Supreme Court New South Wales Medium Neutral Citation: NSW Trustee and Guardian v Lagana [2015] NSWSC 779 Hearing dates: 7 October 2014, 8 October 2014 Date of orders: 19 June 2015 Decision date: 19 June 2015 Jurisdiction: Common Law Before: Garling J Decision: (1)Judgment for the NSW Trustee and Guardian for possession of the whole of the land contained in Folio Identifier 3/252425 being Lot 3 in Deposited Plan 252425 and known as 98 Humphries Road, St Johns Park, New South Wales 2176. (2)Pursuant to r 39.1(1)(d) of the Uniform Civil Procedure Rules 2005, grant leave for the issue of a Writ of Possession of the land referred to in Order 1. (3)Order that the plaintiff is not to execute the Writ of Possession before 21 September 2015. (4)Order that the Amended Cross-Claim filed on 4 August 2014, be dismissed. (5)Order the defendants to pay the costs of the whole proceedings of the NSW Trustee and Guardian. Catchwords: POSSESSION – Trustee claims entitlement to vacant possession of property –defendants claim possession and right to occupy – agreed that Deed of Family Arrangement in 1993 allowed defendant's mother right of occupancy for her life – whether Deed created interest in property for defendants – held that Deed did not create interest in favour of anyone other than defendant's mother – interest ceased on her death – defendants have no legal or equitable interest in property – Trustee entitled to possession of property – cross-claim – cross-claim dismissed – execution of judgment stayed to allow defendants to find alternative accommodation Legislation Cited: Criminal Assets Recovery Act 1990 Uniform Civil Procedure Rules 2005 Cases Cited: Not Applicable Texts Cited: Not Applicable Category: Principal judgment Parties: NSW Trustee and Guardian (P) Maria Lagana (D1) Gerry Lagana (D2) Representation: Counsel: I Temby QC / J Hutton (P) P M Lane (D1, D2) Solicitors: Proactive Legal Pty Ltd (P) Mulally Mylott (D1, D2) File Number(s): 2013/145850 Publication restriction: Not Applicable ___________________________________________________________________ Judgment 1. These proceedings concern a property in Humphries Road, St Johns Park, a suburb of western Sydney ("the Property"). 2. The NSW Trustee & Guardian ("the Trustee"), which is the registered proprietor of the Property, as a consequence of orders made by this Court pursuant to the Criminal Assets Recovery Act 1990 ("the Act"), claims that it is entitled to vacant possession and seeks appropriate relief. 3. The defendants, Maria Lagana and Gerry Lagana claim that they are entitled to remain in possession of the property because of an arrangement made by their late mother, Josephine Lepore, with Cosmo Commisso who was, prior to the Trustee, the registered proprietor of the property. 4. The central factual question which arises for determination is whether there was any arrangement between Mr Cosmo Commisso and his sister, the late Josephine Lepore, which affected his interest in the Property as registered proprietor, and which gave to the defendants, Maria and Gerry Lagana, the right to occupy the property. 5. The Trustee says that there was no such arrangement. Even if there was, the Trustee says that its title prevails over any entitlement of the defendants to remain in the property. Maria and Gerry Lagana say there was such an arrangement and, as a consequence, they have an enforceable right to remain living in the property. 6. For the reasons which appear below, I am not satisfied that there was any arrangement between Mr Commisso and Mrs Lepore which, on its terms, was sufficient to give any right to Maria and Gerry Lagana to occupy the property. As a consequence, I am satisfied that the Trustee is entitled to possession of the property. Factual Background 1. Many of the facts are undisputed. I find them to be as follows. 2. In December 1984, Mrs Josie Lepore purchased the Property for $115,000. 3. In March 1987, Mrs Lepore's daughter, Maria, the first defendant, married Gerry Lagana, who is the second defendant. 4. On 25 February 1993, the Property was transferred by Mrs Lepore to Mr Commisso for a consideration of $200,000. At the same time, Mr Commisso mortgaged the property to secure an advance of $199,000. The mortgagee was the Commonwealth Bank of Australia. 5. The circumstances surrounding the reason for, and the documentation of, the transfer are matters which are not agreed, and are in dispute. It will be necessary to return to those matters in due course. 6. After the transfer to Mr Commisso, Mrs Lepore continued living at the Property with her family. During the time of her occupation, she made a number of improvements to the Property by way of relatively minor renovations, including a new bathroom. Mr Commisso did not pay for those renovations, and I am satisfied that they were paid for by Mrs Lepore. 7. For about a year after their marriage, the defendants lived with Mr Lagana's mother. They then moved to premises at Cabramatta West, which were owned by Mr Lagana's sister. They eventually purchased those premises. Mr Lagana fell ill, and as a consequence, they sold the property at Cabramatta West. For about a year after the sale of this house, Mr and Mrs Lagana moved into the Property and lived with Mrs Lepore. This was in the mid-1990s. 8. Prior to that time, Mrs Lagana had only lived in the Property for about two years prior to her marriage in 1987. 9. Mrs Lepore had four children – one boy and three girls. The last of her children to leave the Property was her younger daughter, Nikki, who left in about 2003 or 2004. 10. Mrs Lepore's husband died in 2002. After his death, she developed respiratory and lung problems. These ultimately led to her death in 2012. 11. After about 2004, Mrs Lepore required the assistance of her daughters in and about her home and in her activities of daily living. Because of her lung problems, she required use of an oxygen bottle from time to time. The assistance was principally being provided by Mrs Lagana, and generally every day. 12. In 2006, Mrs Lepore asked her daughter, Mrs Lagana, and her husband Gerry, to move in and look after her. She said that she would not require them to pay any rent. Although initially reluctant, Mr and Mrs Lagana ultimately agreed and, in July 2006, the defendants moved into the Property. 13. Mrs Lagana deposes in her affidavit that some time in 2007, about a year after she and her husband moved into the Property, she had a conversation with her mother to the following effect: "I said: We're not going to stay here forever, we want to buy our own place. She said: There's no need for you to go anywhere, you can stay here for the rest of your lives. I said: But Cosmo owns the place. She said: Cosmo will never throw you out in the street." 1. Mr Commisso was not present during this conversation. 2. Mrs Lagana accepts that neither she nor her husband discussed this issue, namely their continued residence in the Property for any period, with Mr Commisso at any time. 3. Mr Commisso visited the Property on a number of occasions after Mr and Mrs Lagana moved in. It was apparent that he knew that Mr and Mrs Lagana were living in the Property, and raised no objection or any concern at all about their residence there. There is no evidence that Mr Commisso knew of the arrangement between the defendants and Mrs Lepore about the basis of their residence in the Property, or of anything which Mrs Lepore said to Mr and Mrs Lagana about what he would or would not do, or whether they could stay in the house after she died. 4. On 20 April 2007, the NSW Crime Commission commenced proceedings to recover property which was alleged to be the proceeds of crime ("the criminal assets recovery proceedings"). The Commission obtained an order against Mr Commisso from this Court, pursuant to s 10 of the Act, which restrained Mr Commisso from disposing of, or attempting to dispose of, a number of properties, or any interest in those properties. As well, the order referred to a sum of cash seized by the police on 18 April 2007, at a property at Mt Pritchard. One of the properties that was restrained by the order of this Court was the Property. Mr Commisso, having been served with those proceedings, instructed Ms Lesly Randle of Randle Lawyers, to appear for him. 5. On 25 October 2007, the police executed a search warrant at the Property. They seized $1.313M. Mr Commisso was charged with knowingly dealing with proceeds of crime with respect to that money. 6. On 8 April 2008, police executed a search warrant with respect to Mr Commisso's home at Mt Pritchard. They seized over $1M in cash which was located inside various wall cavities in the house. On the same day, police again searched the Property and seized cash in the sum of $600,000 which was hidden within a mattress at that property. Ms Lepore, who was present during the execution of the search on that occasion, declined to answer any questions about the cash found at the Property. 7. On 10 April 2008, the NSW Crime Commission obtained orders from this Court which joined Mrs Lepore as the fifth defendant in the proceedings commenced against Mr Commisso. She was restrained, pursuant to s 10 of the Act, from disposing of, or attempting to dispose of, any interest which she had in a boat called "Idle Daze". She was served with the Court's orders, and other appropriate documents, by police on 23 May 2008. The matter was next before the Court on 7 July 2008. No specific order was sought or obtained, at that time, with respect to her living in the Property, or with respect to any interest in the property other than that of Mr Commisso. 8. On 16 April 2008, Mr Cosmo Commisso swore an affidavit in front of his solicitor, Ms Randle with respect to the criminal asset recovery proceedings ("the first affidavit"). In that affidavit, Mr Commisso described the Property in the following terms: "48. The current value of the property is approximately $350,000. 49. The property was acquired from my sister. I am unable to state the precise date of acquisition as it is not stated on the transfer of title document. The stated amount is $200,000 because at the time, the State Office of Revenue required the duty to be paid on the value of the property. We complied accordingly. 50. This property is encumbered for approximately $150,000 in favour of the Commonwealth Bank of Australia. I have seen a mortgage document stating the original amount of the loan was $199,000 executed on 10 February 1993. It has since been refinanced. 51. The monthly mortgage repayments on this property are about $1100. 52. My rough estimation of the equity I hold in this property is $150,000. 53. My sister Jose, who is suffering from a lung disease which is expected to be terminal. She has a lifelong lease in this property. I do not take rent from her for this property." (sic) The Family Arrangement 1. As I indicated earlier, the claim of Mr and Mrs Lagana is that they are entitled to live in the Property for the remainder of their lives because of an arrangement made between their mother and Mr Commisso, at the time the Property was sold by Mrs Lepore to Mr Commisso. 2. In addition to the first affidavit, the evidence of Mr Commisso on this issue is relatively brief and is mostly contained in his affidavit in these proceedings ("the second affidavit") and in cross-examination. As well, there is evidence from his solicitor, Mr Bunyan, who acted on the transaction between Mr Commisso and his sister, and some hearsay evidence to which reference will need to be made. 3. In his second affidavit, Mr Commisso says that in late 1992, or early 1993, his sister said to him: "I am in financial trouble. I am behind for the mortgage. The Bank is going to take the house." 1. Mr Commisso says that he replied: "I don't want that to happen. I'll buy the house from you. You and your family can stay here for the rest of your lives. I will take over the mortgage and I will give you $20,000. I will not charge you any rent and I will pay all the rates. You can make whatever renovations or improvement you want to the property so long as you pay for them. You don't have to ask me about them. Continue to treat the house as your own. Should circumstances arise where I need to sell the property, I will replace the house with another home that you and your family can live in." 1. Mr Commisso records that his sister accepted that proposal and they both went to see Mr Bunyan, who was then a practising solicitor at Liverpool. There is no doubt that Mr Bunyan prepared the relevant transfer of the property from Mrs Lepore to Mr Commisso. 2. Mr Commisso goes on to say: "As part of the transaction, Mr Bunyan recommended that a document be prepared to record the agreement between us as to Josie and her family remaining in the property for the rest of their lives. Such a document was prepared and was signed by both Josie and I at Mr Bunyan's office." 1. Mr Commisso says that he told Mrs Lepore to take the document and keep it in case she had to prove what the agreement was. It is accepted that such document as was referred to by Mr Commisso has not been located, and that despite reasonable enquiries, cannot be located. 2. I have already noted in [27] above that Mr Commisso, when he swore his first affidavit, described what had happened at the time of his purchase of the Property by saying that, with respect to the Property, Josie had a "lifelong lease". 3. In cross-examination, Mr Commisso was taken to the contents of his first affidavit, and directed to paragraph 53, where he said of his sister, Josie, that "She has a lifelong lease on this property". He was asked this question, and gave this answer: "Q. It's true to say, is it not, as was stated in the affidavit, that your sister had a lifelong lease in his property? … Witness: Yeh, she had a lifetime lease, that's right." 1. He also gave this evidence: "Q. Was the agreement that Mr Bunyan prepared, so prepared at about that same time? A. Correct. Q. He had been your solicitor for a while, had he not? A. Yes. Q. Did you and your sister go together to see him? A. Yes. Q. So both of you were physically present when he was given instructions? A. Yes. … Q. Did you go there to tell him about an offer that you had previously made to your sister Josephine which she had accepted? A. That's it. Q. Which you wanted him to write up so as to formalise. A. I wanted it on paper so my wife could never throw my sister out. Q. Your purpose was to get the agreement which had reached formalised? A. Hmmmm. Q. So that your sister was protected? A. That's right." 1. Mr Commisso went a little further in his cross-examination in the following question and answer. At the time, I noted that there was significant pause between the first and second parts of his answer. The question and answer was as follows: "Q. And you made it clear to Mr Bunyan that you were anxious that your sister Josie should be protected? A. That's right. And her family." 1. Mr Commisso went on to say that the document that was prepared by Mr Bunyan was then signed by him and his sister, and Mr Bunyan witnessed his signature. He added that perhaps Mr Bunyan's secretary was also a witness. 2. Mr Temby QC, senior counsel for the NSW Trustee, returned to the question of whether the Deed referred to the family of Mrs Lepore. He asked this question: "Q. Are you really sure that the agreement that you made with your sister extended to not just her, but her family? A. Her family also, yes. I had no benefit in the house. The house was one day going to be left to my grandchildren and my children. I was helping me sister out." 1. The inherent contradiction in this last statement remained unexplained by Mr Commisso. How would he have rationally intended to leave the house to his children (and grandchildren), if Mrs Lepore and "her family" could live there for the rest of their lives. No such contradiction is inherent if the only arrangement was for Mrs Lepore to remain in the house for her lifetime. 2. In re-examination, there was further evidence about the arrangement. Counsel for Mr and Mrs Lagana asked: "Q. What do you understand Mr Commisso by the words 'a lifelong lease'? A. I expected my sister to live for another 50, 60 years. His Honour Q: So she would stay in the house whilst ever she was alive? A. That's right. Counsel Q: What do you understand was the nature of the interest that the instructions that you gave Mr Bunyan about the family? A. Well Josie wanted it included because she wanted to look after her family also. Q. What did you understand would occur as a result of that reference to family being made? A. Well, any part of her family." 1. The questions which then followed, as asked by the Court, demonstrated some imprecision in Mr Commisso's explanation of the phrase "any part of her family". Such was the imprecision that I found in Mr Commisso's evidence entirely unpersuasive on this issue. 2. It needs immediately to be said, that Mr Commisso was generally not an impressive witness. He does not have a background of honesty or being a law-abiding and truthful individual. His criminal record is testament to that. The proceeds of his crimes, seized in circumstances where he accepted that he had not filed tax returns for many years, were also a testament to his lack of honesty and integrity. 3. I do not accept Mr Commisso's evidence unless it is otherwise independently corroborated. 4. In particular, as I have earlier noted, his answer in cross-examination, where he agreed with Mr Temby QC, senior counsel for the Trustee that the arrangement was to look after his sister, and then he added "and her family" was particularly unconvincing. It was an afterthought. It was said, in my opinion, only to advance what he perceived at that time were the interests of his sister's family. I do not accept the second part of that answer. 5. Mr Bunyan gave evidence both in affidavit form and orally. In his affidavit, he said that he acted on behalf of Mrs Lepore and Mr Commisso in connection with the transfer of the property. He noted that his signature appears as the witness to the signatures of Mrs Lepore and Mr Commisso on the Memorandum of Transfer. With respect to the balance of the issues, he says this: "I recall that I drafted a Deed of Family Arrangement for the parties between themselves that, although the property was to be transferred to Cosmo Commisso, Josephine Lepore and her family could continue to reside there indefinitely. … To the best of my recollection, the Deed of Family Arrangement was signed in my office at or about the same time as the transfer was signed. I cannot now recall what happened to the document. I may have retained it or it may have been taken by one or other of the clients. I am not aware of the location of that Deed of Family Arrangement. To the best of my recollection, the Deed of Family Arrangement covered the following matters: (i) that Josephine Lepore would transfer the property to Cosmo Commisso, but that she and members of her family could remain in the home for life. (ii) that she would not have to make any further payments on her mortgage, that Cosmo Commisso would pay out the mortgage and that he, Cosmo Commisso, was free to take out a new mortgage on the security of the property provided he made all future payments. (iii) that Cosmo Commisso would pay all rates and taxes relating to the property. (iv) that Josephine Lepore and her family would be free to make improvements and carry out renovations to the property at their own expense." 1. Mr Bunyan noted that he was acting on this transaction for both Mr Commisso and Ms Lepore. Mr Bunyan was also cross-examined. I thought he was a witness who attempted to give his evidence honestly and to the best of his recollection. He was prepared to concede when his memory was not good, and I had the clear impression that he did not wish to go further with his oral evidence than he was comfortable with. 2. Mr Bunyan said that he had prepared an agreement by way of a Deed of Family Arrangement. He said that, so far as he could remember, it was prepared in anticipation of signing the Transfer, and probably a little before the registration of the Transfer. So much would accord with good practice. I accept this evidence. 3. He was asked to respond to questions on the basis of a perfectly confident recollection. The exchange which followed established that he clearly recalled that he received instructions from both Mr Commisso and Ms Lepore. Mrs Lepore came to see him initially and then she came in again with Mr Commisso. He was also confident that the Deed of Family Arrangement had been drawn up, executed and witnessed by himself. He was also clear that the only parties to the Deed were Mr Commisso and Mrs Lepore. None of Mrs Lepore's children were parties to the Deed. Mr Bunyan did not suggest that any of Mrs Lepore's children were present during these consultations, nor that he had informed any of them about the arrangement. He did not seek or obtain any instructions from them. 4. The following evidence was then given: "Q. The deed you prepared, to which Mr Commisso and Mrs Lepore were parties, granted rights, did it not, from him to her. A. Yes. Q. You knew at the time, that certain deeds, depending upon their terms and effect, required to be stamped? A. Yes. Q. Was this Deed stamped? A. I can't recall whether it was or not. … Q. So you, as an experienced solicitor of 13 years standing at that time, were doing this job anxious to safeguard the interests of both of your clients? A. Yes, they had the same mindset. Q. I dare say they had the same mindset, but the one who really required looking after was, I suggest to you, Mrs Lepore. A. Yes. Q. That is fair because he was becoming the registered proprietor of the property. A. Correct. Q. And she was being given a right of occupancy for life in that property, wasn't she? A. She was. Q. And that was the kernel of the agreement between the two people? A. Yes. Q. And your job was, I suggest to you, to write up a deed that fairly reflected what had been agreed between them beforehand? A. Yes. Q. Now, had the deed conferred a registrable interest in land, you would have taken steps to register that interest would you not? A. Yes. Q. And had the deed created a caveatable interest in land which was less than registrable interest, you would have caused a caveat to be lodged? A. Not necessarily. Q. OK. But certainly had it conferred a registrable interest you would have taken steps to register that interest? A. If it created a registrable interest under the Real Property Act, yes. … Q. And had she been granted a life interest in the property, that would have been a registrable interest. A. Yes. Q. And you know, don't you, that no interest which belonged to or was claimed by Mrs Lepore was registered. A. No interest was registered. Q. And you know don't you that no interest belonging to or claimed by Mrs Lepore was protected by caveat? A. Correct. Q. And they are both steps I suggest to you, which an experienced, competent solicitor could have taken had either a registrable interest or a caveatable interest been created by the Deed.? A. Yes. Q. That's fair isn't it? A. Yes. Q. What the deed did, I suggest to you, was to ensure that during Mrs Lepore's life she could occupy the premises? A. Yes. Q. And perhaps it went so far as to say he would meet outgoings with respect to property? A. Yes. Q. Is that your recollection? A. It is. Q. And you can't say more than what it is contained in the two propositions I have just put to you as to the contents of the deed, can you Mr Bunyan? A. No." 1. There were some further questions about whether part of the Deed included an arrangement that if the property was required to be sold, Mr Commisso would provide an alternative property. Mr Bunyan said that he had a recollection of such an arrangement, but it was a matter of general memory rather than a confident recollection. 2. In re-examination, Mr Bunyan said he couldn't recall the precise words that he used in the Deed to express the "right" of Mrs Lepore, or anyone else to occupy the Property. 3. As I have earlier said, I was impressed with Mr Bunyan's evidence. I accept the passages to which I have made references above. In giving that evidence, Mr Bunyan was particularly confident in his recollection that if an interest was created by the Deed of Family Arrangement which amounted to either a registrable interest, or a caveatable interest, then further action would have been taken to protect Mrs Lepore's interests. No such action was taken. 4. There was some hearsay evidence given by Mr and Mrs Lagana which was potentially relevant to the issue about the extent of the family arrangement captured by the Deed drafted by Mr Bunyan. 5. The evidence was hearsay, and must be treated with some degree of caution. Mrs Lagana in her affidavit, said that she had an initial conversation with her mother, about a year after she moved into the Property in the terms set out in [19] above. 6. Mr Lagana gave evidence of a different conversation which occurred a few months after he and his wife had moved into the house. His account of the conversation was as follows: "Josie said: Are you happy to stay. I said Yes, but you know that Maria and I are saving up for a deposit. We want to buy another property because you never know what is going to happen with us being here, someone might throw us out. She said: No-one will ever throw you out of here. You and Maria will still be here even after I'm gone for the rest of your life. I have an agreement with Cosmo. If you have money saved up, spend it. Do something else with your money." 1. Mr Lagana went on to say in his affidavit that he had "… similar conversations with Josie on seven or eight occasions to the same effect". He recounted that on one occasion Mrs Lepore said to him: "Don't worry. You and Maria have the right to stay here for the rest of your lives. No one will kick you out." 1. The evidence does not permit of a finding as to whether either of the principal conversations set out in [19] and above, happened before or after the commencement of the criminal assets recovery proceedings in April 2007, although the likelihood is that they were before that time. Circumstances Surrounding Resolution of Criminal Assets Recovery Proceedings 1. Earlier, the circumstances surrounding the obtaining of orders of the Court to restrain the disposition of Mr Commisso's assets have been referred to. 2. By consent, on 3 November 2008, the Court granted leave to the NSW Crime Commission to amend its Summons in the criminal assets recovery proceedings to seek a prayer, pursuant to s 22 of the Act, forfeiting to, and vesting in, the Crown the interest in property of Mr Cosmo Commisso in: "… the property specified in Schedule … 5 hereto 'the St Johns Park Property'…" 1. The property specified in Schedule 5 as the St Johns Park Property, is the Property the subject of this judgment. 2. The consent orders also included the following as Order 29: "The fifth defendant [Mrs Josephine Lepore] shall, from the date of the making of these orders, be entitled to reside at the St Johns Park property for the remainder of her life." 1. An order disposing of the interest of Mr Commisso, who was the first defendant in the proceedings, in the St Johns Park property was made in Order 30 in the following terms: "Subject to order … 29 above, pursuant to s 22 of the Act, the interest in property of the first defendant in … the St Johns Park property … be forfeited to, and vest in, the Crown." 1. Other forfeiture orders were made, and the balance of the proceedings were dismissed. When she consented to those Orders, Mrs Lepore agreed not to make any application under s 25 or s 26 of the Act. Such an application would permit her to seek orders excluding property, or interests in property from either or both of the restraining and the forfeiture orders. 2. Mrs Lepore signed the Consent Orders in the presence of, and witnessed by, Lesly Randle, a solicitor, who had filed a Notice of Appearance for Mrs Lepore. Ms Randle was also acting as the solicitor for each of the other defendants in the proceedings, except the sixth defendant, Mrs Anna Commisso. 3. Ms Randle had instructed counsel, Mr Korn, to appear for Mr Cosmo Commisso in defence of the criminal charges which had been brought against him, and in the criminal assets recovery proceedings. Mr Korn was present with Ms Randle at the time the Consent Orders were signed by Mrs Lepore. 4. The evidence of Mrs Lagana suggests that her mother signed the Consent Orders in her presence, and in the presence of Ms Randle and Mr Korn. Other members of Mr Commisso's family were also present. Mrs Lagana said that both Ms Randle and Mr Korn spoke about the document, but that she cannot now recall what they said. However, she does say that during the course of discussion, no mention was made of "mother's right to remain the home for life" and no mention of "my husband or I having a right to remain there for life". 5. Mrs Lagana says in her affidavit that about a year after the Consent Orders were signed, she had a further conversation with her mother about the house. She records that her mother said "I have a life estate, they can't throw me out". Ms Lagana said "What's going to happen now?". She records that her mother then said: "Don't worry, Cosmo will get the house back. There's an investigation of the Crime Commission by another government body and Lesly Randle is also involved. He'll get the house back". 1. Mrs Lagana records that from time to time her mother searched for a document referring to her entitlement to remain in the house, but was unable to find it. 2. Mrs Lagana's evidence also makes clear that her mother spent money on various renovations and improvements to the house, and its fittings. In total, the monies spent were at least $20,000, and probably more, over the period from 1995 to 2010. 3. The only proof of the expenditure of specific monies relating to occupation of the Property by Mrs Lagana herself, is the sum of $213 for the cost of repairs to a vacuum cleaner. There is no basis to conclude on the evidence that either Mr or Mrs Lagana spent any specific or identifiable sum of money on the Property itself. Submissions 1. The Trustee claims possession of the Property upon the basis that it is the registered proprietor, that Mrs Lepore's life interest has ceased to exist with her death over two years ago, and there are no other interests registered on the title of the Property and there are no equitable interests which affect its right to possession of the Property. 2. In greater detail, the Trustee in submissions accepted that the evidence justified a finding that at or about the time of the transfer of the Property by Mrs Lepore to Mr Commisso, they entered into a Deed of Family Arrangement which had been prepared by Mr Bunyan. The Trustee accepts that neither the original nor a copy, of the Deed can now be located. The Trustee accepts that by that Deed, a right of occupancy of Mrs Lepore in the Property was secured for her life. 3. However, the Trustee submits that the evidence did not enable the Court to conclude that the Deed conferred any interest upon Mrs Lepore greater than a mere right of occupancy which ought be characterised as nothing more than a personal licence. Further, the Trustee submitted that the evidence did not enable any finding to be made that the Deed was intended to, nor did it, create any interest in the Property in any member of Mrs Lepore's family, including Mr and Mrs Lagana. 4. The Trustee submitted that the evidence did not justify a conclusion that the Deed contained any term which entitled Mrs and Mrs Lagana to continued occupation of the Property. The Trustee submitted that, in particular, the terms of the agreement evidenced by the Consent Orders between Mrs Lepore and the NSW Crime Commission, were inconsistent with there being any entitlement or right in respect of the Property in favour of other members of the family. 5. Mr and Mrs Lagana submitted that, on the basis of Mr Bunyan's evidence in his affidavit, in conjunction with the various remarks made by Mrs Lepore, and Mr Commisso's understanding as given in evidence, the Court ought find that these was a term in the Deed of Family Arrangement that Mrs Lepore and "members of her family" could remain living in the Property for the period of their joint lives. Mr and Mrs Lagana submitted that the phrase "members of her family" included members of her immediate family, namely, her children, who, together with their spouses, would have the right to occupy the property for their joint lives. 6. They submitted that the interest which was granted in the Deed amounted to a life estate in the Property which was such as to entitle the holders (which included Mr and Mrs Lagana) to possession of the Property, and an entitlement to rent out the Property and to keep the rents paid. 7. As an alternative to the submission that the Deed created an interest in the Property for the benefit of Mrs Lepore's children, Mr and Mrs Lagana submitted that they nevertheless had an interest in the Property: "… based upon their expenditure on it in the period from 2006 to the date of [Mrs Lepore's] death". 1. It was submitted that the Court would conclude that such expenditure was made on the basis of the promise made by Mrs Lepore that Mr and Mrs Lagana would have the right to stay in the property for life. Discernment 1. At the time the Deed was entered into, in about February 1993, Mrs Lepore had not been diagnosed as being unwell, and there was no suggestion that she would need any of her children to live in the Property with her. The evidence only enables the Court to conclude that the youngest of Mrs Lepore's children, Nikki, who was 19 years old, was living with her mother. It seems that the other children had left home and established independent lives before the transfer of the Property. 2. Mrs Lepore's husband was still alive, but seemingly unable to provide for regular payments to pay the mortgage. Whether he was unable to do so because of his gambling addiction, or because he was not in regular employment, is not clear, and does not matter. As Mr Commisso said, he wanted to ensure that his sister had a house to live in for the rest of her life. 3. Mr Commisso gave evidence that his reason for having the Deed drawn up and entering into it at the time of purchase, was "… so my wife could never throw my sister out", and so his sister was protected. 4. Mr Bunyan, who drew up the Deed, said that had the Deed created a registrable interest in the land, he would have registered that interest, or else perhaps lodged a caveat which prevented any dealing contrary to that interest. He did not do so. There is no reason to doubt either his efficiency or competence as a solicitor. I infer from his failure to either register an interest, or else lodge a caveat, that the Deed did not create, by its terms, any interest in land which was capable of being registered, or else which was capable of being protected by a caveat. 5. Accordingly, I conclude that at its highest, the Deed created a contractual obligation between Mr Commisso and Mrs Lepore, by which Mrs Lepore was entitled to require Mr Commisso, so long as he remained the owner (and registered proprietor) of the property, to permit Mrs Lepore to live in the Property, rent free, for her life. The contractual entitlement also placed on Mr Commisso an obligation that if he sold the Property he had to provide for alternative accommodation for Mrs Lepore, which was also rent free, for the balance of her life. 6. Although Mr Bunyan's conduct in not registering any interest in the land is the surest fact in support of my conclusion that no interest in land was intended to be, and was not, created in the Property, the nature of the alternative accommodation proposal lends significant support to this conclusion. A legal interest in the land registered on the title, or perhaps an equitable interest, protected by a caveat, would, at least without the agreement of Mrs Lepore, have prevented Mr Commisso from himself dealing with the Property contrary to that interest, including by selling it. His statement that he could sell the Property, in effect, when and if he wished, providing he housed his sister elsewhere, supports the conclusion that he was not allowing to his sister any legal right to prevent, or affect, his decision to sell the Property in any way. That freedom of decision-making could only co-exist with a contractual obligation to Mrs Lepore. It could not co-exist with the creation of an interest in the Property. 7. The next question is whether the terms of the Deed extended beyond Mrs Lepore to include any, and if so which, members of her family. 8. The two witnesses who remained alive gave evidence of their recollections of the terms of the Deed. For the reasons which I have earlier discussed, I do not accept Mr Commisso's evidence on this topic. Whilst the evidence in the affidavit of Mr Bunyan, contained his statement that, the best of his recollection was that "… Mrs Lepore and members of her family could remain in the home for life", in light of his evidence in cross-examination, which is set out in [51] above, I am unpersuaded that I can, or should, accept the accuracy of this part of his evidence. As well, other external facts provide no support for his statement. 9. In cross-examination, Mr Bunyan accepted that he had read Mr Commisso's affidavit in these proceedings shortly before swearing his own affidavit. I am satisfied that this, particularly in light of the approximately 20 year gap between preparing and witnessing the Deed and giving evidence about it, must have, at least subconsciously, affected Mr Bunyan's recollection. His more reliable recollection, exposed during cross-examination, was that he could not say any more about the terms of the Deed than that the terms of it would ensure that during Mrs Lepore's life she could occupy the Property. I accept that this recollection is reliable, and tells against anyone other than Mrs Lepore benefitting from the contractual obligations. 10. Several other facts support this conclusion. At the time the Deed was entered into, there is no suggestion that any of Mrs Lepore's family, nor her husband or her children, were present, were consulted about what was being proposed and, importantly, were not made parties to the Deed, thereby giving them a ready and obvious basis to enforce their contractual entitlements. None of Mrs Lepore's family members were given a copy of the Deed, and none of them were told at that time of it having been executed, or shown the terms of the Deed. There was no conversation at all, at or after the Deed was entered into, in which Mrs Lepore told her husband or children that they had any right to live in the Property for the balance of their lives. It seems to me, and I so find, that had such rights been created, then it is highly likely that Mrs Lepore would have told her children about them, and either shown the Deed to them or else given them a copy of it. 11. The first conversation between either Mr or Mrs Lagana with Mrs Lepore, happened sometime in 2007 in circumstances relating to whether the then caring arrangements in which Mr and Mrs Lagana lived in the house and cared for Mrs Lepore, were, at least apparently to Mrs Lepore's perception, being put at risk. Mrs Lagana was telling her mother that she and Mr Lagana would not be living with her for an indefinite period. Mrs Lepore's reassurances that Cosmo would never throw them out represents a statement, not of the existence of any contractual obligation, but rather of entreaty "there is no need for you to go anywhere", a reward for their help "you can stay here for the rest of your lives" and an expression of nothing more than a hopeful belief "Cosmo will never throw you out in the street". This statement is a long way distant from a statement that 14 years, or so, earlier, legal arrangements had been put into place which had the effect of ensuring the entitlement of Mr and Mrs Lagana, as members of Mrs Lepore's family, to live in the Property for the balance of their lives. 12. Finally, the specific Consent Order made in the criminal assets recovery proceedings, that, on its face, makes no reference to any members of Mrs Lepore's family having any right to continue to live in the property, tells against any such rights having been created in the Deed in 1993. The terms of the Consent Orders, and Order 29 in particular, were agreed to by both Mr Commisso and Mrs Lepore. Each was represented by a solicitor. Had the contractual entitlement of members of Mrs Lepore's family to live in the Property until their deaths existed, then I would expect that either or both of Mr Commisso or Mrs Lepore would have informed their solicitor and those rights would have been the subject of discussion, at least, and in all probability negotiations, with the NSW Crime Commission. 13. It is also particularly significant in this respect that Mr Commisso's first affidavit, the terms of which I have set out at [27] above, did not refer to any interest of any family member in the Property other than Mrs Lepore. If there was such an interest created by the Deed, then that was the time to have volunteered it, and to have had it noted. 14. These facts point convincingly to the absence of any contractual obligation being created by the Deed of Family Arrangement in favour of anyone other than Mrs Lepore, and specifically, not in favour of Mr and Mrs Lagana. 15. Accordingly, to summarise, I conclude that neither of Mr or Mrs Lagana have any legal or equitable interest in the Property of any kind at all. I conclude that whilst Mrs Lepore had a licence, or a contractual right to live in the Property for her life, which right was created by the Deed of Family Arrangement and confirmed by Order 29 of the Consent Orders in the criminal assets recovery proceedings, that licence or right ceased upon her death on 18 January 2012. I conclude that neither of Mr or Mrs Lagana had, or now have, any licence or contractual right, created by the Deed of Family Arrangement, or at any other time, to live in the Property. At all times they lived there at the invitation of, and with the permission of Mrs Lepore. 16. Whilst Mrs Lepore may have invited them, or given permission for them to continue living there after her death, such permission could not, and did not, create any legal interest in the land, and could not rise any higher than Mrs Lepore's own legal entitlement to live in the Property which ceased upon her death. 17. It is now necessary to consider the alternative submission advanced by Mr and Mrs Lagana, to which I have referred at [79] above, namely, that by reason of their expenditure on the property between 2006 and Mrs Lepore's death in January 2012, they have an interest in the property which is such as would prevent the Trustee obtaining an order for possession of the property. 18. Whilst Mrs Lagana asserts in her affidavit that she has spent money on the Property in that: "…a number of renovations or improvements were carried out. Some of them were paid for by my mother and others were paid for or contributed to by me", Mrs Lagana accepts that she has difficulty recalling who paid for which renovation. The documents evidencing the carrying out of the repairs and renovations, with the exception noted in [72] above, of $213, do not enable any finding to be made that Mrs Lagana actually paid for any of the renovations and repairs herself. It is not said that her husband, Mr Lagana, paid any monies for any such work. 1. Accordingly, I am not satisfied as a matter of fact that any identifiable sum of money was spent to improve the Property by either Mr or Mrs Lagana, in the period 2006 to January 2012. The alternative submission must fail for want of proof of the foundational facts. 2. However, even if I was satisfied that some monies had been expended on the Property by way of improvements to it, I am not persuaded that this expenditure would have created a right in Mr and Mrs Lagana, enforceable against the Trustee, to reside in the Property for the rest of their lives. The payment of monies may have been sufficient to create some sort of equitable charge over the property in their favour for a monetary sum. The creation of such a charge would not be sufficient to found an entitlement to residence. 3. However, I am simply not persuaded that the evidence enables any finding to be made sufficient to support that conclusion. This alternative argument must also be dismissed. Conclusion on the Plaintiff's Claim 1. It was not in issue that the Trustee is the registered proprietor of the Property, and that it would be entitled to possession of the Property unless the Court was persuaded that Mr and Mrs Lagana had a right to live in the Property until they died, which right prevailed over the Trustee's interest. 2. As I have found, Mr and Mrs Lagana have no such right. Accordingly, the Trustee is entitled to the relief which it claims, namely a judgment for possession of the Property. Cross-Claim 1. On 4 August 2014, Mr and Mrs Lagana filed an Amended Cross-Claim against the Trustee and the NSW Crime Commission. The relief claimed in that Amended Cross-Claim was as follows: "1 Declaration that the cross-claimants are entitled to an irrevocable licence to occupy premises 98 Humphries Road, St Johns Park erected on the land comprised in Certificate of Title Folio Identifier 3/252425 for so long as either one of them shall live. 1A In the alternative to Order 1, a declaration that the cross-claimants are entitled to a life estate in the premises 98 Humphries Rd St Johns Park in the State of New South Wales. 1B An order that the First Cross-Defendant execute such documents and do any other thing necessary to procure the registration of the Cross-Claimants as proprietors of a life estate in the said property. 1C In the further alternative and in the event that this Honourable Court is satisfied that orders made on or about 3 November 2008 were effective against the cross-claimants an order granting leave to bring applications out of time pursuant to s.25 and s.26 Criminal Assets Recovery Act 1990. 1D If leave is granted under paragraph 1C, an exclusion order under s.25 Criminal Assets Recovery Act 1990 in respect of the interest of the Cross-Claimants in the premises 98 Humphries Rd St Johns Park in the State of New South Wales or a declaration and an order s.26 Criminal Assets Recovery Act 1990 for payment of a sum to the Cross-Claimants from the proceeds of sale of the premises 98 Humphries Rd St Johns Park. 2 Order that the cross-defendants be permanently restrained from interfering with such right of occupation. 3 In the alternative, damages." 1. The causes of action pleaded in support of this relief seem to be adequately described in these ways: 1. the existence of an interest in the Property by reason of the Deed of Family Arrangement; 2. the existence of an enforceable interest sufficient to enable ongoing possession of the Property to remain with Mr and Mrs Lagana by reason of the alteration of their positions in reliance upon representations made to them by Mrs Lepore as to what Mr Commisso would allow them to do; 3. a number of irregularities, and inappropriate conduct on the part of the cross-defendants in respect to the obtaining of the Consent Orders in the criminal assets recovery proceedings; 4. the failure, prior to the entry of the Consent Orders, of the cross-defendants or either of them, to investigate the basis upon which Mr and Mrs Lagana were living at the Property, and thereby not informing themselves of any interest which Mr and Mrs Lagana may have in the Property, and not recognising that interest; and 5. the nature of the interest of Mr and Mrs Lagana in the Property either as a registrable interest or else their licence or right to occupy the Property, which takes precedence over the interest of the Trustee as registered proprietor. 1. It can be seen that the basis for relief which I have outlined in [104(a),(b),(d) and (e)] above, all require, as a matter of fact, the establishment of the existence of an interest in the Property of, or enforceable by, Mr and Mrs Lagana. When dealing with the defences raised to the Trustee's claim, I have dealt with the underlying factual basis upon which each of these claims is based. I have found that the factual foundations alleged for each of these claims has not been established. There is no need to further consider and analyse the bases advanced on the Amended Cross-Claim. They are not made out and do not support the relief claimed. 2. The remaining claimed basis, which I refer to in [103(c)] above, centres upon the circumstances surrounding the obtaining of the Consent Orders in the criminal assets recovery proceedings. Mr and Mrs Lagana assert that, for the various reasons pleaded, it must be that Mrs Lepore's signature to the Consent Orders cannot be said to demonstrate "… that she truly consented to what she was signing". 3. In addition to this contention, it is also alleged that the Consent Orders were: "… purportedly entered into by the Court in circumstances of irregularity such that there is a doubt about the validity of any such order purportedly entered." 1. The factual position at the time the Consent Orders were entered into, was on the basis of the finding which I have earlier made, that Mrs Lepore had no interest in the Property, and only a contractual licence or right to occupy the Property given by Mr Commisso. Thus, the Consent Orders, save for Order 29, resulted in the forfeiture to the State of the whole of Mr Commisso's legal and beneficial interest to the Property. Whether that meant that the State was obliged to recognise the contractual licence as right is a nice question which does not need to be resolved, because the effect of Order 29 of the Consent Orders was to note the existence of the right of Mrs Lepore to reside in the Property until her death. That order had the effect of binding the State to recognise Mrs Lepore's contractual right of lifetime residence. The Consent Orders placed Mrs Lepore in the same, if not a better, position with respect to her residence in the Property than had been the case leading up to the Orders being made in November 2008. It certainly did not place her in any position of disadvantage. 2. The Consent Orders also forfeited Mrs Lepore's interest in a boat. That has not been alleged to be relevant to this argument. It is neither pleaded nor relied upon and can therefore be ignored. 3. Even if all of the matters pleaded relating to the allegations that Mrs Lepore's signature may not have been indicative of her true and informed consent were established, I cannot see, assuming an application to vary or set aside the relevant Consent Orders had been made, that it would have been in the interests of justice for a Court to have done so. It is not alleged that the cross-defendants, or either of them, or any one on behalf of the State, was aware of any of the factors contributing to the lack of true consent being given by Mrs Lepore. The Consent Orders, having been apparently regularly signed and properly witnessed, were a valid basis that the second cross-defendant was entitled to rely upon for obtaining the orders. . Once the orders were taken out and acted upon then, assuming that they were not entered irregularly, there was no basis to set them aside. And as indicated earlier, given the lack of any disadvantage to Mrs Lepore from the orders taking effect, the interests of justice would not require such a course being taken. 4. But there is another fundamental difficulty standing in the way of the cross-claimants, Mr and Mrs Lagana. As I have found, at the time the Consent Orders were signed, they did not have any right to reside in the Property, other than by the permission of Mrs Lepore. They had no legal standing at the time to make an application to set aside the Consent Orders. Mr Commisso and Mrs Lepore had the standing so to do, if they had a proper basis. Neither of them made any such application. Even when it became apparent to Mrs Lagana, who had been present when the Consent Orders were signed by Mrs Lepore, as she says about a year later, there may have been some lack of understanding on her mother's part about the orders, she did nothing about it, nor did Mrs Lepore. This basis for the Cross-Claim cannot succeed. 5. The final basis upon which Mr and Mrs Lagana rely for the relief sought in the Cross-Claim is that the Consent Orders were entered irregularly by the Court. The core allegation appears to be that the orders were signed, sealed and entered by a Deputy Registrar of the Court on 3 November 2008, in circumstances where there was no direction that orders could be entered in the Registry in the absence of the parties, and in the absence of an appearance in Court. 6. There is a secondary complaint that a letter mistakenly records that there were six defendants to the proceedings, when there were not. This complaint is fallacious, and readily dismissed because a perusal of the Consent Orders shows they were signed by six individual defendants. 7. However, returning to the core allegation that it was irregular for the Consent Orders to be entered in the Registry. This must also be rejected. Where consent orders are to be sealed and entered, and where consent of a judge to a settlement or resolution of proceedings by way of consent orders is not required, which was the case in 2008 with these Consent Orders, there is no reason to prevent the orders being entered in the Registry and not in Court. Notice does not need to be given to the parties that such orders are about to be entered. 8. There was nothing irregular about the manner of entry of these orders in November 2008. There is thus no basis to find that they are invalid. 9. Finally, it needs to be noted that Mr and Mrs Lagana, not being parties to the Consent Orders, or the criminal assets recovery proceedings, have no standing to advance these arguments or to obtain relief based upon them. 10. In all of those circumstances, the Amended Cross-Claim must be dismissed. Conclusion 1. In my opinion, the Trustee is entitled to the relief which it seeks in respect of possession of the Property. 2. The Amended Cross-claim must be dismissed. 3. Since the Trustee has been wholly successful, I see no reason why costs should not follow the event. Mr and Mrs Lagana must pay the Trustee's costs of the principal proceedings and of the proceedings on the Cross-Claim. 4. Since Mr and Mrs Lagana will need some time to make arrangements for alternative accommodation, and to move their belongings to another residence, it is appropriate to stay the execution of the judgment for a period of three months from the date of delivery of the judgment. Orders 1. I make the following orders: 1. Judgment for the NSW Trustee and Guardian for possession of the whole of the land contained in Folio Identifier 3/252425 being Lot 3 in Deposited Plan 252425 and known as 98 Humphries Road, St Johns Park, New South Wales 2176. 2. Pursuant to r 39.1(1)(d) of the Uniform Civil Procedure Rules 2005, grant leave for the issue of a Writ of Possession of the land referred to in Order 1. 3. Order that the plaintiff is not to execute the Writ of Possession before 21 September 2015. 4. Order that the Amended Cross-Claim filed on 4 August 2014, be dismissed. 5. Order the defendants to pay the costs of the whole proceedings of the NSW Trustee and Guardian. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 June 2015