Supreme Court New South Wales Medium Neutral Citation: Jundi v Saco [2015] NSWSC 1835 Hearing dates: 2 December 2015 Date of orders: 02 December 2015 Decision date: 02 December 2015 Jurisdiction: Equity Before: Pembroke J Decision: Summons dismissed Plaintiff to pay defendant's costs Catchwords: EQUITY – equitable charge to secure contribution to mortgage repayments – need for proportionality – necessity of demonstrating that it would be inequitable or unconscionable for defendant to retain benefit conferred by plaintiff Legislation Cited: Legal Profession Act 2004 (NSW) Cases Cited: Chalmers v Pardoe [1963] 3 All ER 522; [1963] 1 WLR 677 Morris v Morris [1982] 1 NSWLR 61 Public Trustee v Kukula (1990) 14 Fam LR 97 Category: Principal judgment Parties: Leanne Jundi – plaintiff Anthony Saco – defendant Representation: Counsel: C Robinson – for the plaintiff A Paterson – for the defendant Solicitors: Cambridge Law – for the plaintiff Maatouks Law Group – for the defendant File Number(s): 2015/152792 Judgment Introduction 1. This is a foolish case, the weakness of which was made even more apparent by the evidence of the plaintiff. She was so lacking in credibility and made so many admissions that contradicted statements in her affidavits, that counsel for the defendant saw no need to call his client. He was justified in doing so. 2. When the proceedings were commenced, the plaintiff claimed that she had an interest in certain real estate at Sadlier Avenue, Sadlier, pursuant to various types of trusts. She claimed a resulting trust and a constructive trust, among other things. When the hearing commenced, those claims were abandoned and the claim was confined to an allegation that the plaintiff was entitled to an equitable charge over the property to secure the payment to her of the sum of $22,400. That is the only amount in question. 3. The sole factual basis for the plaintiff's claim for an equitable charge is that between January 2014 and February 2015 she contributed $22,400 towards the repayment of a loan that the defendant had taken out with the National Australia Bank. At the time of the payments, the plaintiff believed that she was in what was likely to be a permanent relationship with the defendant. Her claim entirely ignored the overall financial relationship between the plaintiff and the defendant including, in particular, the many monetary contributions that the defendant made for the plaintiff's benefit. And it ignores the evidence of the agreement between the parties that they had decided that, since the plaintiff was earning a stable wage, she could pay off the mortgage as if she were repaying her car loan. The Facts 1. The basic facts are not in dispute. The property at Sadlier was purchased by the defendant's father in July 1997. In 2004 it was transferred to the defendant's mother and in April 2011 it was transferred to the defendant. The plaintiff and the defendant met in 2012. The defendant therefore owned the property before he even met the plaintiff and she made no contribution to the purchase price. 2. On 6 June 2013 the plaintiff and the defendant underwent a form of ceremony of marriage, although no marriage was apparently registered. In July 2013 a Lexus motor vehicle was purchased and registered in the plaintiff's name pursuant to a finance agreement between her and ANZ Esanda. She and the defendant lived together in the Sadlier property for a short time before moving into the plaintiff's parents' house. 3. In October 2013 the defendant borrowed $287,000 from the National Australia Bank, which was secured over the Sadlier property. The $287,000 was disbursed in the follow amounts: $224,613.85 was paid to Westpac to pay out the defendant's prior home loan; $38,782.48 was used to pay out the balance of the defendant's Westpac personal loan; $23,378.37 was paid into a NAB account in the defendant's name; and the balance was used to pay costs associated with the loan. On 21 October 2013 the defendant transferred the sum of $20,000 from his NAB account, to pay off the plaintiff's car loan from ANZ Esanda. 4. The plaintiff and the defendant moved out of the Sadlier property in September 2013. They had lived there for approximately three months. The defendant had been employed by Boral Resources (NSW) Pty Limited until about 16 December 2013. Between January and March 2014 he was effectively unemployed while he undertook training in fascia and gutter work. 5. Commencing in January 2014, the plaintiff made the mortgage repayments to the NAB to which I have already referred. She paid $800 a fortnight. There were 28 payments totalling the sum of $22,400. During the period while the defendant was undergoing training, the company known as Sydney Fascia and Gutter Pty Limited was incorporated and the plaintiff was made its sole director and shareholder. The defendant paid $1,000 for the costs of incorporation of the company from his St George Mastercard account. In March and April 2014 he paid for the purchase of equipment for use by the company from his St George Mastercard account. 6. On 9 February 2015 the plaintiff and the defendant separated. While it is undoubtedly true that the plaintiff contributed the sum of $22,400 in repayment of a mortgage loan obtained by the defendant, the defendant's contributions to the financial well-being of the plaintiff exceeded that sum. They included the sum of $20,000, to pay off the plaintiff's car loan; the sum of $1,000, being the cost of incorporation of the company; and the sum of $3,900, being the amounts paid by the defendant for the purchase of equipment for use by the company. 7. I should also mention the sum of $13,000 which was paid by the defendant in cash for a utility motor vehicle. Several weeks after the separation of the plaintiff and the defendant, a person or persons arranged by the plaintiff took the utility. Not to put too fine a point on it - the utility was stolen. The evidence did not inform me whether it was later returned but the very fact of it being taken did not impress me. 8. The defendant's contributions to the plaintiff also included, at least indirectly, the sum of $27,000 which the plaintiff took from the account of the company on 9 February 2015. She said, somewhat implausibly, that part of that money represented her wages. When I asked her what the wages were for, she said that she 'did' the invoices. There was no evidence of how many invoices she 'did'. If she created any invoices for the company, she was nothing but the defendant's amanuensis. He did all the work and was the heart and soul of the company. The plaintiff grudgingly conceded that part of the monies were for her personal expenditure. I am not prepared to accept that any part of the $27,000 was legitimately due to the plaintiff for services rendered to the company. 9. One further matter representing payments by the defendant should be taken into account. That is the sums which he paid to creditors and suppliers of the company in February 2015, being $1,834.31 to Ace Gutters Pty Limited and $10,263.56 to Stramit. In addition, the defendant purchased a number of construction tools which were necessary to enable him to perform the services provided by the company. After the separation of the plaintiff and the defendant, the defendant was forced to leave the plaintiff's parents' home without those tools or other belongings. 10. I should interpolate to say that without the defendant, the company would have had no business. It is clear to me that the company was established with the plaintiff as its sole director and shareholder simply for convenience and only because the defendant had had an insurance claim rejected, which may have made it difficult for him to be appointed as a director of a company. 11. I was decidedly unimpressed with the plaintiff's repeated assertions that the company was hers. In substance, it was not. She had not the slightest ability to contribute in a meaningful way to the company and no experience whatsoever as a director of a company. In fact, on that issue and other issues, she gave evidence that was not only implausible but was, as she admitted, on occasions untrue. She was not reliable, to put it as neutrally as I can. I do not accept any of the plaintiff's assertions on contentious matters, except where they were corroborated or clearly correct. She invoked her father from time to time in conversations in which he was said to be a participant, but the father did not give evidence, although he was present in court throughout the hearing. Legal Principle – Equitable Charge 1. I said earlier that the plaintiff's claim was confined at the hearing to a claim for an equitable charge. The principle on which such a remedy may sometimes be granted was explained in Morris v Morris [1982] 1 NSWLR 61 in these terms: However, in my view wider equitable principles operate in the present case. The plaintiff spent money on the defendant's property in the expectation, induced or encouraged by the defendants, that he would be able to live there indefinitely as a member of their family. This expectation has been defeated by the occurrence of events which were not in contemplation when the money was spent, and as a result of which any subsisting right of residence by the plaintiff in the property is now of no practical consequence. In my opinion, on the facts of this case, it would be unconscionable and inequitable that the defendant should now retain the benefit of the expenditure by the plaintiff of his money on their property free of any obligation of recoupment to him. Consequently an equity arises in favour of the plaintiff … 1. His Honour said that the principle is a flexible one which is imposed in order to satisfy the demands of justice and good conscience. He drew support from the decision of the Privy Council in Chalmers v Pardoe [1963] 3 All ER 522; [1963] 1 WLR 677 at 681, in which it was stated: The claim is based on the general equitable principle that on the facts of the case it would be against conscience that Pardoe should retain the benefit of the buildings erected by Chalmers on Pardoe's land … 1. The necessity to consider whether the retention of a benefit is against conscience requires consideration of the entirety of the financial circumstances of the parties in the context of which the payment of the $22,400 was made. The plaintiff's case seemed to focus on the payment of the $22,400 in complete isolation from the benefits which she received and the expenditure made by the defendant. It ignored any question of whether, in the overall context, the retention by the defendant of the benefit of the $22,400 was 'unconscionable and inequitable'. 2. I have already referred to a number of items of expenditure by the defendant and of payments to the plaintiff. I should add to that litany, the fact that the defendant spent approximately $40,000 to cover the costs of the wedding, and that after the plaintiff and the defendant established the business to be operated by the company, it appeared that the plaintiff began to make demands for holidays, extravagant nights and expensive dinners, not to mention the designer shoes, clothes, and trips to beauty salons. 3. Everything about the plaintiff's evidence suggested to me that she had a Kardashian expectation of her rights and a highly developed sense of entitlement. She failed to recognise the benefits which she had received or the unfairness of the single‑minded pursuit of her claim against the defendant. The fact that she initially thought, or was advised, that she had some equitable interest in the property as a result of her contributions to the mortgage, modest as they were, indicated to me that the realities of life and the law were absent from her comprehension. The fact that her counsel referred from time to time to the suggested unfairness of her being excluded from the defendant's property, did not impress or assist me. Indemnity Costs 1. I should conclude by explaining the very sorry sequence of events which led to this case coming to a hearing: 1. On 7 August 2015, the defendant's solicitors wrote to the plaintiff's solicitors explaining their inability to understand the plaintiff's claim for a proprietary interest in the Sadleir property. At that stage, the quantum of the plaintiff's claim had not even been articulated. In that letter, the defendant's solicitors made an open offer to pay the plaintiff $3,000 within seven days. 2. On 14 August, at a directions hearing before Darke J, the plaintiff was ordered to provide particulars of the quantum of the interest in the property claimed by her, either by reference to a dollar amount or a percentage interest in the property. 3. On 27 August, the plaintiff solicitors advised that she claimed $22,400 as the quantum of her interest in the property. This was the first occasion on which the defendant or his legal representatives had been made aware of the amount sought by the plaintiff. 4. On 15 September 2015, the defendant's solicitors sent an open offer to the plaintiff's solicitor in the sum of $15,000. The plaintiff did not respond. 5. On 2 October 2015, the defendant's solicitors made another open offer. Its principal elements were that the plaintiff should remove her caveat; that the defendant would pay her $22,400; and that each party should bear their own costs of the proceedings. 6. On 20 October 2015, the plaintiff's solicitors responded with a counter offer offering to accept $22,400 plus $15,000 in costs. 7. On 26 October, the defendant's solicitors responded, repeating the open offer of $22,400, which was expressed to remain open for acceptance for a period of seven days. The plaintiff did not respond. 1. During addresses by counsel, Mr Robinson did his best to persuade me that I should not adopt an adverse view of the plaintiff's case. However he must have recognised the depth of the problem confronting the plaintiff when he submitted to me that an appropriate costs order, assuming that I dismissed the summons, would be that the plaintiff pay indemnity costs from either 2 November or 19 November. 2. I recognise that the plaintiff's solicitor provided the usual certification pursuant to s 347 of the Legal Profession Act 2004 (NSSW) that there were reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim for damages in these proceedings had reasonable prospects of success. I do not suggest for one moment that the solicitor did not hold that view honestly. But I have formed the view that the proceedings were always hopeless and should never have been commenced and maintained. 3. There was never any real prospect of success. And I worried during the plaintiff's evidence whether she was motivated by a desire for vindication following the breakdown of her relationship with the defendant. The claim was misconceived insofar as it relied upon a resulting trust or a constructive trust. The claim for an equitable charge only emerged in the written submissions on the day before the hearing and in the amended summons which was filed at the hearing. Even then, the presentation of the case for an equitable charge ignored the need for a plaintiff to do equity. It ignored any consideration of proportionality. It ignored the need for it to be demonstrated that, by reference to the facts, it would be unconscionable and inequitable for the defendant to retain the benefit of the sum for which a charge was sought. It ignored the statement of principle in Morris v Morris. And it ignored the reasoning in Public Trustee v Kukula (1990) 14 Fam LR 97 at 102, that it is necessary in cases such as this to show that the plaintiff's contribution is disproportionately greater than any contribution of the defendant if an ultimate finding of unconscionability by the defendant is to be made. 4. The interests of justice are not assisted by unmeritorious claims brought by plaintiffs with unrealistic expectations. It promotes the interests of justice to ensure that plaintiffs who bring such claims pay the costs of the successful party. And where the claim is one which never had any real prospects of success, it promotes the interests of justice to ensure that the plaintiff pay the successful party's costs on an indemnity basis. In this case, not only was the claim hopeless, but the plaintiff refused to accept the defendant's offer to pay the full amount of her claim as soon as she had articulated its amount. 5. The orders I therefore make are: 1. Summons dismissed. 2. Plaintiff to pay the defendant's costs on an indemnity basis. ********** 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: 03 December 2015