Galatidis v Kallidis [2025] NSWSC 1555 | Case summary | Zoe

NSWNSWSC

Galatidis v Kallidis

[2025] NSWSC 1555

Supreme Court of NSW|2025-12-19|Before: Brereton J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2025-12-19

Before

Brereton J

Catchwords

ESTOPPEL – proprietary estoppel – common intention constructive
trust – where land is in the first defendant’s
name – whether
the first defendant promised to transfer the property back to the plaintiff on

Source

Original judgment source is linked above.

Catchwords

ESTOPPEL – proprietary estoppel – common intention constructivetrust – where land is in the first defendant’sname – whetherthe first defendant promised to transfer the property back to the plaintiff onthe basis that the plaintiffpay all costs associated with the property and pay$10,000 – the first defendant holds the property on trust for theplaintiff– the first defendant to transfer the property to the plaintiff,conditional on the first defendant being indemnified and paid$10,000

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Galatidis v Kallidis [2025] NSWSC 1555

Hearing dates: 17 – 21 November 2025

Date of orders: To be made

Decision date: 19 December 2025

Jurisdiction: Equity

Before: Brereton J

Decision: The first defendant holds the property on trust for the plaintiff

Catchwords: ESTOPPEL – proprietary estoppel – common intention constructive trust – where land is in the first defendant’s name – whether the first defendant promised to transfer the property back to the plaintiff on the basis that the plaintiff pay all costs associated with the property and pay $10,000 – the first defendant holds the property on trust for the plaintiff – the first defendant to transfer the property to the plaintiff, conditional on the first defendant being indemnified and paid $10,000

There was a lot of evidence advanced by the parties at trial. Much of it was contested in the affidavit evidence. However, the material factual matters relevant to the resolution of the dispute emerged with reasonable clarity during the course of the trial. In the following paragraphs I set out my findings.
In about November 2013, Mr Galatidis’s marriage broke down. He and his former wife have 4 children. The eldest was 12 at the time of the breakdown and the youngest was 7. Mr Galatidis’s former wife left the family home located in Mount Pritchard, being the property at the centre of this litigation. The property was in their joint names. Mr Galatidis took time off work (about 2 years) to care for his children. He had been running a transport company called ATL Services Pty Ltd. While he was not working, Mr Galatidis was frugal and sold much of the equipment that had been used to run the transport company.
In about March 2014, Mr Galatidis commenced a relationship with Ms Kallidis. They have a daughter, born in May 2015.
In around early 2016, Mr Galatidis and his former wife agreed to orders relating to the breakdown of their marriage and the settlement of property. Although there is some uncertainty about the effect of the orders, it appears that orders were made that required Mr Galatidis to pay $55,000 to his former wife within 150 days and, upon payment, she was to transfer her interest in the Mount Pritchard property to him.
In about February 2016, Mr Galatidis applied to the ANZ Bank to refinance a loan over the Mount Pritchard property to enable him to obtain the funds necessary to pay $55,000 to his former wife. The application was declined. Mr Galatidis was informed that she had drawn down on the loan for her own purposes and the mortgage was in arrears, and that she had also used the property to secure a further loan, which had not been disclosed to ANZ. Mr Galatidis was unaware that she had taken these steps before he applied for the refinancing of the loan.
Mr Galatidis contemplated that his inability to obtain refinance would mean that he would have to sell the Mount Pritchard property in order to make the payment to his former wife. He discussed this with Ms Kallidis. She was concerned about the welfare of Mr Galatidis’s young children, who were living at the property and would lose their home. At the time, Ms Kallidis and their young daughter resided elsewhere.
Ms Kallidis devised a strategy. There is a dispute in the evidence about some conversations and aspects of the strategy.
Ms Kallidis gave evidence that she had a conversation with Mr Galatidis and suggested a proposal to sell the Mount Pritchard property to Mr Kallidis, that Mr Galatidis would make all the repayments and when Mr Galatidis was ready, Mr Kallidis would transfer the property back.
Ms Kallidis gave evidence (which was not challenged) that she had a conversation with Mr Kallidis to the following effect:

Mr Kallidis was cross-examined about the conversation, by reference to both Ms Kallidis’s and Mr Galatidis’s version of the conversation. Although he said he could not recall specifically, he accepted that Mr Galatidis may have said that he would do anything to keep the property, that it would not cost Mr Kallidis anything and that Mr Galatidis said he would pay the outgoings, legal fees, and stamp duty to transfer the property into Mr Kallidis’s name, so that Mr Kallidis would not have to pay a cent. He accepted Mr Galatidis may have said that he would then buy the property back from Mr Kallidis for exactly the same price it would be sold to Mr Kallidis and that Mr Galatidis would make the payments for this to happen. It was apparent that Mr Kallidis (understandably) did not have a clear recollection of the terms of the conversation that took place nearly a decade ago.
Mr Kallidis denied that he asked Mr Galatidis what was in it for him or that Mr Galatidis said that he would pay him $10,000. He denied saying that he told Mr Galatidis that he saw how Mr Galatidis was looking after his children and that he was happy to help. He did not think there was discussion at the meeting about the price or the amount Mr Kallidis would borrow.
In the absence of any challenge to Mr Galatidis or Ms Kallidis’s evidence and given Mr Kallidis’s concessions, and also for reasons addressed in more detail below, I accept Mr Galatidis’s evidence about the conversation. To the extent his evidence departs from the evidence of Mr Kallidis, I prefer Mr Galatidis’s evidence.
A contract for sale of the Mount Pritchard property was made on about 11 April 2016. The price was $680,000. That price was apparently based on a valuation report that Ms Kallidis had procured for the purposes of stamp duty assessment. Mr Kallidis’s evidence was that he did not make any assessment of his own about whether the price was reasonable. The contract provided for a deposit of 10%, but no deposit was ever paid. The arrangement between the parties was that on settlement, only 80% of the purchase price would be paid.
Mr Kallidis was separately represented on the sale but Ms Kallidis mostly dealt with his solicitor. All Mr Kallidis did was attend the solicitor’s office with Ms Kallidis briefly one evening and was asked to sign the contract. Unfortunately, he did not get any advice about the underlying arrangement with Mr Galatidis.
Mr Kallidis took out an interest only loan of $544,000 from Westpac to pay the settlement sum. It appears that Ms Kallidis made most of the arrangements for this loan. The loan proceeds were used to repay Mr Galatidis’s (and his former wife’s) outstanding debt to ANZ, pay Mr Galatidis’s former wife, cover stamp duty, pay all legal fees (on both sides) and leave Mr Galatidis with an amount of around $137,000.
The net effect was that Mr Kallidis did not use any of his own assets in the purchase. He did not fund any part of the deposit because no deposit was paid. He borrowed an amount that was sufficient to pay 80% of the purchase price as well as the additional costs associated with stamp duty and (everyone’s) legal fees. He did not draw on his own assets, but of course he contributed money that he had borrowed and became liable to service his obligations to Westpac.
It appears that at about the time the purchase of the Mount Pritchard property settled, Mr Galatidis’s solicitor prepared a draft call option which provided Mr Galatidis a right to call for Mr Kallidis to transfer the property to him for the price of $680,000 and with an option period of 2 years. Mr Kallidis said he did not see the draft agreement at the time of the conveyance. Mr Galatidis and Ms Kallidis gave the same evidence. There is no evidence about any instructions given or advice received in relation to the draft document. In those circumstances, I cannot draw anything from the document.
At the time of the sale, Mr Kallidis was in his mid-twenties. He had commenced a building and carpentry business through a company called Ariston Building Pty Ltd (the second defendant) about 2 years earlier. Ms Kallidis was largely responsible for conducting the financial affairs of the business (including accounting, taxation and borrowing arrangements) while Mr Kallidis worked on building sites and managed the construction side of the business. She was also managing much of Mr Kallidis’s personal financial affairs, such as his taxation returns. This continued until 2021, when there was a major breakdown in the relationship and Mr Kallidis took charge of his financial affairs.
Mr Kallidis’s evidence is that when the sale was completed, his mother congratulated him and said she was proud, but that all he felt was disgust. That was because he did not want to purchase the property and it was not the first time his mother had placed him in a situation with one of her boyfriends. He accepted that he felt, in some respect, that he was being used. If the true position was that Mr Kallidis had purchased the property at a 20% discount to its market value (worth $136,000), and that the purchase was an outright sale with no expectation that it would be sold back to Mr Galatidis (i.e. with no strings attached), then the most natural emotion that Mr Kallidis would have felt would be elation at making an easy profit. His feeling of disgust is consistent with an expectation on his part that he would have to return the property to Mr Galatidis and there was no prospect of material financial benefit to him in the transaction.
For about 2 years after the purchase, Mr Galatidis largely paid to Mr Kallidis amounts to cover all of the outgoings on the Mount Pritchard property, including the interest payments on the loan. Mr Kallidis and Mr Galatidis did not agree on a fixed and regular amount for rent on an ordinary landlord and tenant basis. The practice was for Ms Kallidis to tell Mr Galatidis how much was owing each month to Mr Kallidis’s bank and Mr Galatidis would transfer the necessary amount. Ms Kallidis knew how much was to be paid by Mr Kallidis to Westpac because she had access to his personal and business banking statements and accounts. On occasion, she made the payments herself from her own funds. The monthly amount varied depending on the interest obligations for the month. Amounts were also paid in respect of land tax, which became payable from 2019. There is evidence that Mr Galatidis failed in some months before 2020 to make the payments to cover Mr Kallidis’s loan or made short payments. The evidence suggests that he missed payments for August and October 2016 as well as July, August and December 2019 and that he made short payments in November 2016 and January 2018.
There was some evidence in the case concerning a company called Local Logistics (NSW) Pty Ltd. As at 2017, Local Logistics was in liquidation. Ms Kallidis had previously been a director and secretary of the company. Mr Galatidis (or his company, ATL Services) had been a subcontractor of Local Logistics. In 2017, Ms Kallidis, Mr Galatidis and Mr Kallidis were each examined in relation to the liquidation of the company. There was some suggestion in submissions that the arrangement between Mr Galatidis and Mr Kallidis was connected in some way with the affairs of Local Logistics. But this was not made out.
During the liquidator’s examination on 3 August 2017, Mr Galatidis gave the following evidence in response to a question about whether Mr Kallidis would pay a deposit:

Ms Kallidis’s evidence during her liquidator’s examination lacked some precision. She gave evidence that she and Mr Galatidis “gifted” Mr Kallidis the deposit, which is consistent with Mr Kallidis’s case before me. However, she also gave evidence that the gift of the deposit would enable them to “get the finance in [Mr Kallidis’s] name” and that the property is Mr Galatidis’s property. This is consistent with Mr Galatidis’s case. The reference to a “gift” in this context could be interpreted as meaning that Mr Kallidis was not required to pay a deposit, even though the return of the property to Mr Galatidis would effectively reverse the “gift”. I do not place any significance on Ms Kallidis’s evidence in the liquidator’s examination.
On about 5 November 2017, a document came into existence that was, notionally, a residential tenancy agreement between Mr Kallidis and Mr Galatidis. It purports to contemplate a lease commencing on 5 November 2017 with rent of $550 per week. The circumstances giving rise to the document are disputed and are, on any view, strange. Mr Kallidis’s evidence is that the document came into existence on the insistence of Ms Kallidis. His evidence was that Ms Kallidis insisted that he sign his name on the application form that was otherwise blank apart from the typewritten formal parts, which he did, and that she took the form away with her to complete. Her evidence is that it was Mr Kallidis who was insisting that the form be completed. The document purports to have been signed by Mr Kallidis and Mr Galatidis, with both signatures witnessed by Ms Erika Malone (Mr Kallidis’s partner). However, Ms Kallidis’s evidence is that she forged Mr Galatidis’s signature and also completed the witness block with a signature that purported to be that of Ms Malone. Mr Galatidis knew nothing of the document until these proceedings were commenced. Even on Ms Kallidis’s version of events, the incident does her no credit.
Ms Kallidis’s evidence is that the residential tenancy agreement was prepared in connection with steps taken by Mr Kallidis to secure some further financing for the purchase of another property. She had some involvement in steps to obtain some financing approval as early as June 2017. Mr Kallidis purchased a property in Alma Road, Padstow in May 2018. He obtained finance from the National Australia Bank. There is a dispute about how closely Ms Kallidis was involved in arranging the financing. Ms Kallidis’s evidence was that she had virtually nothing to do with it. Mr Kallidis’s evidence was that she did all the paperwork. I accept that Ms Kallidis played some role in assembling and providing the paperwork. At this time, she was still intimately involved in Mr Kallidis’s financial affairs.
Mr Kallidis used the equity in the Mount Pritchard property to assist to obtain finance from NAB to acquire the Padstow property. The Westpac loan was refinanced and consolidated into a loan from NAB, which effectively was a loan in respect of both the Mount Pritchard and the Padstow properties. Mr Kallidis’s evidence is that as a result of this refinancing he “released approximately $100,000 of my equity in the subject land”. It is not clear what Mr Kallidis means by this. It suggests that the refinancing had the effect of increasing the amount borrowed against the Mount Pritchard property by approximately $100,000, which was money used to help fund the acquisition of the Padstow property. The loan, at least initially, was interest only and was linked to an offset account. The interest charges incurred by Mr Kallidis reflected the loan that was secured by both properties. Ms Kallidis’s evidence is that Mr Kallidis told her that she was to pay the money in respect of Mount Pritchard to the NAB account and the amount would not change. For a period from about September 2018, $2,400 per month was paid from Mr Galatidis’s account to Mr Kallidis’s NAB account.
In late 2018, Ms Kallidis moved into the Padstow property and began paying $3,000 per month into Mr Kallidis’s NAB account.
In mid-2019, Mr Galatidis received an inheritance of approximately $430,000. He paid for some renovations to the Mount Pritchard property in the second half of 2019, apparently through Ariston and its contractors. On Mr Galatidis’s unchallenged evidence, in late 2019 Ms Kallidis said to him that Mr Kallidis did not have any work and she suggested that he be used to undertake some building works at the Mount Pritchard property, including the construction of a granny flat. Mr Galatidis agreed. He left the arrangements to Ms Kallidis.
Ariston needed to obtain home warranty insurance to conduct the building works at Mount Pritchard. Mr Galatidis agreed to lend $100,000 to Ariston, to be held by Ariston during the construction, enabling Ariston to secure the insurance. Mr Galatidis alleges that he has never been paid back. That does not appear to be disputed. There was some suggestion that Ms Kallidis used the money for her own purposes but that was not taken up as a defence against Mr Galatidis.
The building works were completed by Ariston in about July or August 2021. Mr Galatidis’s evidence is that he paid about $400,000 towards the renovations (not including the $100,000 that was lent). However, only approximately $200,000 in expenses has been itemised in the evidence.
Mr Kallidis was aware that Mr Galatidis was spending not insignificant amounts to improve the Mount Pritchard property, because his company was the builder. His evidence was that he did not keep track of all of the expenses but that he estimated that Mr Galatidis and Ms Kallidis spent about $200,000. His evidence was that he paid some of the expenses and that Ariston did not charge the customary builder’s margin, which would ordinarily have been in the order of $100,000. That would seem to be a generous margin if the capital expenditure was $200,000.
Ms Kallidis gave evidence that between 2016 and 2021, she engaged Mr Leontios of Sophos Accountants on behalf of Mr Kallidis to prepare and lodge Mr Kallidis’s tax returns. Her evidence was that Mr Leontios advised her that the expenses related to the Mount Pritchard property could be claimed in Mr Kallidis’s tax returns and, relying on that advice, she included those expenses in his returns. The evidence indicates that Mr Kallidis’s tax returns were prepared on the basis that he had incurred the capital expenditure that had in fact been incurred by Mr Galatidis. A tax depreciation report of 10 June 2021 records capital expenditure totalling $335,000 incurred after the property was acquired. Mr Kallidis’s personal tax returns included capital works deductions in respect of the Mount Pritchard property, although the evidence suggests that Mr Galatidis incurred most of the expenditure. It is not clear how the figure of $335,000 is reconciled with Mr Kallidis’s evidence that he and Mr Galatidis spent approximately $200,000 to improve the property, or with Mr Galatidis’s evidence that he spent approximately $400,000 on capital improvements.
Mr Leontios gave evidence in the proceedings in Mr Kallidis’s case. He did not do so voluntarily. Mr Leontios gave evidence carefully and without any indication of favour or preference to any party. It was not suggested by anyone that he had acted unprofessionally in any way. He prepared Mr Kallidis’s tax returns up to the 2021 year, relying on information provided to him by Ms Kallidis. In those returns, the Mount Pritchard property was treated as an investment property. Mr Leontios understood, from what Ms Kallidis told him, that Mr Kallidis had acquired the property from Mr Galatidis. He was not told of any arrangements about a reacquisition. In the returns, payments made by Mr Galatidis were accounted for as income and interest payments and other outgoings were claimed as expenses. The net rent was shown as a negative figure, which is largely explained by expenses for capital allowance assets and capital works deductions. As I have mentioned, the capital works were largely funded by Mr Galatidis. I do not conclude that Mr Leontios was aware that any capital expenses claimed by Mr Kallidis were expenses incurred by Mr Galatidis. I do not conclude that he advised Ms Kallidis that Mr Kallidis could claim as capital expenditure amounts that had been incurred by Mr Galatidis rather than Mr Kallidis.
In 2020, the COVID-19 pandemic affected Mr Galatidis’s ability to make payments to Mr Kallidis. There was a period where payments stopped. At the same time, Ms Kallidis arranged for Mr Kallidis’s loan repayment obligations to be frozen. However, even after the loan relief period expired, Mr Galatidis was unable to make the payments needed to enable Mr Kallidis to service his loan commitments. Mr Kallidis was understandably angered by this.
In mid-2021, Mr Kallidis purchased another property. He discharged the NAB loan and took out a new loan with ANZ. Ms Kallidis was not involved in this refinancing. Mr Kallidis’s affidavit evidence was that as part of this refinancing, he released approximately $195,807.80 of his “equity” in the Mount Pritchard property. Again, although a little obscure, this suggests he used the Mount Pritchard property to secure extra funding to enable him to purchase another investment property.
There was some evidence that related to the refinancing that was troubling. Mr Leontios prepared the tax returns for Ariston at all relevant times. For the 2020 year, Ariston’s tax returns, as submitted, recorded a loss of $59,298. However, ANZ produced on subpoena an unsigned company tax return for Ariston for the 2020 year, purportedly prepared by Ajaka & Co, which bore little resemblance to the true tax return prepared by Mr Leontios. The Ajaka & Co tax return suggested that Ariston was significantly more profitable, indicating a profit of $648,664 rather than a loss of $59,298. Mr Leontios had not seen these returns before he gave evidence. ANZ did not produce the true tax returns that Mr Leontios had prepared and lodged. Mr Kallidis denied that he had ever seen the Ajaka & Co returns and could not explain why ANZ produced them. This is hard to reconcile with some other evidence.
Mr Luke Galatidis was a witness. He is one of Mr Galatidis’s sons. In around 2021 and 2022 he was working for Ariston. He gave evidence that he had a conversation with Mr Kallidis at a time when Mr Kallidis was in the process of obtaining a loan. Mr L Galatidis’s evidence was that Mr Kallidis told him that “sometimes you have to cut corners, and you have to know the right people to get what you need”. Mr L Galatidis said that Mr Kallidis acknowledged that it was a “fraudulent loan”. He also gave evidence that Mr Kallidis asked him to hold an envelope that, according to Mr Kallidis, contained $25,000 cash for payment to a mortgage broker. Mr L Galatidis was not cross-examined about the conversation. Mr Kallidis was cross-examined about it. He denied the conversation ever occurred. I conclude that the conversation took place. Mr L Galatidis was not challenged about it and there was nothing in cross-examination that suggested to me that any of his evidence should be rejected. I accept Mr L Galatidis’s evidence and conclude that Mr Kallidis made admissions of dishonesty to Mr L Galatidis.
I reject Mr Kallidis’s evidence that he knew nothing of the false tax return that was submitted to ANZ. He had an interest in obtaining finance from ANZ. I accept that he was willing to procure that false information be provided to ANZ in order to obtain that finance. I conclude that he was willing to engage in dishonesty to advance his financial interests.
I make a similar observation about Ms Kallidis. She too is prepared to act dishonestly in relation to important matters. She admitted to forging Mr Galatidis’s signature on a residential tenancy agreement and falsely signing Ms Malone’s signature. She forcefully denied that she had ever forged Mr Kallidis’s signature. However, she falsely signed Mr Kallidis’s name on the NSW Residential Builders’ Warranty form that was submitted to HIA Insurance Services Pty Ltd for Ariston to vary an amount of home warranty insurance. Her evidence was that this was not a forgery because the signature was not made to imitate Mr Kallidis’s actual signature. This is a cute distinction. Of course, HIA Insurance Services would not be expected to have appreciated the subtlety. By any reasonable assessment, she had made a fake signature of Mr Kallidis with an intention that it would be relied upon as a legitimate one. Generally, Ms Kallidis’s evidence was often unresponsive and she seemed intent to reveal herself in what she thought would be the best possible light.
I am not willing to place weight on the uncorroborated evidence of either Mr Kallidis or Ms Kallidis unless the evidence is against their respective interests.
The relationship between Mr Kallidis and Ms Kallidis had been tempestuous at times, but broke down during 2021. Mr Kallidis was angry about failures on the part of Mr Galatidis to pay anything in respect of the Mount Pritchard property and failure by Ms Kallidis to keep up to date on payments for the Padstow property. At some stage during the year, Mr Kallidis arranged for the granny flat at the Mount Pritchard property to be rented to third party friends of his, and he kept the rent. That was a source of tension. Mr Galatidis regarded the Mount Pritchard property as his and did not think that it was right that Mr Kallidis would rent part of his property to other persons. Mr Kallidis did not think that it was right that Mr Galatidis was failing to make his payments to him and was looking to make some income from the property.
Matters came to a head in October 2021. Mr Kallidis decided to take control of his and Ariston’s financial affairs. There were heated communications between Mr Kallidis and Ms Kallidis. Mr Kallidis directed Mr Leontios to cease dealing with his mother on his behalf and to deal directly with him.
In mid December 2021, Mr Kallidis sent Mr Galatidis a text message which made a threat that the Mount Pritchard property would be sold by auction. A long text message was sent from Mr Galatidis’s phone. The message suggested that Mr Kallidis needed to work things out with his mother. It referred to the “original agreement” which was that all Mr Galatidis had to do was pay the loan and the bills that came for the house. There were also text messages at about this time contemplating a sale of the property to Mr Galatidis for $1,050,000 “less expenses paid”. The evidence did not draw out how that figure was derived or what constituted the expenses paid.
In February 2022, Mr Kallidis undertook a third refinancing, this time with AMP. By this refinancing, Mr Kallidis “released” further “equity” in the Mount Pritchard property – this time approximately $40,000. AMP retains a mortgage over the Mount Pritchard property. It is the third defendant in the proceedings and has filed a submitting appearance. There is no suggestion that any party has an interest that prevails over AMP’s security interest.
In August 2022, Mr Kallidis evicted Ms Kallidis (together with his sisters) from the Padstow property. Ms Kallidis and her young daughter moved to the Mount Pritchard property. In the same month, Mr Galatidis received a telephone call from a solicitor who said that he had instructions to sell the Mount Pritchard property.
Mr Galatidis lodged a caveat over the Mount Pritchard property on 16 September 2022. The caveat stated that Mr Galatidis claimed the beneficial interest in the whole of the land and stated facts that are consistent with the case propounded by Mr Galatidis in these proceedings.
On 26 September 2022, Mr Galatidis received a notice purporting to terminate his tenancy of the Mount Pritchard property. At about that time, Mr Galatidis agreed to pay $500 per week to Mr Kallidis and he remained in possession of the property. Payments of $500 per week have been made since September 2022.
In January 2023, solicitors for Mr Kallidis sent a draft contract for the sale of the Mount Pritchard property to solicitors acting for Mr Galatidis. The proposed purchase price was $680,000. That transaction did not proceed. Mr Kallidis retained new solicitors.
Mr Galatidis and Ms Kallidis continue to reside in the Mount Pritchard property.
I should mention the evidence of the other witnesses called by Mr Galatidis, although none of it plays a material role in my conclusions.
Ms Kristianni Kallidis gave evidence. She is Ms Kallidis’s daughter and Mr Kallidis’s half-sister. She was once close to Mr Kallidis but that relationship broke down after she was evicted from the Padstow property in August 2022. She does not get on with Mr Galatidis. She gave thoughtful and considered evidence which was not challenged. I accept her evidence. The main thrust of her evidence was that Mr Kallidis told her that he had the Mount Pritchard property in his name to help Mr Galatidis and Ms Kallidis out. She said that Mr Kallidis expressed frustration about Mr Galatidis failing to make the repayments and that he often remarked that he wanted Mr Galatidis to get his finances in order so that he could transfer the property back to him.
Mr Galatidis’s other son, Mr “Toli” Galatidis also worked for Ariston for a time. He gave unchallenged evidence that on several occasions Mr Kallidis told him that he wished that Mr Galatidis would take the house back because Mr Kallidis was over dealing with Mr Galatidis and the house. This is consistent with some appreciation by Mr Kallidis that he was required to transfer the property back to Mr Galatidis.
Evidence was also given by Mr Robert Galatidis, who is Mr Galatidis’s brother. He gave evidence about a conversation with Mr Kallidis in about mid-2022. The conversation was about the Mount Pritchard property but it did not advance matters in the case because it could be interpreted as consistent with both sides.
There was unchallenged evidence from a valuer, Mr Daghl, which was that: (a) the value of the Mount Pritchard property as at 1 April 2016 was $680,000; (b) the improved value as at 4 December 2024 was $1,250,000; and (c) the value as at 4 December 2024, assuming the works undertaken after 2016 by Mr Galatidis were not performed, was $900,000. This suggests that the underlying movement in the market value of the property in nearly 10 years was relatively modest ($220,000 or 32%) and if there was expenditure of $400,000 on improvements, that is not fully reflected in capital appreciation ($350,000). Mr Daghl’s evidence is that his valuations as at 4 December 2024 are no longer current.
The scheme that was conceived by Ms Kallidis in early 2016 and implemented by Mr Galatidis and Mr Kallidis was not well-considered. It would have been much better if any arrangement was properly documented and given contractual force based on independent legal advice for each of Mr Galatidis and Mr Kallidis. That would likely have avoided these proceedings and may have avoided the unfortunate collapse in the relations between mother and son.

The most difficult element for Mr Galatidis to satisfy is the requirement of a clear and unequivocal promise. Any promise was made nearly 10 years ago in a brief oral conversation.
However, I accept that Mr Kallidis did make a promise. I accept that during the course of the conversation between Mr Kallidis and Mr Galatidis (with Ms Kallidis present) at the Greenacre property in March 2016, Mr Kallidis made a promise to transfer the Mount Pritchard property back to Mr Galatidis. He made the promise on the basis that Mr Galatidis would cover all costs associated with the property and pay him $10,000 at the time of the transfer back. The arrangement was that Mr Kallidis was not to “pay a cent” in relation to the property and that, as a matter of substance, the property would continue to be owned by Mr Galatidis.
I have accepted Mr Galatidis’s version of the conversation. I reject the proposition that Mr Kallidis thought that he was purchasing the property outright as an investment property and made no promise about transferring the property back to Mr Galatidis. That is inconsistent with the following matters:
the amount actually paid by Mr Kallidis did not include 20% of the purchase price and there was little sense in Mr Galatidis making an outright gift of $136,000 to Mr Kallidis;
Mr Kallidis made no effort to negotiate the price or consider whether the price was reasonable;
Mr Kallidis was aware that the transfer was a favour to Mr Galatidis brought about because he needed to pay his former wife but was unable to raise the finance to do so and was at risk of having to sell his property;
Mr Kallidis’s feeling of disgust at the time of making the contract for sale is consistent with him understanding that there was little in the transaction for him and that he was being “used”, rather than with him thinking he had just made an outright purchase with a gift of the 20% of the purchase price;
the subsequent conduct of the parties is consistent with Mr Kallidis having made the promise in about March 2016 to hold the property for Mr Galatidis and with an obligation to transfer it back to him, particularly:

The promise made by Mr Kallidis was made against a promise by Mr Galatidis that the arrangement would not cost Mr Kallidis a cent, meaning that Mr Galatidis would cover all of Mr Kallidis’s expenses associated with the property. Mr Kallidis would be paid $10,000 for his participation in the arrangements. On any reasonable view, from a commercial perspective this was an improvident arrangement so far as Mr Kallidis was concerned. He was being asked to take the credit risk on his mother’s boyfriend in circumstances where Mr Galatidis was not working, was in the middle of a family law property settlement and a bank had declined his attempts at refinancing. If Mr Galatidis did not honour his promise, Mr Kallidis would be exposed on the loan he had taken to pay for the property. Mr Kallidis was a relatively young man, trying to develop his own business. His mother had significant control over his financial affairs. He was in a vulnerable position. She pressured him to make the promise that I have found was made.
As I have recorded, there was evidence that Mr Kallidis felt “used” and in my view that was a legitimate feeling. I consider that the arrangements did involve an element of exploitation. Ms Kallidis used emotional pressure to persuade her son to take steps that would benefit her boyfriend but would yield little benefit and potentially disaster for her son.
It was not suggested that Mr Galatidis should be denied equitable relief because he came to the Court with unclean hands by reason of the circumstances which gave rise to the sale of the land in the first place. Nor was it suggested that there was an exercise of undue influence or that there was a catching bargain. Mr Kallidis’s case was that he did not promise to transfer the property back to Mr Galatidis, not that he should not be held to the promise because of the circumstances in which it was made. I have rejected his contention that there was no promise.
Nevertheless, in fashioning any relief, the Court can make sure that Mr Galatidis upholds his promise to Mr Kallidis to hold him harmless. Mr Galatidis seeks equity and so must do equity. Putting aside the costs of these proceedings (which will be addressed later), Mr Kallidis should not be out of pocket as a consequence of any relief. Moreover, even if there was some wrongdoing in the manner in which the promise was procured, the appropriate remedial response would be to ensure that Mr Kallidis suffers no loss, rather than to permit him to profit from the wrongdoing.
During the course of oral closing submissions, counsel for Mr Kallidis submitted that his preferred way of putting the case was not that the events of March 2016 could not give rise to a common intention constructive trust or proprietary estoppel but that events that occurred after that time mean that Mr Galatidis should be denied relief. It was submitted that Mr Galatidis’s rights in respect of the property were, in effect, lost when he defaulted in making the payments necessary to enable Mr Kallidis to fulfil his obligations to his banker in respect of the loan used to finance the acquisition of the property and defaulted on other outgoings for things such as land tax.
As I have noted, the evidence indicates that Mr Galatidis missed the payments necessary to cover Mr Kallidis’s financing obligations in some months starting as early as August 2016. His failure to make payments became sustained from March 2020. They resumed in June 2021 until October 2021, but payments were again missed from November 2021 to February 2021 and from May 2022 to August 2022, following which payments of $500 per week were paid.
Mr Kallidis’s anger about Mr Galatidis’s failure to make payments developed in 2020 and grew in 2021, after the moratorium on his loan came to an end but Mr Galatidis was still failing to make the payments to Mr Kallidis – leaving Mr Kallidis exposed to his banker. Mr Galatidis’s failure to make the payments necessary to indemnify Mr Kallidis was a serious breach of the promise he made to Mr Kallidis, which was that Mr Galatidis would ensure that the arrangement did not cost Mr Kallidis a cent. Mr Kallidis’s anger is easy to understand. There is not much evidence that Mr Galatidis was sympathetic to the position that Mr Kallidis was in, notwithstanding that the whole arrangement reflected a large favour being done for Mr Galatidis’s benefit.
Mr Galatidis’s failure to keep the promise he made to Mr Kallidis does not lead me to conclude that Mr Kallidis should be excused from fulfilling his promise. Rather, the consequence should be that any relief Mr Galatidis obtains must be fashioned in a way that sees him fulfilling his promise as a condition of that relief.
Faced with Mr Galatidis’s reneging on his promise and being unwilling or unable to fulfill it, an appropriate response from Mr Kallidis would have been to insist that Mr Galatidis purchase the property from him on the basis that Mr Kallidis would be fully indemnified. If Mr Galatidis was unable or unwilling to purchase the property, Mr Kallidis could have insisted that the property be sold with Mr Kallidis to take so much from the sale proceeds to ensure he was not of pocket, with the balance to go to Mr Galatidis. If Mr Galatidis still refused to cooperate, Mr Kallidis could have sought remedies from the Court. It is inconceivable that Mr Galatidis could insist that Mr Kallidis uphold his promise while at the same time reneging on his own promise.
For these reasons, I am satisfied that the elements required for proprietary estoppel are satisfied. Mr Galatidis is entitled to relief.

There will be a declaration that Mr Kallidis holds the Mount Pritchard property on trust for Mr Galatidis. There will also be an order that the property be transferred to Mr Galatidis. However, the orders for transfer will contain conditions to ensure that Mr Kallidis is not out of pocket (putting aside expenses associated with these proceedings).
There are various matters that need to be taken into account to determine the total amount of money that will ensure that Mr Kallidis suffers no loss by reason of his arrangements with Mr Galatidis. They have not been properly or fully addressed in the proceedings.
First, there needs to be a complete accounting of Mr Galatidis’s failure to pay Mr Kallidis’s holding costs (including interest and land tax). This amount appears to be in the tens of thousands of dollars. The calculation will be complicated because Mr Kallidis has refinanced and combined the Mount Pritchard property with other properties to secure a single loan. Apportioning interest (and possibly principal) to the Mount Pritchard property will not be straightforward. Only limited sympathy can be extended to Mr Kallidis for this complication because he used the Mount Pritchard property to help him obtain finance to buy an investment property and may not have been able to do so without using the Mount Pritchard property in that way. I have referred to Mr Kallidis’s evidence that each time he refinanced, he “released” some of the equity in the Mount Pritchard property. He will be obliged to transfer the Mount Pritchard property to Mr Galatidis on terms that ensure that he suffers no loss, but also wins no profit (aside from $10,000). Insofar as equity has been “released” this will need to be taken into account.
Second, it seems inevitable that the transfer will create a capital gains tax liability for Mr Kallidis. Counsel for Mr Galatidis accepted that absent some default on Mr Kallidis’s part (and none was identified), Mr Galatidis will bear responsibility for that amount. The capital gains tax liability will depend on various matters, including the market value of the property at the time of the transfer. The calculations are likely to require taxation and valuation advice. Those costs must be borne by Mr Galatidis.
Third, there may be additional taxation complications arising from the claims that Mr Kallidis has made on his taxation returns on account of capital expenditure incurred by Mr Galatidis. There is no evidence that Mr Galatidis was responsible for those claims and he should not be responsible for these matters (including any professional fees required to undertake any necessary steps to regularise the position).
Fourth, there should be allowance for the $100,000 that Mr Galatidis lent to Ariston to enable it to hold funds in a sufficient sum so it could obtain home building insurance, which was necessary to undertake the works on the Mount Pritchard property. It was accepted by counsel for Mr Kallidis in closing submissions that it was just and equitable for there to be an allowance in favour of Mr Galatidis for this amount.
Fifth, the usual expenses to be incurred by a vendor (including legal fees) will be for Mr Galatidis to meet.
Sixth, Mr Galatidis must also pay the $10,000 to Mr Kallidis.
It was submitted for Mr Galatidis that the Court should compel the transfer and these financial matters can be attended to afterwards. That is not appropriate. A calculation of the amount that Mr Galatidis must pay to Mr Kallidis to leave him whole should be made before the property is transferred and that is the amount that should be paid as a condition of the transfer. It is desirable that Mr Kallidis is made whole at the time of the transfer of the property. He should not be placed in a position where he has transferred the property but remains out of pocket. Furthermore, if Mr Galatidis, upon learning of the amount he must pay, cannot afford it, then orders will be made that involve sale of the property on the open market.
I appreciate that it is possible that final amounts may not be able to be calculated until after the transfer. For example, the capital gains tax liability is likely to be an estimate only. There should be provision for a payment to be made by one party to the other after the transfer to address the final and certain amount that is required so that the arrangement does not cost Mr Kallidis a cent (but makes no profit apart from $10,000).
It would be best if the parties can agree on the amount to be paid upon transfer. That would avoid unnecessary cost. If they cannot, the amount will have to be determined by the Court. That may be best achieved by obtaining a report from a referee.

Galatidis v Kallidis

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

JUDGMENT

The facts

The land claim

Was there a clear and unequivocal promise?

Was there an expectation or intention?

Was there reliance?

Would there be detriment?

Are there reasons why the doctrine of proprietary estoppel should not apply?

The form of relief – complications and conditions

The alternative land claims and the loan claim

Orders

Costs

Parties

Cases Cited (3)

Cited By (1)