Michaelopoulos v Pomering

[2008] NSWSC 329

CITATION:	Michaelopoulos v Pomering [2008] NSWSC 329
HEARING DATE(S):	8, 9, 10, 11, 15, 16, 17, 18, 23, 24, 25, 26, 29, 30 May 2006, 1, 2 June 2006, 6, 24, 25, 27, 28 July 2006, 24 August 2006, 20, 21 August 2007.
JUDGMENT DATE :	15 April 2008
JURISDICTION:	Equity Division
JUDGMENT OF:	Windeyer J at 1
DECISION:	Defendant’s claim for just allowances determined.
CATCHWORDS:	Claim for just allowance on limited basis.
LEGISLATION CITED:	Property (Relationships) Act 1984
CATEGORY:	Principal judgment
CASES CITED:	Forgeard v Shanahan (1994) 35 NSWLR 206
PARTIES:	Christine Michaelopoulos (Plaintiff) Cheryl Pomering (Defendant)
FILE NUMBER(S):	SC 3383 of 2001
COUNSEL:	M Aldridge SC with him Ms A Seward and Ms J E Richards (20, 21 August 2007) (Plaintiff) Mr M B Evans with him Mr R McCrudden (Defendant)
SOLICITORS:	Horowitz & Bilinsky (Plaintiff) O'Brien Lawyers (Defendant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

TUESDAY 15 APRIL 2008.

3383/01 CHRISTINE MICHAELOPOULOS V CHERYL POMERING & ORS

JUDGMENT

1 This judgment concerns proceedings commenced in 2001. The plaintiff (Michaelopoulos) and the first defendant (Pomering) were in a de facto relationship which came to an end around May 1999. During that relationship they entered into a number of property transactions, the properties being for the most part purchased in the name of Pomering or in the name of some nominee. Michaelopoulos claimed that she had an interest in a number of properties and Pomering denied she had any interest. The hearing commenced before me in May 2006. After 17 days Pomering said that she was prepared to consent to a declaration and orders to the effect that Michaelopoulos was entitled to a 50% interest in six properties subject to Michaelopoulos giving credit to her in respect of 50% of the proceeds of sale of two other properties and the hearing of a claim for just allowances for improvements by the first defendant claimed to have been done on the properties in question.

2 Although I would in ordinary course have sent the claim for just allowances to be determined by a referee or an Associate Judge I was asked to deal with this myself on the basis that an account was not required, but an overall view be taken on the question of allowances.

3 The declaration and orders to give effect to this arrangement were made on 26 July 2006, being day three of the just allowance hearing, probably because I said I would not proceed further unless that were done. To make the position clear and although the orders do not appear to have been taken out, they were made by consent and are as follows:

BY CONSENT:-

The Court declares that:-
1. The properties registered in the name of the First Defendant at:-

a. 334-336 Abercrombie Street, Chippendale, (folio identifier 1/998855) b. 57 Forbes Street, Newtown, (folio identifier 1/129236) c. 16-18 Gorman Street, Marrickville, (folio identifier 1/326148) d. 36 Sydney St, Erskineville, (folio identifier D/446788)
are held upon trust by her as to a 50 per cent interest for the benefit of The Plaintiff.


2. The property at 21 Cary St, Marrickville, (folio identifier 31/3/759) registered in the name of the First Defendant and Robert George is held upon trust as to equal shares for the benefit of The Plaintiff and the First Defendant.

3. The property at 42 Fotheringham St, Enmore, (folio identifier 8/229079) registered in the name of the Third Defendant is held upon trust as to equal shares for the benefit of The Plaintiff and the First Defendant.

4. The net proceeds of sale of the properties at 53 Wells St, Newtown, (folio identifier B/105503) and 34 Sydney Street, Erskineville (folio identifier C/446788) received by The Plaintiff are held by The Plaintiff upon trust as to 50 per cent for the benefit of the First Defendant.

The Court orders that:-

5. The properties the subject of declarations 1-3 above be sold and the net proceeds of sale be distributed equally between The Plaintiff and the First Defendant subject to any further orders made in the proceedings.

6. The properties the subject of declarations 1-3 above are to vest in trustees for sale of those properties as appointed by the Court pursuant to section 66G of the Conveyancing Act 1919 (NSW).

7. The Plaintiff and the First Defendant may purchase any of the properties the subject of declarations 1- 3 above at auction.

8. The Plaintiff pay the First Defendant the sum of $267,389.47 being 50% of the net proceeds of sale of the properties the subject of declaration 4 above which sum may be set off against any monies held to be owing to The Plaintiff by the First Defendant in the account in these proceedings.

9. That Orders 4, 5, 6, 8 and 9 be stayed for a period of 30 days after final orders are made in these proceedings or such further period as the Court may order.

10. The Cross Claim dated 30 June 2003 and the Second Cross Claim dated 16 August 2005 are dismissed.

11. The parties have liberty to apply on three days notice.

4 So far as order 8 is concerned the account in the proceedings was not an account between co-owners from the time the relationship commenced but the determination of the claim for just allowances, which I had agreed to determine at the end of day 17, which was articulated as being:

(a) a claim of approximately $100,000 for discharge of a mortgage on a property, 42 Fotheringham Street, Enmore;

(b) payment made on discharge of the mortgage over property at 36 Sydney Street, Erskineville, together with payments made to secure vacant possession of those premises which amounted in total to $120,000 and $30,000 respectively;

(c) a claim for rent collected by Michaelopoulos for a flat at 21 Cary Street, Marrickville;

(d) a claim of about $100,000 for expenses for improvements to the properties identified as 34 Sydney Street, 36 Sydney Street, and 23 Wells Street and;

(e) a claim for one third of the proceeds of a Berowra Waters property if it came to be included in the orders by agreement – which it was, on the basis that Michaelopoulos should bear the costs of the discharge of mortgage on that property.

5 When the hearing on just allowances commenced it was clear that Pomering was endeavouring to widen the claim from a figure of about $370,000 to one of $1,160,000 including claims which I had never agreed to determine. I accept that I should have made it clear at that stage that I had never agreed to hear any widened claims and did not intend to do so, although Michaelopoulos had, in fact, endeavoured to deal with them in considerable detail in a document called “Outline Submissions” and “Detailed Submissions”, which in some ways was the most helpful document put before me in this very difficult case.

6 It was apparent from the first written submissions of Mr Evans, counsel for Pomering, who had the onus on the just allowance claim, that he accepted the limitations of the claim to be determined by me. That is because paragraphs 1 to 3 of those submissions are as follows:

General Contentions

1. In these proceedings the plaintiff sought relief against the first defendant under the Property (Relationships) Act 1984 and on equitable grounds. The plaintiff has abandoned her claim under the Property Relationships Act. All her remaining claims rest on equitable grounds.

The first and third defendants have conceded that orders be made to the effect that the plaintiff is entitled to a 50% interest in the following properties (as identified in prayer 5 in the orders sought by The plaintiff in her Further Amended Statement of Claim):
2.1 16 Gorman Street, Marrickville;
2.2 57 Forbes Street, Newtown;
2.3 36 Sydney Street, Erskineville;
2.4 334-336 Abercrombie Street, Chippendale;
2.5 21 Cary Street, Marrickville; and,
2.6 42 Fotheringham Street, Enmore.

3. This concession is made on the following bases:


3.1 The listed properties be sold, along with the property at Lot 9 Dusthole Point, Berowra Waters, and the proceeds be divided between the parties in accordance with the Orders and Directions of the Court, if need be by appointment of trustees for sale;

3.2 Moneys received by the plaintiff upon the sale of the properties at 34 Sydney Street, Erskineville and 53 Wells Street be treated as moneys owned as to 50% beneficially by the first defendant and the proceeds of sale of the properties listed at 2.1 to 2.6 above be adjusted accordingly;

3.3 The plaintiff make just allowance in favour of the first defendant for moneys expended by the first defendant on the said properties following the separation of the parties in about May 1999, on the ground that in seeking equity in relation to the properties listed in 2 above, The plaintiff should equity by making appropriate reimbursement or adjustment in favour of the first defendant for moneys expended for their joint benefit or to meet some expense which must be seen as a joint expense.

7 In paragraph 3.3 it is clear the claim for allowances related to expenditure by Pomering on the properties after May 1999.

8 The result of all of this is that I accept that the task that I undertook was to determine those matters referred to which are set out in paragraph 3.3 of Mr Evans’ original submissions together with claims for the distribution of proceeds of sale for Berowra Waters. In subsequent and then final written submissions, after re-opening, to which I will come, Mr Evans has attempted to widen the inquiry by seeking some allowance for what is claimed to be a greater capital contribution to the purchase price of the properties by Pomering. This is a claim which should not have been made and I do not address it. It is quite contrary to the consent orders which have been made. Neither should leave have been sought to introduce documents into evidence through submissions. Pages of written submissions have been addressed to the court on the law as to accounts between co-owners which is quite irrelevant except insofar as entitlements to claim for repairs and occupation fees, etc are concerned which is not in any way in dispute. The consent orders were, I would have thought, the almost inevitable result of the evidence given up to the time they were made.

9 Pomering and her advisers are not solely to blame. On the final re-opened hearing Ms Richards then appearing for Michaelopoulos, attempted to re-visit the entire case, which I refused to allow. She handed up a document entitled Plaintiff’s Statement of Contentions of Fact, which would have required a full account which I do not intend to take. This attempt to relitigate matters was apparently made on instructions from Michaelopoulos and her solicitor. It was not proper.

10 The claim for just allowance proceeded in the same extraordinarily difficult and contentious way that has been the history of the action perhaps to some extent as the result of lack of control by me. About five days were spent in this battle and then on 28 July 2006 the matter was stood over for final submissions on 24 August 2006, which took place, and the matter was stood over for judgment. On 28 November 2006 Michaelopoulos by motion sought leave to re-open and I gave that leave based on evidence in affidavits which, for the most part, were from witnesses never seen again and whose affidavits were not read on the re-opened hearing. The purpose of the re-opening was to adduce evidence not available earlier that Pomering was obtaining income from the properties not brought to account and that claimed improvements had not been made. For various reasons it was not possible to proceed on the re-opened hearing until 20 August 2007 when another two days was spent in this tussle. I was on leave in September 2007 and had begun to endeavour to write a judgment when I was asked to relist the matter on 27 November 2007 for various reasons, including distribution of proceeds of the sale of one of the properties.

11 I was advised then that there might be a further application to reopen which I directed be made, if at all, within seven days. After some encouragement from me I was told that the parties had agreed to proceed to mediation and I was asked not to make orders about this. I do not know what happened but on 20 February 2008 my Associate was told that the hearing and submissions were concluded from which I gathered I should proceed to judgment.

12 The only point in setting this out is to explain what might otherwise appear to have been an appalling delay in this matter. As was made clear at the outset an account was not sought, but rather a relatively broad brush approach to the task of determining whether or not Pomering had a claim for just allowances for particular expenditure which was to be taken into account prior to distribution of the proceeds of sale of the co-owned properties in equal shares between the parties. I proceed on that basis.

13 The way forward is to deal with the properties listed in the consent orders where any claim is made by Pomering in respect of the particular property. Once that is done it will be necessary to determine whether funds used for expenditure on the properties belonged to Pomering or belonged to both Michaelopoulos and Pomering; a matter which I think is almost impossible to determine. There are two ways to work out the figures. One is to allow Pomering the full amount of any allowance before division of the proceeds of sale of each property. The other is to add 50% of each claim to Pomering’s share and deduct it from the share of Michaelopoulos. It will result in the same figure. As Pomering has usually used the second method I will do the same.

Claim for occupation fees and rents received for Carey Street

14 I said during the hearing that there was no entitlement to adjustment of occupation fees. While Pomering was in occupation of either 36 Sydney Street or 34 Sydney Street and was making claims for improvements, at the same time Michaelopoulos was in occupation of Carey Street. As each co-owner was in occupation of one of the properties held in co-ownership there should therefore be no adjustment on the basis of different rental values. Both Michaelopoulos and defendant collected rents from a tenant of part of Carey Street. There is the usual dispute about this but I find that Michaelopoulos collected approximately $10,000 more than Pomering. An allowance of $5,000 should be made.

36 Sydney Street

15 Insofar as Pomering expended moneys on improvements to this property which resulted in an increase in its value by the same amount or more, she is entitled to be credited with such expenditure or the increase in value, whichever is least: Forgeard v Shanahan (1994) 35 NSWLR 206. As there is no evidence as to increase in value it is necessary to take a somewhat conservative view on the allowance and as a matter of law without that evidence it may be no allowance should be made. Difference between purchase price and sale price some years apart is not evidence of increase in value brought about by improvements. The reason why, as a matter of equity, it is proper to make some allowance without evidence of value is that the original agreement between the parties was a joint enterprise for the purchase, improvement and sale of properties with proceeds to be equally shared. When things were going well, the question of whether costs of improvements brought commensurate increase in value was not a consideration. In spite of the efforts of Michaelopoulos to resist such a finding there is evidence which does establish considerable work was done. Pomering’s claim is that the expenditure amounted to $145,959.86. She has produced an itemised list of claimed expenditure said to be supported by invoices and dockets in an exhibit one of which dockets is for an amount of 80 cents. Some items have been claimed twice; some refer to other premises; some are double claimed, namely that they are claimed for other premises as well. One of the claimed items is item 164 for $3,720 where the docket is for paint costing $133.75 and that amount has already been claimed less $10 at item 66. There are items claimed for hose connectors, a lady’s shaver, garden gloves and other items, which on a true account could not be allowed. Little reliance can be placed on the list which seems to have been prepared by putting together bundles of documents hoping they might slip through. Nevertheless it is clear that material such as timber were purchased for renovation works and that renovation work was done by the firm called Messrs Tepass Moss.

16 As I have said the original claim is for $145,959.86, but was later increased to $170,809 for some plumbing expenses which do not appear to have been admitted into evidence. As the major items claimed were for materials such as timber and building work I am prepared to allow a claim of $90,000 for 36 Sydney Street. I fix that figure having regard to the completely unreliable schedule. However, I will have to return to this in determining the source of funds. Pomering also claims for her labour on this property. I find no agreement was proved about this let alone some basis for the hourly rate claimed. In an adjustment between co-owners this should not be allowed.

17 I come to the claim for the amount paid on discharge of mortgage on 36 Sydney Street. It was refinanced through a line of credit obtained through St George Bank. That will be or has been discharged on the sale of the properties so that it cannot be claimed twice. If Pomering has assumed liability for the St George Bank debt this can be adjusted. The allowance then will be $64,702.79.

18 There is a claim for stamp duty paid on transfer of the property from the name of Jay Pomering to Pomering. The property was purchased in 1996 in the name of Jay Pomering. Many of the property transactions of the parties were conducted in the names of others for reasons which can only be the subject of speculation. Properties 32 and 34 Sydney Street Erskineville were purchased at the same time as No 36, both in different names. Jay Pomering transferred 36 Sydney Street to Pomering in 2000. She, Pomering, claims the stamp duty of $8,817 or one half of it. On any basis the parties were co-owners, but a transfer to both would have been liable for the same duty. In fact as Jay Pomering made no contribution to the purchase price or the mortgage, the parties could have said he held it on trust for them, but they might not have wished to say that. Nevertheless, neither Michaelopoulos nor the defendant deserves any sympathy in the various manipulations of the properties and both should bear the cost. In addition Pomering says she paid $30,000 to a protected tenant to obtain vacant possession of a property. That evidence is not absolutely clear but on balance I accept it. The allowance in total for 36 Sydney Street is therefore as follows:

Improvement works $ 90,000
Stamp Duty $ 8,817
Payment to protected tenant $ 30,000
$128,817
½ of that $ 64,409 Total A
plus the possible claim of $64,702.79

Susan Street

19 This was not part of any claim for just allowances. No amount is allowed.

34 Sydney Street

20 The same approach must be taken to this property as to the one next door, namely Number 36. Substantial renovations were done to this property but there is no evidence of increase in value. The claim for expenses is $66,183. The accounts are better supported by vouchers. I allow $66,000 from which should be deducted an agreed figure of $30,000, making $36,000. I will not make any allowance for labour. This property was transferred to and held in the name of Mr Kyriacou. The less said about that the better. He was paid $10,000 to hold it as trustee and a further $10,000 which he said, and I accept, he applied towards mortgage outgoings. Consent order 8 set out the agreed net proceeds of sale for the property at 53 Wells Street. I see no reason for Pomering to bear one half of the first $10,000 paid to Kyriacou, but she should bear one half of the second payment. Pomering should have an allowance of $18,000. If the second $10,000 payment was not accounted for in the order 8 figure, this should be reduced by $5,000 to $13,000. If the first payment was deducted before the net proceeds of sale figure calculated, the allowance should be increased by $5,000. Total B

Claim for unaccounted rents

21 This was not part of any enquiry I agreed to conduct. It is not possible to determine without taking accounts. An amount of $9,078 is admitted. I allow it as it is admitted.

Wells Street

22 Under the consent orders, Pomering is entitled to one half of the net proceeds of sale of this property. It is incorporated in the sum of $267,389.47. I accept that Pomering did some work on the property but again increase in value has not been proved. Pomering makes various somewhat conflicting claims as to her payments on Wells Street. The property was held in the name of Victoria Harvie. This lady became the fourth defendant. She changed sides and evidence during the time these proceedings were on foot. Unless supported by independent evidence I would not accept her evidence. Neither would I place any reliance on the fact she executed a mortgage over Wells Streets in favour of Pomering for $90,000. On its face that document acknowledges receipt of $90,000 from Pomering, which is not true. Pomering says that this was to secure money which she had spent on the property including mortgage payments of $23,550. On no basis is it proof of her assertion. She relies on a document called a write up and various vouchers and dockets which do not match the write up nor the mortgage figure. The write up includes a figure of $35,313.33 stated to be a deposit. Whatever it was, it was not the deposit paid on purchase but it may have been the deposit and the balance purchase moneys. Some of the moneys claimed were lent to Harvie. Pomering also claims to have expended additional moneys in excess of the $9,000 after the mortgage date but there is nothing to substantiate this claim. On the original hearing it turned out that Harvie had received $20,000 from the proceeds of sale but on what basis I do not know. However, if the sum of $20,000 has been deducted from the order 8 figure, Pomering should be credited with $10,000 because she had no part in that payment. The way in which the sale of the property took place and the transfer of moneys between solicitors reflects badly on Michaelopoulos.

23 I find some work was done on the property but in the light of evidence of the purchaser, Mr Cole, who was not cross-examined, I cannot find it of much value. Items claimed, such as a stove, were not put into the house. The mortgage payments of about $20,000 should be allowed. Rates and other outgoings of approximately $500 should be allowed and an additional figure of $10,000 which is a generous figure as no increase in value was established. There should be an allowance of 50% of a rounded sum of $31,000, namely $15,500. If the $10,000 should be added to this, the figure is $25,500. Total C

Berowra Waters

24 In her affidavit of 27 June 2006 Pomering seemed to claim a one half interest in this property but that was not pursued. Her claim is limited to a one third interest but free of mortgage.

25 Pomering claims one-third of estimated rent less outgoings of $300 per week for 7 1/6 years. She does this on the basis that the property has either been let or Michaelopoulos has had the use of it over that period.

26 Michaelopoulos says (a) there are no surplus rents after outgoings including mortgage payments (I find that correct); (b) any co-owner is entitled to occupation and (c) that Pomering is liable under the mortgage although it shows her as mortgagor not borrower. The real dispute is as to (c).

27 The mortgage was a mortgage for $200,000 to the Commonwealth Bank of Australia. Michaelopoulos says that Pomering did not wish to be included as a borrower because she would appear to be overcommitted having regard to her other borrowings if applications were made for further loans. Pomering denies this. The mortgage for $200,000 was entered into in 1997. The proceeds were used as to $150,000 to discharge a mortgage over the property from Pomering Warren and Dunlevy in favour of the CBA and $40,000 was paid into the 0205 account. There is no doubt Pomering benefited from the $200,000 loan. I accept the evidence of Michaelopoulos on this matter. Pomering has not established any right to a share of rent on the basis she was not liable under the mortgage she having obtained the benefit of the mortgage moneys. Any other claim in respect of Berowra Waters requires a detailed accounting not undertaken by this exercise. It is more likely than not that there was a loss in running this property. However, Michaelopoulos has accepted she should account for one half of a payment made from her Raynday account funds which were joint moneys. The figure is $5,000.

Fotheringham Street mortgage

28 Pomering claims $99,000 which she says she paid to discharge a mortgage over this property when she transferred it to Melissa Bundy. As to $61,000 this is accepted. The contest is as to the $38,000. In her affidavit of 26 June 2006, Pomering says (a) she transferred title to the property to Bundy in May 2001; (b) at that time “the outstanding mortgage loan owing to AAA was discharged in the sum of $99,000”. She does not say it was discharged by her.

29 The reason for this peculiar wording is, no doubt, because in her original affidavit of 9 June 2005 and in oral evidence of 1 June 2006, Pomering gave evidence about this matter at least a part of which she admitted was untrue. However, she said that she was holding $38,000 of Miss Bundy’s money which she applied to discharge the mortgage. In other words, she says, that it was treated as part of the purchase price. On this basis her own payment was $61,000. Leaving aside $1,000 that $60,000 came from drawing down on what has been called the St George Line of Credit. If Pomering assumed responsibility for that mortgage then she would be entitled to an allowance of $30,000. If it turns out not to be the position and the St George Line of Credit is to be paid out of the proceeds of sale of all the properties sold, then there would be no allowance. If she used Miss Bundy’s money, which she says she did and the sale to Bundy never went through, then Pomering owes Miss Bundy $38,000, but that is a matter for her.

Interest

30 As Michaelopoulos has had the proceeds of sale of 34 Sydney Street and 53 Wells Street, she should allow interest to Pomering on one half of the proceeds at 9% per annum in each case from the date of settlement.

Source of funds of Pomering

31 While it has been possible to come to some conclusion as to payments made by Pomering there still needs to be some conclusion or determination of the source of the funds for those payments. For the most part they were made out of bank accounts in the name of Pomering, those accounts having been set up, for the most part, for the purposes of the joint venture between the parties and into which moneys were received and from which payments were made.

32 There were three bank accounts opened between 1992 and 1993 all in the name of Pomering and all used for the joint endeavours. These were:

(a) Commonwealth Bank Account XXXX XXXXX (the 439 Account)

(b) Westpac Option Account XX-XXXX (the 0205 Account)
(c) Westpac cheque account XX-XXXX (the 779 Account)

In addition an account called the Veridian Account was opened with the State Bank in 1994.

33 Pomering has said that she considered the moneys in those accounts were hers as she said that she considered all the properties to be hers. As the latter was not correct, the former was not necessarily correct. Nevertheless it is likely that some of the moneys in those accounts were moneys which, if an account were taken of those accounts, would be found to belong to Pomering. I am not taking that account and it is a matter which cannot be determined with accuracy.

34 It is clear that at the date of separation some of the moneys in the accounts were joint moneys which came from sales and rents of properties which were part of the joint endeavour. Each party had other bank accounts involved with her separate business available to her from which it is possible the accounts in question could have been funded. Michaelopoulos had various real estate businesses and Pomering a business called Chip n Dale nuts. The evidence establishes that certain payments for which Pomering claims credit were made either from her credit card accounts of from the Chip n Dale accounts. However, these sources were themselves funded from time to time from the 439 Account or the 779 Account.

35 There is no basis without a full account that I could find that all contributions, by way of improvements or otherwise to the joint venture properties after separation, were made from funds which Pomering contributed to the joint venture accounts from her own resources. It is not possible to give credence to the evidence of Pomering as to her sources of funds with the result that much of the allowance otherwise made will not be allowed. The fact is, however, that after the relationship came to an end Pomering did make some payments into the accounts from her own funds and she did make some of the payments from Chip n Dale funds. I have been asked to come to an overall conclusion. Those claims in totals A, B and C where 50% has been allowed should be reduced by one half. The findings on credit bear on this.

Credit

36 Long submissions were made on the question of credit on both sides which in some ways did not take the matter any further. Neither party could be regarded as a responsible or reliable witness. Both have been involved in purchasing properties in the names of others for no good reason; both have engaged in conduct misleading banks. Michaelopoulos has given false information as to her assets to the State Bank and transferred properties into the name of nominees to hide them from the bank; she has engaged in conduct designed to ensure a secured lender to her real estate operation did not obtain the benefit of all the charged assets. Pomering has given evidence so incredible as to be quite unacceptable in stating that the proceeds of the stock of an electrical business conducted by her when she was about 20 in the late 1970s amounted to $150,000 which she kept in paint tins for safety and which she used for renovations and other purposes. This evidence was given in an endeavour to show that she always had money available when she needed it. I do not accept that evidence. She also said that she had money available from her business called Chip n Dale Nuts. No recent accounts of that business were produced, despite notice and request, and earlier accounts or retained copies of tax returns which were produced showed regular losses with profit made for only one year, but shown on a document prepared as an income tax return which has apparently never been lodged. Pomering said that this business had turned around in more recent years, but produced no records to establish that to be true. She said it is a cash business. No doubt it is. Pomering gave false evidence on affidavit about payment by a cheque drawn on a company account which first was never cashed, second was signed by somebody who had no interest in the company, and third which came from a deregistered company. She described this as a joke, but the evidence was put forward as true. Much of the evidence which she gave in cross-examination appeared to have been made up on the run and could not be accepted. Neither party has put in an income tax return for the last eight years. In fact, at one time during the hearing, I said, probably in despair that, I did not really know why I was worrying about just allowances when it seemed that whatever the amount of those, they should all go to the federal and state revenue authorities. Days were spent on cross-examination of the parties. After listening to this I consider Michaelopoulos’s evidence somewhat more reliable than that of Pomering. My impression of Pomering in the witness box was that she would say anything at all which she thought might advance her case.

Cary Street 5,000.00

36 Sydney Street
¼ improvements 22,500
¼ stamp duty 2,204
¼ payment to protected tenant 7,500
½ mortgage discharge 64,702 * 96,906.00

34 Sydney Street
¼ improvements 16,500
Less ½ of $30,000 ( 15,000)
½ Kyriacou payments 5,000 6,500.00

Unaccounted rents
Conceded claim 9,078.00

Wells Street
½ of $15,500 7,500
Harvie payment 10,000 17,750.00

Fotheringham Street
½ of discharge 30,500.00*

Berowra
Agreed allowance 5,000.00

170,734.00

Note : Items marked * are allowed on basis the defendant has relieved the plaintiff from liability on the St George Line of Credit.

Interest : The plaintiff should allow interest to the defendant on the defendant’s one half share of the proceeds of sale of Wells Street and 36 Sydney Street from the date of settlement to date at 9% per annum.

Costs

37 I will hear submissions as to costs. The plaintiff is the successful party at least up to the time the defendant conceded to orders as to the plaintiff’s interest. However, the claim under the Property (Relationships) Act 1984 was abandoned. Either the defendant should have the costs of that issue or perhaps the plaintiffs costs should be reduced by some percentage. The latter may be a more simple course.

38 So far as the just allowance claim is concerned, while not an account between co-owners, it was something like it. Neither side could be regarded as successful. My present thought is that the parties should bear their own costs apart from the re-opened claim.

39 The re-opening brought about nothing but suspicion. The plaintiff did not gain from it. Again my present thoughts are that the costs of the motion to re-open and the re-opened hearing should be paid by the plaintiff. The final written submissions should not be included in those costs.

Final calculations

40 Each party is entitled to half of the net proceeds of sale of the six properties. The defendant is entitled to one third of the net proceeds of the sale of Berowra and the plaintiff is entitled to two thirds of that figure.

41 The plaintiff’s share should then be reduced by the following:

1. The summary figures $170,739 (adjusted if
required)

2. ½ of the net proceeds of sale of
Wells street and 36 Sydney Street $
3. The interest calculation $

The total of those amounts should be added to the defendant’s share.

The parties will need to bring in orders to give effect to these reasons. I will stand the matter over for about two weeks to allow that to be done and for argument on costs.

**********