Menka Tasevska v Vlado

Credit issues 3It is common ground that the proceedings are rife with credit issues.

The seemingly critical issues 4In 1989 Larry and Susan Tasevski purchased vacant land at [...] ("The Fig Tree Property") and subsequently developed it. Only Larry and Susan's names are on the title. 5The ultimate dispute is centred on the relative contributions of the plaintiff (Menka) and the defendants (Susan and Larry) to the Fig Tree Property and what these contributions now entitle them to. 6The plaintiff's case is broadly as follows: (1)The plaintiff and her late husband Dusan are of Macedonian background, with little schooling or commercial sophistication. Their English language skills were and are very limited. Dusan worked in the steelworks and Menka was a housewife, raising their two children in the home. (2)In the early 1990s the plaintiff and her husband Dusan owned their own home in Shellharbour Road, Warrawong. They had two adult sons, Vlado and Peter. Vlado lived with them prior to marriage and once married, in 1988, he and his wife lived with them too. In due course three children were born to Vlado and his wife Susan. (3)On or around 4 May 1990 Dusan took voluntary retirement from his 'unskilled' work at the Steelworks, where he worked and received a payment of $75,000.00. He and Menka placed this money at the disposal of Vlado and Susan to build a house for them all to live in. Vlado and Susan promised that Dusan and Menka could co-own the home and live there with them for the rest of their lives and that they would take care of them as needed. (4)Menka and Dusan sold their home for $115,000.00 in December 1992, placing the net proceeds, $110,000.00 at Vlado and Susan's disposal to use to build a house for them all to live in. Menka and Dusan were taken by Vlado to see a solicitor. (5)In May 1993, after moving in to the residence, the parties signed a Deed of Agreement which inaccurately set out the oral agreement that Menka and Dusan had with Vlade and Susan. Their agreement with Vlado and Susan was that their names would be placed on the title as co-owners of the property. The document stated that whilst they could continue to occupy for the rest of their lives, they "acknowledge that they have no interest in the property". It also misstated the sum contributed as being "$100,000.00". No interpreter was provided and the solicitor spoke in English. They were not encouraged to seek independent legal advice. The document was not properly explained to them. Because they did not read English they were not sure what they were signing but trusted their son. (6)Menka and Dusan also provided another $30,000 for the purchase of furniture for the home but Vlado and Susan spent this only on dining room furniture. (7)Menka, Dusan, Vlado, Susan and their children all moved into it. (8)When the plaintiff and her late husband realised that they were not on the title, they confronted Vlado and Susan, who refused to change the title particulars to reflect the fact that Dusan and Menka were co-owners. The request to put their names on the title was repeated many times over the years. Dusan was quite ill at that time and, although a solicitor's letter was written to Vlado and Susan dated 20 July 1999 seeking return of the $75,000 and $110,000 paid to enable building of the home, no further legal action was taken at that time. (9)The plaintiff has undertaken a great deal of childcare over the years, for her grandchildren, whilst the defendants both worked outside the home. She has also undertaken a great deal of cooking, cleaning of the house, gardening, shopping for the family and made payments towards household bills. (10)Dusan died in October 1999, leaving his estate to his executor and sole beneficiary, Menka. (11)In April 2008 Vlado demanded and Menka refused to give him her pension. After that, the relationship soured further. Menka's access to amenities of the home, including hot water, TV, stove, phone was restricted. In August 2008 Menka stopped contributing to the household bills. Vlado told her that he wanted her to leave the house and later assaulted her and threatened to kill her if she did not leave the house. In fear, she left hurriedly, telephoned her other son, saw the police and only returned to get some basic clothing. She has not lived there since. 7It is the plaintiff's case that the property is held on trust for her in whatever proportion the Court sees fit, or otherwise she is entitled to payment relating to an equitable charge on the property.

The defendants' case 8In general terms the defendants' case sought to grapple with the entirety of the suggested chronology and in that regard the defendants' chronology proves to be of considerable utility, although not all items in the chronology are accepted in the reasons which follow Date Event 1933 Dusan Tasevski (Dusan) born in Macedonia 1937 plaintiff (Menka) born in Macedonia Pre 1960 Peco (Peter) Tasevski born 14.08.60 Vlado Tasevski (Larry) born 9.09.62 Dusan migrates to Australia 22.12.64 Date of transfer to Dusan of Shellharbour Road property 22.12.64 Dusan grants mortgage over Shellharbour Road property to Savings Bank of New South Wales 22.12.64 Caveat J887602 entered against Shellharbour road title in relation to mortgage dated 22.12.64 from Dusan 18.12.65 Menka, Larry and Peter migrate to Australia 1971 Dusan discharges mortgage to Bank of New South Wales Savings Bank Limited over Shellharbour Road property 30.11.77 Dusan grants charge to AGC (Advances) Limited 15.12.77 Date of AGC caveat Q511197 over Shellharbour Road property in relation to equitable charge granted by Dusan to AGC 13.07.79 AGC execute withdrawal of caveat Q511197 May-88 Larry marries Susan Tasevski (Susan) Larry and Susan move in with Dusan and Menka at the Shellharbour Road property. Susan takes Dusan (and Menka) to doctors' appointments Larry and Susan pay for half the groceries while living with Dusan and Menka Larry and Susan's eldest daughter is born while they are living at Dusan's place 14.02.89 CBA approve loan of $60,000 to defendants to help buy land to build a home 12.04.89 Larry and Susan settle the purchase of land at 35 Baker Crescent, Figtree 13.04.89 CBA write to Larry and Susan confirming that the CBA paid $71,827.67 on settlement made up of $11,827.67 withdrawn from their savings investment account and the $60,000 bank loan 1989 In family discussions Peter and Eliana do not want Dusan and Menka to live with them and all of them agree that Dusan and Menka will go and live with Larry and Susan 1989-90 Dusan tells Larry that Dusan will sell his house and give the money to Larry as a gift for taking Dusan and Menka and looking after them. Menka tells them that Dusan and Menka will also give some money to Peter and Eliana 1989-90 Dusan tells Larry that Dusan will provide $100,000 to Larry and Susan and also will give Peter and Eliana $10,000 1989-90 Larry tells Dusan and Menka that D&M will not have to pay for anything 9.03.90 Larry and Susan execute loan agreement for construction loan of $100,000 to be drawn in instalments as agreed secured by mortgage over 35 Baker Crescent, Figtree 25.06.90 Date of withdrawal of caveat J887602 by Harry and Bertha Wadds over Shellharbour Road property lodged by Morris Hayes & Edgar for Maguire & McInerney 12.03.91 Maguire & McInerney return Dusan's title deed to the Shellharbour Road property to Dusan following registration of a withdrawal of caveat 24.05.91 Larry, Susan, Dusan and Menka sign loan facility agreement with Westpac of up to $70,000 as a "Bridging Loan" secured by mortgage over 102 Shellharbour Road property and to be cleared on sale of that property in approximately 12 months (CB 362) 24.05.91 Dusan grants mortgage 696826H to Westpac securing the debt incurred by Larry, Susan, Dusan and Menka 23.04.92 Westpac write to Larry, Susan, Dusan and Menka confirming offer to increase facility limit from $70,000 to $82,000 17.07.92 Larry, Susan, Dusan and Menka sign loan agreement with Westpac increasing facility limit to $82,000 repayable on sale of Shellharbour Road property by 30 September 1992 (CB 369) 11.11.92 Larry and Susan Tasevski and Dusan and Menka Tasevski execute loan agreement for a bridging loan repayable the next month on 15.12.92 Pre-14.12.92 Larry, Susan, Dusan and Menka move from Shellharbour Road property to 35 Baker Crescent property 14.12.92 Dusan Tasevski settles sale of his property at 102 Shellharbour Road, Port Kembla for $115,000. The proceeds received on settlement of $103,456.22 were disbursed $100,643.12 to Westpac Banking Corporation, $1,769.90 to the defendants and $1,043.20 to Maguire & McInerney, solicitors for Dusan Tasevski (CB 376) Post mid-December 1992 Larry and Susan pay all bills and groceries from when Dusan and Menka move in. Dusan and Menka keep their pensions. 16.12.92 Westpac Banking Corporation notify Dusan Tasevski, the plaintiff and the defendants that the payment of $100,643.12 discharges the bridging loan made to Larry, Susan. Dusan and Menka and associated fees 17.12.92 Bevans Real Estate account to Dusan Tasevski for the balance of the deposit less commission c. 12.92 Dusan (and Menka) give/s $10,000 to Peter 31.12.92 Discharge of Mortgage I017009 by Dusan over Shellharbour Road registered 5.02.93 Larry and Susan Tasevski execute loan agreement with Westpac Banking Corporation to borrow $143,000, to be drawn in instalments Early 1993 Dusan asks Larry to take Dusan and Menka to a solicitor because Dusan doesn't "feel comfortable not having anything in writing". 26.05.93 Dusan, Menka, Larry & Susan sign agreement at Maguire & McInerney recording arrangements among them. The document is explained by Mr McInerney. Larry translated for Menka. Larry asks if Dusan and Menka want an interpreter and this is refused 20.07.99 Lawson Andonovski send letter to Larry on behalf of Dusan and Menka demanding $110,000 paid from sale of property and $75,000 allegedly advanced in 1991 from funds received on Dusan's voluntary retirement c. early August 99 Dusan and Menka apologise for letter and says they want to continue living with Larry and Susan 7.10.99 Dusan Tasevski dies Thereafter Menka continues living with Larry & Susan. They take her to the cemetery every Sunday and on special occasions when appropriate under Macedonian tradition. They take her on hairdresser's appointments, dressmakers' appointments, doctor's appointments, social engagements. Menka prepares her own breakfast and lunch and Susan prepares dinner. Menka does not prepare meals for the family. Menka does her own washing but not the family washing. Menka does not do dusting apart from her own bedroom and does not do grocery shopping until 6 months before she leaves. Menka tends the vegetable garden and gives all produce from it to Peter. Susan does the shopping and washing and Susan, with help from her three daughters, does the cleaning. 2001-2003 Susan assists Menka with psoriasis issues including wrapping Menka in cut up wet sheets 2003 Peter and Larry argue over Peter's conduct at Larry's 40th birthday party. Peter calls Larry and says he is going to take Larry and Susan's house 2003 Peter calls and tells Susan that Peter is going to take their house and Larry and Susan will be living in Susan's father's garage c. 10.08 Menka starts to buy her own groceries Menka packs 20.04.09 Peter receives call from work mate saying that Peter is at Larry's work yelling and screaming and Peter gets on the phone and says Larry must go home and Police are waiting Menka returns, collects some of her things and leaves the house and obtains interim apprehended violence order. Police tell Larry not to let Menka into the house unless the Police were there to supervise. All Menka's things have been put in boxes for collection. Menka and Peco return and Larry rings Police who attend and supervise. 15.07.10 Statement showing $384,134.06 owing in respect of ANZ mortgage

A brief examination of the several causes of action relied upon by the plaintiff

[Each of the following causes of action and claims to relief are heavily dependent upon the Court's findings of credit]

Contracts Review Act 9The plaintiff contends that the document signed in the solicitor's contract is an unjust contract which should be set aside and effect given to the real agreement between the parties, which was that Menka and Dusan contributed monies to the building of the home on the basis that they would both be listed as co-owners on the title to the property. The Contracts Review Act ('CRA') permits the Court to review contracts and to set aside "unjust contracts". 10Aspects of the contract that are claimed to give rise to material "unfairness" within the terms of Section 9 of the CRA are the fact that the plaintiff and her husband were clearly much less educated than their son and daughter in law, not experienced in property matters and not sophisticated commercial people. (See Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413; St George Bank Ltd v Trimarchi [2004] NSWCA 120; Small v Gray [2004] NSWSC 97; Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; Higgs v Thompson bht The Protective Commissioner [2006] NSWSC 920; Irvine v Irvine [2008] NSWSC 592). 11They did not speak much English and the contract was not translated to the plaintiff or her husband prior to signing it. They did not have legal advice or independent legal advice in relation to the contract. This was found to be an area of injustice in Khoshaba at [25]. ( See also Irvine v Irvine [2008] NSWSC 592 and Mighell and Anor v Gargoura and Ors [2009] NSWSC 248). 12Additionally, the plaintiff's husband appears to have been ill for at least some of the period during which these events occurred. 13The plaintiff claims that if there is injustice in the contract, then whether or not it was caused or contributed to by a party, it can be taken into account as a matter relevant to the exercise of discretion by the Court, pursuant to Section 9 of the Contracts Review Act ( Perpetual Trustee Co Ltd v Khoshaba , [2006] NSWCA 41 per Spigelman CJ at [93 - 97]). 14The plaintiff claims that if a finding of injustice is made under the CRA, then the remedial scope of the Court is considerable (see for example Irvine v Irvine [2008] NSWSC 592). In that circumstance the plaintiff seeks that the Court grant to the plaintiff financial compensation, or an order for sale of the house and division of the proceeds, including payment to the plaintiff of such sum as the Court may determine to be appropriate.

Unconscionable conduct at general law 15As already mentioned the plaintiff contends that she and her husband made a contribution on the basis that their names would be registered on the title as co-owners of the property, but they were not, to the knowledge of the registered owners. Accepting the contribution of Menka and Dusan Tasevska to the property and permitting them to believe that they would be co-owners, sell their home and invest the proceeds, as well as the voluntary redundancy money of Dusan and $30,000 towards furniture, constitutes unconscionable conduct and an unconscientious bargain ( Blomley v Ryan (1956) 99 CLR 362; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Bridgewater v Leahy (1998) 194 CLR 457).

Trust 16The plaintiff's contention is that it would be appropriate for the Court to declare a trust over such proportion of the value of the property as the financial contribution to the acquisition of the property represented ( Calverley v Green (1984) 155 CLR 242; Ryan v Dries [2002] NSWCA 3, Giumelli v Giumelli (1999) 196 CLR 101).

Equitable estoppel 17Representations were made by the defendants, Larry and Susan, as to future conduct, namely that the plaintiff and her husband could live in the premises as co-owners and would have a home for life. They altered their positions in reliance on those promises (by contributing financially and providing a great volume of work and personal services for the household). An equitable estoppel therefore arises ( Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Commonwealth v Verwayen (19990) 170 CLR 394; Morris v Morris [1982] 1 NSWLR 61; Baumgartner v Baumgartner (1985) 2 NSWLR 406). 18Menka seeks that the contribution she and her husband have made to the property be recognised, either by the imposition of a remedial trust or order pursuant to the Contracts Review Act . The plaintiff's valuation indicates that the property is worth approximately $700,000. The plaintiff, Menka, seeks that either trustees for sale be appointed or the property be sold by judicial sale or, alternatively an equitable charge be imposed on the property. 19It would be desirable for all concerned for a "clean break" (see Sullivan v Sullivan & Ors [2006] NSWCA 312 per Handley J at [48] and Young, Croft and Smith On Equity , Thomson Reuter, 2009 at 14.240). The plaintiff seeks to re-house herself appropriately in her own home.

Returning to the disputes as to the contributions 20In general terms the respective contentions are as follows: The plaintiff claims to have made the following contributions: (1)$75 000 to the defendants from Dusan's early retirement pay out which was to go towards the building of the Fig Tree Property (paragraph 14 of Statement of Claim); (2)$110 000 from the net proceeds of the sale of the Port Kembla property (paragraph 15); (3)$30 000 towards the purchase of furniture for the Fig Tree Property; (4)Considerable household services to the defendants (paragraph 28); (5)Contributions towards household bills (paragraph 29). 21The defendants dispute these contributions, arguing: (1)The Fig Tree Property was purchased using $60 000 borrowed in their names from the Commonwealth Bank; (2)In exchange for allowing Menka and Dusan to live with the defendants for life and not pay any bills, Dusan gave a gift of $100,000 to the defendants from the sale of his Port Kembla home; (3)This $100,000 gift was used for: (a)$70 000 bridging loan from Westpac on 24 May 1991; (b)Increase to $82 000 on 23 April 1992; (c)Further increase on 11 November 1992; (d)The gift actually totalled $100 643.12 when paid.

The 26 May 1993 agreement 22One of the key disputes concerns the 26 May 1993 agreement. 23The document sets out an agreement where by Dusan and Menka gifted $100 000 to the defendants. The agreement states that this gives them no interest in the Fig Tree Property. However, due to this gift, Menka and Dusan were promised they could live expense free for life at the Fig Tree property. The agreement is signed by Dusan, Menka and both defendants. 24The defence alleges that this document was brought about at the request of Dusan as he had given $100 000 to the defendants and wanted the oral agreement in writing. The plaintiff alleges that she was told to sign the document, did not understand it and did not have an interpreter present (paragraph 22-26 of Affidavit of Menka Tasevska 16 March 2010).

Issues in cross-examination 25The cross-examination was directed at discrediting Menka's account. While a number of minor issues were raised, there were four key issues of note: (1)The defendants put to the witness that she knew the contents of the 26 May Agreement and her son translated it for her. The defence also pointed to Exhibit P2, which is a letter from Maguire & McInerney Solicitors enclosing a draft of the 26 May Agreement which proves that Dusan and Menka had time to consider the agreement. The plaintiff maintained she didn't recognise the document. She admitted to signing a document on 26 M Cth ay 1993 but at the direction of her son without understanding it. The defence countered that her husband who spoke "reasonable" English must have understood it. (2)Menka claims her and her husband realised their names were not on the title of the property when she received water and council rate bills addressed solely to Larry and Susan. Dusan and Menka's names were absent. (3)The defence questioned whether Menka could even read the bills due to her limited reading skills and how Menka identified what the bills were as they were always sealed in envelopes. (4)The defence also proved that at the Port Kembla residence (on which Dusan's name was on the title) the bills were also addressed to Larry and Susan (Exhibit D2) and thus it is not plausible that bills being addressed solely to the defendants would raise any suspicion.

The documentary evidence 26The documentary evidence seems to strongly support the defendants' oral evidence, while providing little, if any support to the plaintiff. This is true in the following regards: (1)There is no evidence of the $75 000 retirement contribution existing. There are no bank records, no records of transfer or any other documents. The only time such an amount was mentioned was in a letter from Lawson Andonovski Solicitors addressed to the defendants (Annexure E to Tasevski's affidavit 12 May 2010). (2)In the above letter, which was supposed to address Menka's concerns over the property, there is no claim that the defendants have left Dusan and Menka's names off the title. If this were a serious issue of contention as stated in the plaintiff's affidavits, one would expect it to be raised by her solicitor. Instead, the solicitor's letter is more consistent with the defendants' explanation of the arrangement as to title. (3)Menka was cross-examined over a purported will (Exhibit D3) in which she listed at length all her possessions. In this will she left property in Macedonia to her grandchildren but did not mention any interest in the Fig Tree property. This is consistent with the defendants' contention that Menka did not have any interest in the property. (4)There is no evidence of Dusan providing $30 000 to the defendants, nor an explanation of how he acquired such a large sum of money when his only earnings were from a pension. Further, the defence indicated that Peter Tasevski's first affidavit made no mention of this $30 000. It was only mentioned in the second affidavit. (5)Evidence given by the Tasevski's neighbour, Miriana Nedeski, indicates that despite Menka's denial in the witness box of being aware of the May 1993 agreement, Menka told her neighbour on numerous occasions about an agreement that required the defendants to take care of her.

Shortly dealing with the evidence given by Mr and Mrs Tasevska 27Both Peter and his wife made affidavits and were shortly cross-examined on them. They of course may be seen as vitally interested in the outcome of these proceedings. In truth, subject to only one or two areas of disagreement, neither of these witnesses added very much by way of concrete information of a type which the Court could rely upon. Peter had only in his second affidavit mentioned that his father had told him that he had given $30,000 to Larry with which to purchase furnishings in the house. This was hearsay evidence and is suspect for the reason that it had not been included in Peter's first affidavit. 28Peter also gave evidence that his father had carried out all the shopping in terms of groceries, as I understand it, when he was sufficiently healthy. 29Eliana Tasevska gave evidence of the rift between the two families which occurred at her sister-in-law's 40th birthday party. She recalled one occasion when she and her husband went over to her in-laws only to find that her in-laws were required to stay in the family room and not allowed to come into the dining room because of the falling out. She also gave evidence that it was possible that she had heard from the plaintiff and Peter a number of complaints about Mary and Susan since 2008.

The evidence of the plaintiff 30The evidence of Menka left much to be desired . 31Her evidence was given through an interpreter. Her first answer, when being shown her husband's signature on his will and being asked what the document was, involved her saying that she could not recall whether her husband made a will at all. On being shown a letter from Maguire and McInerney Solicitors addressed to herself and her husband enclosing draft wills prepared in accordance with their instructions, her answer was that she did not know the letter at all. She was asked whether back in 1993 she contacted a solicitor and asked a solicitor to draw up a will for her and her answer was I do not know, I do not remember. 32Her powers of recall were on significant areas shown to be faulty. 33Whilst it may be appropriate to observe that the first several pages of her transcript were perhaps due to her anxiety in being in a witness box, the fact is that the documentary evidence on numerous occasions was disparate to her own evidence. 34On the major issue of the meeting with Mr McInerney her evidence included the following : Question What happened when you met with Mr McInerney? Answer I don't know, we went there, they were talking with Vlade and Susan, Dusan and I would just listening, we didn't understand. Neither Dusan nor me, we did not understand. Question [Transcript 40] when you were in Mr McInerney's office, did Mr McInerney speak about each part of the document you were asked to sign.? Answer I'm sorry I don't understand this response, he took us there, Dusan didn't know what to say anything, well ... how to say anything, he didn't know what we went for. 35The cross-examination on a number of occasions sought to elicit from the plaintiff the fact that her husband had having been at work in Australia for some considerable time achieved a familiarity with a number of common English terms. 36In general terms the plaintiff did not agree. 37When the evidence of Larry and Susan was taken they both said that not only Dusan but also the plaintiff had some familiarity with the English language although Dusan had more familiarity than the plaintiff. 38In truth and having listened carefully to the cross-examination of the plaintiff, the combination of her very poor recall on many areas, combined with the documentary evidence before the Court, permits a finding that in most cases strongly support the defendants' oral evidence. In the circumstances proven before the Court there is no justification for the plaintiff's contention that the subject contract is shown to be an unjust contract which should be set aside

The circumstances that led to Menka leaving 39It is unfortunate that the circumstances leading to Menka leaving the defendants' home were not the focus of oral evidence or cross-examination. Essentially the Court was left with the bald contradictory assertions of wrongdoing leading it seems to a magisterial holding. 40During the hearing there was a contest as to whether or not the local Court's transcript and decision on the occasion of the plaintiff's application for an apprehended violence order was admissible. The Court indicated that the materials would be taken in as an MFI, treated with as on a voire dire and that the parties would only learn when the judgment was handed down, whether or not to that material had been found to be admissible. In my view that material is inadmissible so that it is not before the Court. 41As with many of the issues in this case, the parties' accounts differ.

The plaintiff's account 42The plaintiff claims that following Dusan's death relations between her and the defendants got progressively worse. 43In a section titled "Life Since 2008" in Menka's 16 March 2010 affidavit, Menka claims the defendants curtailed her activities, including restricting her access to: (1)The oven and cook top (2)Telephone (3)Television (4)Bathroom 44This conflict on her evidence culminated in two alleged threats made by Larry to Menka including the words "I'm going to get you. I'm going to kill you". 45The plaintiff's evidence was that she finally left the defendants' house on 20 April 2009 after allegedly being shaken by Larry and told "I'm going to kill you. Even if I have to serve a jail sentence..." 46Peter and his wife Eliana gave similar accounts, but as highlighted by defence counsel, since 2003 neither Peter nor Eliana entered the defendants' home and thus their accounts were largely based on what they were being told by Menka.

The defendants' account 47In both cross-examination and Larry Tasevski's 12 May 2010 affidavit "Reply to Menka Tasevska" he denies these allegations. 48Larry alleges the conflict arose from a 2003 family dispute which culminated in Peter resolving to take Larry's house and force his family onto the street. 49From this point on Menka became more distant from the defendants' family. 50The defendants deny assaulting Menka or making life difficult for her by cutting off her access to appliances. 51Susan also denied that Menka made a large contribution to household chores.

The Court's finding 52The parties' accounts differed and the Court found it difficult to accept either party's evidence in full. 53The Court has already expressed concerns over the plaintiff's evidence. These concerns are particularly acute in this regard, as by Menka's own admission, all of the alleged assaults occurred without witnesses. Further, as pointed out by defence counsel, after the alleged assault on 20 April, Menka delayed calling the police until 2.30pm and instead went to the Macedonian Club. She did not tell any of her friends at the club of the assault. 54The defence's evidence is also not accepted in full. The Court had difficulty in accepting all of Susan's account, especially in relation to Menka playing little role in supervising her children. It is difficult to accept that Susan frequently went to work and left the children with Menka, yet Susan denies Menka played a significant role in caring for her children. 55Susan also showed bitterness towards Menka. An assessment of her demeanour in the witness box makes it difficult for the Court to accept that she treated Menka with the utmost respect and courtesy as relations began to sour between them. 56Based on this, it is impossible to attribute blame solely to either party. Both sides are responsible for the current state of affairs.

Relief 57The Court has considered a number of approaches in deciding on the appropriate remedy. The ultimate consideration was which approach would do equity to both parties ( Morris v Morris [1982] 1 NSWLR 61 at [64]). 58After carefully considering the evidence and counsel's submissions, I have found that an equitable lien over the Fig Tree Property is the most appropriate instrument with which to grant relief 59Before proceeding to discuss this remedy, I have sought to value both the Fig Tree Property and Menka's contribution.

Valuing the Fig Tree Property 60In assessing the plaintiff's interest, it is important to have an accurate value for the Fig Tree Property. 61The defence tendered an affidavit by David Bird of Kohler Bird Appraisals. Mr Bird has 27 years experience. Through a process explained in his affidavit, Mr Bird arrived at a value of $700 000. The defence accepted this valuation. There was some cross examination concerning Mr Bird's qualifications and experience in valuing finished houses but this was not sufficient to doubt the accuracy of the $700 000 valuation.

Menka's contribution to the Property 62There were competing claims throughout the hearing as to what Menka's contribution to the Fig Tree Property was. The Court has been careful to weigh up the oral and written evidence. Given the Court's finding on credit and the documentary evidence, the only value supported by evidence is $100 643.12. This relates to the discharge of the Westpac mortgage on 14 December 1992.

Constructive Trust 63I start by considering a remedial constructive trust, as this is the most common form of relief in cases of this nature. See Muschinki v Dodds (1985) 160 CLR 583, Henderson v Miles (No 2) [2005] NSWSC 867, Kriezis v Kriezis [2004] NSWSC 167. 64In Muschinki v Dodds, Deane J at [13] explained the rationale behind the remedy as: "...where money or other property is paid or applied on the basis of some consensual joint relationship or endeavour which fails without attributable blame, it will often be inappropriate simply to draw a line leaving assets and liabilities to be owned and borne according to where they may prima facie lie, ... If... the relevant relationship is merely contractual and the contract has been frustrated without fault on either side, the present tendency of the common law is that contributions made should be refunded at least if there has been a complete failure of consideration in performance" 65From the evidence it is clear that Menka did contribute to the property and a denial of her interest would leave the defendants with an unconscionable windfall. Thus at first glance it would be possible for a constructive trust to be ordered in proportion to her contribution. However this requires further consideration in the instant circumstances.

Consideration 1: the May 1993 agreement 66The Court accepted the evidence of the defendants in reference to the May 1993 agreement. Therefore, any finding of a constructive trust would give Menka an equitable interest in the property. This would be contrary to the intentions of the parties. 67This poses no problem as since Muschinski v Dodds (1985) 160 CLR 583 the constructive trust has been recognised as a remedial institution. 68Wright, D. in "The Remedial Constructive Trust" writes: "The legal justification for the imposition of a constructive trust in the remedial theory is the principle of improper gain" " Butterworths 1998 at p.3. It is unconscionability rather than intention that lies at the heart of this remedy. Baumgartner v Baumgartner (1987) 164 CLR 137 at 147-148 and Young, Croft, Smith, On Equity, Thomson Reuters (2009) 6.670. 69On this basis, the constructive trust, works independently of the parties' intentions. It is imposed where one party would retain an unconscionable windfall if the other's interest in the property was not recognised. See Henderson v Miles (No 2) [2005 NSWSC 867 at [13] 70Given the unconscionable windfall that the defendants stand to retain if the agreement is enforced, the parties' intentions pose no barrier to the imposition of a constructive trust.

Consideration 2: Attributable blame 71Mr McGrath submitted that even if the Court were to favour a constructive trust, Menka should not be entitled to relief as the relationship broke down because of her behaviour. Mr McGrath submitted that 'attributable blame" is an essential element of relief per Baumgartner v Baumgartner (1987) 164 CLR 137 and Taylor v Streicher [2007] NSWSC 1006 per McDougall J. 72The concept of attributable blame has received considerable attention over the years. 73In McKay v McKay [2008] NSWSC 177, Brereton J adopted (at [16]) what was said by Bryson J in Bennett v Horgan (in a passage that has been approved by Burchett AJ in Kriezis v Kriezis [2004] NSWSC 167 (at [23]), and by Campbell J (as his Honour then was) in Hill v Hill [2005] NSWSC 863, at [35]): The concept of attributable blame must be understood and applied with some tolerance; in my view it does not call for a judgment attributing blame among members of a family for the continuing relationship becoming intolerable, unless perhaps in particularly gross cases. Such judgment would be difficult and unreliable, as it is rare indeed that something or other which could be said to be a ground for blame cannot be identified and laid to the charge of each of the persons concerned. Leaving gross cases involving criminality or similarly reprehensible behaviour on one side, it should usually be understood, in my opinion, that where personal relationships deteriorate and the sharing of a dwelling becomes intolerable to some or all of those concerned, there is, within the meaning of Deane J's expression, no attributable blame and the case is one for an equitable adjustment. 74Austin J in Palinkas v Palinkas [2009] NSWSC 92 (at [52]) said: The parties clearly have strong views as to whether there has been attributable blame for the breakdown of their relationship, but this is not the case where, on the evidence, there is clear wrongdoing on one side while the other is manifestly faultless. Rather it is a case of a relationship gradually turning sour through incremental events where thoughtless conduct appears to have been matched by undue sensitivity. ... Considering the evidence as a whole, I would not conclude that there is "attributable blame" on either side for the purpose of applying the equitable principles espoused by Deane J. 75In my view the present case is a paradigm example of the above observations. 76Whilst it is true that the plaintiff is disbelieved (1)in that section of her proceedings in which she claimed that she and her husband had been promised by their son and daughter-in-law that their names would be placed on the title as co-owners of the [...] home, (2)in relation to her claims of a $75,000 retirement contribution and as to her claims that her husband provided $30,000 to the defendants, there remain other areas of her claims to be considered. 77Standing back from the minutiae which characterised the whole of this unfortunate litigation, the Court finds it extremely difficult to believe that : (1)Larry and Susan never argued with the plaintiff and on every occasion over the years when they lived together were the epitome of perfect behaviour towards the plaintiff. (2)plaintiff was herself the epitome of perfection in her behaviour towards the defendants. 78Human nature being what it is, there would obviously have been be many occasions where family squabbles occurred, sometimes caused by one side of the family and sometimes caused by the other. 79As to the circumstances leading to the application for an apprehended violence order, there is insufficient evidence one way or the other as to whether or not as the plaintiff contended, her son manhandled her and treated her roughly. However having observed Larry in the witness box I cannot accept that he would have threatened to kill his mother. Rather, as I see it, the whole exercise can simply be put down to the case of a relationship gradually turning sour through incremental events. But human nature being what it is, no members of any family are blameless and sometimes, with the best will in the world, both sides bear the responsibility for goading each other in a fashion which goes too far.

Consideration 3: More than the minimum equity 80If the Court were to find a constructive trust, exactly how Menka is to exercise her right is still the subject of judicial and academic debate. Pound R, "The Progress of the Law- Equity" (1920) 33 Harvard Law Review 420 explains that a constructive trust may or may not give rise to a proprietary interest. The complexities in defining a constructive trust are further discussed by Young, Croft and Smith On Equity, Thomson Reuter, 2009 at [6.690]. 81It is this difficulty in implementation, amongst others, that prompted the High Court in both Bathurst City Council v PWC Properties Pty Limited (1998) 195 CLR 566 at [585] and in Giumelli v Giumelli (1999) 196 CLR 101 [113] to state that before a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust. 82In determining whether to impose a constructive trust and then in deciding the form and scope of the trust, it is necessary to look to the circumstances of the case to decide how the equity can be satisfied ( Bathurst City Council v PWC Properties Pty Limited at [585]. Whatever will be the minimum relief necessary to satisfy the equity should be the form of remedy imposed ( Giumelli v Giumelli at [10]). 83Considering this, the Court does not accept that forcing the defendants to sell their house to satisfy Menka's interest is the minimum equity to do justice between the parties. Alternative remedies must be sought.

Equitable lien 84An equitable lien or charge is often employed in cases where the imposition of a constructive trust would be inappropriate. Counsel pointed the Court to the authority of Taylor v Streicher [2007] NSWSC 1006 which has been of much assistance. Other notable examples are Morris v Morris 1982] 1 NSWLR 61 and Stoklasa v Stoklasa [2004] NSWSC 518. 85Academia has also engaged in lengthy discussion as to the appropriateness of this remedy as an alternative to a constructive trust. See Burns, Fiona R "The Equitable Lien Rediscovered: A Remedy for the 21st Century" (2002) 25(1) UNSWLJ 1. 86In determining the appropriate equitable charge, the Court considered: (1)The value of the Fig Tree Property; (2)Menka's Contribution; (3)Any factors which should impact upon Menka's contribution; (4)The amount of Menka's interest already exercised; (5)Interest.

The value of Menka's equitable lien 87Ms Tibbey provided useful guidance as to how Menka's interest should be calculated. 88The plaintiff and her husband contributed $100,643.12 of the $280 000 cost of Fig Tree and its subsequent development. This entitles them jointly to a 35.9% share of the $700 000 property or $251,300.00. 89In considering this interest, I accept Mr McGrath's submission that the initial contribution was in consideration of a life interest for both Menka and Dusan. Dusan was effectively cared for his entire life and therefore the initial contribution must be halved to represent Menka's share. 90Menka's interest is therefore $125 650.

Adjustment for contributions 91This contribution may be subject to a range of adjustments; see Baumgartner v Baumgartner (1987) 164 CLR 137. 92The content of these adjustments was the subject of lengthy submissions by counsel. 93The plaintiff submitted the initial $ 100 643.12 should be increased on account of the following factors: (1)Menka undertook considerable housework, child care, gardening and shopping responsibilities whilst living at 35 [...]; (2)she and her husband purchased groceries for the household and contributed from time to time on household bills until the death of Dusan in October 1999; (3)she has contributed since Dusan's death the sums of $100 for electricity, $100 for water bills, 50 per week to groceries and $50 per telephone bill, until August 2008; (4)the contribution of $30,000 towards furniture (5)the contributions of various amounts of $100 - $300 during construction when Vlado approached Dusan seeking a contribution (6)the fact that the defendants have had full use of the [...] property since 20 April 2009, without housing the plaintiff; (7)the plaintiff's expectation that she would have been able to live there until her death; (8)the circumstances of her leaving, including withdrawal of services and threats being made to her; (9)the standard of accommodation of the Warrawong home (10)if the interest is proprietary, then it would be one capable of being passed on. 94The defendants argued that the equitable charge should be reduced in line with the authority set out by McDougall J in Taylor v Streicher [2007] NSWSC 1006. The Court was asked to pay particular attention to the fact that: (1)Dusan received accommodation and care for life. (2)Menka received care from 14 December 1992 through to 20 April 2009, some 17 years. (3)On the plaintiff's evidence, Menka has a life expectancy of 15.6 years

Valuing the adjustments 95At the outset a number of the plaintiff's claimed contributions must be rejected due to the Court's hesitance to accept the accuracy of her evidence. The following contributions are rejected: (1)she has contributed since Dusan's death the sums of $100 for electricity, $100 for water bills and $50 per telephone bill, until August 2008; (2)the contribution of $30,000 towards furniture; (3)the contributions of various amounts of $100 - $300 during construction when Vlado approached Dusan seeking a contribution 96As for the plaintiff's contentions as to the circumstances that led to her leaving the house, the events are uncertain. The burden of proof lies with the plaintiff in this regard and in the absence of sufficient evidence, I do not accept she is entitled to an adjustment. 97However, for the remaining contributions Menka deserves recognition. 98In relation to domestic contributions, it is well settled that such contributions are recognised in equity; see Baumgartner v Baumgartner (1987) 164 CLR 137 at 155-6; per Gaudron J; Bryson v Bryant (1992) 29 NSWLR 188 at 203-4 per Kirby P. However, how to accurately value these contributions in light of sparse evidence as to their value to the property over which the equitable charge relates is difficult. In one of the principle cases on the issue Anson v Anson [2004] NSWSC 766, Campbell J at [49] expresses this difficulty stating: " ... it is only at the level of broad impression that a conclusion can be arrived at about what has been established concerning the proportionate contributions made to the present value of the property." 99His Honour follows with setting out the principle to be considered, explaining: "In arriving at even those broad impressions, I bear in mind that it is only to the extent to which it is established that it would be unconscionable for the proportionate beneficial interests to lie in accordance with the legal title ...." that an adjustment (in that case a constructive trust) should be made. 100In valuing Menka's contributions, one cannot neglect the significant care Menka also received over and above the defendants' contractual obligations. One such example given in evidence was Susan wrapping Menka in sheets during a period of psoriasis. This sort of care was clearly beyond what was envisaged in the May 1993 agreement. 101However, it is undoubtedly the case that Menka cared for the defendants' three girls, especially when Susan was at work. Without this contribution, Susan would have had to have found paid care for her children. I note however, that for much of this time, the children were at school. On this basis, I afford Menka an extra 5% interest in the Fig Tree Property to account for the surplus valuable contribution she made to the familial life of the defendants. It was this contribution valued at $35,000 that allowed Susan to carry out part time work. 102There is one further area with which the Court grappled. This is the payment of Menka and Dusan for groceries both while Dusan was alive and following his death. Susan admitted that Menka frequently shopped with a trolley of her own and paid for those groceries herself. These payments were clearly in violation of the May 1993 agreement. 103It is unfortunate that no evidence was presented by the defence as to how much was expended on groceries over time. The only reference was a $50 a fortnight contribution following Dusan's death. Without any other evidence as to value, I have added $50 a fortnight to Menka's contributions for the period following Dusan's death in October 1999 until her departure from the house in April 2009. This is 10 years and 7 months, resulting in an additional contribution of $13,700. 104Therefore considering the adjustments put forward by counsel, Menka's entitlement is $174,350.

Re-adjusting the equitable lien 105The equitable lien must undergo two further adjustments to produce a fair sum of compensation. 106The first adjustment is that advocated by the defence. This is the calculation performed by McDougall J at [66] -[67] which adjusts for life expectancy. The plaintiff submitted that the life expectancy of a woman of Menka's age is 15.6 years. With respect to Ms Tibbey, I was unable to locate this figure in the "Population Projections, Australia 2006 - 2101" published 4 September 2008 to which she pointed the Court. 107The Australian Bureau of Statistics did have another table titled "Life Tables, Australia 2007-2009" released on 8 December 2010. This table indicates that the life expectancy of a 74 year old woman is 14.5 years. This is the figure on which the Court will proceed. 108In line with Mr McGrath's submissions, for just over 15 years the plaintiff lived with the defendants. From the time of the contract until Menka's expected death (according to the table) it was envisaged she would live with the defendants for 29.5 years. This means Menka's residual interest is 14.5 / 29.5. In other words, Menka is entitled to just under half of the remaining contribution. 109This reduces the amount to $85,697.46. 110McDougall J also made a contingency adjustment in case the plaintiff decided to leave voluntarily. I am not convinced that on the terms of the May 1993 agreement a similar contingency adjustment should be made. Menka had few financial resources and needed familial care. The likelihood of her leaving the defendants' home in circumstances other than conflict is extremely low. It would be inappropriate to make such an adjustment. 111Finally, this entitlement must be altered for interest as advocated for by the plaintiff in line with McDougall J's formula in Taylor v Streicher at [68]. Interest should run from 20 April 2009, the day on which Menka left the defendants' home, at the prejudgement interest rate. 112The final equitable lien is $85,697.46 plus interest accruing from 20 April 2009. 113The advantage of awarding an equitable lien as opposed to an interest in the Fig Tree Property through a constructive trust is that Menka's detriment can potentially be remedied without the need for the defendants to sell the property. The equitable lien rather recognises that Menka has a right to be paid and that debt is referable to the Fig Tree Property. Of course, failure to pay this debt may result in an order for sale Ell v Cisera [2001] NSWSC 242.

Alternate relief 114In coming to its conclusion, the Court considered other forms of equitable relief.

Proprietary Estoppel 115The remedy of proprietary estoppel was closely examined. This would ensure that the expectation upon which the money was advanced to the defendants was fulfilled. This approach has received much support in the High Court. 116In Commonwealth v Verwayen (1990) 170 CLR 394 Deane J states: "The central principle of the doctrine is that the law will not permit an unconscionable - or, more accurately, unconscientious - departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation." 117However, his honour qualifies: "the prima facie entitlement to relief based on the assumed state of affairs must, under a doctrine which is of general application in a system where equity prevails, be qualified if it appears that that relief would exceed what could be justified by the requirements of conscientious conduct and would be unjust to the estopped party." 118Despite the apparent utility and fairness of the estoppel approach, it is clear from the evidence that it is not desirable for Menka to return to the defendants' house. This would not be in the interests of either party and would lead to further conflict. Menka's prima facie entitlement must be qualified to prevent injustice to both the plaintiff and defendants.

An alternate to estoppel 119While estopping the defendants from denying Menka's right is undesirable, the High Court in Commonwealth v Verwayen ( 1990) 170 CLR 394 recognised that more flexible remedies are available, provided they fulfill the over riding purpose of curing the detriment suffered: "Equity was concerned, not to make good the assumption, but to do what was necessary to prevent the suffering of detriment" [411]. 120This flexible approach is particularly favoured as it provides for a clean break see Giumelli v Giumelli (1999) 196 CLR 101 [113-114]. 121The essence of the contract was that in exchange for the gift, Larry and Susan would care for Dusan and Menka for life. Allowing them to walk away from this obligation would be inequitable. 122Guidance in achieving this objective is provided by Gzell J in Stoklasa v Stoklasa [2004] NSWSC 518 at [42]: "In the tragic circumstances of this breakdown in family relationships it is inappropriate that the defendant should take the plaintiff back into the house. It seems to me that the appropriate form of order is an equitable charge over the house in favour of the plaintiff for the value of the obligation to provide him with care and accommodation as at 1 November 2002 plus interest thereon and for an inquiry to be made by a Master to determine the amount of the charge." 123Such an order was cited by Young CJ in Eq with approval in Henderson v Miles (No 2) [2005] NSWSC 867 at [53 - 54]. 124While this remedy is favourable in the sense it will best fulfil the agreement of the parties without imposing the injustice of forcing them to live together, valuing Menka's life interest is extremely difficult and uncertain. 125In rejecting the above approach, Brereton J cited similar concerns in McKay and Anor v McKay [2008] NSWSC 177 at [37]: "The practical problems of the Stoklasa approach in a case such as the present involve the difficulty of valuing, not just the lifetime right of residence, but the right to receive care. Personal injury cases of seriously disabled plaintiffs show that the cost of care can be enormous. It is quite unknown whether, and if so for how long, Mr McKay would require intensive care in the future. While, as in common law personal injury cases, an estimate can be made, it is an unsatisfactory approach in the context of Mr McKay's reduced life expectancy, where the risk of error and consequent injustice is magnified in quantum." 126For this reason, the Court preferred an equitable lien.

The probate issue 127During the proceedings Ms Tibbey requested the Court appoint Menka as executor of Dusan's estate. She stated in submissions that this would only be necessary if the Court was to find a later will or if the Court accepted Mr McGrath's argument that Menka's claims were a nullity because the proceedings were brought by an executor named in the will but without probate ( Darrington v Caldbeck (1990) 20 NSWLR 212 ). The Court has not found it necessary to consider this argument, as it is clear Menka has brought the proceedings in her own name, not in reference to Dusan's estate. 128For this reason, it is innapropriate for the Court to grant probate. The usual procedures should be followed should Menka wish to do this.

Costs 129It is important to also make clear that it was indeed unfortunate that the plaintiff and her husband were not given the courtesy of being taken to an entirely independent solicitor. That circumstance should not be forgotten notwithstanding that the defendants had not been shown to have misled their parents. To my mind much of the conflicts and misunderstandings had their genesis because of the lack of courtesy and this will become one of the areas where the parties may address on costs.

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: 17 March 2011