Togias v State of New South Wales

[2024] NSWSC 703

Supreme Court

New South Wales

Medium Neutral Citation:

Togias v State of New South Wales [2024] NSWSC 703

Hearing dates:

4 September & 17 October 2023

Date of orders:

7 June 2024

Decision date:

11 June 2024

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Set-off available to be argued but is not required to be applied. Directions made for the determination of the periods of time since January 2010 when the plaintiff occupied the property on her own or shared it and what an appropriate notional occupation fee should be for the periods of time that she has occupied the property. Various arguments that the plaintiff has not made payments of rates, charges, and mortgage instalments from her own money, and that the plaintiff should account for monies received from another property are rejected.

Catchwords:

LAND LAW – Co-ownership – second defendant has recently become the registered proprietor of certain residential real property occupied by the plaintiff and her former de facto partner – the second defendant has acquired title to the property consequent upon orders under the Criminal Assets Recovery Act 1990 against the plaintiff’s former de facto partner – the Court of Appeal has declared that the plaintiff has a 25% interest in the property and the second defendant holds the other 75% – the second defendant now seeks to sell the property – the second defendant was found in a previous judgment to have an immediate right to possession of the property against the plaintiff, a co-owner in equity, who is also a tenant at will of the second defendant – judgment for possession has been entered in favour of the second defendant against the plaintiff and writ for possession stayed pending the taking of accounts between the plaintiff and the second defendant – whether there can be a set-off against the plaintiff’s charge for her payments of rates, charges and mortgage instalments during her occupation, a notional occupation fee in respect of the balance of the interests that she does not own in equity in the property.

Legislation Cited:

Uniform Civil Procedure Rules, r 31.46

Cases Cited:

Biviano v Natoli [1998] 43 NSWLR 695

Forgeard v Shanahan (1994) 35 NSWLR 206

Pascoe v Swan (1859) 27 Beav 508; 54 ER 201

The Owners of Strata Plan 50276 v Thoo [2013] NSWCA 270

Togias v State of New South Wales [2023] NSWSC 665

Category:

Principal judgment

Parties:

Plaintiff: Nicolitsa Togias
First Defendant: State of New South Wales
Second Defendant: NSW Trustee and Guardian

Representation:

Counsel:
Plaintiff/Respondent: Mr M. Condon SC
Second Defendant/Applicant: Mr T.S. Hale SC (for Trustee)

Solicitors:
Plaintiff/Respondent: Waldemar Abramowicz, Fox & Staniland Lawyers
Second Defendant/Applicant: Da Wei David Gu, ProActive Legal Pty Ltd

File Number(s):

2020/189689

Publication restriction:

No

Judgment

1. This is the Court’s second judgment in the post-appeal applications in these proceedings. The Court gave its first judgment concerning this post-appeal phase of the proceedings on 20 June 2023: Togias v State of New South Wales [2023] NSWSC 665. This judgment should be read with that first post-appeal judgment (referred to in these reasons as “the June 2023 judgment”) and assumes a reading of that judgment, which (at [13] – [17]) gives a summary of the overall course of these proceedings. Persons, matters, and events are referred to in both judgments in the same way.

2. In the first judgment the Court considered the remaining issues in the proceedings. These were a set-off issue and a possession issue. The Court decided the possession issue but deferred determination of the set-off issue to allow the parties to put supplementary submissions. The parties put supplementary written submissions and spoke to them on 17 October 2023.

3. The parties’ legal representation was substantially the same as what it had been at the time of the first judgment. Mr N Kabilafkas instructed by Fox & Standiland, solicitors, appeared for Ms Togias. Mr T Hale SC, instructed by Proactive Legal, appeared for the NSWTAG.

4. Much of the argument on the set off issue turns on the construction of the Court of Appeal’s declaration (3) and order (4) in its judgment of 23 May 2022, which provided as follows:

3   Declare that the NSW Trustee and Guardian holds the land situated at XX Rothwell Circuit, Glenwood, NSW, also known as Folio Identifier XXX/XXXXX X (“the Glenwood Property”):

(a)   as to a one quarter interest on trust for Nicolitsa Togias; and

(b)   subject to a charge in favour of Nicolitsa Togias for the amount (if any) by which her payments of rates, charges and mortgage instalments since 29 January 2010 exceed the proportion payable for her interest in the Glenwood Property, less a notional occupation fee in respect of the balance of the interests in the Glenwood Property.

4   Remit the matter to the Equity Division for any further or consequential orders, if not agreed.

5. The parties were focused in argument on the set off issue upon what was meant in the wording of declaration 3(b) by “her payment of rates, charges and mortgage instalments” and by “a notional occupation fee”. They were also concerned with the question of what “further or consequential orders” could be made on the remitter to the Equity division. In the Court’s view when the reasons for decision of the Court of Appeal are read in full the meaning of declaration 3(b) and order 4 can be readily discerned.

The Set-Off Issue

6. The parties’ principal positions and overarching arguments on the set off issue may be shortly stated.

7. NSWTAG accepts that declaration 3(b) of the Court of Appeal’s orders recognises that the Glenwood property is charged for the benefit of Ms Togias to secure the outgoings that she has met in respect of the Glenwood property that are more than her proportionate 25% interest in that property. But NSWTAG advances evidence of the market rental value of the Glenwood property during the period of Ms Togias’s occupation since January 2010, through a valuer, Ms Lynette Savage. Then, NSWTAG submits that the notional market rental payable by Ms Togias for her occupation of the Glenwood property since January 2010, discounted by a factor of 25%, to subtract from it her proportionate interest in the property, should be offset against the value of any charge over the property that would otherwise benefit her by reason of her payment of rates, charges, and mortgage instalments since 29 January 2010.

8. NSWTAG submits that when this notional rental calculation is undertaken the market rent payable by Ms Togias is so substantial that it fully offsets the amount of any charge over the Glenwood property that would otherwise arise for her benefit. NSWTAG submits that as a result it is not necessary for the Court to attempt to calculate the amount of the charge, thereby reducing the need for any further accounting or a referral of these proceedings out to a Court expert for calculation of the quantum of the charge of Ms Togias.

9. Based upon the evidence that NSWTAG has adduced, it calculates a nil value for the charge in the following way. For the purposes the calculation, NSWTAG accepts the plaintiff’s evidence that she may be credited the sum of $394,020 for the payment of mortgage instalments to the mortgagee of the Glenwood property (although in a later argument, as will be seen NSWTAG seek to reduce this figure). These payments can then be reduced by 25% to reflect her payment for her own proportion of these outgoings, meaning that she has paid $295,515 on account of the other 75% interests in the Glenwood property that she does not own.

10. NSWTAG then calculates a “notional occupation fee” by reducing the market rental figure of $425,000 by 25% to $318,750, which NSWTAG says represents “the notional occupation fee” for the balance of the 75% of the Glenwood property which she has occupied but in which she does not have an equitable interest. NSWTAG submits that when the maximum amount that the plaintiff can claim, a charge of $295,515, is offset against the notional occupation fee that she must pay of $318,750, she is left with a deficit which he owes to NSWTAG of $23,235. Thus, NSWTAG submits there is no point in referring this matter out to a referee or court expert to do any calculation of the amount of her charge over the Glenwood property, because at best it will be nil.

11. In reply, Ms Togias contends that a notional rent should not be set-off against her charge over the property. Her argument assumes that neither the Court of Appeal nor Sackar J have already decided against her that a notional rent must be offset against her charge.

12. This generated the first sub-issue between the parties on the set off question: namely whether it was open for Ms Togias to contend upon the proper construction of the orders of the Court of Appeal that a notional rent should not be set off against her charge. On this sub-issue, Ms Togias put the following in her written submissions:

“2   The NSW Court of Appeal, which on 9 November 2022 remitted these proceedings to this Court for determination of consequent final orders, held “the appropriate remedy in relation to those payments would be an equitable charge, in respect of which there may need to be a set off with respect to the respondent’s occupation of the Glenwood Property with her children” (NSW Trustee and Guardian v Togias (2022) 406 ALR 254; [2022] NSWCA 225 at [113], Mitchelmore JA, Basten JA and Griffiths AJA agreeing). The emphasis is supplied, to make good the point that the Court of Appeal did not accept that an occupation fee was inevitable.

3   The question of whether an occupational fee with respect to the Glenwood property was payable was not argued and has not been decided. It therefore falls to be determined by this Court as part of the remitter.”

13. In other words, Ms Togias submitted that the Court of Appeal did not find that an occupation fee must be paid but only concluded that on remitter the Equity court might find that an occupation fee should be paid but might not need to be paid, depending on the circumstances.

14. But the NSWTAG took a contrary position, arguing that the Court of Appeal’s decision required the market rent of the Glenwood property for Ms Togias’ occupation to be offset against Ms Togias’ charge.

15. Before examining NSWTAG’s argument it is useful to examine the relevant part of the decision of the Court of Appeal that explains the rationale for the set-off. In the Court of Appeal, in the reasons for decision of Mitchelmore JA, which were agreed in by Basten AJA and Griffiths AJA, her Honour addressed the issue of the rental value of the Glenwood property under the heading “Relief” as follows.

“112   For the reasons I have set out above, the appeal must be allowed with respect to the Seven Hills Property. I would allow the appeal with respect to the Glenwood Property in so far as it concerned the imposition of a constructive trust in the order of 50% of the interest in that Property.

113   Notwithstanding that the appellant submitted that primary judge erred in taking the financial contributions after January 2010 into account for the purposes of determining whether a constructive trust existed, it accepted that an account must be made for the contributions that the appellant has made to the mortgage for the Glenwood Property for the last 11 years. The remedy as to those contributions does not lie, however, in a constructive trust, there being an appropriate equitable remedy which falls short of the imposition of a trust: Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [10]. In my view, the appropriate remedy in relation to those payments would be an equitable charge, in respect of which there may need to be a set off with respect to the respondent’s occupation of the Glenwood Property with her children. On 21 May 2021, the Court made an order restraining the appellant from disposing of the Glenwood Property upon an undertaking from the respondent, to the extent her claim failed, to pay an occupation fee to be determined by the Court.

114   On 3 March 2022, Sackar J made a series of orders which were consequential upon his Honour’s declaration of the constructive trusts, with some variations made to those orders on 22 March 2022. In relation to the Glenwood Property, those orders included (changing the title of the parties so as to be consistent with their roles in the appeal):

(1)   Order 7, which made provision for the payment of expenses, and then 50% of the balance, of the proceeds of sale of the Seven Hills Property (which, by a joint submission, the parties informed this Court had been sold in December 2021 and settled in February 2022) and the Glenwood Property.

(2)   Order 9 (as varied by order 1a of the orders made on 22 March 2022), that the parties, on or before 22 April 2022, negotiate in good faith, to determine, if possible, the price for which the respondent can purchase the appellant’s interest in the Glenwood Property.

(3)   Order 10 (as varied by order 1b of the orders made on 22 March 2022), that the sale of the Glenwood Property to any third party be stayed to permit the respondent, if possible, to enter into a contract for the purchase thereof, such stay to expire on 24 May 2022.

(4)   Order 15 (as varied by order 1c of the orders made on 22 March 2022), that in the event that the respondent could not proceed to purchase the Glenwood Property, the respondent give possession of the Glenwood Property to the appellant, as trustee, on and from 25 May 2022.

115   On 28 March 2022, orders were made by consent in this Court to stay the operation of a number of the orders made by Sackar J; those orders were subsequently amended pursuant to the slip rule. Pursuant to those orders:

(1)   the operation of Order 7 was stayed, to the extent that it required payment of the proceeds of the sale of the Seven Hills Property to the respondent and the appellant, up to and including the date of delivery of judgment by the Court of Appeal;

(2)   the time stipulated in Order 1a of Sackar J’s orders of 22 March 2022 (which related to Order 9) was extended to 7 days after the date of delivery of judgment by the Court of Appeal;

(3)   the time stipulated in Order 1b of Sackar J’s orders of 22 March 2022 (which related to Order 10) was extended to 35 days after the date of delivery of judgment by the Court of Appeal; and

(4)   the time stipulated in Order 1c of Sackar J’s orders of 22 March 2022 (which related to Order 15) was extended to 42 days after the date of delivery of judgment by the Court of Appeal.

116   In relation to the Glenwood Property, for the reasons I have outlined above there is a need to determine the amount of the equitable charge which arises with respect to the Glenwood Property. In circumstances where the amount of the charge may impact the formulation of the consequential orders, the appropriate course is to set aside all of his Honour’s orders (except orders 2 and 3, which related to the removal of caveats) and remit the matter to the Equity Division. Consequential orders, such as in relation to the sale of the Glenwood Property and vacation thereof, and the costs of the proceedings below, will also be necessary, should the parties not be able to agree them.”

16. NSWTAG further submits that the way the set off question was formulated by this Court on the remitter (see the June 2023 judgement at [8]) is not consistent with what was intended by the Court of Appeal in declaration 3(b) and in the above passages. NSWTAG further submits that to ascertain the meaning and intent of declaration 3(b) it is necessary to consider declaration 3(b) in the context of the judgments of Sackar J and the Court of Appeal.

17. The NSWTAG’s submission is correct that on this remitter this Court’s original formulation of the set-off question (in the June 2023 judgment at [8]) does not capture all the issues that have now been debated between the parties about the set-off issue. It is now convenient to abandon that previous formulation of the question and deal with the issues actually raised by the parties as a series of sub-issues.

18. The first sub-issues is: what did the Court of Appeal decide? The NSWTAG submits the Court of Appeal decided that “a notional occupation fee” must be set off against Ms Togias’ charge. The NSWTAG submits that the Court of Appeal’s declaration 3(b) is founded upon principles which underpin the grant of relief imposing a constructive trust to prevent unconscionable conduct. The NSWTAG submits that as a condition of imposing the equitable charge to ensure appropriate fairness in the formulation of the remedy of an equitable charge the Court required Ms Togias to pay for her occupation of the Glenwood property through “a notional occupation fee”. The NSWTAG submitted that declaration 3(b) is not based upon doctrines of legal or equitable co-ownership and that doctrines of ouster are therefore irrelevant to determining whether occupation fee is payable and to be offset against Ms Togias’ equitable charge. In short, the NSWTAG emphasises that the “notional occupation fee” is a condition of moulding the grant of relief in the form of an equitable charge.

19. Ms Togias’s contrasting contention is that the Court of Appeal left open the possibility that doctrines of ouster between equitable co-owners may be brought into play because the Court of Appeal did not determine that “a notional occupation fee” must be paid but rather that it may need to be paid to mould a suitably balanced equitable charge but equally it may not need to be paid.

20. Upon analysis of the Court of Appeal’s reasons Ms Togias’ argument is more persuasive on this issue. Mitchelmore JA is the only one of the three judges who discussed the terms upon which the equitable charge remedy would be imposed. Basten AJA made observations about the availability of the remedy of a remedial constructive trust and the basis for valuing the entitlement of Ms Togias but he did not separately deal with the terms of the equitable charge. Griffiths AJA agreed with the reasons of Mitchelmore JA and the additional reasons of Basten AJA. Therefore, the answer to this question must look to analysis of the reasons of Mitchelmore JA. The relevant parts of her Honour’s judgment are set out earlier in these reasons. The sentence in her Honour’s reasoning which is key to the resolution of this issue is the following sentence in [113]:

In my view, the appropriate remedy in relation to those payments [the contributions Ms Togias has made to the mortgage for the Glenwood property] would be an equitable charge, in respect of which there may need to be a set off with respect to the respondent’s occupation of the Glenwood property with her children” [emphasis added]

21. Her Honour did not find that there must be a set off with respect to the respondent’s occupation of the Glenwood property with her children. Rather, her Honour used language which clearly conveyed that she was leaving open the question of whether there would or would not be a set off with respect to Ms Togias’ occupation of the Glenwood property.

22. Declaration 3(b) should be read in the context of these reasons. Given what is said in paragraph [113] of her Honour’s judgment the formulation of her Honour’s declaration in 3(b) to include the words “less a notional occupation fee” should be taken as leaving open the question of whether that occupation fee will be a market rent or a fee based upon an implied licence or a fee that is so nominal that it qualifies as “notional” and is possibly even nil. Such an interpretation would be consistent with paragraph [113] in her Honour’s reasons. In other words, her Honour was leaving to the trial judge in the Equity Division on remitter to decide questions such as whether a notional occupation fee would be paid or not.

23. Two further observations should be made here. Nothing in her Honour’s reasons can be taken as suggesting that “a notional occupational fee” must be measured by the market rent for the Glenwood property, as distinct for example for a fee for a non-exclusive license to occupy the Glenwood property. Her Honour merely refers to “a set off with respect to the respondent’s occupation of the Glenwood property” and “a notional occupation fee”. Her Honour’s language does not refer to “market rent” and leaves what is the appropriate measure of the fee, if any, to the Equity Division. NSWTAG’s contentions that a market rent must be the appropriate measure of the occupation fee and that an occupation fee must be charged as the result of her Honour’s reasons, are not correct.

21. This leads to the second sub-issue.

22. The next sub-issue is whether doctrines of ouster are relevant to the fixing of “a notional occupation fee” with respect to the balance of the interests in the Glenwood property. The parties expressed strong disagreement about this issue in their respective submissions. Ms Togias contended that she was an equitable co-tenant who had not taken positive steps to oust either Mr Subakti or the NSWTAG from the Glenwood property and therefore the NSWTAG could not seek an occupation fee from her.

23. The NSWTAG argued a contrary position as a matter of law. Quite apart from whether there had been an ouster in fact, the NSWTAG argued that a merely equitable co-tenant, such as Ms Togias, could not take advantage of the doctrine available to a legal co-tenant – that an occupation fee was not chargeable to a co-tenant unless that co-tenant had ousted the other co-tenant. Ms Togias countered by contending that (a) not only was the position the same between legal and equitable co-tenant’s, but (b) she had not ousted either Mr Subatki or the NSWTAG and a nil occupation fee was appropriate here.

24. On this issue the arguments advanced by Ms Togias are the more persuasive for the following reasons.

25. In Forgeard v Shanahan (1994) 35 NSWLR 206 (Forgeard) Meagher JA with whose reasons Mahoney JA (as His Honour then was) agreed, decisively stated the applicable law contrary to the contentions of the NSWTAG. In Forgeard (at 223A-D) Meagher JA stated the principle in question as follows:

So much for rents actually received. Turning to the liability of a co-owner in occupation to pay an occupation fee, the position at law is fairly clear. He was not liable unless he excluded his co-owner, in which case he rendered himself liable in ejectment and for mesne profits, or if he constituted himself a bailiff, in which event he would be liable in an action of account, like any other bailiff: Re Tolman's Estate (1928) 23 Tas LR 29 at 31; Rees v Rees [1931] SASR 78 at 80-81. Indeed, the whole bias of the law against making a co-owner in occupation liable to account is precisely based on the rationale that if such a liability were to exist a co-owner could, by abstaining from entering into occupation, turn his co-owner into an involuntary bailiff. As far as equity is concerned, an occupation fee will be exacted in at least two circumstances: first, in a partition suit (or related litigation): if there has been an exclusion, the tenant in occupation will be charged with an occupation fee (see, eg, Pascoe v Swan (1859) 27 Beav 508; 54 ER 201); this is an example of equity following the law; and secondly, if the owner in occupation claims an allowance in respect of improvements effected by him, equity will permit such an allowance only on terms that he is accountable for an occupation fee — this is an example of he who comes to equity having to do equity: see Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476.

29. Based upon doctrines going as far back as Pascoe v Swan (1859) 27 Beav 508; 54 ER 201 Meagher JA here clearly accepted here that an equitable co-tenant in occupation will be charged with an occupation fee if there has been an exclusion of the other co-tenant, but will not be charged an occupation fee if there is no exclusion.

30. The case of Biviano v Natoli [1998] 43 NSWLR 695 (at 700D-G) applied this reasoning in Forgeard and considered whether or not there had been ouster of an equitable co-tenant.

31. Finally, Tobias AJA came to the same conclusion in another case in 2013. Tobias AJA applied these principles in The Owners of Strata Plan 50276 v Thoo [2013] NSWCA 270 at [143] – [145] as follows:

“143.   Thus, the circumstance that the lot owners have equitable interests as tenants in common of the common property does not of itself impose any duty upon the owners corporation. Rather, it has significance as among the owners themselves. It is their status as equitable tenants in common that gives them rights of enjoyment of the common property. In Bull v Bull at 237, Denning LJ suggested that the rights of equitable tenants in common are the same as those of legal owners in common so that

‘[e]ach of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account.’

144.   As the discussion by Meagher JA in Forgeard v Shanahan (1994) 35 NSWLR 206 at 222-223 demonstrates, the concept of "proper share" and a common law action for account relates to rents and profits; while a case of ouster attracts common law liability in ejectment and for mesne profits: see also Biviano v Natoli (1998) 43 NSWLR 695 at 700 per Beazley JA, with whom Powell and Stein JJA relevantly agreed. Equity will no doubt award like remedies in the case of a dispute between equitable tenants in common.

145.   The important point for present purposes is that the rights and obligations of equitable tenants in common as regards the use and enjoyment of land exist only among themselves. Their status as equitable owners is not the source of any right against or obligation of the trustee who holds the land upon trust for them. The rights that they have against the trustee and the obligations the trustee owes to them derive from the trust and the relationship of trustee and beneficiary. It follows that if the owners corporation, duly and faithfully performing the terms of the trust as embodied in the 1973 and 1996 Acts, acknowledges the interests of the lot owners as a body in the common property and performs the functions otherwise imposed upon it by statute, any complaint that the activities of one owner impair another owner's enjoyment of the common property is a dispute to which the owners corporation, as trustee, is a stranger.”

32. This authority (especially at [144]) puts beyond question that a co-tenant in Ms Togias’ position should not be charged an occupation fee if she has not ousted her equitable co-tenant. This is a matter quite distinct from the issue decided on the 2023 judgment that the NSW TAG as the legal owner of the property may obtain an order for possession against her. That matter has been decided against her in the Court’s June 2023 judgment. It is important to distinguish the NSWTAG’s position is legal owner from its coordinate position as a co-tenant with the NSWTAG in equity.

33. This leads to the third sub issue.

34. The third sub issue is the question of how the Court will approach this issue in practice when tasked with settling “a notional occupation fee” in accordance with the Court of Appeal’s declaration 3(b). Several matters will guide the parties’ preparation of this part of the case. The first matter is that Mitchelmore JA (at [113]) recorded in the last sentence of that paragraph that on 21 May 2021 the Court had made an order restraining the NSWTAG from disposing of the Glenwood property “upon an undertaking from the respondent, to the extent that her claim failed, to pay an occupation fee to be determined by the Court”. When the Court intervened on 21 May 2021 to restrain the NSWTAG from disposing of the Glenwood property, the Court changed the ground rules for Ms Togias claiming an occupation fee. From that date onwards she undertook that “to the extent her claim failed” she would pay an occupation fee to be determined by the Court. From that time forward, it is not open to Ms Togias to argue that as an equitable co-tenant she is not liable to pay an occupation fee because she has not ousted her co-tenant. She has given a positive undertaking to the Court to pay an occupation fee as the price for delaying sale of the Glenwood property. In the present contest in the Equity Division she will be required to pay an occupation fee from 21 May 2021, come what may.

35. This leads to 2 related questions.

36. But the next two related question are: (a) how should the occupation fee after 21 May 2021 be calculated and similarly (b) how should any occupation fee for which Ms Togias is found liable between 29 January 2010 and 21 May 2021 be calculated. This whole period is relevant because the NSWTAG may be able to establish, when the evidence is analysed that there was a period in which Ms Togias ousted her co-tenant.

37. In the Court’s view for any period that Ms Togias is to be required to pay an occupation fee, the fee should be measured by the true legal position in which she found herself as was found in the June 2023 judgement: she was a licensee at will with non-exclusive occupation of the property. And, for some periods of her occupation, she has actually shared occupation of the Glenwood property with Mr Subatki but not as part of the same household. Her security of tenure was improved when she gave the undertaking on 21 May 2021, but prior to that it was no more than was stated here.

38. The existing evidence as to the market rental of the property is not a true measure of the market value of the legal tenure Ms Togias held in the Glenwood property. It may be expected that the occupation fee she should be charged, especially before 21 May 2021 will be less than a market rent. And in this respect the observations Beazley JA in Biviano (at 307E-304E) that an appropriate occupation fee to be claimed by an ousted co-tenant would not necessarily be the full rental value of the property in question, come into focus. The expert evidence that has been prepared will need to be adjusted to accommodate this conclusion. The parties will also need to agree upon periods of time when Ms Togias was in the Glenwood property on her own and the periods of time when Mr Subatki was in occupation.

39. But in one important respect the NSWTAG submissions are correct. Although the Court has found that Ms Togias can claim that she is not liable for an occupation fee between 29 January 2010 and 21 May 2021 (because she has not ousted her equitable co-tenant), equally it is open to NSWTAG to answer that argument by emphasising, as it does, the present situation is slightly different from mere equitable co-tenants and that the Court of Appeal is formulating equitable relief by way of a charge on a condition that an occupation fee may – but not must – be paid. Notwithstanding that Ms Togias can set up her position as an equitable co-tenant NSWTAG can still argue that particular circumstances established here mean that to prevent a disproportionate grant of relief that some level of occupation fee should nevertheless be charged. These will be matters for final submissions upon the evidence.

Three subsidiary issues

40. NSW TAG’s submissions raised three other matters that should be addressed.

41. The first of these subsidiary issues is the NSW TAG’s submission that from 9 June 2021 the date on which the NSW TAG filed its Cross-Claim applying for an order for possession that the plaintiff has been a trespasser. This can be rejected on two grounds. First, it is inconsistent with the Court’s reasoning in the June 2023 judgment at [36]-[42]. Secondly, it is not consistent with the undertaking that was given by Ms Togias on 21 May 2021.

42. The second subsidiary issue relates to the mortgage instalments claimed by the plaintiff. The NSW TAG submits that when the Court is seeking to determine what are “her payments”, which taken together will establish the quantum of the charge within declaration 3(b), that Ms Togias cannot rely upon payments that were made from various funds that were legally or beneficially owned or controlled by Mr Subakti. NSWTAG submits that using funds from various accounts of Mr Subakti and his businesses – which may have come from the legal sources – are not payments by Ms Togias for the purposes of declaration 3(b).

43. This argument has a simple answer. It is inconsistent with the Court of Appeal’s reasoning that expressly rejected such an argument. Mitchelmore JA said about this same issue at [108] and [109] the following:

“[108]   In support of the proposition that the primary judge erred in determining that the respondent held a beneficial interest in the Glenwood Property as to 50 per cent, the appellant relied on a number of matters, including that the respondent did not make any financial contributions before the cessation of the relationship and that her contributions did not otherwise generate any profit. The appellant also relied on the inference, which it submitted was available on the evidence, that “a significant portion of the financial contributions to Mr Subakti and the respondent’s expenses – and in particular property purchases – came from illegitimate sources”. As a matter of public policy, the appellant submitted, “it would be inappropriate for a Court, through creation of a constructive trust in equity, to grant the Respondent a 50% share of assets purchased using illegitimate funds. To do so would legitimise those funds.”

[109]   The appellant’s reliance on the likely illegitimate sources of parts of Mr Subakti’s income is not relevant in the present case. In circumstances where the respondent did not know of Mr Subakti’s serious criminal activities, the nature of his activities should not operate to deprive her of an equitable interest where it is otherwise appropriate to confer it. I accept the submissions of the respondent in this regard.”

44. In formulating the relief in declaration 3(b), Mitchelmore JA had here put to one side all questions of the legitimacy of Mr Subatki’s income. There was no issue that Ms Togias did not know of her de facto partner’s illegal activities when she used she could legitimately regarded as joint funds from their relationship that she was entitled to apply for the joint endeavour in which they were involved. Her use of these funds did not deprive her of an equitable interest in the Glenwood property and it would now be an abuse of process to permit these matters now be raised again on this remitter to the Equity Division.

45. The last subsidiary issue is a claim that the NSWTAG makes for an accounting from Mr Togias in respect of the rental income she received from the Seven Hills property, in which the Court of Appeal – unlike Sackar J – found she had no interest. The NSWTAG submits that a duty “arose’ in Ms Togias to account to the NSWTAG for the rental income of the Seven Hills property due to the forfeiture of that property to the Crown, once the Court of Appeal found that Ms Togias did not have any interest in that property.

46. No such claim arises from the Court of Appeal’s findings for several reasons. First, it does not arise on the pleadings. The NSW TAG filed a Cross-Claim in the proceedings. It made no claim in that Cross-Claim for an account in respect of rental income from the Seven Hills property in the event that the NSWTAG was successful. No claim made for such rental income in the NSWTAG’s motion of 13 February 2023 or the NSWTAG’s motion of 4 July 2023. The issue is obliquely referred to in paragraph 7 of the NSWTAG’s Amended Defence in relation to the acquisition of the Seven Hills property but that does not entitle the NSWTAG now to bring a claim upon that subject. Nor did NSWTAG raise the issue in the Court of Appeal in a manner that is evident from the Court of Appeal’s judgment.

47. Finally, this issue does not come within the apparent scope of Order 4 of the Court of Appeal’s orders remitting the matter to the Equity Division “for any further or consequential orders”. Mitchelmore JA gave examples (at [116]) of the consequential orders that her Honour had in mind, and they were matters in relation to the vacation and sale of the Glenwood property and the costs of the proceedings. A broad ranging accounting in relation to the Seven Hills property which had never previously been claimed on the pleadings could hardly qualify as a “consequential order”.

48. In summary, once the Court determines basic factual issues such as when the Glenwood property was occupied and has evidence before it that is relevant to the claim for an occupation fee, the matter can either be determined by the Court or referred out to an expert. The Court will make directions for the parties to identify a suitable a court expert to determine an appropriate occupation fee for the Glenwood property in accordance with these reasons. But if the parties agree for the Court to determine this matter, they can ask for this direction to be vacated. The Court deciding the matter is probably likely to be more cost-effective.

49. The Court notes there is something of a trend in these proceedings for matters that have been decided to be reargued. The Court requests the parties to be mindful of what has now been decided and move on with determining the balance of the issues to bring the matter to a final resolution. The remaining issues are not extensive.

Conclusions and Orders

50. In addition to the NSWTAG’s primary motion of 13 February 2023 seeking possession and sale of the Glenwood property the NSWTAG filed a supplementary motion on 4 July 2023, shortly after the June 2023 judgment. The NSW TAG 4 July 2023 motion sought various amendments to the June 2023 judgment. These amendments in substance sought to change the Court’s conclusions - that Ms Togias was a mere licensee of NSWTAG, that she did not occupy the Glenwood property as an exclusive licensee, and that at all times since the NSWTAG became registered as proprietor of the property that the plaintiff occupied the property as a trespasser or in the alternative without any licence or permission of NSW TAG.

51. This motion must be dismissed. It is in substance an appeal from the June 2023 judgment. It seeks to change the result of the judgment. That can only be done on appeal and not by motion before the trial judge. The NSWTAG seeks for that motion to be dealt with. For these reasons the Court will dismiss the 4 July motion as incompetent.

52. The parties have had mixed success upon the present application although Ms Togias has had the greater success. It may be appropriate for each party to bear her and its own costs of the application. But the Court will reserve costs for the present and hear any applications in due course.

53. For these reasons the Court makes the following orders and conclusions which are designed to bring the remaining issues to a head:

1. DIRECT that the parties consult with one another and make their best endeavours to agree upon a chronology of the time periods in which Mr Subatki has and has not occupied the Glenwood property since 29 January 2010 and the extent of his occupation of the property during those periods of occupation, so that the Court can then determine on the evidence tendered,

1. whether or not there has been any ouster of Mr Subatki or the second defendant by the plaintiff from the Glenwood property, and

2. what is the appropriate measure of an occupation fee for the plaintiff’s occupation of the Glenwood property,

1. in the event there has been ouster of Mr Subatki or the second defendant from the Glenwood property, or

2. in the event there has been no ouster but equity and good conscience in circumstances of this case nevertheless requires the plaintiff to pay some occupation fee.

2. DIRECT the second defendant within 21 days to

1. identify in the evidence any acts of ouster upon the second defendant seeks to rely to show that an occupation fee is payable by the plaintiff, and the alternative

2. identify the circumstances that notwithstanding the lack of evidence of acts of ouster suggests that in equity and in good conscience should nevertheless pay an occupation fee.

3. DIRECT the parties within 21 days to agree upon a list of 4 persons suitably qualified to be appointed as Court experts under Uniform Civil Procedure Rules r 31.46 to determine an occupation fee for the Glenwood property not on the basis of market rent but on the basis of the plaintiff occupying the property under a licence terminable at will and where the premises were from time to time shared with Mr Subatki.

3. RESERVE costs of this application.

4. GRANT liberty to apply.

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Decision last updated: 11 June 2024