Milenkovic v Belleli - [2015] VSC 349

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2013 3286

JASMINA MILENKOVIC	Plaintiff
v
JERRY BELLELI	First Defendant
BRENDAN KING	Second Defendant
LEGAL CHICKS PTY LIMITED	Third Defendant
- and -
JERRY BELLELI	First Plaintiff by Counterclaim
BRENDAN KING	Second Plaintiff by Counterclaim
LEGAL CHICKS PTY LIMITED	Third Plaintiff by Counterclaim
v
JASMINA MILENKOVIC	Defendant by Counterclaim

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JUDGE:	Lansdowne AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	3, 4, 5 and 31 March 2014
DATE OF JUDGMENT:	20 July 2015
CASE MAY BE CITED AS:	Milenkovic v Belleli and ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 349

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PAYMENT OUT FROM FUNDS IN COURT – competing claims for funds being the residue of mortgagee sale – plaintiff the wife of the former registered proprietor – plaintiff claims an interest by way of trust as to one half of his beneficial interest and a secured interest by way of loan and charge in respect of the other half - whether the plaintiff’s claimed interests were created – whether the plaintiff’s claimed interests, if they were created, were shams – construction of the terms of the charge taken by the first and second defendants – calculation of the amount secured by that charge - whether the plaintiff gave notice of her interests to the first and second defendants – whether the first defendant gave notice of the charge taken by the first and second defendants to the plaintiff – consideration of the interest acquired by the third defendant as purchaser at a sheriff’s auction – whether the plaintiff’s interests should be postponed to those of the defendants by reason of her failure to lodge a caveat or untruthful evidence in relation to disclosure – doctrine of ‘unclean hands’ - the plaintiff’s claimed interest by way of trust found to exist and not be a sham – the plaintiff’s claimed interest by way of loan found to be a sham – defendants failed to show that the plaintiff’s interest by way of trust should be postponed to that of the first and second defendants’ by way of charge, or to that of the third defendant as purchaser at the sheriff’s auction.

Sharrment Pty Ltd and ors v Official Trustee in Bankruptcy (1988) 18 FCR 449; Jacobs v Platt Nominees Pty Ltd and ors [1990] VR 146; Black Uhlans Incorporated v New South Wales Crime Commission and ors [2002] NSWSC 1060 considered and applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J L Evans	Pryles & Co
For the Defendants	Mr M Campbell	Belleli King & Associates

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

Outline of the facts........................................................................................................................ 2
Relevant procedural matters....................................................................................................... 5
Credit.............................................................................................................................................. 5

Issues.................................................................................................................................................... 7

Plaintiff’s assertion of an acknowledgement of trust (‘Milenkovic Trust’)......................... 7
Plaintiff’s claim of a charge over Mr Milenkovic’s interest in the property (‘Loan Agreement’ and ‘Charge’)................................................................................................................................ 7
Defendants’ claim of a charge in June 2006 (‘BKA Charge’)................................................... 7
Claimed interest by Legal Chicks (‘Legal Chicks’ interest’)................................................... 8
Priority............................................................................................................................................ 8

Summary of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Milenkovic v Belleli

Details

AGLC: Milenkovic v Belleli [2015] VSC 349
Case: [2015] VSC 349
Decision Date: 20 July 2015

CaseChat Overview and Summary

Milenkovic v Belleli is a case involving competing claims over the residue from the sale of a mortgaged property. The plaintiff, Milenkovic, sought an interest by way of trust in half of the former registered proprietor's beneficial interest, as well as a secured interest by way of loan and charge over the other half. The defendants, Belleli and others, disputed these claims. The court was tasked with determining whether the plaintiff's interests were created, whether they were shams, and how to calculate the amount secured by the charge taken by the first and second defendants. Additionally, the court had to consider whether the plaintiff had given notice of her interests to the defendants and whether the first defendant had notified the plaintiff of the charge. The case also involved the interest of a third defendant who purchased the property at a sheriff's auction.

The court's analysis began with the plaintiff's interest by way of trust, which was found to exist and not be a sham. The court then examined the plaintiff's interest by way of loan, which was determined to be a sham. The defendants argued that the plaintiff's interest by way of trust should be subordinated to their charge or to the third defendant's interest as the purchaser at the sheriff's auction. However, the court found that the defendants had not proven any grounds for postponement. The court also considered whether the plaintiff's failure to lodge a caveat or provide truthful evidence in relation to disclosure should result in her interests being postponed under the doctrine of 'unclean hands.' Ultimately, the court concluded that the plaintiff's interest by way of trust should not be subordinated.

The court's decision hinged on the careful construction of the charge taken by the first and second defendants and the calculation of the amount secured by that charge. The court applied precedent from cases such as Sharrment Pty Ltd and ors v Official Trustee in Bankruptcy, Jacobs v Platt Nominees Pty Ltd and ors, and Black Uhlans Incorporated v New South Wales Crime Commission and ors. The court's reasoning was thorough, and it found in favour of the plaintiff, ensuring that her interest by way of trust was protected against the claims of the defendants.

The final orders of the court recognised the plaintiff's interest by way of trust over half of the former registered proprietor's beneficial interest. The court also rejected the defendants' claims to the residue of the mortgagee sale, ensuring that the plaintiff's interest was not subordinated to the defendants' charge or to the interest of the third defendant. The court's decision provided clarity and protection for the plaintiff's interest, and it set a precedent for future cases involving competing claims over the residue of a mortgaged property.

Orders