New South Wales Supreme Court CITATION : Jolevski v Jolevska [2010] NSWSC 416 HEARING DATE(S) : 2 and 3 February 2010 JUDGMENT DATE : 7 May 2010 JUDGMENT OF : McLaughlin AsJ 1. I make orders as in prayers 1 to 7 in the summons. DECISION : 2. I order that the costs of each party be paid out of the proceeds of sale of the property referred to in prayer 1 in the summons ("the subject property"). 3. I reserve to the parties liberty to apply, within 14 days of the date hereof, for a variation of order 2 herein. 4. I reserve to the parties and to the Public Trustee liberty to apply in respect to the sale of the subject property. CATCHWORDS : REAL PROPERTY - co-ownership - statutory trust for sale - discretion of Court to refuse order - alleged agreement which would deprive Plaintiff from prima facie right to relief - proprietary estoppel - unconscionable conduct. LEGISLATION CITED : Conveyancing Act 1919 Statute of Frauds of 1677 (29 Car. II c. 3) CATEGORY : Principal judgment Ex parte Permanent Trustee Nominees (Canberra) [1989] 1 QdR 314 Ngatoa v Ford (1990) 19 NSWLR 72 Woodson (Sales) Pty Ltd v Woodson (Aust) Pty Ltd (1996) 7 BPR 14,685 CASES CITED : Callahan v O'Neill [2002] NSWSC 877 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51 Vukic v Grbin [2006] NSWSC 41 Tory v Tory [2007] NSWSC 1078 Simpson-Cook v Delaforce [2009] NSWSC 357; PARTIES : Blagojce Jolevski (Plaintiff) Marija Jolevska (Defendant) FILE NUMBER(S) : SC 2763 of 2009 COUNSEL : Mr E. Petersen (Plaintiff) Mr P. Menadue (Defendant) SOLICITORS : Matthew Trevillion (Plaintiff) Good Legal Lawyers (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSCOCIATE JUSTICE McLAUGHLIN Friday, 7 May 2010 2763 of 2009 BLAGOJCE JOLEVSKI –v- MARIJA JOLEVSKA JUDGMENT 1 HIS HONOUR: By summons filed on 12 May 2009 Blagojce Jolevski claims relief pursuant to Division 6 of Part 4 of the Conveyancing Act 1919 (in particular, section 66G of that statute), in respect to real property situate at and known as 8 Anama Street, Fairy Meadow ("the subject property"), of which property the Plaintiff and the Defendant, Marija Jolevska, are tenants in common in equal shares. The consent of the Public Trustee to be appointed, pursuant to section 66G of the Conveyancing Act, trustee for sale of the subject property, has been filed on behalf of the Plaintiff. 2 The Plaintiff is the elder child of the Defendant. The subject property was purchased in 1978 for $59,000. That purchase price was funded by a deposit of $30,000, the balance being met by a housing loan from the Commonwealth Bank of Australia, secured by a mortgage over the subject property. There was dispute between the parties as to the extent of their respective contributions to the deposit. 3 At the time of the purchase the Plaintiff (who had been born in 1957) was aged about 20. At that time he, the Defendant and his father (the husband of the Defendant) were all employed at the Port Kembla Steel Works. They (together with the Defendant's younger son, Nick Jolevski, the Plaintiff's brother, who was born in 1963) were residing in a house property in Aitcheson Street, Wollongong. 4 Upon its purchase the subject property was registered in the names of the Plaintiff and the Defendant as tenants in common in equal shares. 5 As a co-owner of the subject property, the Plaintiff has a prima facie entitlement to relief of the nature claimed in the summons. 6 In Ngatoa v Ford (1990) 19 NSWLR 72, Needham J held that the word "may" in section 66G(4) of the Conveyancing Act, does not have a mandatory effect; it confers a limited discretion on the Court to refuse to make an order appointing trustees for sale in an appropriate case. His Honour reviewed the various relevant authorities, and, at 77, expressed agreement with what was said by Kelly SPJ in the Full Court of the Supreme Court of Queensland in, … in my opinion the existence of some contractual obligation with which an order for the appointment of trustees on the statutory trust for sale would be inconsistent is one such matter which may have that result. 7 Needham J continued, in Ngatoa, at 77, It is not, I think, desirable that one should attempt to define exhaustively the circumstances in which an order may be refused; judicial experience is that such matters should be resolved on a case by case basis. My opinion is, however, that a contractual limitation upon the exercise of the right… is a proper consideration to be taken into a account in such applications. 8 However, the Defendant opposes the granting of the relief sought by the Plaintiff. Although the Defendant has not filed a cross-claim, her opposition to the claim of the Plaintiff appears to be based upon two grounds. Those grounds are, first, the existence of a contract alleged to have been made between the parties in 1977, the effect of which, it is submitted, would preclude the Plaintiff from being granted the relief which he presently seeks; and, further, or in the alternative, a defence grounded upon the principle of proprietary estoppel. 9 The Defendant does not assert that there was any form of written agreement between herself and the Plaintiff, to the effect of the contractual arrangement which the Defendant now appears to be alleging. However, the Defendant asserts the existence of some form of oral agreement between the parties. The evidence of the Defendant in this regard, was far from clear, consistent or satisfactory. 10 It will be appreciated that the Defendant is not, by such an alleged agreement, asserting that any interest in land was created in her favour; she asserts only that there was an agreement between the parties, the effect of which was that the Plaintiff would not enforce his legal right under section 66G of the Conveyancing Act. In consequence, it is not necessary for me to consider the requirement for writing consequent upon the re-enactment, in substance, of the relevant provisions of the Statute of Frauds of 1677 (29 Car. II c. 3) in section 23C and section 54 of the Conveyancing Act. 11 Whilst making all allowances for the fact that the Defendant gave her evidence in the Macedonian language, through an interpreter, nevertheless, I regarded the Defendant as a most unsatisfactory witness. So far as could be gleaned from her evidence, both by affidavit and under cross-examination, it was the assertion of the Defendant that there was some form of agreement between herself and the Plaintiff, that, although the Plaintiff would appear on the title to the subject property, nevertheless, the Defendant would be enabled to remain for the totality of her life in residence in that property (which, upon its purchase, became the family home of the Plaintiff, his parents and his younger brother). 12 There have been considerable disputes between the Plaintiff and the Defendant, especially in recent times. A number of apprehended violence orders have been taken out by the Defendant against the Plaintiff, with the consequence that the Plaintiff himself is no longer enabled to reside in the subject property. 13 The Defendant gave evidence, which was disputed by the Plaintiff, concerning the respective contributions of the parties towards the deposit and also towards the repayments of the mortgage loan. 14 The Defendant throughout her cross-examination constantly, persistently and insistently asserted (whether responsively to what she was being asked, or not) that at the time of the purchase of the subject property in 1978 the Plaintiff was receiving only "a child's wage" or "a child's wages". That assertion, whatever it might have meant, was disputed by the Plaintiff, who at the relevant time was being employed in an adult capacity by the Port Kembla Steel Works (as were both his father and his mother, the Defendant). It was the Plaintiff's evidence that he was at that time working as an assistant foreman in the tin mill, and that in that employment he was paid fortnightly in cash. He said that from 1977 to 1982, he worked considerable periods of overtime, and that on most pay days he received a net amount after tax of between $400, and $500. 15 It was the Plaintiff's evidence that in 1972, when he was aged 13, he obtained his first job, working on a milk run in Coniston. He said that from 1972 to 1975 he arose at 3am on six mornings a week, to work on the milk run, and that he gave his pay from that employment to his parents. The Plaintiff left school in 1975, and thereupon studied at a technical college, before commencing employment at the Port Kembla Steel Works in 1976. 16 It was the Plaintiff's evidence that the deposit for the purchase of the subject property was paid out of savings from the Plaintiff's own employment (from the milk run and from the steel works) and from his father's employment. 17 It was also the Plaintiff's evidence that throughout that period he gave all his pay packets directly to his parents. He said that his mother and his father usually waited for him near the pay office at the steel works, and took his pay packet immediately after he received it. The Plaintiff also said that on many occasions, when receiving his pay packet, his mother and his father said, "This is for the mortgage on Anama Street". The Plaintiff said that that mortgage was paid off in three years, by about 1980, but that nevertheless he continued to give his entire pay packet to his parents. The Defendant did not dispute the substance of the foregoing evidence, agreeing that the Plaintiff gave to her his fortnightly pay packets, and that the contributions from the plaintiff, his father and the Defendant enabled the mortgage to be paid off in the shortest possible time, in no more than three years. 18 The Plaintiff said that his father controlled the family finances. When the Plaintiff wanted to go out he asked his father for money. His father also gave the Plaintiff money for cigarettes and petrol. It was the Plaintiff's evidence that once a fortnight he, at the request of his father, took money to the Commonwealth Bank to make payments on the mortgage on Anama Street, his father giving him the cash on those occasions, and saying "This is for the mortgage". 19 In 1982 the Plaintiff was diagnosed as suffering from schizophrenia. Apparently, he then lost his job, because, he said, he could not work, and could not sleep. He was in receipt of unemployment benefits for a period of two years. 20 Somewhat inconsistently with her assertion that the Plaintiff throughout the relevant period was receiving only "a child's wage", the Defendant said that the agreement between the parties required the Plaintiff to make regular financial contributions towards the mortgage payments, in return for the subject property being purchased in the Plaintiff's name as well as that of the Defendant. 21 The Plaintiff did not dispute that it was part of the agreement between himself and the Defendant that, in return for his name being put on the title to the subject property, he would make financial contributions to the repayment of the home loan. The Defendant agreed that he made such contributions. I would record, in this regard, that it was also the evidence of the Plaintiff that after the purchase of the subject property the Defendant promised that he would ultimately be entitled to the entirety of that property. 22 Apart from the Plaintiff's father, who died in 1997 (and who appears not to have shown much interest in the purchase of the subject property and in the relocation thereto of the family residence), the only person who might have been able to give accurate and reliable evidence of the existence of any such agreement as is now asserted by the Defendant concerning her alleged entitlement to remain in the house property was the former solicitor of the parties, Mr Daniele Paussi. It would appear that Mr Paussi is now deceased, he having died in about December 2009. Enquiries conducted on behalf of the Defendant have not been fruitful in ascertaining the existence any relevant documents from Mr Paussi's former practice (from which it would appear that he had retired in January 1980, a considerable time before his death). 23 The evidence of the Defendant concerning this alleged agreement between herself and the Plaintiff lacked clarity and precision regarding elements essential to the existence of such an agreement: for example, when, and where it took place, and the exact terms thereof; let alone any information concerning any asserted consideration for that agreement. 24 There can be little doubt that before the purchase of the subject property there was general discussion within the family concerning that purchase and, possibly, concerning the intentions of the parties regarding the arrangements for the occupation of the property by various members of the family. But such general discussions fall far short of establishing the existence of a binding agreement between the Plaintiff and the Defendant – the existence and the precise terms whereof it is for the Defendant to establish – which would displace the entitlement of the Plaintiff to the relief which he presently claims. 25 The impression which one gains from the quite unsatisfactory evidence of the Defendant and from the evidence of the Plaintiff (which, in certain respects, was hardly more satisfactory) is that it was the intention of those parties that they should each remain in occupation of the subject property. Against the present complaint of the Defendant that, by bringing the proceedings for the appointment of a statutory trustee for sale, the Plaintiff is depriving her of her residence of many years, can be counterbalanced the complaint of the Plaintiff himself that the various apprehended violence orders which have been obtained against him at the instance of his mother have deprived him of an entitlement to reside in the property of which he is the legal co-owner. 26 There was much evidence offered, especially on behalf of the Defendant, concerning the circumstances in which the Plaintiff became a co-owner of the subject property. It was asserted by the Defendant that the essential reason was to bring about a situation in which the Plaintiff would "settle down", and by which he would be diverted from the paths of carnal pleasure which, according to his mother, he was at that time pursuing (including the use of marijuana, the consumption of alcohol, and the patronage of brothels). Whether or not that was the original motivation of his mother (the Plaintiff's father, who died in 1997, appears to have been largely unconsulted concerning the purchase of the subject property, and appears to have been content for the family to remain in residence in their former home at Wollongong), it can hardly have been financially possible for the Defendant on her own to have purchased the subject property. 27 Not only was it necessary, for the obtaining of the housing loan from the Commonwealth Bank, that the Plaintiff should be a co-purchaser (and I would here interpolate it as being highly unlikely that the Commonwealth Bank would have granted a housing loan to the Plaintiff if he were merely, as asserted now by his mother, receiving "a child's wage"), but I am satisfied that the Plaintiff himself made significant contributions both to the deposit of $30,000 and also to the regular mortgage repayments (even if his contributions were not as great as those of his parents). 28 In summary, therefore, I am not satisfied that the Defendant has established the existence of an agreement or arrangement which she now asserts – or, indeed, of any agreement or arrangement which would preclude the Plaintiff from availing himself of his rights under section 66G of the Conveyancing Act to have the Court appoint a statutory trustee for the sale of the subject property. 29 It was further submitted on behalf of the Defendant that, even if the Court is not satisfied that there was an express agreement between the parties, there was, in any event, an implied agreement that the Plaintiff could not dispose of his interest in the subject property or force a sale thereof without the consent of at least his mother. In this regard the Defendant relied upon the following circumstances. (a) The mother and son were to become tenants in common of a property. (b) The mother and son intended to live in the property with the rest of their family. (c) The mother (and her husband) provided, by way of deposit, at least half of the sale [ sic ] price of $59,000. 30 For the reasons which I have already set forth in relation to the existence of an alleged express agreement, I am not satisfied that any form of agreement can be implied from the foregoing circumstances now relied by the Defendant (even if I were to be satisfied, which I am not, of the disputed facts asserted by the Defendant in that regard). 31 If there is any right which can be implied from the foregoing circumstances, it is surely the right that the Defendant would not, as she has now done, prevent the Plaintiff from residing in the subject property. 32 I am not persuaded that any form of binding agreement can be teased out of the foregoing circumstances. Again, in the case of an implied agreement, just as in the case of an express agreement, the terms of that agreement must emerge with clarity and precision. No such terms can emerge from the foregoing allegations of the Defendant (and the evidence discloses that they can be regarded as no more than allegations). Again, there is no evidence of any consideration for such an implied agreement. 33 The Defendant has not established the existence of an agreement, be it an express agreement or an implied agreement, in terms which would deprive the Plaintiff of his entitlement to the relief which he presently claims. 34 The Defendant also relies upon the principles relating to estoppel, as a defence to the Plaintiff's entitlement to the relief presently claimed by him. 35 In this regard the Defendant relies upon what have been referred to in her submissions as the three following separate instances of estoppel. First Estoppel (express pre-contractual representation). 36 It is alleged by the Defendant that before the purchase of the subject property the Plaintiff represented to her that the Defendant could live in the property for her life, and the Defendant relied upon that representation to her detriment. 37 The alleged detriment suffered by the Defendant included: (i) Allowing the Plaintiff to become a tenant in common of the property (especially in circumstances where the Defendant and her husband clearly contributed significantly more to the deposit and the mortgage payments), and thus made a substantial gift to the Plaintiff. (ii) Agreeing to take out a mortgage loan to purchase the property and thereafter having to repay that loan with no effective assistance from the Plaintiff. (iii) For the last 34 years conducting her life in the expectation that she could live in the subject property until her death. 38 Each of the foregoing matters relied upon by the Defendant is the subject of disputed evidence between the Defendant and the Plaintiff, upon which each party was cross-examined at the hearing. I am not satisfied from the Defendant's evidence that any of the three foregoing matters has been established. 39 I have already observed that I do not accept the Defendant's evidence concerning the Plaintiff receiving what was referred to as "a child's wage". Further, I am satisfied that the Plaintiff made significant contributions both to the deposit and to the mortgage repayments. 40 It is difficult to see how the conduct of the Defendant in her lifestyle during the last 34 years, in the expectation that she could live in the property until her death, can be regarded as an express pre-contractual representation on the part of the Plaintiff. 41 At the time of the purchase he Plaintiff was aged only about 20. His parents were desirous (according to the Defendant) that he should pursue a more settled lifestyle, although his father, at least, appears not to have been particularly enthusiastic about the purchase of the subject property. 42 I am not persuaded that an express pre-contractual representation of the nature now asserted by the Defendant was, in fact, made by the Plaintiff, or (if, contrary to that conclusion, there was such a representation) that the Defendant acted upon such representation to her detriment. Second Estoppel (implied pre-contract representation/expectation). 43 It is alleged on behalf of the Defendant that before the purchase of the subject property the Plaintiff created an expectation that the Defendant could live in the property for her lifetime, and that the Defendant relied upon that expectation to her detriment. It is alleged that such assumption/expectation arose from the following facts: (i) In a situation where a mother and her son were to become tenants in common of a house property in which their entire family intended to live, both parties would have clearly assumed that neither party could force the sale of the property without the consent of the other (or, indeed, of the whole family). When the property was purchased, the other members of the family were the father, and the Plaintiff's younger brother (then aged 14). (ii) In those circumstances if the son wished to reserve a right to force the sale of the property, or deal with his share of the property, as he wished, he clearly had an obligation to speak. It is alleged by the Defendant that, upon the Plaintiff's own evidence, he did not speak. 44 Once again, the foregoing matters alleged by the Defendant to create what is described as an implied pre-contractual representation or expectation, are dependent upon disputed matters of fact. As I have already observed in the case of the asserted "first estoppel", I am not satisfied from the disputed evidence of the Defendant that the facts upon which she now relies have been established. Further Estoppel (post-contractual assumptions/expectation). 45 It is alleged on behalf of the Defendant that after the purchase of the property the Plaintiff allowed the Defendant to assume, for 33 years, that she could live in the property for life. It is submitted that, indeed, there is no suggestion that the Plaintiff, at any time before the institution of the present proceedings, suggested that the Defendant's occupancy of the property was not secure. 46 In regard to this alleged further estoppel, I again refer to the disputed questions of fact. I am not satisfied that the matters upon which the Defendant relies in her evidence have been established. 47 But, further, what appears to me to be fatal in the submissions of the Defendant in asserting the existence of an estoppel which would have the effect of precluding the Plaintiff from enforcing his legal entitlement to obtain the relief which he presently claims, is that the alleged detriment suffered by the Defendant is not "detrimental reliance" of the nature referred to in the various decided cases relevant to this area of the law. (See, for example, Vukic v Grbin [2006] NSWSC 41, where Brereton J summarises the matters which a Plaintiff must establish to found an equitable estoppel; Simpson-Cook v Delaforce [2009] NSWSC 357; Tory v Tory [2007] NSWSC 1078; see, also, Gillett v Holt [2001] Ch 210.) 48 In Simpson-Cook v Delaforce, Bergin CJ in Eq referred, at [29], to the following principles which may be gleaned from the analysis of Robert Walker LJ in Gillett v Holt, (1) promises unsupported by consideration are initially revocable, however detrimental reliance on such promises make them irrevocable; (2) there must be a sufficient link between the promises relied on and the conduct which constitutes the detriment; and (3) detriment can be financial or otherwise, however if other than financial it has to be substantial. 49 In Tory v Tory, White J said at [42] Whilst an order under s 66G of the Conveyancing Act is discretionary and the Courts have declined to define the matters which are bar to a successful application ( Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068), such an order is almost as of right unless on settled principles it would be inequitable to allow the application ( Callahan v O'Neill [2002] NSWSC 877 at [8]). An application will be refused, if to make the order would be inconsistent with a proprietary right, or a contractual or fiduciary obligation ( Re McNamara and the Conveyancing Act ; Ngatoa v Ford (1990) 19 NSWLR 72 at 77; Williams v Legg (1993) 29 NSWLR 687 at 693; Hogan v Baseden (1997) 8 BPR 15,723 at 15,726-15,727). Conventional estoppel may be a ground for refusing an order under the section ( Woodson (Sales) Pty Limited v Woodson (Australia) Pty Limited (1996) 7 BPR 14,685 at 14,701 (" Woodson ")). It is consistent with a settled principle for equitable estoppel, which may itself be the source of rights, to be a ground for refusing an order. In Woodson , Santow J, (as his Honour then was), held (at 14,701) that unconscionability was a ground for refusing an order if the application under s 66G involved one party in a dominant position taking unconscientious advantage of the vulnerability of the other party, or involved one party asserting or retaining the benefit of relevant property where it would be unconscionable to do so. 50 In the instant case, even upon the Defendant's own version of the evidence, it was the Defendant, as the adult mother, making the greater financial contribution towards the purchase, who was in a dominant position, whilst the Plaintiff, aged only about 20 and receiving (according to the Defendant) only "a child's wage", and making smaller financial contributions, who was in a position of vulnerability to his mother. 51 Even upon the Defendant's evidence, there is no suggestion that the Plaintiff actively encouraged the asserted "belief" upon which the Defendant now apparently relies. The most that the Defendant now says is that the Plaintiff remained silent. It is quite apparent that silence cannot be regarded as encouraging a belief on the part of the Defendant of the nature which she now alleges. 52 I am not satisfied that the Defendant has established the existence of any form of equitable estoppel which would deprive the Plaintiff of an entitlement to the relief which he presently claims. 53 Finally, in opposition to the Plaintiff's claim, the Defendant placed reliance upon a general ground of asserted unconscionability. 54 In this regard the Defendant relies sought to derive some benefit from what was said by Young CJ in Eq (as he then was) in Callahan v O'Neill [2002] NSWSC 877, at paragraph [57], There is some room for general unconscionability to be relied on as a defence, see Woodson (Sales) Pty Ltd v Woodson (Aust) Pty Ltd (1996) 7 BPR 14,685 at 14,701, where Santow J said that whilst general hardship or unfairness was insufficient to defend a claim, where there was a conventional estoppel or one party had taken unconscientious advantage of another, that would constitute a defence. 55 The Defendant submits that if (contrary to the Defendant's foregoing submissions) the Court finds that there was no agreement and that there is no operative estoppel, then the Plaintiff took unconscionable advantage of his mother when the subject property was purchased, because there was no contractual term in any agreement or arrangement between them which would allow her to stay in the property for her lifetime. 56 In Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51, at 63 (paragraph [7]) Gleeson CJ expressed the following salutary admonition regarding unconscionable conduct, In everyday speech, "unconscionable" may be merely an emphatic method of expressing disapproval of someone's behaviour, but its legal meaning is considerably more precise. 57 In the present proceedings the Defendant disapproves of the Plaintiff pursuing his present claim for relief, and as a last resort the Defendant has pleaded unconscionable conduct on the part of the Plaintiff. Yet it is clear that the Defendant has not been able to establish the basis of such a claim. The Defendant has not sufficiently established any special disadvantage from which she was suffering at the time when the subject property was purchased. Moreover, it is inconsistent with her earlier evidence that the Defendant now asserts that she was fully capable of entering into an agreement with the Plaintiff not to sell the property, whilst she was at the same time suffering from a special disability of a nature which precluded her from making a judgment as to what was in her own best interest. 58 There is nothing in the circumstances of this case, even if the Defendant's unsatisfactory evidence be accepted in its entirety, that would support the assertion that the Plaintiff has taken unconscionable advantage of the Defendant. Indeed, to the extent that there may have been an understanding between the parties, to the intent that they would each remain in residence in the subject property, that understanding was first breached by the Defendant in taking out the apprehended violence orders against the Plaintiff, with the consequence that the Plaintiff has been deprived of remaining in what had been his home for many years, the Defendant's conduct thus precipitating the institution of the present proceedings. 59 I am not satisfied that any of the grounds upon which the Defendant attempts to resist the claim of the Plaintiff has been established. 60 In proceedings under section 66G of the Conveyancing Act the usual costs order is that the costs of the parties be paid out of the proceeds of sale of the subject property. I propose to make such an order in the instant case. However, as I have not heard any submissions as to costs, I will reserve to the parties liberty to apply, within 14 days of the date hereof, for a variation of that order. 61 Accordingly, I make the following orders; 1. I make orders as in prayers 1 to 7 in the summons. 2. I order that the costs of each party be paid out of the proceeds of sale of the property referred to in prayer 1 in the summons ("the subject property"). 3. I reserve to the parties liberty to apply, within 14 days of the date hereof, for a variation of order 2 herein. 4. I reserve to the parties and to the Public Trustee liberty to apply in respect to the sale of the subject property. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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