Milenkovic v Milenkovic

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2021 01802

MILAN MILENKOVIC (by his litigation guardian NENAD NIKOLIC)	Plaintiff/First Defendant by Counterclaim
v
MILIC MILENKOVIC	First Defendant/Plaintiff by Counterclaim
COOPERS LAWYERS (AUST) PTY LTD (ACN 084 948 907)	Second Defendant/Second Defendant by Counterclaim

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	21–24 May, 27–29 May, 19–20 June, 7–8 and 14-15 August 2024
DATE OF JUDGMENT:	11 December 2024
CASE MAY BE CITED AS:	Milenkovic v Milenkovic
MEDIUM NEUTRAL CITATION:	[2024] VSC 763

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ESTOPPEL – Proprietary estoppel – Constructive trust – Plaintiff promised to bequeath property to first defendant if he undertook significant renovation of property – First defendant relied upon promise to his detriment by working full time on renovation for fifteen months, forgoing income he would otherwise have earned and contributing to the cost of the renovation – Whether unconscionable for plaintiff to depart from promise – Prima facie entitlement of first defendant to receive proceeds of sale of property – Whether receipt of proceeds of sale goes beyond what is required for conscientious conduct – Whether remedy is disproportionate to first defendant’s detriment.

LACHES – Whether first defendant acquiesced to plaintiff having legal and beneficial interest in property to the exclusion of first defendant’s proprietary interest in property – Whether first defendant’s delay in lodging a caveat on title of property unreasonable – Whether plaintiff suffered serious prejudice by reason of first defendant’s delay in claiming a proprietary interest – Plaintiff failed to establish prejudice by reason of first defendant’s delay.

LEGISLATION – Evidence Act 2008 ss 64(2)(b), 64(3)(b), 140(2)(c) – Limitation of Actions Act 1958 s 21(1)(b) – Supreme Court (General Civil Procedure) Rules 2015 order 15.03(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/First Defendant by Counterclaim	Mr RC Wells (21 May to 26 June), Mr P Reynolds (7 to 15 August 2024)	Kathy Wilson Legal
For the First Defendant/ Plaintiff by Counterclaim	Mr DB Clough	TLM Law
For the Second Defendant/ Second Defendant by Counterclaim	No Appearance

HIS HONOUR:

Introduction

Milan Milenkovic was born on 15 February 1937. He was married to Milunka Milenkovic who died on 27 August 2020. They had two children: Radunka, born 20 November 1957 and Milic, born 31 January 1960. Due to the commonality of surnames I shall refer to the parties by their first names, without any disrespect intended.

Milan and Milunka migrated to Australia from Serbia in January 1971. Throughout the period 1971 to 1984 they purchased a number of properties including 285 Glenlyon Road, Fitzroy North (‘Glenlyon Road’). This property was purchased for $64,000 in February 1984.

Between late April 1993 and July 1994 Glenlyon Road was extensively renovated. It is common ground that Milic, who was a registered builder, obtained the building permits for the renovation and undertook work on the renovation project. The extent of his involvement in the project, including any financial contribution he made to the cost of the project, is hotly contested.

Milic contends that in 1992 Milan and Milunka promised to bequeath Glenlyon Road to him if he agreed to renovate the property. Milic contends that he worked full time on the project from late April 1993 until July 1994. He also contends that he paid for nearly all of the building materials and the tradespeople who worked on the renovation. Milan denies that any promise was made to Milic that he would receive Glenlyon Road. He accepts that Milic was involved in the renovation. However, he contends that Milic’s involvement was limited to obtaining the permits and plans, undertaking some work and arranging for contractors to work on the site.[1] He denies that Milic made any financial contribution to the cost of the renovations.
[1]Transcript (‘T’) T 60 L 23–27 (Mr Wells).

On 14 September 2019 Milan and Milunka signed a contract for the sale of Glenlyon Road for $1.83 million. On 16 October 2019 Milic lodged a caveat on the title of Glenlyon Road. In order to allow the sale of the property to proceed an agreement was reached between Milic, Milan and Milunka whereby the second defendant acted in the sale of the property and retained the net proceeds of sale on trust, to be dispersed only upon authorisation in writing by Milic, Milan and Milunka or by order of the Court. As part of this agreement the caveat on the title was withdrawn.

On 27 May 2021 Milan filed a writ and statement of claim. In his statement of claim he seeks a declaration that he is the sole person entitled to the proceeds of sale of Glenlyon Road. He also seeks a direction that the funds presently held by the second defendant be paid to him. By his amended defence and counterclaim Milic claims a proprietary interest in Glenlyon Road pursuant to a proprietary estoppel constructive trust. He seeks a declaration that prior to the sale of Glenlyon Road Milan and Milunka jointly held Glenlyon Road on trust for themselves for their own use and possession for their own lives, and upon their deaths, for Milic. He also seeks an order that the second defendant pay the proceeds of sale of Glenlyon Road to him.

I have concluded that in 1992 Milan and Milunka promised to bequeath Glenlyon Road to Milic if he undertook renovations of the property. Milic relied upon this promise by working full time on the renovation between late April 1993 and July 1994. He acted to his detriment by devoting time and labour to the renovation, by forgoing income he would otherwise have received as an employee of the Australian Customs Service (‘ACS’) and by contributing his own money to the cost of the renovation. He also relied upon the 1992 promise to his detriment in 2006 when he constructed a summer kitchen at Glenlyon Road which he paid for.

By July 1994 Milic had a proprietary interest in Glenlyon Road pursuant to a proprietary estoppel constructive trust. I have concluded that it would be unconscionable if Milan resiled from the 1992 promise. Milic is entitled to an order that the second defendant pay him the net proceeds of the sale of Glenlyon Road together with any accrued interest. An order of Keith JR made on 13 August 2021 records the net proceeds as $1,808,909.98.

The appointment of a litigation guardian

Milan commenced giving evidence on 20 June 2024 the ninth day of trial. Shortly after he commenced giving evidence it was apparent that Milan was having difficulty understanding the questions he was being asked. This was not due to a lack of proficiency in English because he had the assistance of an interpreter. He also could not identify his own signature on his will even though it was not in dispute that the signature was his.[2] Following the luncheon adjournment on 20 June 2024 his counsel informed the Court that both he and his instructing solicitor had significant doubts about Milan’s capacity to give instructions.[3] Counsel submitted that prior to 20 June 2024 neither he nor his instructing solicitor had any doubts as to Milan’s capacity to provide instructions.
[2]T 861 L 7–18 (Exchange between Milan, Mr Wells and his Honour).
[3]T 863 L 7–9 (Mr Wells).

The proceeding was adjourned to allow Milan to be assessed by a neuropsychologist to determine whether an application would be made for the appointment of a litigation guardian. The application was made by summons filed 26 July 2024. The application was supported by an affidavit sworn by Milan’s solicitor, Ms Kathleen Wilson. The affidavit annexed a neuropsychology report of Dr Karen Bird. Dr Bird concluded that due to cognitive impairment Milan was incapable of competently managing his affairs in relation to the current proceeding. On 30 July 2024 the Court made an order pursuant to order 15.03(3) of the Supreme Court (General Civil Procedure) Rules 2015 appointing his grandson, Nenad Nikolic, as his litigation guardian.

What promises, if any, were made to Milic prior to him undertaking work on Glenlyon Road in 1993/1994?

Milic contends that his parents made two promises to bequeath Glenlyon Road to him. The first promise was made in about 1989. Milic contends that his parents promised that if he built a double brick garage and pergola at Glenlyon Road he would inherit the property. Milic contends that a second promise was made in 1992 (‘the 1992 promise’). Milic contends that during a discussion with his parents Milan said words to the effect:

‘I want you to build a house, this house is old, it’s derelict, it’s falling apart. You’re a builder, you’re my son, how dare you make me look like a pauper. Why don’t you build it for me? I need it getting built and we will make sure this house stays with you forever.’ … ‘We will give you this house as payment for that because we can’t afford to do it. We want you to do it’.[4]

[4]T 107 L 4–14 (Milic).

Milic gave evidence that Milan told him that if he built the house it would be left to him. Milan said Radunka had already received, prior to 1992, 12/33 Ballarat Road, Footscray (‘Ballarat Road’), 35 Percy Street, St Albans (‘Percy Street’) and 3 Koala Court, Chelsea (‘Koala Court’).[5] Milunka nodded in agreement.[6] There was no discussion at the time or thereafter as to who would be paying for the renovation.[7]
[5]T 106 L 15–30 (Milic).
[6]T 106 L 31 (Milic).
[7]T 112 L 10–13 (Milic).

Milic’s primary case is based on a proprietary estoppel constructive trust. He contends that Milan is estopped from denying the 1992 promise. In the alternative, he contends that Milan is estopped from denying the first promise which was made in 1989. He also contends that the first promise forms part of the factual substratum evidencing the fact that his parents made the 1992 promise.

As Milic’s primary case is based on the 1992 promise, in the first instance I shall address the question of whether that promise was made and, if so, whether Milic relied upon it to his detriment.

Much of the evidence in the present proceeding involved witnesses recounting events and conversations which occurred many years ago. It is only natural that with the passage of many years recollections of past events and conversations can be unreliable. I have therefore approached with caution the evidence of witnesses recounting conversations which occurred many years ago. The need for caution is amplified in the case of Milic and Radunka, the principal protagonists in the litigation. Regrettably, there is deep seated and long standing ill will between Milic and his sister. Each of them has a direct and significant pecuniary interest in the outcome of the proceeding. Although Milan is the plaintiff, he is 87 years old and Radunka is the sole beneficiary of his estate. An order requiring the release of the proceeds of sale of Glenlyon Road to Milan is almost certain to result in a significant financial benefit to Radunka upon his death.

I have treated the evidence of both Milic and Radunka with caution where it has not been corroborated by independent witnesses or contemporaneous documents. Both Milic and Radunka were unreliable witnesses. In significant respects their evidence was tailored to enhance what they perceived would benefit their respective cases. For Milic this involved exaggerating the extent of his financial contribution to the 1993/1994 renovation and downplaying the financial benefits which he received from his parents. In Radunka’s case it involved denying any knowledge of the 1992 promise and significantly understating the extent of Milic’s contribution of labour and funds to the 1993/1994 renovation of Glenlyon Road.

Was it inherently unlikely that the 1992 promise would have been made?

Milan’s counsel submitted that it is inherently unlikely that Milan and Milunka would have promised to bequeath Glenlyon Road to Milic in 1992 in return for Milic agreeing to undertake a renovation of the property.[8] Counsel submitted that if the promise had been made Milan would not have been free to sell Glenlyon Road to fund Milunka’s aged care, as he in fact endeavoured to do in 2019. Nor would he have been in a position to sell the property to fund his own aged care.[9] Counsel submits that if such a promise had been made Milan and Milunka would have given effect to such a promise in their wills, which they did not do. Further, they would have been expected to discuss their wills with Milic which they did not do.[10] Counsel submits that there is no mention of the 1992 promise in a letter written by Milic to his father dated 14 January 2009.[11] Counsel submits that if Milan and Milunka had promised to bequeath Glenlyon Road to Milic it is very unlikely that they would subsequently have transferred 29 Stanley Street, Brunswick (‘Stanley Street’) to Milic in May 1999, leaving them with only Glenlyon Road and whatever superannuation they had accrued, to fund their retirement.[12] Counsel submits that it is unlikely that Milan and Milunka would have put themselves in a position where they would be entirely reliant on the goodwill of their children to have a roof over their heads in retirement.[13]
[8]Milan’s Outline of Closing Submissions dated 20 August 2024 at [19].
[9]Ibid.
[10]Ibid at [21].
[11]Ibid at [22].
[12]Ibid at [23].
[13]Ibid at [24].

Counsel submits that if there was a promise to bequeath Glenlyon Road to Milic this would have been discussed in April 1993 when Percy Street was transferred from the joint ownership of Milan, Milunka, Radunka and Milic to be solely owned by Radunka.[14] Counsel submits that the Court should conclude that it is more likely than not that Milic undertook the renovation of Glenlyon Road on the basis of the financial assistance he had already received from his father, and assistance which he expected to and did subsequently receive, rather than on the basis of the 1992 promise.[15]
[14]Ibid at [25].
[15]Ibid at [27].

Milan was born on 15 February 1937. In 1992 he was 55 years of age and still in full time employment. Milunka was born on 20 October 1933.[16] In 1992 she was 59 years of age and also in full time employment. Milunka retired in 1998. Milan retired in January 1999 after he was made redundant by Bayside Trains on 23 December 1998.[17]
[16]Court Book (‘CB’) 769, Milunka’s 1996 Tax Return dated 30 October 1996.
[17]CB 798, Letter from Bayside Trains to Milan dated 23 December 1998.

On 18 June 1986 Milan purchased a property in Kraljevo, Serbia. The property was registered in the names of Milic and Radunka.[18] It is common ground that Milan paid the purchase price of $32,000. On 26 July 2011 Milic gifted his share of the property to his nephew who is the son of a half-brother from Milunka’s first marriage.[19] In 2017 Milan sought to have Milic’s share in the Kraljevo property transferred to him. Milic objected to the transfer. This resulted in proceedings in a Serbian Magistrates’ Court and a decision on 21 November 2017 to transfer the property to Milan.[20] Milic gave evidence that he subsequently successfully appealed this decision and that legal proceedings relating to the ownership of the Kraljevo property are ongoing.[21]
[18]CB 140, Contract of Sale Kraljevo dated 18 June 1986.
[19]CB 142–143, Agreement Regarding Gifting of Real Estate dated 26 July 2011.
[20]CB 132, Judgment of Serbian Magistrates’ Court dated 21 November 2017.
[21]T 301 L 5-6, 25 (Milic).

There is a considerable body of evidence which supports a finding that in 1992 Milan and Milunka intended to retire permanently in Serbia and to live at the Kraljevo property. Radunka agreed that when Milan and Milunka purchased the Kraljevo property in 1986 they always intended to retire there.[22] Radunka agreed that after 1999 when both Milan and Milunka had retired they spent many months each year in Serbia.[23] In addition to his Australian pension entitlements Milan also had a small pension from the Serbian government.[24]
[22]T 940 L 17–18 (Radunka).
[23]T 940 L 20–21 (Radunka).
[24]T 940 L 22 (Radunka).

Drago Susanj gave evidence, which I accept, of discussions with Milan concerning his intention to retire permanently in Serbia. Milan told Mr Susanj that Glenlyon Road was for the next generation, that he and Milunka were retiring overseas, that they had their pensions and that they had all that they needed.[25] When it was put to Mr Susanj in cross-examination that Milan and Milunka had never permanently moved to Serbia, Mr Susanj replied: ‘No, that was discussed as their retirement plan. I remember Milan specifically telling me about how he looked forward to making wine and enjoying all the fruits and the lifestyle in Serbia’.[26] This discussion was in the late 1990s.[27] I accept this evidence. Mr Susanj’s account of his discussions with Milan coincides with the commencement of his retirement in 1999.
[25]T 716 L 28–30 (Drago Susanj).
[26]T 740 L 5–9 (Drago Susanj).
[27]T 740 L 14 (Drago Susanj).

In addition to acquiring the Kraljevo property, in 1986 Milan entered into an agreement with Radunka pursuant to which Radunka would become the sole registered proprietor of Percy Street.[28] Under the terms of this agreement Radunka took over payment of the mortgage for Percy Street which had a balance of $45,000 in mid-1986.[29] Radunka agreed to transfer to Milan when requested the title to her family home 213 Furlong Road, St Albans (‘Furlong Road’).[30] Subsequently, in 1999 Milan agreed with Radunka that rather than Furlong Road being transferred to him it should be transferred to her daughter, Natasha.[31] The significance of this agreement is that in 1992 when Milan promised to bequeath Glenlyon Road to Milic there was no risk of Milan not having any assets which he could sell to fund aged care for himself and Milunka. In 1992 in addition to the property in Kraljevo where he intended to retire Milan had an agreement that Furlong Road would be transferred to him.[32]
[28]T 243 L 5-28 (Milic), T 465 L 14 (Milic).
[29]Ibid.
[30]T 242 L 16-30 (Milic).
[31]T 244 l 31 (Milic), T 894 L 7-8 (Radunka).
[32]T 954 L 19 (Radunka).

Counsel submits that if the 1992 promise had been made, Milan and Milunka would have been expected to have given effect to it in their wills. In order to address this submission it is necessary to examine the evidence relating to Milan and Milunka’s wills.

Milan and Milunka executed identical wills on 22 April 1975 leaving their entire estates to the survivor with the survivor leaving his or her estate to Radunka as trustee to hold the balance of the estate on trust for herself and Milic as tenants in common in equal shares.[33] When the 1975 wills were executed Milic was a minor. Milan and Milunka owned two properties: 19 Cecil Street, Fitzroy, purchased 19 February 1974[34] and 46 Andrea Street, St Albans, purchased 4 March 1975.[35]
[33]CB 310, Will of Milunka Milenkovic dated 22 April 1975, CB 313, Will of Milan Milenkovic dated 22 April 1975.
[34]CB 294, Historical Title Search Cecil Street.
[35]CB 308, Transfer of Land 46 Andrea Street (purchase) dated 4 March 1975.

Milan and Milunka’s next wills were made on 28 March 2008. Under the 2008 wills Milic and Radunka were appointed as joint executors and trustees in the event of the survivor’s death. The 2008 wills contained the following bequest:

I GIVE AND BEQUEATH the whole of my estate both real and personal of whatsoever nature and wheresoever situate to such of my said children as shall survive me for a period of thirty (30) days and if more than one as tenants in common in equal shares.[36]

[36]CB 409, Will of Milan Milenkovic dated 28 March 2008, CB 412, Will of Milunka Milenkovic dated 28 March 2008.

When the 2008 will was executed the only property owned by Milan and Milunka was Glenlyon Road. On 28 May 2010 Milan and Milunka executed identical wills leaving their entire estate to the survivor with the survivor appointing Radunka as sole executor and trustee and leaving the whole of the estate to Radunka.[37] On 9 August 2019 Milan executed a new will. He appointed Radunka as his executor and trustee. He bequeathed his entire estate to Radunka. He expressly stipulated that he made no provision for Milic.[38]
[37]CB 747, Will of Milan Milenkovic dated 28 May 2010, CB 745 Will of Milunka Milenkovic dated 28 may 2010.
[38]CB 749–753, Will of Milan Milenkovic dated 9 August 2019.

In 2009 there was an exchange of correspondence between Milic and Milan. On 14 January 2009 Milic wrote to his parents. An English translation of this letter is Annexure A to this judgment. The letter commences with Milic stating that he renounces his inheritance to Glenlyon Road as well as renouncing his interest in the Kraljevo property. Thereafter, the letter sets out a raft of grievances. Milan responded to the letter. The response is Annexure B to this judgment. The letter is undated, but is plainly written in response to Milic’s letter of 14 January 2009. Page 2 of the letter sets out Milan’s account of the circumstances in which Milan’s will dated 28 March 2008 was executed:

You threw away the papers, said that you did not want to look after the bills anymore. You said: "Give them to Radunka, let her look after it for a while". I got angry, went and gave Radunka (JUST RADUNKA, not Rajko Nikolic) Power of Attorney. Then I annulled the old will and made a new one: HALF FOR YOU AND HALF FOR RADUNKA. This is what I had always said I needed to do.
The Title in Kovanluk is in two names. YOUR [sic] AND RADUNKA. No one can change it without you! Radunka has never asked for the house in Kovanluk. Rajko Nikolic IS NOT MY SON, NOR CAN HE EVER BE. THERE IS NOTNIG [sic] OF MY PROPERTY IN HIS NAME!
You know the best [sic] what you did and how you behaved towards us. We had never made any difference between you and Radunka. You know very well how you obeyed us and how Radunka did it. We had never praised you nor scold you among people. We had never made any difference among the grandchildren. They are all equal to us Why do you mention Radunka's and your children? What did you intend to say? What have your sister and brother-in-law do [sic] to you so that you don't invite them to your Saint Day celebration?
We never did anything behind your back. When we came back from Serbia it took you 43 days to come and visit your mother and father. You took Marina on a holiday
You have helped me open my eyes and do what we had always talked about doing - divide everything equally among you two after our death. Thank you for that' [sic] We woke up after you threw away the papers. We had always tried to be just.[39]

[39]CB 426, Letter from Milan and Milunka to Milic (English Translation) undated.

When the 2008 will was made Glenlyon Road was the only asset owned by Milan and Milunka (putting to one side the Kraljevo property which at the time was registered in the names of Radunka and Milic). The final paragraph of Milan’s letter supports a finding that the intent of the 2008 will was to alter the distribution of Milan and Milunka’s assets upon their death, such that Milic and Radunka would each receive 50% of Glenlyon Road. Radunka’s evidence supports this finding. Radunka gave evidence that in early 2008 she was told by her parents that they had changed their wills and that Radunka and Milic would each receive 50% of the estate.[40]
[40]T 920 L 29 – 921 L 6 (Radunka), T 922 L 5–18 (Radunka).

It is difficult to reconcile the evidence set out above with the terms of the 1975 will. Under the terms of that will the Glenlyon Road property would have been divided equally between Radunka and Milic in the event of Milan and Milunka’s death. The oral and written statements of intent by Milan to change his will such that Glenlyon Road would be divided equally between Milic and Radunka supports a finding that Milan believed that, absent the 2008 will, Glenlyon Road would not be divided equally between Milic and Radunka.

One reason why Milan would have had such a belief is that he had previously promised Milic that he would inherit Glenlyon Road in his own right, and, as is detailed later in this judgment, had repeated that promise in the presence of others on numerous occasions. It is correct that Milan and Milunka failed to amend their wills post 1994 to reflect the promise which had been made to Milic in 1992. However, the failure of Milan and Milunka to act in accordance with the 1992 promise does not warrant a finding that the promise was not made. Milan made an express promise to bequeath Glenlyon Road to Milic. Milic was entitled to assume that both Milan and Milunka would amend their wills to reflect this promise. Their failure to do so is not evidence of the absence of the promise. Rather, it is evidence of unconscionable conduct on their part in failing to act in accordance with the 1992 promise.

Milan’s counsel submits that the 1992 promise is not mentioned in the letter of 14 January 2009. It is correct that there is no express reference to the 1992 promise in this letter. However, it is referred to in a subsequent letter written by Milic to Milan. The letter is undated. Radunka gave evidence that the letter was received by Milan and Milunka in Serbia in an Express Post envelope dated 17 May 2009.[41] An English translation of the letter by certified translator is Annexure C to this judgment. I shall refer to this letter as the May 2009 letter.
[41]CB 440, Letter from Milic to Milan (Serbian Original) undated, CB 526, Express Post Envelope dated 17 May 2009; T 985 L 30 – 986 L 13 (Radunka).

The original Serbian version of the May 2009 letter includes diacritics which have been handwritten over the typeface. The 14 January 2009 letter which Milic accepts he wrote does not include any diacritics. Milic gave evidence that he never uses diacritics when writing in Serbian.[42] This evidence must be weighed against the contents of the May 2009 letter. The letter could only have been written by somebody with an intimate knowledge of the Milenkovic family and the history of the breakdown in the relationship between Milic and his father. Realistically, this means the letter could only have been written by Milan or Radunka/Rajko.
[42]T 536 L 28 – 537 L 16 (Milic).

It is highly unlikely that the May 2009 letter would have been written by Radunka or Rajko. First, because the letter contains vitriol directed at Radunka and Rajko. For example: ‘Kudos to Radunka (Nikolic family) for not coming to hospital to visit Zendi when my child almost died (he was bleeding on his brain) even though they were told’.[43] Second, and more importantly, the May 2009 letter contains vitriol directed at Radunka’s own children. For example: ‘Kudos to Natasha [Radunka’s daughter] for what she has to do in order to lie and also to force Dejan to lie that he has no family here and say that she met Dejan through Rajko’s niece and not through us and Tanja [Milic’s daughter] (what kind of idiots do they think we are who think of evil things and to only try and grab as much as possible for them)’.[44]
[43]CB 900, Letter from Milic to Milan (English Translation) undated (‘May 2009 Letter’).
[44]Ibid.

Milic contended that the May 2009 letter was written by a family member who was seeking to damage the relationship between Milic and his parents.[45] In effect, Milic contends that either Radunka or Rajko wrote a letter full of invective and vitriol directed at themselves and their children in order to generate ill will from Milan and Milunka towards Milic. I reject this contention. The letter was written by Milic.
[45]T 538 L 12-17 (Milic).

The May 2009 letter contains the following:

The fact, that you had always told my children, from a young age, that the house in Brunswick was intended for them when you die, even though I forbade you to talk about that to them, you had messed up that promise and all behind my back along with Radunka and gave half of that house to Radunka, who accepted it with open arms although she knew very well about your promise that you had made to my children and also the fact that you had already prearranged to pass on the house in Furlong Rd, House in Percy St, a Block of Land in Chelsea both to her and her children, and who knows what else behind my back, and while she was accepting all that, she also knew very well that you didn't give anything to my children, only hers, and whenever she sees my children she pretends to give them hugs and pretends to love them ??? That kind of fine love isn't real. She only pretends to be their real auntie.[46]

This extract from the May 2009 letter is plainly referring to the 1992 promise.

[46]CB 897, May 2009 Letter.

Milan’s counsel submits that if Milan and Milunka had promised to bequeath Glenlyon Road to Milic it is very unlikely that they would have subsequently given Stanley Street to Milic, leaving them only with Glenlyon Road and whatever superannuation they might accrue to fund their retirement.[47] This submission raises three issues for consideration. First, who purchased Stanley Street. Second, if Stanley Street was purchased by Milan/Milunka, did they gift the property to Milic? Third, if so, was the property gifted to Milic in March 1988 when it was purchased, or subsequently in May 1999?
[47]Milan’s Outline of Closing Submissions dated 20 August 2024 at [23].

Stanley Street was purchased on 4 March 1988 for $77,500 with Milan and Milunka registered on title as joint proprietors on 11 March 1988.[48] The property was mortgaged in favour of the Commonwealth Bank of Australia on 11 March 1988.[49] The mortgage was discharged on 4 April 1995. A CBA loan statement dated 1 June 1990 records an original loan secured by the mortgage of $50,000.[50]
[48]CB 494, Transfer of Land Stanley Street (purchase) dated 4 March 1988, CB 268, Historical Title Search Stanley Street.
[49]Ibid.
[50]CB 353, CBA Loan Statement dated 1 June 1990.

Milic disputes that his parents paid for Stanley Street. He contends that he funded the purchase of Stanley Street even though his parents were registered on title.[51] He says he gave his parents $45,000 cash up front for the purchase of the property with an additional $30,000 in three subsequent instalments of $10,000 in cash.[52] I do not accept this evidence.
[51]T 229 L 19–20 (Milic).
[52]T 309 L 24-26 (Milic), T 319 L 23 (Milic).

Milic gave evidence that the $45,000 he provided for the purchase of Stanley Street was part of the proceeds of sale of 272 Highett Road, Highett (‘Highett Road’).[53] The property was purchased by Jasmina’s parents on 19 October 1979 for $42,000.[54] Milic gave evidence that the property was transferred to himself and Jasmina in late 1984.[55] They paid Jasmina’s parents $45,000 but were not registered on the title at the time. The property was sold on 2 February 1988 for $126,000.[56] Milic gave evidence that in addition to the $126,000 from the sale of the property Jasmina received $25,000 from the sale of a hairdressing business which she had been operating from the premises.[57] Milic gave evidence that Jasmina’s parents agreed that he and Jasmina would receive all of the proceeds of the sale.[58] However, it is difficult to reconcile this evidence with the fact that two ANZ mortgages which had been taken out by Jasmina’s parents were discharged from the proceeds of sale on 2 February 1988.[59] I infer that these mortgages were discharged from the proceeds of sale of Highett Road.
[53]T 229 L 21–23 (Milic), T 237 L 14 (Milic).
[54]CB 673, Transfer of Land Highett Road (purchase) dated 19 October 1979.
[55]T 352 L 7 (Milic).
[56]CB 524, Transfer of Land Highett Road (sale) dated 20 January 1988.
[57]T 312 L 17-18 (Milic).
[58]T 240 L 22 (Milic), T 506 L 17-18 (Milic).
[59]CB 289, Historical Title Search Highett Road.

Milic’s evidence that Jasmina’s parents gave both himself and Jasmina all of the proceeds of sale from Highett Road could have been corroborated by Jasmina’s mother.[60] Jasmina’s father has passed away. Milic did not produce any documentary evidence to disclose where and when the proceeds from the sale of Highett Road were deposited.
[60]T 241 L 9-12 (Milic).

Milic gave inconsistent evidence as to how he utilised the proceeds of sale of Highett Road. After giving evidence that he used $45,000 to fund the purchase of Stanley Street, he gave evidence that he used the proceeds from the sale of Highett Road to build number 14 and 16 Cabinda Drive, Keysborough.[61] He also gave evidence that he needed all of the proceeds from the sale of Highett Road to build 14 and 16 Cabinda Drive and that these properties would not have been built had he not received all of the proceeds of sale.[62]
[61]T 313 L 19–21 (Milic).
[62]T 356 L 13–16 (Milic).

Milic’s evidence in relation to the purchase of Stanley Street is inconsistent with evidence which he gave in proceedings which were heard in the Supreme Court of Victoria in March 2014 in which Jasmina claimed a portion of the proceeds of sale of Stanley Street.[63]
[63]Milenkovic v Belleli & Ors [2015] VSC 349.

In late 2009/early 2010 Milic had a serious workplace injury when he fell from a height of 4.5 metres on a building site and injured his back resulting in permanent disability.[64] It is common ground that after this injury occurred he was no longer able to continue to work as a builder. Following the injury he was not able to service a mortgage in favour of Westpac Bank which he had taken out after Stanley Street had been transferred to him in May 1999. Stanley Street was repossessed by Westpac Bank and was sold for $671,000 on 9 May 2012. After the mortgage was discharged there were four competing claims for $224,900.48 which had been paid into Court on 24 April 2013 following the discharge of the Westpac mortgage.[65]
[64]T 181 L 4–8 (Milic), T 216 L 23–26 (Milic).
[65]Milenkovic v Belleli & Ors [2015] VSC 349 at [2]–[10] (Lansdowne AsJ).

Jasmina contended in the Supreme Court proceedings that Milic had executed an acknowledgment of trust in her favour on about 2 June 1999 by which he declared and acknowledged that he held a one half undivided interest in the property on trust for her.[66] Milic was not a party to the proceedings in the Supreme Court in March 2014. However, he filed an affidavit in support of Jasmina’s claim dated 25 February 2014. The affidavit includes the following:

4. During the 1980s, my parents bought a number of residential properties as investments, using borrowed funds. Two of these properties were the property at 29 Stanley Street, Brunswick and a property in Andrea Street, St Albans. In the early 80s, my parents told me that they could not afford to meet their bank payments in respect of their investments. They asked me if I could help them out, by taking over the loan repayments for the St Albans property. I discussed this with Jenny, and we agreed that we would help my parents. We paid the monthly mortgage payments, in relation to the St Albans property, for a number of years, until about 1985 or 1986 and after we assisted my parents in paying the monthly mortgage payments for the Brunswick property.
5. At around this time, my parents said to me words to the effect that to repay me for helping them out, they would transfer the title to the Stanley Street property to me. While I considered that the title should be transferred to Jenny and to me, as we had used our combined income to meet the mortgage repayments on the St Albans property, I did not want to argue with them, as they have old fashioned views about husbands and wives. I did tell Jenny at about this time that I considered that the Stanley Street property would be half hers.
6. I recall my parents signing a written declaration of trust in my favour in respect of the Stanley Street property in about 1988 or 1989. In early 1999, I decided to go into business for myself as a builder. I arranged for a company called Unique Investments (Vic) Pty Ltd to be incorporated, and I became its sole shareholder and director. It traded as "Milic Constructions”. As part of setting up the business, I needed my own truck. I arranged for finance through Liberty Funding Pty Ltd of about $70,000. Liberty Funding required security over more than just the truck, so I obtained a transfer of land from my parents, and became the sole registered proprietor of the Stanley Street property, and gave a mortgage of it to Liberty Funding. I told Jenny about this before I gave the mortgage to Liberty Funding.

[66]Ibid at [2] (Lansdowne AsJ).

Milic’s affidavit is inconsistent with his evidence in the present proceeding that he paid the purchase price of Stanley Street. The affidavit makes no mention of Milic having provided his parents with a lump sum of $45,000 and a further $30,000 in three instalments of $10,000. Rather, it expressly states that his parents purchased Stanley Street as an investment property. He also deposes that he and Jasmina assisted Milan and Milunka in paying the monthly mortgage payments on Stanley Street. Based on his evidence in the present proceedings there would have been no mortgage to service. He contends that he provided his parents with the cash equivalent of the full purchase price of $75,000.

As set out above, I have concluded that Milic is the author of the May 2009 letter. Attached to this letter is a table in which Milic compares what he considers to be the value of gifts of property by his parents to himself and Radunka. In this table Milic has identified the Stanley Street property (with an original value of $78,000) and the payment of the stamp duty transfer fee of $6,000 as a gift which he received from his parents.[67] I reject Milic’s evidence that he provided Milan and Milunka with $75,000 to purchase Stanley Street.
[67]CB 910, May 2009 Letter.

The second issue to be addressed is whether Milan and Milunka gifted Stanley Street to Milic. The third issue is whether, if the property was gifted to Milic, this took place in March 1988 or in May 1999. It is convenient to address these issues concurrently.

There is in evidence a document signed by Milunka, Milan and Milic dated 11 March 1988 (‘the 1988 agreement’) in the following terms:

We, Milan MILENKOVIC and Milunka MILENKOVIC of 285 Glenlyon Road Brunswick VIC 3068 and Milic MILENKOVIC of 12 [sic] Cabinda Drive Keysborough VIC 3173, hereby jointly agree that I Milan MILENKOVIC and Milunka MILENKOVIC are purchasing a house at 29 Stanley Street Brunswick VIC 3068, Title Certificate Vol. 4300 fol 859813, Lot 9 Plan of subdivision 7537.
The above mentioned house is to be held in legal documents in the names of Milan MILENKOVIC and Milunka MILENKOVIC,-but will be the ownership of Milic MILENKOVIC. This agreement is made due to the instability in marriage of Milic and Jasmina MILENKOVIC, thus if it comes to the divorce, we Milan MILENKOVIC and Milunka MILENKOVIC have the full right to handle or otherwise dispose of it in any manner we choose.
The house at 29 Stanley Street Brunswick VIC 3068 will be held in the name of Milan and Milunka MILENKOVIC for exactly (10) ten years from the date of registration after which time it will revert to the ownership of Milic MILENKOVIC providing that the marriage of Milic and Jasmina MILENKOVIC is a sound and stable one.

The following undersigned hereby consent and sign this agreement as the only valid document.[68]

[68]CB 352, Agreement (English Translation) dated 11 March 1988.

Milic was cross-examined about the 1988 agreement as follows:

MR WELLS: I put to you that the reason why this document was created, and that you arranged for it, was to ensure that the gifting by your parents of Stanley Street to yourself would not have adverse consequences for them in their application for aged pension?
MILIC: Not correct. I didn't fill out the forms for aged pension, I helped him, assisted him, and it was their financial advisor that actually took him to the - organised aged pension for them, not me.[69]

[69]T 314 L 23–31 (Exchange between Milic and Mr Wells).

In final submissions, Milan’s counsel[70] submitted that the 1988 agreement was a sham.[71] The principles in relation to when an agreement will be a sham are well established. In Re Willow Fashions (Aust) Pty Ltd (in liq); Leveque v Downey as liquidator of Willow Fashions (Aust) Pty Ltd (in liq)[72] Hayne J stated:
[70]In final submissions Milan was represented by Mr Reynolds rather than Mr Wells who did not appear after 26 June 2024.
[71]T 1082 L 6–7 (Mr Reynolds).
[72]Unreported, Supreme Court of Victoria, Hayne J, no N07678 of 1994, 27 April 1995.

In this connection it is important to bear steadily in mind that ordinarily speaking, the legal rights and obligations of the parties to a contract depend upon their intention and:
The relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party’s words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party.

(Gissing v Gissing (1971) AC 886 at 906 per Lord Diplock; Australian Broadcasting Corporation v XIVCommonwealth Games Ltd (1988) 18 NSWLR 540 at 548–549 per Gleeson CJ).
Thus the uncommunicated subjective intention one party to a contract is, ordinarily speaking, irrelevant to determining the nature and extent of the rights and obligations of the parties to that agreement. It is for this reason that for a supposed contract to be a sham, it must be demonstrated that it was the common intention of the parties that the acts or documents concerned are not to create the legal rights and obligations which they may give the appearance of creating. Thus, even if it is assumed that the intention of either or both of the corporate parties to the contracts with the employees was to create some illusion or pretence, that is not sufficient to demonstrate that what otherwise would be an agreement binding upon those corporate parties may be treated as a sham.[73]

[73]Ibid at 11–12 (Hayne J). See also Finance Sector Union of Australia v Commonwealth Bank of Australia Ltd (2005) 147 FCR 158 at [129] (Merkel J); Damevski v Giudice (2003) 133 FCR 438 at [140] (Merkel J).

It was not put to Milic that the 1988 agreement was a sham, in the sense that Milic did not intend the agreement to create the legal rights which, on its face, it appeared to create. On its face the 1988 agreement created a beneficial interest for Milic in Stanley Street with a right to have the property transferred to him in March 1998 provided he and Jasmina had not divorced. Save for the 14 month delay to May 1999 in the transfer of Stanley Street, Milan and Milunka acted consistently with the 1988 agreement. This weighs against a finding that the 1988 agreement was a sham.

An allegation that the 1988 agreement is sham is a very serious matter. A finding that the agreement is a sham would entail a finding that Milic, Milan and Milunka signed the agreement in 1999 and backdated it to March 1988 so that Milan and Milunka could receive pension entitlements which they would not otherwise have received if they were the owners of Stanley Street in May 1999. Necessarily, a finding that the 1988 agreement is a sham would entail a finding that, prima facie, Milic engaged in social security fraud by facilitating his parents’ receipt of pension entitlements they were not in fact entitled to receive. Equally, it would entail a finding, that prima facie, Milan and Milunka engaged in social security fraud. The 1988 agreement was signed and dated by both Milan and Milunka. If the document was in fact signed in May 1999 at the time Stanley Street was transferred to Milic, there is no evidence to support a finding that Milan and Milunka would not have understood what the agreement was or that its purpose was to facilitate their receipt of pension entitlements they were not entitled to receive.

On 20 September 1999 Milan applied for a Centrelink benefit from the Commonwealth.[74] For the purposes of completing the application Milan was required to answer the following question: In the last five years have you given any cash, assets, property or income away to anyone as a gift (or sold them to someone to less than their value)? In response to this question Milan stated: ‘In the last ten years from 1988 to 1998 we have given my son approximately $10,000 per annum as a gift, namely we payed [sic] for a house for him addressed at 29 Stanly [sic] Street Brunswick.’[75] Milan signed a declaration that the information which he provided Centrelink was correct together with an acknowledgement that there are penalties for deliberately giving false or misleading information.[76]
[74]CB 784 Centrelink Application Form – Income & Assets dated 20 September 1999.
[75]Ibid at 787.
[76]Ibid at 791.

Milan’s reference to having given Milic $10,000 per annum between 1988 and 1998 is consistent with Stanley Street having been purchased by Milan and Milunka in 1988 for $75,000 and then Milan and Milunka subsequently paying off the mortgage prior to 1998. Milan’s answer to the question of whether he had given away any property in the five years preceding September 1999 is totally inconsistent with Stanley Street having been purchased by Milan and Milunka in 1988, but only gifted to Milic in May 1999. Acceptance of the submission that the 1988 agreement was a sham and that Milic had no beneficial interest in Stanley Street prior to the transfer of the property to him in May 1999 would support a prima facie finding that Milan engaged in social security fraud when he applied for a Centrelink benefit on 20 September 1999.

Whether the 1988 agreement is a sham is to be determined on the balance of probabilities taking into account the gravity of the matter alleged. Counsel for Milan put to Milic that he had ‘arranged’ for the agreement to be created ‘to ensure that the gifting by your parents of Stanley Street to yourself would not have adverse consequences for them in their application for aged pension’.[77] Milic denied this. Nothing further was put to Milic. If Milan intended to submit that the 1988 agreement is a sham that allegation should have been put squarely to Milic to provide him with an opportunity to respond to that allegation. Further, it should have been put to Milic that the 1988 agreement was in fact signed in May 1999 and that the date of 11 March 1988 was a fabrication to enable his parents to obtain pension payments which they would not otherwise have been entitled to receive. The failure of counsel to put these matters directly to Milic is understandable. If it had been put to Milic that the 1988 agreement is a sham this would have raised directly the question of whether Milan had knowingly participated in an arrangement to defraud the Commonwealth.
[77]T 314 L 23–27 (Mr Wells).

In addition to the failure to put directly to Milic the allegation that the 1988 agreement is a sham, there is another matter that weighs against making this finding. Milan’s counsel did not point to any provision of Commonwealth legislation which supports a finding that by signing the 1988 agreement in May 1999 Milan and Milunka ensured that they would receive a full pension, which they would not have otherwise been entitled to. If there was a legislative rationale in May 1999 for backdating the gifting of Stanley Street to March 1988 it was incumbent upon Milan’s legal representatives to have identified the relevant provisions and to have provided Milic and his legal representatives with an opportunity to address the question of whether Milic had any knowledge of such provisions in 1999. Assuming there was a legislative rationale in May 1999 for backdating the gifting of Stanley Street to March 1988, it was not put to Milic that he had knowledge of this legislative rationale.

Taking into account the gravity of the allegation that the 1988 agreement is a sham, the evidence falls well short of establishing on the balance of probabilities that the 1988 agreement was drafted and signed in May 1999. I accept Milic’s evidence that the 1988 agreement was signed and dated on 11 March 1988 as recorded in the agreement. It follows that prior to Milan and Milunka making the 1992 promise they had already agreed in March 1988 to transfer legal title of Stanley Street to Milic in March 1998 provided he and Jasmina had not divorced during the preceding 10 years.

Although Stanley Street was transferred to Milic in May 1999 the transfer gave effect to an agreement dating back to March 1988. When Milan promised to bequeath Glenlyon Road to Milic in 1992 he had already promised to transfer Stanley Street to him. The transfer of Stanley Street in May 1999 does not support a finding that it is unlikely that Milan would have promised to bequeath Glenlyon Road to Milic in 1992.

Milan’s counsel submits that if it had been agreed in 1992 that Glenlyon Road was to be bequeathed to Milic, a discussion to that effect would have taken place when Milic signed over his legal interest in Percy Street to Radunka in April 1993.

On 15 November 1976 Milan, Milunka, Milic and Radunka each executed a contract of sale for the joint purchase of 35 Percy Street, St Albans for $72,500.[78] The purchase was registered on title on 23 May 1977.[79] The family then resided at the property.[80] At this time, Milic was 17 years old. The Milenkovic family resided together at Percy Street until 1978 when Radunka married Rajko Nikolic and vacated the property.[81] In the early 1980s the family left Percy Street and relocated to Cecil Street, Fitzroy, a property which had been purchased by Milan and Milunka in February 1974.[82] In 1982 Milic and Jasmina moved into Highett Road.[83] The property consisted of a shop and a dwelling. Jasmina used the shop to conduct a hairdressing business which she operated from the premises from 1982 to 1988.[84]
[78]CB 316, Sale Note Percy Street (purchase) dated 15 November 1976.
[79]CB 271, Historical Title Search Percy Street.
[80]T 285 L 12 (Milic).
[81]T 935 L 27 (Radunka).
[82]CB 294, Historical Title Search Cecil Street; T 243 L 30-31 (Milic), T 886 L 11-14 (Radunka).
[83]T 238 L 17 (Milic), T 619 L 22 (Jasmina).
[84]T 560 L 18 (Jasmina).

Milic gave evidence, which I accept, that in 1986 the family entered into a verbal agreement for Percy Street to be transferred to Radunka, to own solely, subject to her servicing the existing mortgage.[85] At this time each family member was a registered proprietor[86] and the property was rented.[87] Milic agreed to this transfer.[88] As part of the agreement, Furlong Road was to be transferred from Radunka to Milan and Milunka in lieu of Percy Street.[89] Furlong Road had been purchased by Radunka and Rajko on 27 November 1980.[90] The arrangement was for Radunka to continue to collect rent from Furlong Road and use the rental payments as contributions to the mortgage at Percy Street. Once the mortgage was discharged, Furlong Road was to be transferred to Milan and Milunka.[91] Jasmina corroborated this evidence.[92]
[85]T 243 L 5-28 (Milic), T 465 L 14 (Milic).
[86]CB 271, Historical Title Search Percy Street.
[87]T 244 L 4-5 (Milic).
[88]T 243 L 7 (Milic).
[89]T 242 L 16-30 (Milic).
[90]CB 223, Contract of Sale Furlong Road (purchase) dated 27 November 1980.
[91]T 242 L 16-30 (Milic).
[92]T 585 L 13-22 (Jasmina), T 627 L 20 (Jasmina).

Radunka confirmed that in the middle of the 1980s she agreed to continue paying the mortgage for Percy Street and that Milan had instructed her to use rent from Furlong Road towards the payment of the mortgage.[93] Radunka recalled that at the time she agreed to take over the mortgage it was between $45,000-46,000.[94] A bank statement from National Mutual records $45,000-$46,000 was owed between 1985 and 1986.[95] Radunka moved into Percy Street in 1986 and tenants then moved into Furlong Road.[96] Radunka acknowledged when giving evidence that she received a substantial benefit from receiving Percy Street, as at the time its net value was more than that of Furlong Road which she was to transfer to her father in return for Percy Street.[97]
[93]T 893 L 1-6 (Radunka).
[94]T 893 L 11 (Radunka).
[95]CB 348-349, Bank Statement National Mutual Royal Savings Bank Limited dated 30 June 1986.
[96]T 893 L 18 (Radunka).
[97]T 954 L 22 (Radunka).

The mortgage over Percy Street was discharged in May 1988.[98] At this time, Milan approached Milic and stated he wanted Radunka to retain both Percy Street and Furlong Road.[99] Milic agreed with this proposal and recalled stating to his father: ‘As long as I'm looked after [in] the end I don't really mind’.[100] Milic received no consideration for this transfer. Milic recalled this occurring in 1992.[101] Milic gave evidence that he co-operated with the transfer of Percy Street to Radunka on the basis that Milan stated he ‘would be looked after’.[102]
[98]CB 273, Historical Title Search Percy Street.
[99]T 244 L 15-22 (Milic).
[100]T 244 L 18-19 (Milic).
[101]T 244 L 26 (Milic).
[102]T 465 L 7-11 (Milic).

Despite paying off the mortgage in 1988, Radunka did not become the registered proprietor of Percy Street until 26 April 1993.[103] When asked to explain this delay, Radunka stated that she was in ‘no hurry to register it’.[104] Radunka gave evidence that in 1999 Milan instructed her to transfer Furlong Road to her daughter, Natasha (now deceased).[105] Natasha became the registered proprietor of Furlong Road on 20 September 1999.[106] Radunka gave evidence that Furlong Road was transferred to Natasha in 1999 rather than 1993 (when Radunka became the registered proprietor of Percy Street) because Natasha was a minor at that time.[107] Percy Street continues to be owned by Radunka.[108]
[103]CB 273, Historical Title Search Percy Street.
[104]T 894 L 10 (Radunka).
[105]T 894 L 7-8 (Radunka).
[106]CB 892, Historical Title Search Furlong Road at CB 892.
[107]T 895 L 10-11 (Radunka).
[108]T 881 L 20 (Radunka); CB 232, Outline of Evidence of Radunka Nikolic dated 1 June 2023.

Ownership of Percy Street was transferred to Radunka on 26 April 1993. However, the agreement that Radunka would take over the mortgage payments and be registered as the sole proprietor of Percy Street once the mortgage had been paid off, dated back to the mid-1980s.[109] The transfer of Milic’s interest in Percy Street to Radunka in April 1993 gave effect to a longstanding agreement.
[109]T 893 L 1–6 (Radunka).

I reject the contention that it was inherently unlikely that the 1992 promise was made. In rejecting this contention I have placed weight upon the fact that Milic’s evidence that the 1992 promise was made to him was corroborated by four witnesses: Mr Tom Savic, Mr Drago Susanj, Mr Petar Stojanovic and Mr Milutin Bogicevic.

Mr Tom Savic was called as a witness by Milic. Mr Savic is retired. Immediately prior to his retirement he was general manager, customised research at Roy Morgan Research.[110] Previously he had worked as a consultant for ASX 200 companies advising on marketing and strategic direction. Although he was called to give evidence by Milic, I do not consider him to have been a partisan witness. He gave evidence, which I accept, that he had a very close relationship with Milic since he was 15 years old.[111] Equally, he gave evidence that Radunka’s son, Nenad, is married to his niece.[112] Further, Radunka’s husband, Rajko, who is deceased, was a first cousin of Mr Savic’s wife and they had previously lived in the same house in Rosanna.[113]
[110]T 793 L 18–19 (Tom Savic).
[111]T 767 L 7 (Tom Savic).
[112]T 767 L 14 (Tom Savic).
[113]T 767 L 14–16 (Tom Savic).

Mr Savic gave evidence, which I accept, that he had a ‘fairly intimate relationship with both sides of the family’ (ie Radunka’s side of the family and Milic’s side of the family).[114] Mr Savic has known Milic’s side of the family all of his life and frequently socialised with them.[115]
[114]T 767 L 17–18 (Tom Savic).
[115]T 767 L 19–20, 25–26 (Tom Savic).

Mr Savic was the most impressive witness of all of the witnesses who gave evidence in the present proceeding. He was independent and even handed in giving his evidence. He had an excellent recall for detail, but did not embellish any aspect of his evidence. If he did not have a clear recollection of events or a subject matter he would say so. Mr Savic gave his evidence on 19 June 2024, the eighth day of the trial. His evidence, including evidence which was inconsistent with key aspects of Milan’s defence to Milic’s claim, was unchallenged. The timing of his evidence is significant. Mr Savic gave evidence prior to the ninth day of trial, 20 June 2024, when an application was made for an adjournment of the proceeding to allow for Milan to be assessed by a neuropsychologist to determine whether Milan was competent to provide instructions to his lawyers. When Milan’s counsel sought the adjournment he stated that he had not had any doubts prior to 20 June 2024 regarding Milan’s capacity to provide instructions.[116]
[116]T 863 L 10 (Mr Wells).

In an affidavit sworn 25 July 2024 in support of the application for the appointment of a litigation guardian, Milan’s solicitor deposed:

8. I have personally attended Milan to take instructions and advise since 2020, both in the company of his daughter, Radunka Nikolic and, less frequently, his grandson Nenad Nikolic, as well as by himself, including with an independent interpreter, when settling outlines of evidence and settling and taking affidavits of documents.
9. From the time of the commencement of this legal dispute up until the trial, sometimes with the assistance of an interpreter, Milan was able to give instructions in relation to the relevant factual issues in the dispute, albeit with some limitations on his ability precisely to recollect events that occurred some decades ago.
10. On 23 January 2024, Milan scored 29/30 in a Standardised Mini-Mental State Examination. A copy of the examination score sheet, signed by Dr Amid Karami of St Albans Medical Services, is at pages 6 to 9.
11. The trial of the proceeding commenced on 21 May 2024. Milic's evidence was led first. On 20 June 2024, the ninth day of the trial, Milan gave evidence and began experiencing difficulties in understanding and responding to certain questions during his examination in chief.

A witness outline for Mr Savic was filed on 17 May 2023. The outline included the following:

4. In or about 1993, I worked at the Australian Bureau of Statistics in the Melbourne CBD. On my way home from work I often went by the Glenlyon Road property to see Milic as I was aware that he was attending to renovations work at the property at the time.

5. I witnessed the commencement of the renovation works when Milic demolished a substantial part of the house. I often joked with Milic that he should have demolished the entire house given its run down state. Given that a substantial part of the house had been demolished, I am not sure if anyone was residing at the Glenlyon Road property during the renovations.
6. On some occasions when I visited, Milic stopped work and sat down for a coffee with me. On other occasions he would continue to work on the renovations while we talked. During our conversations he often repeated to me that he was only doing work because his parents had promised that he was going to inherit the Glenlyon Road property.
7. Occasionally Radunka and her husband, Rajko, would be at the Glenlyon Road property when I visited, however, Rajko did not assist Milic with the renovation. I often joked with Rajko that Milic was doing all the work while he sat and watched. Rajko always responded with words to the effect that "Milic is doing this for himself, he is the one getting the property". Rajko also said to me that once Milic completed the renovation at the Glenlyon Road property, he was going to start renovation works at the Percy Street property.[117]

[117](Emphasis in original).

Milan and his legal advisers were on notice of the substance of Mr Savic’s evidence more than 12 months prior to the commencement of the trial. Prior to Mr Savic giving evidence on 19 June 2024 Milan’s legal advisers had ample opportunity to take instructions from Milan about the matters set out in Mr Savic’s witness outline.

Mr Savic gave evidence of a discussion he had with Radunka at the time Milic was undertaking the Glenlyon Road renovation: ‘Radunka said she got Percy Street and Micky was doing this for himself’.[118] Mr Savic also gave evidence that Milan told him that he had given Glenlyon Road to Milic because he had given Percy Street to Radunka:

MR WELLS: What did you understand he meant by that, that he had given the property to Micky?
MR SAVIC: Exactly what he said, that he had given the property to Micky and - because he was talking about dividing the assets that he had equally amongst the family. So he had already given - he said he had given Radunka Percy Street. I don't know whether he had transferred it or whether there was any commercial - that wasn't what he was saying. He was talking about giving, 'I have given', in Serbian it is (speaks Serbian), 'We gave Percy Street, St Albans, to Radunka. We gave Micky this house.'…[119]

[118]T 776 L 15–16 (Tom Savic).

[119]T 787 L 21–31 (Exchange between Tom Savic and Mr Wells).

Mr Savic was not challenged on this evidence. Radunka was not asked any questions about any conversation between herself and Mr Savic. Radunka did, however, confirm that Mr Savic did attend family functions ‘at the beginning’ after 1993.[120] It is more likely than not that Radunka would have made the statement attributed to her by Mr Savic that she had received Percy Street and Milic was ‘doing [Glenlyon Road] for himself’. Percy Street was purchased on 15 November 1976 for $72,500.[121] Radunka and Rajko purchased Furlong Road on 27 November 1980 for $38,000.[122] Radunka accepted that as part of the 1986 agreement for her to acquire Percy Street, Furlong Road was to be transferred to Milan and Milunka.[123] The transfer was to take place after Radunka had paid off the mortgage on Furlong Road using rental income from Furlong Road while she lived in Percy Street.[124] Subsequently, in 1999 Milan agreed that Radunka could transfer the property to her daughter Natasha rather than transferring the property to Milan.[125]
[120]T 959 L 17 (Radunka).
[121]CB 316, Sale Note Percy Street dated 15 November 1976.
[122]CB 324, Contract of Sale Furlong Road (purchase) dated 8 December 1980.
[123]T 954 L 17–19 (Radunka).
[124]T 953 L 20–26 (Radunka).
[125]T 895 L 7–12 (Radunka).

Percy Street was purchased for $72,500 on 15 November 1976.[126] Furlong Road was purchased for $38,000 on 27 November 1980.[127] Radunka agreed that she received a substantial financial benefit from receiving Percy Street in 1993.[128] Radunka also agreed that by 1993 when Milic started work on Glenlyon Road she had received far more in value from her parents by way of distribution of property than Milic.[129] In June 1976 Milan and Milunka purchased Radunka a flat at 12/33 Ballarat Road, Footscray as a gift.[130] This property was purchased for $13,000.[131] On 9 May 1989 a block of land at 3 Koala Court, Chelsea was registered in Radunka’s name.[132] Radunka’s evidence was that she ‘helped out a little bit to pay towards it as well’.[133] The property was sold for $450,000 on 15 August 2011.[134] It is common ground that Radunka received the proceeds of sale.
[126]CB 316, Sale Note Percy Street (purchase) dated 15 November 1976.
[127]CB 322, Sale Note Furlong Road (purchase) dated 27 November 1980, CB 323-324, Contract of Sale Furlong Road (purchase) dated 8 December 1980.
[128]T 954 L 24 (Radunka).
[129]T 955 L 7 (Radunka).
[130]T 937 L 4–5 (Radunka).
[131]CB 893, Transfer of Land Ballarat Road (purchase) dated 4 June 1976.
[132]T 938 L 13-15 (Radunka).
[133]T 938 L 16–17 (Radunka).
[134]T 938 L 24–25 (Radunka).

When Radunka took over the mortgage on Percy Street in 1986 Milan and Milunka had been paying off the mortgage on the property since 1977. A bank statement for the mortgage account for Percy Street shows the balance of the mortgage as being $45,661.73 on 30 June 1986.[135] This is about the same time Radunka assumed liability for paying the mortgage. The mortgage was discharged on 26 May 1988.[136] Percy Street was valued for stamp duty purposes at between $105,000 to $110,000 when the property was transferred to Radunka in April 1993.[137]
[135]CB 349, Royal Bank Statement of Mortgage Account dated 30 June 1986.
[136]CB 273, Historical Title Search Percy Street.
[137]CB 355, Market Appraisal Percy Street dated 30 September 1992.

In April 1993 the only property that had been distributed to Milic by his parents was 46 Andrea Street, St Albans. That property had been purchased for $19,950 in March 1975.[138] The property was mortgaged from 11 March 1975 until the discharge of the mortgage on 18 July 1984. Andrea Street, St Albans continued to be registered in the name of Milan and Milunka, but Milic received the proceeds of sale after the discharge of the mortgage. The property was sold for $41,000 on 2 July 1984.[139] Milic gave evidence that prior to the sale of Andrea Street he was servicing the mortgage over the property at the request of Milan. Initially, he stated that he started paying the mortgage in 1982 when he and Jasmina relocated to Highett Road, Highett.[140] He then gave evidence that he took over the mortgage payments when the family moved to Cecil Street in mid-1981.[141] It is common ground that Milic received the proceeds of the sale of Andrea Street after the mortgage had been cleared. The evidence as to the exact amount which he received is unclear. Initially, Milic gave evidence that he received ‘some money’ but could not recall the exact amount.[142] He then gave evidence that he had received $10,000 to $12,000.[143] Jasmina gave evidence that the net proceeds of sale of Andrea Street was between $10,000 to $15,000.[144] If the net proceeds had been between $10,000 and $15,000 this would mean that the mortgage when the property was sold in 1984 would have exceeded the original purchase price of $19,950. Milic gave evidence that the size of the mortgage increased after the property had been purchased because Milan drew down on the mortgage when he was under financial pressure in the 1970s and 1980s.[145]
[138]CB 308, Transfer of Land Andrea Street (purchase) dated 4 March 1975.
[139]T 203 L 13–18 (Milic); CB 346, Transfer of Land Andrea Street (sale) dated 2 July 1984.
[140]T 291 L 3–4 (Milic).
[141]T 291 L 14-18 (Milic).
[142]T 203 L 23–24 (Milic).
[143]T 298 L 27 (Milic).
[144]T 555 L 16 (Jasmina).
[145]T 299 L 1-8 (Milic).

It is unnecessary to express a concluded view about the amount received by Milic from the sale of Andrea Street. It is clear that the amount received was less than the sale price of $41,000. When Milic was cross-examined counsel did not put to him a specific amount as being the proceeds received by him after the sale of Andrea Street. In Milan’s final written submissions counsel submitted that it was more likely that Milic had received $20,000 to $30,000 from the net proceeds of sale. Whatever the actual amount received by Milic after the discharge of the mortgage of Andrea Street, the amount was significantly less than the value of the properties which had been distributed to Radunka by April 1993 when Radunka was registered as the sole proprietor of Percy Street.

By 1993 Radunka had acquired ownership of Percy Street, valued for stamp duty purposes at $110,000 for an outlay of $45,000 (being the amount required to discharge the mortgage). In addition, she retained ownership of Furlong Road (which she subsequently transferred to her daughter Natasha rather than to Milan) and a block of land at 3 Koala Court, Chelsea. Radunka was able to use rental income from Furlong Road to pay off the mortgage on Percy Street.

Even taking into account the value of Stanley Street (which was not transferred to Milic until May 1999) the properties which had been gifted/distributed to Radunka by April 1993 exceeded the $20,000 to $30,000 which Milan’s counsel submitted Milic received from the sale of Andrea Street and the value of Stanley Street. When Stanley Street was transferred to Milic in May 1999 Milan paid $6,460 stamp duty for the transfer based on a valuation of $180,000.[146] In 1993 when Percy Street was transferred to Radunka, the value of Milic’s beneficial interest in Stanley Street would have been significantly less than $180,000.
[146]CB 388, Transfer of Land Stanley Street (transfer) dated 14 May 1999.

I accept Mr Savic’s unchallenged evidence that Radunka told him in 1993 that she had received Percy Street and Milic was ‘doing this [Glenlyon Road] for himself’. This evidence supports a finding that Radunka was aware of the promise that her parents had made to Milic in 1992 to bequeath Glenlyon Road to him. This finding is inconsistent with Radunka’s evidence that she was not told by her parents at any time that they intended to bequeath Glenlyon Road to Milic.[147] I reject this evidence. Radunka was not a reliable witness. Radunka sought to downplay the extent of Milic’s contribution to the renovation of Glenlyon Road. Radunka claimed that she did not know over what period of time the renovation was undertaken.[148] This evidence is implausible. It is clear that Radunka had a close relationship with her parents throughout 1993 and 1994 and thereafter. I infer that Radunka regularly visited her parents’ residence at Glenlyon Road. Milan and Milunka were living in the garage built by Milic in 1989 whilst the renovations were undertaken. Radunka would have observed first hand the work undertaken by Milic and the period of time Milic was working at the site.
[147]T 941 L 28–30 (Radunka).
[148]T 899 L 6 (Radunka).

Radunka gave evidence that Milic was not working regularly at Glenlyon Road and that he was undertaking work at Glenlyon Road in between other jobs he was working on.[149] I reject this evidence. It was not put to Milic that he was working on other jobs in 1993 and 1994 when he was undertaking the renovation at Glenlyon Road. Nor was it put to him that he was working at Glenlyon Road on an irregular basis.
[149]T 898 L 25 (Radunka).

Radunka also gave evidence that her parents told her that they were paying for the renovations.[150] However, they did not tell her how much they had paid for the renovation in total.[151] Radunka gave evidence that her parents paid ‘all the tradesmen’.[152] I reject this evidence. It is inconsistent with evidence which I will address later in this judgment which supports a finding that Milic paid some of the tradespeople who worked on the site. Further, although giving evidence that her parents had paid for all of the building materials and all of the tradespeople Radunka gave no evidence which explained how her parents, who had relatively lowly paid employment, could have afforded to have funded all of the costs associated with the renovation which she accepted was ‘extensive’.[153]
[150]T 899 L 28–30 (Radunka).
[151]T 900 L 5 (Radunka).
[152]T 900 L 3–4 (Radunka).
[153]T 899 L 14 (Radunka).

I do not accept Radunka’s evidence as to when she first became aware that she would solely inherit Glenlyon Road. Milan and Milunka made wills in 2010 which bequeathed their entire estate to Radunka. Their previous wills made in March 2008 had divided their estate equally between Milic and Radunka. A subsequent will made by Milan in 2019 expressly stated that Milic was to receive no part of the estate. Radunka gave evidence that prior to 2019 she had no knowledge that she would solely inherit Glenlyon Road. I do not accept this evidence. The May 2010 will made significant changes to the March 2008 will. Under the March 2008 will Milic and Radunka were joint executors and trustees of the estate and shared equally in the distribution of the estate. Under the May 2010 will Radunka was the sole executor, trustee and beneficiary of the estate. It is common ground that by 2010 there had been a significant breakdown in the relationship between Milic and his parents and between Milic and Radunka’s husband Rajko. It is highly unlikely that Milan and Milunka would have made significant changes to their wills in May 2010 bequeathing their entire estate to Radunka without having discussed those changes with her. The affect of the May 2010 wills was to double the size of Radunka’s inheritance. It is highly unlikely that she would not have fully grasped the significance of this change. Radunka gave evidence that in 2010: ‘They [Milan and Milunka] were upset with what’s happening and they said they were going to change it, but I never thought about it’.[154] I do not accept this evidence.
[154]T 930 L 5–7 (Radunka).

Mr Savic gave evidence that when the Glenlyon Road works were being undertaken he visited the site ’10 or 15 times, maybe more’.[155] His house was about 2 kilometres from Glenlyon Road.[156] He would drop into the site on a Saturday morning when his children were attending Serbian language classes at a nearby church.[157] When he visited, Milic was always at the site.[158] He observed various aspects of the work being undertaken:
[155]T 768 L 2 (Tom Savic).
[156]T 768 L 4-5 (Tom Savic).
[157]T 768 L 6–8 (Tom Savic).
[158]T 768 L 15–16 (Tom Savic).

MR SAVIC: I would see various aspects of the work that was being done. I was there when the concrete was being poured for the footings. I would see him - I don't know, putting in pipe for the upstairs toilet, roughing it in, maybe drilling holes in the wood and wiring up, putting the cables in to be wired up and that sort of stuff. Basically anything that was being done around there. Lots of different things. Often he would give my son a hammer and nails and he'd take a break, we'd had a cup of coffee and my son would be nailing away and, you know, then we'd leave him to his work. Sometimes I would stand there and talk while he was up on a ladder doing something. I wouldn't - sometimes he wouldn't let me into the work site because it might have been dangerous or whatever. So, you know, a lot of different things that were associated to building a property that size.
MR CLOUGH:          On the times when you visited, was Milan Milenkovic there?
MR SAVIC:Often, yes.
MR CLOUGH:          What was he doing?
MR SAVIC: Milan was probably like a third hand, he was always helpful, like, he might be holding - cleaning up, holding a shovel, cleaning up some mess or handing Micky some things, unloading a truck or something like that. So he was helping out in that nature.
MR CLOUGH:         Did you see subcontractors working on site when you visited?
MR SAVIC: Yeah, often at various stages. I saw the brickies there, I saw the concreters when they were there. I saw, you know, various people working in there at various stages. I had been there sort of from, you know, when it first started till the job was finished. So I had seen various people working there which Micky was supervising and telling them what to do. So yeah.[159]

[159]T 768 L 19 - 769 L 22 (Exchange between Tom Savic and Mr Clough).

Mr Savic also gave evidence that he observed Milic doing work on the foundations,[160] crane and steel work,[161] working in a cavity in the roof,[162] installing a pipe in the upstairs toilet,[163] drilling holes and installing electrical cabling.[164]
[160]T 769 L 24–28 (Tom Savic).
[161]T 770 L 14–22 (Tom Savic).
[162]T 771 L 9 (Tom Savic).
[163]T 771 L 16–17 (Tom Savic).
[164]T 771 L 20–22 (Tom Savic).

Mr Savic gave evidence that Milic told him that he was paying for the work because he was doing it for himself.[165] He gave evidence that Milic told him: ‘”I went and bought my mum a whole heap of kitchen appliances” at some place, St George and he had paid such and such amount of money for it. I don’t recall the numbers. But I recall there was times when he was talking about what he had paid for various things but I didn’t take much notice to be honest’.[166]
[165]T 771 L 29–31 (Tom Savic).
[166]T 772 L 3–9 (Tom Savic).

As to the duration of the project Mr Savic stated: ‘Oh, must have been over a year, I can’t remember’.[167] Milic told Mr Savic that he was doing the work ‘because he was doing it for himself, it was going to be his place’.[168] Milic told him: ‘It’s got to be good, I’m doing the right thing. My parents will enjoy it but it’s mine at the end’.[169]
[167]T 772 L 29–30 (Tom Savic).
[168]T 773 L 7-8 (Tom Savic).
[169]T 773 L 14–16 (Tom Savic).

None of the evidence set out above was challenged. The evidence, which I accept, supports the following findings. First, the duration of the project exceeded 12 months. Second, Milic was nearly always present on site undertaking work himself and co-ordinating the work of other tradespeople. Third, Milic contributed his own money to the cost of the project.

In final written submissions filed on behalf of Milan it was submitted:

Tom Savic, a retired former general manager at Roy Morgan gave hearsay evidence that Milic was paying for the Glenlyon Road renovation.[170]

[170]Milan’s Outline of Closing Submissions dated 20 August 2024 at [36].

Mr Savic’s evidence was admitted without objection. Further, the hearsay rule does not apply to the evidence because Milic had been called to give evidence and Mr Savic was a person who heard the representation made by Milic that he was paying for the renovation: s 64(3)(b) Evidence Act 2008 (Vic).

Mr Savic gave evidence that Milan told him that Milic would receive Glenlyon Road. Mr Savic gave evidence of conversations he participated in with Milan and Milunka at his mother’s house: ‘Micky’s parents would come down and they’d have coffee and Micky’s parents would be talking about it as well, how the project was going and how it was all Micky’s, Micky was doing a great job and how, you know, he was doing it for himself and how, you know, he was proud of the fact that he was giving his son some capability to do something’.[171]
[171]T 773 L 23–29 (Tom Savic).

Mr Savic gave the following evidence when asked to describe the words used by Milan as to why Milic was doing the work:

Relief

In Harris v Harris[474] the Court of Appeal summarised the principles which apply when determining the proper remedy in a case of proprietary estoppel:
[474][2021] VSCA 138.

In summary, then, the authorities establish that in determining the proper remedy in a case of proprietary estoppel:
·the promisee is prima facie entitled to have the promisor held to the promise or expectation, ie the relief which is necessary is ‘usually’ that which reflects the value of the promise;
·the court will then consider all the circumstances to determine whether it is necessary to mould or modify the relief to avoid going beyond what is required for conscientious conduct, or to avoid injustice to others. The equity may be satisfied in another more limited way where a plaintiff’s expectation or assumption is uncertain, or extravagant, or out of all proportion to the detriment suffered;
·proportionality is a relevant consideration, but it should not be viewed as a ‘necessary constitutive element’ to be proved by the party seeking relief;
·the character of the promise/expectation is also a relevant consideration, including whether it is vague or imprecise;
·while the character of the detriment is a relevant consideration, the exercise is not one of ‘weighing detriment too minutely in order that it be converted into some equivalent of cash or kind’, nor does it require ‘substantial correspondence’ between the expectation and the monetary value of the detriment. The detriment should also not be treated as ‘consideration’ for the proprietary interest;
·the detriment need not consist of expenditure of money or other quantifiable financial disadvantage, so long as it is something substantial.[475]

[475]Ibid at [79] (Beach, Niall and Kennedy JJA) (citations omitted).

Consistent with the principles set out above, Milic is prima facie entitled to relief which reflects the value of the promise made to him in 1992 that Glenlyon Road would be bequeathed to him. The value of that promise equates to the $1.83 million realised from the sale of Glenlyon Road, together with any accrued interest held in the trust account of the second defendant. It is necessary to consider all of the circumstances of the case to determine whether if Milic received all of the proceeds of the sale of Glenlyon Road this would exceed what is required for conscientious conduct, or would result in injustice to third parties.[476]
[476]Giumelli v Giumelli (1999) 101 at 123 [42], 125 [50]; Donis at 588 [32], 594 [56].

Milic’s expectation based on the 1992 promise that he would receive the whole of Glenlyon Road was neither uncertain nor extravagant. An unequivocal promise was made to him in 1992 that he would inherit the whole of Glenlyon Road. He acted in reliance of that promise to his substantial detriment. He worked full time on the project for 15 months, forgoing income he would otherwise have received if he had been working for the ACS. He contributed directly to the cost of the renovation in 1993/1994 and again in 2006 when he built the summer kitchen. Milic’s entitlement to the whole of the proceeds of sale of Glenlyon Road is not out of all proportion to the detriment he suffered. The detriment was substantial. It stands in stark contrast to the example given by Nettle JA in Donis v Donis[477] of a party not being held to a promise to transfer property worth $1 million in return for the promisee having outlaid a couple of hundred dollars in construction of a shed on land.[478]
[477](2007) 19 VR 577.
[478]Ibid 588 at [34] (Nettle JA).

Milan submits, referring to the judgment of Nettle JA in Donis, that Milic did not make ‘life changing decisions with irreversible consequences of a profoundly personal nature’.[479] Donis is not authority for the proposition that a promisor will only be estopped from resiling from a promise if the promisee has suffered detriment in the nature of life changing decisions with irreversible consequences of a profoundly personal nature. Rather, Donis is authority for the proposition that detriment need not consist of expenditure of money or other quantifiable financial advantage so long as it is something substantial.[480] Milic’s contribution of his own labour over a period of 15 months constitutes substantial detriment. This finding is reinforced by his financial contribution to the renovations in 1993/1994 and the construction of the summer kitchen in 2006 as well as loss of income from ACS which he could otherwise have earned in 1993 and 1994.
[479]Milan’s Outline of Closing Submissions dated 20 August 2024 at [158].
[480]Donis at 583 [20].

It is necessary to address the proportionality of the interest claimed by Milic in the proceeds of the sale of Glenlyon Road compared to the detriment which he suffered. It is common ground that of the $1.83 million realised from the sale of Glenlyon Road approximately $1.5 million is attributable to the value of the land.[481] The increase of the value of Glenlyon Road since the renovations were undertaken in 1993/1994 is largely attributable to the increase in the value of the land as distinct from the capital improvements undertaken by Milic. The proportionality of Milic’s claimed interest in 100% of the proceeds of sale relative to his contribution of labour and money to the renovations is a relevant consideration and may be of considerable importance when assessing whether it would be unconscionable for Milan to resile from his promise to bequeath Glenlyon Road to Milic.[482]
[481]T 1116 L 16–25 (Mr Reynolds); CB 528, Glenlyon Road Property Land Tax Clearance Certificate dated 6 August 2019.
[482]Harris v Harris [2021] VSCA 138 at [75] (Beach, Niall and Kennedy JJA).

In Delaforce v Simpson-Cook[483] Allsop P made the following observations regarding the issue of proportionality:

4 Proportionality of the claimed interest or remedy to the prejudice or detriment is undeniably a relevant consideration, and sometimes of considerable importance. It should not, however, be transformed into a necessary constitutive element of a cause of action to be pleaded or proved by the party seeking relief. To do so would elevate one consideration above others, and in particular above the importance of making good an expectation by encouragement or representation: Plimmer v The Mayor, Councillors and Citizens of the City of Wellington (1884) LR 9 App Cas 699 at 713–714; Riches v Hogben [1985] 2 Qd R 292; Giumelli (at [10] and [35]). It would tend to equate the analysis to one requiring that the party encouraged receive no more than it can prove that it suffered in detriment. This would see the equity become one of compensation for proved equivalent detriment. The equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation. As Handley AJA says, the role of proportionality is better understood, in a doctrine dealing with the legitimacy or otherwise of resiling from an encouragement or representation that has created an expectation, as assisting in an assessment whether what is claimed or contemplated to be granted is disproportionate or unjust in all the circumstances.[484]

[483](2010) 78 NSWLR 483.

[484]Ibid at [4] (Allsop P).

Although the majority of the $1.83 million realised from the sale of Glenlyon Road is attributable to the increased value of the land, it does not follow that it would be conscionable for Milan to resile from the 1992 promise. Proportionality between the detriment suffered by Milic and the interest he claims in the proceeds of the sale of Glenlyon Road is not an element of Milic’s claim based on a proprietary estoppel constructive trust. Proportionality is a relevant consideration but is not to be elevated above the importance of making good the promise that Milic would receive the whole of Glenlyon Road if he renovated the property. The 1992 promise was a promise that Milic would receive both the house and the land at 285 Glenlyon Road. The promise was not subject to any qualification to the effect that Milan would not be bound by it if there was a significant increase in the unimproved value of the land in the years following 1994. It is significant that Milic returned to Glenlyon Road 12 years later in 2006 and undertook further works constructing a summer kitchen and contributing approximately $30,000 of his own funds towards that construction, as well as a salvaged kitchen valued at approximately $20,000. Fourteen years after the 1992 promise was made he undertook further significant renovation works relying upon the 1992 promise. The interest which Milic claims in the proceeds of sale of Glenlyon Road is not disproportionate to the detriment which he suffered in reliance upon the promise to such an extent that it would not be unconscionable for Milan to resile from the 1992 promise.

Milan submits that the Court should find that Milic stole $15,000 from Milan in August 2007. He submits that this conduct precludes Milic from having any entitlement to the proceeds of sale of Glenlyon Road.[485]
[485]Milan’s Outline of Closing Submissions dated 20 August 2024 at [168], [169].

It is common ground that on 13 August 2007 Milic withdrew $15,000 from his parents’ AMP account,[486] exercising a power of attorney which he held at that time.[487] It is also common ground that on 22 August 2007 $11,373.64 was transferred from Westpac bank account number 0333 7226 1843 for the purchase of a Corvette motor vehicle.[488] Milic gave unchallenged evidence that this is the personal account of his daughter.[489] Milic gave evidence that he signed the Bill of Sale for the purchase of the corvette.[490] He said he did so because the vehicle was going to be imported from the USA and he had experience with customs requirements due to his work experience with the ACS.[491] He gave evidence that although he signed the Bill of Sale his daughter paid for the vehicle with funds she had borrowed.[492]
[486]CB 397, AMP Flexible Lifetime Investments Withdrawal Statement dated 13 August 2007; T 430 L 27–28 (Exchange between Milic and Mr Wells).
[487]CB 394, Enduring Power of Attorney – Milan dated 14 May 2003, CB 396, Enduring Power of Attorney – Milunka dated 14 May 2003.
[488]CB 402, Overseas Telegraphic Transfer dated 22 August 2007.
[489]T 430 L 14-18 (Milic), T 431 L 4, 11-12, 18 (Milic).
[490]T 430 L 30 (Milic).
[491]T 430 L 19-22 (Milic).
[492]T 430 L 24 (Milic), T 432 L 9 (Milic).

The characterisation of Milic’s withdrawal and expenditure of $15,000 from the AMP account was hotly contested. On the one hand, Milan submits that the funds were stolen and used for the purchase of a Corvette. On the other hand, Milic submits that Milunka had agreed with him prior to August 2007 that he could withdraw $15,000 from the AMP account at any time he was in need of funds.[493]
[493]T 427 L 24-26 (Milic).

The contention that Milic stole $15,000 from his parents and used the funds to purchase a Corvette is a very serious allegation. Milan bears the evidentiary onus of establishing the truth of the allegation. The evidentiary onus is subject to the balance of probabilities taking into account the gravity of the matters alleged.[494]
[494]Evidence Act 2008 (Vic) s 140(2)(c); Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170–171 (Mason CJ, Brennan, Deane and Gaudron JJ); Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 (Dixon J).

Milic’s bank account statement with the Commonwealth Bank of Australia for August to October 2007 is in evidence.[495] On 15 August 2007 the balance in the account was $54.61. On 20 August 2007 the following entry is recorded: ‘AMP withdrawal’ with the account credited $15,000. Between 20 August 2007 and 1 October 2007 there were numerous withdrawals from the account until the balance was $5.28. On 14 September 2007 there was a withdrawal of $2,500. On 25 September 2007 there was a withdrawal of $3,712.59. On the face of the bank statement it appears that all of the other withdrawals were for relatively small amounts for living expenses. The CBA bank statement supports Milic’s contention that he did not purchase a Corvette motor vehicle with the $15,000 he withdrew from his parents’ AMP account in August 2007. Rather, the bank statement supports a finding that the funds were used primarily to meet routine living expenses.
[495]CB 648-652, CBA Streamline Account Statement dated 31 October 2007.

It is common ground that on numerous occasions Milan and Milunka gave money to Milic.[496] The actual amount of money gifted to Milic is not agreed. There is documentary evidence which records payments made to Milic or for his benefit. Milan’s TransComm Credit Co-op statement dated 31 March 1990 contains an entry ‘bank cheque Veridian $8,300’. Veridian Pty Ltd was the vendor of 9 and 11 Ellsa Close purchased by Milic and Jasmina in July 1990. 11 Ellsa Close was purchased for $80,000.[497] I infer that Milan provided Milic with $8,000 to pay the 10% deposit for 11 Ellsa Close.
[496]Agreed Statement of Facts dated 10 May 2024 at [15].
[497]CB 539, Transfer of Land 9 Ellsa Close dated 23 July 1990.

Milan’s credit union statement for April 1998 records a payment to Milic’s construction company, Unique Constructions Pty Ltd, on 24 April 1998 in the sum of $4,000.[498] Milic denied that this was a gift. Rather, he described the payment as a short term loan.[499] Milic produced no evidence of a repayment. I am satisfied that the $4,000 was a gift.
[498]CB 386, Statement Transcomm Credit Union dated 30 June 1998.
[499]T 326 L 27-29 (Exchange between Milic and Mr Wells).

Milan’s CBA statement for August 2002 records a payment of $2,500 to Unique Constructions Pty Ltd on 9 August 2002.[500] Milic accepts that the money was deposited into his account but cannot recall what it was used for.[501] I find that the payment was a gift.
[500]CB 392, CBA Streamline Account Statement dated 30 August 2002.
[501]T 328 L 19 (Milic)

Milic gave evidence that prior to his parents leaving Australia to go to Serbia on holiday in 2007 his mother told him that if he needed money he could withdraw $15,000 from her AMP account after she had left for Serbia.[502] The AMP statement recording the withdrawal of $15,000 on 7 August 2007 discloses that the payment of $15,000 was made to Milic’s account with the CBA.[503] There was no attempt on Milic’s part to conceal the fact that he had received payment. The AMP statements were collected by Radunka whilst Milan and Milunka were overseas. Radunka gave evidence that she collected the AMP statements from Glenlyon Road and filed them away whilst her parents were overseas.[504] Initially her evidence was that she did not look at the August 2007 statement.[505] Subsequently, Radunka gave evidence that she could not remember whether she had opened the August 2007 statement.[506] However, she then gave evidence that if she had opened the statement she would have remembered having done so because of the large amount of the withdrawal.[507]
[502]T 427 L 25-26 (Milic).
[503]CB 397, AMP Flexible Lifetime Investments Withdrawal Statement dated 13 August 2007.
[504]T 982 L 2–4 (Exchange between Radunka and his Honour).
[505]Ibid.
[506]T 982 L 27 (Exchange between Radunka and his Honour).
[507]T 982 L 30 (Radunka).

Milan’s letter to Milic in response to Milic’s letter of 14 January 2009 includes the following:

Whenever you came we gave you money – 10 thousand, 6 thousand at the airport, at 10 o’clock at night 6 thousand. Then 15 thousand that we did not know about and numerous times when you left the customs one thousand, two thousand, three thousand and I had never written anything down.[508]

[508]CB 425, Letter from Milan and Milunka to Milic (English Translation) undated.

In Milic’s May 2009 response to this letter, under the heading ‘Dad – from 1990 to 2009’ the following appears: ‘Let’s say he gave me $60,000’.[509] This entry is qualified by the comment, ‘Although it is excessive’, which I infer to be Milic contending that the figure of $60,000 is an overestimate of how much money Milan had given him between 1990 and 2009.
[509]CB 910, May 2009 Letter.

It is an agreed matter that Milan gave money to Milic on many occasions. Milan’s letter in response to Milic’s letter of 14 January 2009 describes the $15,000 as ‘$15 thousand that we did not know about’.[510] Milan does not describe the withdrawal of $15,000 as theft. The letter does state that ‘we did not know about’ the $15,000. However, this statement is explicable if Milan was not aware that Milunka had previously agreed with Milic that he could withdraw the $15,000. Milunka had a direct interest in the superannuation account which was in both her name and Milan’s name.
[510]CB 425, Letter from Milan and Milunka to Milic (English Translation) undated.

Milic’s withdrawal of $15,000 in August 2007 occurred approximately 12 months after he had completed construction of the summer kitchen at Glenlyon Road. Milic’s unchallenged evidence is that he outlaid approximately $30,000 of his own funds to build the summer kitchen, as well as a salvaged kitchen worth $20,000. If Milunka agreed that Milic could withdraw $15,000 from the AMP account this represented a reimbursement of half of the money which Milic had outlaid when building the summer kitchen (putting to one side the value of the salvaged kitchen).

I reject Milan’s attempt to characterise the withdrawal of the $15,000 as theft. I accept Milic’s evidence that he did not use the $15,000 to purchase a Corvette. On balance, I consider it more likely than not that Milic had been authorised by Milunka to withdraw $15,000 from the AMP account. Milic’s conduct is consistent with this. He made no attempt to conceal the payment. The AMP statement disclosed that he was receiving the funds. I infer that Milic was aware that the statements were being collected by Radunka from Glenlyon Road and could have been read by her, thereby exposing any wrong doing on his part if he had not been authorised to withdraw the funds. Further, the withdrawal of $15,000 must be viewed in the context of a long history of Milan and Milunka advancing funds to Milic. It must also be viewed in the context of the work undertaken and funds outlaid by Milic approximately 12 months earlier in 2006 when he built the summer kitchen.

Having regard to the gravity of the allegation, I am not satisfied, on the balance of probabilities, that Milic stole $15,000. Milic did not engage in conduct which precludes him from holding the benefit of the 1992 promise.

Conclusion

Milic is entitled to an order that the proceeds of sale of Glenlyon Road, together with any accrued interest held in the trust account of the second defendant be paid to him forthwith. I shall provide the parties with an opportunity to make submissions on the costs of the proceeding. My provisional view is that Milan should pay Milic’s costs of the proceeding on a standard basis, to be taxed in default of agreement.

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ANNEXURE B: UNDATED 2009 LETTER

ANNEXURE C: MAY 2009 LETTER

[2024] VSC 763

11 December 2024