Saravinovska v Saravinovski (No 6)

[2016] NSWSC 964

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964

Hearing dates:

10/9/14, 17/9/14, 14-17/10/14, 20-24/10/14, 28-31/10/14, 3-7/11/14, 10-13/2/15, 16-20/2/15, 16-19/3/15, 27/3/15, 2/4/15, 5/6/15

Decision date:

12 July 2016

Jurisdiction:

Equity

Before:

Kunc J

Decision:

Adjustment of interests in favour of Maria; all other claims dismissed

Catchwords:

ESTOPPEL – Whether representations made – No issue of principle
EVIDENCE – Affidavit evidence – Further application to use parts of affidavits excluded due to deponent’s lack of mental capacity – Evidence said to be corroborated by other evidence already admitted – UCPR Pt 35, r 35.2(3)
EVIDENCE – General matters – Inferences – Jones v Dunkel inference drawn for failure to call solicitor in relation to matters where client legal privilege had been waived
EVIDENCE – Inspection – Late application to have access to videotape for expert to examine authenticity – Evidence Act 1995, s 169 – UCPR Pt 23r 23.8
FAMILY LAW – Adjustment of property interests – Whether a close personal relationship between father-in-law and daughter-in-law – Where domestic support provided to whole multi-generational family including defendant – Whether domestic support and personal care provided “for fee or reward” – How property interests to be adjusted where a close personal relationship rather than de facto relationship – Property (Relationships) Act 1984, ss 5, 14, 20
MORTGAGES – General principles – Mortgage of no force or effect where mortgagee fails to prove recited advance actually made – No collateral or other agreement proven to give mortgage effect
PRACTICE – Pleadings – Amendment at close of lengthy hearing to conform pleading to evidence given in witness box – No issue of principle – Civil Procedure Act 2005, s 64

Legislation Cited:

Evidence Act 1995 (NSW)
Civil Procedure Act 2005 (NSW)
Property (Relationships) Act 1984 (NSW)
Property (Relationships) Legislation Amendment Act 1999 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Ashton v Pratt [2015] NSWCA 12
Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044
Baumgartner v Baumgartner (1987) 164 CLR 137
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Bilous v Mudaliar [2006] NSWCA 38
Burgess v Moss [2010] NSWCA 139; (2010) 43 Fam LR 260
Commissioner of Prices and Consumer Affairs (SA) v Charles Moore (Aust) Ltd [1977] HCA 38; (1977) 139 CLR 449
Cooper v Hobbs [2013] NSWCA 70
Cubillo v Commonwealth of Australia (No 2) [2000] FCA 1084; (2000) 103 FCR 1
Dridi v Fillmore [2001] NSWSC 319
Evans v Marmont (1997) 42 NSWLR 70
Fulton v Fulton [2014] NSWSC 619
Grech v Walsh [2007] NSWSC 302
Hayes v Marquis [2008] NSWCA 10
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Kardos v Sarbutt [2006] NSWCA 11
Klein v Law Society of NSW (Court of Appeal NSW), 4 September 1987, unreported
Kuhl v Zurich Financial Services [2011] HCA 11; (2011) 243 CLR 361
Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406
G124
Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 603
Muschinski v Dodds (1985) 160 CLR 583
Palagiano v Mankarios [2011] NSWSC 61
Parsons v Southern Tableland and South Coast Racing Association [1978] 1 NSWLR 47
Sangha v Baxter [2009] NSWCA 78
Saravinovski v Saravinovski [2014] NSWSC 1282
Saravinovska v Saravinovski (No 2) [2014] NSWSC 1513
Saravinovska v Saravinovski (No 3) [2014] NSWSC 1961
Saravinovska v Saravinovski (No 4) [2015] NSWSC 64
Saravinovska v Saravinovski (No 5) [2015] NSWSC 128
Sharpless v McKibbon [2007] NSWSC 1498
Skarica v Toska [2014] NSWSC 34
Smilevska v Smilevska (No 2) [2016] NSWSC 397
Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640
The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404
Vella v Wah Lai Investments (Australia) Pty Ltd [2004] NSWSC 583
Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56
Watson v Foxman (1995) 49 NSWLR 315
White v O’Neill [2010] NSWSC 1193
Wilcox v Wilcox [2012] NSWSC 1138
Woodland v Rodriguez [2004] NSWSC 1167

Texts Cited:

Cross on Evidence, 10th Australian edition, 2016 Lexis Nexis Butterworth
Fisher and Lightwood’s Law of Mortgage, 3rd Australian Ed, Lexis Nexis Butterworths, 2014
Macquarie Australian Dictionary, online edition

Category:

Principal judgment

Parties:

2011/361081
Maria Saravinovska (Plaintiff)
Krste (Chris) Saravinovski (Defendant)

  2012/39748
Chris Saravinovski (Plaintiff/Cross-Defendant)
George Saravinovski (Defendant/Cross-Claimant)

Representation:

Counsel:

 

2011/361081
G.A. Sirtes SC and A.L. Avery-Williams (Plaintiff)
E.A. Cheeseman SC and J.A. English (Defendant)

 

2012/39748
E.A. Cheeseman SC and J.A. English (Plaintiff/Cross-Defendant)
G.A. Sirtes SC and A.L. Avery-Williams (Defendant/Cross-Claimant)

 

Solicitors:

 

2011/361081
Gells Lawyers (Plaintiff)
F.C. Bryant Thomas & Co (Defendant)

  2012/39748
Rudra Legal Corporation Pty Ltd (Plaintiff/Cross-Defendant)
Gells Lawyers (Defendant/Cross-Claimant)

File Number(s):

2011/361081 and 2012/39748

Publication restriction:

No

Judgment

1. These reasons are divided into the following sections:

1. A. Summary and procedural history – paragraphs [2] – [30]

2. B. Findings of fact – paragraphs [31] – [238]

3. C. Resolution of Chris’ Case – paragraphs [239] – [264]

4. D. Resolution of George’s Case – paragraphs [265] – [304]

5. E. Resolution of Maria’s Case – paragraphs [305] – [461]

6. F. Legal principles as to fact finding and credit – paragraphs [462]-[473]

7. G. Findings as to credit – paragraphs [474]-[601]

8. H. Reasons for some contested findings of fact – paragraphs [602]-[622]

9. I. Three interlocutory applications – paragraphs [623]-[672]

10. J. Conclusion – paragraphs [673] –[674]

11. Schedule One – Dramatis Personae

12. Schedule Two – Consolidated history of properties

13. Schedule Three – George’s submissions on his contributions

14. Schedule Four – Chris’ submissions on George’s contributions

A.   Summary and procedural history

2. Leo Tolstoy famously begins his novel “Anna Karenina” with the observation “All happy families resemble one another, each unhappy family is unhappy in its own way”. Very sadly, the Saravinovski family falls into the latter class. This judgment resolves three sets of proceedings between members of that family. Without any disrespect, in these reasons the Court will refer to the parties and other witnesses by their Christian names.

3. Chris or Krste Saravinovksi (“Chris”) is the patriarch of the family. He was born in Macedonia in 1930.

4. Chris married Radmila (“Rada”) in Macedonia in 1955. While still living in that country, they had three sons: George Saravinovski (born in 1956) (“George”), Bill Saravinovski (born in 1961) (“Bill”) and Louie Saravinovski (born in 1962) (“Louie”).

5. Chris migrated to Australia in 1963. Rada and the three boys joined him in 1966.

6. Over the years, Chris built up a substantial property portfolio. The complicated history of the ownership of, and dealings with, the properties in that portfolio plays an important role in these proceedings. In particular, George says that, as an obedient son and at Chris’ request, between 1972 and 2009 he gave Chris all his (George’s) income, which enabled Chris to build up that portfolio. Chris denies that and says that George owes him $800,000 secured by a mortgage over one of the properties. Chris says he built up his property portfolio from savings, superannuation and investment income.

7. In 1986 the Saravinovski family travelled to Macedonia. One of the purposes, if not the motivating purpose, of that trip was to find George a Macedonian wife. That was done. Within 4 days of first meeting her, George (then aged 30) married the 19 year old Maria Jovanovska, who became known as Maria Saravinovska (“Maria”).

8. The origin of these proceedings is Maria’s allegation that while in Macedonia, in the days before she married George, Chris made certain representations to her about property she would receive in Australia if she married George and looked after Chris and Rada. Maria says she relied on those representations and acted accordingly. Chris, and those members of the family allied with him, deny her allegations in their entirety.

9. Rada died in July 1993.

10. At various times over the years Bill and Louie lived independently. At other times they lived under Chris’ roof in the Saravinovski family home. In contrast, Maria, George and their children, Belinda Saravinovksa (“Belinda”) and Bobby Saravinovski (“Bobby”) lived under Chris’ roof the entire time from when George and Maria returned from Macedonia as a newlywed couple in 1986 until 2 December 2009. On or shortly before that day simmering tensions between family members erupted into a violent argument which included the police being called. On George and Maria’s version of events, Chris threw them out of the Saravinovski family home.

11. The family was, and remains, split into two. On the one side is Chris, supported by Bill and Louie. On the other side are Maria and George, supported by their children. The implacable hostility of each alliance towards the other was made clear by the evidence and by what I was able to observe in the court room. Maria and George (but not Chris) called third parties such as old family friends to provide what was submitted the Court should accept as credible, independent evidence in support of their cases.

12. By statement of claim filed on 11 November 2011 Maria commenced proceedings which, in their final form, sought orders against Chris under the Property (Relationships) Act 1984 (NSW) (the “PRA”) that he pay a just and equitable amount to her and, under the PRA or by reference to principles of estoppel, that he transfer to her what might be described, at least until December 2009, as having been the Saravinovski family home (“Maria’s Case”).

13. By summons filed on 17 February 2012 and statement of claim filed on 5 April 2012, Chris sues George for the repayment of $800,000 that Chris alleges is owing and secured over one of the properties. He also seeks interest on that sum calculated from 2003 (“Chris’ Case”).

14. By cross-claim filed in Chris’ Case on 29 June 2012 as subsequently amended, George cross-claims against Chris seeking an account of the money which George says he paid to Chris between 1972 and 2009, a declaration that Chris holds certain property on trust for him and, among other things, equitable damages for detrimentally relying on representations made by Chris (“George’s Case”).

15. In relation to George’s Case the parties made the following agreement:

1. The issue of quantification of George’s earnings that he asserts were given to, or under the control of Chris, will be addressed as part of a subsequent reference in these proceedings.

2. It would not be necessary in this phase of the hearing to challenge George in cross-examination on the aspects of his evidence going to quantification.

16. The agreement recorded in the previous paragraph reflects indications from the Court that if George was able to prove that he had, in fact, provided his earnings to Chris, the precise quantification of that amount would be referred out. In the result, that will not be necessary.

17. Quite apart from the factual and legal complexities, the conduct of the proceedings was far from straightforward. It is appropriate immediately to record that the case was marked by two further, unfortunate events.

18. First, it became apparent during what became the first part of the hearing that Chris had suffered a serious loss of his mental capacity. It was necessary to appoint Louie as Chris’ tutor (Saravinovska v Saravinovski (No 5) [2015] NSWSC 128) (“Saravinovski (No 5)”). This occurred before Chris was cross-examined. The Court therefore had to consider in the same judgment how much of Chris’ affidavit evidence remained admissible and how it should be treated when he could no longer be cross-examined.

19. Second, after he had given his evidence and while this judgment was reserved, George suddenly and unexpectedly died. No formal steps to regularise the parties to the proceedings have been taken consequent upon George’s death, pending the delivery of these reasons.

20. These further general observations should be made. The hearing was originally fixed for 10 days. It ultimately occupied 34 hearing days. As a result of case management hearings before me it was eventually fixed for 15 days commencing on 14 October 2014. It began on the appointed day and continued until 7 November 2014, when it was apparent that it would still not finish. The hearing then continued between 10 February 2015 and 2 April 2015. The evidence just concluded in the allotted time. The Court was informed that George and Maria had exhausted their available finances to fund the litigation. Directions were made for the filing of extensive written submissions and the hearing concluded with addresses limited to one day on 5 June 2015.

21. A number of witnesses, including Maria, gave their evidence (including, by the Court’s direction, viva voce in chief) through an interpreter. Maria was cross-examined for 8 days (the length being attributable in large part to the need for an interpreter) and George for 3 days. Because of his incapacity, Chris could not be cross-examined. 17 witnesses gave evidence with nearly all cross-examined. The trial bundle was 1309 pages long, of which 434 pages comprised affidavit evidence. There were 133 additional individual exhibits. The transcript numbers 2326 pages. The parties’ final written submissions were 432 pages long and covered 44 issues which were raised on the pleadings. Every aspect of the history of the Saravinovski family over nearly fifty years that anyone thought might be of any relevance was thoroughly explored.

22. The proceedings have already given rise to the following judgments:

1. Saravinovski v Saravinovski [2014] NSWSC 1282

An application brought by George pursuant to Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) Pt 22, r 22.1 for an order that Chris answer certain interrogatories in relation to George’s cross-claim. The Court dismissed George’s notice of motion.

2. Saravinovska v Saravinovski (No 2) [2014] NSWSC 1513

Objection to the tender of a document by Chris on the basis of client legal privilege by Maria. The Court allowed the tender of the document pursuant to s18 and s122 of the Evidence Act 1995 (NSW) (the “EA”).

3. Saravinovska v Saravinovski (No 3) [2014] NSWSC 1961

Objection to the admission of evidence contained in the affidavit of Chris sworn 4 June 2013 on the basis of relevance. The Court excluded the evidence under s135 of the EA for want of relevance to the substantive issues.

4. Saravinovska v Saravinovski (No 4) [2015] NSWSC 64

Order made appointing Louie as tutor for Chris.

5. Saravinovska v Saravinovski (No 5) [2015] NSWSC 128

Application to remove Louie as Chris’ tutor rejected. Chris’ earlier affidavit evidence ruled admissible but affidavits sworn at a later date ruled inadmissible by reason of his lost capacity.

23. The preceding three paragraphs are not complaints or criticisms of the parties or their lawyers. The parties had the advantage, and the Court had the assistance, of highly experienced and effective counsel who themselves were supported by obviously diligent solicitors. Mr G A Sirtes of Senior Counsel, leading Ms A L Avery-Williams of Counsel, appeared for Maria and George and Ms E A Cheeseman of Senior Counsel, leading Ms J A English of Counsel, appeared for Chris. While each side fearlessly advanced their case, the Court acknowledges that, in accordance with the parties’ obligations under s 56 of the Civil Procedure Act 2005 (NSW) (the “CPA”), there was much common sense co-operation between the parties’ legal advisers that ensured a very difficult and emotionally charged dispute was dealt with as efficiently as possible.

24. The parties’ submissions went into extraordinary detail about almost every factual matter. I have reviewed all of those submissions and many parts of the transcript carefully several times. However it is neither necessary nor desirable that, in particular, every factual dispute is resolved in these reasons. Accordingly, these reasons record those matters which I have relied upon (whether by acceptance or rejection) in reaching the Court’s ultimate conclusions. Examples of matters which I do not think it is necessary to resolve (see paragraph [473] below) include arrangements for Chris’ name day celebrations, the extent to which Louie was out of touch with Chris and the rest of the family, whether there was a tape recorded meeting between Chris, Maria and Belinda in a car and all of the minutiae of life under Chris’ roof, including the degree of ill-feeling alleged to have existed between various family members.

25. The Court’s conclusions may be summarised as follows.

26. Credit is the most important issue for the resolution of each of the proceedings. In the case of each member of the Saravinovski family (Chris, Maria, George, Bill, Louie, Bobby and Belinda), the Court is not satisfied that he or she is a reliable witness. Their evidence on any controversial matter is only accepted if it is inherently credible, independently corroborated by contemporaneous records or independent testimony or is otherwise against interest. In contrast to the members of the Saravinovski family, the Court accepts each of the independent (non-family) witnesses as having done the best they can to give truthful evidence to the best of their recollection.

27. In Maria’s Case, the Court has determined that Maria is entitled under the PRA to an order adjusting Chris’ property interests so that Maria obtains a 30% interest as tenant in common in what was the Saravinovski family home at No 5, Kogarah Bay (“No 5”). (In these reasons properties are identified only by their street number).

28. Chris’ Case fails. The Court has found that the mortgage on which Chris sues George has no legal effect. It is therefore unnecessary to consider the various special defences pleaded by George.

29. George’s Case also fails. The Court is not satisfied that George gave all his income to Chris or that Chris used funds from George to acquire any of the properties referred to in the proceedings.

30. The structure of these reasons is set out in paragraph [1] above. Because references to the various people and properties are to be found throughout what follows, for the assistance of the reader Schedule One contains a dramatis personae and Schedule Two sets out a consolidated history of each of the properties involved in the proceedings.

B.   Findings of fact

31. Chris was born in Macedonia in 1930. He married Rada in 1955. Rada was 22 years old. While they were still living in Macedonia they had three sons: George born in 1956, Bill born in 1961 and Louie born in 1962.

32. In 1963 Chris migrated to Australia. Rada and the three boys joined him in 1966.

33. Maria was born in Macedonia on 14 July 1967.

34. By transfer dated 22 July 1966 Chris, described as a labourer, purchased No 45, Rockdale (“No 45”), for $12,000 subject to a 10 year mortgage of $7,750 from the Commonwealth Savings Bank of Australia (“CSBA”).

35. By transfer dated 29 November 1974 Chris (now described as a PMG technician) and Rada purchased No 22, Rockdale (“No 22”) for $34,000 subject to a four year mortgage to CSBA for $17,500.

36. In 1975 George completed the Higher School Certificate at James Cook Boys High School.

37. On 22 February 1977 the CSBA’s mortgage over No 22 was discharged.

38. Also in February 1977, George sat the matriculation examination for Sydney University.

39. On 18 September 1980 George became an Australian citizen.

40. On 11 December 1980 George commenced employment with the Stock Exchange as an Information Officer – Library Investor Services.

31. By transfer dated 11 June 1981 Chris and Rada (both of No 45 and Chris now described as a Telecom Supervisor) purchased No 14, Rockdale (“No 14”) for $73,000 subject to a mortgage for an unknown amount to the Bank of New South Wales Savings Bank Limited. The transfer is the first document in evidence signed by Gordon Bryant as solicitor for Chris and Rada.

32. In May 1983 Chris received a licence as a real estate salesman at the agency of Mr C Cockinos at No 414, Rockdale (“No 414”).

33. In 1984 Rada had a stroke which left her with a slight droop on the right side of her mouth and some small difficulty with her right hand and may have mildly affected her speech (see paragraph [393] below).

34. By transfer dated 8 February 1984 (with Mr Bryant apparently acting for both parties) Chris and Rada transferred No 22 to George and Bill as joint tenants for $110,000. George (described as a Clerical Assistant) and Bill (described as a Bank Officer) were recorded on the transfer as living at No 22. The property was subject to an 8 year mortgage from George and Bill to the CBA for $56,000. The Court is unable to conclude whether any money was paid to Chris in respect of this transfer or applied by him towards the purchase recorded in the next paragraph.

35. By transfer also dated 8 February 1984 Chris and Rada (with Mr Bryant acting for them), purchased No 428, Rockdale (“No 428”) for $230,000 subject to a four year mortgage from the CSBA for $75,000.

36. Chris retired from Telstra in 1985 after Rada had suffered her stroke.

37. By transfer dated 29 April 1985 Louie (represented by Mr Bryant), then aged 22, purchased No 49, Rockdale (“No 49”) for $75,000 subject to a seven year mortgage to the CSBA for $56,000.

38. There is a letter of 22 August 1985 which refers to Louie as being “of Sands’ Real Estate”.

39. Sometime in 1986, Bill commenced employment with St George Building Society (later St George Bank) (“St George”).

40. In or about April 1986 Chris, Rada, George and Bill travelled to Macedonia. One of the purposes, if not the motivating purpose of that trip, was to find George a Macedonian wife. On Macedonian Easter Monday (5 May 1986) George was introduced to Maria. On 9 May 1986, George, then aged 30, married the 19 year old Maria in a civil ceremony in Macedonia. Maria had completed year 10 and was part way through her nursing studies when she married George.

41. In the course of the first and a subsequent conversation between Maria and Chris in Macedonia before Maria married George, Chris said to Maria words to the effect of:

1. They had come to Macedonia to find a wife for George.

2. He (Chris) was a very well off Macedonian in Australia, owning houses and a shop.

3. If Maria married George and came to Australia and looked after Chris, and especially Rada, who had had a stroke, she (Maria) would not have to work and he (Chris) would ensure that Maria had everything she needed.

52. Chris did not say to Maria words to the effect that he would give her one of his properties. (As to the findings in this and the preceding paragraph see paragraphs [308] to [329] below).

53. I have watched several video extracts taken during the 1986 trip to Macedonia. These included:

1. The young Maria walking up an unsealed road with Rada and Chris and another woman to what appeared to be a small farm. Rada appeared to be being offered a steadying arm by the other woman. At the end of the sequence Maria has her arms around Rada. Maria appears to be very much a teenage ingenue.

2. A scene where the family are playing with a kitten. Rada puts the kitten on her head. She does not appear to be in any way impaired. Chris sits next to her, appearing very much larger than life.

3. Rada and Chris walking down a street together. Rada does not appear to have any difficulty walking, although she does guard her right hand.

4. Chris, Rada, George and a little girl climbing along a waterfront and climbing up a rock. Rada is able to climb up the rock with no more than what one would regard as normal assistance to an older person from George who is on the rock with Chris and the little girl.

5. The group moving along a boardwalk next the sea. Rada runs along for a few paces before climbing three steps without apparent difficulty and with only courteous assistance from Chris who is standing at the top of the steps. There is subsequently a shot of Rada, Chris and George with the little girl waving to the camera. Rada takes the little girl from Chris’ arms and, without apparent difficulty, holds her in her (Rada’s) arms.

6. Rada sitting astride a small, stationary horse. The horse is being held by someone, Chris is next to her and Maria is nearby with two other women. There is no footage of Rada getting on or off the horse or with the horse moving. Rada is certainly able to sit on the stationary horse without assistance, sitting astride what appears to be a not particularly comfortable wooden saddle.

7. A scene of a family meal with Chris at the head of the table and Rada on his right. The camera focuses on Rada. She has no difficulty feeding herself and while, again, she appears to be guarding her right hand, she uses it to hold what appears to be the spring onion that she is eating. There is a slight droop on the right side of her mouth, but it is difficult to assess its extent because she is chewing on food at the time.

8. A scene with Chris lying on a bed with someone, probably Rada, throwing clothes at him. The other half of that sequence shows Chris in a living room sitting on a sofa with his arm around a young relative. The young Maria sits at a table nearby with a female relative. At the very end of the sequence Rada comes in and is seen to be picking up a handful of bedding in both arms without any apparent difficulty.

54. Maria migrated to Australia in 1986 as a member of the Saravinovski family.

55. On 20 November 1986 George ceased his employment at the Sydney Stock Exchange.

56. Maria and George’s Australian wedding took place on 23 November 1986. I have watched several extracts of video footage from that occasion, including:

1. The celebratory dancing in the rear of No 45, including George and Chris leading the dancing and then Chris giving cash to the musicians as the guests danced around them in a circle. At one point Rada joins the circle and appears to move without difficulty as the circle of dancers slowly turns around the musicians.

2. The food being served (plates of chicken and salad) in what the Court infers is No 45, by people who do not appear to be professional waiters.

3. Maria standing with Chris and another gentleman receiving gifts in what appears to be the front yard of No 45.

4. Chris and Rada making their official entrance at the wedding reception. Rada appears to walk normally and does not require any assistance.

5. General shots of the scene at the wedding reception. This includes a very large wedding cake comprising of two, three layer cakes side by side with a further three layer cake above those, resulting in nine layers. There is a top table with 14 or 16 people at it. There is a six piece band on a stage behind the main table and a large hall with many tables in it, although it is impossible to estimate how many people might be there. The camera does not pan across the entire room, but my estimate of what appears to be about two thirds of the room shows what could be up to 200 people. A total attendance of around 300 people is therefore possible.

57. Maria and George gave Chris and Rada two grandchildren: Belinda Saravinovska (born 1987) (“Belinda”) and Bobby Saravinovski (born 1991) (“Bobby”).

58. By transfer dated 23 November 1987 Chris and Rada purchased No 5, Kogarah Bay (“No 5”) for $220,000 unencumbered. Mr Bryant acted for Chris and Rada. The auction advertisement for the property described it as “a magnificent location with potential for a two storey residence of exceptional views”.

59. By transfer dated 12 February 1988, No 22 was transferred from George and Bill to Bill alone for a recorded consideration of $57,500. Bill and George appear to have signed the transfer which is also signed by Mr Bryant as Bill’s solicitor. The transfer was registered on 12 March 1988. George admitted he did not receive any of that consideration. The Court cannot determine to whom (if anyone) the recorded consideration was paid.

60. On 10 March 1988 (registered 12 April 1988) Bill mortgaged No 22 under a seven year mortgage to the CSBA for $70,000. The Court cannot determine to whom (if anyone) any of these funds were paid.

61. Also by a mortgage dated 10 March 1988 and registered on 5 April 1988, George gave a seven year mortgage to the CSBA over No 14 to secure a $70,000 advance made to George and Maria. Maria acknowledged her and George’s signature as mortgagor and debtor on the mortgage, but said that at that time she could not read English and that no one had translated or explained the document to her.

62. By a transfer dated 18 March 1988 Chris and Rada purchased No 414 for $220,000. The transfer is signed by Mr Bryant as their solicitor. By a mortgage dated 10 March 1988 over No 414 Chris (now described as retired) and Rada mortgaged that property to secure a $115,000 loan for six years to the CSBA. Both the transfer and the mortgage of No 414 were registered on 12 April 1988. No 414 is used as the premises of Chris Realty, a real estate agency operated at various times by different members of the Saravinovski family.

63. By discharge of mortgage dated 21 March 1988 and registered on 12 April 1988 the CSBA discharged the mortgage which George and Bill had given to it over No 22.

64. By discharge of mortgage dated 21 March 1988 and registered on 5 April 1988 the CSBA discharged the mortgage which Chris and Rada had given to it over No 428.

65. By an undated transfer but registered on 5 April 1988, Chris and Rada transferred No 14 (which was given as George’s address) to George for recorded consideration of $120,000. The transfer is signed by Chris and Rada, with their signatures witnessed by Mr Bryant. Mr Bryant signed the transfer as solicitor for George. George admitted that he did not pay anything for the transfer to him of No 14.

66. On 17 February 1989 Bill mortgaged No 22 to St George for an unspecified amount. Bill’s signature on the mortgage is witnessed by Mr Bryant.

67. On 17 April 1989 the CSBA discharged the mortgage which Bill had given it over No 22 on 10 March 1988.

68. A notice of assessment from the Australian Taxation Office (“ATO”) records that George’s taxable income for the year ended 30 June 1991 was $25,071.

69. Bobby was christened in 1991. I have watched several extracts from video footage of that event, including:

1. A long pan across the top table and a couple of tables of those attending. Maria is nicely dressed, wearing a hat and jewellery while holding Bobby. Chris and Rada sit next to her. Rada has aged considerably compared to how she appeared in the videos of George and Maria’s wedding nearly five years before.

2. Two sequences of Rada dancing at the reception after the christening. The dancing consists of a reasonably slow rotation around the tables by a group of people holdings hands and moving sideways. While Rada certainly appears able to get up and keep up with the group, there are sections where she appears to be more pulled along than moving freely of her own volition. She appears to be an older and noticeably less mobile person than she was at George and Maria’s wedding nearly five years before.

3. While Maria, George and Chris dance behind her, Rada sits at the top table holding the baby Bobby with no apparent difficultly.

4. Further dancing in which Rada participates with enthusiasm but still appears as though she is being more pulled along by Chris than anything else. Chris leads the dancing as the centre of attention, including very publicly taking out his wallet and waving it around and then depositing cash at the feet of the musicians on the stage behind the top table, before rejoining the dancing which is then led by Rada. She does appear to tire slightly as the dance comes full circle. She guards her right hand when it is not being used. The venue for the christening is smaller than the venue for Maria and George’s wedding reception. Doing the best I can, it appears that the two tables at the back sat 16 people at each, there were also 10 tables of 8 people and a U-shaped top table that had approximately 20 people sitting around it. This gives a total attendance of about 130 people.

70. I have also viewed a recording of about 1 hour 20 minutes in length taken at Bobby’s christening, extracts of which have been referred to in the preceding subparagraphs. Other than observing that in front of the official table there was a very large christening cake (about one metre long and 50 or 60 centimetres wide), only minor additional observations need to be made by virtue of viewing the whole tape to supplement particular observations made in the preceding subparagraphs. These are that George also goes up on stage at one point and somewhat ostentatiously gives cash to one of the musicians. Later Chris is again seen giving money to one of the musicians, as do other guests.

71. By a discharge dated 5 September 1991 the CSBA discharged Louie’s mortgage (granted in 1985) over No 49.

72. On 6 September 1991 St George discharged its mortgage over Bill’s property at No 22.

73. On 16 October 1991 the CBA discharged its mortgage over George’s property at No 14.

74. The Court cannot determine the source of funds which brought about the discharges of mortgage referred to in the preceding three paragraphs.

75. On 12 May 1992 at Kogarah Local Court, Maria was convicted of false pretences and larceny and fined $200 on each charge.

76. An ATO notice of assessment records that George’s taxable income for the year ending 30 June 1992 was $26,572.

77. In 1992 Bill married Marina Simonovska (“Marina”) in Macedonia with a ceremony sometime in 1993 in Australia. The marriage lasted only about six months and they separated in mid-1993.

78. On 7 September 1992 Bill mortgaged No 22 to Chris and Rada, acknowledging receipt of the principal sum of $250,000. The document contains material omissions. There is no interest provision. The covenant for repayment is left blank. Bill’s signature on the mortgage is witnessed by Mr Bryant. Chris signs the mortgage twice, once in his own right and once as attorney for Rada. By reason of the matters set out in paragraphs [133] to [137] and [144] to [153] below and the proximity of this mortgage to Bill’s marriage, the Court infers that the mortgage was intended to be deployed against any future claims by Bill’s wife.

79. In early 1993 Bill married Marina in an Australian ceremony.

80. There is in evidence a photograph of Rada and Chris arriving at Bill and Marina’s wedding reception. There was much argument in these proceedings as to how ill Rada was on that occasion. The Court concludes that she was quite sick, not by reference to her appearance, but because the photo includes a woman who was identified as a nurse who had been retained to look after Rada. It is clear that family members, presumably Chris, thought that Rada was sufficiently ill that she might require a nurse at the festivities.

81. By transfer dated April 1993 Chris and Rada purchased Unit 3, Marrickville (“Unit 3”) for $255,000 subject to a mortgage for $30,000 to the Commonwealth Bank of Australia (the “CBA”). The transfer was signed by Mr Bryant as solicitor for the transferees.

82. An ATO notice of assessment records George’s taxable income for the year ended 30 June 1993 was $29,990.

83. Shortly before Rada died, Marina left Bill.

84. Rada died on 29 July 1993 at the age of 59. “Chronic renal failure years” is given as one of the causes of death on Rada’s death certificate.

85. Rada was buried in a plot which is also intended for Chris. Chris arranged for the erection of a substantial headstone over her grave which included an extensive inscription which concluded “… Chris and his family: sons George, Bill and Louie, daughter in law Maria and grandchildren Belinda and Bobby”. The Court concludes that it is a sign of the depth of the falling out within the family that sometime later (presumably after 2 December 2009) Chris arranged for a new headstone to be placed over Rada’s grave, the inscription of which included “… Chris and his family” but all the individual names have been removed.

86. An invoice dated 21 December 1993 for a security system at No 5 is in evidence addressed to Chris and Louie care of Southern Sydney Real Estate at No 414.

87. An ATO notice of assessment records George’s taxable income for the year ended 30 June 1994 as $35,726.

88. On 11 September 1994 George completed an ANZ Agents’ Authority form authorising Chris to act on his behalf with ANZ.

89. On 28 June 1995 Chris sold Unit 3 for $319,000. Mr Bryant witnessed Chris’ signature on the transfer.

90. An ATO notice of assessment records George’s taxable income for the year ended 30 June 1995 as $33,795.

91. On 7 September 1995 KR & Sons Pty Limited (“KR&S”) was registered. Its registered office and principal place of business was recorded as No 5. Chris, George, Bill and Louie were inaugural directors of the company. This accords with the company’s name which was intended to represent “Kris, Rada and sons”. The original shareholdings were Chris with 700 shares and each of George, Bill and Louie with 100 shares. When Bill and Louie ceased to be directors, it appears that they transferred their shares to Chris. George (now his estate) continues to hold 100 shares in KR&S.

92. On 3 November 1995 KR&S granted a fixed and floating charge to the CBA.

93. By transfer dated 22 December 1995 KR&S Pty Limited purchased shop premises at No 509, Rockdale (“No 509”) for $520,000 subject to a mortgage of $364,000 to the CBA. Mr Bryant signed the transfer as solicitor for the transferee.

94. One of the pieces of video footage I have watched shows a meal at No 45 dated by the parties as 1996. Chris is sitting at the head of the table, which is filled with a very large quantity of food. Three guests are sitting at the table. They are relatives of Maria’s. On the other side of the table are four dining chairs still in their plastic covers. George is taking the video. A very young Bobby and Belinda wander in and out of the shot. Maria comes into the picture to serve the guests. However, she is not sitting at the table. Despite the very large quantity of food, the table appears only to be set for Chris and the three guests.

95. The meal referred to in the preceding paragraph appears to have been during the day. There is also footage of a similarly set up meal with the same participants, but this time in the evening. Again, Chris and his guests sit at the table which is replete with food (although not as much as at the meal referred to in the preceding paragraph). At the end of the sequence Maria can be seen hovering near the kitchen. In a further sequence of the same meal, one of the children takes the camera and shows George and Maria standing by the table as Chris and the guests eat. Later, Maria can be seen sitting on a side table as the meal continues. The sequence ends with a young Belinda holding up to the camera a primary school merit certificate which she had won. She stands off to one side as Chris asks her “Do you love me for real or because I give you things or because I am your grandfather?”. Belinda replies “I love my grandfather”.

96. In January 1996 Bobby turned five. I watched some short footage of Bobby’s 5th birthday in the garage at No 45. George was taking the video. Maria was at the table serving Bobby, Belinda and, seated on the other side of the table, Chris and Bill. Maria then sits down and has some food seated next to Bobby.

97. On 28 March 1996 Chris gave a mortgage over No 428. The mortgage was stamped to a value of $430,000.

98. At this point in the chronology it is necessary to refer to an unexplained document. The document is a mortgage over No 7, Kogarah Bay (“No 7”) which, while largely incomplete as to its details, refers to the repayment of the principal sum on an unspecified date in 1996. The mortgage is signed by George and purports to acknowledge receipt of $180,000. The mortgagors are described as George and Bill. Chris is described as the mortgagee. Mr Bryant’s firm is listed as the lodging firm.

70. Chris’ affidavit evidence was he discovered this mortgage looking through bank packets at Mr Bryant’s request. Chris could not explain the document. No 7 was not in fact purchased until 23 January 1998. The document is otherwise undated and George’s signature is not witnessed. It was submitted for Maria that this document demonstrates mortgages being concocted and shows that George would sign whatever was put in front of him, especially if he was asked to do so by his father.

71. An ATO notice of assessment records George’s taxable income for the year ended 30 June 1996 as $30,613.

72. Construction of No 5 took place in and about 1996.

73. When the extended family moved into No 5 there was a housewarming party on 27 January 1997. I was shown several pieces of video footage of the housewarming party and note the following:

1. The video made it clear that the house at No 5 is a very substantial home. From the street it presents as a two storey house, including a double garage on the ground floor level next to the main entrance door. There is a wraparound balcony supported by thick columns around the first floor facing the street. The upstairs balcony was festooned with bunting and some balloons.

2. The ground floor interior has terrazzo style flooring and what appears to be new, expensive timber and other furnishings in the living room and dining room, leading into a very large and well-appointed kitchen. There is a mix of what appears to be terrazzo marble tiling and also parquetry flooring. There is the central staircase that leads to the first floor.

3. From the rear, the house is a three storey home. The back garden, at the lowest level, has stairs leading down to it from the house. For the occasion of the housewarming, several long tables have been set up under a marquee seating 40 or 50 people on the lawn. There is a large amount of food and drinks on the tables and the barbeque is going in the background. Louie can be seen standing near the barbeque. George’s voice can be heard on the tape explaining that he is making the video to be sent to relatives overseas.

103. As part of the housewarming, there is a lengthy sequence showing every room of the house and the members of the family being blessed by a Macedonian Orthodox archbishop. Chris leads the party up the central circular staircase so that the living quarters upstairs comprising several bedrooms can be blessed. There is an elaborate stained glass cupola in the roof above the staircase. Maria can be seen standing back respectfully as Chris leads the ecclesiastics through the house. Maria clears the table after the ceremony. Finally, at the end of the sequence Maria is seen carrying a large Kentucky Fried Chicken box and a plate of food back into the house from the outdoor area.

104. In 1997 Louie moved out of No 5.

105. Louie ceased to be a director of KR&S on 10 April 1997.

106. On 21 May 1997 Louie mortgaged No 49 to GIO Building Society Limited. The mortgage was stamped to a value of $160,000. Louie’s address on the mortgage is given at a location in Hillsdale.

107. Bill’s group certificate for the year ended 30 June 1997 in respect of his employment with St George Bank discloses a gross salary of $30,921.

108. An ATO notice of assessment records George’s taxable income for the year ending 30 June 1997 as $34,680.

109. In August 1997, Mr Bryant as Chris’ solicitor, attended to the filing of a caveat by Chris over No 49. The caveat claimed an interest pursuant to an unregistered mortgage between Louie as mortgagor and Chris as mortgagee dated 16 June 1997. This mortgage was called for during the course of the hearing but was not produced.

110. On 11 November 1997 Chris completed an authority with the Commonwealth Bank to operate the KR&S account. Chris was the sole authorised signatory for that account.

111. On 21 November 1997 Bill and George completed an ANZ Home Loan Application to purchase No 7. Their solicitor is listed as Mr Bryant. Both of them are described as living in the family home at No 5 and having previously lived for 30 years at No 45. Bill’s occupation is given as a construction officer working for St George. George’s occupation is given as a clerk working at Yellow Pages. The purchase price for No 7 is given as $460,000 with additional costs of $23,000. The application asserts that George and Bill would be providing their “own funds” of $183,000 and that they were seeking a loan of $300,000. In the section for disclosure of liabilities, no reference is made to Bill’s 1992 mortgage to Chris over No 22 (see paragraph [78] above). Bill also acknowledged in cross-examination that, contrary to what was said in the loan application, he did not have cash savings at that time of anything like $360,000. Curiously, $360,000 is the sale price of No 45 (see paragraph [113] below).

112. With effect from 8 December 1997 George held a real estate agent’s licence. The licence gave his address as No 14. It was submitted for Maria that the timing of this licence coincided with Louie leaving the family. It was said that Chris needed George to help with Chris Realty.

113. By transfer dated 22 December 1997 Chris sold the first family home at No 45 for $360,000. Mr Bryant witnessed Chris’ signature on the transfer.

114. By transfer dated 23 January 1998 Bill and George purchased No 7 as tenants in common in equal shares for $470,000. The transfer is signed by Mr Bryant as solicitor for the transferees. The transfer still records Bill and George as living at No 45, notwithstanding that property had been sold a few weeks earlier. By a mortgage made on 29 December 1997 Bill and George mortgaged No 7 to the ANZ for $350,000. By reason of the proximity of this purchase to the sale of No 45, the Court finds that Chris provided the balance of the purchase price ($120,000) to Bill and George.

115. By transfer dated 20 May 1998 Louie sold No 49 for $274,000. Mr Bryant witnessed Louie’s signature on the transfer.

116. On 20 May 1998 Louie (the “owner”) and Chris (the “caveator”) entered into a deed of release which included:

WHEREAS

The owner is the registered proprietor of property known as No 49, Rockdale being the whole of the land comprised in Certificate of Title Folio Identifier 27/7585 AND WHEREAS the caveator has claimed certain moneys to be owing by the owner to the caveator and has secured repayment of same by stamped mortgage executed by the owner and caveat registered 3319751 on the title of the said property AND WHEREAS the owner has denied liability for repayment of those moneys to the caveator AND WHEREAS the owner has claimed from the caveator and his associated family company K.R. & Sons Pty. Limited moneys owing from previous transactions and business operated as Southern Sydney Real Estate at Rockdale in the said State AND WHEREAS the owner is due to complete a Contract for the sale of the said property, No 49, Rockdale AND WHEREAS the parties have reached agreement as to the distribution of payment of the balance of sale proceeds and for the withdrawal of the said caveat.

…

4.   In consideration of the withdrawal of the said caveat, the owner hereby acknowledges as follows:-

(a)   The owner shall have no further claim against the caveator or members of the caveator’s family nor the Company K.R. & Sons Pty. Limited nor the said business Southern Sydney Real Estate;

(b)   The owner shall not claim further moneys to be advanced by the caveator’s family, the said Company or the said business;

(c)   The owner shall indemnify and keep indemnified the caveator, the caveator’s family and K.R. & Sons Pty. Limited for any claim that the owner may make for moneys claimed to be due to the owner.

(d)   The owner has received $100,000.00 from the caveator and this sum is in full settlement of any claim the owner has against the caveator, the caveator’s family, K.R. & Sons Pty Ltd and future claims against the caveator’s estate.

117. An ATO notice of assessment records George’s taxable income for the year ended 30 June 1998 as $36,098.00.

118. On 21 April 1999 St George discharged its mortgage over Chris’ property at No 428.

119. George’s tax return for the year ending 30 June 2000 discloses PAYE income from employers such as Red Rooster of $33,391, gross income for Chris Realty of $30,120 (which after expenses was $3,603) and records Maria’s taxable income for that year as $4,700.

120. A group certificate from Chris Realty for the year ended 30 June 2000 in respect of Maria records her income as being $12,000. George admitted this group certificate was false and had been produced by him to assist Maria in a personal injury claim (see paragraph [497] below).

121. By discharge of mortgage dated 9 August 2000 Chris and Rada, whose signatures were witnessed by Mr Bryant, discharged the mortgage which had been given to them by Bill over No 22. However, the discharge was never registered. Chris appears to have signed this discharge twice and his signature is witnessed by Mr Bryant.

122. George’s tax return for 30 June 2001 discloses PAYE income (primarily from Red Rooster) of $46,905, gross income from Chris Realty of $28,100 (which after expenses yielded net income of $2,954) and records Maria’s taxable income for that period as $2,990.

123. A document signed by George on Chris Realty letterhead purports to record that for the 12 months ending 30 June 2001 “Mary Saravinovska whilst employed as a Receptionist for the period has earned $31,200 gross wages”.

124. As with the group certificate referred to in paragraph [120] above. George admitted that this document had been concocted by him (see paragraph [497] below).

125. On 10 December 2001 Maria suffered an accident (the “2001 accident”). Maria was disembarking from a bus on her way to Rockdale Plaza. Her right foot was caught for a few minutes by the closed bus door. While her left leg remained on the ground, her right leg was trapped. She suffered injuries to her foot and lumbar spine. She was first given physiotherapy treatment on 24 December 2001.

126. On 21 December 2001 Bill, describing himself as office manager of Chris Realty, signed a letter on the business’ letterhead “To whom it may concern” stating that “Mary Saravinovska of No 5 is employed by Chris Realty for 40 hours per week. Mary’s wage is $600 gross per week.” This is also a false document produced by Bill for the purposes of Maria’s personal injury claim arising from the 2001 accident. The Court rejects as a completely implausible fabrication Bill’s evidence that he relied on George for the veracity of that statement (see paragraph [525] below).

127. In a motor vehicle personal injury claim form completed by Belinda and Maria verified by Maria’s statutory declaration made on 27 December 2001, Maria said she was employed 40 hours per week at Chris Realty as a receptionist with usual weekly earnings of $600. Bill was the contact person at Chris Realty which Maria gave to her doctor. That statement about her employment and earnings was false.

128. By discharge of mortgage dated 11 January 2002 the CSBA discharged the mortgage which it had over No 414.

129. On 2 April 2002 a consultant orthopaedic surgeon (Dr Guirgis) gave Maria an initial medical certificate stating that she was unfit for work from 2 April 2002 to 2 May 2002 “due to back and right foot injuries”.

130. On 11 April 2002 a Motor Accidents Authority (“MAA”) physiotherapy treatment review notes that Maria gave her current work status as “not return to work” and describes her current functional status as “unable to do home duties e.g. cleaning”.

131. On 24 June 2002 the CTP insurer approved an initial 10 hydrotherapy sessions for Maria.

132. In 2002 Bill married his second wife, Valentina Josifova (“Valentina”). They have two children: Christopher (born in 2002) and Stephen (Born in 2007).

133. On 24 June 2002 Mr Bryant wrote to Bill at No 7 (although there was no suggestion Bill was living there at the time):

Re: Proposed prenuptial agreement and title information

We prefer to previous correspondence and advise that we have now obtained title searches for the property at XXX Street and Kogarah Bay.

The title search for [22] XXX Street indicates that the mortgage to both your parents is still on the title. We originally thought that the Commonwealth Bank was to discharge those mortgages but that mortgage is still in place. You might need to make some further enquiries about that situation.

In relation to the Kogarah Bay property (No 7), this is held with your brother George in equal shares as tenants in common. There is also a mortgage to ANZ Bank on the title of that property.

We will await your further instructions regarding the above.

134. George’s tax return for 30 June 2002 discloses gross PAYE income (primarily from Red Rooster) of $36,740, gross income from Chris Realty of $42,240 (which after expenses yielded net income of $5,800) and no longer records Maria’s taxable income.

135. In a fax sent on 19 July 2002 to an unnamed recipient but which the Court infers to have been Mr Bryant, Bill wrote:

I have spoken to Valentina Josifova (she will be my partner). She said she would be prepared to sign any documents to state that she has no interest in No 22, Rockdale, No 7 Kogarah Bay or any assets owned KR&S No 509 Rockdale.

She acknowledges that she has not contributed to any of these properties nor has she any rights to them in the future.

Valentina’s address is the same as mine which is No 5 Kogarah Bay.

Could you please have a look at drafting a statement to that effect by her.

136. In a document apparently signed by her on 24 July 2002, Valentina states:

I Valentina Josifova of No 5 Kogarah Bay accept that I have not contributed nor have any claims over the assets now or in the future over No 22, Banksia or No 7 Kogarah Bay.

I have no claims against any assets or shares owned by KR&S now or any claims in the future.

Bill Saravinovski had these assets prior to our relationship and has paid all my living expenses.

137. On 26 July 2002 Mr Bryant wrote to Bill at No 5 enclosing a deed of acknowledgement for Valentina to sign, substantially to the same effect as the document reproduced in the preceding paragraph. The property referred to in the draft deed is No 22, No 7, and shares in KR&S. Maria and George submitted that this represented the entirety of Bill’s then assets.

138. On 13 August 2002 the CTP insurer approved payment for a three month gym program as part of Maria’s rehabilitation.

139. There is in evidence a series of bank statements for George’s passbook account commencing on September 2002 to May 2010. A table was provided to the Court of some of those records between 2004 and 2009 indicating withdrawals from George’s account made by Chris and those made by George to the extent withdrawal slips were available. An analysis of that is revealing. Over that period of time, Chris withdrew a total of $63,206 from George’s account and George withdrew $261,245 from his account. However, those totals are misleading in the sense that in each of those years Chris made more withdrawals than George, particularly in 2007, 2008 and 2009. For example, in 2008, Chris made 43 withdrawals (totalling $17,150) and George made 10 withdrawals (totalling $32,226). George’s total figure is higher owing to several large single withdrawals such as $32,000 in 2006, $35,700 in 2007, $27,000 in 2008 and the withdrawal of $111,061 in 2009.

140. On 6 November 2002 Bill ceased to be a director of KR&S.

141. On 27 April 2003 Chris was involved in a motor vehicle accident in respect of which he made a third party claim (“Chris’ accident”). According to the particulars of his claim (prepared by the same solicitors who had acted for Maria in relation to her claim), Chris had been left with 46 different disabilities.

142. George’s tax return for the year ending 30 June 2003 discloses gross PAYE income (all from Red Rooster) of $34,523 and gross income from Chris Realty of $8,025 (with a net loss after expenses of $9,429).

143. Chris’ tax return for the year ending 30 June 2003 discloses total taxable income of $30,722. This comprised his “main salary” as a clerk paid by KR&S of $7,500, Commonwealth superannuation of $12,937, net rental from No 428 of $9,665 and $620 interest from ANZ and CBA.

144. On 7 July 2003 Bill and George signed a mortgage over No 7 in favour of Chris said to secure an indebtedness of $1,000,000 (the “2003 Mortgage”). This is the mortgage on which Chris sues George. The 2003 Mortgage was duly stamped on 4 September 2003.

145. Both Bill and George acknowledged in evidence that the 2003 Mortgage bore their signatures. Those signatures were witnessed by Mr Bryant. The form also had provision for Mr Bryant to sign as the mortgagee’s solicitor, although the copy in evidence is unsigned for the mortgagee.

146. The 2003 Mortgage incorporates an annexure. The annexure contains material omissions which are reproduced in what follows (handwritten insertions appear in italics):

ANNEXURE A

ANNEXURE TO MORTGAGE DATED

FROM CHRIS SARAVINVOSKI

TO BILL SARAVINOVSKI and GEORGE SARAVINOVSKI

The mortgagor hereby acknowledges receipt of the principal sum of One Million Dollars ($1,000,000.00) and in consideration thereof hereby:-

…

(b)   Covenants with the mortgagee as follows:-

Firstly – The mortgagor will pay to the mortgagee the principal sum, or so much thereof as shall remain unpaid, on the 7th day of JULY 2008

Secondly – The mortgagor will pay interest on the principal sum or on so much thereof as for the time being shall remain unpaid, and upon any judgment or order in which this or the preceding covenant may become merged, at the rate of 8 per centum ( %) per annum as follows, namely – By equal quarterly payments on the                days of the months of   

in each and every year until the principal sum shall be fully paid and satisfied, the first of such payments computed from the          day of

to be made on the             day of          next;

Provided always, and it is hereby agreed and declared, that if the mortgagor shall on every day on which interest is hereinbefore made payable under this security, or within fourteen days after each of such days respectively, pay to the mortgagee interest on the principal sum or on so much thereof as shall for the time being remain unpaid at the rate of 6 per centum (6%) per annum, and shall also duly observe and perform all and every the covenants on the mortgagor’s part herein contained or implied then the mortgagee shall accept interest on the said principal sum or on so much thereof as shall for the time being remain unpaid at the rate of                 per centum (    %) per annum in lieu of          per centum (   %) per annum for every quarter for which such interest shall be paid to the mortgagees within such fourteen days as aforesaid.

147. It is George’s case that he never received $1,000,000 from Chris. There was no real dispute that Mr Bryant had been involved in arriving at the figure of $1,000,000.

148. Also by a mortgage executed on 7 July 2003 Bill mortgaged No 22 to Chris (“Bill’s New Mortgage”). Like the 2003 Mortgage, Bill’s signature is witnessed by Mr Bryant. However, notwithstanding provision for Mr Bryant to sign on behalf of the mortgagee, the copy in evidence is unsigned by the mortgagee. This mortgage also incorporates Annexure A, which is in the same terms as Annexure A to the 2003 Mortgage, with three important differences. First, the amount acknowledged as being received by Bill is $600,000. Second, the covenants in relation to the date for repayment and for interest are completely blank, so that they appear as:

Firstly – The mortgagor will pay to the mortgagee the principal sum, or so much thereof as shall remain unpaid, on the      day of       

Secondly – The mortgagor will pay interest on the principal sum or on so much thereof as for the time being shall remain unpaid, and upon any judgment or order in which this or the preceding covenant may become merged, at the rate of      per centum ( %) per annum as follows, namely – By equal quarterly payments on the                days of the months of    in each and every year until the principal sum shall be fully paid and satisfied, the first of such payments computed from the          day of   to be made on the             day of          next;

Provided always, and it is hereby agreed and declared, that if the mortgagor shall on every day on which interest is hereinbefore made payable under this security, or within fourteen days after each of such days respectively, pay to the mortgagee interest on the principal sum or on so much thereof as shall for the time being remain unpaid at the rate of    per centum (  %) per annum, and shall also duly observe and perform all and every the covenants on the mortgagor’s part herein contained or implied then the mortgagee shall accept interest on the said principal sum or on so much thereof as shall for the time being remain unpaid at the rate of                 per centum (    %) per annum in lieu of          per centum (   %) per annum for every quarter for which such interest shall be paid to the mortgagees within such fourteen days as aforesaid.

149. Third, Annexure A is not signed by anyone on behalf of either Bill as mortgagor or Chris as mortgagee.

150. In evidence in the Court Book with the 2003 Mortgage and Bill’s New Mortgage there is also an undated discharge of mortgage over No 22. That refers to the registration number of the mortgage initially for $250,000 which Bill gave Chris and Rada in 1992 (see paragraph [78] above). Because of the similarity of the forms and the typefaces on all three documents, the Court has no hesitation in inferring that this discharge of mortgage was prepared at the same time as the 2003 Mortgage and Bill’s New Mortgage. This discharge is undated but signed by Chris and witnessed by Mr Bryant.

151. The 2003 Mortgage was stamped on 4 September 2003. Bill’s New Mortgage was also duly stamped on that day. However, the receipt from the Office of State Revenue refers to “a previous amount” of $250,000 and a “new amount” of $600,000 and refers to a “refinance”. That treatment of Bill’s New Mortgage follows from a statutory declaration which Mr Bryant swore on 27 August 2003, obviously for the purposes of stamping:

1.   I am the Solicitor for Bill Saravinovski the mortgagor named in Mortgage dated 7th July 2003 for a consideration of $600,000.00.

2.   I confirm that the said Mortgage lodged herewith for stamping is partly the refinancing of a balance outstanding under an existing loan security (“the previous loan security”).

3.   The previous loan security was secured by a Mortgage registered number XXX from the said Bill Saravinovski to Chris Saravinovski and Rada Saravinovski as mortgagees securing an advance of $250,000.00. A copy of the said previous loan security Mortgage document is attached hereto.

4.   The advance made under the refinancing is secured by the Mortgage between Bill Saravinovski and Chris Saravinovski lodged herewith for a loan consideration of $600,000.00.

5.   The property used as security for the previous loan security is identical with the property used as security for the advance made under the refinancing namely the land comprised in Certificate of Title Folio Identifier XXX being property known as No 22, Rockdale.

6.   The borrower named in the previous loan security, namely Bill Saravinovski, is identical with the borrower named in the refinancing.

7.   Rada Saravinovski, one of the mortgagees named in the previous loan security, died on the 29th July, 1993; Chris Saravinovski, the mortgagee named in both the previous loan security and the Mortgage for the refinancing, is the surviving joint tenant of the said Mortgage.

8.   The maximum amount secured under the refinance loan security is $600,000.00.

152. On 11 September 2003 Mr Bryant wrote to “Messrs C, B and G Saravinovski, c/ Chris Realty, No 414”. That letter includes:

We confirm that we have now completed the stamping procedures for the two mortgages referred to above.

In relation to the property at No 22 a total of $1,400 stamp duty was paid to secure a refinance in the sum of $600,000. This was the duty payable after allowing for the earlier mortgage of $250,000 which this supersedes.

In relation to the mortgage over No 7 this was stamped at a value of $1,000,000 with stamp duty payable in the sum of $3,941.

We enclose herewith copies of the stamped mortgages, the originals of which will be placed in a safe custody packet pending receipt of further instructions.

These mortgages can be registered on the title of both properties if you wish. However, this will require the consent of the current mortgagees and you will need to let us have your further instructions if you wish to take that step. However the mortgages are valid as far as any court proceedings are concerned and would be treated a (sic) evidence of the legitimacy of the loan should that ever become necessary.

153. This letter is significant for three reasons. First, it refers to what was done in relation to No 22 as a “refinance”. Second, it refers to the mortgage over No 7 being stamped “at a value” rather than referring to a contemporaneous advance. Third, the last sentence quoted puts beyond doubt that the mortgages were entered into with an eye to future court proceedings and to be evidence of the “legitimacy” of “the loan”, although it is difficult to identify exactly to what “the loan” is intended to refer.

154. In a report dated 30 December 2003 addressed to Maria’s personal injury solicitor, a consultant orthopaedic surgeon concluded:

The patient remains unfit for activities that would require applying stresses to the spine and right leg. She is in need for home help with the heavier type of home chores on a 3 hour/day per day, 3 days/week basis.

155. In a report dated 12 January 2004, an orthopaedic surgeon retained by the CTP insurer in relation to the 2001 accident recorded:

WORK HISTORY

I note that she worked as a receptionist in a Real Estate office at the time I last saw her and she was working at the time but she informs me that because of ongoing and increasing symptoms she had to stop work about six months ago and has not worked since then. She is not looking for work at the present time. …

Ms Saravinovska’s husband informs me that the treating specialist has told him that she needs an operation to “re-set her spine” and that the “disc is broken and that there is a problem with her nerves”.

156. Bill’s son Christopher Jnr was christened in March 2004. I have reviewed several extracts of a video of the christening and reception. This included:

1. Chris walking around the church followed by Bobby, Belinda and a well-dressed Maria;

2. Maria helping to change Christopher Jnr after the christening;

3. Chris making a formal entry to the post-christening reception accompanied by George, Maria, Bobby and Belinda;

4. Chris leading the dancing at the reception with Maria and Belinda also dancing in the line while George holds the young Christopher off to one side.

157. Chris is always very much taking a leading role at the centre of things, clearly the head of the family. He appears to be suffering no physical impediments whether caused by Chris’ accident or otherwise.

158. On 20 April 2004 George completed another authority enabling Chris to operate the former’s account with ANZ.

159. On 23 April 2004 Bill, describing himself as “Office Manager – Chris Realty” wrote to Maria’s personal injury solicitors. That letter included statements that “Mary started her employment 4/2/2000” and “ceased working 2/7/03 (please note that since the accident she had been a (sic) restricted light duties calling into the office for few hours a day) her income was reduced due to the accident”. That letter was a fabrication by Bill (see paragraphs [126] above and [525] below).

160. On 13 May 2004 Maria’s solicitors arranged for her to see another doctor concerning her injury. That doctor records Maria as saying (and the Court finds she said):

Restriction of Activity

She is no longer able to do household duties as normal. She is not able to do heavy lifting, cleaning, bending. She relies on her daughter’s assistance to do the vacuuming. In the kitchen she is unable to do any heavy work.

161. On 19 May 2004 Maria saw a consultant psychologist, who recorded Maria as saying (and the Court finds she said):

Mrs Saravinovska stated that her life was significantly changed by the effects of the accident. She stated that she could not carry out many of the activities and chores that she used to do prior to the accident, for example: self-care and dressing, cleaning, gardening, washing, cooking, hanging the laundry, carrying heavy shopping bags, prolonged sitting or standing or driving or walking, and social outings.

162. On 4 June 2004 Maria saw a rehabilitation specialist for the purposes of an MAA assessment. The doctor’s report of that attendance records Maria as saying (and the Court finds that she said):

She commenced full-time employment as an Office Administrator/Property Officer with “Chris Realty” in the year 2000 but resigned from this position in July 2003 and has not undertaken any further formalised employment since that time.

163. On 29 June 2004 Maria saw a psychiatrist for the purposes of the MAA assessment. The psychiatrist’s report records (and the Court finds Maria said):

Mrs Saravinovska was employed on a full time basis as a Secretary in a Real Estate Agency at Rockdale. She worked there over a four-year period until 11 months ago. …

Further, Mrs Saravinovska is tearful when she thinks about her predicament. She noted that she cannot look after her family to her satisfaction and she relies upon her daughter for help with ordinary household chores such as making the bed, cleaning and dusting as well as cooking. Mrs Saravinovska exclaimed “What can I do?”.

164. George’s tax return for the year ending 30 June 2004 discloses gross PAYE income (all from Red Rooster) of $41,346 and gross income from Chris Realty of $28,510 (which after expenses yielded net income of $3,404).

165. Chris' tax return for the year ending 30 June 2004 discloses gross taxable income of as $41,594 ($9,750 from KR&S; $13,328 from Commonwealth superannuation; $14,211 net rental from No 428; $4,288 interest from ANZ and CBA).

166. On 24 March 2005 an MAA medical assessment service report in relation to Maria records her as saying (and the Court finds she said) that “she now requires assistance with housework” and that “Mrs Saravinovska was working as a full time Real Estate secretary at the time of the accident”. The various statements attributed to Maria in the preceding paragraphs made to the medical professionals were false (see generally as to Maria’s credit paragraphs [474] and following below).

167. On 17 June 2005 ANZ discharged its mortgage over No 7. The Court infers from that the mortgage sum of $350,000 plus interest was repaid over the seven year life of the mortgage but cannot determine by whom it was paid.

168. On 25 June 2005 Bill wrote to Chris’ solicitors in connection with Chris’ claim arising from Chris’ accident. The letter included:

Chris was employed for 40 hours a week prior to the accident and was paid a listing fee of 20% on any properties he would list for Sale.

Should Chris sell the property he was paid 50% of the selling fee (which includes the listing fee) our office would charge.

Chris would also be paid 50% of any leasing fees our office would get on any leasing transactions he acted on.

Payment would be made to Chris or to his company KR&S at the end of the transaction.

The Court has serious doubts about the truth of anything in this letter (see paragraph [519] below).

169. George’s tax return for the year ending 30 June 2005 disclosed gross PAYE income (all from Red Rooster) of $54,311 and gross income from Chris Realty of $17,029 (a loss after expenses of $19,751).

170. Chris’ tax return for the year ending 30 June 2005 discloses gross taxable income of $48,960 ($12,000 from KR&S; $13,616 from Commonwealth superannuation; $13,302 net rental from No 428; $9,644 interest from ANZ and CBA).

171. On 7 July 2005 Chris underwent a daily living assessment in the presence of George in connection with Chris’ insurance claim arising from Chris’ accident. Again, the Court has serious doubts about the reliability of what Chris is recorded as saying in this document. The report records (and the Court finds that Chris told the assessor):

Current Activities

Mr Saravinovski reported he struggles to remain independent. He continues to perform paper work and activities in the real estate office owned by his son. He no longer takes clients to view property. He attempts to perform his own personal cares (sic) but occasionally requires assistance from his son and granddaughter. He attempted to perform some property maintenance but found he was unable to due to the pain and restricted movement in his neck and shoulder. He relies heavily on his son and granddaughter for assistance with domestic tasks. He continues with his presidency of the community dance group but is unable to travel with them to festivals and competitions as he did in the past. He reported being very frustrated about his situation. …

Pre-injury status

Mr Saravinovski reported independence in all activities of daily living prior to his accident. He described himself to be an active, outgoing person. He worked full-time in the family real estate business. He owned several properties on which he did his own maintenance, including climbing ladders to reach high areas. He was involved in community activities and was president of a Community Dance Group for which he had received a citizenship award.

He drove independently without restrictions. He cleaned and washed his car weekly and polished it every three months, as he thought it was important in his business to have a well-presented car.

He reported he was responsible for all home maintenance, gardening and mowing. He did his own laundry and ironing and cleaned his own room and ensuite. He assisted his daughter in law with the family grocery shopping and house cleaning when he was able to as his daughter in law had been injured in an accident three years prior to his and could not perform more domestic duties for their very large home by herself.

He took great pride in the family home as he and his wife had spent many years designing it and planning for it prior to her death.

172. Between 14 and 22 July 2005 Maria was hospitalised at St George Hospital suffering from chronic low back pain. The discharge summary records:

Mrs Saravinovska is a 38 year old woman who presented to St George Emergency with low back pain radiating down both legs. She has had chronic back pain since 2001 following minor trauma, but had experienced an acute exacerbation. She was admitted for bed rest and analgesia.

173. There is in evidence a rent receipt book which demonstrates that between 23 July 2005 and 30 September 2006, Maria collected fortnightly rental payments from the tenants of No 7. The receipt dates do not match with deposits into either George’s bank account or Maria’s bank account that is in evidence. The payments were in cash and do not appear to have been banked.

174. On 3 October 2005 Belinda signed a statement in connection with Maria’s 2001 accident.

175. On 3 October 2005 George gave a statement in relation to Maria’s 2001 accident.

176. There is a document dated 8 November 2005 addressed to George congratulating him on receiving the Red Rooster Shield of Excellence. George admitted that he forged this document.

177. On 14 December 2005 Bill provided a signed statement in connection with Chris’ claim arising from Chris’ accident. Again, given what the Court has found to be Bill’s production of false documents, the Court has serious doubts about the reliability of what is said in this document. In his statement, Bill describes himself as “senior salesman with Chris Realty, progress payments officer with St George Bank”. His statement includes (emphasis added):

Over the past twenty years I have worked as a real estate agent and I also work with the St George Bank. I have been a counselor (sic) for Rockdale Council for the last 23 years and I am currently the Deputy Mayor.

I am married and have an infant son. My family and I reside in the family home with my father Chris Saravinovski and my brother Bill and his family [this is clearly an error and should read “George”]. …

As far as I can recall, my father has always worked and we have worked together in the family business since Chris started operating.

The real estate agency “Chris Realty” is operated by my father, my brother George and myself. My brother George is the licensee. In addition to working in the family business I am also employed by St George Bank as a progress payments officer. I have been with the bank for over twenty years. I usually work in the real estate office Mondays to Fridays between 1-2 pm and Saturdays from about 8.30am to 7.00pm. I occasionally work on Sundays from about 9.00 to 1.00pm. …

The real estate business survives from its long term clients for whom we handle rental properties. We ceased the rent roll in about 1998 and retained only a few long term clients who have between 5-6 properties. The business is usually by way of referral and walk in clients requesting to buy or rent a particular area. We therefore do a letter box drop to obtain a property which we may list and show. …

At home my father essentially maintained the garden. He mowed the lawn and also mowed the lawn next door. He maintained the vegetable garden which he shared with my sister in law Mary …

Inside the home my sister in law Mary used to do most of the cleaning. However my father with help her with dusting, cooking and weeding which he did manually as he did not like to use weed killers. He also did his own maintenance and I do not recall ever having the need to call a tradesman to work around the home. He constructed the shed, he would do his own carpentry work, concreting, guttering and painting. He essentially is a ”Jack of All Trades”.

178. There is in evidence bank statements for Maria’s account with the Commonwealth Bank between 3 January 2006 and 15 January 2011. This shows regular credits into the account from Red Rooster. Those payments appear to be, with only a handful of exceptions (e.g. a deposit of $15,000 on 15 June 2010 which was withdrawn on the same day), the only source of payments into that account. By reference to the payees recorded in the account such as Coles, 7Eleven, McDonalds, Lowes, Priceline and the like, the Court infers that Maria met ordinary personal expenses from that account.

179. On 6 April 2006 Maria saw the CTP insurer’s doctor. That doctor’s report (which the Court finds accurately records what Maria told the doctor) includes:

At the time that I assessed her, she said that she was reliant on her husband’s wages. In addition to working as a real estate agent, he also works as a store manager at a restaurant …

Mrs Saravinovska’s history seemed to me to be medically implausible. She continually conveyed a sense that she was exaggerating and embellishing her difficulties. This made the interpretation of her symptoms extremely difficult. …

At the time that I examined Mrs Saravinovska, she complained of a number of symptoms of depression. She also said that she was very fearful about buses and would cry every time a bus drove past. I found the latter symptoms to be medically difficult to explain.

180. On 13 April 2006 George withdrew $32,000 from his ANZ passbook account. It is said this went into his V2 account.

181. A deed of release made on 19 May 2006 records a payment by the CTP insurer to Maria of $150,000 in respect of the 2001 accident. Maria’s solicitor’s trust account ledger shows that, after payment of costs and disbursements, Maria received $84,402.05 from the settlement. Maria says she spent this on a family trip to Macedonia and otherwise on herself and her family.

182. On 28 June 2006 there is a withdrawal of $6,000 from George’s passbook account he said related to a trip to Macedonia.

183. On 30 June 2006 the CBA discharged the mortgage which KR&S had given over No 509.

184. On 30 June 2006, Maria opened a cash investment account with the Commonwealth Bank of Australia (“CBA”) with her CTP insurance payment.

648. The Court allowed the amendment for the following reasons.

649. Amendment is governed by s 64 of the CPA, which relevantly provides:

64 Amendment of documents generally

(1) At any stage of proceedings, the court may order:

(a) that any document in the proceedings be amended, or

(b) that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

…

650. Given that the amendment was intended to capture precisely the evidence which Maria had ultimately given, it was a “necessary amendment” for the purposes of s 64(2) of the CPA because it was necessary for the purpose of determining the real questions raised by the proceedings. Therefore, the amendment had to be allowed unless there was a more powerful, countervailing consideration raised by the matters set out in s 58 of the CPA, to which s 64(2) is expressly subject.

651. Sections 56-58 of the CPA provide:

56 Overriding purpose

(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.

…

57 Objects of case management

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects:

(a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).

58 Court to follow dictates of justice

(1) In deciding:

(a) whether to make any order or direction for the management of proceedings, including:

(i) any order for the amendment of a document, and

(ii) any order granting an adjournment or stay of proceedings, and

(iii) any other order of a procedural nature, and

(iv) any direction under Division 2, and

(b) the terms in which any such order or direction is to be made,

the court must seek to act in accordance with the dictates of justice.

(2) For the purpose of determining what are the dictates of justice in a particular case, the court:

(a) must have regard to the provisions of sections 56 and 57, and

(b) may have regard to the following matters to the extent to which it considers them relevant:

(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,

(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,

(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,

(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),

(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,

(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,

(vii) such other matters as the court considers relevant in the circumstances of the case.

652. The starting point is s 58, which by s 58(2) requires the Court to have regard to ss 56 and 57 and permits (but does not require) the Court to have regard to the matters set out in s 58(2)(b).

653. Insofar as s 56 is concerned, the requirement for “just, quick and cheap”, it had only been suggested that “just” was relevant for the purposes of the present application. There has been no submission that allowing the amendment will cause delay or an increase in expense. The Court accepted Maria’s submission that it would not be a just outcome for the case to be dealt with otherwise than by reference to the evidence which she had ultimately given. As is next developed, there was no countervailing injustice to Chris.

654. The Court was unable to identify any contrary indication to the grant of the amendment within the matters identified by s 57.

655. The matters primarily relied upon by Chris in opposing the amendment fell to be considered under s 58(2)(b)(vi). The Court was satisfied that there would be a significant degree of injustice to Maria if the amendment was not allowed in circumstances where, on examination, substantially for the reasons advanced by Maria, there was no corresponding injustice or prejudice to Chris. That lack of prejudice was demonstrated by:

1. In the course of argument Senior Counsel for Chris, when pressed by the Court, was unable to identify how she would have conducted the case differently, had, for example, the amendment been made at the conclusion of Maria’s evidence or what other prejudice her client might suffer. Maria had been extensively challenged in cross-examination on both the evidence that she had given in the witness box and earlier versions of the representations on which she had relied. The Court was unable to identify any forensic disadvantage to which Chris would be subjected if the amendment were allowed.

2. The Court accepted Maria’s submission that the lack of prejudice was only highlighted by the fact that Chris and Bill had flatly denied that Chris had made any representation or inducement to Maria in Macedonia. While it might be technically correct to say that Chris had strictly met the case which had been pleaded against him, he had done so by presenting a case which strenuously denied anything of the kind (as opposed to the specific words alleged) had been said to Maria.

3. While there had been delay in bringing the application, the delay did not cause any prejudice to Chris.

Use of Chris’ 22 December 2014 affidavit

656. In Saravinovski (No 5) the Court declined leave to Chris to use his affidavit of 22 December 2014 (the “22 December affidavit”). The second matter dealt with by the Court at the hearing on 27 March 2015 for which reasons are required is Chris’ application under UCPR Pt 35, r 35.2(3) to allow paragraphs [A54] to [A59] of the 22 December affidavit to be used. The Court refused that application and this section sets out the reasons for doing so.

657. There was no dispute between the parties that, in making its decision for which reasons are given in Saravinovski (No 5), the Court had reserved Chris liberty to apply to use particular parts of affidavits that had been rejected in total. The background to the present ruling is found in Saravinovski (No 5):

21.   On 13 February 2015 the Court made orders with the consent of the parties appointing Associate Professor Tuly Rosenfeld, a specialist geriatrician, as a Court expert to examine Chris. Dr Rosenfeld examined Chris later on the same day.

22. In lieu of a written report Dr Rosenfeld gave his report to the Court viva voce on 16 February 2015. He was questioned by both parties. As a result of Dr Rosenfeld’s evidence the parties accepted – and the Court finds – that Chris is now a person under legal incapacity for the purposes of UCPR Pt 7 r 7.18.

23.   Based upon Dr Rosenfeld’s evidence the Court also finds:

(1)   Chris suffers from vascular dementia. His condition is about half way between moderate and severe.

(2)   His illness is a significant one which affects his higher level cognitive function, short term memory and also reasoning to the extent that he is not able to reason fully with the benefit of memory and understanding.

(3)   His illness has been present and progressing gradually for at least three to four years.

(4)   Chris is and has been able to express strong views about matters relating to himself such as where he should live and what care he requires. However, he is unable to provide instructions about a complex matter such as these proceedings because he cannot process the context and information that would be necessary to do so.

(5)   His short term memory is very poor. His recollection of historical events is largely biographical, can only be recovered with time and difficulty and is not likely to be reliable. He is suggestible.

(6)   His ability to deal with questions will be better on some days than others. It is likely to be better when he is in a familiar environment and the questions are being asked by people he knows and trusts.

…

92.   The Court will not grant leave for Chris’ Recent Affidavits to be used. This is because they were sworn so close in time to Dr Rosenfeld’s diagnosis which has led to the conclusion that Chris is now a person under legal incapacity that the Court cannot be satisfied that those affidavits are unaffected by Chris’ illness. This includes an inability to be satisfied that he properly understood what was being asked of him, that his answers were reliable or that they were unaffected by suggestion.

658. The paragraphs of the 22 December affidavit Chris sought leave to use were:

A54   I disagree with Maria’s account of the events leading up to the serious falling out we had in late November/early December 2009 and her account of what happened during the falling out.

A55   My recollection is that the argument did not have anything to do with the fact that George was off work. I was not particularly concerned about the financial impact of him being off work at that stage.

A56   I recall that the argument started when George came home and said to me:

“You pig. You have eaten all the rissoles!”

A57   We began to argue and I went to my bedroom to get away from the argument.

A58   Later that same night I said to Maria and George “I left my tablets at the office. Can someone go and get them for me? At this stage I had recently been in hospital and felt that I should not drive. George and Maria both refused.

I then said:   “I have a doctor’s appointment next Monday. Who can take me to the doctor?”

Maria said:   “I’m not taking you to the doctor.”

George said:   “Sign over your properties if you want us to get your tablets or take you to the doctor’s on Monday.”

A59   I became very upset at these comments and I felt intimidated. That is why I went away from the house for a while.

A60   I initially went to the real estate office late that night and I called Louie. He came and picked me up and I went and stayed at his house for a few days.

659. The fundamental submission for Chris was based upon this piece of Dr Rosenfeld’s evidence (T1527:42-T1528:4):

Q. What concern would you have, having seen him, as to the veracity of recollections that he would have set forth, for example, three days before he came and saw you?

A. Sorry, what concern—

Q. What concern would you have about the veracity of his recollections in evidence as contained in this evidence, having been sworn three days before he saw you?

A. The only concern that I would have in the context of what I found generally would be that there was some contemporaneous witness accounts that those events actually occurred or some other backing up of that story. Because as I said, elements of those things may have occurred and depending on how many times he’s gone over the events in his mind, I think they can become embedded.

Q. Would suggestibility, for example, by other family members play a role in that?

A. Absolutely, yes.

660. Emphasis was also placed on this passage of Dr Rosenfeld’s evidence (T1527:20-35):

Q. Can you explain how that’s reconcilable?

A. Well, pretty much because as I said, there are aspects in biographical memory that if they were very significant and made a great impression on you or more importantly, if you have gone over them and over and over them, just as his ability to recall apple, table and coin because we went over it 50 times, he probably now will remember it for a long time. If you recall, if you go over things, they do get embedded into your memory and then they’re the later things to be lost. And particularly, so for instance, in some people who are suffering from dementia who go over and over these ideas that are in their mind because they were so significant and prominent, they can almost become ingrained to the point that it takes over a lot of other things.

661. On the basis of that evidence it was submitted that the paragraphs which were the subject of the application were likely to be reliable because they were corroborated. Such corroboration was said to come from Chris’ affidavits that had been admitted, Maria’s evidence and parts of the hospital tape.

662. In addition to that allegedly corroborating evidence, Chris’ submissions also recalled evidence from Dr Rosenfeld of what Chris had told him (Dr Rosenfeld) in response to questions about why he was now living with a different son. Dr Rosenfeld’s evidence was (T1523:28-45):

Q. His Honour asked you a question which, in relation to what was the capacity of Chris to answer questions, to which you responded “He could answer simple questions” but I think you added “so long as they were framed in a way that concerned his best interests” or something along those lines. Can you explain to me what you meant by that answer and also perhaps give an example of the kind of question you would mean?

A. So, for example, we were talking about who was living with him and he told me that he was living with his other son before and my quotations are given in the context that I was quoting him and his English wasn’t very great and he was talking to me directly, not through the solicitor, through the interpreter. So I asked him who was living with him and he said that George and his family moved out and I didn’t write down exactly, but he said something about sign over properties and he was talking about his son saying “Give it to me” and then they moved away, so I was just quoting him. And then I asked him, well what’s your view on these sort of things, and he says “I have three sons, not for one. I worked very hard” then he went off and told me about his three shops in Rockdale et cetera, so he went off and discussed those sorts of things, so it was a very tangential conversation. Sorry, go on.

663. It was submitted that the corroborative evidence, including what Chris had said to Dr Rosenfeld about the events which led to Maria and George’s family leaving No 5, was sufficient corroboration to suggest that the particular paragraphs in question were likely to be reliable and should be admitted. It was submitted that the additional evidence did not open up a new area of factual context between the parties and had been the subject of responses from George and Maria. Finally, any inability to cross-examine Chris on this aspect of the matter could be adequately addressed by the Court applying an appropriate discount to the weight attributed to the evidence in the subject paragraphs.

664. Maria and George opposed the admission of those paragraphs of the 22 December affidavit. They drew attention to the context of the time in which it was sworn, namely five years after the disagreement in question, three years after Maria’s proceedings were commenced, two years after his last affidavit dealing with the relevant events and three months before his diagnosis of vascular dementia by Dr Rosenfeld on 16 February 2015. It was submitted that Chris’ affidavit did not lose the character of unreliability simply because some statements contained within it were similar to evidence contained in Chris’ earlier affidavits.

665. Maria and George next drew attention to Dr Rosenfeld’s evidence that, in the doctor’s view, Chris was no longer a reliable witness for historical events (T1528:21-39):

HIS HONOUR:

Q. Sorry, picking up on your last answer to Mr Sirtes, professor, I take it in terms of your concern being to have some sort of corroboration, that’s just consistent with your view that in and of itself, he’s really no longer a reliable witness for historical events?

A. That’s right.

SIRTES

Q. Are you able to provide any retrospective opinion as to how long that reliability would be impaired sufficiently for you to adhere to that view?

A. I’m just, I’m just hypothesising when I answer that question but it would be, as I said, relative to how far back you go in time but as we know from the history, he was very ill and was very likely suffering similar problems at least a year ago.

Q. It could be longer?

A. It could be longer.

666. Maria and George made four additional submissions.

667. First, they submitted that Chris had given evidence of the relevant events in his two affidavits which had been admitted into evidence. In terms of proximity to those events, the earlier affidavits were likely to be more reliable than his most recent affidavit.

668. Second, it was submitted that what was said in the 22 December affidavit was not really corroborated by the matters to which Chris’ submissions had referred because the material in his latest affidavit was substantially more detailed than the allegedly corroborative evidence and given in direct speech. They submitted that Chris’ detailed recollections in the 22 December affidavit had to be viewed against Chris’ evidence in cross-examination on 11 February 2015 (T1279:46-T1280:44):

SIRTES

Q. Now, the affidavit that you swore yesterday dealt with your recollection of some of the events that you say took place in late November 2009, that’s correct, isn’t it?

A. WITNESS: No, you not my side, you his side. He, solicitor belong to my son, not to me. I got problem 85, 85 nobody to look after me. I don’t know what to do. Nobody look after me.

HIS HONOUR

Q. I’m going to try again. Please listen to Mr Sirtes’ question. You told me a moment ago that you thought you were able to answer his questions, so let’s see if you can. Please listen carefully to the question.

SIRTES: Mr Interpreter, can you turn the affidavit to page 3 for me, please.

Q. Now, you can read some English, can’t you?

A. INTERPRETER: No.

A. WITNESS: Before yes, not now.

Q. So I’m just going to ask the interpreter to interpret the heading about two-thirds of the way down page 3.

SIRTES: Can you show Mr Saravinovski the English and translate it for him, please.

INTERPRETER: Which?

HIS HONOUR: The words, “Events leading--

SIRTES: “Events leading up to George and Maria moving out.”

Q. Now, you accept, don’t you, that you have in this affidavit you’ve signed yesterday set forth some of the things that occurred? As you sit here today, do you tell his Honour that you recollect some of the events that happened in November and December 2009 leading up to George and Maria and their family leaving No 5?

A. WITNESS: Go, go ..(not transcribable).. nobody look after me now.

HIS HONOUR

Q. Do you remember what happened in November 2009 when George and Maria moved out of No 5?

A. WITNESS: No, I can’t remember ..(not transcribable).. what the problem. He say to me ..(not transcribable).. property in his name. I say ..(not transcribable).. for my wife, nobody. My children after passed away, he can take it by law. Now I can’t ..(not transcribable).. 85, I’ve got problem, I’m sick, you know. My son take me to Court, not my son. I give him two home, he take me to Court. What I can? Now 85, I’m sick. Sorry, I never been to Court all my life here.

669. Third, Maria and George submitted that when the detailed evidence in his 22 December affidavit was compared to his evidence less than two months later, and mindful of Dr Rosenfeld’s evidence that Chris had been suffering from vascular dementia for some time, the Court could not be satisfied that the evidence in the 22 December affidavit was not the product of something suggested to Chris at the time it was sworn or that something had been suggested to him so repeatedly that it had become ingrained.

669. Fourth, it was submitted that the issue of the circumstances surrounding Maria and George’s family’s departure from No 5 was an important one in the proceedings. Chris had never given evidence in the detail which appeared in his 22 December affidavit compared to his evidence in his earlier affidavits. Given that Chris could not be cross-examined about those paragraphs of his 22 December affidavit, there was significant prejudice to Maria and George. Applying a discount to that evidence would not adequately address the issue of prejudice or reflect the Court’s general conclusions about the reliability of the 22 December affidavit generally.

670. During the course of argument I particularly invited Senior Counsel for Chris to address the stark contrast between the clarity of Chris’ evidence in his 22 December affidavit when compared to his evidence in the witness box. The answer was to rely on Dr Rosenfeld’s evidence that people with vascular dementia such as Chris had good days and bad days.

671. Reliance on the possibility of good and bad days was insufficient to overcome the Court’s concerns about the reliability of the 22 December affidavit for the reasons set out in Saravinovski (No 5). I refused Chris’ application to read those paragraphs in his 22 December affidavit because I accepted Maria and George’s submissions set out in paragraphs [664] to [670] above. On the question of prejudice I also took into account that the prejudice to George and Maria of not being able to cross-examine Chris about his precise evidence given in those paragraphs of his 22 December affidavit far outweighed the prejudice to Chris by the non-admission of that evidence, because Chris was still left with all of the evidence that had been admitted of the relevant events which had been described as “corroborative” for the purposes of the present application.

J. Conclusion

673. The result is that Chris’ statement of claim and George’s amended statement of cross-claim should be dismissed. In Maria’s Case she is entitled to an order granting her a 30% interest as tenant in common in No 5. If probate has not been granted of George’s estate, then an order will need to be made in these proceedings either appointing a representative of the estate or an administrator ad litem.

674. The Court will stand the proceedings over to give the parties an opportunity to agree a form of orders to give effect to these reasons. The parties will also be able to address on costs to the extent they are not able to be agreed.

Schedule 1 Dramatis personae SARAVINOVSKI (9.44 KB, pdf)

Schedule 2 - Properties (27.9 KB, pdf)

Schedule 3 - George's submissions on contributions (73.2 KB, pdf)

Schedule 4 - Chris' submissions on George's contributions (71.8 KB, pdf)

**********

Amendments

13 July 2016 - Re-added Schedules

13 July 2016 - Minor typographical errors in paras 367, 374, 375, 380, 403, 469, 585 and 587

Decision last updated: 26 July 2018