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[2026] NSWSC 993
Supreme Court of NSW
2026-08-19
Brereton J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Galatidis v Kallidis (No 2) [2026] NSWSC 993
Hearing dates: 28 July 2026
Date of orders: 19 August 2026
Decision date: 19 August 2026
Jurisdiction: Equity
Before: Brereton J
Decision: (1) Direct the first defendant within 7 days to provide a copy of these reasons to the officer of the Australian Taxation Office who has conduct of the first defendant’s application for a private binding ruling, under cover of a letter that states:
(a) that the reasons are being provided pursuant to this decision; and
(b) that the application made on 13 May 2026 misstates the effect of the reasons delivered on 19 December 2025 and orders made on 22 April 2026 insofar as it conveys that those reasons and orders had the effect of creating a constructive trust on and from the date of the orders.
(2) The parties are to notify my Associate by 5pm on 28 August 2026 if they wish to make any submissions about costs, failing which I will order that there be no order as to costs.
Catchwords: PRACTICE AND PROCEDURE – application to vary or substitute orders pursuant to “slip rule” or inherent jurisdiction – where previous orders recognised existence of constructive trust – where declaration expressed in present tense – whether present tense necessitated that constructive trust commenced prospectively from the date of orders – no occasion to apply the slip rule or exercise the inherent jurisdiction – where application to the Australian Taxation Office for a private binding ruling misstated effect of earlier reasons and orders – where defendant ordered to correct misstatement
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd (No 2) [2025] NSWCA 62
Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201; [2007] NSWCA 104
Commonwealth of Australia v Kupang Resources Pty Ltd [2026] NSWCA 161
Galatidis v Kallidis [2025] NSWSC 1555
Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342; [1958] HCA 33
Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78
Nenadic v Nenadic [2014] NSWSC 1229; 17 BPR 33,225
Newmont Yandal Operations Pty Limited v the J Aron Corporation and the Goldman Sachs Group Inc (2007) 70 NSWLR 411; [2007] NSWCA 195
Radmanovich v Nedeljkovic [2002] NSWSC 212
Rawlinson v Mort (1905) 93 LT 555
Samawi v Faraone [2025] NSWSC 970
Texts Cited: Young, PW, Declaratory Orders (2nd ed, 1984)
Category: Consequential orders
Parties: Apastolis Raymond Lucas Galatidis (plaintiff)
Adrian Kallidis (first defendant)
Ariston Building Pty Ltd (second defendant)
AMP Bank Limited (third defendant)
Representation: Counsel:
M W Young SC (plaintiff)
I S Young (first and second defendants)
Solicitors:
Shad Partners (plaintiff)
VanderFox (first and second defendants)
File Number(s): 2023/85932
Publication restriction: N.A.
I delivered reasons in this matter on 19 December 2025: see Galatidis v Kallidis [2025] NSWSC 1555. As I recorded in the first paragraph of those reasons, the principal relief that Mr Galatidis sought was a declaration that Mr Kallidis holds certain property located at Mount Pritchard on trust for Mr Galatidis and for orders that the property be transferred to him. Mr Galatidis relied on the doctrine of common intention constructive trust and was content to proceed on the basis that the trust claim was to be determined according to the principles applicable to equitable proprietary estoppel: see Galatidis v Kallidis at [68]-[69].
Mr Galatidis was successful. I observed at [91] that there would be a declaration that Mr Kallidis holds the Mount Pritchard property on trust for Mr Galatidis and an order that the property be transferred to him. I also noted that the orders for transfer would contain conditions to ensure that Mr Kallidis is not relevantly out of pocket. I ordered that the parties confer and provide proposed orders to give effect to my reasons.
The parties, eventually, were able to agree a form of orders. I made orders, consistently with what had been agreed, on 22 April 2026. The orders were as follows:
1. Declare that the property comprised in Folio Identifier 7/650459 and described as 338 Elizabeth Drive, Mount Pritchard 2170 in the State of New South Wales (the Property) is held by the First Defendant on trust for the Plaintiff, subject to the Third Defendant’s rights as registered mortgagee and subject to the First Defendant’s rights to recover the Payment Amount (as defined below).
2. Declare that the First Defendant has an entitlement to receive from the Plaintiff an amount (the Payment Amount) calculated as follows:
a. $10,000; plus
b. Such amount as the First Defendant is entitled to receive by way of indemnity for money in his capacity as trustee of the Property (the Indemnity Amount), such amount to include any reasonable personal financial cost to the First Defendant (save for the costs of these proceedings) arising from his holding of the Property, including but not limited to;
i. The $546,471 initially paid and any incidental transaction costs paid by the First Defendant for the transfer of the Property;
ii. Any interest and loan principal that the First Defendant has paid from his own pocket in relation to his original borrowing of the sum of $544,709.50 and refinances of that sum (but not in relation to any other sums borrowed or the refinance of those further sums);
iii. The income tax liability that the First Defendant has or will incur by reason of him acting or having acted as the trustee of the Property or in relation to the future transfer of the Property to the Plaintiff or its sale by way of public auction;
iv. Any expenses paid by the First Defendant from his own pocket by way of holding costs in relation to the Property;
v. Any presently existing liabilities the First Defendant has incurred (whether or not presently known) but has not yet paid in relation to the Property; and
vi. The future transfer costs of the Property from the First Defendant to the Plaintiff or its sale by way of public auction; less
c. $100,000.00.
3. Order that the Plaintiff and the First Defendant cooperate so as to attempt to agree the quantum of the Indemnity Amount by 20 May 2026.
4. Relist the proceedings at 9:30am on 10 June 2026 before Brereton J for further directions with a view to making orders on that occasion for the reference of the determination of the Indemnity Amount to a referee in the event that the Plaintiff and the First Defendant are unable to agree the quantum of the Indemnity Amount prior to that date and to discharge or otherwise vary orders 5 to 11 to accommodate the referee’s determination of the Indemnity Amount.
- Direct the First Defendant, by his tax advisor, make an application for a private binding ruling with the Australian Taxation Office within 21 days of the date of these orders in relation to the income tax (capital gains) implications of the First Defendant giving effect to the Court’s orders.
6. Direct the First Defendant to provide a copy of the application that is made in accordance with order 5 to the Plaintiff within 7 days of the application being made.
6A. Direct the First Defendant to include in the application referred to in order 5 a notation that the First Defendant has been directed as per order 6 and is to note that a submission may be made by the Plaintiff in respect of the application.
6B. Note for the avoidance of doubt that it is not intended that the directions in order 6 or order 6A will oblige anyone to do anything that is not permitted by law.
7. By no later than 14 days from the date on which the First Defendant obtains a private binding ruling from the Australian Taxation Office, the First Defendant must instruct a registered valuer, at the Plaintiff’s sole cost, to perform a valuation of the Property for duty and capital gains tax purposes.
8. By no later than 14 days from the date on which the First Defendant obtains a valuation of the Property, the First Defendant must instruct his tax advisor to calculate the income tax payable on the transfer of the Property based on the determination of the private binding ruling and the Property’s valuation.
9. Order that the Plaintiff indemnify the First Defendant of any fair and reasonable costs incurred in the course of obtaining a private binding ruling with the Australian Taxation Office.
10. Order that, within 56 days of the quantum of the Indemnity Amount being agreed or otherwise determined and the First Defendant having obtained a private binding ruling from the Australian Taxation Office, the following shall occur simultaneously:
a. the Plaintiff shall to pay the First Defendant the Payment Amount in cleared funds;
b. the First Defendant is to make payment to the Third Defendant in cleared funds the amount required to discharge the mortgage registered on the title to the Property in favour of the Third Defendant;
c. the Third Defendant shall discharge the Third Defendant’s mortgage; and
d. the First Defendant shall transfer the Property to the Plaintiff free of all mortgages and other encumbrances.
11. Nothing in these orders affects the rights of the Third Defendant as registered mortgagee of the Property, and the Third Defendant is not required to take any step except to the extent necessary to provide a payout figure and, upon receipt of payment in full in cleared funds, to provide a discharge of mortgage in the usual course.
12. Upon completion of the transfer or sale (as applicable), the Plaintiff shall withdraw any caveat lodged over the Property and do all things necessary to allow registration of the transfer and discharge of mortgage.
- Liberty to apply on 3 days’ notice.
A dispute has arisen concerning the form of declaration expressed in order 1.
By notice of motion filed on 15 June 2026, Mr Galatidis seeks a declaration in the following terms:
Declare that the trust declared by Order 1 of the orders made on 22 April 2026 with respect to the land comprised in folio identifier known as 7 /650459 and as described as 338 Elizabeth Drive, Mount Pritchard NSW 2170 came into existence on 14 May 2016 at the moment of transfer of the said land to the First Defendant.
Declare that the property comprised in Folio Identifier 7 /650559 and described as 338 Elizabeth Drive, Mount Pritchard 2170 in the State of New South Wales (the Property) is held by the First Defendant on trust for the Plaintiff, subject to the Third Defendant's rights as registered mortgagee and subject to the First Defendant's rights to recover the Payment amount (a[s] defined below), with that trust having come into existence on 14 May 2016 at the moment of transfer of the said land to the First Defendant.
It can be seen that the additional or corrected declaration principally identifies a specific date on which the trust came into existence.
The application is brought on alternative bases. Mr Galatidis contends that the declaration can be made because it concerns an outstanding issue in the proceedings. He alternatively relies on the slip rule or on the inherent power of the Court to correct an order.
Mr Kallidis opposes the application. He submits that no additional declaration can or should be made, including because I am functus officio. He further submits that the slip rule is not engaged. He submits that the proper path for Mr Galatidis, if he is discontent with the declaration, is to appeal.
Consistently with order 5 made on 22 April 2026, Mr Kallidis submitted an application for a private binding ruling on 13 May 2026. The form of the application was principally a matter for Mr Kallidis. It was required to be made consistently with the obligation imposed on a taxpayer when making such an application. It is significant, however, that Mr Kallidis was required to make the application because he was required to do so as a step in giving effect to my decision in this matter. The application had the express purpose of determining the income tax (capital gains) implications of Mr Kallidis giving effect to the orders.
Mr Kallidis’s application for a private binding ruling included representations that the effect of my reasons and orders was that the trust that is referred to in the declaration came into existence at the time of the declaration and not at any earlier time. The application states that the property was not held on trust by Mr Kallidis for Mr Galatidis from the time the property was transferred in May 2016, including because:
The Decision and Orders are expressed in present tense (“holds the Property on trust for Mr Galatidis” and “(the Property) is held by the First Defendant on trust for the Plaintiff”) respectively. Neither the Decision or Orders are expressed in both past and present tense (cf “was and is held”).
The application also included the following:
40. This conclusion is also supported by the decision of Brereton J where it was stated at Decision [94] that it was “inevitable that the transfer will create a capital gains tax liability for Mr Kallidis”, supra.
41. Had the Decision and the Orders giving effect to the Decision been expressed as the imposition of a constructive trust nunc pro tunc (i.e. “now for then”, or put another way, retrospectively):
a. The Taxpayer accepts CGT event E1 may have occurred instead of CGT event A1 which flows from the operation of law in the Court declaring that the Property is held by the Taxpayer on trust for the Plaintiff.
b. There would be no CGT consequences for the Taxpayer in relation to the Orders because the Property would have been held on trust by the Taxpayer from inception.
42. However, the Decision and Orders were not expressed to have retrospective effect, and even if Order 1 was capable of being construed as operating nunc pro tunc (which is not open based on the present tense adopted in Order 1, supra), the following observations are made.
There are aspects of the application that cause some concern.
In particular, the application appears to misunderstand and misrepresent my reasons and the orders insofar as it conveys that they support the proposition that the trust came into existence on the date of the orders, being 22 April 2026. The application draws attention to the use of the present tense in the orders and the absence of orders that impose the constructive trust nunc pro tunc. This reflects a misunderstanding on the part of Mr Kallidis.
A declaration that property is held on trust speaks of a state of affairs at the time of the declaration. It does not, or at least does not necessarily, reflect the creation of a trust, by way of remedy, by and on the date of the declaration. It is not a case of orders operating retrospectively or nunc pro tunc. It reflects that at the date of the declaration there is a certain state of affairs. It says nothing about when the state of affairs came into existence.
In my reasons I observed that the case was framed in the same way as the case was framed in Samawi v Faraone [2025] NSWSC 970. In that case, Leeming JA framed a declaration (see [277]) that was in the same form as the declaration that I made. The present tense is used in exactly the same way. It is apparent from his Honour’s reasons (at [269]) that property was held on constructive trust pursuant to a common intention. The declaration recognised a state of affairs that existed independently of the declaration. This reflects the institutional character of a constructive trust that arises from a common intention.
When a court makes a declaration of ownership of property, it is commonplace simply to declare that there is ownership at the time of the declaration, without stating explicitly that there was ownership before that date. In his work on Declaratory Orders (2nd ed, 1984), P W Young QC offers the following as a precedent form of declaration (at [2509], drawing from Rawlinson v Mort (1905) 93 LT 555):
Declare that the organ presently situate in the Church of St Paul at Bloggsville in the State of New South Wales is the property of the plaintiff.
This form of declaration, including the use of the present tense, is appropriate even where the organ has long been church property.
…The substantial relief claimed is by way of declarations that the defendant holds in trust for the plaintiff the rights given by the quarterly licences granted to it, and all profits made by it by the use of those licences. The doctrine of Keech v. Sandford is shortly stated by saying that a trustee must not use his position as trustee to make a gain for himself: any property acquired, or profit made, by him in breach of this rule is held by him in trust for his cestui que trust*.* The rule is not confined to cases of express trusts. It applies to all cases in which one person stands in a fiduciary relation to another…
In Commonwealth of Australia v Kupang Resources Pty Ltd [2026] NSWCA 161, Bell CJ (Ward P and Griffiths AJA agreeing) quoted that passage and noted at [56] that: “it is clear that the trust described is institutional in character in that its existence does not depend upon a curial declaration”. Keith Henry supports the proposition that a constructive trust can exist before and independently of a curial declaration and that such a trust is appropriately recognised by a declaration that the defendant “holds” the relevant property on trust for the plaintiff.
Where a court determines that it is an appropriate remedial response to impose a constructive trust, it would be orthodox for the orders to specify the date on which the constructive trust is created by the order of the Court. It will often be the date on which the reasons are published: see Muschinski v Dodds (1985) 160 CLR 583 at 615; [1985] HCA 78 (Deane J).
It follows that it was an error for Mr Kallidis to suggest in his application for a private binding ruling that the use of the present tense in the declaration signals that the trust only arose on that day. Further, contrary to what is suggested by the application, it would not require orders to be made nunc pro tunc in order for the trust, as an institutional constructive trust, to be established at a time earlier than the date of the orders. The trust does not depend on the declaration for its existence.
It is also significant that the extract from [94] of my reasons included at [40] of the application for the binding private ruling (set out above) is incomplete, with the risk it could mislead. Paragraph 94 reads:
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.
The omission of the word “seems” in the application is significant because it is a word of qualification. The reference to taxation advice is also consistent with the observation that the position is qualified.
If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.
Instructive in the present case is the distinction drawn by McHugh JA in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 449 (Storey & Keers) as to the distinction between a mistake or error which is the result of an accidental slip or omission (capable of correction under the slip rule) and a mistake or error which is the product of a deliberate decision (which does not enliven the slip rule), the dividing line between which his Honour said had often been difficult to draw. In Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520 at 530; [1985] 1 All ER 520 [1985] 1 Lloyd’s Rep 189, Donaldson MR referred to the “distinction between having second thoughts or intentions and correcting an award of judgment to give true effect of first thoughts or intentions”.
That passage is also instructive in this case.
The slip rule can be used to correct the form of a declaration. For example, in Nenadic v Nenadic [2014] NSWSC 1229; 17 BPR 33,225, Young AJA relied on the slip rule to cure a declaration that, by mistake, referred to 2013 as the date of a contract when the true date (evident from the reasons) was 2012.
The Court also has an inherent jurisdiction to correct a duly entered judgment where the orders do not truly represent what the Court had intended to pronounce: see Newmont Yandal Operations Pty Limited v the J Aron Corporation and the Goldman Sachs Group, Inc (2007) 70 NSWLR 411; [2007] NSWCA 195 at [79].
In determining whether the slip rule or the inherent jurisdiction is engaged, it is relevant to consider how the issue of the date of the creation of the constructive trust was addressed at trial.
The issue of the date of creation was not expressly addressed by Mr Galatidis. In particular, he did not seek a declaration that identified the date on which the trust was created.
The issue was raised in closing written submissions by counsel for Mr Kallidis, delivered after oral argument. It was raised in the context of what were described as “preliminary tax submissions”. The submissions warned of complex tax consequences that may arise from the relief claimed by Mr Galatidis. They addressed matters depending on whether a constructive trust was “imposed” from 6 May 2016 or only with effect from the date of the Court’s order. The submissions concluded by noting that Mr Kallidis was not opposed to relisting the matter for directions or having the hearing re-opened to deal with the “myriad tax problems associated with achieving equity between the parties”.
In reply, it was submitted for Mr Galatidis that the concluding submission from Mr Kallidis was “odd”. The notion of there being any re-opening was opposed. It was submitted that the matter did not need to be re-listed before judgment being delivered. Mr Galatidis did not engage with the preliminary tax submissions.
There was no application to re-open the hearing or relist the matter prior to delivery of my judgment. I accepted Mr Galatidis’s submission that I should proceed to deliver judgment. My reasons did not engage with the substance of Mr Kallidis’s “preliminary” tax submissions. I did not address the question of the precise timing of the creation of the trust.
The issue of the date on which the constructive trust came into existence was not raised with me after I delivered reasons on 19 December 2025 but before I made orders, including the declaration, on 22 April 2026. There is no evidence that it was addressed between the parties in that period.
Had the issue about the timing of the creation of the constructive trust been raised for determination at trial on Mr Galatidis’s claim, some nice questions may have arisen. No doubt, Mr Galatidis could have submitted with some force that the constructive trust arose upon the transfer of the Mount Pritchard property to Mr Kallidis. However, there could have been an argument that Mr Galatidis only suffered a detriment, and Mr Kallidis’s conscience was only pricked, when the conditions for the retransfer of the property were satisfied. It is also noteworthy that counsel for Mr Kallidis accepted that that the events of March 2016 could give rise to a constructive trust, but argued that Mr Galatidis’s conduct after that time should deny him the right to relief (see my earlier reasons at [85]). Another consideration is that it may have been argued that the date for fixing the creation of the constructive trust should be moulded to protect the interests of third parties. I did not have to address that possibility.
At the time I made the declaration on 22 April 2026, had Mr Galatidis raised the question of the date on which the constructive trust was created, I would not “at once” have corrected the form of the declaration to make it clear that the trust was created on 14 May 2016 (being the date identified in the proposed new or corrected declarations): see Aurora Australasia at [31]. I would have recognised that the matter had some nuance and could properly have been the subject of argument. The possible room for debate reveals why this is not a proper occasion to apply the slip rule.
In distinguishing between an accidental slip or omission and the product of a deliberate decision, this case is properly seen as an example of the latter. The form of the declaration that was made mirrored in precise terms the declaration that the parties put forward as an appropriate form of declaration to give effect to my reasons. It was true to the form of declaration that Mr Galatidis sought in his pleading. The declaration gave effect to my first thoughts. Had I known at the time of making the declaration what has emerged since that time, I may have done something differently. But that would be the product of second thoughts, informed by argument, and outside the proper application of the slip rule.
I am not satisfied that either the slip rule or the Court’s inherent jurisdiction is engaged to either vary the form of the declaration that was made on 22 April 2026 or make a new declaration. It is too late.
The Court is not, however, relevantly without power to do anything. There is in place a detailed regime that gives effect to my earlier reasons. The regime contemplates the determination of a Payment Amount, to be paid by Mr Galatidis to Mr Kallidis. A component of the Payment Amount is the Indemnity Amount. The private binding ruling is to be obtained as part of the calculation of the Indemnity Amount. The orders contemplate that there may be some dispute about the Indemnity Amount, and that a referee may be appointed to resolve that dispute.
Given that Mr Kallidis has made the application for a private binding ruling pursuant to a direction of the Court, the Court has power to take some step if it comes to the attention of the Court that the application misstates the effect of my reasons and orders. An application for a binding ruling that misstates the effect of my reasons and orders does not conform with the direction I made that an application for a private binding ruling be made in relation to the income tax implications of Mr Kallidis “giving effect to the Court’s orders” (see order 5).
This does not involve me saying subjectively what I might have meant by the declaration. That would not be open to me: see Radmanovich v Nedeljkovic [2002] NSWSC 212 at [7], [14]. Nor does it involve altering the substance of an order already made: see Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201; [2007] NSWCA 104 at [52]. Rather, it is a consequential order that is required in the proper working out of my orders of 22 April 2026, arising because of a step purportedly but mistakenly taken by Mr Kallidis in fulfilling those orders. The order would give effect to my earlier orders, not change their effect.
I propose to make a direction that will compel Mr Kallidis to take steps to correct what I consider to be a misstatement in his application for a private binding ruling. Whether those steps have any bearing on the outcome of the application is a matter for the Commissioner of Taxation.
I make the following orders:
Direct Mr Kallidis within 7 days to provide a copy of these reasons to the officer of the Australian Taxation Office who has conduct of Mr Kallidis’s application for a private binding ruling, under cover of a letter that states:
(a) that the reasons are being provided pursuant to this decision; and (b) that the application made on 13 May 2026 misstates the effect of the reasons delivered on 19 December 2025 and orders made on 22 April 2026 insofar as it conveys that those reasons and orders had the effect of creating a constructive trust on and from the date of the orders.
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Galatidis
Kallidis (No 2)
(2007) 70 NSWLR 201
(1958) 100 CLR 342
(1985) 160 CLR 583
(2007) 70 NSWLR 411
(1987) 9 NSWLR 446