Srbek v Wilkie

[2025] NSWSC 507

Supreme Court

New South Wales

Medium Neutral Citation:

Srbek v Wilkie [2025] NSWSC 507

Hearing dates:

20 May 2025

Date of orders:

20 May 2025

Decision date:

20 May 2025

Jurisdiction:

Equity - Real Property List

Before:

Pike J

Decision:

(1)   Declare that the first defendant holds the one-half share of the property situated at and known as X Roberts Street, Angus, New South Wales, 2765, being Lot X in deposited plan X and the land comprised in folio X/X, registered in the name of the first defendant (the Land) on trust for the plaintiff as tenants in common with the second defendant in equal shares.

(2) Order pursuant to s 71(2)(i) of the Trustee Act 1925 (NSW) that the Land vest in the plaintiff for an estate in fee simple as tenants in common with the second defendant in equal shares.

(3)   Order the first defendant to pay the plaintiff's costs of the proceedings.

Catchwords:

EQUITY – equitable interests in property – whether second defendant held interests in property on trust for plaintiff – evidence of trust — Statute of Frauds – limitation defence – laches – no question of principle

Legislation Cited:

Conveyancing Act 1919 (NSW) s 23C(1)(a)

Limitation Act 1969 (NSW) s 47(1)(e)

Trustee Act 1925 (NSW) s 71(2)(i)

Cases Cited:

ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697

Kauter v Hilton (1953) 90 CLR 86; [1953] HCA 95

Li v Tao (2023) 113 NSWLR 131; [2023] NSWCA 310

Texts Cited:

JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)

PW Young, C Croft and ML Smith, On Equity (2009, Lawbook Co)

Category:

Principal judgment

Parties:

Bohzanna Simone Srbek (Plaintiff)
Sophia Wilkie (First Defendant)
Martina Helen Srbek (Second Defendant)
Roderick Storie (Third Defendant)

Representation:

Counsel:
D C Price (Plaintiff)

Solicitors:
Ian Roche Solicitors (Plaintiff)

File Number(s):

2022/00298967

Publication restriction:

Nil

JUDGMENT (EX TEMPORE REVISED FROM TRANSCRIPT)

1. The essence of the dispute before the Court is whether the first defendant (Ms Wilkie), who is the plaintiff's mother, holds her one half share in a property located at Robert Street, Angus, being Lot X in Deposited Plan X (Property) on trust for the plaintiff.

2. By her amended statement of claim filed 4 April 2024, the plaintiff seeks a declaration that Ms Wilkie holds the plaintiff's one half share in the Property on trust for the plaintiff and an order pursuant to s 71(2)(i) of the Trustee Act 1925 (NSW) that the Property vest in the plaintiff for an estate in fee simple as tenants in common with the second defendant in equal shares.

3. For the reasons set out below, I am satisfied that relief should be granted.

Procedural history

4. These proceedings were commenced by summons filed 7 October 2022. As commenced, two defendants were named, Ms Wilkie and the other co-owner of the property who is the sister of the plaintiff, and other daughter of Ms Wilkie.

5. The second defendant filed a submitting appearance on 27 October 2022.

6. A solicitor filed a notice of appearance for Ms Wilkie on 23 November 2022.

7. A statement of claim was filed on 30 January 2023. A defence to that statement of claim was filed on behalf of Ms Wilkie on 14 April 2023. An affidavit sworn by Ms Wilkie was filed on or about that date.

8. An amended statement of claim was filed on 4 April 2024. It joined as third defendant the plaintiff's former solicitor in these proceedings who had also previously acted for various parties at the time of the transfer of the Property into the names of Ms Wilkie and the second defendant.

9. In July 2024, Ms Wilkie's solicitor filed a notice of intention of ceasing to act on behalf of Ms Wilkie and on 8 August 2024 a notice of ceasing to act was filed. Since then, Ms Wilkie has not taken any role in the proceedings. The plaintiff's solicitor has continued to send to the address stated in the notice of ceasing to act for Ms Wilkie, the orders and other documents in relation to the proceedings.

10. An application for default judgment against Ms Wilkie was dismissed by Williams J on 13 September 2024. Williams J also ordered that the defence of Ms Wilkie to the statement of claim stand as her defence to the amended statement of claim.

11. On 7 February 2025, I made orders that the plaintiff's claim against the third defendant be determined separately from and after the plaintiff's claim against Ms Wilkie. I listed the plaintiff's claim against Ms Wilkie for hearing before me to commence on 19 May 2025.

12. A copy of the orders notifying Ms Wilkie of the hearing were sent by the plaintiff's solicitor to the address for Ms Wilkie set out in the notice of ceasing to act.

13. At the commencement of the hearing on 19 May 2025, Ms Wilkie's name was called outside court and there was no appearance. I am satisfied, however, that she has been put on notice of the hearing date and could have attended to appear if she so wished.

14. Due to an illness of the plaintiff's counsel on 19 May 2025, I adjourned the hearing in the matter for one day, to today. The hearing has proceeded today, with Mr D C Price of counsel appearing for the plaintiff.

15. The plaintiff relied on the following evidence:

1. two affidavits made by herself on 6 October 2022 and 3 November 2024;

2. an affidavit of Amy Joanne Geleedst made 6 October 2022;

3. an affidavit of Ian Douglas Roche of 30 April 2025;

4. certain paragraphs of an affidavit made by Ms Wilkie on 13 April 2023 which I have marked as Exhibit A;

5. certain documents contained in the court book which I have marked Exhibits B and C.

The Relevant Facts

16. The plaintiff is the eldest daughter of Ms Wilkie and Milos Srbek (Milos). The plaintiff was born in February 1988. The second defendant is her younger sister.

17. Milos passed away on 28 September 2001, leaving a will made 22 September 2001.

18. At the time of his death Milos was the registered proprietor of the Property. The Property is part of a larger parcel of land then owned by Milos of approximately five acres in size, which is divided into two parcels - Lot 23 in deposited plan X of approximately two acres, and the Property being Lot 24 in deposited plan X of approximately three acres.

19. On 21 February 2002, the Supreme Court granted letters of administration (with the will annexed) to the Public Trustee, likely because no executor was named in the will.

20. Pursuant to the will, Milos relevantly left Lot 23 to his three sons from a previous marriage and Lot 24 to the plaintiff and the second defendant. Title to Lots 23 and 24 were subsequently transferred to the Public Trustee.

21. Ms Wilkie and Milos’ wife by a former marriage subsequently brought family provision proceedings against Milos' estate.

22. The family provision proceedings were settled and orders were made on 8 August 2005 and entered on 2 August 2006. Relevantly, orders 1, 2 and 3 of the orders were as follows:

1   By way of provision for each of the Plaintiffs, the Will of the deceased be varied as follows:

(a)   in respect of that part of the estate which passes to Michael, Robert and Milos Srbek, the entitlement be varied so as to provide for June Srbek to receive a legacy of $60,000.

(b)   in respect of that part of the estate which passes to Martina and Anna Wilkie, the entitlement be varied to as to provide for Sophia Wilkie to receive a legacy of $60,000.

2   No order as to the costs of the Plaintiffs or beneficiaries to the intent each bear his or her own costs.

3   The defendant's costs on the indemnity basis be paid out of the estate of the deceased.

23. Paragraph 4 of the orders noted an agreement that the costs of the Public Trustee are to be apportioned as to 4/11 out of that part of the estate passing to Milos' three sons, and 7/11 out of that part passing to the plaintiff and second defendant.

24. In 2007, the Public Trustee commenced proceedings in the Supreme Court for possession of the Property.

25. In early 2008, the plaintiff and Ms Wilkie had a conversation to the following effect:

Mum: We need to borrow money from the Commonwealth Bank to pay the public trustee to transfer Martina's and your property into your names. Because you have a bad credit rating and don't have a job, I'll hold your share in trust for you.

Me: I'll think about it.

26. Ms Wilkie had also brought a document with her, and then said to the plaintiff words to the effect:

You have to sign it! You have to sign it! If you don't, we'll lose the property! It's fine. It's just a trust. The only way we can save the property is if we put it in trust for you, and I'll be your trustee.

27. The plaintiff deposed to signing the document which Ms Wilkie then took away with her. The plaintiff has not seen it since and does not know its whereabouts. There is no certainty as to what this document, in fact, was. There is evidence that, at or about this time, a company, Air Larthar Pty Limited was incorporated to be the trustee of the Srbek family trust. The plaintiff was made a director of that company for a short period and then replaced by Ms Wilkie. There is no evidence that the Property ever became trust property.

28. There is also some evidence to suggest that Air-Larthar was not able to borrow money. Money was subsequently borrowed by Ms Wilkie and the second defendant from the Commonwealth Bank to pay out the Public Trustee.

29. It appears on the evidence that all of these steps were being carried out without the plaintiff's knowledge.

30. On 6 June 2008, the possession proceedings were resolved with orders made by consent. The orders relevantly included:

1   Plaintiff to have possession of the whole of the land ("The Land") comprised in certificate of title volume X folio X and known as X Roberts Street, Marsden Park.

2   Plaintiff to have leave to issue forthwith a writ of possession in respect of the land, the execution of the said writ to be stayed up to and including 8 August 2008.

3   Statement of claim otherwise dismissed.

4   The Plaintiff's costs on the indemnity basis be paid out of that part of the estate of the deceased which passes to Martina Srbek and Bohzanna Srbek.

5   There be no order as to costs of the defendants to the intent they bear their own costs of the proceedings.

The Court notes:

6   The agreement of the parties that, in consideration of the Public Trustee and the parties entering into the orders herein:

(a)   The Public Trustee will transmit the land to Martina Srbek and Bohzanna Srbek or transfer the land to such person or persons as they may direct upon receipt of the sum of $102,331.43, such sum fixed so long as it is paid by 8 August 2008 and to be inclusive of the costs in ordered in order 4 herein;

…

(e)   Sophia Wilkie releases the Public Trustee from any obligation to pay the legacy of $60,000 ordered on 8 August 2006 in proceedings 2013 of 2003 between the parties and expressly waives her entitlement to the said sum.

31. On 5 November 2008, the Public Trustee transferred the Property to Ms Wilkie and the second defendant as tenants in common in equal shares for the sum of $102,331.43.

32. In evidence before me is a file note prepared by Amy Geleedst (Ms Geleedst), who at the time was a conveyancer employed by the solicitor acting for Ms Wilkie and the second defendant on the transfer of the property from the Public Trustee. That solicitor is now the third defendant in these proceedings.

33. The file note is of a conversation between Ms Geleedst and Ms Wilkie and the second defendant. It relevantly records that Ms Wilkie:

advised that [second defendant] should be exempt from paying stamp duty as the property has been transmitted from the Public Trustee and that [Ms Wilkie’s] half share is purely going into her name in trust for her other daughter.

34. Ms Geleedst made an affidavit which was in evidence before me authenticating the file note. Her affidavit also stated, relevantly:

However, [the plaintiff] couldn't be on the title for some reasons and it was determined that the mother, [Ms Wilkie] … would hold it in trust for her.

35. Ms Geleedst also deposed to having a number of conversations (apart from that set out in the file note) with Ms Wilkie in relation to stamp duty and other matters which she instructed were made for and on behalf of her daughter, the plaintiff.

36. It was not until 2021 that the plaintiff was made aware that Ms Wilkie contended that she - the plaintiff - had no interest in the Property. In January 2022, the plaintiff's solicitor wrote to Ms Wilkie requiring her to transfer her share of the Property into the plaintiff's name. No response was received to that letter. A caveat was subsequently lodged by the plaintiff over the title of the Property.

37. The proceedings were then commenced in October 2022.

38. It is against this background that the plaintiff seeks the relief that she does - being a declaration and a vesting order.

Determination

39. The plaintiff contends that Ms Wilkie held the plaintiff's interest in the Property on express trust for her.

40. In Kauter v Hilton (1953) 90 CLR 86; [1953] HCA 95 at 97, Dixon CJ, Williams and Fullagar JJ, referred to the:

established rule that in order to constitute a trust, the intention to do so must be clear and that it must also be clear what property is subject to the trust, and reasonably certain who are the beneficiaries.

41. Having regard to the evidence set out above, I am satisfied that Ms Wilkie relevantly declared that she would hold her interest in the Property on trust for the plaintiff.

42. I accept the evidence of the plaintiff as to conversations that she says she had with her mother. The interest which the plaintiff claims in the Property was left to her in Milos' will and one would ordinarily expect it to be transferred to her. The existence of the trust is also corroborated by the evidence of the conveyancer, Ms Geleedst.

43. The trust was then constituted by the transfer of the plaintiff's interest in the Property to Ms Wilkie.

44. The defence filed by Ms Wilkie sought, inter alia, to raise a number of defences. The first of these was to contend that the Statute of Frauds, relevantly s 23C(1)(a) of the Conveyancing Act 1919 (NSW), was not complied with in that the alleged trust was not in writing. The fact that the trust is not recorded in writing is no bar to the relief claimed. It is clear that the Statute of Frauds cannot be used as an instrument of fraud. Among the many authorities, Barrett J stated in ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697 at [329] (citations omitted):

This principle has been taken to mean that a plaintiff claiming beneficial ownership of land previously conveyed to another may prove by parol evidence that the land was conveyed on trust for it, and may be entitled to a declaration that the transferee holds the land on trust for it notwithstanding that the declaration of trust does not satisfy the requirements of the statute of frauds… It is not necessary that the conveyance was fraudulently obtained: the doctrine will apply whenever the legal owner asserts absolute entitlement under the conveyance so as to defeat the beneficial interest.

45. The learned authors of Jacobs' Law of Trusts in Australia (8^th ed, 2016, LexisNexis Butterworths) at [7-09] state:

… equity considers it a fraud for a person to whom land is conveyed as a trustee, and who knows it was so conveyed, to deny the trust; in such cases, parol evidence of the trust may be adduced to establish the trust and a declaration obtained.

46. In Li v Tao (2023) 113 NSWLR 131; [2023] NSWCA 310, Kirk JA (Ward P and Mitchelmore JA agreeing) stated at [68] that there are four requirements to be satisfied:

1. The defendant has had land conveyed to them on trust;

2. When they received it they knew it was to be held on trust;

3. They now seek to deny the trust by relying on the Statute of Frauds provisions;

4. They do so in order to claim the land for themselves.

47. I am satisfied that each of these requirements is satisfied in the present case.

48. Further, I am also satisfied that there is no relevant vitiating purpose to deny the existence of the trust.

49. The defence also alleges limitation defences and laches.

50. In circumstances where the plaintiff did not become aware until 2021 that Ms Wilkie took the view that the Property was held by her outright and not on trust for the plaintiff, no question arises as to whether the proceedings were commenced within time: see s 47(1)(e) Limitation Act 1969 (NSW).

51. In relation to laches, a question may arise as to whether laches has any application in the present context: see PW Young, C Croft and ML Smith, On Equity (2009, Lawbook Co) at [17.110]. In any event, the claim fails on the facts. Nothing has been put forward to make it inequitable for the plaintiff to enforce her claim. The plaintiff only became aware of the relevant facts in 2021.

52. The defence also alleged various estoppels. These fail for want of proof.

53. I am therefore satisfied that I should make the declaration and vesting order sought by the plaintiff.

54. There is no reason why costs should not follow the event. The plaintiff sought indemnity costs. I am not satisfied that in the circumstances an order for indemnity costs is warranted. The situation is simply one where Ms Wilkie has taken no active role in the proceedings after her solicitor ceased to act for her in August 2024.

55. The orders of the Court are as follows:

1. Declare that the first defendant holds the one-half share of the property situated at and known as X Roberts Street, Angus, New South Wales, 2765, being Lot X in deposited plan X and the land comprised in folio X/X, registered in the name of the first defendant (the Land) on trust for the plaintiff as tenants in common with the second defendant in equal shares.

2. Order pursuant to s 71(2)(i) of the Trustee Act 1925 (NSW) that the Land vest in the plaintiff for an estate in fee simple as tenants in common with the second defendant in equal shares.

3. Order the first defendant to pay the plaintiff's costs of the proceedings.

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Decision last updated: 21 May 2025