Sevdalis v Sevdalis

The hearing and issues for determination

1. On 24 June 2022, Parker J made an order in favour of Nicholas for possession of the Arncliffe Property to enable it to be sold.
2. On 8 July 2022, Parker J, sitting as Expedition Judge, listed the proceedings for hearing solely in respect of: 1. George's claim as to the existence and validity of a charge over the Arncliffe Property and the $620,000 debt which the charge allegedly secures, as set out in prayers 1 and 2 for relief in the SOC (with the understanding that if the Arncliffe Property is sold it will be claimed that the fund is charged); and 2. Nicholas' claims under the Contracts Review Act, as set out in prayers 8, 9 and 10 for relief of the ASCC.
3. The hearing of those claims was conducted before me on 5, 6 and 7 September 2022.
4. At the hearing, George only pressed for the relief set out at prayer 1 of his SOC and did not press for the prayer 2 relief that seeks a declaration of a half-interest in the Arncliffe Property (T.D3.175.17-22, 42-45). He also consented to an order requiring him to remove the Caveat by 17 September 2022 to enable the Arncliffe Property to be sold. Based on a communication received by my Chambers, I understand that the Arncliffe Property has now been sold.
5. Nicholas also confined his claims to the relief in prayer 10 of the ASCC, being a declaration that the document that Nicholas signed on 30 March 2020 is void, invalid and/or unenforceable, relying on the Contracts Review Act. He did not press his separate pleaded claims that the document should be set aside at law by reason of coercion, duress or undue influence and/or unconscionable conduct on the part of George and Stella (T.D3.235.14-236.4). Nor did he press his claims for relief at prayers 8 and 9 of the ASCC for declarations that the documents that Nicholas signed on 28 August 2018 and 23 October 2019 are void, invalid and/or unenforceable, having regard to concessions made by George's counsel that George only relies on the 30 March 2020 document to establish the charge and debt claimed and will not sue on the other documents in future proceedings (T.D3.181.9-41).
6. Accordingly, these reasons deal with George's claim for a declaration that the fund created by the net proceeds of sale from the Arncliffe Property is charged for payment of $620,000 to him plus interest and costs based on the 30 March 2020 document, with the primary issue for determination being whether that document should be set aside as an unjust contract under the Contracts Review Act.
7. As the hearing was confined by Parker J's orders of 8 July 2022, these reasons do not determine Nicholas' cross-claims seeking restitution and payments of amounts from George and/or Stella. However, some findings relevant to those claims have been made given that Nicholas' claim under the Contracts Review Act requires factual findings to be made as to the circumstances that existed as at 30 March 2020.

The evidence and assessment of witnesses

1. George and Stella read affidavits from: George affirmed 3 May 2021, 15 November 2021 and 24 March 2022; Stella dated 24 March 2022; and Gary Cassim, a solicitor, dated 24 March 2022 and 19 May 2022.
2. Nicholas read two affidavits he swore on 16 December 2021 and 14 April 2022. He also relied on affidavits from: Vince Galluzzo, Nicholas' solicitor in these proceedings, sworn 16 December 2021 and 14 April 2022; and Eva Naumovski, Nicholas and George's sister, sworn 23 June 2022.
3. George, Stella and Nicholas were cross-examined. As will appear, there are significant conflicts in their evidence about certain matters, including conversations that occurred some years ago. In view of the frailty of human memory and the parties' self-interest, I have placed more weight on the contemporaneous documents to the extent they are available, the objective surrounding facts and the inherent probabilities and improbabilities of events: Watson v Foxman (1995) 49 NSWLR 315, at 319; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, at [28]-[31].
4. I did not form a favourable view of much of the evidence given by George and Stella. I deal with the key aspects of their evidence later but set out below some observations that raise doubts about the reliability and credibility of their evidence.
5. During cross-examination, George was argumentative and non-responsive to questions put to him (see, for example, T.D1.28.18-28, 36.40, 65.18-19). Aspects of George's evidence in cross-examination were also new and uncorroborated. For example, George's evidence about the circumstances in which Nicholas signed the 30 March Agreement (T.D2.128.13-129.2), to the effect that it was given to Nicholas in the kitchen by Stella to sign and that George explained to Nicholas the meaning of the words "I will sign this agreement of my own free will and without coercion or duress", was not referred to in his affidavit and appeared to be directed at giving answers that assisted his case. George's evidence that he gave Nicholas cash at Kingsgrove was also new, uncorroborated by documents and non-responsive to questions that were put to him (T.D1.35.4-13, 97.45).
6. George's evidence about the value of his half-interest in the Arncliffe Property was also inconsistent and unconvincing, as outlined at [55] below. George made some appropriate concessions during cross-examination about using Nicholas' NAB credit card (T.D1.78-81). However, George's evidence that he had possession of, and used, that credit card from 2014 to 2017, and the fact that no payments were made towards it from mid-2017 (at which time there was an opening balance of just over $26,000, CB1095) undermined George's claim that Nicholas owed him $10,000 for payments to the NAB credit card.
7. While accepting that memories fade, George's evidence in cross-examination that he had no knowledge about a draft deed of family settlement and sale contract, which provided for George to purchase the Arncliffe Property in 2019 for $1.3 million, was improbable given that the documents were prepared by George's solicitor, Nick Cassim, presumably on instructions from George (T.D2.116.26-32, CB1409).
8. George and Stella's evidence in cross-examination, to the effect that Nicholas was not working or earning money from 2015 and the money in his bank account was not from his job (T.D2.144.42, T.D1.93.10), was also undermined by the Westpac bank statements in evidence that record deposits of cab charge vouchers relating to Nicholas' work as a taxi driver between 2015 and 2020 (see, for example, CB658-664, CB706-720, CB742-744, CB801-808).
9. During cross-examination, Stella gave answers to questions that she later resiled from, such as her initial answer in cross-examination that Nicholas was not working in May 2015 and her later answer that "he was working. I'm not saying he wasn't exactly working" (T.D2.144.42-50), and her evidence about her awareness of Nicholas' NAB credit card (T.D2.147.17-42). Stella initially gave evidence that she did not know that Nicholas had a NAB credit card, but then accepted that she was aware that George was using it to pay for expenses on the Gold Coast.
10. She also gave evidence that was, in my view, simply unbelievable. Her evidence that she withdrew cash from Nicholas' Westpac account on 8 May 2015 at the Bexley RSL to pay Nicholas his weekly allowance of $300 (T.D2.144.23-39, 145.6-9), and that it was not used by her to play the pokies (T.D2.145.11-15), was unconvincing in circumstances where: Stella could not explain why transactions amounting to over $600 were made that day (T.D2.145.17-19); the bank statements in evidence demonstrate that Stella frequently made withdrawals from her personal bank account at the Kingsgrove and Bexley RSL Clubs from November 2011 (CB161-6); and the withdrawals at the Bexley RSL from Nicholas' account commenced in October 2014, after Stella had moved into the Arncliffe Property, and on days where Stella did not make withdrawals from her own account (CB574-707).
11. Stella's evidence in cross-examination regarding her and George's involvement in the signing of the 30 March 2020 document was also implausible. Her evidence that she did not get involved with what the brothers were doing (T.D2.154.11, 154.24, 155.34-36, 155.41-42, 147.44) was undermined by the fact that Stella gave the 30 March 2020 document to Nicholas and asked him to sign it and her explanation that she handed him the document to "just help" was not convincing (T.D2.154.14-155.10).
12. Her evidence that she did not obtain or use the power of attorney that Nicholas granted to her in relation to a proposed sale and discharge of mortgage on the Arncliffe Property (T.D2.156.8-26, T.D2.157.26-27) was simply fanciful given the timing and circumstances in which she was appointed Nicholas' attorney and executed the NAB Discharge of Mortgage Instruction Form and the contents of that form.
13. I do not accept George and Stella's counsel's submission that, based on her demeanour in the witness box, Stella does not appear to be a person who could be overbearing. During cross-examination, Stella gave evidence in an assertive and sometimes emotional manner and offered lengthy self-serving answers that were sometimes unresponsive to direct questions and clearly intended to assist her case (see, for example, T.D2.147.42-148.15, 149.43-46, 150.9-11, 152.38-46, 156.8-26). My overall impression is that Stella is a person who can hold very strong views and would have no hesitation in making them known to Nicholas (and others) in a forceful manner.
14. Nicholas impressed me as a witness who was seeking to give truthful evidence to the best of his recollection. In many respects, his evidence was credible and his evidence in cross-examination was generally consistent with his affidavit and documentary evidence. He conceded appropriately when he did not recall things (see, for example, at T.D2.180.32, 185.40, 210.35) and gave evidence that was clear and direct about factual matters in dispute, such as that George was not present when Nicholas signed the 30 March Agreement (T.D2.205.30) and that he was told that he would be sued if he did not sign it (T.D2.195.10-11).
15. That said, on occasion, Nicholas' evidence in cross-examination was not responsive to direct questions, such as when asked whether he saw the word "rent" in his affidavit (T.D2.189.27-190.2), whether he read the word "Agreement" on the 30 March 2020 document (T.D2.196.14-47, 198.21-24) and whether he was having meals with George's family (T.D2.201.3-5). His evidence in response to these and other questions tended to be self-serving. Other aspects of his evidence were not entirely satisfactory and raised doubts about its reliability.
16. In particular, Nicholas' evidence in cross-examination that he was always making mortgage payments in the period March 2014 to 20 March 2019 (T.D2.180.1) was at odds with his pleaded allegation that he agreed that George would pay the mortgage, utilities and council invoices within six weeks of George and his family moving into the Arncliffe Property. His evidence that George said that he would pay the mortgage and bills "in lieu of rent" and that he asked George about paying rent (T.D2.187.44-190.7-8) was also new and seemingly inconsistent with his first affidavit, which used the word "Rent" as a defined term to denote "the utilities and council rates and make the mortgage payments" and did not include any reference to a discussion that such payments were agreed to be in substitution for, or in lieu of, rent.
17. I do not accept George and Stella's submission that Nicholas is not a witness of truth because he made a false allegation that he was suffering cognitive impairment that vitiated his free will when he signed the 30 March 2020 document and the earlier documents in which he acknowledged that amounts were owing to George. In my view, Nicholas' evidence in cross-examination that referred to his intense hip pain, an inability to concentrate and not feeling well (T.D2.215.46-216.34) was a satisfactory explanation for his pleaded claim that he suffered cognitive health issues at the relevant times. As Nicholas' counsel submitted, by reference to an extract from Centers for Disease Control and Prevention, cognitive health has been described as "staying sharp" or "being in the right mind" and includes when a person has trouble concentrating or making decisions that affect their everyday life.
18. At times, Nicholas did appear confused and was slow to respond to some questions (see, for example, T.D2.211.36-46, 215.19-42). However, the contents of his affidavits and the evidence he gave in person did not persuade me that Nicholas is "intellectually challenged" (Nicholas' Outline of Opening Written Submissions, at [2]), in the sense that he is of such low intelligence that he was unable to comprehend the contents of the documents that he was asked to sign, although I accept his evidence that he did not understand what a "charge" was (as referenced in the 30 March Agreement) or appreciate the legal significance of what he was signing. His pleaded claim that he had mental health issues was withdrawn at the hearing, appropriately, in my view.
19. For these reasons, where there is a conflict, I generally prefer Nicholas' evidence to that of George and Stella, although there were enough issues with Nicholas' evidence that I have approached his uncorroborated evidence with some caution.

The Arncliffe Property and the parties

1. The Arncliffe Property was purchased in 1965 by George and Nicholas' parents, Phoebus and Catherine Sevdalis, as a home for their family: Nicholas (born 1953), George (born 1957) and Eva (born 1959).
2. Phoebus and Catherine lived at the Arncliffe Property until Phoebus' death in May 1998 and Catherine's move to a nursing home in September 2013. Catherine died in April 2018.
3. Nicholas lived at the Arncliffe Property with his parents while they resided there and, from early 2014, with George and his family. Nicholas has never married and has no children. He left school at 16 years of age and worked at the railways for some years. In 1988, he commenced, but did not complete, a university degree. From 1989, he worked full time as a taxi driver until he retired in March 2020.
4. Nicholas had his right hip replaced in 2008 and began experiencing instability and pain in his left hip in February or March 2019. At the time, due to his work as a taxi driver, he did not take pain relief medicine other than Panadol. Nicholas started experiencing difficulties with his sleep and concentration in 2015. He was diagnosed with sleep apnoea in early 2018 and leased a sleep apnoea machine during 2018, 2019 and 2020. Nicholas moved into the Macquarie Lodge Aged Care Centre (Macquarie Lodge) in September 2020 for respite care prior to having his left hip replaced and continues to reside there.
5. George moved out of the Arncliffe Property in 1983 when he married his first wife, Desi. In 2000, George married Stella, his third and current wife. Since early 2014, they and their three children have lived at the Arncliffe Property.
6. George describes his occupation as an accountant. He worked for his father, Phoebus, at his accountancy business, although he did not complete his accountancy course and is not a registered accountant. In around 1990, he began a small business importing, refitting and selling used luxury foreign cars. He has also been involved in organising loans for clients (for which he was paid referral fees) and has undertaken a small-scale residential property development in Kingsgrove.
7. George has been bankrupted twice. First, on 13 May 1986, which was discharged on 24 December 1990. Second, on 18 March 2011, which was annulled on about 28 June 2019 pursuant to s 153A of the Bankruptcy Act 1966 (Cth).

1991 - 2013: Loans and dealings with the Arncliffe Property

1. On 6 September 1991, Phoebus and Catherine transferred the Arncliffe Property to George and Nicholas for consideration of $160,000. That day, George and Nicholas granted a mortgage over the Arncliffe Property to the State Bank of New South Wales Ltd to secure a loan of $160,000 (State Bank Loan), which was registered on 16 September 1991.
2. The State Bank Loan was used to pay out the existing mortgage on the Arncliffe Property that had been granted by Phoebus and Catherine on 3 December 1990 as security for a loan of $95,000 from Maggie Davies (Davies Loan). Nicholas says that the balance of the State Bank Loan proceeds was provided to George for his investment purposes and that George agreed to make the repayments. He also says that George made some, but not all, of the repayments on the State Bank Loan and that Nicholas made some repayments to avoid default and eviction. George's evidence is that the balance of the State Bank Loan proceeds was used to pay Phoebus and Catherine for his share of the Arncliffe Property.
3. The Davies Loan was the third loan secured by a mortgage over the Arncliffe Property that George had arranged since October 1988.
4. The first loan was for $94,000 from Constantine Vella (Vella Loan) that George had asked Phoebus and Catherine to help him borrow and that he agreed to repay. The Vella Loan was secured by an equitable mortgage over the Arncliffe Property dated 5 October 1988 and was subject to a caveat lodged by Mr Vella.
5. The second loan was for $100,000 from Esmarelle Pty Ltd (Esmarelle Loan) that was secured by a mortgage dated 10 October 1989 and used to discharge the Vella Loan and mortgage. According to Nicholas' evidence, which was not challenged by George and which I accept, George's defaults on the Esmarelle Loan led to Esmarelle Pty Ltd taking possession of the Arncliffe Property in around November 1990 and Phoebus, Catherine, Nicholas and the brothers' maternal grandmother being evicted. On 23 November 1990, the mortgage to Esmarelle Pty Ltd was discharged using the proceeds from the Davies Loan and, on 3 December 1990, the family moved back into the Arncliffe Property.
6. In September 1993, George needed money in relation to a duplex development that he was carrying out at a property he had purchased in Kingsgrove. He arranged a loan for $175,000 from Alfred Moss Investments Pty Ltd (Moss Loan) that was secured by mortgages dated 8 September 1993 over the Arncliffe Property and over George's Kingsgrove property. Nicholas gives evidence, which I accept, that he acceded to the Arncliffe Property being used as security for the Moss Loan because George agreed to make all the repayments on the Moss Loan.
7. On 12 January 1995, George arranged a loan from Westpac Banking Corporation for $476,000 (Westpac Loan) that was secured by mortgages over the Arncliffe Property and his Kingsgrove property. The proceeds of the Westpac Loan were used to discharge the mortgages on the Arncliffe Property that secured the State Bank Loan and the Moss Loan. Nicholas gives evidence, which was not challenged by George and which I accept, that the balance of the Westpac Loan proceeds were provided to George for building works on the duplex at his Kingsgrove property and George agreed to make all the repayments in relation to the Westpac Loan.
8. In 1999, George completed the development of the Kingsgrove property. He sold one of the duplexes and lived in the other.
9. Sometime in late 1999, George and Nicholas agreed that: George would transfer his interest in the Arncliffe Property to Nicholas; George would use the proceeds from the sale of the Kingsgrove duplex to pay off part of the Westpac Loan; and the balance of the loan would be paid by Nicholas taking on a loan for $210,000 in his name. On 29 December 1999: 1. Nicholas and George executed a transfer of the Arncliffe Property to Nicholas that acknowledged receipt of consideration of $250,000 (Registered Dealing 6600948J); 2. the mortgage over the Arncliffe Property that secured the Westpac Loan was discharged; and 3. Nicholas executed a mortgage over the Arncliffe Property in favour of Permanent Custodians Ltd that secures a loan to him of $210,000 (PCL Loan).
10. There is a dispute about whether George has received consideration from Nicholas for the transfer of his half-interest in the Arncliffe Property.
11. George gives evidence that Nicholas asked George to sell his half-interest in the Arncliffe Property because: George already had a property of his own that was fully paid; George agreed to give a fair price based on a valuation; and he and Nicholas had organised for two valuations and agreed that a fair price for George's share would be $475,000, noting that the property market was buoyant at that time. George says that Nicholas could not get a loan for $475,000 and agreed to: refinance the existing loan; take on the PCL Loan in his name; and pay George $250,000 later. He also says that he transferred his interest in the Arncliffe Property to Nicholas for the sum of $250,000 which Nicholas has not paid him.
12. Nicholas deposes that he agreed with George that Nicholas would take out the PCL Loan in his own name and make all the repayments on it in exchange for George transferring his share of the Arncliffe Property to Nicholas, and that Nicholas taking on the PCL Loan was payment for that transfer.
13. I do not accept George's evidence that it was agreed that a fair price for his share would be $475,000. In cross-examination, he gave evidence that the value of the Arncliffe Property in 1999 was close to $700,000 or $800,000 (T.D1.50.18-26) but later gave evidence that he received a valuation for $500,000 (T.D1.52.40-41). In his second affidavit dated 15 November 2021 he deposed to transferring his half-interest to Nicholas for the sum of $250,000 (at [7]), whereas his evidence in his third affidavit dated 24 March 2022 is that he believed that he and Nicholas agreed that George's half-interest was valued at $475,000 (at [25]). George's evidence that his half-interest had a value of $475,000 in 1999 is also implausible having regard to the documents in evidence that refer to a sale price of $1.3 million in 2019 and $1.12 million in 2020 (CB1409, CB2147). There is also evidence that Nicholas valued the Arncliffe Property at $500,000 in December 2005 (see Loan Application, at CB91).
14. I am also not persuaded by George's claim that he did not receive any consideration for the transfer to Nicholas of his half-interest in the Arncliffe Property in December 1999. In my view, Nicholas' evidence that he took on the PCL Loan as consideration for the transfer is consistent with the logic of events given that, at the time of the transfer, the existing mortgage on the Arncliffe Property related to the Westpac Loan for which George had received the benefit and had agreed to repay. There is no cogent reason advanced as to why Nicholas would take on a debt in his own name that equated to the unpaid portion of the Westpac Loan, other than as consideration for the transfer of George's interest in the Arncliffe Property. Nicholas may not have paid the sum of $250,000 directly to George but I am satisfied that George received consideration from him by reason of Nicholas assuming liability for a mortgage on the Arncliffe Property that secured a loan of $210,000 in his own name.
15. In December 2005, Nicholas purchased taxi plates for around $190,000. He funded that purchase by a personal loan of $90,000 from Progressive Mortgage Company Ltd (PMC Loan) and proceeds from a loan of $360,000 from Perpetual Trustees Australia Ltd (PTA Loan) that was secured by way of mortgage over the Arncliffe Property. The balance of the PTA Loan was used by Nicholas to discharge the PCL Loan and mortgage and pay off a credit card debt of $40,000 relating to home repairs and improvements on the Arncliffe Property.
16. The PMC Loan was advanced to Nicholas on 16 December 2005 and was paid out on 3 March 2014. Nicholas accepts that the final payment of $16,278.51 was paid on his behalf by George as Nicholas had insufficient funds in the bank at the time.
17. Nicholas deposes that George assisted him to refinance the PTA Loan in April 2009 by borrowing $360,000 from Wide Bay Australia Ltd (Wide Bay Loan) that was secured by a mortgage over the Arncliffe Property. According to Nicholas, $75,000 of the Wide Bay Loan was used to pay off a short-term loan made to George by Mr Zaigham Abbas Malik, with the balance used to pay off what was remaining of the PTA Loan.
18. In 2011, Nicholas bought a new taxi through a leasing arrangement with Macquarie Leasing Pty Ltd. Nicholas gives evidence that he made payments for the taxi by automatic debit from his Westpac bank account number ending #8649 (Westpac Account), except for two payments in 2015 or 2016 which George made on his behalf totalling around $6,000. According to Nicholas' evidence, George made these payments because Nicholas had defaulted on the lease due to insufficient funds in his Westpac Account at the time. George's evidence is that he paid $6,500 towards George's taxi lease payments to avoid them being repossessed.
19. Nicholas gives evidence that in August 2011, George arranged for Nicholas to take out a new loan with RAMS for $476,000 (RAMS Loan) that was secured by mortgage over the Arncliffe Property and was used to discharge the $360,000 mortgage for the Wide Bay Loan. Nicholas also gives evidence that at the time, he believed that the RAMS Loan was only for $360,000, and that the balance of the RAMS Loan (of $116,000) was received by George without Nicholas' knowledge or consent.

2014: George and family move into the Arncliffe Property

1. In early 2014, George sold his Kingsgrove property. Shortly after, George, Stella and their children moved into the Arncliffe property to live with Nicholas. George and Nicholas disagree about the circumstances and terms on which this occurred.
2. George deposes that, in early 2014, he and Stella visited the Arncliffe Property at Nicholas' request, where they were told by Nicholas that he was not well (his hip was playing up and he was not getting a lot of sleep) and needed help. George says that he told Nicholas that he and Stella were looking for a new place to rent, they could move in with Nicholas for a while and help until they found suitable accommodation, and that Nicholas agreed and said they could stay for as long as they wanted as he did need a lot of help. Stella also gives evidence that they visited Nicholas at the Arncliffe Property at his request and deposes to a discussion with Nicholas in precisely the same terms as George.
3. In cross-examination, George gave evidence that he reached an agreement with Nicholas that George would pay Nicholas' bills and help him out and Nicholas would "fix me up when we sell the house" (T.D1.58.36-38).
4. Nicholas gives evidence that George asked if he and his family could move into the Arncliffe Property for six weeks while they looked for a new place to live and that Nicholas agreed. He says that six weeks later, George and Nicholas had a discussion during which they agreed that George's family would continue to live at the Arncliffe Property with Nicholas, and that George would pay the utilities, council rates and mortgage payments while they lived there. Nicholas says that he had been making all the mortgage repayments up until that point, although with some assistance from Catherine while she was living there.
5. George deposes that shortly after moving into the Arncliffe Property, he found bills lying around that had been outstanding for a while. George states that he offered to Nicholas that he would take care of them, Nicholas agreed and Nicholas told George to sort out the bills and he would pay George back as soon as he could.
6. George deposes that the first thing he took care of was a section 57(2b) notice from Westpac bank (which I took to mean a notice of default issued by Westpac Banking Corporation under s 57(2)(b) of the Real Property Act 1900 (NSW) (Real Property Act), and that he paid an amount of $34,000 in order to set the notice aside.
7. Nicholas gives evidence that he was not aware that a s 57(2)(b) notice had been issued to him or that George had made that payment on his behalf in early 2014.
8. There is no notice issued under s 57(2)(b) by Westpac or RAMS in evidence. While the bank statements relating to Nicholas' home loan account with Westpac for the period 19 August 2013 to April 2014 identify that some transactions were dishonoured, the RAMS Home Loan statement for the period 1 July 2013 to 31 December 2013 and transaction listing for the period 2 January 2014 to 31 March 2014 do not refer to any defaults during those periods and the bank statements for 2014 do not show any payment of $34,000 (or around that sum) being paid into Nicholas' Westpac home loan account (or his other accounts) from George's or Stella's bank accounts. George's explanation in cross-examination that he did not have time to subpoena the section 57(2)(b) notice (T.D1.61.6) was also unsatisfactory in the context where subpoenas had been issued to banks for the production of records relating to 2014 and the proceedings had been on foot for more than a year.
9. In the absence of any bank documents that corroborate George's claim, I do not accept George's evidence that he paid $34,000 on behalf of Nicholas in early to mid-2014 in relation to a s 57(2)(b) notice that had been issued by Westpac or RAMS.
10. I am, however, satisfied and find that shortly after George and his family moved into the Arncliffe Property, Nicholas and George discussed and agreed that George would make mortgage and other payments relating to the Arncliffe Property, and George and Stella would assist Nicholas with his finances. This finding is consistent with the evidence given by both Nicholas and George. That said, I do not accept George's evidence that, at the time, they agreed that the payments George would make made would be paid back to him when the Arncliffe Property was sold or Nicholas' evidence that it was agreed at the time that George's payments were in lieu of rent. I consider it more likely that, at the time, the brothers did not discuss the terms on which the payments were to be made by George. In my view, the position was as George's counsel described during closing submissions: that there was no antecedent consensus that if money was to be expended it would be repaid, rather, all that occurred was a family situation where money was to be paid by George on things such as the mortgage (T.D3.224.7-11).
11. In February 2014, George made an enquiry about the amount to discharge the PMC Loan and was advised by email dated 28 February 2014, that it was $16,278.51. Nicholas accepts that the final payment for the PMC Loan, of $16,278.51, was paid on his behalf by George as Nicholas had insufficient funds at the time.
12. In around April 2014, George suggested that Nicholas refinance the Westpac Loan at a lower interest rate and subsequently arranged for Nicholas to take out a loan with the National Australia Bank Ltd (NAB). The NAB loan was for the amount of $624,000, was secured by a mortgage over the Arncliffe Property and was settled on 28 April 2014 (NAB Loan).
13. The NAB drawdown notice identifies that the loan of $624,000 was used to pay out the Westpac Loan ($484,728.62), legal service and mortgage related fees ($805) and Nationwide Capital Pty Ltd ($138,466.38).
14. The payment to Nationwide Capital Pty Ltd (NWC) appears to relate to a short-term loan of $139,000 for which a transaction statement issued by NWC Finance refers (CB421). The statement shows that it was advanced to "Nick Sevdalis" on 3 March 2014, and features a handwritten note stating, "just settled 1 month ago - private loan."
15. Nicholas says that he has never heard of NWC Finance and that he did not take out a loan with, or receive any money from, them. He also deposes that George arranged for the NAB Loan with a mortgage broker, George provided Nicholas with a signature page and the New South Wales mortgage duty declaration to sign and that, at the time, Nicholas did not read or understand that the loan was for $624,000.
16. In his third affidavit, George deposes that he organised the NAB Loan through his connections and once the loan settled, Nicholas paid out the Westpac Loan and Nicholas was left with an amount of about $150,000. When asked about NWC in cross-examination, George accepted that he had done business with that company in the past, including receiving commission payments for loan referrals. He did not accept that he had taken out the loan with NWC in Nicholas' name and gave evidence that he was not sure what the loan was as he could not recall (T.D1.63-65).
17. I accept Nicholas' evidence that he knew nothing of the NWC loan. There is no apparent reason why Nicholas would take out a short-term loan of $139,000 in March 2014 (he was working full time as a taxi driver and, in the past financial year, had a taxable income of $128,732 (CB453)) and there are no records of deposits into Nicholas' bank accounts of large sums in or around March 2014.
18. On the other hand, in the context where George accepted that he had always assisted Nicholas with taking out loans or borrowing money in the past and George had past dealings with NWC, George's evidence in cross-examination that he did not know of the short-term $139,000 loan with NWC Finance was implausible, in my view. Further, in March 2014, George was bankrupt, had no property, had a negative balance in his St George bank account (CB408), had an opening balance of $54.39 in his Westpac bank account (CB422), and presumably was unable to obtain a loan in his own name. The inescapable inference is that, sometime in early March 2014, George arranged a short-term loan from NWC Finance in Nicholas' name for George's own benefit and, after the Westpac Loan was paid out and contrary to George's assertion in his evidence, Nicholas was not left with $150,000, and I so find.
19. Prior to April 2014, Nicholas had the Westpac Account into which his earnings were deposited. His earnings were received by way of credit card, cab charge and cash deposits into that account. He also retained some cash earnings to pay for petrol and other charges related to his taxi and living expenses. He has an ATM card for the Westpac Account which he says he used rarely, on such things as EFTPOS purchases for tolls and taxi-related services and repairs.
20. From April 2014, Nicholas also had a home loan bank account with NAB and had also been issued with a NAB credit card with a credit limit of $25,000. Nicholas gives evidence, which I accept, that George said he would cancel the credit card for Nicholas but did not do so and that George used the NAB credit card over the next several years to make purchases for himself and his family. As already noted, George accepted in cross-examination that he had possession of, and used, the NAB credit card during the period from 2014 to 2017.
21. On 4 December 2014, Macquarie Leasing Pty Ltd issued a notice of termination in relation to Nicholas' taxi vehicle which stated that $27,703.26 was due and that the chattel mortgage was thereby terminated. George deposes that paying off that vehicle cost $31,000 due to termination and penalty fees that "we had to pay" (by which I understand him to mean that he and Stella had to pay). George also deposes that he paid Nicholas' taxi plate in full, the costs of which amounted to $33,000.
22. I do not accept George's evidence that he paid $33,000 to pay out Nicholas' taxi plate or $31,000 to finalise the matter with Macquarie Leasing.
23. As to the taxi plates, as already noted at [72], Nicholas accepts that George paid out the PMC Loan in March 2014 in the amount of $16,278.51. The PMC Loan statement, which identifies that this payment was made on 3 March 2014 by way of final discharge, does not support George's claim that he paid $33,000 to finalise the transaction.
24. As to Nicholas' taxi, Nicholas accepts that George paid around $6,000 sometime in 2015 or 2016 to prevent it from being repossessed, which is generally consistent with George's evidence that he made payments of $6,500 to avoid repossession and Stella's evidence that refers to a payment of $3,080. I find that Nicholas' funds were used to pay out the lease on the taxi to Macquarie Leasing Pty Ltd, based on the amount of $18,859.25 that was withdrawn from Nicholas' Westpac Account by bank cheque in favour of Macquarie Leasing Pty Ltd on 20 August 2015.
25. The payment to Macquarie Leasing Pty Ltd appears to have been funded by a superannuation payment from MLC of $45,152.96 that was deposited into Nicholas' account on 19 August 2015. Nicholas gives evidence, which I accept, that Stella told him to clear out his superannuation account so she could pay out his taxi and pay for other bills, and that she obtained the paperwork and filled out the requisite forms. In addition to the withdrawal for Macquarie Leasing Pty Ltd, on 20 August 2015, $13,000 cash was withdrawn from Nicholas' Westpac account. According to Nicholas, he gave the $13,000 cash to Stella as she told him she needed it to pay all of Nicholas' bills. Based on the timing, the $13,000 may have been used by George or Stella to go towards: the $11,500 cash payment on the NAB credit card on 20 August 2015; and/or the $6,7189.07 payment on 21 August 2015 to Bayside City Council (CB2272).
26. In 2016, Nicholas received a cheque in the amount of $20,000 from Transport NSW for a hardship settlement relating to the legalisation of rideshare. According to Nicholas, Stella took the cheque from him without his knowledge and, when questioned by him, told Nicholas that she had used it to pay bills. Stella says that Nicholas put the amount in his account and used it to pay bills. The bank statements in evidence do not record a deposit of $20,000 into Nicholas' Westpac or NAB accounts or his credit card accounts in 2016.
27. George and Stella depose that at the time they moved into the Arncliffe Property, it was dirty and full of junk and that they cleaned things up when they moved in. Nicholas claims that George and Stella exaggerated the condition of the Arncliffe Property, although he accepts that it was cluttered to some extent with Catherine's things and that the house may have benefitted from some cleaning and updating.
28. George deposes that he slowly undertook the task of cleaning, fixing and renovating the Arncliffe Property and annexes four invoices addressed to him from Sydney Master Painters (dated 20 April 2015, 26 August 2015, 10 June 2016 and 10 February 2018) which total $40,250 and relate to painting and remedial works to the Arncliffe Property. Nicholas accepts that the works were done, although he says that Stella demanded the new kitchen and bathroom and believes that the money from his bank accounts was used to pay the invoices. I find it likely that George paid these invoices as, other than the cash withdrawal of $13,000 on 20 August 2015, there are no large cash withdrawals from Nicholas' bank accounts around the dates of the invoices.

2018: The first acknowledgement

1. In his second affidavit, George deposes to a discussion with Nicholas in August 2018 during which George said that it was time that the money that Nicholas owed is paid, including "the $250,000, from when I transferred the house to you", and to which Nicholas responded by suggesting that they agree on a document that he would sign.
2. George deposes that he tabbed up the advances, told Nicholas that the total owing was $642,750, and then asked Nicholas to sign a document that he had prepared. He deposes that Nicholas agreed to sign the document and did so. In cross-examination, George gave evidence that he prepared the document on his computer at the Arncliffe Property on 27 August 2018 (T.D1.95.9-16).
3. There is no dispute that Nicholas signed the document that George prepared on or about 28 August 2018 (First Acknowledgement) which states as follows: "Moneys paid by George Phoebus Sevdalis for Nicholas Peter Sevdalis as at 27th August 2018 Repayment of taxi plate 33,000 Repayment of car (taxi) 31,000 Section 57(2b) loan repayment 34,000 Payment to repossessor of car finance company 6,500 Renovations to house - painter & repairs 40,250 Payments to NAB credit card 10,000 House repayments (55 x $3,350 = $184,250 plus late payments & additional interest 200,000 Debt owed from Kingsgrove 38,000 Moneys not paid for transfer of house (1991) 250,000 Total 642,750 I, Nicholas Peter Sevdalis hereby acknowledge the above amounts are owed by me and are true & correct. [Signature] Nicholas Peter Sevdalis Date 28/08/18"
4. Nicholas' evidence about the circumstances in which the First Acknowledgement was signed differs significantly from the affidavit evidence of George.
5. Nicholas deposes that, at around 9:00am on 28 August 2018, Stella entered his room and woke him from a deep sleep. He says that he had gone to bed at 5:00am that morning after a late taxi shift, was exhausted and experiencing intense pain from his left hip that had been affecting the quality of his sleep. Nicholas says that Stella waved the document in his face and said in a loud and angry voice: "Sign this. You owe us $642,750 and we want our money." Nicholas says that while he was in bed, they had a conversation to the following effect: "Nicholas: What is this? Why do I have to sign it? Stella: We put that money into the mortgage for this house. We have also been paying all of the bills since we moved in. Now we want our money back so that we can build a house in Monterey Bay. You have to sign it. Nicholas: I will pay you back what you put in. Stella: Then sign It now."
6. Nicholas deposes that Stella handed him a pen and pointed to where he should sign without providing any further explanation as to the contents of the document, he signed the document while he was still in a drowsy state and he saw the $642,750 figure but did not otherwise read or understand the document and was not given an opportunity to do so. Nicholas deposes that he trusted George and Stella and believed that they had paid $642,750 of their own money towards the NAB mortgage (based on what Stella had said) and it was fair to sign the document if they had done so. He also says that, at the time, he did not know the true state of the NAB mortgage and that he would not have signed the First Acknowledgement but for his belief that he owed George money for various things, which Nicholas now believes he did not owe him.
7. In her affidavit evidence, Stella denies Nicholas' evidence. I do not place any weight on Stella's denial given she accepted in cross-examination that she went into Nicholas' bedroom in the morning, said to Nicholas that she and George had been paying the mortgage and Nicholas "need[ed] to help", was aware that Nicholas was suffering hip pain at the time and obtained his signature on the document shortly after he had woken up (T.D2.149-150). According to Stella's evidence in cross-examination, Nicholas was not in a deep sleep when she went into the bedroom, she asked him to come to the kitchen when he was ready to sign the document, and George and their children were in the kitchen when Nicholas came in and signed it.
8. During cross-examination, George gave evidence that he gave the document to Stella to present to Nicholas to sign, Stella went into Nicholas' room with it and George was present in the kitchen when Nicholas came out to sign the document (T.D1.96.3-27). George accepted that, at the time Nicholas signed the document, he did not show Nicholas receipts to corroborate the amounts that were allegedly due, Nicholas responded "yes" when George asked him whether he knew what he was looking at and that he gave Nicholas a photocopy of the document after he signed it (T.D1.96.35-97.6, 107.27-37).
9. During cross-examination, Nicholas maintained that, at around 9:00am on 28 August 2018: Stella put the document "in [his] face"; he was feeling drowsy after having finished his shift at 5:00am; he was woken up from a deep sleep by Stella saying, "[c]ome on, you've got to sign this document… We want our money. We put money in the house and we… been paying the mortgage and… all [the] bills"; and he did not get a chance to read it (T.D2.212.10-41). Nicholas rejected that the First Acknowledgement was signed at the kitchen table, stating "[n]o, that was the other one" (T.D2.212.44). He also gave evidence that he did not receive a copy of the document (T.D2.213.39).
10. I prefer Nicholas' evidence regarding the circumstances in which he signed the First Acknowledgement. His evidence during cross-examination was more consistent with his affidavit evidence than that of George and Stella's evidence in cross-examination, which I found to be new and largely self-serving. Nicholas' evidence was also plausible and credible in my view. I reject the evidence of George and Stella concerning the events of that day unless it is corroborated by Nicholas' evidence or is contrary to their interests.
11. In relation to the amounts referred to in the First Acknowledgement as monies paid (and not paid) by George to, or on behalf of, Nicholas, I have already dealt with George's evidence and claims regarding the amounts for: the repayment of the taxi plate, the prepayment of the car (taxi) and payment to repossessor of car finance company (at [82]-[86]); the section 57(2)(b) loan repayment (at [67]-[70]); and the renovations to the Arncliffe Property (at [89]). In summary, I am not satisfied on the balance of probabilities that George paid the amounts claimed in respect of those five items other than the amounts of $16,278.51 and $6,000 that he paid towards Nicholas' taxi plate and car, and the invoices of $40,250 towards renovations and repairs to the Arncliffe Property.
12. I deal with George's evidence and his claim that he paid "[h]ouse repayments" of $200,000 (or other amounts) at [138] below.
13. As to the "[p]ayments to NAB credit card" and "[d]ebt owed from Kingsgrove", George's counsel accepted that he could not support those claims (T.D3.230.14). In my view, this concession was appropriate given George's evidence (as referred to at [21], [22] and [79] above), the fact that there was $27,086.10 owing on the NAB credit card as at 16 October 2017 and Nicholas' evidence that the card was subsequently cancelled because of the default in payment and NAB is holding him responsible for the arrears.
14. In relation to the "moneys not paid for transfer of house (1991)", for the reasons set out at [51]-[56] above, I do not accept George's evidence that Nicholas owed George $250,000 for the transfer of his half-interest in the Arncliffe Property in 1991. As George's counsel accepted in closing submissions, the objective evidence is not in his client's favour that the $250,000 has not been paid (T.D3.224.10-11).

2019: Proposal to sell the Arncliffe Property and a second acknowledgement

1. On 14 January 2019, solicitor Mr Nick Cassim sent a draft deed of family settlement between George and Nicholas to solicitor Mr James Jordan (Draft Deed of Family Settlement) asking him, as someone familiar with the "family conditions", to give independent advice. Based on that email and other documents in evidence, it appears that Mr Cassim was acting for George and Mr Jordan was to act for Nicholas.
2. The Draft Deed of Family Settlement records that George had been making payments on Nicholas' behalf in respect of Nicholas' mortgage, loans and other debts (referring to, amongst other things: a section 52 notice under the Real Property Act; loans to prevent repossession of Nicholas' taxi; and a loan of $250,000 for the unpaid balance of the purchase price of the Arncliffe Property) and provides that the parties agree that Nicholas will sell the Arncliffe Property with vacant possession to George for the sum of $1.3 million and George had the funds to discharge the mortgage (estimated to be $570,000). The Draft Deed of Family Settlement outlines that Nicholas will give credit towards the purchase price for all debts and that, after settlement and upon George's purchase of a new property, George will allow Nicholas to reside there rent free, and in the event that Nicholas chooses to leave he would endeavour to lease or buy a further house for him. Attached to the Draft Deed of Family Settlement is a draft contract for sale of the Arncliffe Property that refers to Nicholas as the vendor, George as the purchaser and a purchase price of $1.3 million with no deposit.
3. A file note that appears to have been taken by Mr Jordan during a meeting with Nicholas records that: the "property got put in my name in 1999"; when Nicholas took over the property the mortgage "was $210,000"; Nicholas "increased the mortgage" to buy his taxi plate in 2005; George and his family had been living with him since 2014; George had been "paying for mortgage over last 3 or 4 years" and paying "most utilities"; Nicholas was "sick and off work… Illnesses - cellulitis (left foot/leg); and the mortgage "is late $500,000". It also records the following: "- I have to pay him back what I owe him, but don't know how much. … - Shouldn't I get something out of it? - Banks got to get paid out first. - He said that George was probably entitled to an equitable interest in the property. … - I want some money to buy myself a unit…. Do not want to live with George long term."
4. Mr Jordan referred Nicholas to Dr Nick Cvetkovski requesting a report concerning Nicholas' competence to manage his own financial affairs. According to the instructions to Dr Cvetkovski dated 25 January 2019, Mr Jordan was instructed by Nicholas in a "transaction wherein he is to transfer his home to a family member… [to] discharge a liability that he has to the family member and payout the family member's equitable interest". Mr Jordan was concerned whether Nicholas understood his financial position, noting that he was instructed that he had been ill over the last few years suffering from sleep apnoea, cellulitis, some hip and mobility issues and other issues, and that Nicholas had expressed an intention to acquire a loan (to be guaranteed by his brother) but did not seem to grasp the complexities of an inability to pay.
5. Dr Cvetkovski's medical certificate dated 11 February 2019 records that the patient (Nicholas) was agreeable and understanding that the sale of the Arncliffe Property will be split between "pt and his brother" and that there was no past history of mental health issues or memory problems. It also records that no significant cognitive impairment was identified based on the Mini Mental State Examination (MMSE) score of 30, that the patient demonstrated an understanding of simple issues and his MMSE showed normal range.
6. Mr Jordan sent Dr Cvetkovski's certificate to George by email dated 20 February 2019 and said that he wanted the doctor to diagnose Nick's capacity to understand complex issues, complex legal arrangements and to make decisions about his own financial affairs as the doctor had not addressed those matters. He asked George to obtain such a certificate to progress the matter. There is no evidence of any steps being taken by George to do so.
7. During cross-examination, George gave evidence that he did not know about the Draft Deed of Family Settlement or the proposal to sell the Arncliffe Property to him. His evidence was that he had found a house to purchase in Sans Souci (where Nicholas would live in a granny flat) and he was looking to use the Arncliffe Property as security or to sell it to enable the purchase to occur. He also said that the sale of the Arncliffe Property to enable the purchase of the other property was the only transaction pursuant to which Mr Jordan was instructed and that there was no reason for the Arncliffe Property to be sold to him (T.D2.115.30-40, 120.8-18). I do not accept George's evidence on that issue. It is inconsistent with the contemporaneous documents.
8. George also gave evidence in cross-examination that, by the time of Mr Jordan's 20 February 2019 email, the property (which I understood as a reference to the Sans Souci property) had been sold and so "we couldn't go ahead" (T.D2.118.40-46).
9. George deposes to a discussion with Nicholas in early October 2019 in which he asked Nicholas, "[w]hen do you think my money may be coming?" to which Nicholas responded, "[l]et's sell the house and I will pay you your amount out of the sale." He gives evidence that they listed the Arncliffe Property with a real estate agent at Rockdale and nominated Gary Cassim & Associates as the solicitors firm that would act on the sale.
10. George deposes to a further conversation during which Nicholas asked where he would go after the sale of the Arncliffe Property. George said that Nicholas would live with George and Stella in the next house George bought (referring to a granny flat at the back) and that Nicholas had to sell the Arncliffe Property and pay George what he owes as it was the only way to clear his debts and allow George to get back on his feet and buy another property. George contends that he promised Nicholas that, within six months of the sale, he would buy Nicholas a car, being a Toyota Hybrid, to use as a taxi as soon as his health allowed.
11. George says that, on 23 October 2019, Nicholas signed a letter addressed to solicitor Mr Nick Cassim (Letter Acknowledgement) (CB1668) and sent it to Mr Cassim.
12. The signed Letter Acknowledgement states as follows: "23rd October 2019 Gary Cassim & Associates Attention:- N.G.Cassim By email : nick@cassim.com.au GARRY MERVYN WOOD Dear Nicholas, Re : Sale of 94 Wollongong Road Arncliffe I, Nicholas Peter Sevdalis, am the proprietor of the above property hereby irrevocably instruct you to pay from the proceeds of sale (after mortgage has been satisfied ) all monies owed to George Phoebus Sevdalis as per schedule attached plus mortgage repayments paid to date. Furthermore, once the payments have been made and all parties are satisfied as to the repayment of debt, it is acknowledged that George Phoebus Sevdalis will give to me a Hybryd Toyota vehicle to be used as a taxi to the value of $35,000 to $50,000 within six(6) months of repayment. I do this uncoerced and without duress. N.P. SEVDALIS [Signature] DATE 23/10/19"
13. Nicholas accepts that he signed the Letter Acknowledgement but says he did not suggest to George that they should sell the house to pay George any money and did not agree to list the house for sale. He deposes that George asked him to go see George's solicitor, Mr Gary Cassim, in relation to the Arncliffe Property so he could sign over the house to George because he owed George $600,000. According to Nicholas, George "got in [his] face" and started screaming at him, words to the following effect: "I am entitled to that money. Who are you - with no wife and no kids? You deserve nothing. If you don't sign the house over then I will take you to court. and you will be left on the streets with nothing. I will ruin you. I will make sure of that."
14. Nicholas deposes that he went with George to Gary Cassim's office, was handed the Letter Acknowledgement, told he needed to sign it as that was what he owed George and that neither George nor Mr Cassim explained it to him. According to Nicholas, he pointed out that he did not owe George any money for the transfer of the Arncliffe Property because he paid for George's share by taking out the $210,000 loan for the monies he owed; he otherwise did not review the items or understand the document and he signed it because he trusted George and believed that he and Stella had paid off the mortgage and were owed money.
15. Nicholas also deposes that, later that day, Stella approached him with the Letter Acknowledgement and told him that a justice of the peace, Mr Rami Abdala, would be coming around to witness his signature on the document, and referred to it as the document he signed at Gary Cassim's office. Nicholas says that when Mr Abdala arrived, he signed the document in his presence but did not read or look at it other than to confirm it was the same document that he signed in Mr Cassim's office.
16. In cross-examination, George denied saying the words attributed to him by Nicholas (as described at [116] above), gave evidence that he prepared the Letter Acknowledgement himself without legal advice on 23 October 2019, denied that they went to Gary Cassim's office to sign it and accepted that he suggested that they get an independent witness and that he called Mr Abdala who was a real estate agent and a justice of the peace (T.D2.124.28-29, 124.31-48, 125.3-5, 127.27-31). As George explained in cross-examination, the independent witness was so "there's no, there's no qualms or anything like that, that I've, that I'm pushing you into anything like that."
17. In her affidavit, Stella denies Nicholas' evidence, as set out at [118] above. She gave oral evidence that she did not know who prepared the Letter Acknowledgement but knew that Nicholas went to a justice of the peace in Arncliffe and signed it in front of them (T.D2.152.6-10).
18. I am unable to accept Nicholas' evidence that he met with Mr Cassim on 23 October 2019 when he signed the Letter Acknowledgement and I accept George's evidence that they did not attend Mr Cassim's office that day. George's evidence is supported by Mr Cassim's unchallenged evidence that he has never met or spoken with Nicholas. In my view, Nicholas must be mistaken as to his recollection or has conflated events from when, on other occasions, he dealt with Mr Nicholas Cassim, a solicitor and Gary Cassim's father.
19. I find it likely that Nicholas signed the Letter Acknowledgement after it was presented to him by George at the Arncliffe Property and in the presence of Mr Abdala, either at the Arncliffe Property or at Mr Abdala's offices. However, I accept Nicholas' evidence that he had no input in its preparation, he had not discussed or negotiated the matters referred to prior to signing it, he did not receive any legal or financial advice in relation to it and did not fully understand its implications in the sense that he did not understand that he would not receive any funds from a sale after payment of the mortgage (which was approximately $620,000 at that time) if George was paid what he claimed he was owed. As George said in cross-examination, "when he wouldn't sign it" and George asked him what he wanted, Nicholas responded "I want half", which George understood to mean half of the sale price (T.D2.126.31-34).

March 2020: The 30 March Agreement

1. In March 2020, Nicholas retired as a taxi driver.
2. According to George's affidavit evidence, in March 2020, he had a discussion with Nicholas in words to the following effect: "George: What is happening, we have to sell the Land. I don't want to go legal but were [sic] are running out of choices. Nicholas: Don't go legal, its expensive and a hassle. Listen, I will acknowledge the debt for $620,000 and you can have it secured against the home."
3. George deposes that he agreed to this as he wanted the matter to be resolved "rather than be at war" with his brother, that Nicholas signed a document dated 30 March 2020 (30 March Agreement) and that he then used it to lodge the Caveat against the Arncliffe Property.
4. The 30 March Agreement states as follows: "30th March 2020 GARRY MERVYN WOOD AGREEMENT I, Nicholas Peter Sevdalis, being the proprietor of the property at 94 Wollongong Road Arncliffe (Title particulars Lot 2 DP 205974) hereby acknowledge that I owe my brother, George Phoebus Sevdalis the sum of approximately $620,000 (six hundred and twenty thousand dollars) plus any further loans that will be advanced on his behalf being monies lent to him over the course of eight (8) years. I allow him to take a charge over my property to secure his interest, and will be repaid upon the sale of the property. I sign this agreement on my own free will and without co-ercion [sic] or duress. [Signature] [Signature] Nicholas Peter Sevdalis George Phoebus Sevdalis Date: 30th March 2020 Date: 30th Marc [sic] 2020"
5. George gave evidence in cross-examination that he prepared the 30 March Agreement and it was given to Nicholas in the kitchen by Stella to sign (T.D2.127.41, 128.13-15). He also gave the following evidence (T.D2.128.17-129.2): "Q. And so, you asked her to get him to sign this agreement, didn't you? A. I didn't force him. I didn't force him. I asked my wife to, to wake him up and come and sign. He was in bed. I dunno if he was asleep or what state he was. He came, he was pretty coherent. There was no drama. I bring your attention to the bottom paragraph, says "I will sign this agreement of my own free will and without coercion or duress." And he asked me what these words meant. And I explained it to him. I didn't put a knife to his throat. I didn't push him into anything. Q. But you are the one who wrote those words? A. Yes. And I explained them to my brother. Q. Do you have a legal background? A. I don't have a legal background, but it's, it's very simple. Coercion, you know what coercion is, and duress. Q. Well, if it's so simple, why did you need to explain those to him? A. Because I don't think he would understand it. Did I do the wrong thing, did I? … HER HONOUR: Can you recall what you said to him, Mr Sevdalis? WITNESS: Yeah, I said to him, "Nick, this is, this is the, the agreement. I'm not forcing you to sign it. I'm not putting the knife to your throat." I said, "All I want to do is get my money, so I can move on." That's what I said to him. And he came, and he signed it. I explained to him what duress was and explained to him. HER HONOUR: But what, I'm asking you what you said to him, when you say you explained duress. WITNESS: I said, "Look, Nick, I didn't, I didn't force you, and I didn't put the knife to your throat for you to sign it. Are you aware of it, before you, before you signed it." And he turned around and signed it, and that was it."
6. George knew that Nicholas suffered from sleep apnoea at the time, that Nicholas did not have any input into the preparation of the 30 March Agreement and that he did not tell Nicholas to get legal advice before he signed (T.D2.129.21, 129.36, 129.43).
7. When asked about the amount of $620,000 referred to in the 30 March Agreement, George gave the following evidence at (T.D2.139.26-34): "Q. Can you tell me what the $620,000 was made up of at that time? A. It was about 650,000, less about $20,000 that - I can't remember exactly what it was. It - it came off the amount. There was a - there was a difference of $20,000 thereabouts. Q. Sorry, the $650,000 you said-- A. It was 642 that we went to first, and then there was a difference of $20,000 that came off. And I'm not entirely sure exactly what it was. I can't remember, to tell you the truth. But the debt came to 620,000 from the 642."
8. Nicholas' evidence is in stark contrast to George's evidence. He deposes that he was alone in the kitchen of the Arncliffe Property when Stella came in at around 4.00pm and handed him a document and said to him, in a tone that Nicholas described as loud and intimidating, the following: "We have paid off the mortgage on the Property. You owe us $620,000. If you don't immediately sign this document, we will sue you and you will have nowhere to live - we will make sure you [sic] that you have nothing. If you sign the document, you can live with us and we will buy you a new car."
9. Nicholas deposes that George was not present when he signed the 30 March Agreement and did not recall George's signature being on it at the time he signed. He says that he had not discussed or negotiated the matters in it with George or Stella prior to signing; he was not given an opportunity to obtain legal or financial advice about it before signing and he was not provided with a copy until these proceedings were commenced.
10. Nicholas deposes that, at the time: he felt scared of George and Stella and believed they would sue him and leave him "with nothing" if he did not sign the 30 March Agreement; he was experiencing severe hip pain, had trouble concentrating and was feeling groggy due to waking up in the night (from the hip pain); Stella and George had complete control over his finances; he had still not seen the NAB mortgage statements or his personal bank statements; he felt helpless; and he signed because he felt that he did not have any other choice. He deposes that he did not know what a charge was nor the implications of George having a charge over his property and would not have understood what was meant by "plus any further loans that will be advanced on his behalf being monies lent to him over the course of eight (8) years".
11. In her affidavit, Stella denies Nicholas' evidence concerning the 30 March Agreement although, in cross-examination, she accepted that she gave the 30 March Agreement to Nicholas to sign when he was in the kitchen (T.D2.152.30-34). When asked what she said to Nicholas, she gave evidence that she said to him: "[y]ou need to read the document, sit down, and sign it"; "you know what you're signing"; "[y]ou know what we've been paying all these years"; but did not accept that she said to Nicholas "this is the amount you owe us" (T.D2.152.28-42, T.D2.155.29-31). She testified that George explained the 30 March Agreement to Nicholas, Nicholas read and signed it and that she and George did not push Nicholas to sign anything and that "100% he knew what was happening" (T.D2.154.11-12, 154.4-5, 152.40-42). She also testified that George said to Nicholas: "You know that we've been paying everything, and we, we will always help you. And this is our money that we put there. We've always paid cash to the mortgage. Everything" (T.D2.154.48-50).
12. In cross-examination, Nicholas maintained that he was sitting at the kitchen table having a cup of coffee when Stella approached him saying "you have to sign this" and that George was not present (T.D2.194.15-19, 196.4-12, 203.39-45, 205.29-30). He gave evidence that he did not read the 30 March Agreement when it was given to him, described having "only had one look" at it, said he did not see the words "Agreement" and "I owe my brother" on the document "very well" and referred to not concentrating because he was experiencing excruciating left pain in his hip at the time (T.D2.194.43-195.2, 196.45-47, 195.13-16, 200.1-3). He accepted that he felt George would sue him if he did not sign, that he knew that George was demanding Nicholas pay money to George and that when he signed the document on 30 March 2020, he knew that George was claiming $620,000 from Nicholas (T.D2.218.8-19, 218.47-49). Nicholas also gave evidence in cross-examination that George did not tell him to get independent legal advice, did not provide him with a copy of the document and told him not to discuss the document with their sister (T.D2.203.5-7, 214.7-9).
13. I accept Nicholas' evidence that George was not present when Nicholas signed the 30 March Agreement, that Stella asked Nicholas to sign the 30 March Agreement and that he signed it after she did so while he was in the kitchen on 30 March 2020. In my view, George and Stella's evidence was too inconsistent and unreliable for me to accept that George was present and that he explained the 30 March Agreement to Nicholas prior to Nicholas signing it. Relevantly, George's counsel did not advance any submission to the contrary. He accepted, on the balance of probabilities, that George was not there (T.D3.216.38-39).
14. I find it likely that Stella had a conversation with Nicholas along the lines deposed to by Nicholas (as set out at [130] above), although I am unable to accept Nicholas' evidence that Stella told him, or that he understood from what he was told, that George and Stella had paid off the mortgage on the Arncliffe Property at that time. It is difficult to accept that Nicholas was told, or that he believed, that the mortgage had been paid off by March 2020 given the evidence indicates that Nicholas was aware that the mortgage "is late $500,000" in February 2019 (as described in Mr Jordan's note, at [106] above). In my view, it is more likely that Stella said to Nicholas words to the effect that George and Stella had been making the mortgage payments on the Arncliffe Property for many years, Nicholas knew they had been paying those amounts and she told Nicholas that he owed them money and referred to the amount of $620,000, and I so find.
15. My findings of fact in respect of George's evidence and his claims that Nicholas owed him money for most of the items that made up the "$642,000" referred to in the First Acknowledgement are set out at [100]-[103] above.
16. As to George and Stella's evidence that George had been paying the mortgage repayments and other bills in relation to the Arncliffe Property and George's claim for "[h]ouse repayments" of $200,000 in the First Acknowledgement, the bank statements and other documents in evidence disclose that: 1. a direct debit arrangement that had provided for automatic payments to be made from Nicholas' NAB home loan account number ending #2171 to his offset home loan account number ending #5903 (NAB Loan Account) ceased in mid-August 2014 (CB582); 2. NAB issued default notices in relation to the NAB Loan Account on 30 October 2018 (CB1568), 29 June 2019 (CB1565), and 19 August 2019 (CB1667) and a temporary payment arrangement was accepted by NAB on 4 November 2019 (CB1690); 3. a total of $195,238.35 was deposited directly into Nicholas' NAB Loan Account (by way of cash and cheque deposits) during the period 14 July 2014 to 30 June 2021 (MFI-4) [1] , with the last recorded deposit into that account, of $3,350 (in cash), being made on 27 March 2020 (CB1697); 4. the NAB Loan Account was $575,075.98 in debit as at 27 March 2020 (CB1697) and $610,443.85 in debit as at 29 October 2021 (CB2219); 5. no payments were made to Bayside Council, other than a payment of $6,718.07 on 21 August 2014 (as referred to at [86] above); $7,413.64 was owing as at the end of the 30 June 2020 rating period; and $10,886.88 was owing at the end of the 30 June 2022 rating period (CB2270); and 6. no payments were made to AGL for the gas and electricity accounts for the Arncliffe Property after 26 March 2018 and 24 September 2018 respectively (CB2269 and CB2277).
17. I am satisfied, and find on the balance of probabilities, that George made mortgage payments on the Arncliffe Property, by way of the $195,238.35 cash and cheque deposits into the NAB Loan Account between 14 July 2014 and 27 March 2020. This is based on my finding that Nicholas and George agreed that George would make the mortgage payments and pay other bills in relation to the Arncliffe Property (at [71] above), Nicholas' evidence in cross-examination that he could not recall making the cash deposits of $14,000, $4,000, $5,000 and $6,600 and the cheque deposit of $5,000 during the period from 1 July to 31 December 2015 (T.D2.210.16-47), Nicholas' evidence that he only made "small payments, a thousands, 900's, 800" (T.D2.211.3-4), and the fact that a large number of deposits were for amounts of $1,000 or more. That said, I cannot be certain that all of the deposits were made by George using his own funds.

April 2020 to May 2021: Events leading to these proceedings

1. On 24 April 2020, Nicholas began to receive a pension from Centrelink in the amount of $841.90 per fortnight into a bank account with ANZ in his name (ANZ Account). According to Nicholas' evidence, Stella had access to the ANZ Account and withdrew amounts from pension payments. Stella denies this.
2. In August 2020, Nicholas had two falls at the Arncliffe Property and was hospitalised on both occasions. On 9 September 2020, he was admitted into Macquarie Lodge for respite care prior to an operation to replace his left hip, which was expected to take place in October that year.
3. On 22 October 2020, Stella and a solicitor, Mr Steve Kassem of Future Legal, visited Nicholas at Macquarie Lodge and Nicholas executed an enduring power of attorney that appointed Stella as his attorney (POA). Nicholas deposes that he did so at Stella's request and no explanation was provided to him about the documents other than that they could be used by Stella to pay his bills and utilities.
4. On 23 October 2020, Nicholas had a total hip replacement for his left hip (CB1946). The same day, Stella, in her capacity as Nicholas' attorney, signed a mortgage discharge authority form to NAB in relation to a sale of the Arncliffe Property with a preferred settlement date of 9 November 2022. The form identified Stella as authorised to speak on Nicholas' behalf and instructed NAB to deposit any excess funds received on settlement into Stella's bank account (CB1936). Given Stella's role as Nicholas' attorney and her knowledge that the Arncliffe Property was to be sold, her evidence in cross-examination that she had "no idea" that she was nominated to receive the excess funds (T.D2.158.9-20) was fanciful, in my view. I accept Nicholas' evidence that he was not aware of that matter and did not know that any excess funds from a sale of the Arncliffe Property were to be paid into Stella's account.
5. George deposes that Nicholas had placed the Arncliffe Property on the market in late September or early October 2022. I reject that evidence and accept Nicholas' evidence that he did not agree to list the Arncliffe Property for sale at that time. As George accepted in cross-examination, he decided to sell the property after the 30 March Agreement (T.D2.130.3).
6. It appears that George had arranged to sell the Arncliffe Property to Mr Mohamed Hammoud for $1.2 million with no deposit, settlement to occur in four weeks and on terms that provided for Nicholas to lend Mr Hammoud the sum of $200,000 (described as the balance of the monies payable on settlement) that was repayable in two instalments over twelve months, and that George was instructing Mr Kassem in relation to those transactions, including to prepare the "Deed of Loan" (CB1912). Around this time, George was also negotiating to purchase a property at Bexley, in respect of which Mr Hammoud was arranging finance for George, and the sale proceeds from the Arncliffe Property were essential to enable George to complete that purchase (CB2068, T.D2.136.22-137.16).
7. As events transpired, the intended simultaneous exchange and settlement on the sale of the Arncliffe Property to Mr Hammoud and George's purchase of the Bexley property did not go ahead. It is not clear on the evidence whether this was due to questions raised by NAB about the POA, whether George was unable to get finance approval for his purchase, or whether Mr Hammoud would not provide security for the $200,000, as George sought to explain in cross-examination (T.D2.137.15-16). Whatever the reason, I find it likely that Nicholas was not informed about the sale of the Arncliffe Property to Mr Hammoud on the terms proposed, he did not authorise George or Stella to arrange the sale and he was unaware that Stella was using the POA in relation to that transaction.
8. In December 2020, Nicholas was advised by his treating doctors that his hip replacement surgery was successful and he could return home. Nicholas deposes that George and Stella told him that they have given their daughter his room and that they refused to allow him to move back in. He also says that he started to feel uncomfortable with the POA, he called Mr Kassem who told him that he needed to sort it out with Stella and, when Nicholas told Stella that he wanted to revoke the POA and get his ATM cards back, Stella refused.
9. In January 2021, Nicholas was advised by Macquarie Lodge to pay his account and was surprised to find that it was in arrears of around $10,000. He believed that Stella had been paying the account using his pension money.
10. Around this time, Nicholas approached his sister, Eva, to assist him in dealing with his financial affairs. After she did so, she noticed that Nicholas had a number of unpaid bills. Eva gives evidence, which was not challenged, that when she asked Nicholas why he had not been paying the bills, Nicholas said that Stella told him she was paying the bills and that Stella had his bank cards, controlled his account and had his POA.
11. After his discussions with Eva, Nicholas revoked Stella's POA and appointed Eva as his attorney. Nicholas closed his ANZ Account and opened a new one in which to receive his pension, requested mortgage statements from NAB and had his mail re-directed to Macquarie Lodge. He gives evidence that, at this time, he became aware that the mortgage repayments had not been made for many months, George had not cancelled the NAB credit card (it was closed in March 2021) and there were outstanding amounts payable to Bayside Council, AGL for gas and electricity and Sydney Water (NS First Affidavit, at [64]).

Other matters

1. Nicholas deposes that he agreed to Stella taking over his finances shortly after she moved into the Arncliffe Property in April 2014. According to Nicholas, Stella insisted on doing so as Nicholas was behind on paying bills and needed help. He says that he agreed as he trusted Stella, was tired and was suffering from sleep apnoea at the time. He also says that: he gave Stella his Westpac ATM card and pin numbers; Stella (and George) took his cab charges and other dockets to deposit into his Westpac Account; Stella and George used the ATM card to make cash withdrawals; Stella and George paid him a $100 weekly cash allowance; Stella helped him open, and had access to and control of, his ANZ Account; and that George and Stella intercepted and took possession of his bank statements.
2. Nicholas also gives evidence that he has reviewed the bank statements for his Westpac Account from 28 April 2014 to 28 July 2020 and the ANZ Account and deposes that he did not make, approve or have knowledge of the transactions identified on the bank statements for those accounts except for those listed in the third column of a table referred to in his first affidavit as "Annexure A" (Exhibit C). Nicholas says that the fourth column of the table identifies the amount of money that was misappropriated by Stella and George from his Westpac Account (of $233,755.55) and from his ANZ Account (of $22,713.10).
3. Stella disputes this. She describes her role as Nicholas' "private driver" and deposes that she used to take Nicholas to the ATM, bank and post office to assist him to pay bills, and that she only used his ATM card when authorised by Nicholas (T.D2.143.39).
4. I do not accept Stella's evidence that she only acted as Nicholas' driver. There was no need for Stella to act as Nicholas' driver when he had his own car and worked as a taxi driver until March 2020, other than during periods when he was off work with illnesses related to his hip and cellulitis in his left leg.
5. As already noted, the hearing before me was not to determine Nicholas' claims that George and Stella misappropriated his funds. It is, therefore, unnecessary for me to make findings about each of his claims. However, as the issue of whether Stella and George assisted Nicholas with his finances and had access to, or control over, Nicholas' ATM cards, bank accounts and records has some relevance to his Contacts Review Act claim, it is appropriate to record that I do not accept Stella's evidence: that Nicholas was, at all times, in control of his finances; that she did not have control over his ATM and bank cards; that there were no "unauthorised transactions" as alleged by Nicholas; and that she solely used the ATM cards to make withdrawals on Nicholas' behalf when authorised to do so or to pay him $300 per week for living expenses.
6. While I make no findings in relation to the extent of Nicholas' claims of misappropriation from his bank accounts, the evidence satisfies me that Stella had access to, and control over, Nicholas' ATM cards, Westpac Account and ANZ Account, and that she made some unauthorised withdrawals. This is based on: 1. Nicholas' evidence, which I accept, that he did not make or authorise the cash withdrawals from his Westpac and ANZ Accounts at the Bexley RSL club. For the reasons set out at [26] above, I find that those withdrawals were likely made by Stella without Nicholas' knowledge or consent; 2. the nature and timing of transactions on Nicholas' ANZ Account, such as a payment to Joelle S Hair & Beauty for $60 on 8 May 2020 (CB1755) and the multiple EFTPOS and ATM transactions on 24 and 25 October 2020 at Turrella, Arncliffe and at the Bexley RSL, noting the temporal proximity of these transactions to Nicholas' hip replacement operation on 23 October 2020; and 3. my doubts about the reliability and credibility of Stella and George's evidence about these matters and their evidence more generally.
7. Based on the above and my findings that George arranged for the loans that were taken out in Nicholas' name and agreed to, and made, mortgage and some other payments in relation to the Arncliffe Property and on George's behalf in relation to the PCL Loan, I accept Nicholas' evidence that he did not have visibility of his bank statements and overall financial position from shortly after April 2014 (when George and Stella moved into the Arncliffe Property and took over his finances) until around January 2021 (when Eva started to assist him with his finances).

The 30 March Agreement and the Contracts Review Act Claim

1. George's claim for relief relies on the 30 March Agreement, which he submits is an enforceable contract as it resolved George's claim for a sum greater than $620,000 and his equitable half-interest in the Arncliffe Property and was made in return for George agreeing not to sue Nicholas (T.D3.176.28-178.18).

Is the 30 March Agreement a contract?

1. George submits that the consideration supporting the contract was George's forbearance from "going legal" and, when the deal was recorded in writing, a contract was "brought to life". George's counsel says it follows that George can sue for the debt of $620,000 and enforce the security granted by the contract to repay that debt unless the 30 March Agreement is unenforceable because of the Contracts Review Act issues raised by Nicholas' cross-claim.
2. In his pleadings and written submissions, Nicholas did not contend that the 30 March Agreement was not a contract for the purposes of the Contracts Review Act but asserted that it should be set aside as an unjust contract, which is predicated on the 30 March Agreement being a contract for the purposes of that Act.
3. At the hearing, Nicholas accepted that the 30 March Agreement created a charge (on the assumption that it was a valid contract). While his counsel noted that there was a dispute that the amount of $620,000 was due and owing and the terms of the document were vague and unclear, she did not contend that they were so uncertain or incapable of meaning that the 30 March Agreement was void for uncertainty.
4. The issue raised by Nicholas' counsel during closing submissions was whether the 30 March Agreement was supported by consideration in the form of forbearance to enforce George's claim.
5. Nicholas' counsel submitted that George's evidence that the amount of the debt had come down from $642,000 to $620,000 due to "the $20,000" (as set out at [129] above) was a different story to his pleaded case that, if George refrained from taking legal proceedings, Nicholas would acknowledge indebtedness in the reduced sum of $620,000 to George and charge his property for payment (SOC, at [22]). As I understand the submission, Nicholas' counsel argues that as George had not proven his pleaded case on forbearance, there was no consideration flowing from George to Nicholas.
6. I accept that George's evidence in cross-examination did not clearly align with his pleading that refers to an agreement whereby Nicholas would acknowledge a reduced indebtedness. However, Nicholas admits that George demanded repayment of $642,750 from him in March 2020 and informed him that he would commence legal proceedings to recover that sum from Nicholas (Defence, at [21] and [22]). Nicholas also gave evidence that he signed the 30 March Agreement document, which provided for a charge and repayment of $620,000 when the Arncliffe Property was to be sold, because he believed that George was going to sue him and he wanted to settle the dispute about whether he owed George money or not and avoid George commencing legal proceedings against him (T.D2.217.38-218.2).
7. In my view, these matters establish that it was essential to Nicholas signing the 30 March Agreement that he understood that, in return for doing so, George was undertaking to forebear from suing Nicholas for the sum of money that George had previously claimed was owing and continued to be owing, even if that amount was "approximately $620,000". The evidence may not disclose an express request by Nicholas to George not to sue or that Nicholas offered to provide a charge in return prior to signing the 30 March Agreement, but it seems reasonably open to find that there was an implied agreement to forbear given that security in the form of a charge was given by Nicholas in response to George's request: Re Hyams; Official Receiver v Hyams (1970) 19 FLR 354, at 254 per Gibbs J.
8. Forbearance to sue, or to otherwise press for payment of an amount, will also be good consideration for a subsequent agreement even if the claim is doubtful in law, in the sense that there does not need to be a clearly enforceable legal right to demand repayment of a debt that is owed at that time of the compromise. So long as George had a bona fide belief that his claim against Nicholas had a fair chance of success and he agreed to forbear from suing, that forbearance should be adequate consideration in return for Nicholas' promise to grant a charge and repay the lesser amount when the Arncliffe Property was sold: Callisher v Bischoffsheim (1870) LR5QB 449, at 452; see also JD Heydon QC, Heydon on Contract (2019, Thomson Reuters), at [5.380] and the authorities there cited.
9. It is true that the forbearance related to claims for payment of monies that, in my view, were doubtful at law. As his counsel accepted at the hearing, there was no debt in contract prior to signing the 30 March Agreement (T.D3.224.1-6). George also had no existing security in relation to the monies he claimed were owing and in respect of which Nicholas had already signed the earlier acknowledgements. In that respect, there is some force to Nicholas' submission that he received no benefit from the 30 March Agreement such that there could not be any valuable consideration flowing from George to Nicholas. However, no submission was advanced by Nicholas and it was not put to George in cross-examination that George knew that his claims for payment of $642,750 or $620,000 were entirely unfounded, that he believed them to be invalid at the relevant time or that he had no intention to sue Nicholas in respect of those claims.
10. In the absence of such evidence, and for the above reasons, I am not persuaded by Nicholas' submission that the Court should conclude that the 30 March Agreement is not a contract for the purposes of the Contracts Review Act because it was not supported by consideration and thus, there is no unenforceable contract and George's case fails.
11. However rudimentary it may be, I am satisfied that the 30 March Agreement was signed by Nicholas to give effect to an understanding that George would not sue Nicholas in relation to George's claim that Nicholas owed him over $620,000 and that it contained contractual terms that impacted the legal relations between the brothers. As a consequence, in my view, the starting point is that Nicholas is bound by the terms of that contract whether he read it or not, unless he can establish it is unjust and should be set aside in accordance with the Contracts Review Act.

Contracts Review Act: Legal principles

1. Section 7(1) of the Contracts Review Act provides: 7 Principal relief (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, (d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that: (i) varies, or has the effect of varying, the provisions of the land instrument, or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument.
2. "Unjust" is defined in s (4)(1) to include "harsh, unconscionable or oppressive".
3. Section 9 sets out the matters to be considered by the Court, as follows: 9 Matters to be considered by Court (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract … (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract; (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract.
4. Section 7(1) of the Contracts Review Act involves distinct enquiries; first, is the contract unjust, and second, if it is unjust, what if any orders should be made: Balagiannis v Balagiannis [2022] NSWCA 18 (Balagiannis), at [110] per Brereton JA.
5. The first enquiry has been described as involving a two stage process, as it requires the Court to make findings of fact as to the circumstances relating to the contract at the time it was made and then make a broadly based evaluative judgment whether the contract was unjust or not having regard to the totality of the circumstances: Balagiannis, at [110] per Brereton JA.
6. The effect of ss 7 and 9 of the Contracts Review Act is that a contract may be unjust in the circumstances existing when it was made because of the way it operates in substance in relation to the claimant or because of the way in which it was made, or both: Balagiannis at [4], [67] and [111]-[112]. As McHugh JA said in West v AGC (Advances) Ltd (1986) 5 NSWLR 610, at 620 (with whom Hope JA agreed): "A contractual provision may be unjust simply because it imposes an unreasonable burden on the claimant when it was not reasonably necessary for the protection of the legitimate interests of the party seeking to enforce the provision: cf s 9(2)(d). In other cases the contract may not be unjust per se but may be unjust because in the circumstances the claimant did not have the capacity or opportunity to make an informed or real choice as to whether he should enter into the contract: cf s 9(2)(a), 9(2)(e), 9(2)(f), 9(2)(g), 9(2)(i), 9(2)(j). More often, it will be a combination of the operation of the contract and the manner in which it was made that renders the contract or one of its provisions unjust in the circumstances. Thus a contract may be unjust under the Act because its terms, consequences or effects are unjust. This is substantive injustice. Or a contract may be unjust because of the unfairness of the methods used to make it. This is procedural injustice. Most unjust contracts will be the product of both procedural and substantive."
7. In Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36, at [7] (cited with approval in Superannuation & Corporate Services Pty Ltd v Turner [2020] NSWCA 246 at [51]), Allsop P (as his Honour then was) said: "The broad evaluation of unjustness under the Contracts Review Act 1980 (NSW) ss 4, 7 and 9 involves the normative evaluation of the totality of relevant circumstances. Inevitably minds may differ as to conclusions about such questions. Also, it is often not fruitful to compare other cases with the particular circumstances at hand, lest one be deflected from an appropriate overall assessment by focus on particular aspects relevant to any such comparison. Central to the normative evaluation is the recognition that there is a need for the protection of some people in some circumstances, who are not able fully to protect their own interests against factors that may cause injustice. That vulnerability may come from one or more of many circumstances, such as lack of education or of intelligence, from gullibility, from the predation of fraud and greed, and also sometimes from loyalty and love. The characterisation of a contract as unjust and the sheeting home to the other contracting party of the consequences of its unjustness may be a difficult evaluative exercise. At its heart, however, is the recognition of the inadequacy of one party to protect her or his interests in the circumstances. Here, there was no predation. There was no behaviour in which [the lender] sought to take advantage of [the borrower]."
8. In Magann v Trustees of Roman Catholic Church for Diocese of Parramatta [2020] NSWCA 167, Bell P (as his Honour then was) observed at [50] (with Macfarlan and Payne JJA agreeing) that a valuable recent summary of the principles governing consideration of an application under the Contracts Review Act and the application of s 9 is that of Gleeson JA (sitting at first instance) in Lauvan Pty Ltd v Bega (2018) 330 FLR 1; [2018] NSWSC 154 at [283]-[285]: "It may be accepted that one of the general legislative purposes of the Contracts Review Act is to protect persons who, for various reasons, are not able to look after their own interests, and who are preyed upon by dishonesty, trickery and other forms of predation: Kowalczuk v Aecom Finance (2008) 77 NSWLR 205; [2008] NSWCA 343 at [102] (Campbell JA, Hodgson and Mccoll JJA agreeing); Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [7] (Allsop P, Sackville AJA agreeing); Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 at [270] ). However, it is also well-established that a contract will not be unjust merely because it was not in someone's interest to enter into it: Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482 at 491 (Handley JA, Santow and Simos AJJA agreeing); or because it was inopportune or produced a loss Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413 at [78] (Beazley JA, Santow JA and Campbell AJA agreeing); or because the party seeking relief was foolish, gullible or greedy: Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; 14 BPR 26,639 at [128] (Basten JA); or because the contract was burdensome, a hard bargain, strongly in the interests of the party against whom relief is sought, or in some sense unreasonable: Conley v Commonwealth Bank of Australia [2000] NSWCA 101 at [96] (Heydon JA, Handley JA agreeing). The significance of the absence of independent legal advice will depend on the circumstances. It will be of particular significance if the party seeking to enforce the contract is actually aware that the advice has not been given or has not been understood: Esanda Finance Corporation Ltd v Tong at 491 (Handley JA, Santow and Simos AJJA agreeing), approving comments by Rolfe J in St George Commercial Credit Corporation Ltd v Collins Wallis Properties Pty Ltd (Supreme Court of NSW, 11 February 1994, unreported)."
9. The second enquiry involves a discretionary decision. Before the Court intervenes, it must consider that it is just to do so and for the purpose of avoiding as far as practicable an unjust consequence or result: s 7(1) Contracts Review Act; Balagiannis at [110]; Perpetual Trustee Co Ltd v Khoshaba (2005) 14 BPR 26,639; [2006] NSWCA 41 at [34]-[40] (Spigelman CJ), [106]-[111] (Basten JA).
10. In determining whether it is just to grant relief in accordance with s 7(1), the Court may "have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made": s 9(5).

Consideration and determination

1. Nicholas claims that the entirety of the 30 March Agreement is unjust in the circumstances at the time it was made and should be declared void, invalid and/or unenforceable.
2. The circumstances upon which Nicholas relies to establish that the 30 March Agreement was unjust at the time it was made are set out at [84(a)-(n)] of the ASCC. In summary, Nicholas claims that: 1. he was vulnerable at the time as he was suffering from ill health which led to cognitive health issues: ASCC, at [84(a)]; 2. Nicholas was pressured into signing the 30 March Agreement by Stella (on behalf of George), who approached Nicholas and, in an angry and intimidating tone, falsely represented to Nicholas that George and Stella paid off the mortgage on the Arncliffe Property and Nicholas owed $620,000 to George (Representations), claimed that George would sue Nicholas if he did not sign and demanded that Nicholas immediately sign the 30 March Agreement: ASCC, at [84(b), (c), (d), and (k)]; 3. George and/or Stella knew (or should have known) of the falsity of the Representations: ASCC, at [84(f)]; 4. Nicholas trusted George and Stella and believed that they would not mislead or deceive him: ASCC, at [84(j)]; 5. Nicholas was unable to independently verify whether the Representations were true as George and/or Stella had control over Nicholas' bank account and bank statements, Nicholas had not seen his bank statements and was not aware of his true financial position: ASCC, at [84(i)]; and 6. George prepared the 30 March Agreement without Nicholas' input, Nicholas did not receive any independent legal advice in relation to it and he did not fully understand it or its implications: ASCC, at [84(l), (m) and (n)]. At the hearing, reference was also made to the absence of financial advice at the relevant time.
3. During oral submissions, Nicholas' counsel stressed the lack of evidence that substantiated George's claim that he was owed $620,000 (accepting it may have come down from $642,000) and submitted that the Court should not enforce a contract where Nicholas had acknowledged an amount that is not, in fact, due and owing, particularly where the contract is so one-sided, as it is in this case.
4. George and Stella's counsel accept that the Court is likely to find that Nicholas probably made a bad bargain, which is sufficient to enliven consideration of the Contracts Review Act (T.D3.217.49-51). However, it was submitted that the circumstances in this case did not render the 30 March Agreement unjust. The following matters were highlighted by their submissions.
5. First, a finding that Nicholas had made a bad bargain is not determinative as, at the time, Nicholas was capable of looking after his own interests, including by asking questions about his financial position and obtaining legal advice. Relevantly, he was dealing with Stella, a person who the Court should find, on an impressionistic assessment, as someone who could not be overbearing of her husband's older brother.
6. Second, George and Stella's counsel contended that there was no idiosyncratic factor or circumstance existing at the time that overbore Nicholas' ability to make a decision that he believed to be in his own interests. Contrary to the pleaded case and his submissions, Nicholas did not suffer from any cognitive defect or intellectual incapacity, referring to the opinion of Dr Cvetkovski on 11 February 2019. It was submitted that the objective evidence does not support the proposition that Nicholas' physical ailments, such as his hip pain, was of such magnitude that it affected his ability to appreciate what was occurring and to make a decision in his own best interests, nor does it establish that George was aware of any cognitive problem or other impairment that impacted Nicholas' ability to appreciate what was occurring.
7. Third, George and Stella's counsel submitted that, at the time he signed, Nicholas clearly understood that George was claiming that Nicholas owed him money, knew that his claim was for $620,000, and was aware that George would sue him if he did not sign. As was put, Nicholas made an informed decision because he believed it was in his interests at the time to settle the dispute by signing the 30 March Agreement.
8. Fourth, as Nicholas was capable of looking after his own interests, George and Stella's counsel contended that the Court should lean towards upholding the general policy of the law that people should honour their contracts, citing Baltic Shipping Company, The Mikhail Lermontov v Dillon (1991) 22 NSWLR 1 and Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127, at [109]. It was submitted that there was no reason why the 30 March Agreement ought not be honoured.
9. Having considered the parties' submissions, the matters required to be considered by s 9(1) of the Contracts Review Act, namely regard to the public interest and to all the circumstances of the case, and the factors listed in s 9(2), I have concluded that the 30 March Agreement was unjust at the time it was made within the meaning of s 7(1) of the Contracts Review Act.
10. This is primarily because the 30 March Agreement records that Nicholas owed George approximately $620,000 when the evidence satisfies me that George had not lent funds to, or made payments on behalf of, Nicholas in that amount (or a similar amount) over the past eight years (or longer), and records that Nicholas willingly agreed to provide a charge in George's favour for that sum when the evidence demonstrates that he had not done so and Nicholas was not provided with the necessary information or the opportunity to obtain legal or financial advice regarding the effect of the agreement on his financial position.
11. At the time that Nicholas signed the 30 March Agreement, he had just retired at 66 years of age. The evidence suggests that his only financial asset of any value was the Arncliffe Property. He does not appear to have had any superannuation at that time, any expectation of future income other than the pension and he had minimal funds in his bank accounts. The value of his only real asset was already impacted by the existing NAB Loan and mortgage. As I have found (at [79] above), the NAB Loan was arranged by George in an amount that discharged a loan in respect of which I am satisfied that Nicholas received no benefit.
12. Considered objectively, there was no good reason for Nicholas to sign the 30 March Agreement. In my view, it was clearly an improvident transaction. It was not in Nicholas' financial interests to agree to it. By signing the 30 March Agreement, Nicholas had, in effect, agreed that George would receive the bulk, if not all, of the net proceeds from the sale of the Arncliffe Property, with the attendant risk that Nicholas would be left with nothing after the mortgage and other outstanding liabilities were paid out, such as the council rates, utilities and credit card charges, in the context where George had not established a proper basis for claiming payment of the amounts he did. In contrast, having Nicholas sign the 30 March Agreement was of some significant benefit to George as he was able to rely on the 30 March Agreement to lodge the Caveat and, in the future, pursue Nicholas for a contractual debt that did not otherwise exist.
13. I am satisfied that there was an inequality of bargaining power between Nicholas and Stella, who was acting as George's agent that day. I do not accept George and Stella's counsel's submission that, based on her demeanour in the witness box, Stella does not appear to be a person who could be overbearing. My overall impression is that Stella is a person who holds very strong views and would have had no hesitation in speaking to Nicholas in a loud, forceful and possibly volatile manner in order to obtain Nicholas' signature on the 30 March Agreement that day.
14. Nicholas' physical conditions at the time, namely his hip pain and sleep apnoea, may not have prevented him from understanding that the 30 March Agreement related to Georges' claim that Nicholas owed him money. I also accept the force in George's submission that the evidence does not establish that Nicholas was cognitively and intellectually challenged.
15. That said, in my view, it was apparent that Nicholas was unsophisticated and unworldly about financial matters. This was made clear from Mr Jordan's request to George for a further report about Nicholas' capacity to make decisions about his own financial affairs (as referred to at [109] above) and George's own description of Nicholas in cross-examination, when he referred to Nicholas during the meeting with Mr Jordan in the following terms (T.D2.122.33-39): "Not that my brother was, not that he was mentally deficient or anything like that. My brother understood exactly what he was saying. He just, he rambled off, and said things that were not, not coherent. How can I put it? They weren't, not normal for a guy of 65 years old, to turn around and say that he's gonna start working and save up his money, and do this, and do that. There was nothing wrong with my brother. He understood exactly what he was saying."
16. I am also persuaded by Nicholas and Stella's evidence that, in March 2020, his physical ailments and sleep apnoea adversely affected his mobility and ability to concentrate, with the consequence that he was reliant on help from others, particularly Stella, in his daily activities, which increased his vulnerability to her influence.
17. I am also satisfied that Nicholas needed, and had received, assistance managing his financial affairs at the time he signed the 30 March Agreement and that he had relied on George and Stella to assist him with that aspect for nearly six years. Their position of influence with Nicholas arose from a relationship of trust for a brother and his wife, and his willingness to place confidence in them to look after his interests. Relevantly, he gave Stella access to his ATM cards and bank details, signed loan documents presented to him by George without question and placed faith in George that he would pay the mortgage and other bills in relation to the Arncliffe Property.
18. I do not consider that Nicholas' signature on the 30 March Agreement or the previous acknowledgements should be taken as Nicholas' acceptance that the money referred to and items listed had been lent or paid by George for Nicholas' benefit. The provisions of the 30 March Agreement and the earlier acknowledgements were not the subject of negotiation or any input from Nicholas before they were signed and I do not accept George's submission that it was reasonably practicable for Nicholas to have sought to do so. In my view, Stella's demand that he sign the 30 March Agreement in the kitchen while they were alone created a sense of urgency that Nicholas had to execute it immediately and without the opportunity or benefit of receiving any independent legal or financial advice at the time. To my mind, the relational factors and level of trust in Stella and George also made it less likely that Nicholas would seek such advice.
19. I do not accept George's submission that Nicholas was capable of looking after his own financial interests and that he did not need an explanation of the terms of the 30 March Agreement or the legal and financial impacts to him of signing that day.
20. Nicholas was not in a position to test or verify the claim that he owed George $620,000 as at 30 March 2020. He was not provided with any substantiation of the $620,000 claimed as owing, any details of the monies that had been lent over the "past eight years", any explanation about what it meant to provide a charge in favour of George or what the overall practical and legal effect of signing the document would be for him. He also did not have regular access to his bank statements and was unaware that George had been using his NAB credit card for many years or that Stella had been making some unauthorised transactions on his accounts, matters about which George and Stella were aware, or should have been aware.
21. In my view, the circumstances also support a finding that Nicholas was misled at the time he signed the 30 March Agreement. While it may be correct for Stella to say that George had been making payments towards the mortgage, as at 30 March 2020, the position was that the mortgage had been in default on numerous occasions in 2019 and only one mortgage payment of $3,350 had been made in the 12 months ending on 27 March 2020. It was misleading to suggest, as Stella did, that they had been paying the mortgage on a regular basis in recent years.
22. It was also misleading to suggest that Nicholas owed George all the money that he had paid towards the mortgage over Arncliffe Property given that no consensus had been reached between George and Nicholas that the payments were being made by way of loan and had to be repaid to George in their entirety. It may not have been agreed that the mortgage payments were to be in lieu of rent, but it seems reasonable to expect that any "repayments" to be made to George would have accounted for the financial benefit that he and his family obtained from living at the Arncliffe Property with Nicholas for six years.
23. Even George accepted at the hearing that he could not support a number of items for which payment had been sought and that the evidence was not in his favour in relation to his claim that Nicholas owed him $250,000 for his half-interest in the Arncliffe Property. To that extent, the 30 March Agreement was misleading as it suggested that Nicholas owed George the full amount of $620,000.
24. As to the 30 March Agreement, I accept that the wording used to describe what Nicholas owed as the "sum of approximately $620,000 plus any further loans that will be advanced on his behalf being monies lent to him over the course of eight (8) years" lacks clarity. That said, I do not consider that this lack of clarity is a significant factor in this case. According to Nicholas' evidence, he was aware that George claimed he was owed $620,000 and that George had recently demanded payment of $642,750.
25. Having regard to the above, I am satisfied that Nicholas lacked sufficient knowledge about his true financial position to enable him to properly consider the effect of the 30 March Agreement. I find that Nicholas did not fully understand the personal implications of signing and was not reasonably able to protect his own interests at the time he signed the 30 March Agreement. While I make no finding that Stella unduly influenced or exercised duress on Nicholas, in my view, the cumulative effect of the circumstances warrants a finding that Nicholas was vulnerable to Stella and George's positions of influence at the time he signed, Nicholas was concerned that if he did not sign he would be sued by George and left without a home, and he had been placed under some pressure to sign the 30 March Agreement that was unfair in the circumstances at that time.
26. While I accept that there is a public interest in parties being held to their contractual obligations, in this case, the substantive burden placed on Nicholas from signing the 30 March Agreement, together with the manner in which his signature was obtained, satisfies me that it would be contrary to the public interest for George to be able to enforce the 30 March Agreement against Nicholas.
27. As to the second inquiry, at the hearing, George accepted that if the Court were to conclude that the 30 March Agreement is unjust, then the just outcome would be to set it aside (T.D3.227.28).
28. I am satisfied that it is appropriate to set aside the 20 March Agreement in its entirety. Although Nicholas accepts that George has made some payments on his behalf and I have found that other payments were made by George for Nicholas' benefit (such as mortgage payments), I have made no finding that Nicholas was under a legal obligation to repay those monies as a contractual debt or pursuant to an enforceable loan.
29. In my view, setting aside the 30 March Agreement in its entirety would not serve to punish George, particularly as there is no evidence of any further payments having been made by George for Nicholas' benefit. Setting aside the 30 March Agreement would also avoid an unjust result in the context where Nicholas claims that George and Stella have misappropriated his funds and seeks restitution.

Conclusion and orders

1. In conclusion, George's claim for declaratory relief that the fund created by the net proceeds of sale from the Arncliffe Property is charged for payment of $620,000 to him plus interest and costs based on the 30 March Agreement fails. Nicholas is entitled to relief pursuant to the Contracts Review Act that the Agreement be set aside in its entirety as an unjust contract in the circumstances relating to the contract at the time it was made.
2. Finally, there appears to be no reason why the costs of this hearing should not follow the event. The Court will therefore order that George pays Nicholas' costs of the hearing the subject of these reasons.
3. For these reasons, I make the following orders: 1. The plaintiff's claims for relief in prayers 1 and 2 of the Statement of Claim filed on 7 June 2021 be dismissed. 2. Pursuant to s 7(1) of the Contracts Review Act 1980 (NSW), declare that the document signed by the defendant on 30 March 2020 entitled "Agreement" is an unjust contract and is set aside in its entirety, and otherwise dismiss the cross-claimant's claims for relief in prayers 8, 9 and 10 of the Amended Statement of Cross-Claim filed on 14 April 2022. 3. The plaintiff to pay the defendant's costs in relation to the applications the subject of these reasons.

Endnote

1. The reference to $204,619.31 on MFI-4 appears to be in error based on the cheque deposits on 2 December 2015 (of $5,000), 7 March 2019 (of $15,000) and 30 March 2015 (of $5,000) and cash deposits totalling $170,238.35. 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: 28 February 2023