Saravinovski v Saravinovska

Saravinovski v Saravinovska - [2016] NSWCA 310 - NSWCA 2016 case summary — Zoe

[5]

Judgment

BASTEN JA: On 12 July 2016 Kunc J in the Equity Division handed down judgment in relation to a family dispute involving claims in relation to property. The appellant, Krste Saravinovski (referred to in the judgment by his anglicised first name, Chris) came to Australia from Macedonia in 1963. Three years later he was joined by his wife and their three boys, George, Bill and Louie. In 1986 the family returned to Macedonia, at which time the oldest son George married Maria Jovanovska.
The trial involved two separate claims. One was brought by the appellant, Krste Saravinovski, against his son George Saravinovski. The appellant alleged that his son owed him an amount of $800,000 plus interest, which had been secured by an unregistered mortgage over a property owned by his son at 7 Wharf Road, Kogarah. The trial judge was not satisfied that the appellant's claim had been made good and accordingly that proceeding was dismissed. The appellant (who became incompetent during the course of the trial) has lodged an appeal against that judgment, through his tutor, who is his third son, Louie. The appeal is defended by Ms Maria Saravinovska, as executrix of her husband's estate, he having died whilst judgment was reserved.
George's wife, Maria, brought separate proceedings against the appellant, her father-in-law, under the Property (Relationships) Act 1984 (NSW) seeking a share of his home. She was successful in that claim, the trial judge ordering that her father-in-law transfer to her a 30% interest in his home at 5 Wharf Road, Kogarah. Mr Saravinovski has also lodged an appeal from that judgment. Maria Saravinovska is defending the appeal.
The appellant has two motions before the Court. The first, in relation to his claim with respect to 7 Wharf Road, originally sought an order restraining the respondent from disposing of or otherwise dealing with the property, pending determination of the appeal. The purpose of the motion was to preserve the property as security to satisfy the debt, should he succeed on his appeal. In the alternative, the motion sought an order that the Court fix a minimum price for sale and require that the net proceeds (after payment of a bank mortgage) be paid into an interest bearing account in the names of the parties' solicitors.
The second motion sought a stay of the orders by which Ms Saravinovska was to obtain either a 30% interest in the appellant's home, or an amount equivalent to the value of that interest.
In the course of hearing senior counsel for each party, I formed the view that the matter could properly be disposed of by way of undertakings which would avoid the need for either an interlocutory injunction with respect to the sale of one property or the stay of orders requiring payment in respect of the Property (Relationships) Act claim. The parties agreed to prepare appropriate undertakings and these reasons briefly indicate why that course has been adopted.
In considering the position of the parties with respect to each motion, I did not consider it necessary or appropriate to address the merits of the appeals. The trial ran for some 34 days and the principal judgment ran to more than 670 paragraphs. Although one could readily anticipate strenuous objection to any interference with findings of fact based on the credibility of the witnesses (which formed a major part of the judge's reasoning), I was prepared to assume for the purposes of the motions that there were grounds of appeal which were reasonably arguable. Both parties were represented by experienced counsel and the written submissions filed in favour of and in opposition to the motions did not suggest that that course would be inappropriate.
First, in relation to the sale of the property said to be subject to the mortgage, it was common ground that the property should ultimately be sold. It is presently uninhabited and the outstanding question concerned the proper disposition of the proceeds of any sale if it were to take place before the appeal was determined.
Senior counsel for the respondent resisted orders dealing with that issue in circumstances where it was not clear that the property would be sold (and settlement take place) before the appeal was heard and because it was also unclear at what price the sale would take place, with the result that it was not known whether the proceeds could accommodate the appellant's claims and the outstanding debts which Ms Saravinovska wished to pay out to avoid further interest accruing.
The potential for prejudice to either party was significantly ameliorated by the Court being able to offer hearing dates in the second week of February, which was a time convenient to the parties. Accordingly, I considered that the position of each party could be accommodated by way of undertakings which would allow the matter to be brought back before the Court if a sale were to be effected, before settlement. In the event that appropriate orders could not be made by consent, there was also a real possibility that they could be made by the Court as constituted to deal with the appeal.
Accordingly, in matter 2016/239390 the Court notes the undertakings and makes orders as set out in the short minutes of orders dated 14 November 2016, initialled by me and placed with the Court papers. The Court further orders that the costs of the motion be costs in the appeal.
With respect to the motion seeking a stay of the orders made under the Property (Relationships) Act, the arguments in favour of maintaining the status quo pending the appeal warranted that the appellant not be required to realise property at this stage, so long as the interests of the respondent were adequately protected. Although it appeared that the appellant had other means to meet the relevant payment, and would not be required to sell the family home in which he resided, the parties agreed that an undertaking could be given and accepted to preserve that property, which was otherwise unencumbered.
The respondent resisted that course on the basis that any delay in payment might give rise to further complications if the appeal were ultimately dismissed and the trial judgment came to be enforced. She submitted that the relevant sum should be paid into a controlled money account, pending determination of the appeal. The amount would therefore be available for payment out immediately should the appeal be dismissed, but not having been paid to her prior to that event, there was no risk of dissipation due to her impecuniosity.
Given the relatively short period which may be expected before the appeal is determined, in my view the balance of convenience favoured a resolution of the issue on the basis that the position of each party would be preserved by way of undertakings. The likelihood of complications arising in respect of enforcement due to a delay of a few months did not warrant the insistence upon a sale of property to realise the funds at this stage.
Accordingly, in relation to the stay application in the Property (Relationships) Act proceeding, matter 2016/233724, the Court notes the undertakings and makes orders as set out in the short minutes of orders dated 14 November 2016, initialled by me to be placed with the Court papers. The Court further orders that the costs of the motion be costs in the appeal.
The effect of these orders is to leave each of the motions on foot, so as to allow either party to exercise the liberty to apply and with the intention, if that does not happen, that the motions will be dismissed by the Court as constituted to determine the appeals.

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