SHAKE VOSKIAN & ORS v ZAREH JAMGOTCHIAN

Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd & Ors (1992) 8 ACSR 405 CASES CITED : Merribee Pastoral Industries Pty Ltd & Ors v Australia & New Zealand Banking Group Ltd (1998) 193 CLR 502 Sharjade v Darwinia Estate & Anor [2006] NSWSC 708

Shake Voskian - First Plaintiff Leina Voskian - Second Plaintiff PARTIES : Suzy Touloudjian - Third Plaintiff Johnny Habchi - Fourth Plaintiff Zareh Jamgotchian - Defendant

R Steward - Defendant (Applicant on the Motion) COUNSEL : M Willmott SC with him M J Claridge - Plaintiffs (Respondents on the Motion)

SOLICITORS : Kazi Portolesi Lawyers (Plaintiffs) Prime Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2009/287529 - SHAKE VOSKIAN & ORS v ZAREH JAMGOTCHIAN

1 HIS HONOUR: This is an application brought by notice of motion filed on 9 February 2010 by the defendant. The defendant seeks, in substance, security for costs in the sum of $100,000 and an order for the production of an original document held in Lebanon so that it may be examined forensically. 2 The plaintiffs are persons who claim to be entitled to an interest in property of which Miram Voskian (the deceased) was the registered proprietor. The deceased died on 14 May 2007. By her last will and testament, made on 7 August 2006, she appointed the defendant her sole executor and trustee and gave the whole of her estate to the defendant. The probate of the will indicates that the sole property in the estate is the house property at 262 Trafalgar Street, Annandale. The estimated value of that property, in the inventory attached to the probate, is $600,000. The deceased became the registered proprietor of the Annandale property on 14 November 1969. The purchase price was $9,050. The mortgage in favour of the Commonwealth Bank indicates that a loan of $3,500 was advanced to her. 3 The plaintiffs contend that, of the purchase price of $9,050, the deceased contributed 25 per cent and her late brother, Garabed Voskian, contributed 75 per cent. The plaintiffs allege that the property was held on a resulting trust for Garabed as to 75 per cent. They claim through him.

The Acknowledgement 4 The fulcrum on which the plaintiffs' case depends is a document described as Acknowledgment and Irrevocable Engagement (Acknowledgement) said to have been made in April 1992 by which the deceased is alleged to have acknowledged that she held an equitable interest in the property in trust for Garabed as to 75 per cent. It is also said that that document contains an agreement between the deceased, Garabed, and the plaintiffs, that in consideration of Garabed and the plaintiffs agreeing not to enforce their rights with respect to the property during the life of the deceased, the deceased would not sell the property without the written consent of Garabed and/or the plaintiffs and would not revoke her will made on 9 March 1987. It is also alleged that the document contains a provision that provides that the deceased would otherwise ensure that Garabed and the plaintiffs would remain the sole beneficiaries of her estate in accordance with the terms of the will made 9 March 1987. 5 The defendant was a person who cared for and became friendly with the deceased. There is no issue in these proceedings as to the testamentary capacity of the deceased to leave the Annandale property to the defendant. Nor is there any issue as to any undue influence or other impropriety on the defendant's part. The defendant denies the resulting trust, and appropriately, does not admit the genuineness of the Acknowledgment, as he is in no position to do so. That is because the original Acknowledgment has never been produced in these proceedings. It is apparently kept with a notary called Mr George Rizk, who resides and carries on business in Lebanon. Mr Rizk has said that the original Acknowledgment cannot be produced in these proceedings. His reasons for doing so are less than persuasive. He says as follows: For legal reasons and in accordance with the law of Lebanon, I am unwilling and unable to release from my custody the original Acknowledgment and Irrevocable Engagement executed by Miram Voskian on April 1992 unless all parties of the deceased are in attendance at Hazmieh-Mallat Center 2 First Floor.

6 This evidence is less than persuasive for two reasons. First, Mr Rizk himself explains that the unidentified legal reasons on which he relies would permit the production of the document in these proceedings if all "parties of the deceased" attend at his office and consent to the production of the document. The second is that I am naturally wary of such a general and unspecified explanation as to the supposed legal reasons preventing production from a person who is, or should be, in a position to be more specific. 7 A Mr Mrad, who has a Bachelors degree in Lebanese law from the Lebanese University, Faculty of Law and a Bachelors degree in general law issued by the University of the Holy Spirit in Kaslik, Lebanon, has explained as follows: According to Lebanese law, Mr Rizk is entitled to hold this document at his office because it is his duty to preserve the rights of all of the beneficiaries. Despite this, I confirm that Mr Rizk is entitled to release the document if all the beneficiaries are present in his office and ask for the document to be released. In addition, if the beneficiaries are unable to attend his office in person, the Lebanese law provides that any one of them can attend a Lebanese consulate or Lebanese embassy in the country where they are currently living and have a power of attorney made which will allow that attorney to be present in the office of Mr Rizk to represent the beneficiary so that Mr Rizk may release the original document. 8 It is not the function of this court, on an application such as this, to make final decisions on aspects of evidence which may be contested. But the evidence of Mr Mrad is inherently plausible and I find it difficult to accept that there are any substantial obstacles which prevent the original Acknowledgment being produced in these proceedings. The reluctance of the plaintiffs to produce the original Acknowledgement causes me to doubt their bona fides.

Altered Documents 9 In addition, there are other factors which cause me to doubt the plaintiffs' case. There are a number of additional documents, which will no doubt form part of the evidence in the proceedings at the final hearing, which appear on their face to support the plaintiffs' claim for a resulting trust but which, according to the expert evidence before me filed on behalf of the defendant, would appear to have been fraudulently altered. I do not reach any final conclusion on that matter, of course, but the evidence before me suggests that the following documents have been fraudulently altered. I will deal with them in chronological order. 10 The first is a letter from Garabed Voskian to the deceased dated 23 January 1966. It is, although addressed to the deceased, not a document which was found in her possession. Curiously, it appears to have been in the possession of one of the plaintiffs. The substance of the letter, taken at face value, would support the plaintiffs' claim. But the expert evidence before me indicates that the letter was very probably not written by the writer, namely, Garabed Voskian. Further, the expert states that he considers that the differences are so profound and numerous that he is almost certain as to his conclusion. 11 The second letter is a letter dated 2 August 1966, also from Garabed Voskian to the deceased. This is also a letter which inexplicably was not found in the possession of the deceased but apparently has been in the possession of one of the plaintiffs. This letter, although it would, on its face, support the plaintiffs' claim, is another letter as to which the expert evidence is that it was very probably not written by the writer, namely, Garabed Voskian. The expert also says the differences are so profound and numerous that he is almost certain as to his conclusion. 12 The next letter is a handwritten letter from the deceased to Garabed Voskian dated 4 June 1971. This letter appears, on its face, to say: "We have a very nice home". When account is taken of the alteration, which the expert has explained, it should read: "I have a very nice home". 13 The next letter is a letter dated 11 March 1987, also from the deceased to her brother, Garabed Voskian. On its face, it appears to say: "The price of the house is also rising. We had bought it before 17 years for $9,000". In another part of the letter, on its face, it refers to "the house". In fact, when account is taken of the alterations which are explained by the expert evidence, those statements should read: "I had bought it before 17 years for $9,000", and "my house" rather than "the house". 14 The final letter to which I will refer in these reasons is a handwritten letter on the back of a photograph from the deceased to Garabed Voskian dated 2 March 1988. I infer that it is a photograph of the house because the words on the back of the letter appear to say: "This is our house". But after account is taken of the alterations explained by the experts, it should read: "This is my house".

Good Faith & Merits 15 The plaintiffs say that these documents are peripheral and do not undermine the centrality of the Acknowledgment. However, in the absence of any handwriting evidence concerning the Acknowledgment, and in the light of the failure to produce the original Acknowledgment for forensic examination in these proceedings, I would not regard these other documents as peripheral. I do not think that their relevance can be diminished in that way. I will treat them as evidence which I can take into account in the exercise of my discretion in determining whether, among other things, the nature of the plaintiffs' case, the features which attend its merits, and other matters, should result in an order for security for costs being made. If the strength and good faith of plaintiffs' case are suspect, that will invariably constitute a relevant consideration on an application for security for costs: Merribee Pastoral Industries Pty Ltd & Ors v Australia & New Zealand Banking Group Limited (1998) 193 CLR 502 at 513-514 (per Kirby J). See also Sharjade v Darwinia Estate & Anor [2006] NSWSC 708 (per McDougall J) and Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd & Ors (1992) 8ACSR 405 (per Cooper J).

Impecuniosity 16 Another factor on which the plaintiffs relied in resisting the order for security for costs is their impecuniosity, as to which there was evidence which I accept. However, that is to be balanced against the evidence given by the solicitor for the plaintiffs who has deposed as follows: The plaintiffs have available for security sections 108 and 84 in the real estate 1546 Baoushrieh, New Raouda Ment. The total sums of these properties have been valued at $79,500 USD which equates $94,771 AUD.

17 It seems to me that the impecuniosity of the plaintiffs individually is only a minor factor, when their solicitor has made clear that security is available in the form of real estate. I do not suggest for one moment that the availability of the real estate security should result in an order that the plaintiffs provide the property by way of security. The order that I propose to make in due course is the usual order that the plaintiffs provide security for costs by the payment of a sum of money. The fact of the real estate in Lebanon being available, as the plaintiffs' solicitor explains, merely goes to satisfy me that the plaintiffs will be in a position to raise money on the security of that real estate. It is not for me to speculate as to how they will raise the money, but their solicitor has said without qualification that they have available that property for security.

Costs Out of Estate 18 One of the other factors relied upon by the plaintiffs in resisting the application is the proposition that the defendant may be entitled at the conclusion of these proceedings, if there is a final hearing, to recover his costs out of the estate. I do not think that there is any analogy between these proceedings and non-adversarial disputes involving a testamentary instrument where the position of the trustee and executor is as a necessary but reluctant party. The principle behind those cases does not apply in this case where the proceedings are truly adversarial and are properly characterised in a manner which is quite different to the way in which one would characterise a case of a different sort where costs out of the estate might be appropriate. I do not mean to suggest that at the final hearing, if there is one, the court will not entertain an application for payment of the defendant's costs out of the estate, but I do not need to make a final decision about that at this time. Delay 19 Finally, I should say something about delay. The foreign addresses of the plaintiffs were apparently only ascertained by the defendant in October 2009. The underlying principle on which the court operates, in relation to considerations of delay in security for costs applications, is that the plaintiffs may sometimes be relieved of the usual obligation to pay security for costs if the defendant has delayed so severely in bringing an application that prejudice has been caused to the plaintiffs - because they have incurred expenditure which they would not have otherwise have incurred. I am satisfied, insofar as there has been delay, that it has been adequately explained by the defendant in paragraphs 50-61 of his affidavit sworn 9 February 2010. Any delay which has occurred - and I do not regard the delay as significant in any event - can be accommodated by a reduction in the amount of security for costs which I would otherwise be disposed to order. 20 I should add that on 25 February these proceedings were before Rein J, who vacated certain orders previously made about the production of the original Acknowledgment and made directions for the bringing on, and determination, of a security for costs application. I draw no inference from what occurred before Rein J adverse to the defendant's application. The expert evidence as to the alleged fraudulent alterations to a number of documents which would otherwise support the plaintiffs' case, had not been entirely compiled at that time. And such of it as there was, was not drawn to his attention. All that the judge did on 25 February was to clear the decks to enable once and for all a security for costs application to be made so that the parties would know whether this case would proceed or not. Conclusion 21 I accept that, at least conceptually, the plaintiffs' claim is not misconceived. Nor is it frivolous. It is clearly a serious claim. But its factual foundation seems fragile. If the expert evidence of document alteration is accepted at the final hearing, the court may regard the claim as bogus. At this stage of the unfolding of the evidence, any court would be seriously concerned about the merits and bona fides of the plaintiffs' claim. That factor weighs heavily in my mind in reaching the conclusion at which I have arrived. 22 For those reasons I will order that the plaintiffs provide security for the defendant's costs in these proceedings in the sum of $60,000 by way of payment into court within two months of the date of this order. The proceedings will be stayed unless and until that security is provided. If the security is not provided within two months of the date of this order, the proceedings will be dismissed. If the proceedings are maintained and security is provided, I order that the plaintiffs produce to the court for forensic examination the original Acknowledgment. I note that the plaintiffs will have liberty to apply if they are able to put forward credible evidence as to their inability to comply with my order for the production of the original Acknowledgment. I note, however, that they will only need to apply if and when security in the amount of $60,000 is paid. I order the plaintiffs to pay the defendant's costs of this application. 23 If security is provided, the parties should arrange with my associate to list this matter for directions before me and I will deal on that occasion with any issue that then arises in relation to the production of the original Acknowledgement. oOo

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.