Rupchev v Callow

Rupchev v Callow - [2007] NSWSC 1097 - NSWSC 2007 case summary — Zoe

[10]

BELL J: Introduction 1 Vladimir Rupchev and Beverly Callow were living together in a de facto relationship in April 1998 when they jointly purchased a property at 21 Redgrave Road, Normanhurst (the property). The purchase was funded by a loan advance of $252,500 made by the St George Bank. Mr Rupchev's father, Svjatoslav Rupchev, guaranteed their obligations under the loan agreement and the St George Bank took a mortgage over property owned by him. Mr Rupchev and Ms Callow granted a mortgage over the property to Svjatoslav Rupchev. 2 The relationship between Mr Rupchev and Ms Callow came to an end not long after they acquired the property. Ms Callow moved out of the property leaving Mr Rupchev in occupation of it and responsible for making the mortgage repayments. For a time Mr Rupchev maintained the loan account in advance of the scheduled repayments. However, by January 2004 he was in financial difficulties and the loan account was about to fall into arrears. Svjatoslav Rupchev took over and continued to make the loan repayments in order to protect his security. 3 On 18 June 2004 Svjatoslav Rupchev commenced proceedings against his son and Ms Callow seeking to enforce his security over the property. The proceedings were resolved by consent orders which were made on 29 May 2006, by which Svjatoslav Rupchev obtained a money judgment and an order for possession of the property. The orders contemplated the exercise of the power of sale under the mortgage and provided that the balance of the proceeds of the sale were to be invested by Svjatoslav Rupchev's solicitors in trust for the parties until further order. 4 The orders made on 29 May 2006 disposed of the proceedings, save for the second cross-claim, which had been filed on 8 December 2005 by Mr Rupchev against Ms Callow. By this claim Mr Rupchev sought orders including the imposition of a constructive trust on Ms Callow's interest and/ or a declaration that Ms Callow held the whole of her interest on trust for Mr Rupchev.

[18]

19 The relationship between Mr Rupchev and Ms Callow was a tempestuous one. Relevant to the issues to be determined by the present claim is Ms Callow's assertion that Mr Rupchev was violent towards her and that she was in fear of him. In her affidavit, which was sworn on 23 March 2005, Ms Callow asserted that Mr Rupchev had punched several holes in the wall of the residence that they had rented. She stated that she had stayed with him because he had been very good to her daughter. She gave an account of an incident that occurred after they moved into the property in which Mr Rupchev had become angry with her and put his hands around her throat. She said that her daughter witnessed this incident and that seeing her daughter so closely involved with this violence had been a major factor in her decision to leave Mr Rupchev. I will refer to this as the bedroom incident. 20 In a further affidavit, which was sworn on 31 August 2007, Ms Callow said that after the move to Normanhurst relations between them had completely deteriorated. By way of example, she referred to an incident in which she had come home and found Mr Rupchev installing down lights in the ceiling. She complained that he had not consulted her and that they were not particularly nice lights. Mr Rupchev nonetheless installed the lights. She referred to one further incident which occurred towards the end of June 1998: they were arguing and Mr Rupchev interrupted her before she had completed what she wanted to say. 21 Mr Rupchev said that by June 1998 he and Ms Callow were having frequent fights and that a subject of difficulty was Ms Callow's unbased suspicion that he had been sexually unfaithful to her. He described her as unreasonable and given to sobbing and screaming at him. He said that he had become frustrated at her behaviour and he acknowledged the bedroom incident. He said that he had put his hands on her collarbone on either side of her neck saying, "get some sense into you girl". He pushed her onto the bed and left the room. Ms Callow's daughter was standing in the doorway at the time of this incident and he had not been aware of her presence. Mr Rupchev said that the following day he and Ms Callow discussed the fact that the child had seen their argument and both agreed to make their disagreements less volatile. He denied that he had punched holes in the walls of any premises in which they had lived. He said there had been an incident when they were renting premises in Willoughby in which he had punched a hole in a door.

[22]

26 There was a further discussion concerning the property in which Ms Callow said that she would like to "get off the loan" because it was affecting her pension (paragraph 60 of Mr Rupchev's affidavit, sworn 26 May 2006). At the time Mr Rupchev understood that the transfer of Ms Callow's interest in the property to him would require the payment of substantial stamp duty. Neither was in a position to pay any duty. The conversation concluded with Mr Rupchev saying, "well we will just have to leave it the way it is. When we get some money we will get it changed". 27 On 30 July 2003 Ms Callow sought to obtain a valuation of the property at the request of a solicitor, whom she had retained to finalise her financial arrangements with Mr Rupchev. Mr Rupchev refused access to the house in order to carry out the valuation. Ms Callow changed the locks to the premises in order to obtain the valuation. 28 Around two years after the separation Ms Callow drove past the property and noticed that work was being carried out on the premises. She made inquiries of the Hornsby Council and came to learn that Mr Rupchev had signed a building application on her behalf, stating, "signing on behalf of wife". 29 Mr Rupchev admitted that he had falsely asserted in the application to the Council that he was signing on Ms Callow's behalf. He acknowledged that he had refused access to the premises for the purpose of the valuation. The submissions 30 Mr Rupchev claims that he and Ms Callow were subject to a common obligation to repay the St George Bank and that he has discharged more than his share of that obligation and he calls upon her for contribution: Muschinski v Dodds (1984-1985) 160 CLR 583 per Gibbs CJ at 596-597. 31 Mr Quickenden, who appeared on Ms Callow's behalf, submitted that there was no evidence that Mr Rupchev had paid any repayments under the loan agreement or that he had paid the stamp duty and certain other of the acquisition costs. In Mr Quickenden's submission a third party, RUP Constructions, had assumed responsibility for these payments and the principles respecting contribution between co-debtors did not extend to requiring contribution in such a case.

[24]

33 Ms Callow and Mr Rupchev were jointly responsible under the terms of the loan agreement to repay the loan advance. Ms Callow made no repayments. Ms Callow and Mr Rupchev acquired the property jointly upon the understanding that Mr Rupchev would be responsible for the acquisition expenses and for servicing the loan and that Ms Callow would assume responsibility for their living expenses. No claim is made for the repayments in the period between April and July 1998, when they jointly occupied the premises and Ms Callow paid for household expenses. Thereafter, Ms Callow left the premises and ceased paying household expenses and Mr Rupchev continued to make the loan repayments up to January 2004. I consider that he is entitled to contribution from Ms Callow subject to consideration of her claim to an occupation fee and/or to withhold the declaratory relief that is sought in the exercise of discretion. 34 In Forgeard v Shanahan (1994) 35 NSWLR 206 Meagher JA (with whose judgment Mahoney JA agreed) considered the circumstances in which a co-owner will be entitled to claim an occupation fee. His Honour summarised the position, noting that where one co-owner is in occupation and the other not, but in which there has been no ouster or exclusion by the former of the latter, the law treats the latter simply as someone who has chosen not to exercise his legal right to occupy the land (at 221.G). 35 In Chieco v Evans (unreported) Equity Division, 5 June 1990, Young J (as he then was) discussed what constitutes ouster. His Honour said this: It is often put that what is necessary for an ouster is an act of a co-tenant which amounts to a trespass. However, sometimes that proposition is turned upside-down and it is said that a sufficient act of ouster will be considered a trespass, Jacobs v Seward (1872) LR 5 HL 464, Ferguson v Miller [1978] 1 NZLR 819. It is not necessary to show some act of violence or direct force, a course of conduct which operates to deny the co-owner's title will suffice. This conduct will not be held to exist from more isolated acts even deliberate acts such as placing a lock on a gate without providing the co-owner with a key (Jacobs v Seward) or even keeping the profits of the land.

[25]

36 There is an issue concerning the scope of what amounts to ouster in cases involving the breakdown of a domestic relationship. In Dennis v McDonald [1982] Fam 63 Purchas J found that the plaintiff/wife had left the family home as the result of violence or threatened violence by the defendant/husband. His Lordship considered that it would be unreasonable to expect her to exercise her rights as a tenant in common to occupy the jointly owned home as she had done before the breakdown in the relationship. In Chieco Young J doubted that such an approach should be accepted as part of Australian law. In Biviano v Natoli (1998) 43 NSWLR 695 at 702 Beazley JA (with whom Stein JA agreed) expressed a contrary view (at 702.F), albeit it was not necessary for decision in that case. 37 Mr Quickenden submitted that Ms Callow left the property because she was in fear of Mr Rupchev and that in the circumstances, which included the bedroom incident, it would be unreasonable to expect that she would return and resume joint occupation of the premises. In his submission Ms Callow had established that she was ousted and thereafter excluded from occupation of the property. 38 I do not find that Ms Callow left the property, and remained away from it, because she was in fear of Mr Rupchev. Such an assertion was not one which found support in her oral evidence. In this respect I refer to the matters touched on in paragraph [22] above. Ms Callow gave as her reason for not returning to the property that she had placed her daughter in school and she did not wish to see her schooling disrupted again (T 54). 39 There are a number of facts and circumstances which are against a finding that Ms Callow left the property and/or remained away from it because she was in fear of Mr Rupchev. These include the absence of any complaint by Ms Callow to the police or to any other person of violence by Mr Rupchev or that she was in fear of him. Mr Rupchev's version of the bedroom incident, which I accept, suggests that it was an unpleasant and distressing event. However, it did not cause Ms Callow to leave the property. Her conduct was not consistent with the suggestion that she was in fear of Mr Rupchev; she returned to the property and discussed arrangements for the house within weeks of their separation. She allowed Mr Rupchev to baby-sit her daughter after they had separated and permitted the child to go away on holidays with him. Ms Callow's evidence was eloquent of her realisation that her relationship with Mr Rupchev was unfulfilling but not that she was in fear of him.

[30]

48 Mr Rupchev gave an account of his and Mr Callow's respective financial contributions to the payment of rent and household expenses in the period from 1996 until the purchase of the property; paragraphs [11] to [19] of his affidavit, sworn 26 May 2006. He was not challenged in these respects. Prior to moving into the property Mr Rupchev paid at least half the rent. Each contributed to their joint household expenses. From the time of moving into the property until their separation Ms Callow paid most of the household expenses (paragraph [32] of Ms Callow's affidavit, sworn 23 March 2005). The conduct of the parties is consistent with the submission made on Mr Rupchev's behalf that their agreement was that he would pay the costs of acquiring the property and servicing the loan repayments and that Ms Callow would pay their household expenses. In the event, their separation within three months of the purchase resulted in Ms Callow not fulfilling her agreement to pay their household expenses. In these circumstances I consider that Mr Rupchev has made out his entitlement to contribution in relation to the acquisition expenses. 49 I am satisfied that Mr Rupchev has established his entitlement to contribution from Ms Callow of amounts equivalent to a one half share of (i) the expenses incurred by him and her in the acquisition of the property and (ii) repayments of the loan standing in their joint names with the St George Bank, made by him in the period from 25 August 1998 up to and including 19 January 2004. The matter was argued on the basis that Mr Rupchev's entitlement to contribution in respect of the mortgage repayments was as to one half of the amount expended by him in repayments for the period to which I have referred, being the sum of $111,206.11 and not the lesser sum pleaded in paragraph 2(a) of his amended second cross-claim. The evidence of the payments made by Mr Rupchev is that contained in annexure "I" to his affidavit, sworn 31 July 2007. I propose to make orders consistently with the evidence and the way in which the matter was argued. 50 An order was made reserving costs on 2 August 2006. Mr Rupchev's claim included interest. No submissions were directed to this claim. The proceedings may be re-listed for submissions on both interest and costs. ORDERS

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