Pescos v Pescos
[2018] VSC 580
•2 October 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S CI 2016 01592
| STAVROS PESCOS (also known as STEVEN PESCOS) | Plaintiff |
| v | |
| EFTIHIA PESCOS | First Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 September 2018 |
DATE OF JUDGMENT: | 2 October 2018 |
CASE MAY BE CITED AS: | Pescos v Pescos |
MEDIUM NEUTRAL CITATION: | [2018] VSC 580 |
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CONSTRUCTIVE TRUST — Where plaintiff pleaded on oral declaration of trust — At trial claim recast to assert constructive trust based on written declaration of trust — No evidence of written declaration of trust — Claim dismissed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Plaintiff in person | |
| For the First Defendant | Mr J Tsalanidis QC | Privitelli Solicitors |
HER HONOUR:
Introduction
The plaintiff is the adult son of the defendant. The first defendant (‘the defendant’) is the registered proprietor of a property in Moody St, North Balwyn, Victoria (‘the Moody Street property’). On 14 January 1971, the defendant and her husband were registered as the joint proprietors of the property. On 10 May 1976, the defendant’s husband died and, on 19 August 1977, the defendant was registered as the surviving proprietor of the property. The Moody Street property is the defendant’s home.
By writ filed 2 May 2016, the plaintiff claims that in or around 1976 or 1977 and repeated from time to time, the defendant made an oral declaration of trust whereby she would transfer the Moody Street property to him. On this basis, the plaintiff seeks various orders and declarations, including that he has an equity or interest in the Moody Street property; that the defendant holds the property on trust for him and is estopped and precluded from denying that she holds the property on trust for him; and a transfer of the property to him absolutely. The basis of the claim is pleaded as an oral declaration of trust made by the defendant.
The defendant is now aged 84 years. She is currently undergoing radiotherapy of a palliative nature at the Peter MacCallum Institute. The state of her health meant that she was unable to be present in court for the entire day. On the morning of the trial, her circumstances were compounded when she fell getting out of her taxi, causing her some pain and further upsetting her.
Background
On 19 November 2014, the plaintiff lodged a caveat on the certificate of title of the Moody Street property claiming an estate in fee simple on the grounds that the defendant holds the property as trustee for herself and the plaintiff, pursuant to an implied, resulting, or constructive trust. The extent of the prohibition recorded in the caveat is ‘absolutely’. Prima facie, the caveat is bad as it cannot support an interest in fee simple.
After a caveat is lodged on a certificate of title, the Registrar of Titles gives written notice of the caveat to the registered proprietor. In this instance, the Registrar’s written notice did not reach the plaintiff. She discovered the existence of the caveat more than a year later when attending on her solicitor on 10 February 2016 to give instructions for her will. In taking those instructions, the solicitor obtained a search of the Moody Street property. At the time the Registrar of Titles would have sent the notice of the caveat to the defendant, the plaintiff and his family resided in the Moody Street property. The plaintiff did not resile from the inference that at that time he re-directed the defendant’s mail in order to keep her in ignorance of the existence of the caveat.
Upon becoming aware of the caveat, pursuant to s 89A of the Transfer of Land Act 1958, the defendant made application on 24 March 2016 for the removal of the caveat.
On 29 March 2016, the Registrar of Titles notified the plaintiff that the caveat would lapse on 3 May 2016 unless steps were taken to commence a proceeding.
Procedural history
On 2 May 2016, the plaintiff’s then solicitors, Tisher Liner FC Law, commenced this proceeding. They retained counsel to draw the plaintiff’s statement of claim. The defendant denied the claims and sought removal of the caveat.
On 23 August 2016, Tisher Liner FC Law ceased acting for the plaintiff. On 28 September 2017, the plaintiff retained Ms Elisa Rothschild as his solicitor. On 9 May 2018, leave was granted for her to cease acting for the plaintiff.
It is apparent from the court file that the proceeding has had a difficult history.
The many delays experienced in the proceeding were due to the plaintiff’s conduct in failing to comply with the directions made by the Court. In addition, the plaintiff and his family lived in the Moody St property from 2009 onwards. In May 2016,
the Victoria Police obtained an interim intervention order against the plaintiff under the Family Violence Protection Act 2008. On 31 May 2016, by an exclusion order made by the Melbourne Magistrates’ Court, the plaintiff and his family moved out of the Moody Street property. The proceeding was the subject of three mediations, two of which were judicial mediations. The first mediation occurred on 3 June 2016, the second on 18 November 2016 and the third on 12 June 2018.
The proceeding was fixed for trial on 22 May 2018 on an estimate of 2-3 days. The trial date was adjourned to 13 August 2018. The second trial date was then adjourned and re-fixed for hearing on 11 September 2018 on an estimate of 7-10 days.
The plaintiff’s claim
At trial, the plaintiff represented himself. The plaintiff sought a further mediation of the proceeding as he wished to explain his case to a mediator. The plaintiff’s request for a further mediation was rejected and it was explained to him that the hearing was the trial of the proceeding.
The plaintiff commenced by explaining that he was not happy with the way that his statement of claim could be interpreted. He stated that what was supposed to happen was the Moody Street property was to be transferred to the Pescos Family Trust and the reason he lodged the caveat on the Moody Street property was for the beneficiaries of the Pescos Family Trust, which was a trust document that was settled and signed by the defendant.
In view of this, the proceeding was stood down while discussions were held between counsel for the defendant and the plaintiff, at all times in the presence of counsel’s instructing solicitor. After those discussions, with the plaintiff’s permission,
counsel for the defendant informed the Court that the plaintiff wished to proceed with a different case. Counsel for the defendant carefully explained the plaintiff’s recast case for the assistance of the plaintiff and the Court. The Court records its appreciation to senior counsel for the defendant and the defendant’s solicitor in assisting the plaintiff at trial. This task was undertaken in a fair and objective manner in the presentation and interpretation of the plaintiff’s original claim, his recast claim and in ensuring that all relevant documents were before the Court.
In substance, instead of alleging an oral declaration of trust, the plaintiff wished to allege a case based on a written declaration of trust as constituted by a written trust deed entitled the Pescos Family Trust and that the trust deed applied to the Moody Street property.
The Pescos Family Trust is constituted by a trust deed dated 5 September 1977.
The trustee of the Pescos Family Trust was Steve Nominees Pty Ltd. The plaintiff believes that both he and the defendant are beneficiaries of the Pescos Family Trust. The plaintiff now alleges, in some way, that the Moody Street property was an asset of the Pescos Family Trust and was governed by it, alternatively, that it was an asset of Steve Nominees Pty Ltd. The plaintiff stated that it was his mother's idea to establish the Pescos Family Trust on the basis of his interpretation of what she said to him and what ‘we had decided to do with the estate – of my father's estate – and what it involved as far as what I was supposed to do and what the rest of the family was going to do, division-wise, and all the rest of it’.
The schedule to the Pescos Family Trust deed lists the beneficiaries of the trust.
The defendant is not listed as a beneficiary of the Pescos Family Trust. The listed beneficiaries are the plaintiff, his wife, his children and grandchildren and the spouses thereof. At trial, the plaintiff accepted that the defendant was not a beneficiary of the Pescos Family Trust. His position was that the Moody Street property was to be given to him and to the whole family. Notably, the plaintiff’s recast case was alleged by his then solicitors in a letter dated 26 April 2016 and in response to that allegation,
the defendant’s solicitors stated that the defendant had not been aware of the Pescos Family Trust prior to receipt of the letter.
Steve Nominees Pty Ltd was incorporated on 30 August 1977. The historical company documents for Steve Nominees Pty Ltd record the directors as the plaintiff, his first wife, Nunciella Bisogni, and the defendant. The plaintiff is recorded as the secretary. The requisite historical documents were signed only by the plaintiff. The recorded directors and the secretary ceased in their respective roles on 20 September 1988.
In April 1988, ASIC gave notice of the cancellation of the company and Steve Nominees Pty Ltd was deregistered on 20 September 1988. Accordingly, since 20 September 1988, there has been no trustee of the Pescos Family Trust.
The financial documents for Steve Nominees Pty Ltd as trustee of the Pescos Family Trust for the period December 1978 through to 30 June 1983 record the paid up capital of the company at $2 and a nil balance in 1978, and for the years 1979 to 1983 the trust recorded a negative balance of $6,116, being the plaintiff’s loan account. None of these documents record the Moody Street property as an asset of the Pescos Family Trust.
The plaintiff accepted that Steve Nominees Pty Ltd was deregistered in September 1988 and that the Pescos Family Trust has no assets.
As stated, the plaintiff’s recast case is not a new claim. It was first made in correspondence by his then solicitors after the defendant made her application for the removal of the plaintiff’s caveat. In a letter dated 22 April 2016 to the defendant’s solicitor, the plaintiff’s solicitors, Tisher Liner FC Law, stated:
We act on behalf of Steven Pescos, who is the son of Eftihia Pescos.
Both of our clients reside together at Moody Street, North Balwyn (“the Property”) and have done so for over thirty (30) years.
On 19 November 2014, after discussions with your client, our client lodged a caveat over the title to the above property to protect his interest and that of his family.
Our client has, quite accidentally but fortuitously, discovered that your client has lodged a s 89A (3) application pursuant to the Transfer of Land Act challenging our client's caveat. Our client is totally perplexed by this given that your client:
(a) Has been aware of the caveat since November 14 and agreed to it being lodged;
(b) Has for years informed our client that the Property was being held by her on trust for our client and/or the Pescos Family Trust of which your client is fully aware. …
There is over 35 years of history in relation to our client's connection with the Property and it is beyond doubt, on our instructions, that the Property is being held by your client on trust, be it implied, resulting or constructive, on behalf of our client and the Pescos Family Trust.
By letter dated 27 April 2016 comprising two pages, the defendant’s solicitors responded to the plaintiff’s solicitors. The plaintiff did not include the second page of this letter in his court book. The second page relevantly stated:
Mrs Pescos denies the allegations set out in your first (and “open”) letter dated 22 April 2016. In particular, our client denies the allegations that:
(a) she was aware of the caveat since November 14;
(b) she has ever informed your client that the property was being held by her on trust for your client and/or the Pescos Family Trust (and this is the first time she has been made aware of the Pescos Family Trust); and
(c) there were never [sic] any discussions involving our client regarding “financial planning” or plans to subdivide and develop the property.
In the letter dated 22 April 2016, the plaintiff’s solicitors set out a claim for an interest in the Moody Street property either for the defendant and/or the Pescos Family Trust. Had the plaintiff’s solicitors conducted the usual searches of the relevant documents concerning the Pescos Family Trust, they would have discovered that the Pescos Family Trust did not have a trustee, nor did it have any assets and nor did the financial documents record the Moody Street property as an asset of the trust. Further, the letter dated 22 April 2016 referring to the Pescos Family Trust preceded the issue of the plaintiff’s proceeding, yet it was not included in his statement of claim.
With knowledge of this claim, no step was taken by the plaintiff either to remove the caveat, re-lodge it on the basis of either an express declaration of trust, an oral declaration of trust, a change of the interest from a fee simple interest to an equitable interest or a prohibition not to be absolute.
The plaintiff’s recast claim was to assert that the Moody Street property was an asset of the estate of his deceased father. This has never been the case and, no doubt,
this would have previously been explained to the plaintiff. As the Moody Street property was originally registered in the joint names of the defendant and her late husband, on his death the property passed to her by survivorship. At trial,
the plaintiff accepted this.
The Court explained and delivered oral reasons to the plaintiff that there was no basis for his recast claim or for the caveat to remain on the Moody Street property.
The Court also explained the costs principles to the plaintiff in the circumstances where his claim was dismissed. It was also explained to the plaintiff that minutes of the orders dismissing his claim would be sent to him to consider them and ask any questions about them. To ensure that the plaintiff understood the orders, the Court re-listed the proceeding on 18 September 2018 and on that occasion the plaintiff informed the Court that he had no questions concerning the orders.
The Court ordered the removal of the caveat from the Moody Street property and the plaintiff pay the defendant’s costs on the standard basis and otherwise the proceeding be dismissed.
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