Sandich v Fasoulis & Anor [2023] VSC 65 (17 February 2023), John Dixon J.
- The plaintiff, Ms Sandich, and her former husband were registered proprietors of a property in Kew. The first defendant, Mr Fasoulis, married Ms Sandich in 2017 but they later separated.
- Mr Fasoulis deposed that –
- At the start of their marriage Ms Sandich solely occupied the Kew property and he shared his time between it and his property in Murrumbeena with his children.
- The financial burden of supporting her and his children and running two households, quickly became untenable and he fell into serious financial difficulty. He sold property including the Murrumbeena property and used the proceeds to pay debts including debts of Ms Sandich.
- He and his children then moved to the Kew property until its sale by Family Court order, the contract of sale being dated 27 July 2022 and due for settlement on 20 February 2023. He financially assisted in preparing the property for sale, undertaking substantial refurbishments costing an estimated $20,000, Ms Sandich having no money.
- On 6 February 2023 Mr Fasoulis commenced family law proceedings against Ms Sandich seeking financial orders pursuant to s. 79(1) of of the Family Law Act. The next day he through a solicitor lodged a caveat claiming an ‘Implied, resulting or constructive trust,’ the estate or interest claimed being a ‘freehold estate‘ and the prohibition on dealings being ‘absolutely.’
- Ms Sandich applied under the Transfer of Land Act s. s. 90(3) for removal of the caveat.
- Mr Fasoulis argued that there was a serious question to be tried that he was a beneficiary of a constructive trust based on Baumgartner v Baumgartner (1987) 164 CLR 137. He deposed that: he discussed with Ms Sandich the benefit of undertaking substantial refurbishment of the Kew property so as to realise its maximum value; they discussed that getting the highest sale price would benefit both of them financially; and for this reason his funds were invested in the Kew property. He did not depose that she said, or agreed, that such expenditure would entitle him to an interest in the property.
John Dixon J. ordered removal of the caveat with costs –
- The first defendant had not established a serious question to be tried of a caveatable interest because –
- The grounds of claim could not be made out against the joint-registered proprietor Ms Sandich’s former husband. There was no evidence that he was party to a joint endeavour or relationship. [21], [30]
- The claim was overstated in the form of a trust affecting the whole freehold estate. [30]
- There was no joint relationship or endeavour for improvement of the Kew property. The first defendant had only contributed some $20,000 to tidying up the property for sale, which did not improve the property nor was a significant amount, in return for a promise that he be repaid out of the sale proceeds. There was no evidence of any specific discussion or agreement that he would have any interest in the property. He had conflated what he alleged to be contributions to the marriage with what he described as an agreement that he finance the cost of preparing the property for sale on the basis that he would be repaid out of the proceeds of sale. [20], [22], [24]-[26], [28], [30]
- If there was any pooling of resources to the parties’ common benefit it was in the circumstances of the marriage and not in relation to the improvement of the Kew property. [28]
- There was no unconscionability in not recognising that the first defendant had an equitable interest in the property, particularly where he contended that his expenditure was on the basis of a promise that he be repaid. [26]
- Claims under the Family Law Act s. 79 did not create caveatable interests in any land that may be part of the matrimonial assets. [27]
- Although the caveat was lodged as a bargaining chip in the Family Law proceedings the circumstances were not such as to warrant an order for indemnity costs against the caveator. [34], [37], [39], [42]
Philip H. Barton
Owen Dixon Chambers West
Tuesday, April 4, 2023