Saravinovski v Saravinovska - [2017] NSWCA 85

Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Saravinovski v Saravinovska [2017] NSWCA 85
Hearing dates: 15 February 2017; 16 February 2017
Decision date: 04 May 2017
Before: Beazley ACJ at [1];
Leeming JA at [2];
Emmett AJA at [43]
Decision:
In the Mortgage Appeal: The proceedings be dismissed. The appellant is ordered to pay the respondent’s costs of the appeal.
In the Property Appeal: The proceedings be dismissed. The appellant is ordered to pay the respondent’s costs of the appeal.
Catchwords:
PROPERTY – mortgages – whether valid and enforceable mortgage – whether loans purported to be secured by the mortgage were in fact made – whether intention to create legal relations – whether appellant discharged evidentiary onus
FAMILY LAW – ss 5(2)(a), 20 of the Property (Relationships) Act 1984 (NSW) – whether parties in a ‘domestic relationship’ – whether parties in a ‘close and personal relationship’ – whether respondent provided domestic services for fee or reward – whether primary judge erred in assessment of parties’ financial and non-financial contributions – whether primary judge erred in exercising discretion under s 20 of the Property (Relationships) Act 1984 (NSW)
Legislation Cited: Family Law Act 1975 (Cth)
Property (Relationships) Act 1984 (NSW), ss 5, 20
Succession Act 2006 (NSW), ss 3(3), s 3(4)
Succession Amendment (Family Provision) Act 2008 (NSW)
Cases Cited: Barns v Barns (2003) 214 CLR 169; [2003] HCA 9
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36
Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; (2012) 289 ALR 237
Holmes v Permanent Trustee Co of New South Wales Ltd (1932) 47 CLR 113; [1932] HCA 1
House v the King (1936) 55 CLR 499; [1936] HCA 40
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154; [1974] UKPC 1
Re Filomena Rodi, decd [2016] NSWSC 1696
Sarkis v Morrison [2013] NSWCA 281
Skarica v Toska [2014] NSWSC 34
South Australian Commissioner for Prices and Consumer Affairs v Charles Moore (Aust) Ltd (1977) 139 CLR 449; [1977] HCA 38
Victims Compensation Fund Corporation v Brown [2003] HCA 54; 77 ALJR 1797
White v O’Neill [2010] NSWSC 1193
Ye v Fung [2006] NSWSC 243
Category: Principal judgment
Parties:
Chris (Krste) Saravinovski (by his tutor Louie Saravinovski) (Appellant in 2016/239390)
Maria Saravinovska (As Executrix of the Estate of the Late George Saravinovski) (Respondent in 2016/239390)
Krste (Chris) Saravinovski (by his tutor Louie Saravinovski) (Appellant in 2016/233724)
Maria (Maria) Saravinovska (Respondent in 2016/233724)
Representation:
Counsel:
D R Pritchard SC with J Rose (Appellant in 2016/233724)
D R Pritchard SC with A J Macauley (Appellant in 2016/239390)
G A Sirtes SC with A L Avery-Williams (Respondent)
Solicitors:
F C Bryant Thomas & Co (Appellant in 2016/233724)
Vaikom Law (Appellant in 2016/239390)
Gells Lawyers (Respondent)

File Number(s): 2016/233724; 2016/239390
Decision under appeal

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Citation:

[2016] NSWSC 964

Date of Decision:

12 July 2016

Before:

Kunc J

File Number(s):

2011/361081 and 2012/39748

Headnote

[This headnote is not to be read as part of the judgment]

George and Bill Saravinovski owned a property in Kogarah Bay (the Property) as tenants-in-common in equal shares. On 7 July 2003 George and Bill purported to mortgage the Property to their father, Chris Saravinovski. An annexure to the mortgage stated that a loan of $1 million had been paid by Chris to George and Bill, however it was common ground that the sum had never been received by either George or Bill. The mortgage was neither fully executed nor registered.

In 2009, there was a falling out within the Saravinovski family with Chris and his sons Bill and Louie on one side, and George and his wife Maria on the other.

Chris sought judgment in the Supreme Court against George for an amount based on the loan referred to in the mortgage and a declaration that the Property was charged with the repayment of that sum. Chris alleged that he and George had entered into an informal, oral agreement, and that the $1 million reflected the value of various benefits conferred on George and Bill.

Maria Saravinovska, Chris’ daughter-in-law and wife of George, commenced separate proceedings in the Supreme Court in which she claimed an interest in the Property on the basis that she had provided domestic services to Chris over a period of 23 years without fee or reward.

Both proceedings were heard together. The primary judge found that the mortgage agreement was no more than a device to protect the Property in the event of a falling out between Bill and his wife, on the basis that the secured debt would prevail over any claim by her as an estranged or former wife. His Honour also found that Chris had transferred other properties to George and Bill in order to give them a start in life, and not as part of some wider legal agreement. As there was insufficient evidence to discharge the onus that George and Bill had agreed to take on the obligation to repay $1 million, his Honour dismissed Chris’ statement of claim.

In relation to Maria’s claim, the primary judge found that Maria was entitled to a 30% interest in the Property on the basis that Maria and Chris were in a ‘close personal relationship’ for the purposes of s 5 of the Property (Relationships) Act 1984 (NSW). In support of that conclusion, his Honour found that Maria did not provide those domestic services to Chris for ‘fee or reward’ in accordance with s 5(2)(a) of that Act in exchange for lodgings provided by Chris, rather, it was incidental to their ongoing relationship.

The principal issue for determination on the Mortgage appeal was:

(1) whether the mortgage agreement was valid and enforceable.

The principal issues for determination on the Property appeal were:

(2) whether the primary judge had erred in the construction of the expression “for fee or award” in s 5(2)(a) of the Property (Relationships) Act 1984 (NSW);

(3) whether the primary judge erred in the exercise of his discretion under s 20 by finding that it was ‘just and equitable’ to award Maria a 30% share in the Property.

Emmett AJA (Beazley ACJ and Leeming JA agreeing):

In relation to (1):

(i) The primary judge made no error in law in finding that the appellant’s evidence was not capable of supporting a finding of an agreement in the terms relied upon or any other terms such as would constitute consideration for an acknowledgment that the mortgagors had received the principal sum of $1 million referred to in the mortgage in circumstances that would give rise to indebtedness at law: [97] (Emmett AJA).

In relation to (2):

(ii) The primary judge did not err in law in concluding that the domestic support and person care provided by the respondent was not provided for fee or reward for the purposes of s 5 of the Property (Relationships) Act 1984 (NSW): [169] (Emmett AJA).

In relation to (3):

(iii) The function of the Court is to determine what adjustment to the interests of the parties in their property seems just and equitable, having regard to the respective financial and non-financial contributions made by the parties to the acquisition, conservation or improvement of the property and to the welfare of the other party or of the family constituted by the parties: [127] (Emmett AJA).

(iv) The primary judge did not impose a fetter upon himself in exercising the discretion under s 20 of the Property (Relationships) Act 1984 (NSW): [181]-[182] (Emmett AJA).

(v) The jurisdiction conferred by s 20 of the Property (Relationships) Act 1984 (NSW) involves the exercise of a discretion. To succeed in a claim of error in the exercise of a discretion, the appellant must demonstrate that the primary judge failed to address the correct question, applied an incorrect principle, took account of irrelevant considerations or failed to take account of considerations that were required to be taken into account. It must appear that an error has been made in exercising the discretion, either by acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or effect the decision, mistaking facts or failing to take into account some material considerations. Alternatively, where the result is unreasonable or plainly unjust, an inference may be drawn that in some way there has been a failure to exercise the discretion properly: [192] (Emmett AJA).

House v The King (1936) 55 CLR 499; [1936] HCA 40 applied.

Leeming JA’s additional reasons:

In relation to (1):

(vi) In establishing an inferred agreement, language and conduct which is capable of being viewed as giving rise to contractual rights between strangers may be viewed differently if it occurred between family members: [16] (Leeming JA).

Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; (2012) 289 ALR 237 applied.

In relation to (2):

(vii) The phrase “for fee or reward” in s 5(2)(a) of the Property (Relationships) Act 1984 (NSW) and the phrase “for fee and reward” in s 3(3) and (4) of the Succession Act 2006 (NSW) should be construed together: [24]-[27] (Leeming JA).

(viii) The question posed by s 5 of the Property (Relationships) Act 1984 (NSW) is whether the person provided domestic support and personal care “for fee or reward”, rather than asking merely whether he or she did so “for reward”: [34] (Leeming JA).

(ix) In determining whether domestic support and personal care have been provided for the purposes of s 5 of the Property (Relationships) Act 1984 (NSW), regard may be had to the characterisation of the relationship as ‘commercial’ or ‘contractual’, but ultimately the statute requires an examination of a question of fact: why did the person provide domestic support and personal care: [41] (Leeming JA).

Judgment

BEAZLEY ACJ: I have had the advantage of reading in draft the reasons of Leeming JA and Emmett AJA. I agree with the reasons of each of their Honours and given their comprehensive nature have nothing further to add. I agree with the orders proposed by Emmett AJA.
LEEMING JA: I have had the considerable advantage of reading the judgment of Emmett AJA in draft. I agree with the orders proposed by his Honour, and with his Honour’s reasons. I provide the following reasons by way of elaboration, and without detracting from any aspect of his Honour’s reasons. I shall use the same abbreviations as his Honour, and will assume familiarity with and not repeat matters in his Honour’s reasons.

The Mortgage Appeal

The threshold and dispositive question in the Mortgage Appeal is whether, putting to one side the parties’ testimonial evidence, there was an enforceable promise to repay $1 million, secured by the Mortgage.
The starting point is the Mortgage itself. It was signed, stamped and registrable, but unregistered. The annexure which was incorporated in it contained an acknowledgement that the “mortgagor” [sic] had received “the principal sum of One Million Dollars ($1,000,000.00)”, but it was common ground that no such amount had ever been received by either or both of George and Bill, the co-owners who had signed the Mortgage. Hence, as stated by the primary judge at [253], and acknowledged on appeal, it was necessary for Chris to identify an enforceable promise by George.
Even so, there is force in the proposition that Chris would only have caused the Mortgage to have been stamped, based on its securing a loan of $1 million and costing $3,941 in stamp duty, if he perceived that doing so achieved some legal effect. Hence the significance of the finding by the primary judge at [263] (and elsewhere) that the purpose of the document was to protect the “Saravinovski” property in the event of a falling out between Bill and his wife, on the basis that the secured debt would swamp any claim by her as an estranged or former wife:

“the 2003 Mortgage ... was conceived by Chris as a protective measure against the possibility, in particular, of Bill’s marriage to Valentina ending in divorce and was only intended to be deployed against a departing wife. It was a repeat of his conduct in 1992.”

As Emmett AJA observes, that finding falls short of a finding that the Mortgage could only be relied upon in order to frustrate a claim by Bill’s spouse, or that the Mortgage was a sham.
A number of circumstances sustain the correctness of the primary judge’s finding, including the following.
First, Bill signed at least three mortgages in favour of Chris: the Mortgage, and two other mortgages over another property owned by him, once in September 1992, and then again in 2003. The earlier mortgage was in favour of Chris and Rada, and acknowledged receipt of the principal sum of $250,000. The latter was also signed, stamped, registrable but unregistered, and purported to secure indebtedness of $600,000. This mortgage was granted on the same day (7 July 2003), and stamped on the same day (4 September 2003), as the Mortgage. The annexures of each mortgage, including the omissions, are reproduced in [146] and [148] of the reasons of the primary judge.
Secondly, all three mortgages were witnessed by Mr Bryant, and all three had material omissions. The September 1992 mortgage omitted the covenant for repayment and the rate of interest. Neither of the 2003 mortgages was signed by the mortgagee, and the annexure to each (which was in similar terms) had some eight and twelve gaps intended to state dates for payment and interest rates. The mortgage which was granted solely by Bill was more incomplete than the Mortgage; its annexure was not signed by Bill at all, and no interest rate was indicated for the loan of $600,000 it purported to secure.
Thirdly the September 1992 mortgage was entered into at around the same time as Bill’s first marriage, and the 2003 mortgages were entered into at around the same time as Bill’s second marriage. The primary judge found that Bill’s first marriage took place in Macedonia in 1992, with a ceremony in Australia in 1993, but that he separated from his wife later in 1993, shortly before Rada died. Bill married his second wife in 2002 (so far as I can see, the evidence does not indicate when precisely the marriage took place, although both parties’ chronologies state that it was in the second half of the year).
Fourthly, roughly contemporaneous documents in 2002 and 2003 make it plain that there was concern about the potential for a claim against property in Bill’s name in the event that his second marriage failed. Emmett AJA has described the documents faxed on 19 July 2002 and 26 July 2002, which were directed to obtaining acknowledgements that Bill’s wife would have no claim on property in his name. The fax header of each document is the fax number of Mr Bryant’s office. Further, a letter dated 26 July 2002 from Mr Bryant to Bill referred to “your instructions today” concerning a deed which had already been prepared which did not amount to a pre-nuptial agreement, and advised how such an agreement might be prepared and the limitations of any such agreement.
The foregoing does not explain why the two mortgages signed by Bill in September 2003 were many months later than his second marriage. However, there is a further letter from Mr Bryant to Chris, dated 5 May 2003, which sheds light on the timing. It stated that Mr Bryant was now holding two mortgages, one for $1,000,000 over the jointly co-owned property, the other for $600,000 over Bill’s property. It advised the amount of stamp duty owing on each mortgage, which calculation was based on the absence of any existing security. It concluded:

“Would you please let us have your instructions as to whether you would like us to arrange stamping of these mortgages. As indicated, the mortgages will need to be stamped if they are to be used in any Court proceedings in the future. We await your further instructions in this regard.”

Of course, the mortgages which were in evidence were dated some two months later, and the mortgage over Bill’s land was eventually only upstamped on the basis that there was an existing mortgage of $250,000. The letter seems to suggest that there were mortgages, signed by Bill and George by early May 2003, in the possession of Mr Bryant. At least part of the delay thereafter may have been attributable to the realisation that it was only necessary to upstamp the mortgage over Bill’s land, coupled with the fact that Chris sustained a serious accident in April 2003.
For those reasons, the fact that the Mortgage was prepared, signed by George and stamped is insufficient to establish that George was indebted to Chris. But once one discounts, for the reasons given above, what would in an ordinary case flow from the signed acknowledgement of indebtedness in the Mortgage itself, there are large difficulties confronting Chris’ case. There are no documents supporting the existence of contractual obligations brought about by offer and acceptance. The pleaded case alleged an informal, oral agreement involving an obligation to repay $1 million fairly reflecting the value of previous advances made to George and Bill. The difficulties facing that claim when the testimonial evidence has been rejected are obvious. In oral submissions, particularly submissions in reply, Chris relied upon an analysis in accordance with the recognition by (among others) McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 and Heydon JA in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 that contracts may exist even though it may be difficult to identify an offer which has been accepted.
That does not assist Chris. This is scarcely the sort of contractual relation – indebtedness of $1 million – which can be inferred by reference to conduct demonstrated over an extended period of time. For one thing, the precision of $1 million tells against it. It was of course open to the parties to convert years of financial and non-financial accommodation by Chris into an obligation to pay $1,000,000 on particular terms. That could readily have been done by writing, or by oral agreement. But this is far removed from the cases identified by Lord Wilberforce in New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154 at 167:

“this same difficulty exists in many situations of daily life, e.g. sales at auction; supermarket purchases; boarding an omnibus; purchasing a train ticket; tenders for the supply of goods; offers of rewards; acceptance by post; warranties of authority by agents; manufacturers’ guarantees; gratuitous bailments; bankers’ commercial credits. These are all examples which show that English law, having committed itself to a rather technical and schematic doctrine of contract, in application takes a practical approach, often at the cost of forcing the facts to fit uneasily into the marked slots of offer, acceptance and consideration.”

It is one thing to acknowledge that many contractual situations may only with difficulty fit into offer and acceptance. It is another to contend that a contractual obligation to pay $1 million, which could readily have been produced by offer and acceptance, is to be discerned from a range of circumstances in familial relations over many years. And it is to borne in mind that even if an agreement could be inferred, its parties were members of the same family, and language and conduct which is capable of being viewed as giving rise to contractual rights between strangers may be viewed differently if it occurred between family members: see (for example) Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; (2012) 289 ALR 237 at [16].

Ultimately, the onus rests with Chris and there is no evidence of an agreement sufficient to discharge that onus whereby George and Bill subjected themselves to an obligation to repay $1 million (or $1 million plus interest at 6 or 8 per cent per annum).
For those reasons, together with those given by Emmett AJA, Chris has not established that there was an obligation upon George to repay $1,000,000. It follows that this appeal must be dismissed. I agree with Emmett AJA that it is not necessary to address all the matters argued on appeal.

The Property Appeal

The threshold question in the Property Appeal is narrow, but of general application. It is whether Maria is disentitled by reason of s 5(2)(a) of the Property (Relationships) Act 1984 (NSW) because she had provided Chris with domestic support and personal care “for fee or reward”.
Section 5 is as follows:

“5 Domestic relationships
(1) For the purposes of this Act, a domestic relationship is:
(a) a de facto relationship, or
(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.
(2) For the purposes of subsection (1)(b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:
(a) for fee or reward; or
(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).”

Very similar provision is made by s 3(3) and (4) of the Succession Act 2006 (NSW) (which sections were introduced by amendments effected by the Succession Amendment (Family Provision) Act 2008 (NSW):

“(3) For the purposes of this Act, a close personal relationship is a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.
(4) For the purposes of subsection (3), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:
(a) for fee and reward; or
(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).”

The two provisions are nearly identical, in respect of the defined term itself, and the structure and content and purpose of the definition.

Both provisions define the term, “close personal relationship”.

In both cases, a “close personal relationship” requires (a) two adult persons, (b) who are not married or in a de facto relationship, (c) who are living together, and (d) at least one of whom provides the other with domestic support and personal care.

In both cases, the legislation employs a form of negative deeming, whereby element (d) is “taken not to exist” where one of the two persons provides the other with domestic support and personal care in one of two circumstances.

In both cases, the second of the two disentitling circumstances is where the person does so “on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation)”.

In both cases, the purpose of the definition is to delineate a class of persons who are entitled to make a claim against the other person or the estate of the other person.

The difference between the two definitions lies in the words emboldened in the quotations reproduced above. In the Property Act, the first disentitling circumstance is when the person provides domestic support and personal care “for fee or reward” while in the Succession Act, the first disentitling circumstance is when the person does so “for fee and reward”.
The parties’ submissions invoked decisions on both statutes. They were, with respect, correct to take that course. In Skarica v Toska [2014] NSWSC 34 at [37], Lindsay J disregarded the different conjunctions when fixing the legal meaning of both provisions. I too would adopt the same approach, for the following reasons.
First, every other relevant element of the text and structure of the provisions is identical. There is no sensible purpose which could be achieved by there being ever so slightly different classes of people who are in a “close personal relationship” for the purposes of being entitled to make a claim made inter vivos under the Property Act, but who are disentitled from making a claim under the Succession Act.
Secondly, paragraph (a) of subsection 5(2) contains the word “or” twice, and it is tolerably clear that the word is used in a different sense in each case. The second use of “or” is unquestionably disjunctive: the disentitling negative deeming occurs if either paragraph (a) or paragraph (b) is made out. The first use of “or” is different. It links two words with similar meanings, both of which are governed by the preposition “for”. One way of illustrating the different sense of “or” is by considering an alternative formulation, containing three disentitling circumstances: “... (a) for fee; or (b) for reward, or (c) on behalf of another person or an organisation ...”
Thirdly and perhaps most importantly, the critical unit of language for present purposes is the term “for fee or reward” or “for fee and reward”. That those four words should be construed together is clear from the structure of the provision, from the obvious overlap of the ordinary meanings of “fee” and “reward”, from their both being governed by “for”, and from the linguistic truth that the approach taken in determining the meaning of words is bound up in the syntactical construction of the phrase in question: Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397.
For those reasons I would not accept Chris’ submission, based on what was said in South Australian Commissioner for Prices and Consumer Affairs v Charles Moore (Aust) Ltd (1977) 139 CLR 449 at 462, that “the words ‘fee or reward’ are disjunctive”. The point of the submission was to contend that the words “fee and” could be, for present purposes, disregarded, which would in turn enable Chris to take advantage of the broader shades of meaning of “for reward”. Plainly enough, while the word “fee” is quite closely connected to pecuniary return, “reward” when considered alone is broader. Although little may turn on it in many or most cases, I do not think it is right to sever the statutory language and proceed on the basis that the disentitling circumstance may be made out if the person provides domestic support and personal care “for reward”.
In Charles Moore a broad construction was given to the same words so as to expand the scope of beneficial legislation for the protection of consumers, in an entirely different context. Indeed, Gibbs J said at 463 that although the question was a very arguable one and had caused him much difficulty, “In the end, however, I have been assisted by the consideration that the statute is a remedial one, and should be construed beneficially”.
In the present case, the words “for fee or reward” are a disentitling circumstance in legislation which confers new rights upon a class of applicants. No differently from consumer protection legislation, family provision legislation is a well established class of beneficial legislation: see Barns v Barns (2003) 214 CLR 169; [2003] HCA 9 at [44] and [124], referring to what Rich J had said (with the concurrence of Evatt and McTiernan JJ) in Holmes v Permanent Trustee Co of New South Wales Ltd (1932) 47 CLR 113 at 119 that this class of legislation was remedial in its character and “must be so construed as to give the most complete remedy which the phraseology will permit”.
There is nothing inconsistent with Charles Moore in giving the words “for fee or reward” a slightly narrower meaning when they appear in beneficial legislation in an entirely different context, namely, to disentitle the class of persons eligible to apply under the legislation.
That conclusion may be strengthened by the use of the words “for fee and reward” in the Succession Act. The use of a different conjunction may be a drafter’s slip. If it is not, then it serves to confirm the construction which, in any event, emerges from the structure of s 5(2) and the nature of the legislation.
It is not necessary to go so far as to conclude that the words are a “composite expression”, in the sense stated by Heydon J in Victims Compensation Fund Corporation v Brown [2003] HCA 54; 77 ALJR 1797 at [34]. But there is plainly a similarity between these words and (to take but one example) the liability caused by a dog “attacking or chasing” an animal, considered in Sarkis v Morrison [2013] NSWCA 281. After noting at [34] that the words could hardly be said to be independent, in the sense of being mutually exclusive, Basten JA concluded at [35]:

“No doubt it is entirely appropriate, in most cases, to look for difference in meaning when the conjunctive ‘or’ is used; however, where there is a clear explanation for that construction being used without different meanings being intended, the search may properly be abandoned.”

Here too there is very considerable overlap between “fee” and “reward”. I think it is sufficient to observe that the question posed by the statute is best answered by addressing the statute in terms: whether the person provided domestic support and personal care “for fee or reward”, rather than asking merely whether he or she did so “for reward”.
The primary judge addressed the meaning of the term at [375]-[376] as follows:

“I respectfully agree (to this extent) with Bryson AJ’s conclusion in White that on its proper construction the expression ‘... provides ... domestic support and personal care ... for fee or reward’ requires a ‘direct relation’ between the fee or reward and the provision of support and care. The factual question for the Court, to adopt Bryson AJ’s language, is whether ‘the fee or reward is produced by the provision of support or care’. The relationship must be causative or, putting it another way, be a quid pro quo. This requirement was captured in the observation of Mason J in Charles Moore (at 476) that ‘But for the expectation that it would receive a valuable benefit in the form of reciprocal reports, a department store would not provide a competitor with information about a customer’.
For the foregoing reasons, a party wishing to rely on s 5(2)(a) must satisfy the Court that there is a direct connection in the nature of an immediate and intentional exchange of the provision of domestic support and personal care for the purpose of eliciting the identified fee or reward. So understood, such an arrangement might be seen as the origin of, or motive for, what would otherwise be a close personal relationship under the PRA. It is to be contrasted with the situation where the provision of domestic support and personal care is an indicium or incident of the close personal relationship.”

The contrast drawn by the primary judge may be illustrated by the distinction between, on the one hand, a nurse or housekeeper who lives with an aged or disabled person and is compensated (in money or board or both) and, on the other hand, a niece or nephew who lives with an older relative who is no longer self-sufficient. Even if it is made clear that the niece or nephew will receive free board and lodging and may have an expectation of an inheritance if the relative predeceases him or her, if the purpose of doing so is primarily based on family ties, then he or she will not be living together with his or her relative “for fee or reward”.
Those examples are more clear-cut than some of the relationships which will arise in real cases (an example is the family friend who was treated as a son considered in Ye v Fung [2006] NSWSC 243). It is to be expected that there will be many cases where domestic support and personal care are provided for motives that have elements of affection or familial duty, but also elements of an expectation of some benefit in return. However, it is not necessary in order to resolve this appeal to address cases where the position is more nuanced.
The appellant seized upon the words “direct relation” or “direct connection” in the primary judge’s formulation reproduced above, and contended that on the findings of fact made by his Honour, there was the requisite relation or connection. But there is, in one sense, a direct relation or direct connection between the provision of accommodation to both the nurse or housekeeper and to the niece or nephew in the examples mentioned above. It would however be wrong to disentitle a person merely because it could be shown that there was some causal connection between the fee or reward and the provision of domestic support and personal care. That is the point made by the primary judge in the passages reproduced above, with which I respectfully agree.
There is another matter to bear in mind. These questions will only arise if the two people are “living together” and not married or in a de facto relationship. If the purpose of the living together is primarily based on bonds of family or friendship, then it is likely that the provision of domestic support and personal care will not be “for fee or reward”. If the purpose of living together is primarily remunerative, then the provision of domestic support and personal care is likely to be “for fee or reward”.
There has been an understandable tendency to take the imprecise words of the statute and to impose glosses upon them. Thus it was said in Re Filomena Rodi, decd [2016] NSWSC 1696 at [53] that “in context the expression ‘for fee or reward’ implies a commercial arrangement”. In White v O’Neill [2010] NSWSC 1193 at [47], there was reference to “a contractual arrangement in which the fee or reward is produced by the provision of support and care”.
It may be helpful to ask whether a relationship is properly characterised as “commercial” or “contractual”. If the relationship be “commercial” then it is likely that the domestic support and personal care will be provided for fee or reward. But ultimately the statutory language requires an examination of a question of fact: why did the person provide domestic support and personal care? I respectfully agree with the observation of the primary judge at [378] that placing a gloss upon the statute may ultimately distract from the task of applying the words of s 5(2)(a) themselves. I appreciate, of course, that there will be cases where the reason for providing domestic support and personal care is contestable. Motivations may be mixed, and may vary over time, as the facts in Ye v Fung demonstrate. Here, as Emmett AJA has observed, the board and lodging which Maria received were an incident of her close personal relationship with her father-in-law Chris, but were not the reason for her caring for him. It follows that there was no error in the primary judge’s conclusion that she was not disentitled by s 5(2)(a).
I do not wish at add to what Emmett AJA has said concerning the remaining grounds of appeal. For those reasons, as well as those given by Emmett AJA, the Property Appeal should be dismissed. The orders proposed by Emmett AJA in both appeals should be made.
EMMETT AJA: These two appeals arise out of disputes within the Saravinovski family. The appellant in both appeals is Krste Saravinovski (Chris), who appeals by his tutor, Louie Saravinovski (Louie). Louie is Chris’ third son. The respondent in each appeal is Maria Saravinovska (Maria). In appeal No 239390 of 2016 (the Mortgage Appeal), Maria is respondent in her capacity as executrix of the estate of her late husband, George Saravinovski (George). George was Chris’ eldest son. It is convenient to refer to the submissions made on behalf of George’s estate as having been made by George. In appeal No 233724 of 2016 (the Property Appeal), Maria is respondent in her own right. The appeals arise out of separate proceedings in the Equity Division, in both of which Chris was unsuccessful.
In one set of proceedings (the Mortgage Proceedings), Chris claimed that George was indebted to him in the sum of $800,000 and that that sum was secured by a mortgage dated 7 July 2003 (the Mortgage) of a property situated at Kogarah Bay (the Property). Chris sought judgment against George for the sum of $800,000 and a declaration that the Property is charged with the repayment of that sum due under the Mortgage. Chris was unsuccessful in his claims in the Mortgage Proceedings. The Mortgage Appeal is an appeal from the dismissal of Chris’ claims in the Mortgage Proceedings. George also filed a cross-claim in the Mortgage Proceedings but was unsuccessful in that claim. However, there is no appeal from the dismissal of the cross-claim.
In the other proceedings (the Property Proceedings), Maria was successful in a claim against Chris under the Property (Relationships) Act 1984 (NSW) (the Property Act). In those proceedings, Maria claimed an order under the Property Act that the interest of Chris in various properties be charged with a sum that is just and equitable in accordance with s 20 of that Act. Maria was substantially successful in that claim but not entirely. She was held to be entitled to an order under the Property Act granting her a 30% interest as tenant-in-common with Chris in another property situated at Kogarah Bay (No 5). The Property Appeal is an appeal from that determination.
The Mortgage Proceedings and the Property Proceedings were heard together by a judge of the Equity Division (the primary judge), on the basis that the evidence in one be evidence in the other. The two proceedings were heard over some 36 days in 2014 and 2015. In the course of the hearing, Chris became incapable and Louie was appointed as his tutor. After the primary judge had reserved his decision, George died and Maria was appointed as his legal personal representative. Hence, Maria is the respondent in the Mortgage Appeal as well as in the Property Appeal.
The two appeals raise distinct and separate questions. However the questions are not completely unconnected. Indeed, it was suggested on behalf of Maria that the claim by Chris against George for payment under the Mortgage was prompted by Maria’s claim against Chris under the Property Act. In any event, the result of the Mortgage Proceedings has a bearing on the Property Proceedings, in so far as it determines the extent of the property available to Chris and Maria for the purposes of the Property Act.

Background

Chris was born in Macedonia in 1930. He married his wife, Radmila (Rada), in Macedonia. Chris and Rada had three sons born in Macedonia, being George, born in 1956, Bill, born in 1961 and Louie, born in 1962. Chris migrated to Australia in 1963 and Rada and their three sons joined him in 1966. Chris built up a substantial property portfolio in and around Sydney. It will be necessary to make reference to several of the properties.
In 1986, the Saravinovski family travelled to Macedonia. One of the purposes in doing so was to find a Macedonian wife for George. Within four days of first meeting her, George, then aged 30, married Maria, then aged 19. After they returned to Australia, George and Maria, and their children, Belinda and Bobby, lived under Chris’ roof until 2 December 2009. At various times over the period from 1986 to 2009, Bill and Louie also lived under Chris’ roof in the Saravinovski family homes. At other times they lived independently.
In January 1998, George and Bill purchased the Property as tenants-in-common in equal shares. They mortgaged the Property to Australia and New Zealand Banking Group Limited (ANZ) to secure a loan of $350,000. The mortgage to ANZ was discharged in June 2005.

On 7 July 2003, by the Mortgage, George and Bill purported to mortgage the Property to Chris to secure what was described in the Mortgage as “the principal sum of $1 million”. The Mortgage provided that that sum was to be repaid at the end of five years. The Mortgage was not intended to take priority over the mortgage to ANZ.
On 25 August 2009, Bill transferred his moiety in the Property to George. At that time, a further advance was made by ANZ in the sum of $375,000 on the security of a further mortgage of the Property. The sum of $375,000 was applied as to $275,000 by a payment to Bill and as to approximately $100,000 by a payment to Chris.
On or shortly before 2 December 2009, as the primary judge held, simmering tension between members of the Saravinovski family erupted into a violent argument, which resulted in the police being called. On the version of events given by George and Maria, Chris threw them out of No 5, which was then the Saravinovski family home. That led to the commencement of the Property Proceedings by Maria on 11 November 2011 and, subsequently, the commencement of the Mortgage Proceedings by Chris on 17 February 2012.
The Saravinovski family was split into two camps. On one side was Chris, supported by his two younger sons, Bill and Louie. On the other side were George and Maria, supported by their children, Belinda and Bobby.

The Mortgage Proceedings

The primary judge observed that the way in which Chris ultimately put his case in the Mortgage Proceedings did not reflect the allegations made in his statement of claim filed on 5 April 2012. While senior counsel for George submitted on the first day of the hearing that Chris should be held to his pleading, the primary judge dealt with Chris’ case on the basis of his outline of opening submissions. In the circumstances, it is desirable to say something about the pleading and the outline of submissions.
The relevant allegations in the statement of claim may be restated as follows:

2. George is the registered proprietor of the Property.

4. On 8 February 1984, Chris and Rada transferred to Bill and George as tenants-in-common in equal shares a property situated in Rockdale (No 22) for the expressed consideration of $110,000.

5. Neither Bill nor George paid any money to Chris and Rada for the consideration of the transfer of No 22.

7. On 12 February 1988, George transferred his moiety in No 22 to Bill for the expressed consideration of $57,500.

8. George did not receive the sum of $57,500.

9. On 5 April 1988, Chris and Rada transferred to George another property in Rockdale (No 14) for the expressed consideration of $120,000.

10. George did not pay any money to Chris and Rada as consideration for the transfer of No 14.

11. In January 1998, George and Bill purchased the Property for the sum of $470,000.

12&13. The consideration for the purchase of the Property was provided, as to the sum of $350,000, by a loan from ANZ and, as to the balance, by Chris.

14. Chris paid for repairs and restoration of the Property.

15. Chris assisted George and Bill in the repayment of the loan from ANZ.

16. In November 1998, George became the registered owner of 10% of the issued share capital of KR & Sons Pty Ltd (KR&S) in respect of which he paid no consideration.

17. In 2003 George and Bill agreed orally to grant to Chris a mortgage over the Property to secure payment to Chris of the sum of $1 million.

18. The consideration for the sum of $1 million included the transfer to George and Bill of No 22 and No 14, the monetary contribution made by Chris to George and Bill in respect of the Property and the transfer or allotment to George of the shares in KR&S.

19. The said sum of $1 million was calculated by Mr Gordon Bryant, solicitor, and disclosed to George and Bill at the time of the agreement referred in para 17.

20. Pursuant to the agreement referred in para 17, George and Bill executed the Mortgage.

21. There was an express term and condition of the Mortgage that the sum of $1 million and interest thereon would be paid to Chris on or before 7 July 2008.

22. It was a further express term and condition of the Mortgage that Bill and George would pay interest on the sum of $1 million at the rate of 8% per annum, reducible to 6% if paid within 14 days of the date due for payment.

24. In September 2009, Bill transferred his interest in the Property to George.

25. On 7 September 2009, George paid the sum of $150,000 to Chris in partial satisfaction of the indebtedness secured by the Mortgage.

26. On 7 September 2009, Bill paid the sum of $50,000 to Chris in partial satisfaction of the indebtedness secured under the Mortgage.

27. The balance of the principal sum secured by the Mortgage has not been repaid.

Significantly, there is no allegation in the statement of claim that the benefits alleged to have been provided by Chris to George represented loans or advances or that the sum of $1 million said to be secured by the Mortgage represented the value of the benefits alleged to have been provided by Chris to George. Chris sought to overcome that lack of connection by the way in which the case was opened to the primary judge.
The relevant assertions made in the outline of submissions may be restated as follows:

112. Each of the properties and financial benefits provided to Bill and George by Chris was provided on the following terms, as jointly understood and agreed by Chris, George and Bill:

(a) the provision of each property and benefit constituted a loan by Chris to George and/or Bill in the amount of:

the expressed consideration in the property transfers,

the expenses paid on repairs, restoration and mortgage instalments and

the value of the shares in KR&S;

(b) each of George and Bill was under an obligation to Chris to repay the amounts lent and to pay interest in an amount equal to the interest that would have accumulated had George and Bill borrowed money from commercial sources to pay for the various properties and benefits; and

(c) Chris would be entitled to call on the loans at any time and require payment of the full amounts outstanding, including interest.

113. Accordingly, prior to the execution of the Mortgage, each of George and Bill had a loan from Chris that was repayable at call and subject to a floating interest rate reflecting prevailing interest rates offered by commercial lenders from time to time.

114. The precise balance owing under each loan was not identified at any particular time prior to the execution of the Mortgage, although it was at all times ascertainable within a modest degree of tolerance.

115. Through the execution of the Mortgage, the parties clarified and crystallised the precise amount outstanding on the loans made by Chris to Bill and George.

116. George and Bill had outstanding loans from Chris totalling $1 million at the time of execution of the Mortgage.

Those contentions were reflected in the closing submissions made on behalf of Chris, which may be restated as follows:

In February 1984, Chris and Rada transferred No 22 to George and Bill for the expressed consideration of $110,000;

In February 1988, George transferred his interest in No 22 to Bill for an expressed consideration of $57,500 and in April 1988 Chris and Rada transferred No 14 to George for the expressed consideration of $120,000;

Neither George nor Bill actually paid any part of the expressed consideration for those transfers.

Chris provided the following additional financial advantages to George:

(a) In 1986 Chris paid for George to travel to Macedonia;

(b) In January 1988, Chris paid a sum of $137,000–$139,000 towards the purchase of the Property in the name of George and Bill;

(d) Following the purchase of the Property, Chris assisted in the payment of mortgage instalments to ANZ in respect of the balance of the purchase price lent by ANZ on the security of a mortgage for the Property;

(e) In September 1995, Chris caused George to become the registered owner of 100 shares in KR&S without receiving any payment from George.

Chris also provided a number of additional financial benefits to George, including repairs to No 22, mortgage repayments on No 22 as well as living, rent and board free, in Chris’ homes.
Each of the benefits referred to above was provided on the following terms, as jointly understood and agreed by Chris, George and Bill:

(a) the provision of each benefit constituted a loan by Chris to George or Bill, as the case may be, in the amount of:

(i) the expressed consideration in respect of the property transfers;

(ii) the expenses paid in respect of travel, repairs, deposit paid on the Property and mortgage instalments;

(iii) the value of the shares in KR&S.

(b) George and Bill were under an obligation to Chris to:

(i) repay the amounts lent to them;

(ii) pay interest in an amount equal to the interest that would have accumulated had George and Bill borrowed money from commercial sources to pay for the various properties and benefits.

The primary judge considered that, notwithstanding the pleading point taken at the outset of the hearing, the hearing was conducted on the basis of the allegations made in the outline of submissions. His Honour considered that he was required to adjudicate upon the case that the parties argued and that, by acquiescing in the case in that fashion, the objection taken on the first day by counsel for George ultimately had no practical effect.
At the outset, the primary judge said that he would not accept the evidence of Chris, George or Bill unless it was corroborated by independent sources, inherently credible or otherwise against interest. Proceeding on that basis, his Honour concluded that the evidence had failed to satisfy him that the Mortgage gave Chris any rights against George or over the Property. His Honour accepted George’s submission that the Mortgage, whether it be legally effective or ineffective, was conceived by Chris as a protective measure against the possibility of Bill’s marriage to his wife, Valentina Josifova (Valentina), ending in divorce and was only intended to be deployed against a departing wife. Significantly, his Honour did not conclude that the Mortgage was a sham.
The primary judge considered that, in so far as the case advanced by Chris was an action on the Mortgage simpliciter, Chris had failed to prove payment of the secured sum of $1 million. Indeed, it was common ground that George and Bill had not in fact received a payment of $1 million in consideration for which they had granted the Mortgage. Rather, the way in which the case was ultimately argued on behalf of Chris depended upon a finding by the Court that there was some other agreement in relation to the Mortgage or of which the Mortgage was a part. His Honour held that Chris had failed to make good any such agreement.
The primary judge concluded that Chris had failed to prove that George and Bill agreed to grant a mortgage to secure payment of a sum of $1 million and had failed to prove the allegation that the consideration for that sum included the transfers of properties and other benefits referred to in the statement of claim. His Honour observed that Chris bore the onus of proving those allegations. His Honour concluded that there was no evidence from either Chris, George or Bill that the Court would accept to prove those allegations and that there was no admission against interest by George upon which the Court could rely. In addition, by reason of the failure by Chris to call Mr Bryant, who was closely involved in the relevant events, to give evidence, the primary judge drew the inference that Mr Bryant could not have said anything to assist Chris’ case in relation to the Mortgage. [1] His Honour considered that there was no credible evidence on which the Court could be satisfied, on the balance of probabilities, that the various agreements and understandings in relation to the so called transfers and benefits existed.
1. See Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.
The primary judge was further fortified in his conclusion by what he characterised as the inherent probabilities in the evidence given by Chris. His Honour considered that Chris’ affidavit evidence relating to the transfers of No 22 and No 14, where he said that he was giving those properties to Bill and George to “give them a start”, was inconsistent with the imposition of obligations or the existence of understandings of the kind alleged by Chris.
In addition, the primary judge placed some reliance on what he considered were material omissions from the Mortgage, as well as the absence of reference to the Mortgage in correspondence from Mr Bryant in November 2007. Finally, his Honour placed reliance upon a tape recording of a discussion involving Chris, George and Maria made while Chris was in hospital recovering from surgery in March 2010. His Honour referred to the failure by Chris in that conversation to refer expressly to the amount said to be secured by the Mortgage.

The Mortgage Appeal

The notice of appeal in the Mortgage Appeal identifies several grounds. Chris complains that the primary judge erred as follows:

1. in holding that no monies had in fact been lent by Chris to George and Bill in relation to which the Mortgage was executed.

2. in holding that Chris’ evidence in relation to No 14 and No 22 was equally consistent with the proposition that the properties transferred to George were not gifts but gave rise to financial obligations owed to Chris in respect of the value of the properties transferred and that George could use the properties as a financial start in life.

3. in holding that the omissions from the Mortgage were inconsistent with the finding that the parties had an agreement to be bound by it.

4. in holding that the obvious inference from the fact that the Mortgage was not referred to in Mr Bryant’s letter of 9 October 2007 was that everyone had forgotten about it or they understood it was not binding inter se but was only to be deployed against a departing spouse.

5. in holding that the supposed failure by Chris to mention the forgiveness of any outstanding debts in the conversation recorded while he was in hospital supported the conclusion that the Mortgage was not intended to be binding.

6. in holding that an inference[2] could be drawn against Chris by reason of his unexplained failure to call Mr Bryant in relation to the issues about the calculation of the amount secured by the Mortgage, consideration for the Mortgage and the transaction generally.

7. in accepting George’s submission that the Mortgage was conceived by Chris as a protective measure against the possibility of Bill’s marriage to Valentina ending in divorce and was only intended to be deployed against a departing wife.

Chris contends that the primary judge should have held that the Mortgage was legally valid and enforceable and was intended to, and did, in fact, secure the sum of $1 million plus interest, such that, as at the date of judgment, the Mortgage secured the sum of $800,000 and George was indebted to Chris in the sum of $800,000.

2. See Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.

The grounds stated in the notice of appeal included reasons in support of them. For the purposes of the Mortgage Appeal, senior counsel appearing for Chris identified five broad categories of matters in issue. That categorisation was accepted by counsel for George.
Those categories may be summarised as follows:

(a) the property and money that Chris gave to George and Bill, which is said to give rise to the indebtedness secured by the Mortgage;

(b) the evidence of Chris, George, Bill and Louie in relation to the circumstances in which such property and money was transferred to George and Bill by Chris;

(d) the finding by the primary judge that the Mortgage was conceived by Chris as a protective measure against the possibility of Bill’s marriage ending in divorce, with the Mortgage to be deployed only against an outgoing spouse;

(e) the primary judge’s reliance and findings in relation to the conversation with Chris in hospital in March in 2010 and the inference drawn by the primary judge against Chris for his failure to adduce evidence from Mr Bryant in relation to the calculation of the figure stated in the Mortgage of the principal sum and the circumstances in which the Mortgage was executed.

The first three are interconnected in so far as they each relate to the question of whether George had any indebtedness to Chris that could have been secured by the Mortgage. For Chris to succeed in the appeal, it is necessary for him to demonstrate that the primary judge erred in concluding that no obligations were secured by the Mortgage.

The Property and Money Transferred by Chris to George and Bill

There were four transactions said to give rise to the indebtedness that was expressed to be secured by the Mortgage. There was no dispute about the transactions, each of which conferred benefits on George, and in some cases on Bill. Nevertheless, the primary judge concluded that the conferring of those benefits did not give rise to any liability on the part of George.
In 1984, Chris and Rada transferred No 22 to George and Bill for the stated consideration of $110,000. Both Chris and Bill denied that any money had been paid to Chris in respect of No 22. His Honour was unable to conclude that any consideration had in fact been paid to Chris. At the same time, George and Bill mortgaged No 22 to the Commonwealth Bank of Australia (the CBA) to secure an advance of $56,000. In February 1988, George transferred his interest in No 22 to Bill for a stated consideration of $57,500. George accepts that he was not paid that sum by Bill. In March 1988, Bill mortgaged No 22 to the Commonwealth Savings Bank of Australia to secure an advance of $70,000. It is not clear whether that was an additional advance or to replace the advance secured by the mortgage given to CBA in February 1984.
In April 1988, Chris and Rada transferred No 14 to George for a stated consideration of $120,000. The primary judge found that that sum had not been paid by George to Chris or Rada. That was the effect of Chris’ evidence and George admitted that he did not pay that amount.
In September 1995, when KR&S was incorporated, 100 shares, being 10% of the issued capital, were issued to George. George provided no consideration for the issue of those shares, although it appears to have been accepted that KR&S received the monies on allotment of the shares, presumably from Chris. Bill and Louie also each received 100 shares in the capital of KR&S, for which they paid nothing, although each of them subsequently transferred their shares to Chris. In December 1995, KR&S purchased shop premises at Rockdale (No 509). The primary judge found that George contributed nothing towards the purchase price of No 509 or the repayment of loans secured by mortgage over No 509.
Finally, in January 1998, Chris paid $120,000 towards the purchase of the Property. The Property was registered in the names of George and Bill as tenants-in-common in equal shares.
Chris contends that as at 7 July 2003, when the Mortgage was executed, as a consequence of the transactions referred to above, George and Bill had each received property and money from Chris having a notional value in excess of $350,000. In addition, they had paid no interest on that sum from the time when the benefits were conferred up to the time of the execution of the Mortgage. Chris contends that the addition of notional interest to the value of the benefits conferred would support a conclusion that, as at 7 July 2003, Bill and George together had received benefits in excess of $1 million.

It was not contended on behalf of George that the benefits conferred by Chris were the subject of a presumption of advancement by Chris in favour of his sons, Bill and George. Critically, however, there was no express evidence accepted by the primary judge of any agreement on the part of George (or Bill) to pay to Chris at any time an amount equal to the value of the benefits conferred in relation to the four transactions outlined above. It was not suggested in the proceedings that the transactions gave rise to a resulting trust in favour of Chris or Chris and Rada. Such a contention would have been inconsistent with the assertion made by Chris in the Mortgage proceedings that George was under a liability to him to pay the sum of $1 million referred to as the principal sum in the Mortgage. The Evidence of Chris, Bill and George Concerning the Benefits Conferred by Chris Bill gave evidence that, in respect of the transfer to him of No 22, the allotment of a 10% shareholding in KR&S and the contribution of money towards the purchase price for the Property, Chris told him on each occasion that he and George would need to repay Chris the value of the benefit conferred. Bill’s evidence was that Chris said to him, as well as to George and Louie, that each would need to pay Chris for the shares in KR&S or otherwise return them to him. That evidence was corroborated by Louie. Chris gave evidence that he told each of his sons that they would need to pay him within two years of receiving the shares or return them to him. Consistent with that evidence, both Louie and Bill transferred their shares in KR&S to Chris, Louie in December 1996 and Bill in November 1998.
Chris complains that the primary judge erred in holding that his evidence, that he was giving No 14 and No 22 to his sons to give them a start, was inconsistent with the imposition of obligations or the existence of the understandings of the kind alleged by Chris. He contends that his evidence was more consistent with the proposition that the benefits conferred were not gifts to Bill and George but gave rise to financial obligations in respect of the value of the benefits and that George and Bill could use the properties, and the rent derived from them, as a financial start in life. Thus, it was contended, Chris knew that Bill and George could not afford to buy No 22 but that he hoped they could earn some rent from it and hopefully go on to acquire other properties, which George admitted Chris said to him prior to the transfer of No 22.
Chris points to the evidence given by George that Chris repeatedly said to him, as well as to his brothers, that “anything that’s concerning you, you have to pay for it”. George gave evidence that Chris told him that there is “no such thing as a free anything. You have to pay for it.” Chris contends that the primary judge erred in holding that that evidence was too vague and general to be used to conclude that there existed an obligation on behalf of George to repay to Chris the value of the benefits conferred upon him. Chris asserts that it was a crucial admission by George that the benefits conferred upon him by Chris were not gifts. The vagueness, generality and lack of formality, Chris says, could be explained by the familial nature of the relationship between Chris, on the one hand, and George and Bill on the other. The primary judge rejected George’s contention that he had contributed financially to each of the benefits conferred by Chris by reason of Chris receiving all of his income, such that Chris had been paid for the benefit. By rejecting that contention, as to why he was not obliged to pay Chris for any of the benefits conferred upon him, Chris contends that his case was made out in circumstances where George admitted that the benefits provided to him by his father had to be paid for. Therefore, Chris contends, on each occasion when a benefit was conferred on George and Bill, it was conferred on condition that George and Bill would be liable to pay to Chris the value of the benefit. Accordingly, it was said, the inference should be drawn that Chris, on the one hand, and George and Bill on the other, had agreed, prior to signing the Mortgage, that the sum of $1 million represented a fair value of the benefits that had been conferred and, therefore, that amount of indebtedness was acknowledged in the Mortgage.
As I have said, the primary judge made unfavourable credit findings in relation to each of Chris and Bill, as well as George. His Honour declined to accept their evidence unless it was corroborated or against interest. However, Chris contended that Bill’s evidence in respect of the circumstances in which Chris transferred benefits to George and Bill was against his own financial interests. He argued that Bill’s evidence was to admit to a substantial liability to Chris for the benefits received. If that indebtedness was repaid entirely by George, Bill would be exposed to a potential action by George for contribution. Therefore, Chris asserted, his Honour should have accepted that such evidence fell within the exception made by his Honour that the evidence was “otherwise against interest”.
However, when the primary judge said that he would only accept evidence given by certain witnesses when it was “against interest”, his Honour must be understood as indicating that the witness in question was conscious of giving evidence against interest. I do not consider that the evidence supports a conclusion that Bill knowingly gave evidence that would have the consequence that he may be liable in an action for contribution brought by George if George paid the full amount of their joint indebtedness.

Other Evidence of George’s Indebtedness

In support of the inference sought to be drawn that each of the benefits conferred upon his sons gave rise to financial obligations on their part, Chris relies upon the express terms of the Mortgage and correspondence from Mr Bryant in relation to the proposal for George to purchase Bill’s interest in the Property. Putting aside the oral evidence of the witnesses, which the primary judge did not accept, the only explicit evidence of any indebtedness of George to Chris appears in the Mortgage itself. However, there is other documentary material that the parties rely on as being indicative of the existence or non-existence of indebtedness.
In May 2003, Mr Bryant wrote to Chris concerning mortgages over No 22 and over the Property. Mr Bryant said that he was then holding two mortgages, one for $1 million over the Property and the other for $600,000 over No 22 and that the stamp duty on the mortgage of the Property was $3,941 and the stamp duty on the mortgage of No 22 was $2,341. Mr Bryant asked for Chris’ instructions as to whether he wanted him to arrange stamping of the mortgages. Mr Bryant said that, as he had indicated, the mortgages would need to be stamped “if they are to be used in any Court proceedings in the future”. There was no objective evidence as to what specific “court proceedings”, if any, might have been in mind as at May 2003. As indicated below, Chris contends that, even if court proceedings involving Valentina had been under consideration, that would not support the conclusion, without any other evidence, that it was only in relation to proceedings brought by Valentina that the mortgages would be “used”.
The Mortgage was executed by Bill and George, as “Mortgagor”. Chris was named as “Mortgagee” and the Mortgage contained a provision indicating that it was to be signed by Mr Bryant as Chris’ solicitor. However, Mr Bryant did not sign it in that capacity and the Mortgage was not signed by Chris or on his behalf. However, Mr Bryant did sign the Mortgage in the capacity of witness to the signatures of each of Bill and George. In relation to the mortgage of No 22, Bill was named as “Mortgagor” and Chris was named as “Mortgagee”. The document was signed by Bill and by Mr Bryant as witness. However, the document was not signed on behalf of Chris. Although the form provided for Mr Bryant to sign on behalf of Chris’ as his solicitor, he did not sign in that capacity.
Both mortgages consisted of three pages. The first page is the prescribed form, whereby the Mortgagor mortgages to the Mortgagee the Mortgagor’s interest in the relevant land and covenants with the Mortgagee that the provisions set out in annexure A and memorandum No Q860000 are incorporated in the mortgage. The typed form of annexure A to each mortgage was the same, except for the heading and the preamble. Curiously, the form of annexure A states that it is an annexure to a mortgage from Chris to Bill and George or from Chris to Bill, as the case may be, suggesting that Chris was the mortgagor. That appears to be no more than sloppy drafting.
The operative provision of annexure A to the Mortgage is of some significance. Annexure A, provides, in part, as follows:

The Mortgagor hereby acknowledges receipt of the principal sum of One Million Dollars ($1,000,000,000) and in consideration thereof hereby:
(a) irrevocably appoints the Mortgagee the attorney of the Mortgagor …
(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 …
Thirdly – The Mortgagor will observe the provisions set forth in [Memorandum No Q860000], which provisions are deemed to be incorporated herein.
Fourthly – The Mortgagor shall have the right to repay the whole of the principal sum on any quarter date for payment of interest with interest to that date conditional upon giving to the Mortgagee not less than three months’ prior notice in writing of his intention to do so.

The date was inserted in handwriting. The omitted parts of annexure A contained blank spaces that were not filled in.

On 11 September 2003, Mr Bryant wrote to Chris, Bill and George in relation to the mortgages over the Property and over No 22. Mr Bryant confirmed that he had completed the stamping procedures for the two mortgages. In relation to No 22, he said that duty was paid to secure a refinancing in the sum of $600,000 after allowing for the earlier mortgage of $250,000, which the mortgage superseded. He said that the mortgage over the Property was stamped at a value of $1 million. Copies of the stamped mortgages were enclosed with the letter. Mr Bryant said that the originals of the mortgages had been placed in a safe custody packet pending receipt of further instructions.
Mr Bryant then said in his letter that the mortgages could be registered on the title of both properties, if the parties wished. However, he said, that would require the consent of the current mortgagees and it would be necessary to give further instructions if the parties wished to take that step. However, Mr Bryant said, the mortgages were valid as far as “any court proceedings” are concerned and would be treated as evidence of the legitimacy “of the loan”, should that ever become necessary. Whether any specific “court proceedings” were in mind is a matter for conjecture. As indicated below, George contends that the only proceedings that were in mind were possible proceedings by Bill’s wife and that there was no intention that the mortgages would be relied upon for any purpose other than in resisting a claim by Bill’s wife.
On 9 November 2007, Mr Bryant wrote to Bill concerning a proposed transfer of title to the Property. Mr Bryant said that he had been consulted by Chris regarding a proposal for a transfer of title to the Property and that he understood that there had been some discussions involving Bill, George and Chris regarding the transfer. Mr Bryant said that Chris had told him that the proposal was for George to buy Bill’s half share in the Property, which was currently owned by both of them equally.
Mr Bryant said in the letter of 9 November 2007 that the proposal in detail was as follows:

1.   There is a current valuation for the property which indicates a figure for stamp duty purposes in the sum of $650,000.00.
2.   Mr Saravinovski believes that the market value of the property would be in the order of $750,000.00;
3.   The suggestion is that George pay to your father the sum of $200,000.00 reduction of the various loans that he has made to both of you in respect of this property and other properties;
4.   George would pay you a balance of $275,000.00 which represents your half share in the equity of the property once Mr Saravinovski's loan has been reduced by $200,000.00.

Mr Bryant then went on to say that, if Bill agreed with the proposal, he would prepare the necessary transfer from Bill to George, with George arranging payment of stamp duty for the value of the share being transferred, which would be shown as $325,000. Mr Bryant said that he assumed that George would obtain bank finance to proceed with the purchase from Bill. Mr Bryant asked Bill to confirm his agreement with the above.

For reasons that are not entirely clear, the proposal outlined in Mr Bryant’s letter of 9 November 2007 was not effected immediately. On 11 September 2009, Mr Bryant wrote again to George, Bill and Chris confirming that the transfer of title to the Property “was settled with your bank” on 25 August 2009. Mr Bryant said that he attended on settlement with ANZ, which advanced a total of $374,104 “by way of first mortgage” over the Property. Mr Bryant said that the balance of funds “was paid in by you to make the payments as instructed by you”.
Mr Bryant said that the transfer would be registered by the bank, together with its mortgage documents. He noted also that the payments had now been made to Bill and Chris in accordance “with your instructions as to the sums payable pursuant to your arrangement”. That appears to be a reference to the arrangements set out in the letter of 9 November 2007.

Conclusion as to the Mortgage Appeal

The basis upon which Chris puts his case in relation to the Mortgage is somewhat fluid. I have set out above the allegations made in the statement of claim in support of the case. The parties agreed on a list of issues to be determined at the trial. In relation to Chris’ claim under the Mortgage, the issues were stated as follows:

Were there any loans made by Chris to Bill and George secured by the Mortgage?

In relation to the Mortgage, was there an intention to create a legal relationship, was there any consideration and is the Mortgage otherwise valid?

If the answer to those questions is yes, what sum is secured by the Mortgage?

In support of his contentions, the closing written submissions made on behalf of Chris relied on evidence given by Chris, George, Bill and Louie. As indicated above, the primary judge rejected all of that evidence on the basis that he would not accept any evidence given by those witnesses unless corroborated by independent evidence. The evidence of conversations relied on was not corroborated.
In addition, Chris submitted that he relied on the following:

The reference in Mr Bryant’s letter of 9 November 2007 to the proposed payments being made “in reduction of the various loans that he has made [to George and Bill] in respect of [the Property] and other properties”;

The fact that, in August 2009, $200,000 of the principal sum secured by the Mortgage was in fact repaid by George and Bill;

George’s assertion in his defence that the payment made in August 2009 “extinguished any liability” of George to Chris;

Chris’ reference in the recorded conversation in hospital that he would not ask George for the money if George and Maria looked after him and he would not ask any interest of George, thereby indicating that monies had been lent by Chris to George in the past and that Chris had asked for George to pay interest in respect of the money lent.

In the course of oral argument, senior counsel for Chris accepted that it was necessary for the Court to draw an inference from the evidence, other than the oral evidence of the Saravinovski witnesses, that agreements were entered into between Chris, on the one hand, and, relevantly, George, on the other; that, in consideration of the relevant benefit being given, George would receive the value of that benefit as a loan by Chris, which would be repayable on demand; and that George would, on demand, pay interest on that sum at commercial rates. Chris relies on the documentary evidence summarised above as giving rise to that inference or those inferences.
As the primary judge held, George’s amended defence put in issue the whole question of consideration for the grant of the Mortgage. That is to say, George denied that there was any liability on his part to pay the sum of $1 million referred to as the principal sum in annexure A to the Mortgage. His Honour observed that Chris’ case depended upon the Court finding some agreement in relation to the Mortgage, or of which the Mortgage was part, and that Chris failed to make good any such agreement.
Clearly, in the circumstances, Chris had the onus of demonstrating, on the balance of probabilities, that an agreement of some sort, being either the agreement pleaded or the agreement relied upon in submissions, was made between Chris, on the one hand, and George, on the other. The primary judge was not persuaded to the relevant standard that such an agreement had been made. There was no error in reaching that conclusion. The objective evidence now relied upon by Chris is not capable of supporting a finding of an agreement in the terms relied upon or any other terms such as would constitute consideration for an acknowledgment that George and Bill had received the principal sum of $1 million referred to in Annexure A to the Mortgage in circumstances that would give rise to indebtedness at law. That is the primary conclusion reached by the primary judge. There was no error in doing so. It follows that the mortgage appeal must be dismissed with costs.

The Mortgage as a Defence against Marital Claims

In the light of the conclusion reached above it is not necessary to deal with the other grounds of appeal. Nevertheless, it is desirable to say something about one aspect of George’s defence, which was accepted by his Honour, namely, that the Mortgage was no more than a device to resist any claim by Bill’s wife against any property in which Bill had an interest.
In 1992, Bill married his first wife, Marina Simonovska (Marina), in Macedonia. In September 1992, after the marriage, Bill executed a mortgage over No 22 in favour of Chris, expressed to secure the sum of $250,000. It is unclear whether any advance of that sum was made by Chris to Bill at that time. In mid-1993, Bill separated from Marina.
KR&S was incorporated in September 1995 with Chris, George, Bill and Louie as its inaugural directors. As I have said, the 1000 issued shares in its capital were held as to 700 by Chris, and 100 by each of George, Bill and Louie. In December 1996 Louie ceased to be a shareholder and transferred his 100 shares to Chris. Louie ceased to be a director in April 1997. In November 1998, Bill ceased to be a shareholder and transferred his shares to Chris.
At some time prior to July 2002, Bill entered into a relationship with Valentina. On 24 June 2002, Mr Bryant wrote to Bill in relation to a “proposed pre-nuptial agreement”. In the letter, Mr Bryant said that a title search in respect of No 22 indicated that a mortgage to Chris and Rada was still on the title. Mr Bryant said that he had thought that the CBA was to discharge the mortgage but it was still in place. Mr Bryant also said in the letter that the Property was held by Bill with George in equal shares as tenants in common and that there was a mortgage to ANZ on that title.
On 19 July 2002, Bill sent an email to Mr Bryant saying that he had spoken to Valentina who would be prepared to sign any documents to state that she has no interest in No 22, the property or any assets owned by KR&S. Bill said that Valentina acknowledged that she had not contributed to any of those properties and did not have any rights to them in the future.

By failing to identify and evaluate properly Maria’s contributions of the types referred to in s 20(1)(a) and s 20(1)(b) of the Property Act;

By failing to exercise the discretion vested in him under s 20 properly, in determining that it was just and equitable to adjust Chris’ interest in No 5, when it was not just and equitable to do so;

By failing to exercise the discretion vested in him under s 20 properly, in determining that granting Maria a 30% interest as tenants-in-common in No 5 was just and equitable.

In relation to each of those grounds, Chris asserts that the primary judge:

allowed extraneous or irrelevant matters to guide or effect his determination;

mistook the facts;

did not take into account relevant material; and

made an entirely erroneous estimate of Chris’ contributions, Maria’s contributions and by way of adjustment of financial interests.

He asserts that the primary judge should have determined that it was just and equitable that there be no adjustment in property interests or, alternatively, that Maria was entitled to an adjustment for a substantially lesser interest in No 5 than 30%.

Fee or Reward

The exclusion in s 5(2) is enlivened where domestic support and personal care is provided “for fee or reward”. Both parties accept that the use of the word “for” requires that there be a causal connection between the provision of domestic support and personal care, on the one hand, and that which is to be characterised as “fee or reward”, on the other. Chris contends that Maria provided domestic support and personal care to Chris in consideration of the promises made by him in Macedonia before she married George.
Thus, Maria’s evidence was that she was induced by Chris’ statements in Macedonia to marry George and thereafter to look after Chris and Rada in Australia. She said that she accepted and relied on the statements made by Chris when she decided to marry George, come to Australia and provide support and care to Chris and Rada. Therefore, Chris says, whatever Maria did for Chris was in expectation of, and in return for, Chris extending to Maria and to her immediate family board, lodgings and support, such as paying for christenings, parties, social gatherings, overseas trips and the like.
The primary judge accepted that the use of the word “for” signified that the relevant domestic support and personal care must be provided in consideration of, or in return for, the fee or reward and that there must be a direct relation between the fee or reward, on the one hand, and the provision of support and care, on the other. The relationship must be causative, such that the fee or reward must be a quid pro quo for the provision of the domestic support and personal care. His Honour considered that before s 5(2)(a) is enlivened, there must be a direct connection in the nature of an immediate and intentional exchange of the provision of domestic support and personal care for the purpose of eliciting the identified fee or reward. Accordingly, his Honour held, the arrangement might be seen as the origin of, or motive for, what would otherwise be a close personal relationship under the Property Act. It is to be contrasted, his Honour said, with the situation where the provision of domestic support and personal care is an indicium or incident of the close personal relationship.
The primary judge considered that a close personal relationship involves an expectation of mutual benefit and support on the part of each person in the relationship. For example, one person to the relationship may provide domestic support and personal care while the other person provides free accommodation. While the free accommodation is, in a sense, a reward, his Honour considered that, where it and the provision of domestic support and personal care are manifestations of the close personal relationship rather than the motivation for it, s 5(2)(a) will not be enlivened. His Honour accepted that, while a legally enforceable arrangement would satisfy the provision, a legally enforceable arrangement was not required. While the commercial provision of domestic support and personal care would almost invariably involve a contractual arrangement, and would be sufficient to satisfy the provision, it is not necessary.
Ultimately, the primary judge concluded that there was no direct relation of the kind just identified between Maria providing domestic support and personal care to Chris, on the one hand, and the various advantages identified by Chris as having been conferred by him on Maria and her family, on the other. Rather, his Honour held, those advantages were manifestations or indicia of the close personal relationship between Maria and Chris. They were not the consideration, in the sense of a quid pro quo, for the provision of the relevant domestic support and personal care by Maria to Chris.
The primary judge found that, in the course of the conversations between Maria and Chris in Macedonia, before Maria married George, Chris told Maria that, if she married George and came to Australia and looked after Chris, and especially Rada, Maria would not have to work and Chris would ensure that Maria had everything she needed. Maria’s evidence was that Chris told her that he had a couple of shops and that, if Maria looked after him and his wife, who was very sick, and his other two sons and George, he would give Maria everything she wanted and she would not have to work. Chris told her that George was a good man and was working hard.
In examination-in-chief, Maria gave evidence that George told her that he was the richest Macedonian man in Australia and that if she looked after his family, she would not have to work and would not have to have any concerns about her future. George told her that, if she came to Australia her work would be looking after them, including looking after Chris’ wife. She said that Chris told her that the family came to Australia because his wife is sick. He said that they came to Macedonia to marry George off.
Maria said that her life in Macedonia was good and there were boys who were interested in her, but the promise made by Chris convinced her to marry George. Maria said that Chris’ promises painted a picture where her life would be even more enhanced. According to Maria, Chris told her that she did not have to go to work, did not have to study English and all she needed to do was to look after Rada and Chris and his sons. Maria said that, after George and Chris had said things to her, she felt more empowered to make the decision to marry George following the propositions that he had made. She said that she made her decision to marry George after a second meeting when Chris told her that she would need to look after them at home and did not have to work.
Later in examination-in-chief, Maria said that, when she made the decision to marry George and come to Australia, she thought that her life in Macedonia was good and that George was a good kid. She said that she liked George but what Chris told her caused her to make the decision to come to Australia, because she thought her life would be even better than the life she had in Macedonia and that was what made her come to Australia.
In cross-examination, Maria confirmed that at no time while she and her family lived with Chris were they required to pay to Chris and Rada or, after Rada’s death, to Chris any board for accommodation in Chris’ homes. She said that he held all the money and she did not pay him for any rent or groceries. Subsequently, Maria asserted that she married George because she liked him but that she would not have come to Australia if his father had not promised her that she was going to be wealthy, that she would not be going to work and that she was going to have a house and shops. Maria was asked whether, in marrying George, she had hoped that she would not have to work and that she would get some of Chris’ property but that it was not anything that Chris had said that caused her to marry George. Maria responded that when she met George she liked him, but if not for the promises that she would not make a mistake if she married George, that Chris had houses and a shop and that she would not have to work, she would not have decided to come to Australia.
Maria was also asked whether, to the extent that she expected to receive anything from Chris and Rada, she only expected to receive it in so far as it was given to George rather than to her. Her response was that she did not know how it was given to George but she did her duty in the house, her job. She said that she did not go to school to learn English or to continue and finish her training as a nurse. She said her job was at home and “that’s what he supposed to pay”.
Chris contends that the evidence just described demonstrates that the statements made by Chris to Maria in Macedonia were causative of Maria’s entering into a close personal relationship with him, Maria’s provision of domestic support and personal care to him and his provision of the various rewards to Maria on which he relies. He contends that, but for his statements in Macedonia, Maria would not have provided domestic support and personal care to him. Thus, he says, there was a direct relation between his statements and her provision of that support and care. The benefits provided by him, he contends, were the quid pro quo for the provision by Maria of the support and care to him.
On the other hand, Maria relies on the finding made by the primary judge that she had a close personal relationship with Chris that began sometime after she married George in Macedonia in May 1986 and no later than their return from Macedonia to Australia later in 1986. Maria points to the finding that, until she, George and their family left No 5 in December 2009, she was the chief homemaker for the Saravinovski family, of which Chris was the head. During that time, she provided Chris with relevant support and care. She also points to the findings made by his Honour concerning the evidence of Rade, Pavlina, Nikola, Slavko and Cveta supporting those conclusions.
Where Maria, as a prospective daughter-in-law, was assured in 1986 that she would have everything she needed and from 1986 to 2009 provided relevant support and care to her father-in-law and his family, one would not be a fee or reward for the other so as to enliven s 5(2)(a) unless some specific connection between the assurance and the provision were demonstrated. While the first might act as an inducement to, or an offer of, marriage or perhaps create some expectation of what family life would be like in Australia with the Saravinovskis, it does not, of itself, demonstrate that the subsequent provision of relevant support and care was a quid pro quo, or the assurance was the consideration for the provision of the support and care.
The primary judge rejected Maria’s claim that Chris offered specific property to her and held that Chris had done no more than simply make a promise of a better life. Sweeping statements of the kind attributed to Chris in Macedonia are hardly sufficient to justify the conclusion that providing support and care for 23 years was causally connected to the statements, such that it could be said that the provision of support and care was directly, immediately and intentionally in exchange for the promise of a better life.
The findings made by the primary judge cannot support a conclusion that Maria provided support and care to Chris in consideration of the statements made by him in Macedonia and in anticipation of, and in exchange for, the benefits that Chris subsequently conferred. Thus, the board, lodging and accommodation that Maria enjoyed with her family was not provided in consideration for domestic support and personal care but constituted an incident of the ongoing close personal relationship between her and Chris. Board, lodging and accommodation were necessary for the continuation of the relationship and for Maria to undertake the tasks that she performed, such cooking, cleaning, washing, shopping and the like.
The primary judge did not err in concluding that the domestic support and person care provided by Maria was not provided for fee or reward. It follows that s 5(2)(a) of the Property Act is not enlivened.

Exercise of Discretion

In relation to the second group of questions, it is necessary to say something about the basis upon which the primary judge was invited to decide the case. The parties proceeded on the basis that, once the pre-requisites to the exercise of jurisdiction under s 20 of the Property Act are established, three stages are involved in the exercise of that jurisdiction. The first is the identification and valuation of the property of the parties to the relevant relationship to determine the “divisible pool of property”. The second is the identification, evaluation and weighing of the parties’ respective contributions of the various types referred to in s 20 of the Property Act. The third is the determination of any order required to recognise and compensate the applicant’s contributions. The third stage typically results in an order giving the applicant the proportion identified in the second stage of the divisible property identified in the first stage. As I have said, the proceedings were conducted on the basis that there would be no evidence as to the current value of the various components of the divisible pool of property. Rather, the parties agreed that the precise value of the pool could be the subject of further evidence at a later stage of the proceedings, if necessary. They accepted that the Court could award Maria an adjustment of interests in the nature of a proportion of either the pool of property or of specific property held by Chris, without knowing the precise value of the pool or specific property.
The task of determining what adjustment of the parties’ interests in property is just and equitable, having regard to the contributions of the nature referred to in s 20(1), without agreement or evidence as to the value of the interests of the parties in the relevant property must be fraught with difficulties. However, having regard to the agreement made by the parties, it is not open to either of them, in particular Chris, to complain in the appeal because the primary judge embarked on that exercise. Clearly enough, the parties sensibly sought to avoid unnecessary expense in obtaining valuations of the properties that formed the “pool of property” held by Chris. However, as I have already said, it is difficult to see what a just and equitable adjustment of interests in property might be without knowing the value of the property and the value of the respective contributions made by the parties.
The second category of grounds concerned the exercise of the discretion under s 20 of the Property Act, in the light of the conclusion that that jurisdiction had been enlivened. Chris identified two issues. The first was whether the primary judge made correct findings of fact. The second was whether his Honour erred when carrying out the evaluative task of deciding what, in all the circumstances, seemed just and equitable, having regard to the matters referred to in s 20.
The primary judge found that Chris had made certain financial, non-financial and welfare contributions to Maria within s 20(1)(a) and s 20(1)(b). However, Chris contended that his Honour made findings in respect of some of those contributions that prevented them from being taken into account in determining what is just and equitable. They concerned the value of three of the contributions made by Chris and whether Maria made a particular welfare contribution at all. Chris contended that there was no probative evidence at the trial to support the findings made by his Honour. He contended that, while his Honour found that he had made four contributions, his Honour disregarded three of them in the final analysis, leaving only the transfer of No 14 to George as the sole contribution that was considered to be for the benefit of Maria under s 20(1)(a). Chris complains that the other contributions should also have been valued and taken into account.
In his submissions, Chris identified the following contributions by him under s 20(1)(a):

10% shareholding in KR&S;

Balance of the purchase price of $120,000 for the Property;

Provision of No 14; and

Making funds available to George that would have been payable in rent, had he and Maria not lived in No 45 and No 5, to be applied to No 14 and the Property.

The primary judge concluded that the evidence did not permit him to go beyond acknowledging that George had the shareholding in KR&S, without attributing any specific value to it. The primary judge observed that there was no evidence about the value of the notional rent foregone and that the lack of independent, verifiable evidence concerning how the parties spent their money meant that his Honour could not put a value on the rent. His Honour observed that no submission was made to support a particular value for that benefit. His Honour put no specific value on the contribution to the purchase price for the Property, having regard to the evidence concerning the transfer to Bill and the payments that were made in 2009.
In his submissions to this Court, Chris contended that the value of the contribution of the balance of purchase price for the Property was “substantial”, but did not assert a value. He also asserted that the value of the provision of No 14 was also “substantial” but, again, did not seek to ascribe any specific value to the provision of No 14. He sought to attribute a value of $25,000 to the shareholding in KR&S and a notional value of rent foregone in respect of No 14 and the Property of between $119,600 and $239,200.
On the other hand, Chris contended that the contributions by Maria within s 20(1)(a) were:

Nothing in relation to the acquisition of property by Chris.

Construction of No 5 by cooking meals and doing some incidental light labouring work.

Cleaning and similar activities as chief homemaker.

Chris contended that the value of Maria’s contributions in those respects was minimal.

In relation to contributions under s 20(1)(b), Chris contended that the value of his “welfare contributions”, consisting of the provision of free lodging, board and accommodation and the like, was unknown but “significant”. He contended that Maria’s contribution as homemaker, provider of personal care and public consort was unknown but “minimal”.
In the light of the agreement made by the parties, it was not open to Chris to seek to put values on the parties’ respective contributions. A fortiori, it was not open to him to complain about the failure of the primary judge to do so.
More particularly, however, the exercise briefly summarised above highlights the difficulty of the task set by the parties for the primary judge. It may be that a preferable course would have been to invite the primary judge to reach conclusions as to what constituted the divisible property and the nature of the contributions made by the parties, with a view to determining the integers that his Honour considered appropriate for the purposes of a determination under s 20. Once his Honour indicated his conclusions in that regard, the parties would be in a position to know what property required valuation. As it was, the primary judge determined that it was appropriate to arrive at a proportion of No 5, being the family home, having regard to the fact that Maria had been provided with accommodation for 23 years and she, through George, had been provided with No 14, but without any regard as to the respective values of No 5 or No 14.
Ultimately, the complaint by Chris appears to be that the primary judge improperly fettered the exercise of his discretion by making a comparison between the various contributions that Maria made to Chris over 23 years, while being accommodated in No 45 or No 5, with the interest that she has in No 5. His Honour considered that that comparison was “determinative” and that No 14, being effectively the only benefit that Maria had received, was not a sufficient recognition and compensation for her contributions as homemaker, carer and public consort over 23 years.

On a fair reading of the reasons of the primary judge, his Honour was not, by treating that comparison as “determinative”, imposing a fetter upon himself. He was doing no more than stating his reason for concluding that it was just and equitable, having regard to the contribution made by Maria over 23 years and the benefit she received in having No 14, that she should have an interest in the family home, No 5, of 30%. That may have been an undesirable approach to adopt, in so far as the extent to which his Honour made an allowance for No 14 is unclear, in circumstances where the value of No 14 in relation to a 30% interest in No 5 was unknown. Nevertheless, it was a permissible approach, in the light of the agreement of the parties referred to above.
The primary judge found that Chris had made various welfare contributions to Maria, Belinda and Bobby. However, Chris contended, his Honour fell into error in declining to find that he had made a contribution by paying for the upkeep, utilities and outgoings associated with the family residences at No 45 and No 5 and in disregarding that contribution. He contended that the evidence provided a sufficient basis for the Court to find that Chris had paid for the upkeep, utilities and outgoings associated with the family residences and that it was inherently credible that, as Chris was the registered owner of the properties concerned and had an income throughout the period, Chris had in fact done so.
Further, Chris contended, the primary judge made factual findings in respect of Maria’s contributions that caused his Honour to give excessive weight to those contributions in determining what was just and equitable. His Honour made findings concerning non-financial contributions to the building of No 5 by cleaning activities and findings about the extent of her welfare contributions as homemaker. Chris contends that there was no probative evidence at the trial to support those findings by his Honour.
Chris complains that the primary judge fell into error insofar as his Honour found that Maria made financial contributions to the improvement of No 5 during its construction, by providing meals on site and doing some incidental light labouring work and to the conservation of No 45 and No 5 through cleaning and similar activities. He complains that neither finding was supported by probative evidence or that any such contribution was minimal and should not have been taken into account.
The construction of No 5 occurred during 1996 and the house was very large, with elaborate features. The period of construction was small compared with the total period during which Maria lived with Chris, namely one year as against 23 years. His Honour determined that cooking meals, while part of homemaking, did not fall within s 20(1)(a) and Chris contends that that part of the suggested contribution by Maria should also have been disregarded.
Further, Chris contends, there was insufficient evidence that any other contribution to the improvement of No 5 during its construction was anything other than minimal. Therefore, he asserts, no finding should have been made. Indeed, his Honour found that the work that Maria did was more likely to have been incidental to her attendance at the site for the purpose of providing meals.
Chris also complains that no evidence was given about the value of any such contribution. Therefore, he says, the primary judge was unable to assess the value of Maria’s contribution in terms of what is just and equitable. He complains that the approach taken by his Honour in valuing Maria’s contribution was different from his Honour’s approach in valuing Chris’ non-financial contributions. He asserts that his Honour should have required evidence of value.
That contention flies in the face of the agreement made by the parties as to the basis upon which the primary judge was to decide this aspect of the claim under the Property Act. It is not open to Chris to complain that his Honour did not require evidence of value.
Chris also complains that the primary judge fell into error in failing to find that Maria’s cleaning and similar activities should have been discounted to take into account the other beneficiaries of the activities, namely, the other members of the family. Further, Chris complains, his Honour made findings about the extent of Maria’s cleaning and similar activities on the basis of evidence that did not support those findings. He says that the evidence was not of a sufficient standard to support a reliable finding on the value or extent of Maria’s contribution. He says that the evidence of Maria’s activities was of a low grade and not probative of the extent of her contribution, as determined by his Honour. Finally, Chris contends that his Honour erred in determining that housework undertaken by a homemaker constituted acquisition, conservation or improvement of property, in circumstances where contributions as a homemaker are required to be considered under s 20(1)(b) and not under s 20(1)(a) of the Property Act.
Chris ultimately contends that, when properly weighed and considered, his contributions to Maria under s 20(1)(a) outweighed Maria’s contributions in providing meals on site and doing some incidental light labouring work during the construction at No 5, in cleaning and similar activities at No 5 and No 45 and as homemaker, providing personal care and public consort, as a form of emotional support.
Ultimately, the jurisdiction conferred by s 20 involves the exercise of a discretion. Accordingly, it was necessary for Chris to demonstrate that the primary judge failed to address the correct question, applied an incorrect principle, took account of irrelevant considerations or failed to take account of considerations that were required to be taken into account. That is to say it must appear that an error has been made in exercising the discretion, either by acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or effect the decision, mistaking facts or failing to take into account some material considerations. Alternatively, where the result is unreasonable or plainly unjust, an inference may be drawn that in some way there has been a failure to exercise the discretion properly[3] .
3. See House v The King (1936) 55 CLR 499; [1936] HCA 40.
The primary judge described the issue as being whether, as at the hearing date, Maria’s contributions had been sufficiently recognised and compensated, in circumstances where she had received from Chris the benefit of No 14 but no interest in the family home in which she had lived and played a significant role for 23 years. Chris contends that, in doing so, the primary judge applied wrong principles and took into account irrelevant matters. He contends that the relevant test was not whether Maria had been sufficiently recognised and compensated for her contributions, nor whether she had an interest in the family home. He complains that his Honour gave scrutiny to the adequacy of consideration for Maria’s contributions, which is not the test. He asserts that, by considering what current benefit Maria had, his Honour misdirected himself from examining the contributions that Chris had made, particularly in circumstances where contributions depreciate or are not readily capable of assessment in monetary terms.
Chris contended that, having misdirected himself, his Honour made a wrong determination in concluding that having only No 14 as a benefit was not a sufficient recognition and compensation for Maria’s contributions over 23 years. He says that s 20 requires a balancing of the contributions of the respective parties and a determination of whether it is just and equitable to adjust their property for any differences between them and not a determination as to whether a party has been sufficiently recognised and compensated or has any lasting benefits. He says that his contributions under s 20(1)(a) were significantly greater than Maria’s contributions and that both parties had made some welfare contributions to the other. Even if Maria’s welfare contributions to Chris were greater than Chris’ contributions to her, they were not sufficiently greater to outweigh Chris’ greater financial and non-financial contributions under s 20(1)(a) to require the Court to make an order that would adjust the interests in the way that his Honour did.
Chris contends that the award of a 30% interest in No 5 as tenant-in-common was an entirely erroneous estimate and was unreasonable or plainly unjust upon the facts of the case. He says that no order should have been made or, if an order was to be made, it should have been of a significantly lower proportion.
In the course of his reasons, the primary judge referred to Chris as paterfamilias, exercising patria potestas. Chris complains that, in so doing, his Honour overstated all of Maria’s contributions as he found them. He says that his Honour was wrong to find that he was a paterfamilias or that he thought of himself as the provider and head of the household who, in return, would have expected to be cared for by the woman of the house. He complains that his Honour’s statement that the Saravinovski household was one where the men did not, and were not expected to, play a significant role in domestic affairs was irrelevant and that his Honour was wrong to identify and assess Maria’s contributions to Chris by those findings or determinations. In doing so, Chris says, his Honour misdirected himself in the exercise of his discretion.
It appears that notions of paterfamilias and patria potestas were not the subject of submission by either party. Further, there does not appear to have been any evidence that they were aspects of Macedonian culture that might have been imported to Australia by the Saravinovski family. In so far as the notions might be thought to be derived from civil jurisprudence, they may be misconceived. While, under civil jurisprudence, George and his brothers, as filiifamilias, may be thought to be within the patria potestas of Chris, as their paterfamilias, there is no basis upon which the wife of George would fall into the patria potestas of Chris as George’s paterfamilias. The marriage of a filiusfamilias would have required the consent of his paterfamilias, but that marriage would not, in ordinary circumstances, have had any effect whatsoever on the property of the wife of the filiusfamilias. For the most part, the only consequence of a valid marriage was that the offspring fell into the patria potestas of the husband, assuming the husband was sui juris. If the husband was not sui juris, the offspring would fall into the potestas of the husband’s paterfamilias. There is no suggestion that any male ancestor of Chris was still alive at relevant times. Of course, if George, Bill and Louie were technically within the patriapotestas of Chris, they would be incapable of owning property in their own right. Any property that they purported to acquire would vest, ipso iure, in Chris as their paterfamilias. If such relationship technically existed, the purported transfers of property by Chris to his sons in power would have been quite ineffective.
However, I would not read the primary judge’s references to paterfamilias and patria potestas as indicative of any technical usage. Clearly enough, they are simply intended to indicate that Chris, as described by his Honour, was a person who expected to retain control over his sons and their property. There is no substance in Chris’ complaint concerning the allusion by his Honour to the concepts in question.
There is no substance in any of the second category of grounds. It follows that the Property Appeal must be dismissed.

Orders

It follows from the above that this Court should make orders that both the Mortgage Appeal and the Property Appeal be dismissed. Chris should be ordered to pay Maria’s costs of both appeals.
In the light of delay occasioned by the Property Appeal, the orders made for the working out of the order made by the primary judge under s 20 may require variation. The parties agree that that is a matter that should be the subject of a further application in the Equity Division.

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Endnotes

Decision last updated: 04 May 2017

Medium Neutral Citation:	Saravinovski v Saravinovska [2017] NSWCA 85
Hearing dates:	15 February 2017; 16 February 2017
Decision date:	04 May 2017
Before:	Beazley ACJ at [1]; Leeming JA at [2]; Emmett AJA at [43]
Decision:	In the Mortgage Appeal: The proceedings be dismissed. The appellant is ordered to pay the respondent’s costs of the appeal. In the Property Appeal: The proceedings be dismissed. The appellant is ordered to pay the respondent’s costs of the appeal.
Catchwords:	PROPERTY – mortgages – whether valid and enforceable mortgage – whether loans purported to be secured by the mortgage were in fact made – whether intention to create legal relations – whether appellant discharged evidentiary onus FAMILY LAW – ss 5(2)(a), 20 of the Property (Relationships) Act 1984 (NSW) – whether parties in a ‘domestic relationship’ – whether parties in a ‘close and personal relationship’ – whether respondent provided domestic services for fee or reward – whether primary judge erred in assessment of parties’ financial and non-financial contributions – whether primary judge erred in exercising discretion under s 20 of the Property (Relationships) Act 1984 (NSW)
Legislation Cited:	Family Law Act 1975 (Cth) Property (Relationships) Act 1984 (NSW), ss 5, 20 Succession Act 2006 (NSW), ss 3(3), s 3(4) Succession Amendment (Family Provision) Act 2008 (NSW)
Cases Cited:	Barns v Barns (2003) 214 CLR 169; [2003] HCA 9 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; (2012) 289 ALR 237 Holmes v Permanent Trustee Co of New South Wales Ltd (1932) 47 CLR 113; [1932] HCA 1 House v the King (1936) 55 CLR 499; [1936] HCA 40 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd [1975] AC 154; [1974] UKPC 1 Re Filomena Rodi, decd [2016] NSWSC 1696 Sarkis v Morrison [2013] NSWCA 281 Skarica v Toska [2014] NSWSC 34 South Australian Commissioner for Prices and Consumer Affairs v Charles Moore (Aust) Ltd (1977) 139 CLR 449; [1977] HCA 38 Victims Compensation Fund Corporation v Brown [2003] HCA 54; 77 ALJR 1797 White v O’Neill [2010] NSWSC 1193 Ye v Fung [2006] NSWSC 243
Category:	Principal judgment
Parties:	Chris (Krste) Saravinovski (by his tutor Louie Saravinovski) (Appellant in 2016/239390) Maria Saravinovska (As Executrix of the Estate of the Late George Saravinovski) (Respondent in 2016/239390) Krste (Chris) Saravinovski (by his tutor Louie Saravinovski) (Appellant in 2016/233724) Maria (Maria) Saravinovska (Respondent in 2016/233724)
Representation:	Counsel: D R Pritchard SC with J Rose (Appellant in 2016/233724) D R Pritchard SC with A J Macauley (Appellant in 2016/239390) G A Sirtes SC with A L Avery-Williams (Respondent) Solicitors: F C Bryant Thomas & Co (Appellant in 2016/233724) Vaikom Law (Appellant in 2016/239390) Gells Lawyers (Respondent)
File Number(s):	2016/233724; 2016/239390
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2016] NSWSC 964 Date of Decision: 12 July 2016 Before: Kunc J File Number(s): 2011/361081 and 2012/39748