Milutinovic v Milutinovic

[2004] NSWSC 1110

CITATION:	Milutinovic v Milutinovic [2004] NSWSC 1110
HEARING DATE(S):	16 & 17 November 2004
JUDGMENT DATE:	24 November 2004
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Transfer of interest in land valid
CATCHWORDS:	PRINCIPAL AND AGENT - powers of attorney - transfer of land effected pursuant to power of attorney - no question of principle - TORRENS SYSTEM - indefeasibility of title - volunteer becomes registered proprietor
LEGISLATION CITED:	Real Property Act 1900 Evidence Act 1995
CASES CITED:	Bogdanovich v Koteff (1988) 12 NSWLR 472
PARTIES :	Dusan Milutivonic - Plaintiff Zoran Milutivovic - First Defendant Milica Milutinovic - Second Defendant Emilia Milutinovic - Third Defendant Borka Milutinovic - Fourth Defendant
FILE NUMBER(S):	SC 5623/03
COUNSEL:	S Stojanovic, solicitor - Plaintiff A Enright - Defendants
SOLICITORS:	Stojanovic Solicitors - Plaintiff Mark Brown & Associates - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

24 NOVEMBER 2004

5623/03 DUSAN MILUTINOVIC v ZORAN MILUTINOVIC & ORS

JUDGMENT

1 HIS HONOUR: The plaintiff in this action (“Mr Milutinovic”) is the husband of the fourth defendant (“Mrs Milutinovic”). The first defendant (“Zoran”) is their only child.

2 The dispute relates to a house and land located at 33 Barkly Close Bonnyrigg, being the land in Folio Identifier 33/787762 (“the Property”). At one time, Mr Milutinovic, Mrs Milutinovic, Zoran, and Zoran’s then wife, were registered proprietors of the Property, in equal shares. On 15 July 1996 Mr Milutinovic gave a General Power of Attorney to Mrs Milutinovic. That Power of Attorney was witnessed by Mr Kington, solicitor. Mr Milutinovic left for Yugoslavia, his home country, on 18 July 1996, and remained there for nearly six years.

3 Pursuant to a transfer which was executed on 29 April 1998, and registered on 14 October 1998, Mrs Milutinovic transferred to Zoran both her own one-quarter share in the Property, and, purportedly acting under the General Power of Attorney, Mr Milutinovic’s quarter share in the Property. In these proceedings, Mr Milutinovic seeks to undo that transfer so far as his one-quarter share is concerned, and have trustees for sale appointed to the property, or alternatively to recover compensation for the interest in the Property which he lost by reason of the transfer.

4 The second and third defendants are the daughters of Zoran and his former wife. Zoran’s former wife transferred to them her one-quarter interest in the Property in October 2002, as part of a family law settlement between her and Zoran. They are properly made parties to the proceedings, because their interests could be affected if trustees for sale were appointed, but Mr Milutinovic makes no claim in these proceedings to their interest in the Property.

Purchase of the Property

5 Mr and Mrs Milutinovic, Zoran and his wife purchased the Property in 1989 for $103,000. At that time it was vacant land. Mr Milutinovic had had an accident at work in 1986, when he was aged about 53, after which he had not resumed employment. He received a workers’ compensation settlement in connection with that accident, of $40,000 or thereabouts. He contributed part of that settlement money towards the purchase price of the land. He paid the whole of the ten percent deposit ($10,300). The purchasers between them contributed an additional $10,300 in equity, and paid for the legal and stamp duty connected with the purchase. Those remaining costs which were paid for by the purchasers were contributed partly by Mr Milutinovic, and partly by Zoran and his wife. Eighty percent of the purchase price ($82,400) was raised on a loan from the Commonwealth Bank of Australia. Zoran and his wife made nearly all repayments concerning that loan, apart from a final payment of $74,658 which was made from the proceeds of sale of a unit which Mr and Mrs Milutinovic had owned at Cabramatta. Though the title to that unit at Cabramatta was solely in the names of Mr and Mrs Milutinovic, Zoran and his wife had made some contributions towards mortgage payments connected with it, particularly after Mr Milutinovic ceased working in 1986. Mr and Mrs Milutinovic, and Zoran and his wife, had all lived at the Cabramatta unit.

6 A house was constructed on the land in 1992, at a cost of about $140,000. That sum came partly from savings which Zoran and his wife had of around $60,000, and $80,000 was raised on a further mortgage from the Commonwealth Bank of Australia. Zoran and his wife were the only ones who gave a personal covenant concerning that mortgage. They made nearly all the repayments on that loan, until it was fully discharged in 1999. Once the house was constructed, all four registered proprietors lived there, along with the two daughters of Zoran and his wife.

The Former Issue about Validity of the Power of Attorney

7 In March 2003 Mr Milutinovic lodged a caveat against the title to the Property, which claimed an estate or interest described as an “Equitable interest in the property formerly owned by me and fraudulently transferred by my wife and son”. The facts alleged in the caveat to give rise to that estate or interest were:

“On or about 14th October 1998 pursuant to a fraudulent Power of Attorney my wife Borka Milutinovic transferred my interest in the said property without my consent to my son Zoran Milutinovic.”

That caveat lapsed after a Lapsing Notice was served on Mr Milutinovic, but an undertaking not to deal with the Property without notice was later given.

8 These proceedings were begun by a Statement of Claim filed on 17 February 2004. That Statement of Claim alleged that the transfer of Mr Milutinovic’s one-quarter interest occurred in circumstances including:

“(a) The First Defendant, Fourth Defendant and or First Defendant’s wife purported to transfer the Plaintiff’s interest pursuant to a Power of Attorney dated 15 July 2003;
(b) The Plaintiff says that he had no knowledge of the said Power of Attorney;
(c) The Plaintiff says that even if he had knowledge of the Power of Attorney (which is denied) the First Defendant and the Fourth Defendant failed to act in his best interest by divesting him of his interest in the property; …”

Those allegations were verified by Mr Milutinovic.

9 The plaintiff’s affidavit in these proceedings acknowledged that the signature on the General Power of Attorney was his own signature, but continued:

“… However, the document is dated 15 July 1996. I did not attend Mr Kington on 15 July 1996 nor do I recall ever signing the General Power of Attorney or receiving any advice from Mr Kington in relation to that document. It is my belief that the first defendant and/or the fourth defendant through a process of photocopying had fraudulently created the document which is annexure “E” to my affidavit.”

10 At the start of the hearing, the solicitor appearing for Mr Milutinovic disclaimed any assertion that the Power of Attorney was not a genuine one. The final sentence of the passage I have just quoted from Mr Milutinovic’s affidavit was not read as evidence in chief. Notwithstanding those matters, Mr Milutinovic, in the course of cross-examination, continued to assert that the Power of Attorney was a forgery. The final sentence of the passage just quoted came into evidence in the course of that cross-examination.

11 Mr Milutinovic gave evidence, in his affidavit-in-chief, to the following effect:

“10. I had made arrangements to leave Australia on 18 July 1996. On the day before my departure I had a further conversation with the first defendant in words to the following effect:-
The first defendant said: “Dad you haven’t gone to see the lawyer.”
I said: “I don’t know why I need to see the lawyer but I will go and see him.”
11. At about 4.00pm on 17 July 1996 my wife and I attended on Mr Kington who was our family lawyer and had acted on our behalf when we purchased the property. The practice of Mr Kington was located in Moore Street Liverpool.
12. At the meeting with Mr Kington, the only persons present were me and my wife and Mr Kington. I had a conversation with Mr Kington in words to the following effect:-
I said: “Mr Kington, tomorrow I am going to Yugoslavia. My home, my property, my share stays here for my family. They can live there while I am in Yugoslavia. Maybe my wife or son might want it sold and if it is sold, I just want my share.”
Mr Kington said: “Mr Milutinovic, it has to be how you said and you will get your share to the last cent.”
13. The meeting with Mr Kington lasted for about 5 minutes and at that meeting, no documents were provided to me nor did I sign any documents.”

12 As the solicitor representing Mr Milutinovic conceded in argument (notwithstanding his client’s assertions in cross-examination), the Power of Attorney is a genuine one. The evidence leading to that conclusion is overwhelming. Even though the original of the Power of Attorney has inexplicably disappeared, photocopies are available. and the plaintiff does not dispute that the signature on it is his. It purports to be executed before a solicitor, Mr Kington. The document looks regular on its face, apart from some lack of fluency in Mr Kington’s signature on the second page. Mr Kington is now dead, but his widow gave evidence. She worked in Mr Kington’s practice, assisting her husband particularly with registration work. She identified both signatures of Mr Kington appearing on the document as signatures of her husband. The Power of Attorney was registered at the Land Titles Office on 17 July 1996. Mrs Kington made the certification, required for the purpose of registration, that the registration copy is a true copy of the original. Mrs Kington recognises her own handwriting on the Power of Attorney, at a place where the lodgement details are stated.

13 As well as being registered at the Land Titles Office, the Power of Attorney is recorded in the Deeds Register of Mr Kington, with an identifying number appropriate to a 1996 transaction. That Deeds Register contains the signature of Zoran, alongside an entry in Mr Kington’s handwriting saying “Received Power of Attorney 3/10/96”. Further, there is a receipt, on a printed form which looks like a standard receipt form, acknowledging monies received, whereby Mr Kington’s firm acknowledges receiving $103 from someone with the surname of Milutinovic on 3 October 1996 for costs and disbursements “Re Power of Attorney”.

14 The reason the plaintiff gives as to why he went to see Mr Kington immediately before departing for Yugoslavia, quoted at para [11] above, discloses no credible reason for his making the visit at all. His account of the conversation between himself and Mr Kington is of a conversation which it would be fairly unusual for a solicitor and client to have.

15 Even though Mr Milutinovic was insistent that it was only in the late afternoon of 17 July 1996 that he saw Mr Kington, at Mr Kington’s office in Liverpool, that does not sit well with the indisputable documentary fact that the Power of Attorney was registered at the Land Titles Office on 17 July 1996.

16 I mention in some detail this evidence relating to the validity of the Power of Attorney because, even though there is now no issue in the case about the validity of the Power of Attorney, it provides circumstances by reference to which emphatically certain assertions of the plaintiff can be tested, concerning a topic closely related to the issues in the proceedings.

Whether the Transfer was Unauthorised

17 Mr Milutinovic’s case is that, in the middle of 1996, he decided that he could not remain living in the Property while Zoran’s wife lived there. He says he told Zoran of his intention to go back to Yugoslavia to live, and that Zoran suggested that the Property should be sold and the money divided. Mr Milutinovic said he did not want it sold, but that those remaining behind could live in the house while he was in Yugoslavia. He says that Zoran said that if they ever did decide to sell he would not charge for the loan that he had been paying for, to which Mr Milutinovic replied, “If we do decide to sell all I want is my share.” Mr Milutinovic says that, after the visit to Mr Kington on 17 July 1996, he returned and had another conversation with Zoran, to the following effect:

MR MILUTINOVIC: “I saw Mr Kington and I told him that you can live in the house until you want and until I come back from Yugoslavia, but if we decide to sell, I just want my share.”
ZORAN: “Good, if that’s what you have resolved and we decide to sell I will not charge you on the loan paid.”

18 He also says he had a conversation with Mrs Milutinovic before he decided to go to Yugoslavia, where he said:

“I am going to Yugoslavia. I don’t want the house sold but if you want it sold I want my share. While I am in Yugoslavia I can live on the pension.”

19 Mr Milutinovic returned to Australia on 11 July 2002, after finding out that Zoran’s wife no longer lived in the house, and says that it was a surprise to him to find that he no longer owned any interest in the house.

20 Mrs Milutinovic denies that anything was said in her presence about Mr Milutinovic wanting his share if the house was sold. Zoran denies the conversations which Mr Milutinovic alleges he had with him, and denies that there was any talk at all, before Mr Milutinovic left for Yugoslavia, about the house being sold. I prefer the evidence of Mrs Milutinovic and Zoran on these matters.

21 Mr Milutinovic had gone on trips to Yugoslavia in 1990, and again in 1994. Mrs Milutinovic gives evidence, which I accept:

“… his intention, you know, was to go and live there, you know, because he just wanted to go around and enjoy himself, in a way, and because he was sad, he was melancholy about the old country, and he said that he was in pursuit of a better life. When he went on a holiday in 1994 and came back over here he actually left all his belongings there. When we asked why did he leave those things, he said because he didn't want to stay here.”

Both Mrs Milutinovic and Zoran understood, at the time Mr Milutinovic left for Yugoslavia in 1996, that he was not necessarily leaving permanently, and that he might return, although it was quite unclear when.

22 In mid-1997 Mrs Milutinovic, Zoran, Zoran’s wife and Zoran’s children all went to Yugoslavia for a holiday. They stayed at the home of Mrs Milutinovic’s parents. At that time, Mr Milutinovic was living in the village where he had been brought up and where his mother and father had lived, in a house in which he had been left a one-quarter share under his father’s Will. The circumstances in which he was living are described by Mr Milutinovic as follows:

“Q. The village in which you lived had about 70 households in it, is that right?
A. Yes, that's right.

Q. It comprised of shops, school, and Town Hall?
A. Yes.

Q. You knew most of the people in the village?
A. Yes, I would have.

Q. You had your brother living across the road from you?
A. *Yes.*

Q. He had two sons, Miko and Milan?
A. *Yes.*

Q. They used to visit frequently?
A. When they had time and whenever they wished.

Q. You liked their company?
A. Yes. Sometimes I would like their company, sometimes if they were in my way, I planned something where they could not go.

Q. You had six or seven households of neighbours that you were friendly with?
A. I used to get along with everybody, the neighbours.

Q. You later had a girlfriend there?
A. No. At that stage I was 65 years of age and I am not for women. *I had not much interest for girlfriends.*

Q. Were you involved with the local soccer team?
A. Yes, I was involved with the soccer team. Whenever they play soccer I would watch.

Q. Were you on the committee of the local soccer team
A. Yes, I was president.

Q. You were the president of the soccer club?
A. Yes.”
* not through interpreter

23 There was an area of land attached to the house, which Mr Milutinovic described as “1.3 hectares. About three acres. Maybe an acre and a half”, on which he grew vegetables, and raised chickens and pigs for his own consumption. He received an Australian pension there. He described his circumstances as:

“I could say that I lived comfortably enough. I certainly wanted for myself to live much better, but by and large comfortably, yes.”

24 When Mr Milutinovic left for Yugoslavia, Zoran paid his airfare, which was about $1,400, and gave him about $4,000 in cash. After Mr Milutinovic started living in Yugoslavia, from time to time he telephoned his wife or Zoran in Sydney, and asked for some money to be sent to him, and Zoran sent it to him. Zoran estimates, and his father does not dispute, that over the years he sent sums totalling approximately $9,000. Specific amounts which can be established by documentary evidence are $1,000 on 21 November 1996, $500 on 23 March 1997, and $4,760 on 5 August 1999.

25 In June of 1997, whilst they were in Yugoslavia, Zoran and his wife and children took a drive of thirty minutes or so from the house where they were staying, and visited Mr Milutinovic. During that visit, there was a conversation to the following effect:

MR MILUTINOVIC: “I’m thinking of giving you everything that I have got in Sydney. I’ve got a home here and I don’t need anything else”
ZORAN: “Well Dad, that’s up to you.”

26 Mr Milutinovic denies any such conversation occurred, but I prefer Zoran’s evidence, just quoted, on that topic. The conversation was quite unspecific about when the gift might be made, if at all, and about whether it might be a gift inter vivos or by Will. It created no expectation in Zoran’s mind that he would receive anything from his father. Even so, he mentioned the conversation to his mother.

27 Mrs Milutinovic gives evidence that in late 1997 Mr Milutinovic telephoned her, and a conversation to the following effect took place:

MR: “I’m thinking of giving my quarter share of the house to Zoran.”
MRS: “Is that true?”
MR: “Yes.”
MRS: “If you give Zoran your quarter share of the house I’ll give him mine.”
MR: “Will you transfer my quarter share of the house to Zoran.”
MRS: “I’ll see Mr Kington soon.”

While Mr Milutinovic denies that that conversation occurred, I prefer Mrs Milutinovic’s evidence on that point. Mrs Milutinovic told Zoran about the conversation. Zoran gives evidence, which I accept, of a conversation with her as follows:

MRS MILUTINOVIC: “I’ve spoken to your father and he wants to give you his quarter share of the home.”
ZORAN: “It’s up to him whatever he wants to do.”
MRS MILUTINOVIC: “If that’s what he wants done then I want to give you my share as well.”

28 In January 1998 Mrs Milutinovic and Zoran went to the office of Mr Kington. They discovered that the office was closed. Mr Kington had retired, and transferred his practice to Mark Brown & Associates. Zoran then made an appointment to see Mark Brown, solicitor, and accompanied his mother on a visit to Mr Brown on 29 January 1998. Zoran acted as translator when his mother gave instructions to Mr Brown to transfer the shares of Mr and Mrs Milutinovic in the Property to Zoran.

29 On 3 February 1998 a valuer inspected the Property for the purpose of valuing it for assessment of stamp duty, in connection with that proposed transfer. He valued the Property at $250,000. Thus, a one-quarter share would be valued at $62,500, even if no discount was made for the limited marketability of a fractional interest in property.

30 A few weeks after the meeting with Mr Brown, Mr Milutinovic telephoned Mrs Milutinovic. Mrs Milutinovic gives evidence that the following conversation took place:

MR: “Have you transferred my quarter share of the house yet?”
MRS: I’ve seen the solicitor about it but I am waiting to hear from him.”

Though Mr Milutinovic denies that this conversation took place, I prefer the evidence of Mrs Milutinovic on this topic.

31 On 29 April 1998 Mrs Milutinovic signed a transfer of a half share in the Property to Zoran. She signed it twice, once in respect of her own quarter share, and once as Attorney for Mr Milutinovic, in respect of his share. A delay occurred in the lodgement of the Certificate of Title by the Commonwealth Bank of Australia. The registration of the Transfer of that half interest to Zoran was effected on 14 October 1998.

32 Towards the end of 1998 Mrs Milutinovic spoke to Mr Milutinovic again. She gives evidence of the following conversation:

MRS: “The house has been transferred to Zoran.”
Mr: “OK. It’s fine that it’s done.”

Though Mr Milutinovic denies that this conversation occurred, I prefer the evidence of Mrs Milutinovic on this topic.

33 There continued to be occasional telephone conversations between Mr Milutinovic on the one hand, and either Mrs Milutinovic or Zoran on the other. In some of them, Mr Milutinovic requested that he be sent money, or be sent medication for his ulcer. In none of them did Zoran mention to his father that the transfer had taken place, or thank him for the gift. Neither, however, did he thank his mother for the gift of her quarter share – rather, he unquestioningly accepted that that was what his parents wanted.

34 A few months before July 2002 Mr Milutinovic telephoned his wife, and asked for $5,500 “to buy some land next to my house”. Mrs Milutinovic told him that she did not have that sort of money.

35 Mr Milutinovic arrived back in Australia on 11 July 2002. At some time after his arrival in July 2002, he arrived unannounced at the Property, in the evening. Mrs Milutinovic gives an account of the conversation between them on that occasion as follows:

MR: “I’ve come back. I want to live with you and help you look after the grandchildren.”
MRS: “It’s too late now. You made me very upset before because you found another woman and I mean nothing to you anymore.”
MR: “It’s not true.”
MRS: “Yes it is. I know that.”

While Mr Milutinovic agrees that he “said the first words attributed” to him in that conversation, he denies the rest of it. It was never made clear precisely what he meant by “the first words attributed” . However that does not matter, because I prefer the evidence of Mrs Milutinovic on this topic. I accept her evidence that at that time he made no mention of the transfer of the house.

36 There were then two more telephone conversations between Mr and Mrs Milutinovic, in which Mr Milutinovic asked if he could come back and live with her, and she refused. They have not spoken since.

37 Zoran was present at the house when his father made the visit in July 2002, but did not, I accept, play any significant part in the conversation between his parents. He heard his mother say to his father “You’ve got another woman over there and I don’t want to live with you anymore” or words to that effect.

38 After that visit, Zoran met his father at the house of a mutual friend. On that occasion, a conversation to the following effect occurred:

MR MILUTINOVIC: “I want my quarter share of the house.”
ZORAN: “Well I’m confused – what happened 4 years ago when you gave me your share?”
MR MILUTINOVIC: “Well that was then and now is now and things have changed.”

Though the plaintiff denies that conversation, I prefer the evidence of Zoran on this point. It is evidence of a significant admission by Mr Milutinovic that he once gave Zoran his share.

39 On those occasions when I have preferred the evidence of Mrs Milutinovic or Zoran to that of Mr Milutinovic, I have taken into account the impression which they made on me in the witness box. There were occasions when Mr Milutinovic was giving evidence which was based to some extent on the way in which he believes things ought to have happened, rather than on any actual recollection. One example of this was his persistence in alleging that the Power of Attorney was not genuine, regardless of the fact that that point had been abandoned by the solicitor representing him, and the evidence for its genuineness was overwhelming. Another is that he was extremely sceptical that Mrs Milutinovic had given him a Power of Attorney when she went overseas in June 1977. That Power of Attorney was in evidence, but Mr Milutinovic doubted that it had ever been given, because he could not see any need for it to have been given. Another example arose when he was being questioned about his wife’s evidence of the telephone conversation in which he had asked about whether his quarter share in the house had been transferred yet (para [30] above). His answer included:

“Nobody gives a house over the phone. You don’t do those things over the phone. There are other ways of doing it. If you can find and if you go through the telephone records, if you find we had that conversation, that I had that conversation with my wife, I am going to give that house to them. You know yourself, in order to give a right to the house, it goes through proper channels, through the Consulate in Belgrade. It is signed by me, by witnesses, by Consulate officers, and it would be stipulated over there until then. I would have the right to go into that house anytime I want.”

It is hard to tell when Mr Milutinovic is engaging in this sort of reconstruction of the past, and when he is actually remembering, and this casts a pall over all his evidence. He has no corroboration for his evidence in the areas where there is dispute, either in the form of another witness, or in the form of documentation.

40 Mrs Milutinovic worked first as a process worker in a factory, then in a hospital, for twenty years in all. She has been on the pension, and living at the Property, since she ceased work. Her skill in English is rudimentary. She gave most of her evidence through an interpreter, though occasionally she would give a partial response, in heavily accented English, without going through the interpreter. She gave me the impression of having a more accurate recollection than Mr Milutinovic. She also struck me as a fairly simple and straightforward woman. Her evidence of being instructed to transfer Mr Milutinovic’s share in the house to Zoran involved three separate conversations – when the initial instruction was given, when Mr Milutinovic asked whether she had transferred his quarter share yet, and when she told him that the house has been transferred to Zoran. Her understanding of the Power of Attorney was that she could only use it to carry out transactions which Mr Milutinovic instructed her to carry out. Her evidence of these three different conversations is consistent with her having that understanding. I do not believe, having seen her, that she is a woman who understood she could use the Power of Attorney only to carry out transactions that Mr Milutinovic instructed, but who could decide to transfer the house to Zoran without any such instructions, then make up and give evidence about the moderately complex story of the three separate telephone conversations, and in no way come unstuck concerning that story in the course of cross-examination.

41 Zoran struck me as a frank and straightforward witness. The story he told meshed well with that told by his mother, and with such documentary evidence as there is. He was not shaken in cross-examination.

42 I have given consideration to the inherent likelihood of Mr Milutinovic instructing his wife to give Zoran his quarter share in the Property. Even though at the time he left Australia in 1996 he did not make clear to his family whether or not he would be returning, his verified pleading described his departure in July 1996 as being an occasion “when the Plaintiff left Australia to reside in the former Yugoslavia”. After the end of 1997, when he instructed Mrs Milutinovic to effect the transfer, he continued to live in Yugoslavia for another four and a half years. It was only in 2000, well after the transfer had taken place, that his brother died. At the time the instruction to transfer the quarter share was given in late 1997, he was living in a community which he preferred, at that time, to Australia. He was well established there, and gave no indication of ever intending to return to Australia. He had known that his wife was in Yugoslavia, and that she was staying half an hour’s drive away, in mid-1997, but, though he enquired about her from Zoran, he made no attempt to get in touch with her. He had had a good relationship with Zoran, his only child, up to that time.

43 While Mr Milutinovic had only a one-quarter share in the Yugoslav house in which he was living, none of the other owners lived there. He was engaged in renovating that house. He had an ongoing entitlement to an Australian pension, which met many of his needs in Yugoslavia. He had received various payments of money from Zoran to top up his pension, and had no reason to believe that they would stop. Even though, by giving away his one-quarter share in the Property, he would be giving away his only substantial Australian asset, in these circumstances it does not seem to me that it is so inherently unlikely that he would do any such thing that I should reject Mrs Milutinovic’s evidence. As well, even though it was his only Australian asset, his equity in it, if assessed on the basis of his legal entitlement to a one-quarter share, was worth $62,500 at the time of transfer. If one were to try to assess the value of his equity at that time on the basis of contributions made to the acquisition of the land and house, the value cannot be precisely quantified on the present evidence, but would be of the order of several tens of thousands of dollars, maybe (depending on how much Zoran contributed to payment of the mortgage on the unit after Mr Milutinovic ceased work) more than $50,000. Even though it was all he had in Australia, it was not so large a gift as to be inherently unlikely in the circumstances.

44 Another matter which I take into account is the fact that Mr and Mrs Milutinovic, Zoran and Zoran’s wife had run their finances, in the past, on a basis which did not distinguish between their individual assets – rather, they all regarded there as being a pool of family assets, available to be used by those who needed it. Mr Milutinovic describes this as follows:

“A. I was the boss of the house and the money would belong to the family. So it is not my money, my wife's, or my sons. It is the family's. Who gave the other money to my wife when she went or other people I went? It belonged to the family.

Q. So you were the boss of the family?
A. I was the boss of the house and I was the boss of the family. But I was not the master of bookkeeping, paying bills. That was the wife's duty. She was doing all of that. I didn't have much to do with it. But overall I was running the show.

Q. It is true to say, isn't it, that your airfare was provided for you to go in 1996?
A. Who provided money?

Q. Your son?
A. Which son? It was not as though it was sort of my son's or wife's or my daughter-in-law's laws money. Not at all. It was the family's. The money belonged to the family, whoever needs money would take money.

Q. Your son also provided you with $4,000 to help you on your way to Yugoslavia in 1996, is that right?
A. He sort of - it was the family's money. For example, he even gave me that money that belonged to the family.”

When this was the type of family arrangement he had traditionally lived in, where there was not a strict keeping of accounts of whose property was whose as between the family members, there would not be the same significance in his giving away his property right in the Property to his son as there might be in a family whose members kept rigidly separate their individual items of property.

45 There was some exploration in cross-examination of whether Mrs Milutinovic had a motive for using the Power of Attorney to strip her husband of his property. It is clear that, by 2002, she had heard rumours that Mr Milutinovic had taken up with another woman, and had a child. No evidence in this case suggests there is any substance to those rumours. Even so, Mrs Milutinovic believed them. I am satisfied, however, that it was only in 1999 or 2000 that she came to hear those rumours.

46 I accept that she felt abandoned as a consequence of Mr Milutinovic going off to Yugoslavia in 1996, and was deeply disappointed that her marriage was disintegrating. Even so, I do not accept that this feeling of deep disappointment led her to decide to strip Mr Milutinovic of his quarter share in the Property by an unauthorised use of the Power of Attorney. The fact that she decided to transfer her own quarter share in the Property to Zoran seems to be consistent with her having received instructions to transfer Mr Milutinovic’s share, and with her having occupied a subservient position in the marriage and adopting a “me too” attitude when she found out that Mr Milutinovic wished to transfer his quarter share to Zoran.

47 Finally, I have taken into account, consistently with section 140(2)(c) Evidence Act 1995, the seriousness of the allegation which Mr Milutinovic makes against his wife.

48 I find that it is more likely than not that the transfer of Mr Milutinovic’s one-quarter share in the Property which Mrs Milutinovic effected pursuant to the Power of Attorney was carried out at Mr Milutinovic’s express instruction.

The Indefeasibility Defence

49 Zoran raises a defence that, even if his mother did not have authority to transfer Mr Milutinovic’s one-quarter share to him, he has nonetheless acquired an indefeasible title to it, through becoming the registered proprietor of that one-quarter share. It is clear law that even a volunteer acquires an indefeasible title to Real Property Act 1900 land on registration, unless he has engaged in fraud, or can have the fraud of someone else brought home to him, or unless he is subject to some personal equity: Bogdanovich v Koteff (1988) 12 NSWLR 472. Even if I were wrong in finding that Mrs Milutinovic had express authority from her husband to make the transfer, I find that Zoran believed she had authority, and had no reason to suspect that she did not have it. He himself engaged in no fraud.

50 Zoran’s own account of what his father said to him immediately before he left for Yugoslavia in 1996 is:

“I want to go overseas and I want your mother to have a power of attorney in case she needs to sign any documents for the transfer of the pension – it’s good to have it anyhow because I am going to stay there permanently. I don’t know whether I ‘m coming back.”

Those words do not, in my view, put Zoran on notice that the Power of Attorney was intended to be used only for the purpose of transfer of the pension. Even though transfer of the pension may have been the initial specific purpose which was contemplated, for use of the Power of Attorney, there is nothing to stop the donor of a Power of Attorney from giving instructions from time to time to the donee about how that Power of Attorney is to be used. There is nothing in what Mr Milutinovic said to Zoran about the proposed use of the Power of Attorney which should have led him to the view that the only purpose for which the Power of Attorney could ever be used was to deal with pension matters. When Zoran believed that the transfer of his father’s quarter share was taking place in accordance with his father’s instructions, given over the telephone to his mother, and when his father had mentioned to Zoran himself, earlier in 1997, the possibility of some such transfer occurring, there was no circumstance which should have put Zoran on enquiry that the Power of Attorney was being used for an improper purpose. In that circumstance, I can see no personal equity which Mr Milutinovic could assert against Zoran. Thus, Zoran’s title to the one-quarter share transferred to him pursuant to the Power of Attorney is indefeasible.

The Set-Off Defence

51 As a final fallback submission, Zoran submitted that, if all his other submissions failed, he is entitled to set-off against his father’s claim one-quarter of the money that Zoran and his former wife expended in maintaining the Property after his father left for Yugoslavia. In light of the findings already made, it is not necessary to consider this submission further.

1. Proceedings dismissed.

2. Plaintiff to pay costs of defendants.

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Last Modified: 11/29/2004