Kagelaris v Kagelaris [2017] NSWSC 307

Supreme Court New South Wales

Medium Neutral Citation: Kagelaris v Kagelaris [2017] NSWSC 307 Hearing dates: 14 – 15 December 2016 Decision date: 31 March 2017 Jurisdiction: Equity Before: Robb J Decision: Parties to confer and bring in short minutes of orders to implement the terms of this judgment. Catchwords: SUCCESSION – Administration of estate – Assets – Other cases – Whether asset in estate was held on constructive trust for beneficiary.

SUCCESSION – Administration of estate – Whether executor derelict in his duties under the grant of probate.

CONVEYANCING – Sales by court order or direction – Whether court should make an order appointing a trustee for sale – Where property held by tenants in common – Where an order appointing a trustee for sale would be more expensive than other suggested options. Legislation Cited: Conveyancing Act 1919 (NSW) s 66G Cases Cited: Czapp v Cassar [2015] VSC 111 Monty Financial Services v Delmo [1995] 1 VR 65 Muschinski v Dodds (1986) 160 CLR 583; [1985] HCA 78 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: John Elefterios Kagelaris (plaintiff) Peter Elefterios Kagelaris (defendant) Representation: Counsel: J Hassett, solicitor (plaintiff) J Van Aalsi (defendant)

Solicitors: Hassett Lee & Co Lawyers (plaintiff) John Hertz Associates (defendant) File Number(s): 2016/83657 Publication restriction: None

Judgment

Background 1. The plaintiff in these proceedings, John Elefterios Kagelaris, and the defendant, Peter Elefterios Kagelaris, are brothers. 2. Their parents were named Agatha Kagelaris and Elefterios Kagelaris. 3. Without intending any disrespect, for convenience I will refer to the parties and their parents by their first names. 4. Elefterios died on 25 April 2015 and Agatha died on 4 June 2015. 5. Elefterios and Agatha both made their last wills on 26 June 1985. The wills were in materially the same terms. Each left his or her residuary estate, after payment of debts and testamentary expenses, to the other, provided the other survived the testator by more than 30 days. In default of survival of the other, each left their residuary estate to John and Peter in equal shares as tenants in common. 6. As Elefterios died before Agatha, his residuary estate passed to her, and upon her death shortly thereafter, Agatha's residuary estate passed equally to John and Peter. 7. At the date of Agatha's death, the only substantial asset in her residuary estate was the property known as 22 Tudor Street, Surry Hills, in this State. The Tudor Street property had been purchased by Elefterios and Agatha on 17 May 1963. It was the family home until about May 1975, when Elefterios and Agatha purchased 3/171 President Avenue, Monterey, in this State, and the family moved to that property. The Tudor Street property was leased to tenants until about mid-1990. At that time it became the residence of Peter, who carried out some renovations of the property. There is a dispute between the parties concerning the basis upon which Elefterios and Agatha agreed that Peter could use the Tudor Street property as his sole residence. There is also a dispute about the nature, extent and cost of the renovations undertaken by Peter. Peter has used the Tudor Street property as his residence from 1990 to date. 8. The primary issue in these proceedings is whether, from the time of her death, Peter and John, as Agatha's executors, have held the title to the Tudor Street property on a constructive trust for Peter. 9. On 29 May 1984, Peter and John became registered proprietors of the property at 45 Arthur Street, Carlton, in this State, as tenants in common. 10. There was a dispute between the parties concerning the circumstances in which they became owners of the Arthur Street property, and the arrangements by which the original costs of acquisition were paid. It was Peter's case that he found the property, he had saved the money necessary to pay the deposit and the cost of acquisition, and told his parents that he would buy the property alone. The parents, particularly Agatha, responded by insisting that the property be bought in the name of both brothers. Peter's evidence was that he bowed to his parents' wishes, and further he loaned John $13,000 to pay John's share of the deposit and expenses of purchase. In his evidence, John denied that the purchase of the Arthur Street property occurred in this manner. John said that the decision to purchase the property was a joint one from the outset. There was a family discussion at which Peter said that he had saved up about $12,000. The family agreed that a mortgage of $60,000 should be taken out to cover half of the purchase price of $120,000. The balance was paid as to $6000 by Peter, $6000 by John (of which $5000 was borrowed from Peter), and the parents contributed $48,000. 11. Although there was an evidentiary contest at the hearing as to which of these versions was correct, I am not able to resolve the dispute with any confidence, and in my view the resolution of that dispute is not necessary for the purpose of deciding the real questions is at issue in these proceedings. 12. The simple fact is that the Arthur Street property is owned by the parties in equal shares as tenants in common. 13. On 20 March 1986, Elefterios and Agatha transferred the title to the President Avenue property to Peter and John in equal shares as tenants in common, as a gift. 14. Consequently, of the three properties, the Tudor Street property remained part of the residuary estate of Agatha at the time of her death, and the President Avenue and Arthur Street properties were owned by Peter and John. 15. Relief is sought in these proceedings concerning the President Avenue and Arthur Street properties, as the parties disagree as to the appropriate arrangements for conducting the sale of those properties. 16. As I have noted, Agatha appointed Peter and John as her executors under her will. 17. After Agatha's death, disputes arose between the parties concerning the administration of the estate. There is a suggestion that Peter's original position was that he should be given sole ownership of the Tudor Street property, as his long-term residence, and in return, John should receive sole ownership of the Arthur Street property, which had also been his residence for a long time. That suggestion gave rise to a dispute concerning the respective values of the two properties. 18. John apparently took the view that Peter was not willing to carry out his duties as Agatha's executor, and to obtain a grant of probate of her will, and commenced proceedings for a grant of probate to him alone. 19. There was correspondence between the solicitors for the parties concerning whether or not Peter would renounce probate, but it is not necessary to consider that correspondence in detail. 20. On 12 October 2015, Peter's solicitors filed a caveat in the Probate Registry to prevent a grant of probate of Agatha's estate without prior notice to Peter. 21. On 22 February 2016, Lindsay J made an order granting probate in common form to Peter and John in respect of Agatha's estate. 22. His Honour also ordered that any dispute between the parties concerning the title to the Tudor Street property be determined by proceedings to be commenced in the Equity Division. This judgment relates to those proceedings.