Grounds of appeal
Grounds 1, 2 and 3
55 In 1982, Mrs Zaravinos instituted proceedings in the New South Wales Supreme Court against Dairy Farmers Co-operative for injuries she claimed to have suffered by reason of a foreign body being present in some milk that she drank. She alleged that as a result she suffered alopecia. On 21 March 1988, she obtained judgment for $150,000 inclusive of costs. In his oral submissions, Mr Aldridge submitted that the trial Judge failed to take into account evidence that was capable of suggesting that the funds from Dairy Farmers were used in the purchase of at least one of the properties that was acquired and that she beneficially owned these properties because she provided all the purchase monies. The properties were bought in the names of Mr and Mrs Zaravinos but it was said that the evidence was that Mr Zaravinos, apart from a few weeks work had not been gainfully employed since he had come to Australia, presumably sometime before he married Mrs Zaravinos, on 25 August 1978. Apparently, the proceeds of the Dairy Farmers' proceedings were received on about the date of judgment. Before that, in 1978, a property had been purchased at Westmead. This property was sold in 1980 and a property was bought on the Gold Coast, which was sold in 1983. The Colson Crescent property was bought on 18 June 1984 and the mortgage discharged in 1987. After the receipt of the settlement monies, a property in Derby Street, Penrith was purchased on 16 November 1988 and sold in 1992. In 1995, the Castlereagh Street property was purchased and later that year the Union Road property.
56 According to Mrs Zaravinos, she brought $25,000 to Australia when she arrived in 1976 and later $7,000 was transferred to her. She claimed that Greek family tradition caused the properties to be put in joint names and this happened notwithstanding, according to her, that Mr Zaravinos did not make any monetary contribution to the purchase of the properties. Bergin J remarked that the first property which was purchased at Westmead was bought in the name of Mrs Zaravinos from her brother. There was no real explanation as to how this registration fitted in with her respect for the Greek family tradition of registering property in joint names. The Colson Crescent property was said to have been purchased with the proceeds of the sale of the Gold Coast property. Mrs Zaravinos claimed that the receipt of funds from Dairy Farmers was used to buy the Derby Street property.
57 In her reasons for judgment Bergin J traced out the evidence to which I have just referred. Her Honour said:
55 There are a number of areas of attack upon the defendants' credibility. The first defendant [Mr Zaravinos] gave evidence that he met [a man only known to him as] Carlos in early 1995 and that within weeks he had handed to [Carlos] $16,000 for investment in a brothel. He did not know Carlos' surname and said that it was part of the agreement that he was not to know his surname. He did not know where the brothel was to be located, except that it was to be in Parramatta. He claimed that $5,000 of the $16,000 was borrowed from a third party. In oral evidence he said that the $16,000 was obtained from the second defendant [Mrs Zaravinos]. He claimed that after he, the plaintiff [Mr Houvardas] and Mr Kattirtzis had each given Carlos $16,000 the latter disappeared. There is no evidence that the first defendant did anything about trying to locate Carlos for the purpose of trying to get his money back. For a man on social security benefits and allegedly out of work, this just adds to the farcical nature of this claim.
56 There is absolutely no evidence that suggests that Carlos ever existed other than the first defendant's evidence. The first and second defendants have been in receipt of social security payments for 20 years. The first defendant claims to have worked from time to time as a waiter and in a friend's real estate agency. His bank statements show cash deposits during the time the plaintiff claimed he and Mr Kattirtzis were providing the money to him for investment on the stock market. The first defendant claimed that these amounts in the bank statements were received from a Mr Lee Wong to whom he had sold some antique jewellery that belonged to the second defendant. He claimed to have sold the jewellery for $115,000 and that Mr Wong paid him in various amounts over a six-month period. The bank accounts do not disclose deposits totalling $115,000.
57 The first defendant was asked about later deposits of cash into his bank accounts. The explanations as to the provenance of those amounts changed during his evidence. Initially he was unable to say from where the moneys came. When he was given an opportunity to consider his answers he suggested that the moneys were loans from a Mr Phillipou. The second defendant did not call Mr Phillipou to give evidence and no documentary evidence is available to satisfy me that there was any loan arrangement between the first defendant and Mr Phillipou in relation to these amounts. A further bank account in the first defendant's name with Suncorp Metway, apparently opened in June 2002, was discovered during the proceedings. It recorded cash deposits of approximately $16,000. The plaintiff's solicitor notified the Official Trustee of this account and the first defendant claimed that Mr Phillipou was successful in having those moneys paid to him by the Trustee after he claimed that they were funds loaned to the first defendant.
58 Mr Lee Wong was not called as a witness, however there is a document entitled "Acknowledgment" which purports to be signed by Mr Wong, the first defendant and Mr Moutafis. That document makes no mention of any price to be paid for the jewellery nor does it refer to any payment regime. It states that Mr Wong "of Hong Kong" agrees to buy the jewellery "subject to formal valuation" and that "payment will be made after confirmation of value". The second defendant did not know Mr Wong's address in Hong Kong, nor did he have a telephone number for him. He claimed that when Mr Wong would come to Sydney he would telephone the first defendant and they would meet.
59 The piece of jewellery allegedly sold to Mr Wong was said to have been a gift from the first defendant's mother to his wife. The second defendant claimed it was a gift for her wedding, although she also gave evidence that it was a birthday gift (tr. 429-430). The first defendant claimed he handed the piece of jewellery over to Mr Wong without payment of the alleged $115,000 and with a willingness to be paid in small amounts for which there are no proper receipts. The only documents to which the first defendant referred were some photocopies of deposit slips totalling approximately $27,200.
60 The piece of jewellery allegedly sold to Mr Wong was handed down from the first defendant's grandmother to his mother and then to his wife. The first defendant claimed that the reason the jewellery was sold in 1995 was because his wife was thinking of buying some units. This was also an extraordinary aspect of the defendants' versions of events. Here are two people on social security benefits who, so far as at least the second defendant is concerned, 'respect' the tradition of Greek families, yet they are willing to sell the jewellery handed down in the family not for the purpose of making ends meet, but for the purpose of investing in property. The second defendant said that the first defendant gave her the money from the sale of the jewellery after Mr Wong paid it to him and she then gave it back to the first defendant to bank for her. However the first defendant banked it into his own account rather than his wife's account. This is just another peculiarity in what I regard as totally farcical and false claims."
58 A little later the trial Judge said:
"62 The second defendant gave evidence that after she drank contaminated milk in 1981 she developed alopecia, a condition in which one loses one's hair. It was apparently this condition for which the second defendant received a court settlement of $140,000 [presumably after her costs were paid] in 1988. The plaintiff attacked this claim alleging that the second defendant had suffered from this condition well before the incident in 1981. The second defendant's sister gave evidence that when the second defendant came to live with her for a number of months in 1976 she wore a scarf all of the time. On one occasion during this period the second defendant's sister 'by accident' walked into a room when the second defendant was not wearing a scarf and she saw that the second defendant did not have any hair on her head. She said that her hair subsequently grew back when she was pregnant.
63 The second defendant's niece also gave evidence of her observations of her aunt during that period and said that she did not have any eyebrows or eyelashes. A hairdresser of whom the second defendant was a client in the period before 1981 also recalled that she suffered from alopecia at that time, although his evidence of the timing was rather vague.
64 This family has been suffering from the events that have caused this litigation since 1995. It is obvious to me that emotions have run very high and that caution needs to be exercised in relation to the various claims made by the parties and the witnesses. It seems to me that the second defendant's niece was a very careful and honest witness. She has had the least to do with the family since the late 1970's, when she married and moved to Wollongong with her husband. I accept her evidence as truthful and conclude that it is more probable than not that the second defendant was suffering from alopecia prior to the incident with the milk in 1981. I do not know what evidence was put to Dairy Farmers to induce them into a settlement but this finding is relevant to the second defendant's claim in these proceedings that it was 'only' the incident with the milk in 1981 that caused the development of the alopecia (tr. 243). I am not satisfied that the second defendant's evidence about this matter can be relied upon. I accept the plaintiff's witnesses' evidence that the condition was present prior to 1981.
65 The second defendant gave evidence that the first defendant has been living at the Castlereagh Street property since 1998. She said that the first defendant paid her rent of $120 per week for the first six months but that he then stopped making those payments. She said that she did not declare that rent because she used it in paying expenses. In fact, the second defendant gave evidence that neither she nor the first defendant had lodged tax returns for the last 20 years. She said that for the last four years she has not required the first defendant to pay her rent because she did not want to leave him on the streets and she feels sorry for him.
66 The second defendant was shown a copy of a Residential Tenancy Agreement for the Castlereagh Street property between herself as landlord and Scott John Burdekin and Shane Daniel Miller as tenants for the period 20 September 1999 to 19 March 2000 at a rental of $140 per week (Ex Z). She said that she did not remember the names of the tenants but finally agreed that she had received the rental referred to in the Agreement (tr. 378). The evidence given by the second defendant about the occupancy of the Castlereagh Street property is, in my view, totally unreliable.
67 The second defendant's evidence about the events of 25 or 26 March 1997 when the Transfers were allegedly signed is not supported by Mr Moutafis. He gave evidence that he did not go into the Land Titles Office with the defendants on that day and was thus not in a position, as the second defendant claimed, to do most of the talking for the defendants. The signatures of the transferors and the transferee are purportedly witnessed by a Justice of the Peace (JP), John Rondon, with an address 123 High Street, Penrith. The plaintiff has made exhaustive searches for the JP, John Rondon. Such a person is not, and has not been registered with any of the Australian States or Territories as a JP. Such a person is not registered as a ratepayer with any of the forty seven councils of the Sydney metropolitan area, Blue Mountains, Central Coast and Wollongong areas searched by the plaintiff's solicitors. No person of that name worked at the Land Titles Office at the relevant time. Additionally the address 123 High Street, Penrith is a vacant block of land. The plaintiff submits that on this evidence I would find it is probable that John Rondon JP does not exist.
68 The evidence about the execution of these Transfers is highly suspicious. It appears that there is no JP by the name of John Rondon who allegedly witnessed the signatures on the Transfers and Mr Dubedat, the expert document examiner, expressed the view that the Transfers did not contain the second defendant's signature.
69 The Transfers effecting the alienation of the first defendant's share in the three properties were for "nil" consideration. The second defendant's evidence was inconsistent with the contents of the Transfers. In her affidavit sworn on 19 July 2000 she claimed that approximately one month after the first defendant moved out of Colson Crescent, claimed to have been in late January 1997, she demanded that the first defendant transfer his share in the three properties, informed him that he could keep the motor vehicle and she would also pay him $58,000 as soon as she could. This conversation is alleged to have taken place prior to the date the Transfers were signed. The second defendant claimed that she 'filled out the three transfer forms in my own handwriting'. That handwriting includes the word 'nil' next to the words 'acknowledges receipt of the consideration of' in paragraph (D) on each of the Transfers.
70 There was nothing in writing in relation to this alleged $58,000 until the Consent Orders were filed in the Local Court at Penrith in January 1998. Those Orders do not express the $58,000 as consideration for the transfer of the three properties, but rather link the payment to the sale of the Castlereagh Street property. The plaintiff claimed that the two Agreements signed by the defendants in May and August 1998 in relation to the payment of the $58,000, the alleged transfer of an 18 carat yellow gold single diamond ring, (said to be valued at $34,000), and the alleged payment of $16,000 were part of the steps taken by the defendants in furtherance of their fraudulent design and were prepared for the purpose only of creating the false impression that the three properties were transferred bona fide."
59 In the appellant's written submissions, it was said that the trial Judge made devastating findings on the credit of Mr and Mrs Zaravinos. It was not proposed to seek to traverse those findings except, as I understand it, those relating to the evidence about the alopecia of Mrs Zaravinos. It was said, that the trial Judge accepted that Mrs Zaravinos brought $25,000 to Australia in 1976 and received a further $7,000 some time later. It was submitted there was no evidence given by Mr Zaravinos that he had any income or any assets. Therefore, it could readily be inferred that the three properties were bought with the funds undoubtedly received by the appellant, Mrs Zaravinos. It was submitted that it was reasonable and proper to infer that, notwithstanding Mrs Zaravinos was unable to give a cogent recollection of when properties were sold and the amounts for which they were sold and/or mortgaged, realistically there was no other source of funds to buy the properties other than her funds. Since the properties were purchased with her funds, even though they were registered in her name and Mr Zaravinos's name, a resulting trust arose because Mrs Zaravinos provided the whole of the purchase price. Mr Zaravinos was a bare trustee holding his interest for her.
60 Understandably, having heard the evidence, Bergin J rejected the propositions now put before this Court. There was no reason advanced for saying that it was not open to the trial Judge to reject the self-serving account intended to portray Mrs Zaravinos as the sole pecuniary investor in the various properties. Nothing was put to this Court which would compel any conclusion other than that Mr Zaravinos had a half interest in the three properties transferred which he deliberately sought to shed in favour of Mrs Zaravinos in order to avoid meeting his liability to Mr Houvardas and Mr Kattirtzis. I would reject these grounds of appeal.