Zepinic v Chateau Constructions (Aust) Limited

This proceeding, which was commenced in March this year after nine years of litigation over the same subject matter, is a scandalous waste of public resources and private money. It is driven by the second plaintiff, Dr Zepinic, whose arguments and submissions, it must regrettably be said, are indulgent and irrational.

The comments that I made in Donnelly v Australia and New Zealand Banking Group Limited [2016] NSWSC 263 at [21] are just as appropriate here as they were in that case:

There are two applications before me. On 3 June, the defendant (Chateau) filed a notice of motion seeking summary dismissal of the proceedings. On 8 June, Dr Zepinic responded with an absurd notice of motion of his own, seeking, among many other things, ‘default judgment’ constituted by an order to set aside the contract of the sale of land dated 15 November 2014 between Nicholas Craig Malanos, the court appointed trustee for sale, as vendor, and Yin Ye as purchaser. The property in question was Dr Zepinic’s former property at 34 Turramurra Avenue, Turramurra. The application was made notwithstanding that the sale has long since been completed and the purchaser’s title presumably registered.

Dr Zepinic and his wife Milla were at all material times prior to 12 December 2013, the registered proprietors of the property. On that date, title to the property vested in Mr Malanos as trustee for the sale pursuant to orders of this Court made on 8 April 2010 in proceeding number 2009/290598.

The appointment of the trustee for sale had its origin in the failure of Dr Zepinic to pay amounts due to Chateau pursuant to a building contract. The contract was entered into in February 2006. By December, Dr Zepinic’s relationship with Chateau had erupted in disputation. He did not pay Chateau's progress claim No. 8 dated 28 November 2006 in the amount of $125,000.00 or Chateau's progress claim No. 9 dated 20 December 2006 in the amount of $92,000.00.

On 18 January 2007, Chateau commenced proceedings against Dr & Mrs Zepinic in the Consumer, Trader and Tenancy Tribunal (CTTT). They responded with a cross claim alleging defects in the building work. Chateau sought against Dr & Mrs Zepinic, among other things, an order that they pay Chateau the sum of $223,000.00.

The CTTT Proceedings were heard by Senior Member Paull on 26 and 27 May 2008 and on 22, 23 and 24 September 2008. Senior Member Paull reserved her decision and published her reasons on 18 December 2008. She comprehensively rejected the claims by Dr Zepinic and found in favour of Chateau.

This proceeding is the latest in a farrago of unnecessary and wasteful litigation that derives from Dr Zepinic’s dissatisfaction with the adverse result that he achieved in the CTTT. Following the CTTT decision, Dr Zepinic initiated the following unsuccessful appeals:

Following the commencement by Chateau of proceeding 2009/290598 in this court to enforce its charge over the property, and to obtain an order for the appointment of a trustee for sale, Dr Zepinic initiated three separate appeals to the Court of Appeal and a special leave application to the High Court of Australia. They were:

In addition, Dr Zepenic initiated the following proceedings relating to his original allegations that had been ventilated and dismissed in the CTTT, namely that there were defects in the building work carried out by Chateau:

Dr Zepenic has failed at every turn. Every one of his actions has been determined against him. Eventually, after numerous appearances before other judges of this court, he came before me on 5 September 2016. On that date, I made orders and gave short reasons finally disposing of Chateau’s proceeding number 2009/290598. I also made orders on that date finally disposing of this proceeding. These are the reasons for those orders.

Dr Zepinic’s daughter Nina is central to his allegations in this proceeding. He now contends that in some way she was the owner of the Turramurra property, although it is not clear why that matters in any legally relevant sense. Nina left Australia in 2008 to pursue studies overseas and currently resides in Germany. She has played no active part in court. I allowed Dr Zepinic to put submissions on her behalf. She swore an affidavit but there was no opportunity to cross examine her.

The title searches demonstrate that the registered proprietors of the property at all material times prior to 12 December 2013 were Vitomir Zepinic and Milla Zepinic. In addition, there are numerous other documents and admissions that indicate that Vitomir Zepinic and Milla Zepinic were the effective practical, as well as legal, owners of the property at all material times prior to that date. They include:

I should add that the hearing in the CTTT took five days (26 and 27 May 2008 and 22-24 September 2008). Dr & Mrs Zepinic were represented by counsel and solicitors at the first two days of the trial and were self-represented for the final three days of the trial. Nothing in the transcript indicates that Nina was the owner of the property at any material time or that Dr & Mrs Zepinic were not the owners of the property.

In addition, Dr & Mrs Zepinic relied in the CTTT on a statement by Nina dated 22 June 2007 in which she did not assert that she was the owner of the property. Further still, the following affidavits and statements relied on in the CTTT contain no averment nor any hint that Dr & Mrs Zepinic were not the owners of the property, or that Nina was the true owner: affidavit of Vitomir Zepinic sworn 20 May 2008, affidavit of Vitomir Zepinic of 22 May 2008, statement of Milla Zepinic dated 22 June 2007 and statement of Vitomir Zepinic dated 9 July 2007.

It is no surprise that the orders of the CTTT made on 15 April 2009 to give effect to the Tribunal's findings refer to Vitomir Zepinic and Milla Zepinic as the ‘homeowners’. Nor is it a surprise that when Dr & Mrs Zepinic appealed from the decision of the CTTT, they did not challenge the premise that they were the owners of the property.

There are many, numerous, almost endless, further examples of statements and admissions by Dr Zepinic which are inconsistent with his foundational proposition in this proceeding, namely, for what it is worth, that Nina owned the property. They are conveniently set out in the careful and comprehensive affidavit sworn on 17 June 2016 by Mr Loel, the solicitor for Chateau. I adopt them but shall not repeat them.

There are also many examples of findings or assumptions by this court which are predicated upon Dr & Mrs Zepinic (and not Nina) being the owners of the property. In his reasons given on 8 April 2010, [2010] NSWSC 265, in a fifth judgment in the proceeding at an early stage when the litigation was already threatening to get out of control, Slattery J set the scene by stating:

The root of Dr Zepinic’s misguided claim in this latest proceeding appears to be a document described as ‘Statement Regarding Our Property’ dated 12 March 2004 and the cover page of an unstamped contract for sale of land dated 15 June 2004. I have reservations about the reliability and veracity of those documents but at face value they may reveal an intention to hold the property on trust for Nina. If that be the case, then I am afraid any such trust is both irrelevant and too late. The contention that Nina is the true owner by reason of a trust created in 2004 cannot avail Dr Zepinic. It certainly cannot justify the ‘setting aside’ of an already completed arms-length contract between the trustee and a third party. The argument entirely ignores the legal significance of the paramount interest of the registered proprietor, which is at the core of our system of property dealings: Section 42 Real Property Act 1900 (NSW).

During the many hearings before Slattery J, his Honour gave Dr Zepinic more opportunities than he deserved to develop his arguments and present his evidence – always with unfailing courtesy and patience. If the contention that Nina was the owner were at all relevant, then he could have raised it, and Chateau could have tested it – if indeed it mattered. Six years later, in yet more litigation in which Dr Zepenic has continued to advance hopeless arguments, there is no longer any need to be patient. The ill-considered obsessiveness of his contentions is apparent from the following exchange:

I have no hesitation in concluding that the issues that Dr Zepinic seeks to raise by his statement of claim in this proceeding not only fail to raise an arguable issue, but that they represent an indulgent, wasteful and repetitive exercise in going over old ground. The contention that Nina was the true owner of the property may be new but as I have said, it cannot avail Dr Zepinic. It has been superseded by subsequent events. And he only has himself to blame. But there was never anything in it, in any event.

Dr Zepinic appears to have out-distanced, and probably exhausted, all of his legal advisors. At various times, he has had legal representation including from LAC Lawyers, (January 2007 to March 2007); Schreuder Partners Compensation Lawyers, (March 2007 to October 2007); Gray & Perkins Lawyers, (December 2007 to 18 September 2008); Makinson & d'Apice Lawyers, (December 2008 to February 2009); Macquarie Lawyers, (5 March 2009 to 11 September 2009); Hancock Alldis & Roskov Lawyers & Notaries, (14 September 2009 to 28 September 2009 and from 7 October 2009 to November 2009) and Stacks Goudkamp Lawyers, (8-11 October 2013). This proceeding, in which he is representing and advising himself, appears to be a last desperate throw of the dice. But it is pointless and doomed to fail.

The costs incurred by Chateau in this litigation have been horrifying. All because Dr Zepinic has not been prepared to accept the initial decision of the CTTT. Chateau’s assessed costs in the CTTT proceedings and the subsequent assessment process were in excess of $417,000. Its costs in all of the other failed litigation initiated by Dr Zepinic must also be extensive.

Subject to giving Dr Zepinic an opportunity to be heard, I will entertain appropriate applications by Chateau for an indemnity costs order and an order pursuant to the Vexatious Proceedings Act 2008 (NSW). It is pertinent to observe that Dr Zepinic has already recently been warned by the Court of Appeal. In Zepinic v Chateau Constructions (Aust) Limited [2016] NSWCA 50, the Court stated:

I repeat the orders that I made on 5 September 2016: