place on 10 September 2024, although it was later extended to 30 September 2024, then 14 October 2024 and most recently to 31 October 2024;
(r) the plaintiff moved out of the property in August 2024;
(s) solicitors’ correspondence ensued in September 2024 in respect of the caveat, as well as the issue of vacant possession;
(t) in that regard, by letter dated 25 September 2024, the solicitor for the first defendant asserted as follows –
As your client confirmed in her submissions to AFCA:
•George Mellissinos [the second defendant] was making the repayments to Citibank (we say on behalf of Mrs Mellissinos [the first defendant]);
•Ms Marinos [the plaintiff] was not making payments to Citibank, she was unaware that payments had ceased;
•the property was transferred to Ms Marinos to protect the property from George Mellissinos, who Ms Marinos asserted “had implicated their parents in his finances and now the house was at risk”.
In addition, I am instructed that on top of making all mortgage repayments (again which we say were made by George on Mrs Mellissinos’ behalf), Mrs Mellissinos:
• has lived in the property since 1987;
•was responsible for all property-related expenses, including rates;
•made a substantial payment to Citibank of around $125,000 when informed by Citibank that the mortgage was in arrears and it was seeking to take possession.
In circumstances in which our client has met all property related expenses and your client has met none, your assertion that Ms Mellissinos’ caveat has no proper legal or equitable basis is embarrassing. Clearly the property was held by your client on trust for Mrs Mellissinos.
It follows that Ms Marinos had no right to agree to encumber the property (if that’s in fact what she did) on account of any fees owed to Ms Andritsos [the plaintiff’s former solicitor]. Similarly, Ms Andritsos, knowing most if not all of the above history had no right to lodge a caveat in order to protect her fees.
Accordingly, we do not agree that either Ms Andritsos’ fees, or your fees can be paid from the sale proceeds.
(u) in the same letter, the solicitor for the first defendant proposed that the balance of the sale proceeds be held in the trust account of the conveyancer handling the sale of the property, and that there be ‘a mediation so that this matter [can] be resolved as soon as possible’;
(v) the first defendant and other defendants moved out of the property on about 11 October 2024, and now reside elsewhere;
(w)in that connection, in her affidavit, the first defendant gives the same address as that at which the second defendant was personally served on 16 October 2024;
(x) by letter dated 16 October 2024, Pepper Finance notified the plaintiff that her hardship application (arising from the circumstances addressed by AFCA) had come to an end and that an outstanding amount of $21,483.58 was due by 23 October 2024 with ongoing monthly repayments of $2,444.11 thereafter – which the plaintiff deposed that she is unable to pay and, consequently, she expects that Pepper Finance will repossess the property and sell it;
(y) there are two other caveats on the title lodged by the present and former solicitors of the plaintiff; and
(z) the plaintiff deposes that neither of those caveats will stand in the way of settlement of the contract of sale.
In that general context, the first defendant deposes as follows –
8My understanding of the agreement reached at this time [February 2008] was that the house would belong to John and I, and the family would continue to live at the Property, George would pay the mortgage on behalf of John and I, and John and I would be responsible for all other expenses (including rates, utilities, insurance and maintenance).
9Pursuant to the agreement, John and I, and then I, paid the rates, utilities, insurance and maintenance costs of the Property, while George paid the mortgage between 2008 and 2021. I do not know why he ceased paying the mortgage in 2021. Appearing at page 9 is a sample of bank statements evidencing the mortgage payments made by George.
10John passed away in 2012. Sometime after that, although I am not sure exactly when, somebody knocked on our door and asked for Kalliopi. She was not home that day. They came back a few days later. This time Kalliopi was at home, and I told her that someone was asking for her. She told me to say that she was not there. I asked Kalliopi what that was about and she told me not to worry about it. A few days later, there was a letter for Kalliopi in the mail from the bank. I took it to the bank and asked the Manager to explain what the letter said. They told me that the loan was in arrears and that if we didn’t pay approximately $65,000, the bank would take the house.
11I knew that George had been paying the mortgage. George would give the money to John, and after John passed away, to me, to attend the post office or the bank and deposit it in Kalliopi’s account. I recall that we had to attend the post office or the bank just before 12.00pm when the bank would debit her account, as on many occasions, if the funds were sitting in the account, Kalliopi would go and withdraw it. Fearing that I would lose the house, I paid the arrears of $65,000.
12Sometime later, although I am not sure exactly when, it happened again, and I had to pay loan arrears in the sum of approximately $60,000. Unfortunately, I have not yet been able to locate any documents that evidence these payments.
13On 24 April 2018, the Citigroup loan was refinanced by Pepper Finance Corporation Ltd. I am not aware of the circumstances of the refinance, though I did receive a cash cheque of around $220,000 at the time. I gave the cheque to George because he told me that that was money owed to him by Kalliopi.
The exhibit to the first defendant’s affidavit includes a handful of cheque stubs and other such documents. None of those documents would seem to support the contention that any payments were made by the second defendant. As I have earlier noted, counsel for the first defendant acknowledged that ‘the material we’ve provided to evidence that George [the second defendant] has paid the mortgage on our behalf is slim’.[18]
[18]T20.
Nonetheless, the written submissions of the first defendant spoke in forthright terms of ‘uncontradicted evidence’ of an ‘agreement’.[19]
[19]Outline of submissions of the first defendant filed 17 October 2024, [11]-[12].
By contrast, in her first affidavit, the plaintiff deposes –
The First to Fourth Defendants and I continued to live on the land after settlement. As this was an informal family arrangement, there was no written agreement or contract signed at the time. My parents agreed that they would pay towards the utilities and rates in lieu of rent There was no timeframe discussed, as this was a family arrangement.
In her third affidavit, the plaintiff disputes the claim of the first defendant that she has ‘any interest in the property’ and that she owed any money to the second defendant.[20]
[20]Affidavit in support of order for possession sworn 18 October 2024, (‘plaintiff’s third affidavit’) [5], [11].
In that context, the so called ‘agreement’ made in February 2008, and implemented thereafter, was the centrepiece of the first defendant’s claim to a prima facie case.
In argument, counsel for the first defendant advanced a series of criticisms of the plaintiff to the effect that she should have responded better to the first defendant’s claims.[21]
[21]See, T23 (‘… it would seem to me that this is something that the plaintiff would have to deal with’), T24 (‘… none of this stuff has been addressed in the plaintiff’s material …) and T27 (‘… there’s no evidence whatsoever … by the plaintiff, that she’s made any contributions to the property …’).
In that regard, however –
(a) as I have earlier noted, the plaintiff was disadvantaged by the first defendant’s late service of material;
(b) the plaintiff plainly denied the first defendant’s claims of having an interest in the property;
(c) the first defendant bore the onus of showing that her claim was ‘a probability on the evidence’;[22]
[22]Piroshenko (n 13) [18].
(d) the first defendant had lodged her caveat in March 2024 and so had more than six months to commence proceedings or otherwise assemble evidence in support of her claim;
(e) in fact, she did not commence any such proceeding, or present a statement of claim, and when she did belatedly produce an affidavit the contemporaneous documentary material relied upon in support of her claims was exceedingly ‘slim’ as well as ambiguous in effect;
(f) in the circumstances –
(i) the first defendant bore the onus;
(ii) no amount of criticism of the plaintiff could stand to either reverse the onus, or discharge it; and
(iii) while the financial arrangements relating to the property might be said to be murky, the first defendant bore the onus of showing that, on the evidence, her claims were probable, and it was not for the plaintiff to disprove them.
In those circumstances, the best source of evidence concerning the payments allegedly made by the second defendant pursuant to the ‘agreement’ would seem to have been the second defendant himself.
In that connection –
(a) as I have noted, the second defendant was served with the plaintiff’s material;
(b) the material of the plaintiff, and that of the first defendant, includes significant claims relating to second defendant;
(c) the second defendant is also a party to the proceeding;
(d) the first and second defendants appear to continue to reside together and presented as very much part of the same ‘camp’; and
(e) no reason was identified as to why the second defendant could not have deposed to the payments said by the first defendant to have been made by him – especially when the contemporaneous material produced and sought to be relied upon by the first defendant was acknowledged to be so ‘slim’.
To me, the failure of the second defendant to give any evidence in respect of the matter is a significant matter available to be taken into account in considering the weight of the evidence relied upon by the first defendant.[23]
[23]Cf Moore v Goldhagen [2024] VSCA 25, [80]-[90]; more particularly, in the circumstances of the present case, Blatch v Archer (1774) 98 ER 969, 970.
Whether or not that consideration is taken into account, however, in the circumstances to which I have earlier referred –
(a) it is hardly realistic to describe as ‘uncontested’ the first defendant’s various claims concerning –
(iv) an ‘agreement’;
(v) the first defendant and her husband, and then the first defendant, having paid ‘all other expenses (including rates, utilities, insurance and maintenance)’ pursuant to such an agreement;
(vi) the second defendant having paid the mortgage repayments in respect of the property pursuant such an agreement; and
(vii) the first defendant having made payments in respect of ‘arrears’ of $60,000 and $65,000;
(b) to the contrary, as I have indicated, I understood the first defendant’s claims to be broadly disputed by the plaintiff;
(c) none of the handful of contemporaneous documents produced by the first defendant appear to clearly support the proposition that the second defendant made any payment towards the mortgage, whether on behalf of the first defendant and her husband or otherwise;
(d) indeed, such documents as seem to have been produced relating to payments to Citibank appear to involve payments being made by either the husband, or from the account of the first defendant and her husband, and not by the second defendant; and
(e) no documents have been produced in support of the claims that –
(i) the first defendant paid ‘the rates, utilities, insurance and maintenance costs of the Property’; or
(ii) the first defendant paid arrears of $60,000 and $65,000 respectively.
Even if any of the first defendant’s evidence could be described as ‘uncontested’, that does not mean that the Court is compelled to accept it.[24]
[24]GLJ v Trustees for the Roman Catholic Church for the Diocese of Lismore (2023) 97 ALJR 857, [60].
In that context, I accept the submission of counsel for the plaintiff that the form in which the first defendant deposed to an ‘agreement’ would not be admissible at a trial.
Further, such contemporaneous documentary material as is relied upon by the first defendant in support of her claims is so limited and ambiguous in apparent effect that I could not conclude that any of it is necessarily indicative of the so called ‘agreement’.
In that regard –
(a) it is common ground that –
(iii) the plaintiff was, at all relevant times, the registered proprietor of the property;
(iv) the plaintiff purchased the property for valuable consideration;
(v) the property was mortgaged to Citibank and then to Pepper Finance; and
(vi) the family group lived at the property throughout the relevant period;
(b) it is implicit in the evidence of the plaintiff that neither the first defendant nor the second defendant and his partner ever paid any rent in order to reside at the property;
(c) indeed, such categories of payment as the plaintiff did acknowledge as having been made were specifically identified as having been made ‘in lieu of rent’; and
(d) in her affidavit, the first defendant did not specifically deny that any payments were made in lieu of rent.
That is to say, there is a specific alternative account which would stand to explain any payments as would appear to have been made and that would not support a conclusion that any payments made were intended by the parties to sponsor the maintenance or accumulation by the first defendant of an equitable interest in the property.
Indeed, the alternative account seems to me to make considerably more sense than that propounded by the first defendant in her affidavit which, in my view, counsel for the plaintiff accurately characterised as amounting to a ‘strange proposition’.
For completeness, I should note that while counsel for the first defendant sought to emphasise the relevant contents of the solicitor’s letter of 25 September 2024 (extracted above at [23(t)), no part of that letter includes any clear assertion that an ‘agreement’ was made in February 2008 that would operate to confer upon the first defendant a subsisting equitable interest in the entire property.
Perhaps in light of the difficulties to which I have referred, the oral submissions of counsel for the first defendant avoided grappling with any specific parts of the affidavit of the first defendant, and its exhibit, and so did not take issue with the proposition that the relevant paragraph in the first defendant’s affidavit was a ‘strange proposition’ and in a form that would be inadmissible at trial.
Instead, counsel directed attention to what was described as the plaintiff’s ‘evidence’ to AFCA – which was said by counsel to be ‘consistent with what we say is the agreement between the parties’.
In that way, counsel sought to corroborate the ‘agreement’ to which the first defendant deposed without having to go to the form of it.
None of that, however, seems to me to overcome the difficulties to which I have earlier referred.
Further, although counsel was apt to refer to that which was recorded in the AFCA determination as the plaintiff’s ‘evidence’[25] –
[25]See, eg, T22-23.
(a) it appears, in fact, to be derived from a ‘background’ given to AFCA by the plaintiff’s then solicitor, rather than from any direct evidence given by the plaintiff;
(b) in that sense, it is not ‘evidence’ directly from the mouth of the plaintiff and, presumably for that reason, was not said to amount to any kind of admission by the plaintiff against interest;
(c) in any event, much of it seems to be based in the plaintiff’s beliefs and understandings based in statements made to her by others, particularly by her father;
(d) to the extent that it might suggest that the plaintiff ‘was not making payments to [Company C]’ (which I would read as referring to Citibank), the mortgage was, of course, ‘refinanced’ with Pepper Finance in 2018, and the plaintiff specifically took issue with any contention that she has ‘paid zero dollars of the mortgage’; and
(e) none of it refers specifically to any agreement having been made in February 2008 of a kind now propounded by the first defendant.
In the circumstances to which I have referred, whether one takes into account the failure of the second defendant to give relevant evidence or not, I cannot accept that the first defendant has demonstrated a prima facie case that, on the evidence, it is probable that it would be found that –
(a) any such ‘agreement’ was made and thereafter implemented; and
(b) the first defendant would be found to have the equitable rights or interest she has come now to assert.
In a sense, that is the end of the matter. However, the issue of the balance of convenience was emphasised in the submissions of counsel for the plaintiff and was said to weigh even more heavily against the maintenance of the first defendant’s caveat.
In that regard –
(a) neither the first defendant, nor any other defendant, is any longer resident at the property, and all of them seem to have moved in to other premises;
(b) the circumstances suggest that maintenance of the caveat would continue to erode any equity in the property, to the benefit of neither the plaintiff nor the first defendant – and counsel for the first defendant did not suggest otherwise;
(c) in that connection, perhaps, despite the forthright and absolutist tone of the first defendant’s written submissions –
(vii) in oral argument, counsel for the first defendant almost immediately sought to advance a form of open proposal in which the proceeds of sale would be paid into his instructor’s trust account, but that no part of it would be paid to either of the solicitors that have registered a caveat;[26] and
[26]T19.
(viii) counsel later retreated further into a proposal by which the former solicitor would be ‘paid out’, but not the present one;[27]
[27]T26-28.
(d) in that sense, the fallback positions openly adopted in argument readily acknowledged the force in the submissions of counsel for the plaintiff concerning the overall balance of convenience;
(e) nonetheless, counsel for the first defendant remained silent as to whether the first defendant would give an undertaking to pay any damages sustained by the plaintiff as a result of the presence of the caveat if the interest claimed by the first defendant was not ultimately established in substantive proceedings – and, in context, the first defendant must be thought to have refused to give any such undertaking;
(f) similarly, counsel remained silent as to whether the first defendant would permit the sums claimed by Pepper Finance to be paid out; and
(g) counsel very belatedly floated a proposal by which the first defendant would ‘file a statement of claim outlining our interest in the property within four weeks’[28] – however, even that offer omitted any reference to the first defendant undertaking to do so.
[28]T32.
In the circumstances, whatever might otherwise be said concerning whether the first defendant has demonstrated a prima facie case, I accept that the balance of convenience overwhelmingly favours removal of the first defendant’s caveat.
It follows that an order will be made removing the first defendant’s caveat in order that settlement of the sale of the property should proceed on the presently appointed date.
For completeness, I have earlier noted that, ‘to the extent necessary’, counsel for the plaintiff sought an order restraining the defendants from lodging any further caveat.
In circumstances in which no defendant now resides at the property and, to date, only the first defendant has lodged a caveat in respect of which no prima facie case has been shown and the balance of convenience overwhelmingly favours its removal, I cannot imagine that any defendant would now seek to lodge another caveat with the effect that settlement of the sale now scheduled to be completed on 31 October 2024 would be frustrated.
Indeed, if any defendant were to seek to do so, it seems to me that there would be considerable force in the proposition that such a caveat should promptly be removed as an abuse of process and that any such defendant should pay the costs of any application to remove it on an indemnity basis.
For those reasons, although I am prepared to hear counsel further in respect of the question, I would be inclined to the view that such an order is not necessary.
In light of the above, an order will be made removing the first defendant’s caveat and I will otherwise hear from the parties concerning any further orders that should be made to finalise the matter, including in respect of costs.
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