Arambatzis v Foundas

This judgment is the latest in a series which begins with an October 2018 judgment of Darke J appointing Trustees for sale of a property at Ashcroft under s 66G of the Conveyancing Act 1919 (NSW). The co-owners of the property were the plaintiff, Mr Peter Arambatzis, and the defendant, his sister Ms Cassiani Foundas. Ms Foundas continues to live in the property.

Since 2018, there have been numerous judgments both at first instance and on appeal. This judgment resolves two competing motions:

For the reasons which follow, the Court has concluded that:

Ms Foundas appeared for herself. She was assisted by her former husband, Mr Bill Foundas, for whom she is still the carer. Mr Foundas also briefly addressed the Court (without objection) in his own right. Importantly in relation to the issue of a writ for possession, Mr Foundas has confirmed more than once to the Court that he does not reside in the property. He also said he had nothing to say himself about the merits of Ms Foundas' contentions before the Court.

Mr S Chen, Solicitor, appeared for the Trustees. Mr D Barlin of Counsel appeared for Mr Arambatzis.

The six year history of litigation between these siblings is set out in detail in the recent judgment of Rees J in Foundas v Arambatzis (No 3) [2023] NSWSC 1513. I gratefully acknowledge that history as the source of the following summary of the main events which have led to the present applications.

On 14 June 2018, Mr Arambatzis commenced proceedings for s 66G orders in respect of the property.

On 15 October 2018, Darke J made the s 66G orders and appointed the Trustees in a hearing at which Ms Foundas did not appear. Those orders included an order that judgment be entered for Mr Arambatzis against Ms Foundas for $108,983.93 (being the proceeds of sale of another property they had owned).

Ms Foundas brought a motion to set aside Darke J’s orders referred to in the preceding paragraph. On 6 September 2019, Darke J dismissed Ms Foundas' application with costs. His Honour concluded that her evidence did not disclose a reasonable defence to a claim for s 66G relief, ordered a caveat she had lodged over the property be withdrawn and made orders for possession of the property. Ms Foundas appealed.

On 24 March 2020, the Court of Appeal dismissed Ms Foundas' appeal subject to two minor adjustments: Foundas v Arambatzis [2020] NSWCA 47. The amount of Mr Arambatzis' judgment against Ms Foundas was reduced to $103,704.49, and their respective proportions in the property were amended to 48.7% (Mr Arambatzis) and 51.3% (Ms Foundas). The Court of Appeal discharged the then existing stays and made these orders (which are the relevant orders for present purposes):

For the purposes of order 9, it may be noted that Darke J retired from the Court last year.

Ms Foundas made a further application to the Court of Appeal to vary orders 6 and 7 set out in [10] above by reason of the Covid-19 pandemic. On 28 May 2020, the Court rejected that application with costs, and made orders including:

Ms Foundas did not give possession of the property to the Trustees. On 25 October 2020, the Trustees became the properties registered proprietors as joint tenants. On the Trustees' application, an order was made for the issue of a writ for possession on 7 January 2021. The Sheriff issued a notice to vacate on 21 January 2021, appointing 2 March 2021 as the date for eviction.

In the week before the eviction, Ms Foundas filed "urgent" motions in both the original proceedings before Darke J and in the Court of Appeal seeking to set aside the notice to vacate and for a stay of Darke J's original orders. The basis of her motions was a Deed of Acknowledgement, never before raised by Ms Foundas in any of the previous hearings, whereby it was said Mr Arambatzis had acknowledged that he had no beneficial interest in the property. Despite numerous inter partes requests and court orders for production of the original Deed, Ms Foundas only ever produced a copy.

A further series of hearings then ensued, in some of which Ms Foundas had the assistance of pro bono counsel pursuant to orders made by Brereton JA. Those hearings culminated in a decision of the Court of Appeal delivered on 1 July 2022: Foundas v Arambatzis (No 5) (2022) 109 NSWLR 73; [2022] NSWCA 113. In that decision, the Court concluded that it did not have power to reopen the earlier appeal or set aside its orders.

It followed that to prosecute her continued reliance on the Deed, Ms Foundas had to commence new proceedings. She had done so by summons filed on 20 October 2021, seeking an order that the judgment and orders of Darke J be set aside under r 36.15(1) of the Uniform Civil Procedure Rules 2005 (NSW) as having been entered irregularly, illegally or against good faith, or obtained by fraud. These were the proceedings determined by Rees J late last year. I was informed from the bar table that the Trustees had agreed that they would take no steps in relation to the property pending determination of the new proceedings.

On 15 August 2022, a few weeks after the Court of Appeal decision referred to in [15] above, Ms Foundas filed a statement of claim in the new proceedings. She alleged that both she and her brother had signed the Deed in about December 2013, and that their signatures had been witnessed by Ms Kristine Cox. By his defence, Mr Arambatzis said he had not signed the Deed, had never seen it prior to February 2022, and that his signature on the Deed was a forgery. The Trustees entered a submitting appearance, save as to costs.

On 26 October 2023, shortly before the date fixed for the hearing before her, Rees J heard and dismissed an application for what would have been Ms Foundas' third referral for pro bono assistance. Her Honour was not satisfied that there were any "special reasons" as required under the Court’s rules justifying a further referral. This was for two reasons. First, there was no explanation how the solicitors who were acting pursuant to the second referral had come to cease to act. Second, there was no explanation why Ms Foundas had waited six months since they had ceased to act, and until only days before the hearing, to make her application for a third referral.

At the five day hearing before Rees J, Ms Foundas was unrepresented but, as before me, was assisted by Mr Foundas. In her detailed judgment of 121 paragraphs delivered on 6 December 2023, Rees J dismissed the proceedings, largely (but not exclusively) based on her conclusion that the Deed was a forgery. Her Honour directed the Prothonotary to refer the matter to the relevant law enforcement authorities.

As to the witnesses, her Honour made the following observations (see No 3 [6] to [10]):

Ms Foundas also called Ms Cox to give evidence. Because of a submission made to me by Ms Foundas (see [39(4)] below), I reproduce her Honour's findings about Ms Cox in full:

Her Honour gave six reasons for her conclusion that the Deed was a forgery (No 3 at [104] – [120]) which may be summarised as:

On 15 December 2023, the Trustees wrote to Ms Foundas asking that she give them vacant possession of the property by 8 February 2023 so they could proceed to sell it. Ms Foundas replied that she had filed a notice of intention to appeal, thereby implicity rejecting the Trustees' request.

By a judgment on the papers delivered on 22 December 2023, her Honour ordered Ms Foundas to pay Mr Arambatzis' costs assessed on the indemnity basis in the gross sum of $210,000: Foundas v Arambatzis (No 4) [2023] NSWSC 1648. In what follows, I shall refer to No 3 and this costs judgment as the decisions.

The possession motion was filed on 19 January 2024. On 27 February 2024, at a hearing at which all parties including Ms Foundas appeared, a registrar ordered the motion to be served by 29 February 2024 on both Ms Foundas and Mr Arambatzis, and to be returnable on 11 March 2024. On that return date, all of the parties, including Ms Foundas, again appeared before the registrar. The possession motion was referred to me for directions in the Applications List on 15 March 2024.

When all of the parties came before me on 15 March 2024, the time for Ms Foundas to file her appeal against the decisions had not quite expired. I stood the matter over for directions after that date. By the time of the next occasion on 5 April 2024, Ms Foundas had filed appeal papers (as to which I will say more below). On that date I fixed the possession motion for hearing before me and directed Ms Foundas to file a motion for a stay of any writ that might be issued, in order to crystallise the issues between the parties.

Ms Foundas filed the stay motion (which was dated 25 March 2024) on 5 April 2024 together with her affidavit in support made on 25 March 2024. That affidavit, which she read, repeated the relief she sought in her appeal and the stay motion, and asserted that unspecified critical information had been withheld from Rees J by Mr Arambatzis and Ms Holt.

In addition to addressing me at the hearing, Ms Foundas relied on written submissions dated 8 and 13 March 2024 and 11 April 2024. I have taken each of those submissions into account in reaching this decision.

The other parties indicated, properly in my respectful view, that they would not take any point now or later as to:

The argument before me proceeded on the basis that Ms Foundas' appeal papers should be treated as a summons for an appeal by her alone. I should also record that today Ms Foundas emailed to my chambers (and copied to the other parties) her summary of argument in support of her purported leave to appeal application. While not the subject of submissions by the other parties, I have taken that summary into account. It does not change any of the views I had already come to about the prospects of success for Ms Foundas’ appeal from the decisions which I set out below.

The orders Ms Foundas seeks on appeal are:

There are sixteen, somewhat discursive, grounds of appeal. While I have reviewed them all, the most relevant appear to be:

The Trustees relied on the extant orders of the Court of Appeal granting liberty to apply for a writ of possession forthwith (see [10] and [12] above). I accept their submission that there is no proper basis for them to be kept out of an order of which they have had the benefit of since 2020 and that Ms Foundas' appeal against the decisions does not stay those or Darke J's original orders. They did not dispute that the proper locus of any present argument should be Ms Foundas' application for a stay of any writ for which leave to issue might be granted.

Ms Foundas' submissions opposing the possession motion may be summarised as:

While undoubtedly her view, the first reason is irrelevant to the present question.

The second and third reasons are potentially relevant to whether leave to issue a writ should be granted. However, they are not decisive in Ms Foundas' favour for two reasons. First, the litigious history which I have set out amply justifies the conclusion that after such a long lapse of time since the Court of Appeal's orders, the Trustees and Mr Arambatzis should have the fruit of them. Second, they are properly relevant to what, because of the first reason, should be the real focus of the argument, namely whether the writ should be stayed pending Ms Foundas’ appeal against the decisions.

The fourth reason is without substance. There is no evidence as to when Ms Foundas was served with the possession motion. However, she has participated in all the directions hearings including on 27 February 2024, being the hearing at which formal service was ordered. She has sought to comply with the directions made for the hearing before me and has filed multiple submissions. Even if formal service may not have occurred by 29 February 2024 (something about which there is no evidence), Ms Foundas has been at all relevant times on notice of the possession motion and has been given every opportunity to meet it.

It follows that leave will be granted for the issue forthwith of a writ of execution against the property in favour of the Trustees.

Many of Ms Foundas' submissions (whether in writing or in address) were not relevant to the question of a stay and conveyed, in various ways, her general sense of grievance at the outcome of the numerous decisions against her (excluding the very limited success she enjoyed in the Court of Appeal referred to in [10] above). Those of her submissions which I understood to be arguably dispositive in her favour or which she especially emphasised in address may be summarised as:

Before me, the Trustees adopted Mr Barlin's submissions. Without disrespect to his thorough address, the essence of those submissions appears in these parts of his written submissions:

The Court accepts Mr Barlin's submissions. Before turning to the merits of Ms Foundas' appeal and the issue of stultification, it is convenient first to deal with Ms Foundas' third and fourth submissions that I have identified in [39] above.

As to third submission, I note that there is no express ground of appeal challenging Rees J's decision not to make a third referral for pro bono assistance (see [18] above). However, read broadly, grounds 3 and 7 (see [32] above) might be thought to raise complaints about procedural fairness. To the extent complaints of this character are sought to be raised, on the material before me they have no apparent prospect of success.

A party does not have a right to legal representation in civil litigation. No appeal is brought against her Honour's decision not to make a third referral and, with respect, as a discretionary decision I am, in any event, unable to identify any arguable House v R error in her Honour's approach to the question. Insofar as the conduct of the hearing is concerned, it appears from the decisions that Ms Foundas was able to call her own evidence (including Ms Cox), cross-examine both her brother and Ms Holt, and was given all proper opportunity to make such submissions as she wished.

Beyond the inevitable disadvantage of her being an unrepresented lay person, there is no suggestion that Ms Foundas' ability to present her case was inappropriately curtailed by Rees J in any way. What might be read as Ms Foundas' procedural complaints are really complaints that her evidence and arguments were not accepted, as opposed to her somehow not having been able to make them.

As to the fourth submission, this is unsustainable in the face of her Honour's observations about Ms Cox which I have reproduced in [21] above.

Turning to prospects of success and stultification, I have been acutely conscious of the seriousness of allowing a step which, if taken, will destroy the subject matter of Ms Foundas' appeal. However, I have no hesitation in concluding that is not a decisive factor in Ms Foundas' favour in this case for the following reasons.

First, reading them as generously as I possibly can, Ms Foundas' grounds of appeal do not raise a serious question to be tried in the sense of arguable grounds. They are either irrelevant or amount to no more than vociferous disagreement with the outcome without advancing any credible, legally cognisable reason why the outcome is in error.

Her Honour's decision rests on her assessment of the witnesses in circumstances where her Honour had the advantage of seeing them and has given cogent reasons for her conclusions as to credit. Otherwise, her decision depends on the interaction of such contemporaneous evidence as there was, coupled with inconsistencies and lacunae in Ms Foundas' own conduct and evidence that had no satisfactory explanation. In my respectful view, nothing in Ms Foundas' grounds of appeal remotely approaches raising a serious question to be tried, in the sense of being arguable, against the decisions.

I accept Mr Barlin’s submission that Ms Foundas’ notice of appeal meets this description set out by Campbell JA in Vaughan v Dawson [2008] NSWCA 169 in relation to the notice of appeal his Honour was then considering:

A party whose case is weak may still be able to rely on the balance of convenience. Ms Foundas' case on appeal is less than weak. But even if there was just a weakly arguable case, the Court has concluded that the balance of convenience favours the Trustees and Mr Arambatzis.

For Ms Foundas it can be said that her appeal will be stultified and she will lose her place of residence. Those are very serious consequences.

However, for the other parties, granting a stay will keep them out of orders which have been extant in one form or another for several years in circumstances where Ms Foundas has already had multiple, almost completely unsuccessful hearings in the Court of Appeal; has made an attempt to delay execution further by deploying a document which has been found to be a forgery in circumstances where she must have known it to be such; and, has not even weakly arguable grounds for appeal.

I should record that I raised with Mr Barlin, on the issue of the balance of convenience, whether I should take into account that I would have required an undertaking as to damages as a condition of any stay in circumstances where Ms Foundas did have an entitlement to half the net proceeds of sale of the property. Two matters flowed from that suggestion.

First, while there was no evidence as to the current value of the property or the Trustees' fees, given the long history of the matter the latter were likely to be significant. Furthermore, Ms Foundas was already obliged to pay $103,704.49 with interest (see [10] above), yet to be quantified occupation rent (see [10] above), other unquantified costs orders, and Rees J's gross sum costs order of $210,000 (see [24] above) all of which would come from her net share of the proceeds. I accept Mr Barlin's submission that those matters taken together mean the Court could not have any degree of comfort that any undertaking as to damages could be supported by whatever the balance (if any) may be of Ms Foundas' net share of the proceeds of sale. Ms Foundas told me her only source of income was the carer's pension she received in respect of Mr Foundas. She did not suggest she had any significant assets other than her interest in the property.

Second, Mr Barlin suggested that to be of any relevance on the balance of convenience given the weakness of Ms Foundas' prospects on appeal, an order requiring her to pay into Court even half the fixed amounts she already owes (resulting in a sum of about $150,000) would be warranted. I did not pursue this possibility any further, because Ms Foundas indicated she did not have the funds to satisfy such a condition of any stay.

I explained to Ms Foundas that, as the chronology in [13] above demonstrates, execution of a writ is not instantaneous and she will have some time to seek alternative accommodation or to approach the Court of Appeal in respect of this decision. She was unable to give me a reasoned answer as to how long she would require to secure alternative accommodation. Nevertheless, given the serious consequences for Ms Foundas of the view to which I have come, I will order the writ to lie in the registry for four weeks for the parties to come to some agreement (if possible) about when she will be required to vacate the property or for her to approach the Court of Appeal.

I have heard the parties as to costs. Mr Arambatzis and the Trustees sought their costs of the two motions on the basis that costs should follow the event. Ms Foundas did not wish to make any submissions on the question of costs. I will apply the usual rule that costs should follow the event so that Ms Foundas will be ordered to pay the other parties' costs of the two motions.

Mr Barlin has foreshadowed that his client wishes to make an application for those costs to be assessed on a gross sum basis and I will directions to enable that application to be heard. These directions extend to the Trustees if the Trustees decide in the meantime that they also wish to bring an application for their costs to be assessed on a gross sum basis.

The orders of the Court are: