Plaintiff v Defendant

1 Mr Giurina seeks leave to file a caveat over the property at 120 Elizabeth Street, Geelong West VIC 3218 (certificates of title volume 6451 folio 142 and volume 6835 folio 810) ('the Property').

2 The reason Mr Giurina requires leave is that he has filed caveats before which have arisen in the context of numerous court proceedings including appeals, all of which have been unsuccessful. On 9 March 2023, Matthews AsJ (as her Honour then was) ordered the removal of two caveats and restrained Mr Giurina from lodging any further caveat without leave.[1]

3 Mr Giurina relies on an affidavit sworn on 28 September 2023 which is extensive and exhibits previous affidavits (including one sworn 12 August 2023 in another proceeding) and transcripts and judgments. One of the judgments exhibited is the decision of Matthews AsJ in Greater Geelong City Council v Giurina & Anor ('Geelong Council Decision'),[2] which traversed similar issues to this proceeding and contains an extensive summary of the long history of Mr Giurina's disputes with the Greater Geelong City Council ('Council').

4 Mr Giurina's aunt, Ms Nacinovich died on 10 February 2002. By her will dated 26 March 1995 ('the will'), Ms Nacinovich named Mr Giurina as the sole executor of her estate and gifted the Property to him. The terms of the gift relevantly provide:

I give devise and bequeath my land and house (including all chattels therein) situated at 120 Elizabeth Street, Geelong West ... to Ermanno Giurina ... for his own use and benefit absolutely ...

I give devise and bequeath the rest of my estate to my trustee upon trust to sell call in and convert into money ... and after the payment of my just debts funeral and testamentary expenses and death estate and succession duties State Federal or otherwise to hold the residue upon trust for the following in equal shares ...

and thereafter are named two people who are not involved in the proceeding.

6 Probate was granted to Mr Giurina on 13 September 2002, and by operation of s 13 of the Administration and Probate Act 1958 (Vic) the Property vested in Mr Giurina at that time.

7 Mr Giurina now says that he (as executor) is trustee for himself (as beneficiary) pursuant to a constructive, resulting or implied trust arising as a result of his personal expenditure (as opposed to his expenditure as trustee) in relation to the Property. Upon that basis, Mr Giurina says he has a caveatable interest and ought to be given leave to lodge a caveat recording that interest. Mr Giurina also says the Property was given to him absolutely by the terms of the will and is not available to satisfy any debts arising out of his administration of the estate.

8 A summary of the proceedings is set out in the Geelong Council Decision.[3] The following is extracted largely from that decision.

9 On 12 August 2019, the Council made an emergency order under s 102 of the Building Act 1993 (Vic) concerning the Property. Mr Giurina requested that the surveyor cancel that order, and the surveyor refused. Mr Giurina appealed the surveyor's decision to the Building Appeals Board. On 6 September 2019, the Building Appeals Board dismissed Mr Giurina's application.

10 On 10 September 2019, in his capacity as executor of the estate of Ms Nacinovich ('the estate'), Mr Giurina commenced a judicial review proceeding in this Court (S ECI 2021 02603) against the Council seeking a review of the Building Appeals Board decision ('Judicial Review Proceeding'). On 9 March 2021, Mr Giurina's application was dismissed[4] and on 17 November 2021, a costs order was made (after taxation) against him in his capacity as executor of the estate in the amount of $46,915 ('JRAL Costs Order').

11 Mr Giurina, as executor, sought leave in the Court of Appeal to appeal the outcome of the Judicial Review Proceeding (S EAPCI 2021 0044). That proceeding was also unsuccessful[5] and the Court of Appeal made a costs order against Mr Giurina in his capacity as executor on 7 December 2021, fixed in the amount of $40,000 ('Appeal Costs Order').[6]

12 On or around 2 February 2022, Mr Giurina made two applications for instalment orders in relation to the costs that had been awarded against him. On 7 March 2022, the Court refused both applications.

13 On 30 March 2022, the Council issued warrants of seizure and sale against the Property for payments of both costs orders.

14 On 8 May 2022, Mr Giurina in his capacity as executor issued a summons in the Judicial Review Proceeding seeking orders that the warrants be cancelled or withdrawn. On 24 May 2022, Matthews AsJ dismissed the warrant application, ordered that Mr Giurina as executor pay the Council's costs, and made declarations that:

1. The Plaintiff [Mr Giurina] is the proprietor of the Property.

1. The Property is affected by costs orders made against the Plaintiff in the following proceedings:

(a) S ECI 2021 02603 in the sum of $46,915.00; and

(b) S EAPC 2021 044 in the sum of $40,000.

1. For the purposes of section 52(2) of the Transfer of Land Act 1958 (Vic) the Property is affected by the warrants.

15 On 30 May 2022, in his capacity as executor of the estate, Mr Giurina issued a new proceeding in this Court (S ECI 2022 02430) claiming damages and other orders and declarations against the Council ('Damages Proceeding'). On 4 July 2022, Mr Giurina as executor of the estate filed an application in that proceeding seeking an urgent interlocutory injunction to prevent the sale of the Property ('Injunction Application'). An amended statement of claim was filed in the Damages Proceeding on 12 July 2022 which sought to include a claim for orders that the Sheriff of Victoria be permanently restrained from enforcing the warrants. On 14 July 2022, John Dixon J dismissed the Injunction Application and ordered that Mr Giurina, in his capacity as executor of the estate, pay the Council's costs of the application.[7]

16 On 20 July 2022, Kensington Lawyers lodged a caveat on the Property on behalf of Licia Giurina being Mr Giurina's mother, stating that Licia had a freehold interest in the Property on the grounds that she was a beneficiary under the will. It is noted in the Geelong Council Decision that a copy of Licia's caveat was sent to the Sheriff from Mr Giurina's personal email address on 21 July 2022 in which it was stated that it was from Licia.[8] Licia's caveat was subsequently withdrawn.

17 The Geelong Council Decision concerned two caveats. The first caveat was lodged over the Property on 27 July 2022 by Mr Giurina in his personal capacity and registered on title on 29 July 2022. The caveator is named as Ermanno Giurina, the estate or interest claimed is 'freehold estate', the grounds of claim are 'estoppel' and the prohibition is listed as 'absolutely'. On the same day, Mr Giurina sent an email to the Sheriff's office stating that he had placed an absolute caveat over the Property in his capacity other than executor and asserted that this prevented the sale of the Property. The second caveat was lodged over the Property on 5 August 2022 by Mr Giurina in his personal capacity and registered on the title on 16 August 2022. The caveator is named as Ermanno Giurina, the estate or interest claimed is 'freehold estate', the prohibition is listed as 'absolutely', and the grounds of claim are stated as:

BENEFICIARY/IES UNDER THE WILL OF THE FOLLOWING DECEASED PARTY, WHERE PROBATE HAS BEEN GRANTED AND ALL DEBTS IN THE ESTATE HAVE BEEN PAID.

Parties

LINA NACINOVICH

18 On 8 August 2022, Mr Giurina sent an email to the Sheriff's office stating that he had placed a further absolute caveat over the Property in his capacity other than executor of the estate and asserted that this prevented the sale of the Property.

19 In the Geelong Council Decision, Matthews AsJ said:

[57] Mr Giurina deposes that since 11 October 2003, he believed that he had not performed any executorial acts and he has since been making payments for the outgoings of the Property in his capacity as a specific beneficiary. He deposes that as at 28 October 2022, the payments are as follows:

(a) Rates, valuation and charges on an approved instalment plan of $250 per month.

(b) Property insurance of $35.17 per month.

(c) Gardening services of $110 every six weeks.

(d) Fencing costs of $101.20 per month.

(e) Costs to maintain the buildings and land at the Property.

[58] Mr Giurina deposes that the Estate has not paid for any of these costs.

20 Taking the quantified amounts at their highest, in the past 240 months, Mr Giurina has incurred costs of approximately $120,000, excluding maintenance.

21 As is apparent from the procedural history set out above, Mr Giurina has taken many steps to prevent the sale of the Property. This application for leave to lodge a further caveat is another step directed towards that end.

Does Mr Giurina as executor hold the Property on trust for himself?

22 Mr Giurina submits that he holds the freehold estate absolutely and the beneficial estate absolutely, and that he holds the Property on trust for himself pursuant to a constructive, resulting or implied trust. It is that trust relationship that he relies on to support his caveatable interest.

23 He says he has searched extensively and that the only decision he could find that related to the issue was Fenton v Clegg,[9] which he says supports his submission that he holds the legal estate on trust for himself_._ That case does not stand for the proposition that Mr Giurina says it does. It is a fundamental principle of common law and equity that a person who holds the entire legal and beneficial interest in a property (as is asserted by Mr Giurina), cannot hold the property on trust for themselves. In the High Court decision of DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) ('DKLR'),[10] Aickin J held:[11]

A preliminary argument advanced on behalf of D.K.L.R. was that the transfer of the land to it by 29 Macquarie was effective to transfer only the "bare legal estate" and to leave remaining in 29 Macquarie the entire beneficial interest. It was said that immediately prior to the transfer 29 Macquarie held both the unincumbered legal estate and the entire equitable interest in that property and that all that it had done was to transfer the legal estate. In my opinion this argument is based upon a fundamental misconception as to the nature of legal and equitable interests in land or other property. If one person has both the legal estate and the entire beneficial interest in the land he holds an entire and unqualified legal interest and not two separate interests, one legal and the other equitable. If he first holds the legal estate upon trust for some other person and thereafter that other person transfers to him the entire equitable interest, then again the first-named person does not hold two separate interests, one the legal and the other the equitable estate; he holds a single entire interest - he is the absolute owner of an estate in fee simple in the land. The equitable interest merges into the legal estate to comprise a single absolute interest in the land. It is a fundamental principle of both the common law and of equity that the holder of an estate in fee simple cannot be a trustee of that fee simple for himself for what he holds is a single estate, being the largest estate in land known to the law.

The authorities for this proposition go back a long way but it is sufficient for present purposes to refer to In re Douglas [1884] UKLawRpCh 262; (1885) 28 ChD 327, at p 331 ; In re Selous; Thomson v. Selous [1901] UKLawRpCh 66; (1901) 1 Ch 921, at p 922 ; and In re Cook (1948) Ch 212, at pp 214-215 . See also Lewin on Trusts, 16th ed. (1964), p. 4 and Scott on Trusts, 3rd ed. (1967), vol. II, pp. 795-797.

24 This same point is also expressed in Jacobs on Trusts,[12] in a discussion about the essential elements of a trust as follows:[13]

...[T]here must be a cestui que trust or beneficiary. The trustee may be one of the beneficiaries but cannot be the sole beneficiary. If the trustee were the sole beneficiary there would be no trust because there would be no separate equitable interest vested in the beneficiary - there is a merger of any such possible interest in the legal or equitable interest to the beneficiary as trustee: Re Cook [1948] Ch 212; Re Haberley , dec'd [1971] NZLR 325, 333-4. 346.

25 Leaving aside that fundamental principle, there are further conceptual difficulties with Mr Giurina's submissions. Mr Giurina submits that 'a constructive trust would arise if it would be a fraud for one party ... to assert [an] exclusive beneficial interest, and a trust would be imposed in order to satisfy the demands of justice and good conscience.' Mr Giurina's submission ignores the reality that he is both parties. There is no sense in which Mr Giurina says he might perpetrate a fraud against himself by asserting an interest in the Property that he himself does not have, because he holds it all. He cannot deprive himself of anything when he holds everything. Nor is there any sense in which it can be said the imposition of a constructive trust is necessary to avoid any unconscientious or unconscionable conduct between Mr Giurina and himself.

26 On 27 November 2023, without leave, Mr Giurina filed further submissions addressing the decision in DKLR. The essence of those submissions is that DKLR demonstrates that equitable title may be impressed upon legal title by the creation of a trust and therefore, legal and equitable title can be split, and that is what has been done in this case. But in DKLR the trustee and beneficiary were two different entities. That is a significant difference to the situation where Mr Giurina purports to be both trustee and beneficiary which, as stated above, is impermissible.

27 In addition to the above, Mr Giurina submits that he assented (pursuant to s 41(1) of the Administration and Probate Act 1958 (Vic)) to the transfer to himself of the beneficial interest in the Property. However, in Re Campbell (decd),[14] Menhennitt J held the only interest in real property that may be conveyed by assent under s 41(1) is the interest held by the testator. That is, if the testator held legal title, then assent can only operate to convey legal title, and if the testator held an equitable interest, then the assent can only convey that equitable interest. The process of assent does not enable a personal representative to separate the legal estate and equitable interest in real property, as Mr Giurina has purported to do. In this case, the testator held legal title, and accordingly there is a strong case that the purported assent by Mr Giurina was not effective to convey any estate to himself as beneficiary. That position is fortified by the decision of the High Court in Burke v Dawes,[15] in which Dixon J held that land under the Transfer of Land Act 1928 (Vic) can only be effected by a transfer under that Act,[16] which in this case has not occurred.

28 In those circumstances, it is not arguable that Mr Giurina has the interest he asserts or that it would support the caveat he proposes. Mr Giurina submits that it is sufficient if his claim to a caveatable interest is 'not implausible'. He also submits that it is not 'frivolous or spurious', and that there is a 'valid basis' for it, justifying leave. However the test is put, Mr Giurina should not be granted leave. Mr Giurina has provided no arguable basis for a claim to a constructive, resulting or implied trust, particularly having regard to the fact that he is both trustee and beneficiary of the purported trust. The lodging of any further caveat would be an abuse of the caveat process.

29 That is sufficient to dispose of the application. Mr Giurina raised other issues which I will deal with briefly.

Is the Property available to satisfy debts of the administration?

30 Mr Giurina also submits that the Property is not available to satisfy debts of the estate because the terms of the will prescribe that only the residuary estate may be used to satisfy debts incurred during administration.

31 The first answer to these submissions is that they are irrelevant to the question whether Mr Giurina should have leave to lodge a caveat. The question whether Mr Giurina should have leave is to be answered having regard to the interest asserted by Mr Giurina to the Property. As discussed above, Mr Giurina has not established any arguable basis for the interests he says he has. The fact that the Council is seeking to enforce a warrant of seizure and sale over the Property for payment of Court ordered costs is not relevant to the question whether Mr Giurina has a caveatable interest. It may explain why he wishes to lodge a caveat, but it does not provide a basis for it.

32 The further difficulty faced by Mr Giurina is that he is personally liable for debts incurred by himself as executor. The harshness of that fact is ameliorated by the right of an executor to an indemnity out of the assets of the estate, but an executor's liability is not necessarily limited to the assets of the estate.[17] For example, the indemnity does not extend to costs of actions improperly commenced or defended.[18] Mr Giurina is personally exposed to liability for the costs orders in question, and that personal liability may extend to execution against assets he owns.

33 In that sense, Mr Giurina's submissions as to the different capacities in which he holds the Property provide limited assistance to his submission that recourse may not be had to the Property to satisfy debts that have arisen, and in any case as stated above, that submission is not relevant to the question of leave.

34 Finally, the orders of Matthews AsJ that the Property is affected by the costs orders and the warrant, remain in force.[19] Even if the question of the availability of the Property to satisfy costs orders were relevant to the question of leave, it would not be open to me to upset those orders.

35 For those reasons the application for leave must fail. I will make orders accordingly.

[1] See Greater Geelong City Council v Giurina & Anor [2023] VSC 59, [168]-[169] (Matthews AsJ) ('Geelong Council Decision').

[4] Giurina v Greater Geelong City Council [2021] VSC 103 (Whelan JA).

[5] Ermanno Giurina (as Executor of the Estate of C Nacinovich) v Greater Geelong City Council and Building Appeals Board [2021] VSCA 318.

[6] Giurina v Greater Geelong City Council (No 2) [2021] VSCA 341.

[7] [2022] VSC 396.

[8] Geelong Council Decision (n 1) [14].

[9] [1854] EngR 400; (1854) 156 ER 292.

[10] [1982] HCA 14; (1982) 149 CLR 431 (Gibbs CJ, Stephen, Mason, Aickin and Brennan JJ) ('DKLR').

[12] JD Heydon and MJ Leeming, Jacob's Law of Trusts in Australia (Lexis Nexis, 8th ed, 2016) ('Jacobs on Trust').

[13] Ibid 3-4 [1-07]. See also Lynton Tucker, Nicholas Le Poidevin and James Brightwell, Lewin on Trusts (Sweet & Maxwell, 19th ed, 2015) 7 [1-009]; Austin Wakeman Scott and William Franklin Fratcher, The Law of Trusts (Little, Brown & Company, 4th ed, 1987) vol 2, 46-9.

[14] [1968] VicRp 6; [1968] VR 46.

[15] [1938] HCA 6; (1938) 59 CLR 1 (Latham CJ, Starke, Dixon, Evatt and McTiernan JJ), quoted in Re Campbell (decd) [1968] VicRp 6; [1968] VR 46, 57 (Menhennitt J).

[17] See, eg, O'Brien v McCormick [2005] NSWSC 619, [56] (Campbell J).

[19] Order of Matthews AsJ in Ermanno Giurina (as Executor of the estate of C Nacinovich) v Greater Geelong City Council (Supreme Court of Victoria, S ECI 2019 04286, 24 May 2022).