Promethean Investments Pty Limited and Promethean Trust v Paul Tsilfidis

Supreme Court of NSW|2014-07-29|Before: Sackar J

His Honour 1These are expedited proceedings brought by way of amended statement of claim. A number of orders are sought but apart from the appointment of an administrator by way of letters of administration the principal relief sought is specific performance of a contract for the sale of land of a property in Newtown. 2The first defendant is Mr Paul Tsilfidis. He is the son of Ms Kati Tsilfidis and he is the principal beneficiary under her will dated 16 November 2012. He has appeared in person to oppose orders sought by the plaintiff and certainly to oppose the order for specific performance. 3The second defendant was the New South Wales Trustee and Guardian. On or about 30 May it was excused from any further attendance in the proceedings and it simply filed an appearance and has not participated in the hearing. 4The first defendant Mr Tsilfidis has never filed any defence in the proceedings nor has he ever filed a cross claim. He has provided me today with a document or a series of documents which I have marked Exhibit D1 and I will return to those documents a little later in the judgment.

Background Facts 5The brief background facts are as follows. On 14 September 2009 a financial management order was made and it was made in respect of Mrs Kati Tsilfidis. 6On 16 November 2012 Mrs Kati Tsilfidis made her last will and testament. 7Pursuant to that will which is in Exhibit P1 at pp 125 and following she appointed her son Mr Paul Tsilfidis as executor and trustee and in the event that he predeceased her she appointed her grandson Mr Adam Tsilfidis as executor and trustee. Thereafter she gave the entirety of her estate absolutely to Mr Paul Tsilfidis and in the event of his death to the children of Paul Tsilfidis who comprise Adam Tsilfidis and his sister. 8On 12 December 2013 and pursuant, it is asserted, to the financial management order a sale of a property she owned in Newtown was arranged and a contract was entered into on that day following an auction. The plaintiff was the successful purchaser. 9Sadly and shortly thereafter on 21 December 2013 Mrs Tsilfidis died. 10There followed a very large and extensive body of correspondence between representatives of the New South Wales Trustee on the one hand and representatives of the plaintiff on the other and Mr Paul Tsilfidis and his then legal representatives in relation to the sale and the proposed completion of the sale. 11Mr Tsilfidis's lawyers asserted that the sale was effectively frustrated and in any event should not be proceeded with because it was contrary to what he wished to occur and therefore he opposed the completion of the sale. 12I should add that in October 2009, I was told by Mr Tsilfidis from the bar table he or he and others lodged some process. I am not entirely sure whether it was an appeal or an application for review of the financial management order made in the September of 2009. 13As at the date of Mrs Tsilfidis' death in December of 2013 that proceeding had not been heard and Mr Tsilfidis told me, again from the bar table, that he regarded that application as irrelevant after the death of his mother. It seems that the New South Wales Guardian also regarded the challenge to the financial management order as somewhat irrelevant after her death, but nothing turns upon that.

The legal principles 14The Guardianship Act 1987 provides that the relevant tribunal pursuant to section 25E of that Act may in accordance with the Act order that the estate of a person be subject to management under the NSW Trustee and Guardian Act 2009. 15Pursuant to s25M of that Act the tribunal may commit the estate of a person to the management of amongst others the New South Wales Trustee. That is what occurred in September 2009 and as at the date of the contract of sale in my view there was the plaintiff submits in existence a valid and subsisting financial management order. 16Under the NSW Trustee and Guardian Act 2009 s16(g) the New South Wales Trustee is empowered to buy, sell, realise and mortgage with or without a power of sale real and personal property. 17Pursuant to s56 of that Act the Trustee has or may exercise in respect of the estate of a managed person all functions necessary and incidental to its management and care and such other functions as the Supreme Court or the Civil and Administrative Tribunal may direct or authorise the Trustee to exercise. 18Pursuant to s57 of that Act the New South Wales Trustee for the purposes of its protective capacities in respect of a protected person may exercise all functions that person or patient has and can exercise or would have had and could exercise if under no incapacity. 19In particular under s58 the New South Wales Trustee may execute and sign any document in the name of or on behalf of a managed person for the purposes of exercising a function in a protective capacity. 20Apart from the legislative powers relied upon by the plaintiff it also relies upon what may be described as the doctrine enunciated by Sir George Jessell when Master of the Rolls in the decision of Lysaght v Edwards (1876) 2 Ch D 399 in which his Lordship articulated the proposition that if there be a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold and the beneficial ownership passes to the purchaser. The vendor of course having a right to the purchase money, a charge or lien on the estate for the security of that purchase money and the right to retain possession of the estate until the purchase money is paid in the absence an express contract as at the time of delivering possession. 21Importantly, his Lordship also indicated that the law correctly stated was that a valid contract binds as he described it (at 518) of the judgment the heir in law. He went on to say that he (the heir) does not take beneficially and he is a mere trustee for the next of kin. His Lordship also said (at 522) that where there was a good title, the concurrence of the heir-at-law or customary heir is not necessary to give a complete title to and conveyance of the estate comprised in the contract with the plaintiffs. 22What is said here by the plaintiff is that in the circumstances where the sale has been consummated by way of exchange of contracts pursuant to a financial management order the vendor holds the property as trustee for the purchaser and therefore it is submitted the opposition which Mr Tsilfidis has attempted to mount to the sale cannot be recognised as a matter of law and hence the plaintiff is entitled to specific performance. 23Mr Tsilfidis who opposes the completion of the sale does not and, in fairness to him, is unable to engage in any legal debate about the principle enunciated in Lysaght v Edwards but it does seem to me that it is clear and I should be guided by that principle in the resolution of the matter. 24He tendered what became Exhibit D1. It runs for many pages comprising four documents. In it and not for the first time he refers to the very large losses allegedly suffered by his family, as a result, he says of the wrongful behaviour of his sister Ms Stavrakakis. He also refers to, as he describes in it, the "overwhelmingly incredible mismanagement by the New South Wales Trustee and Guardian and Richardson & Wrench" and he asserts without the benefit of any tangible evidence, that the property in December 2013 was sold negligently at a gross undervalue. 25That he may have remedies against New South Wales Trustee or against for that matter his sister insofar as he can show that she has engaged in any wrongful conduct or against Richardson & Wrench for that matter is really not to the point in the context of my consideration of this case today.

Discussion and Conclusion 26The case revolves around the issue of whether the Trustee was empowered to organise the relevant sale in the December of 2013 and more to the point whether the plaintiff having been the successful purchaser at the auction is entitled to specific performance to complete the contract. 27In my view given the terms of the legislation and the powers which the New South Wales Trustee clearly had, gave it ample authority in my view to do precisely what it did in organising the sale of the property and indeed effecting the exchange of contracts, especially when there was an existing and valid financial management order in place. 28The next question is whether the heir as it were, Mr Tsilfidis in particular, has any legitimate argument sufficient to prevent the completion of the purchase. 29I have heard nothing from him apart from as I have said allegations which if true and can be made good may give rise to an action in damages for the losses he says he and/or his family have suffered as a result of the sale being completed, but against third parties. 30Those matters are not before me. It is for him and whichever lawyer he can obtain assistance from in due course to take whatever course he may be advised to take by way of a claim against any one or more of the persons I have mentioned. 31It seems to me that in the circumstances of this case the vendor indeed is a trustee for the purchaser. Therefore there being a valid contract in existence and the purchaser is ready willing and able to complete, it does seem to me appropriate that I grant an order for specific performance and I propose to do so. 32The next question that I have to determine is the way to implement that and it does seem to me that the appropriate way forward is to appoint an administrator and to make the other orders which are sought. I am satisfied that the third defendant who made a brief appearance this morning on the affidavit evidence qualifies amply for that role and therefore I propose to grant letters in accordance with the request that is made to appoint the relevant person as administrator so that the sale can be completed.

Amendments 06 August 2014 - decision content added Amended paragraphs: coversheet 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: 06 August 2014

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