Pavlis v Pavlis

Francis Michael (Frank) Forde served as Prime Minister for the shortest term in Australia’s history. He held that office from the death of John Curtin on 6 July 1945 until 13 July 1945 when Forde lost the Australian Labor Party leadership to Ben Chifley. His brief occupation of Australia’s highest political office may be contrasted with a more enduring architectural legacy. Although he was a Queenslander, for many years the Forde family lived in Sydney in a grand 1906 Federation home called “Virginia” in Strathfield (the Property). This case concerns a dispute about alleged beneficial interests in the Property among the family of its current owners.

By 1986, the Property was in a very dilapidated state. In that year, it was bought for $300,000.00 by the first defendant, Emanuel Pavlis, and his wife, the second defendant, Koula Pavlis. Without disrespect, I shall refer to the members of the Pavlis family by their Christian names. Emanuel and Koula have three sons: the first plaintiff, George (born 1962); the second plaintiff, Chris (born 1963); and Garry (born 1969).

Regrettably, this is a type of dispute with which the Court is all too familiar. It appears that, for many years, the Pavlis family got along well. However, by 2017, disagreements had split the family in two. On one side are George and Chris. On the other side are Emanuel (now 89) and Koula (now 88), supported by Garry. Although Garry is not a party to the proceedings and claims no present interest in the Property, he has given evidence in his parents’ case and is funding their legal costs. The rancour between the two sides is so great that they disagree completely on almost all of the essential facts.

Over what fell into two broad phases of work (1988 to 1990 and 2001 to 2008), the Property was restored to its former Federation style glory with great attention to matters of period detail. “Restoration” may be a more apt description than “renovation” for what was done. There was uncontradicted evidence that the Property now has a market value of $5.5 million.

George and Chris’ case is that George, assisted by Chris, supervised, physically assisted with, and funded a very large part of the renovations in the expectation, encouraged by Emanuel and Koula, that he and his brother would receive a majority interest in the Property when their parents died. It was not in dispute that under Emanuel and Koula’s current wills, they will receive nothing, although there is some benefit to their children. Their brother Garry is the principal beneficiary.

George and Chris allege, among other iterations, an express representation by Emanuel and Koula that they (George and Chris) would each have a 40% interest in the Property in return for their direct and indirect contributions to the renovations. Alternatively, they submit that their interest in the Property arises by reason of a joint undertaking that has failed without attributable blame. Their case is one of proprietary or promissory estoppel, a constructive trust, or at the very least an equitable lien. They accept that Emanuel and Koula are entitled to reside in the Property for their lifetimes and that Emanuel and Koula should have access, if necessary, to the Property as an asset for the purposes of their maintenance in life, including matters such as medical and nursing home expenses should they arise.

Emanuel and Koula deny any express representations were ever made. Their case is that everyone in the family helped as they were able with the renovations (supporting the various tradespeople involved) as family members, for the benefit of the family as a whole, so that they would have a beautiful home in which to live. That object has been achieved. Their case is that George and Chris have exaggerated their contributions to the renovations.

The Court has concluded that, with the exception of Garry, none of the parties’ evidence on critical matters can be relied on unless it is inherently likely, against interest, or supported by contemporaneous records or other independent evidence. Previous litigation in which the family was involved has informed the Court’s conclusion that George, Chris and Emanuel will give whatever evidence suits the case they wish to make. Therefore, the Court does not accept George and Chris’ evidence that Emanuel and Koula expressly represented that George and Chris would receive a precisely identified interest (40%) or any other interest in the Property.

However, the Court does accept that George and Chris contributed substantially in time, effort and funds (much of which appears to have been reimbursed to them) to the renovation. They did so not on the faith of a promise of a share of the Property or any other encouragement from their parents, but for two reasons. First, they were receiving a significant commercial benefit (with no corresponding benefit to their parents) of using the Property as security for their business ventures. Second, they had their own expectation that after their parents had enjoyed the benefit of the Property, George and Chris, as sons, would receive a “fair” share of their parents’ estate.

George and Chris’ claim fails because that expectation does not give rise to an interest in the Property or an entitlement to any other form of equitable relief. Nor have they persuaded the Court to the level of actual satisfaction that there was any “joint enterprise” in relation to the Property between George and Chris and their parents. Instigated entirely by George, what was done to the Property was done for the reasons identified in the preceding paragraph and incidentally to the benefit of Emanuel and Koula, but not as part of an enterprise which the evidence permits to be characterised as “joint”. The Court accepts the submission made for the defendants that these proceedings are in truth about George and his activities (undertaken with Chris) and are an attempt to achieve something akin to a property settlement from their parents while they are still alive.

Mr H Insall of Senior Counsel appeared with Mr P Horobin of Counsel for George and Chris. Mr G Waugh of Senior Counsel appeared with Ms K Hopper of Counsel for Emanuel and Koula.

What follows is divided into these sections:

It is convenient to begin with an uncontroversial description of each of the members of the Pavlis family and other witnesses.

Emanuel was born in Leros, Greece in 1931. He is the husband of Koula and the father of George, Chris and Garry. Emanuel moved to Australia in 1955. He speaks sufficient English for basic conversational purposes but does not read it. He communicates with his children in Greek. After running a delicatessen and working in the family hardware business, Emanuel retired in 1991. Since 1996 his only income has been the aged pension. His cross-examination was conducted with the assistance of an interpreter, but at various times Emanuel answered in both English and Greek.

Koula was born in Sparta, Greece in about 1932. Koula is the wife of Emanuel and the mother of George, Chris and Garry. Koula moved to Australia in 1956. Koula and Emanuel were married in 1958. Koula has been a homemaker. She speaks very little English and does not read English. She communicates with her children in Greek. Her very brief cross-examination was conducted through an interpreter.

George was born in Australia in 1962 and is the eldest son of Emanuel and Koula. George is a builder and company director. He lived in the various Pavlis family homes, including the Property, until he married.

Chris was born in Australia in 1963 and is a company director. He lived in the various Pavlis family homes, including the Property, and moved in and out of the family home until he married.

Garry was born in Australia in 1969 and is the youngest son of Emanuel and Koula. Garry is not a party to the proceedings but has been paying for Emanuel and Koula’s legal representation. Garry attended university and obtained a Bachelor of Business (Land Economy). He is a licensed real estate agent and valuer and owns a real estate business. Until he married in 2014, he had always lived in the various Pavlis family homes, including the Property.

Nicholas (Nick) Pavlis is a younger brother of Emanuel. Nick was born in 1946 in Greece. Nick gave evidence on behalf of George and Chris, by audio visual link from Queensland. Nick deposed that he had not had any meaningful contact with Emanuel for over 20 years, save for seeing Emanuel at their brother Tony’s funeral four years ago. His cross-examination revealed that he was not close to Emanuel as they grew up. He made no secret of his animosity towards Emanuel, which dates back to the time they were both children. Nick was close to both George and Chris from the time they were children and gave evidence intended to corroborate that Emanuel had been a domineering father.

Jason Field is a valuer and the Managing Director of National Property Valuers NSW Pty Ltd. Mr Field prepared two reports for George and Chris. For the first report, dated 16 December 2019, annexed to his affidavit of 10 February 2020, Mr Field was asked to assess the Property’s current and retrospective market value. In his second report, issued on 23 July 2020, Mr Field was asked to assess the retrospective market rental value of the Property between 1 January 2010 and 5 July 2014.

The case falls into two parts: a case brought on express representations said to have been made, and one which depends on the contributions to the restoration of the Property said to have been made by George and Chris.

The proceedings were commenced by statement of claim filed on 21 September 2018. Relief was purportedly sought in relation to George, Chris and Garry. However, the plaintiffs’ claim was amended during the course of the hearing on 9 November 2020 to take account of the fact that Garry was not a party. The amended relief (including the deletions) includes:

What follows is a summary of the facts alleged by the plaintiffs drawn from their amended statement of claim.

George and Chris claim that, at all material times, the relationship between Emanuel as their father, and George and Chris as his sons, was one whereby Emanuel exercised an authoritarian and domineering influence over them.

They allege that Emanuel established what I will refer to as the South Granville Hardware Business in about 1981 and began operating it as manager, however his poor English and lack of skill and experience meant he could not operate the business and relied heavily on the plaintiffs. Emanuel required George and Chris — then in their early twenties — to work in the business for no remuneration whenever they were not at TAFE, including on weekends and during holidays.

In 1983, Emanuel required George to leave the latter’s employment in an accounting firm to work full time in the South Granville Hardware Business.

In mid-1983, Emanuel purchased the land on which the South Granville Hardware Business was operated, substantially with borrowed funds through the Pavlis Family (No 2) Trust. An extension to the business’ premises was required in order to obtain a Mitre 10 Franchise. Emanuel required George, with the assistance of Chris, again without remuneration, to perform the labour and engage appropriate tradespeople to undertake the construction of the extension.

In or about January 1984, Emanuel required George and Chris to establish a new company known as Pavlis & Sons Australasia Pty Ltd (P & S Aust) for the purpose of acquiring a new Mitre 10 hardware business in Blacktown (the Blacktown Hardware Business). P & S Aust was incorporated on or about 7 February 1984 with George and Chris being sole shareholders and directors.

On or about 6 October 1984, P & S Aust established and operated the Blacktown Hardware Business with borrowed funds secured by a third party personal guarantee from friends of Emanuel’s, being Anthony and Mary Peris of Ashfield. Mr and Mrs Peris provided their property as security. Emanuel required George to work full time in the business, without remuneration save for payment of personal expenses from time to time on an "as needs" basis.

From about the beginning of 1985, Emanuel required Chris to give up his career as a dental technician in order to assist Emanuel on a full time basis at the South Granville Hardware Business.

Chris contended that, from 1985 to 1991, he was required by Emanuel to work seven days a week at the South Granville Hardware Business, without remuneration save for payment of personal expenses from time to time on an "as needs" basis.

In about June or July 1985, Emanuel and Koula purchased a house in Albyn Road, Strathfield (the Albyn Road Property) for $191,000.00 with a $50,000.00 mortgage.

George and Chris allege that they contributed, through their unremunerated work at the South Granville Hardware Business and the Blacktown Hardware Business, towards both Emanuel and Koula’s ability to acquire the Albyn Road Property and Emanuel and Koula’s ability to obtain a mortgage over that property and to make mortgage repayments.

In or about 1985, Emanuel and Koula created or contributed to an assumption on the part of George that the Albyn Road Property was to be held by Emanuel and Koula as a "nest egg" for the whole family, including George and Chris. This allegation was supported by these particulars (the 1985 Conversation):

Over the period from about September 1985 to mid-1986, George says that he expended substantial time and effort, without assistance or remuneration from Emanuel and Koula, on renovating the Albyn Road Property.

George claims that the renovations undertaken by him at the Albyn Road Property increased the value of the property by about $100,000.00. The Albyn Road Property was sold in November 1986 for $365,000.00 and George asserts that he made a substantial contribution to the capital gain that was achieved by his work in renovating the Albyn Road Property.

In about late 1986, George obtained an opportunity, through a friend who was the executor of a deceased estate, to acquire the Property for $300,000.00. The Property was then in need of substantial renovation and George and Chris contend that the purchase price was substantially under its then market value of between $550,000.00 and $650,000.00.

George contends that he offered Emanuel and Koula the opportunity to acquire the Property on the basis that George and Chris would renovate the Property and that the Property would be held by Emanuel and Koula as a nest egg for George, Chris and their brother Garry. He alleges he had a conversation to this effect with Emanuel and Koula in Greek in late 1986 (the 1986 Conversation):

The parties subsequently discussed, at the Albyn Road Property, that the Property required renovation in order to maximise the capital gain.

By reason of the matters in [38] and [39] above, the plaintiffs allege that Emanuel and Koula created an assumption on the part of George that the Property was to be acquired and held by Emanuel and Koula as a nest egg for George, Chris and their brother Garry.

In or about November 1986, Emanuel and Koula purchased the Property using the net proceeds of sale of the Albyn Road Property and a mortgage of $90,000.00 from the Commonwealth Bank of Australia (CBA).

George says that he contributed, through his work in renovating the Albyn Road Property and by providing to Emanuel and Koula the opportunity to acquire the Property at a price which was substantially under market value, both to Emanuel and Koula’s ability to acquire the Property, and to Emanuel and Koula’s ability to obtain a mortgage over the Property and make repayments thereon.

George and Chris also say they contributed, through their unremunerated work at the South Granville Hardware Business and the Blacktown Hardware Business, towards both Emanuel and Koula’s ability to acquire the Property, and to Emanuel and Koula’s ability to obtain a mortgage over the Property and make repayments thereon.

In about 1987, George commenced planning and preparatory work in relation to the renovations to the Property, including lodging Council applications for extensions, a swimming pool and a grand sandstone wrought iron boundary fence.

In about 1987, the home loan relating to the Property was refinanced together with other loans relating to the South Granville Hardware Business into a single facility, initially with Natwest Bank and later with Citibank Savings Ltd (Citibank), in the name of Pavlis & Sons Pty Ltd (P & S). George and Chris became guarantors for the facility and, thereby, guarantors in relation to borrowing relating to the Property.

George and Chris allege they became guarantors of the loan relating to the Property on the basis that the Property was held for the benefit of them and Garry, and that due to the fact that George and Chris were making a substantial contribution towards the acquisition and improvement of the Property, each of George and Chris' share in the Property was to be greater than Garry’s share. In support of this allegation, the plaintiffs particularised these conversations (the 1988 Guarantee Conversations, which were sometimes referred to during the hearing as the 40:40:20 Conversation):

By reason of the matters in the preceding paragraph, the plaintiffs allege that Emanuel and Koula created an assumption on the part of George and Chris that the Property was to be held for the benefit of George, Chris and Garry with each of George and Chris' share in the Property being approximately 40%, alternatively for the benefit of George, Chris and Garry, alternatively to be held on either of the aforementioned bases subject to Emanuel and Koula’s right to reside at the Property for life.

In the period between 1988 and 1990, George undertook what came to be referred to as Stage One of the renovations of the Property and George and Chris paid for the cost of those renovations. The particulars included:

In 1987, the Blacktown Hardware Business was closed down and the assets sold. The third party loan from Mr and Mrs Peris (see [29] above) was repaid.

In 1991, the South Granville Hardware Business was sold as a going concern. The net sale proceeds went to pay trade creditors, being the Mitre 10 franchisor.

After the sale of the South Granville Hardware Business, Emanuel ceased working and, since that time, has had no income other than the age pension which he started receiving in 1996 (which he has expended on his personal living expenses).

Koula's annual income from 1981 to 1991 was limited to the tax free threshold of $4,000.00 to $6,000.00 and thereafter limited to the aged pension.

In or about 1992, the CBA commenced proceedings against Emanuel and Koula in relation to a loan of $275,439.34 in the name of P & S.

The litigation continued until 1999 when a judgment was issued against Emanuel for the sum of around $385,000.00. Koula was discharged from any liability.

George and Chris funded Emanuel and Koula’s costs in the litigation.

Emanuel and Koula had no cash to pay the judgment referred to in [54] and no ability to borrow any money to pay the judgment.

As at about 1999, Emanuel and Koula also owed $155,000.00 to Citibank. They had no cash or income from which to make repayments or to discharge that debt.

In or about 1999, George and Chris organised both the payment of Emanuel's judgment debt, which was paid by Chris and Garry, and the refinancing by St George Bank of the debt owed to Citibank with Chris and Garry as guarantors.

At the time the steps referred to in the preceding paragraph were undertaken, the plaintiffs allege that George, in the presence of Chris and Garry, had a conversation with Emanuel and Koula in Greek in words to the following effect (the 1999 Conversation):

By reason of the 1999 Conversation, the plaintiffs allege that Emanuel and Koula contributed to the assumption on the part of George and Chris that the Property was to be held for the benefit of George, Chris and Garry with each of George and Chris' share in the Property being approximately 40%, alternatively for the benefit of George, Chris and Garry, alternatively, was to be held on either of the aforementioned bases subject to Emanuel and Koula’s right to reside at the Property for life.

Thereafter, in the period from about 2001 to 2008, George expended substantial work, effort and moneys, without any remuneration from Emanuel and Koula, in carrying out and completing what came to be referred to as Stage Two of the renovations to the Property. Chris also contributed substantial sums of money in funding Stage Two of the renovations.

Relying on the foregoing facts, the plaintiffs allege an entitlement to a constructive trust in their favour because there existed between George, Chris, Emanuel and Koula a joint relationship whereby:

The joint relationship terminated in about 2013 when the relationship between George and Emanuel and Koula irretrievably broke down, or alternatively in 2017 when the relationship between Chris and Emanuel and Koula irretrievably broke down.

Emanuel and Koula have disavowed any obligation towards George and Chris in relation to the Property and asserted that they are able to deal with the Property without regard to any interest on the part of George and Chris. This is said to be unconscionable with the result that Emanuel and Koula hold the Property subject to a constructive trust in favour of George and Chris as to a 40% share each, or alternatively a constructive trust in favour of George and Chris “as to such proportion as would prevent the unconscionable retention of property by Emanuel and Koula”.

Further and in the alternative, the plaintiffs rely on an estoppel. This is said to arise because George, or George and Chris, acted to their detriment in reliance on the assumptions created by Emanuel and Koula. In those circumstances, Emanuel and Koula are said to be estopped from denying the assumptions pleaded by the plaintiffs.

Further and in the alternative to the claims for a constructive trust or in estoppel, by reason of the contributions made by George and Chris in the circumstances set out in their claim, the plaintiffs contend that Emanuel and Koula hold the Property subject to an equitable charge or lien in favour of George and Chris to the extent to which their contributions have contributed to or increased the value of the Property.

It is convenient to conclude this section by recording how these claims were ultimately put by Mr Insall SC in final address.

First, he made clear that this was not a case where the plaintiffs said they were owed any money (Tcpt, 10 November 2020, p 506(44–47)):

However, if the Court was not satisfied, as a matter of discretion, that a constructive trust should be ordered, the plaintiffs sought an equitable charge over the Property if the Court did not accept any other part of their case. Assuming the Court did not accept the 40:40:20 Conversation, the charge would reflect the amounts the plaintiffs said they had contributed to the renovation of the Property and for which they had not been reimbursed. The quantum secured by the charge would have to be referred out to an accountant to be ascertained.

In relation to the constructive trust, it was submitted that the parties were engaged in a joint endeavour. The significant size of the task of renovating the Property, the requirements of work and sacrifice on the part of George and Chris, all pointed to the conclusion that they were not to be taken as making a gift to their parents. What they expected was an interest in the Property subject to their parents’ life interest.

It was also accepted that the plaintiffs had made no direct contribution to the purchase price of the Property and that, for want of proof, no case was advanced that they had contributed to paying the mortgage over the Property.

Mr Insall SC ultimately accepted that the plaintiffs’ case was that everything they had done had been done in the expectation that the Property would be theirs one day, that expectation being derived from express representations or common intention, with a fallback of entitlement by reason of the failure of a joint venture. The plaintiffs also sought to do equity, so that they would submit to whatever conditions properly accommodated Emanuel and Koula as, in effect, life tenants. In final submissions, Mr Insall SC informed the Court that he had instructions that, depending on the form of relief the Court might propose, his clients would accept a condition not to press any subsequent claim for a family provision order under the Succession Act 2006 (NSW).

With limited exceptions, the defendants put the plaintiffs’ version of events entirely in issue. In particular, the four conversations critical to the plaintiffs’ case were denied.

I should record that in practical terms it was Emanuel’s evidence that was deployed to meet the plaintiffs’ allegations. Koula swore a very short affidavit in which she denied the critical conversations particularised in the statement of claim and denied she had ever agreed, or been present when it had been agreed, that the Property was to go to her sons in accordance with the 40:40:20 division alleged by the plaintiffs. It was clear from Koula’s brief cross-examination that she now remembers very little and that she left discussions about business to her husband and sons. In final submissions, no one suggested that Koula’s evidence was of assistance to the Court.

Emanuel said he had been running businesses in Australia since 1955. Each of George and Chris had left, respectively, his accounting work and dental technician role of his own volition to work in the South Granville Hardware Business, and George and Chris had set up P & S Aust of their own volition to run the Blacktown Hardware Business.

Emanuel denied that George and Chris in any way contributed to or worked on the Albyn Road Property. He denied the 1985 Conversation. Similarly, he contended that the Property had been purchased at the price offered without any suggestion it was at an undervalue. While the plaintiffs were not guarantors in relation to the Property, Emanuel accepted that George had assisted with Stage One of the renovations, but said that all the family had done so. However, all of the costs were paid by him and Koula. He denied the 1986 Conversation and the 1988 Guarantee Conversations had ever occurred and that he and Koula had ever agreed to hold the Property for their children.

In relation to the litigation with the CBA, Emanuel denied that the plaintiffs funded his and Koula’s litigation expenses. He also denied the 1999 Conversation. However, he accepted that he could not pay what was owing under the settlement of that litigation and contended that Garry had paid $453,000.00 of that amount and that the plaintiffs had paid $22,000.00.

Emanuel also denied that the plaintiffs had contributed to Stage Two as they said they had done.

The defendants also pleaded three special defences:

It will be apparent from the foregoing that all of the critical factual matters are in dispute between the parties. As a first step in resolving those disputes, I will next set out the Court’s findings of fact about matters which were admitted in the pleadings, were supported by independent, contemporaneous documents or were not otherwise seriously in dispute. These facts provide essential points of reference for the Court in making findings about the matters in dispute. As is often the case in matters such as this, I also record at this point that it is neither possible nor legally necessary for the Court to attempt to resolve specific disputed matters of family history going back to the childhood of the plaintiffs.

Emanuel and Koula were married in 1958.

George was born in 1962.

Chris was born in 1963.

In 1967, Emanuel and Koula bought a house in Queen Street, Ashfield for $13,600.00 which was rented out until the family moved into the house in 1974.

Garry was born in 1969.

In 1975, Emanuel and Koula bought a supermarket in Enfield called the Scoop Supermarket Food Store which was open six days a week.

In or about February 1981, at the age of 19, George commenced a course at Sydney TAFE and, thereafter, obtained an Accounting Certificate and a Real Estate Certificate.

While he was studying, George had a job in 1981 for about five months as a bookkeeper in an accounting firm. At the same, he undertook his first property development transaction, participating in a syndicate of five people from the accounting firm to purchase a property.

At some point in 1981 or 1982, Emanuel and Koula leased premises in Guildford Road, South Granville and established the South Granville Hardware Business with Emanuel as the manager.

In or about February 1982, at the age of 19, Chris commenced a Dental Technician course at Randwick TAFE and, thereafter, obtained a Dental Technician qualification.

On 21 June 1982, Pednap Pty Ltd was registered with Emanuel and Koula as the sole directors and shareholders.

By a deed made on 25 July 1982, Pednap Pty Ltd became the trustee of the Pavlis Family (No 2) Trust and, at some point around this time, became the operator of the South Granville Hardware Business.

While there was a dispute about whether George and Chris received remuneration for their work, Emanuel and Koula did not dispute that once the South Granville Hardware Business had commenced, Emanuel required George and Chris to work at the business on Saturdays and Sundays, any free weekdays when not at TAFE and during TAFE holidays.

On 10 November 1982, Emanuel and Koula purchased the land on which the South Granville Hardware Business was operated for $145,000.00.

On 25 November 1982, Pednap Pty Ltd changed its name to Pavlis & Sons Pty Ltd (P & S).

During 1983, the South Granville Hardware Business became a Mitre 10 Franchise.

On or about 7 February 1984, Kangal Holdings Pty Ltd was incorporated.

On 24 May 1984, Kangal Holdings Pty Ltd changed its name to Pavlis & Sons Australasia Pty Ltd (P & S Aust), with George and Chris being sole shareholders and directors. Its purpose was to acquire a new Mitre 10 hardware business in Main Street, Blacktown (the Blacktown Hardware Business) and to undertake property development.

The Blacktown Hardware Business was officially opened by a State Member of Parliament, Mr Ron Mulock, on 6 October 1984. The business received an advance from the CBA supported by a third party mortgage from Anthony and Mary Peris of Ashfield, friends of Emanuel.

On 12 August 1985, Emanuel and Koula purchased the Albyn Road Property for $191,700.00 subject to a $50,000.00 mortgage to the CBA.

On 14 July 1986, a company was incorporated which on 2 February 1987 became Pavmac Enterprises Pty Ltd (Pavmac) with George and Chris as the directors and shareholders with the object of undertaking property development. A company search discloses that Emanuel ceased to be a director and secretary of that company on 14 November 1988, but does not list a start date for him in respect of either of those roles.

On 13 October 1986, Emanuel and Koula completed a home loan application with the CBA to borrow $90,000.00 to purchase the Property for $300,00.00. Among their assets they listed “Equity in 2 hardwares [$]400,000”.

In November 1986, the Albyn Road Property was sold for $365,700.00.

In the same month, Emanuel and Koula purchased the Property for $300,000.00 using the net proceeds of sale of the Albyn Road Property and $90,000.00 from the CBA secured by a mortgage to the CBA. There is no suggestion that any party, other than Emanuel and Koula, either contributed to the purchase price of the Property or to mortgage repayments in respect of the Property.

Emanuel and Koula have lived at the Property since it was purchased by them, now a period of nearly 35 years.

The Blacktown Hardware Business was closed in 1987. In that same year, George said he undertook his first property development in his own right.

On 14 May 1987, a company was incorporated which on 28 July 1987 became Ideal Enterprises Pty Ltd (Ideal) with George and Chris as directors and shareholders to undertake the business of importing and distributing locks and door fittings from Greece.

P & S Aust, described in those documents as a “development company”, made loan applications to CBFC Ltd (CBFC) dated 21 January 1988, 9 March 1988, 27 April 1988 and 26 July 1988. In the interim, finance was provided by Natwest Australia Bank.

By a letter of approval dated 18 February 1988, Citibank agreed to advance funds to P & S as Trustee for the Pavlis Family (No 2) Trust.

On 21 March 1988, Emanuel and Koula (in their personal capacity and as trustees of the Pavlis Family (No 1) (sic) Trust), Pavmac, Ideal, P & S Aust, George and Chris all signed, as guarantors, an all moneys guarantee in favour of Citibank in respect of P & S as trustee of the Pavlis Family (No 2) Trust in respect of funds to be advanced pursuant to the agreement referred to in the preceding paragraph.

On 29 April 1988, there was a settlement whereby Citibank advanced $560,000.00 to pay out Natwest Australia Bank.

On or about 6 May 1988, Emanuel and Koula mortgaged the Property to the CBA in respect of advances to be made to P & S (the CBA Mortgage).

By letter dated 6 July 1988, CBFC confirmed a loan of $310,000.00 to be advanced to P & S Aust, subject to Emanuel and Koula giving CBFC a registered third mortgage over the Property “on the understanding that the principal amounts owing under the prior mortgages over this property do not exceed $610,000” (the CBFC Mortgage). This is the mortgage referred to in [115].

By letter dated 19 July 1988, CBFC had told Emanuel and Koula that their “present maximum liability” under the CBFC Mortgage was “$792,830 plus interest, costs, charges and expenses”.

On or about 26 July 1988, Emanuel and Koula granted a mortgage over the Property to CBFC to secure funds to be advanced to P & S Aust and two individuals, Vasilios Skembes and Suresh Choudhary. By letter of the same date, CBFC informed Emanuel and Koula that their liability to CBFC secured by, among other things, the CBFC Mortgage “has increased to $1,069,305.00 plus interest, costs, charges and expenses”.

In October and November 1988, Emanuel and Koula executed other loan, guarantee and loan related documents in relation to CBFC’s advances to P & S Aust.

Stage One of the renovations to the Property was organised and overseen by George and Chris between 1988 and 1990.

On 9 January 1989, Chris and Koula gave unlimited personal guarantees to the CBA in respect of P & S, P& S Aust and Ideal.

In late 1988 or early 1989, CBFC agreed to consolidate P & S Aust’s loans into what was described as a “Revolving Credit Facility which will eventually replace the current 7 Commercial Loans”. CBFC’s memorandum of this decision, which referred to the CBFC’s mortgage over the Property as part of a “core” of security, includes:

By letter dated 16 February 1989, George (on behalf of P & S Aust) accepted CBFC’s offer of the $1,600,000.00 Revolving Credit Facility (the RCF).

By letters dated 27 March 1989, Emanuel and Koula acknowledged that the CBFC Mortgage secured the RCF.

On or about 5 April 1989, Chris and Koula signed acknowledgements that the CBA would be extending up to $237,162.00 to P & S, P& S Australasia and Ideal, secured against the Property and the guarantees referred to in [118] above.

By a letter dated 29 May 1990 to the General Manager, Building Services Corporation, then NSW Magistrate G C Glass wrote this reference in respect of George:

On 18 June 1991, describing himself as “George Pavlis REI, MBSC, HIA, JP, Manager”, George wrote a five page letter to Citibank headed “Re: Pavlis Family Financial Situation” putting a refinance proposal to Citibank. This referred to selling “some of our property developments”, listed a number of properties (unrelated to Emanuel and Koula) as assets, foreshadowed a sale of the land on which the South Granville Hardware Business operated and included this reference to the Property: “Private residence valuation as at current stage $1.2 million. A further cost of $50,000 to complete with a completion valuation of $1.5 million valued by CBFC Limited in July 1990”. The letter describes “our sources of income” as coming from:

On 9 July 1991, the South Granville Hardware Business was sold for $57,231.00 (goodwill) and $138,282.00 (stock) as a going concern.

After the sale of the South Granville Hardware Business in 1991 Emanuel ceased working and, since that time, has had no income other than the aged pension which he started receiving in 1996 and which he has expended on his personal living expenses.

Koula’s annual income from 1981 to 1991 was limited to the tax free threshold of $4,000.00 to $6,000.00 until 1991 and thereafter limited to the aged pension.

By letters dated 26 September 1991, CBFC demanded $1,604,069.66 from Emanuel and Koula pursuant to the CBFC Mortgage.

An invoice from Pope & Spinks Solicitors dated 4 November 2021 is addressed to Emanuel and Koula, and George and P & S Aust, and is entitled “Re Financial Arrangements with Commonwealth Bank and CBFC”. It refers to “conference with you on 8.10.91, letter to CBFC of 11.10.91, perusal of voluminous documentation provided by Mr G Pavlis in relation to the history of this matter…” (emphasis added).

Subsequent invoices from Pope & Spinks Solicitors from 1991 and 1992 are addressed solely to Emanuel and Koula. However, nearly all of the attendances recorded are on George, including in relation to preparation of an affidavit from him, and there are further references to documents being provided by George. The first mention of a demand upon Emanuel, Koula and P & S by the CBA is for the period between December 1991 and February 1992.

On 17 February 1992, the CBA issued notices to Emanuel and Koula under s 57(2)(b) of the Real Property Act 1900 (NSW) in relation to the Property pursuant to the CBA Mortgage for them to repay $275,439.34.

By 17 July 1992 (being the date of notices to occupier that are in evidence), the CBA had commenced proceedings No 13165 of 1992 against Emanuel and Koula in the Common Law Division of this Court. The summons sought possession of the Property, I infer in reliance on the CBA Mortgage (the CBA Proceedings).

In an affidavit sworn on 2 December 1992 in the CBA Proceedings (George’s 1992 Affidavit), George deposed to a numbers of matters:

Because of its importance to the view I have formed about George’s credit, it is necessary to set out extracts from George’s 1992 Affidavit at some length:

In 1993, Emanuel and Koula commenced proceedings No 11209 of 1993 in the Common Law Division of this Court against CBFC (Emanuel and Koula’s Proceedings). The relief sought in those proceedings was not in evidence. I will refer to the CBA Proceedings and Emanuel and Koula’s Proceedings together as the “Bank Litigation”.

On 30 March 1993, Koula swore an affidavit in Emanuel and Koula’s Proceedings which included:

On 30 March 1993, Emanuel swore an affidavit in Emanuel and Koula’s Proceedings. Again, because of its importance on the issue of credit, it is necessary to reproduce an extensive extract:

On 27 May 1994, Emanuel swore a further affidavit in Emanuel and Koula’s Proceedings which included:

George swore an affidavit in Emanuel and Koula’s Proceedings on 18 May 1995 which was in similar terms and to substantially the same effect as George’s 1992 Affidavit, that Emanuel and Koula were unknowing and unwitting pawns in George’s financial relationship with CBFC, signing bank documents at his request without any explanation or understanding of what they were signing as a result of their blind trust in George. In relation to the RCF, George deposed:

On 13 July 1995, George obtained a painter’s licence, which he continues to hold.

On 22 September 1998, the Court made orders disposing of both Emanuel and Koula’s Proceedings and the CBA Proceedings. The relevant effect of those orders was that the CBA and CBFC obtained orders for possession of Emanuel’s interest in the Property, Emanuel had to pay $2,321,010.55 to CBFC and $478,977.87 to the CBA, and Koula had to pay $79,772.81 to the CBA. Emanuel and Koula had neither the cash nor any ability to borrow money to pay these amounts. This paragraph is based on the Court’s record of proceedings that was in evidence. No party (or the Court) was able to locate any reasons for judgment.

On 26 January 1999, the CBA sent a “without prejudice” letter to George (addressed to him at the Property), making a conditional offer under the heading “Re: Settlement of XX Redmyre Road, Strathfield” and which included: “We refer to your telephone conversation this morning with the writer and confirm that the Bank will accept the amount of $475,000 in full and final settlement”.

On 17 June 1999, a unit in Maroubra (the Maroubra Unit) was transferred from the Public Trustee to Garry for $310,000.00. On 2 July 1999, Garry sold the Maroubra Unit for $380,000.00. The argument about these transfers is set out in [200] and [201] below.

On 28 June 1999, a Deed of Settlement was entered into between CBA, CBFC, Emanuel and Koula which resolved the parties’ liabilities arising from the Bank Litigation. Under that deed Emanuel had to pay $475,000.00 on or before 5 July 1999. Koula was, in effect, discharged from any liability.

A series of bank cheques in favour of the CBA dated in late June or early July 1999 was in evidence which had been arranged by Garry (with some small amounts contributed by George) and used to pay the $475,000 (including from the proceeds of sale of the Maroubra Unit).

In 1999, in addition to owing the money referred to in [144] above, Emanuel and Koula owed $155,000.00 to Citibank and had no cash or income from which to make repayments or to discharge the loan owed to Citibank.

George, Chris and Garry funded Emanuel and Koula’s costs of the Bank Litigation because Emanuel and Koula did not have the means to do so. George and Chris refinanced the Citibank loan through a loan with the St George Bank for which Chris and Garry were guarantors.

On 17 November 1999, Emanuel and Koula made mirror wills drawn by Emanuel’s relative and solicitor Constantine Pavlis. Each left their estate to the other and appointed the other as executor, or in default, Garry. If the other predeceased, then the gifts were:

Each will concluded with this clause:

On 21 June 2001, George obtained a builder’s licence, which he continues to hold.

During the period from about 2001 to 2008, George and Chris oversaw and completed Stage Two of the renovations to the Property.

On 1 October 2010, Emanuel and Koula made mirror wills drawn by Mr John Maitland of the firm Teece Hodgson & Ward. Each left their estate to the other and appointed the other as executor, or in default, two non-family members, and in ultimate default, George. If the other predeceased, then the gifts were somewhat complex. In broad terms, Garry was to receive 60% of the estate (including the Property, of which he was devised 60% with an option to purchase the other 40%). George and Chris received nothing. Trusts were established for the benefit of George’s children and grandchildren (receiving 10% of residue) and for the benefit of Chris’ children and grandchildren (receiving 30% of residue).

Over a period of some years commencing in 2010, the relationship between Chris and his parents, and later between George and his parents, gradually broke down.

On 19 April 2017, Emanuel and Koula made mirror wills drawn by Mr John Maitland of the firm Teece Hodgson & Ward. Each left their estate to the other and appointed the other as executor, or in default, Garry and the two non-family members mentioned in the 2010 wills (see [152]). If the other predeceased, the entire estate fell into residue, with nothing being given to George and Chris and otherwise to be divided:

On 28 June 2017, Emanuel prepared a document (in the nature of a testament or explanation and in part addressed to Garry and his family) that Garry passed on to Mr Maitland at Emanuel’s request. In that document, Emanuel blamed George for the Bank Litigation, stating that George “thought of forging his mother’s signature and taking out a loan of one million dollars and with the then situation the bank took us to court” and describing George as “the protagonist of my financial disaster”.

On 18 July 2018, George and Chris each lodged a caveat on the title of the Property in relevantly identical terms (what follows is taken from Chris’ caveat) (the Caveats):

George and Chris filed their Statement of Claim on 21 September 2018. That pleading did not refer to the 40:40:20 Conversation.

In approaching the task of fact finding, particularly where credit is a significant issue, the Court has applied nine principles.

First, at the forefront of the Court's approach has been the oft cited statement of McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318–9:

Second, the concept of actual persuasion was elucidated by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (in liq) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 at [48]:

Third, there is the statutory successor of the rule in Briginshaw v Briginshaw (1938) 60 CLR 336 in s 140 of the Evidence Act 1995 (NSW):

Fourth, evidence is to be preferred which is inherently probable in the circumstances or is given by a witness against their interest.

Fifth, evidence of independent witnesses (i.e. persons who have no reason to be partisan) may be decisive in resolving the conflicting evidence of interested parties.

Sixth, where a witness has been found to be lying about one thing that does not automatically mean that they are to be disbelieved about everything else. The Court is not bound to accept or reject a witness' evidence in its entirety. This approach was expressed by O'Loughlin J in Cubillo v Commonwealth of Australia (No 2) (2000) 103 FCR 1; [2000] FCA 1084:

Seventh, and closely related to the preceding point, in Sangha v Baxter [2009] NSWCA 78 Basten JA (with whom Handley AJA agreed) cautioned against global credibility findings:

Eighth, disbelieving a witness that "X" was the case does not mean that "not X" has been proven. The Court respectfully adopts what fell from Gibbs J (as his Honour then was) in Steinberg v Federal Commissioner of Taxation (Cth) (1975) 134 CLR 640 at 694; [1975] HCA 63 (citations omitted):

Ninth, the Court can only do the best it can on the evidence which it has. Some issues may need not be resolved or should not be resolved. It may be that they cannot be resolved given the nature of the evidence which the parties have adduced. This case has many similarities to the family dispute considered by Robb J in Ak-Tankiz v Ak [2014] NSWSC 1044. Of the evidence in that case, his Honour said at [187]:

For the reasons that follow, the Court has concluded that Koula’s evidence can carry no weight, and that in relation to George, Chris and Emanuel, each of them is a witness whose evidence cannot be considered reliable on any contested matter unless it is inherently probable, against interest or corroborated by independent witnesses or contemporaneous documents.

The defendants’ submissions concerning George’s credit were based on two fundamental criticisms. The first was to highlight the difference between George’s evidence in the CBA Proceedings and Emanuel and Koula’s Proceedings, and how he sought to present his relationship with his parents, especially Emanuel, in these proceedings.

The second criticism focussed on the alleged 40:40:20 Conversation, but on the basis that the same considerations reflected adversely on George’s credit generally. This criticism relied on three elements: the absence of any reference to a 40% interest in the Caveats; the absence of any particularisation of the 40:40:20 Conversation in the statement of claim filed only a few weeks after the Caveats; and the almost identical versions of that conversation in the affidavits filed by George and Chris. It was submitted that this last matter was sufficient in itself for the Court to find that George and Chris had colluded to make up that evidence.

In answer to the criticism of the differences between George’s past and present evidence, Mr Insall SC submitted that the “different impression” given in George’s earlier evidence was explicable, in words which I had used, as evidence of a family “circling the wagons” to fend off the banks.

As to the differences between the Caveats and George and Chris’ subsequent evidence, the defendants sought to minimise these issues by referring to objective circumstances (primarily the substantial work and expenditure undertaken by the plaintiffs) as supporting their case. The defendants’ approach was criticised for not engaging with “George and Chris’s broader evidence as to the representations or the objective circumstances supporting their case” (Plaintiffs’ Closing Submissions in Reply, at [2]). The essence of the plaintiffs’ answer was set out in [5] of their submissions in reply:

The reference to Masson is to this observation of Nettle and Gordon JJ in Queensland v Masson (2020) 94 ALJR 785; [2020] HCA 28 (Masson) at [112], which, for important context, I set out with its preceding paragraph (citations omitted):

In the course of oral submissions it was argued that, in any event, the fact that their accounts were identical in their affidavits is not a reason to find that the representations were not made. They were inherently likely because why would two young men at the start of their careers take on such a major project without assurances of that kind?

In relation to the Caveats, while there was no evidence to this effect, Mr Insall SC also submitted that the Court would find, as a matter of judicial notice, that caveats sometimes have to be prepared quickly without the benefit of a full statement from the client of the circumstances.

For the following reasons the Court does not accept George as a witness whose evidence can be relied upon in relation to controversial matters. His evidence will only be given weight if it is inherently probable, against interest or corroborated by independent witnesses or contemporaneous documents.

First, and foremost, is the complete contrast between George’s evidence in the Bank Litigation (see [134] and [139]) and the picture he has sought to paint in these proceedings. This contrast is far more than a matter of a “different impression” (see [171]). In the former proceedings, George presented himself as the driving force, assisted by Chris, in all of the commercial undertakings affecting the Pavlis Family and the Property, with Emanuel and Koula as passive and innocent dupes. In these proceedings, George has sought to present himself and Chris as pawns in the hands of a domineering father, forced into helping their father for no reward and having to rely on representations of future entitlement to the Property.

George’s evidence in the earlier proceedings is even more damaging to his credit than because of mere inconsistency. If it is true, it is an admission of disreputable and dishonest conduct by George towards his vulnerable parents. If it is false by reason of its inconsistency with the evidence George now advances, then the Court does not know which evidence is true. On either view the Court is left in the position that it must conclude that George’s uncorroborated evidence cannot be relied upon. The Court concludes that George is a witness who will give whatever evidence suits his cause.

The Court also accepts the defendants’ second criticism (see [170] above). I deal with this in [206] to [214] but it is convenient at this point to set out why I do not accept Mr Insall SC’s submissions on this point:

The defendants’ primary attack on Chris’ credit was to the same effect as the attack on George by reason of their substantially identical affidavit evidence as to the 40:40:20 Conversation. They also submitted that Chris was not being careful to tell the truth (citing his confident, but plainly wrong, answer as to in what country he had verified the statement of claim); that he was evasive about critical conversations being in the statement of claim; and that when asked to identify the most important conversation, he did not refer to the 40:40:20 Conversation (see [238] for this evidence).

The plaintiffs’ response to these criticisms was identical to their response in relation to George set out in [172] to [175]. It was submitted that the other miscellaneous criticisms of Chris were commonplace issues for lay witnesses unfamiliar with cross-examination and did not warrant a finding of lack of credibility.

There are two reasons why the Court does not accept Chris as a witness whose evidence can be relied upon in relation to controversial matters. His evidence on such matters will only be given weight if it is inherently probable, against interest or corroborated by independent witnesses or contemporaneous documents.

First, throughout the relevant history of the Pavlis Family, Chris appears to have played a supporting role to George. As such, the Court’s doubts about George’s veracity necessarily inform the Court’s approach to Chris’ evidence insofar as it corroborates George’s evidence. While it is not Chris’ evidence, George’s evidence in the Bank Litigation about Chris as George’s willing assistant in the family businesses is at odds with Chris’ evidence in these proceedings, which seeks to corroborate George’s evidence in these proceedings that they were both victims of their domineering father.

The second reason is that referred to in [170] and [179] above in relation to George.

Only brief submissions were ultimately made by any party about Nick’s credit and his evidence, to which I have referred in [19]. That evidence was intended to be corroborative of George and Chris’ evidence about, among other things, their early work for, and relationship with, their father and did not go to any of the central factual disputes in the case. Nick’s evidence was too peripheral, and his animosity towards Emanuel too obvious, for the Court to place any reliance on Nick’s evidence.

Mr Insall SC submitted that the beginning and end of the question of Emanuel’s credit was to be found in this evidence, being his own admission that he tells the story that suits him (Tcpt, 6 November 2021, p 421(41)–423(36)):

Mr Insall SC submitted that, on the basis of that evidence, the Court should not accept any of Emanuel’s evidence where it favoured himself. This included his various denials about George’s evidence, including of having made the various representations he was alleged to have made by George and Chris.

Mr Waugh SC submitted that Emanuel was a credible witness whose evidence had the “ring of truth”, not least his denials of ever making any promises to George and Chris about the Property. It was submitted that the Court should be cautious about making adverse findings based on demeanour where a witness gives evidence, as occurred here, with the assistance of an interpreter. Insofar as there were matters adverse to Emanuel in his evidence, and even accepting that it was inescapable to conclude that Emanuel understood what he was saying in his evidence set out in [186], the Court should understand that Emanuel was a suggestible witness. Insofar as he may have accepted that evidence he had sworn in the Bank Litigation was false, it went to peripheral matters and was not to be compared to central issues about which the plaintiffs were said to have lied. Furthermore, at least one of the affidavits in those proceedings that was now in question had been prepared by George’s solicitor at the time.

The Court accepts Mr Insall SC’s submission that by Emanuel’s own admission his evidence on critical matters cannot be relied upon. As the transcript set out in [186] demonstrates, I was concerned that something may have gotten lost in translation when it came to Emanuel’s understanding of what was being put to him. However, he adhered to his admission after he had had the benefit of clarification through the interpreter. Despite his best efforts to minimise the effect of Emanuel’s answers, Mr Waugh SC properly accepted in oral argument that it was “inescapable” that Emanuel understood what was being put to him.

Emanuel presented in the witness box as a proud and stubborn man who wished to resist at every turn the case brought by the plaintiffs rather than attempt to address the evidence in a truthful way to the best of his ability. I accept Mr Insall SC’s submission that many of Emanuel’s strenuous denials were simply unrealistic in the light of common sense and the practical likelihood of what had occurred.

I am also fortified in the conclusion I have reached by the contrast in the pictures which Emanuel sought to paint of himself in these proceedings (independent, patriarchal, “in charge”) with his affidavits in the Bank Litigation. In the face of the contrast, the Court has no basis on which to determine which is closer to the truth.

The Court therefore concludes that Emanuel is a witness whose evidence cannot be considered reliable on any contested matter unless it is inherently probable, against interest or corroborated by independent witnesses or contemporaneous documents

The plaintiffs submitted that Koula had no real recollection of events and that the Court should accept her evidence that “she left it to the men” and her evidence that she had just signed whatever had been put in front of her for the purposes of these proceedings. In short, her evidence was of no assistance to the Court at all.

The defendants submitted that Koula had given her evidence truthfully and to the best of her recollection. She understood that the work was being done to the Property so the family could live in it.

Koula presented, both in the witness box and in her affidavits, as having no real recollection of events. Koula identified herself as a traditional Greek wife and mother who looked after the household, and the Court accepts her evidence that she had no input into monetary or business affairs. Her lack of English also meant she could not read contracts or assist with any accounting or invoicing matters in the various businesses of her husband and sons. Given her lack of recollection and very limited role outside domestic matters, with no disrespect intended, the Court accepts that her evidence is of no assistance on any of the questions central to the resolution of these proceedings.

Mr Insall SC submitted that Garry’s role in the proceedings was somewhat peripheral. As Garry had not been challenged in cross-examination on this point, Mr Insall SC did not submit that Garry’s evidence should not be accepted to the effect that he had made cash contributions to the renovations of the Property of approximately $150,000.

However, he submitted that Garry’s evidence should be approached with caution and a recognition of at least the likelihood of exaggeration for three reasons:

The defendants submitted that Garry’s evidence had not been seriously challenged in cross-examination, with the exception of the issue of the Maroubra Unit. Garry frankly accepted that he has a financial interest in the outcome of the proceedings. He continues to contribute to his parents’ finances and is paying their legal expenses. However, none of this is a reason to find that he was not a credible witness.

The attack on Garry’s credit, such as it was, was essentially based on Garry having a financial interest in the outcome, but the same could be said of the plaintiffs. Garry presented in the witness box as a frank witness who was endeavouring to tell the truth. The Court accepts him as a witness of truth. However, with the exception of the 1999 Conversation, much of his evidence was peripheral to the essential factual matters genuinely in dispute.

In reaching this conclusion, it is necessary to say something briefly about the dispute between the parties concerning the Maroubra Unit. Garry’s evidence was that he had bought the Maroubra Unit in March 1999 and had sold it “to free up funds” to assist in paying the settlement with CBA and CBFC. Chris’ affidavit evidence was that he (Chris) “in May 1999, …sold the unit which I owned” (being the Maroubra Unit) and applied the proceeds to the settlement. Chris said he was the building manager of the relevant unit block, became aware of the Maroubra Unit and brought it to Garry’s attention so he could “flip” it for a quick profit to apply to the settlement. Garry accepted that Chris had drawn the Maroubra Unit to his attention but otherwise denied Chris’ version of events.

The Court accepts Garry’s version of events and rejects Mr Insall SC’s criticism of Garry on this point for two reasons: first, that the only contemporaneous records available (the transfers of the Maroubra Unit) on their face contradict Chris’ assertion that the Maroubra Unit was his; and, second, because of the general view I have taken about Chris’ credibility in the absence of independent evidence (see [182]).

Having set out the Court’s findings as to credit, it is convenient to turn next to the question of whether the Court accepts the plaintiffs’ case in relation to the various representations pleaded. In doing so, I pass over the 1985 Conversation because Mr Insall SC made clear that his clients did not contend that any rights which they now asserted arose from the alleged conversation. However, I note for completeness that applying the Court’s findings as to credit has the result that were a finding necessary, the Court would not accept that the 1985 Conversation occurred as alleged.

George’s affidavit evidence of the 1986 Conversation was:

Emanuel’s affidavit response to this evidence was:

It is not necessary for the Court to resolve the dispute in the evidence about how the Property was brought to the attention of Emanuel and Koula or whether the purchase price represented the market price. The 1986 Conversation is completely uncorroborated. As such, given the Court’s findings as to George’s credit, the Court is not satisfied on the balance of probabilities that the 1986 Conversation actually occurred. Because of the Court’s findings about Emanuel’s credit, the Court’s conclusion about the 1986 Conversation does not depend on giving any weight to Emanuel’s denial.

George’s affidavit evidence of the 1988 Guarantee Conversations was:

Chris’ affidavit evidence of the 1988 Guarantee Conversations was:

Emanuel’s affidavit response in evidence was:

The Court does not accept these conversations occurred for the following five reasons.

First, there is no independent corroboration of these conversations. Conformably with the view that I have set out at [176] and [182] above in relation to the credit of George and Chris, the Court does not accept their evidence. Because of the view I have taken about Emanuel’s credit, this conclusion does not depend on Emanuel’s denials.

Second, there is no reference to the 40% interests in the Caveats. The Caveats are set out in [156] and I repeat the reasoning set out in [179(1)].

Third, the particulars given in the statement of claim for the 1988 Guarantee Conversations are reproduced in [46]. The first conversation particularised does not include any reference to 40% being discussed. The Court does not accept that it is credible that this would have been omitted if it had occurred and was of any importance to the plaintiffs. Curiously, the next paragraph of the statement of claim alleges the plaintiffs assumed their interest in the Property was “approximately 40%”. This appears to be an inference from the particularised conversation about George and Chris having a larger share than Garry, but again the word “approximately” would have been unnecessary if the actual conversation was as ultimately alleged by the plaintiffs in their affidavits. This same point can be made about [47] of the statement of claim, which also refers to “approximately 40%” after the 1999 Representation.

Fourth, while there are minor differences of expression in the accounts given by George and Chris set out in [206] and [207], they are largely identical. Most significantly, their versions of the critical conversations are in identical terms, with the exception of slight variations in how the 40:40:20 interest is expressed. Putting it another way, the 40:40:20 aspect of the conversations appears to have been inserted into what are otherwise identical accounts of the conversations reproduced in the particulars. Given that apparent insertion, the absence of a reference to 40% in the Caveats and the absence of that part of the conversation in the particulars, I find the 40% references in the alleged 1988 Guarantee Conversations set out in the affidavits to be, literally, incredible and that they were concocted by George and Chris at some time between when the statement of claim was filed and when they filed their affidavits. I am fortified in that conclusion by what follows in the next paragraph.

Fifth, the Court’s serious doubt about any of this evidence is compounded to the extent it is identical in the two affidavits. As I have already said in [179(2)], I accept Mr Waugh SC’s submission that the Court cannot accept that two people recalling conversations in Greek after 30 years would remember them identically not only in Greek, but then also produce identical interpretations of them into English. Based upon just how similar those two accounts are, the Court finds that George and Chris have colluded in this evidence such that it cannot be satisfied that the account of either of them can be relied upon as true. It is uncontroversial that such a finding is open to a Court when confronted with otherwise unexplained (as is the case here) identical evidence of conversations: see, for example, Rosebanner Pty Ltd v Energy Australia (2009) 223 FLR 406; [2009] NSWSC 43 at [326] to [327] per Ward J (as her Honour then was). Furthermore, because it goes to such a critical part of their case, it casts doubt upon the reliability of their evidence generally on any controversial matter of importance.

George’s affidavit evidence of the 1999 Conversation was:

Although George says the 1999 Conversation was in the presence of Chris, Chris’ affidavits made no mention of it.

In his affidavit evidence, Emanuel does not deny George’s account of the 1999 Conversation although nothing turns on this. He does say: “These proceedings are the first time I have heard that George and Chris are claiming an interest in” the Property. The 1999 Conversation is denied in the amended defence and Emanuel denied it in cross-examination (Tcpt, 9 November 2020, p 468(8–20)).

In his affidavit evidence, Garry said of the 1999 Conversation:

The 1999 Conversation is uncorroborated. Conformably with the Court’s findings as to credit, the Court is not satisfied that the 1999 Conversation ever occurred. In reaching this conclusion, the Court accepts, and is fortified by, Garry’s evidence that he was not present for any such conversation, but for reasons already set out, gives no weight to Emanuel’s denial.

It follows from the foregoing that the plaintiffs’ case, insofar as it relied on any pleaded representation, fails on the facts. It is therefore unnecessary to set out the parties’ detailed submissions on the law.

The same outcome applies to the plaintiffs’ case based upon the contributions which they made to the improvement of the Property by reason of the further factual and legal conclusions which follow.

Viewed in its totality, the evidence makes clear that George was the driving force behind everything that has led to this litigation, including on his version (although the Court does not find it necessary to resolve) being the person who introduced the Property to his parents. His dominant role was neatly expressed in his self-description of “manager” in the document set out in [124] of what he represented to banks to be the “Pavlis Family Business” which was centred around property development but included the importing business of Ideal. He was assisted in this by Chris. That dominant role also appears in what evidence there is about the conduct of the Bank Litigation (see [129], [130] and [142]).

This conclusion of George’s dominance is consistent with, but for obvious reasons does not depend upon, George’s version of each of the representations asserted by him on behalf of the plaintiffs. They have not been accepted as fact by the Court. Nevertheless, it is revealing that George, on his own version of those alleged conversations, portrays himself as their unequivocal instigator, with Emanuel and Koula’s alleged responses barely amounting to more than acquiescence or passive agreement. George’s versions of these alleged representations are at least insistent and could reasonably be viewed as aggressive or bullying.

Not least because of their limited formal education and English language ability (with no disrespect intended), Emanuel and Koula were, at best, passive participants in and indirect beneficiaries of George and Chris’ activities. At worst, if George’s evidence in the Bank Litigation is to be believed, they were the victims of being used and disgracefully deceived by George — but it is not necessary for the Court to make any finding about this and no such finding is made.

While George and Chris may have represented, and even persuaded themselves, that they were engaged in the “Pavlis Family Business”, they were the immediate beneficiaries of that business through the activities of P & S Aust and, to a lesser extent, P & S. Emanuel and Koula had no legal entitlement to any benefit from George and Chris’ development activities and, as George admitted in cross-examination, none of the financial transactions which actually precipitated the Bank Litigation were for the benefit of Emanuel and Koula. Whatever Emanuel and Koula may have received was literally in the gift of George and Chris.

There can be no real doubt that George and Chris (and, for that matter Garry) contributed financially and physically to the renovation of the Property, but not to its acquisition or paying the CBA Mortgage. However, a critical feature of the present case is that having the Property available as security to fund the activities of P& S Aust and P&S was an essential element of George and Chris’ activities, as appears, for example, from CBFC’s memorandum at [119]. By undertaking and funding the renovation of the Property they received the benefit of the Property’s enhanced value as security. For example, George’s effort to use that improved value appears in the letter to Citibank referred to at [124].

Their business activities put the Property at risk. George sought to minimise this in his evidence, in particular by saying that the CBA Proceedings were based on the debts of P & S secured by the CBA Mortgage. That is true, but ignores the fact that demands were first made on Emanuel and Koula under the CBFC Mortgage (which secured the debts of P & S Aust) and only later on them under the CBA Mortgage (see [128], [130] and [131]). The various securities in evidence make clear that they were cross-collateralised and the Court is satisfied that the likely order of events was failure to meet demands under the CBFC Mortgage triggering a default under the CBA Mortgage.

It is also apparent from the judgments set out in [141] that Emanuel and Koula were ultimately found liable for amounts that could only be referable to amounts borrowed by George and Chris for their property development and other business interests. George’s pivotal role was only demonstrated rather than diminished by his evident pride in telling the Court on more than one occasion in his cross-examination that neither he nor Chris ever went bankrupt, ever had any legal action against them and that his companies were never wound up: he had successfully avoided any personal liability.

In addition to being motivated by the commercial benefit to them of being able to use the Property as security, I will assume in George and Chris’ favour that they also perceived themselves to be fulfilling a filial obligation to their parents and the Pavlis family generally in renovating the Property as the family home. However, based on the contemporaneous evidence of their business activities which I have set out in [98] to [125], the Court concludes that such filial munificence was incidental to their commercial ambitions.

George was the instigator of the renovation of the Property for the commercial and filial motives which I have identified. On the evidence which the Court has accepted, and contrary to the submission put on behalf of the plaintiffs (see [70]), the only legal conclusion which the Court can make, and makes to the extent it is necessary, is that the funds and personal exertion George and Chris expended on the renovation of the Property constituted gifts to Emanuel and Koula. (However, I do not think that finding is strictly necessary because the onus at all times was with the plaintiffs to establish the legal character of their claim, not upon the defendants to prove an alternative legal character.) There is no evidence that they were sought or initiated by Emanuel and Koula, and there is no suggestion consideration was given by Emanuel and Koula. As is sometimes the case with generosity of children to parents, they would be no less a gift because they were made in the expectation purely by reason of their status as children that the plaintiffs would one day benefit from their efforts because they would inherit the Property in a fully renovated condition.

By reason of their status as sons and because of the funds and work they expended on the Property, George and Chris at all times expected and continue to expect that they are entitled to a “fair share” of the Property, subject to what emerged in the evidence as a vaguely defined right of Emanuel and Koula to reside in and use the Property (or its monetary equivalent) for their benefit and maintenance during their respective lifetimes. That expectation, the Court readily infers, was also why George and Chris funded Emanuel and and Koula’s legal costs of the Bank Litigation; why George arranged and Chris contributed to the settlement of the Bank Litigation to ensure the Property was not lost; and why they continued with Stage Two after the Bank Litigation had been concluded.

However, while it may be accepted as inherently likely that, as parents, Emanuel and Koula enjoyed and expressed gratitude for what was done to the Property by George and Chris, George and Chris have failed to prove any knowledge, action or inaction (including representations or encouragement by words or other conduct) on the part of Emanuel and Koula that would affect Emanuel and Koula’s consciences so as to attract any kind of equitable relief.

Nor have Chris and George established any “joint endeavour” in relation to the renovation of the Property which has failed, as opposed to what the Court is satisfied was really in the nature of unilateral action undertaken for the reasons set out in [226], and [229] to [231] above. The Court accepts Mr Waugh SC’s submissions that the plaintiffs’ error was to equate a joint undertaking with a family relationship and that to be “joint” there had to be more than just an open ended expectation that when parents die the children will get a share.

The plaintiffs, with respect correctly, submitted that the essence of the equity identified in cases such as Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 and Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 is the making of contributions for the purposes of a joint endeavour or relationship, and the retention by one party of those contributions when the relationship fails without blame where that retention is unconscientious because it was not intended that the other party alone should enjoy them. This last element generally follows from the fact of the endeavour being “joint”.

In this case the defendants criticised the plaintiffs’ case because it was submitted the plaintiffs had not identified what the “joint endeavour” was. For example, was it no more than to renovate the Property so that Emanuel and Koula could live there and all the family could enjoy it? In the end, the Court finds, given the conclusions about the plaintiffs’ motives set out in [226], and [229] to [231] above, that the plaintiffs have failed to make out the more basic element that whatever was done was a “joint” endeavour so as to render Emanuel and Koula’s retention of the benefit unconscientious, as opposed to what was unilateral and, to a large degree, self-interested conduct by the plaintiffs. In other words, the Court cannot infer that they were not intended to retain the benefit if the alleged endeavour should fail. It is not enough, for example, for the plaintiffs to submit (as they do) that from 2000 to 2009 Emanuel and Koula accepted the plaintiffs’ monetary and non-monetary contributions to the Property “without protest”.

In reaching these conclusions, and for completeness, I record five other matters.

First, I am fortified in these conclusions by what I consider to be very telling — and the Court accepts as truthful — evidence given by George at the conclusion of his cross-examination (Tcpt, 4 November 2020, p 252(47)–254(6)):

Chris gave similar evidence (Tcpt, 5 November 2020, p 300(38)–301(25)):

There was no re-examination. Chris also gave this evidence about the “continual promises”, being unable when asked by Mr Waugh SC to identify the most important conversations upon which he relied (Tcpt, 5 November 2020, p 303(6)–304(13)):

The plaintiffs have been unable to satisfy the Court that the specific representations pleaded by them were ever made. As I have noted in [232], it is inherently probable that Emanuel and Koula expressed words of gratitude and encouragement to their sons in relation to what was being done to the Property. George and Chris undoubtedly now, to use Chris’ word, “interpret” what was said to them as promises. But that is not sufficient to make out a basis for the intervention of equity. My overall impression of their evidence is that it is not that of men who had done what they did in reliance on specific representations about what they would receive. Instead, it was the evidence of men who had a strong expectation, by reason of what they had done and their status as sons in a traditional Greek family, that they should receive their “fair” or “majority” share of their parents’ estate (comprising largely the Property), but that what that might be was a matter for negotiation, even through the medium of these proceedings.

Second, I have given careful consideration to Mr Insall SC’s submission, emphasised several times, to this effect: why would George and Chris have put all that work and money into the Property if they had not been given the assurances they alleged they had received from their parents? He submitted that the only other conclusion — that what they did was a gift — defied common sense, given the size and scope of the undertaking. The answer as to why they did that, entirely consistently with there having been no representations of the kind alleged, is in the conclusions I have set out in [226], and [229] to [231] above.

Third, the plaintiffs submitted that while George and Chris were cross-examined on the 1988 Guarantee Conversations at length, there were many other matters, including conversations, that were not challenged in cross-examination, such that the defendants could not submit to the contrary. Reference was made to the decision of the Court of Appeal in SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd (2017) 345 ALR 633; [2017] NSWCA 132, in which McColl JA said (Gleeson JA and Sackville AJA agreeing) (citations omitted):

Furthermore, in the plaintiffs’ closing submissions in reply, twelve “key” matters were identified upon which it was said the plaintiffs had not been challenged.

The Court does not accept the plaintiffs’ criticism in relation to any matter of importance for the purposes of its decision, even if it is assumed in the plaintiffs’ favour that the twelve matters were not cross-examined upon. The pleadings, affidavits and the course of the case made it obvious that the defendants denied the conversations pleaded to have been relied upon by the plaintiffs had ever happened (the 1985 Conversation, 1986 Conversation, the 1988 Guarantee Conversations and the 1999 Conversation). Those matters, together with the extent to which they were cross-examined upon (either specifically or by reference to general propositions), satisfy the rule in Browne v Dunn (1893) 6 R 67. There is no procedural impediment to the defendants submitting that the plaintiffs’ evidence of those conversations should not be believed.

Of the unchallenged matters identified specifically by the plaintiffs, they are either peripheral (so as not to require the Court to make specific findings) or were matters that it became obvious could not, as general propositions, be disputed. The latter category included matters such as George being the prime mover in organising the renovations to the Property, George and Chris undertaking physical work (although how much was disputed) or the fact that the plaintiffs contributed financially to the renovations (although, again, the amounts were disputed and, as I have noted, it was accepted that if a precise determination were required, it would have to be referred out).

Fourth, while the court book included a great deal of material said to evidence the contributions various parties made to the costs of renovating the Property, the parties resisted my invitation to make any detailed submissions about how the Court should assess those respective contributions as a matter of dollars and cents. As I have noted in [69], the plaintiffs’ position was that if the Court reached the position that all the plaintiffs were entitled to was a charge or similar relief reflecting their contributions to the improvement of the Property, that detailed exercise would have to be referred out to an accountant.

The Court has not reached that position, so I expressly refrain from making any findings about the timing and quantum of the contributions any party made to the improvement of the Property (it being accepted that the plaintiffs did not contribute to the purchase price or, given the difficulty of the calculation, towards the mortgage). Nor is it necessary to determine whether in this case the amount of any lien or charge is limited to the extent the plaintiffs’ efforts improved the value of the Property.

There is a second reason for this approach. Without wishing any further litigation on what is now, most unfortunately, a deeply divided family, there appears to be a real prospect of family provision proceedings being brought by one or both of the plaintiffs after the death of either of the plaintiffs (unless there is a reconciliation or further agreement in the meantime). The extent of the parties’ contributions to the improvement of the Property will inevitably be a central issue in any such proceedings. Given the result of these proceedings, that issue can and should be left to another day.

Fifth, were it necessary to decide, the Court would not have accepted that the defence of laches had been made out so as to disentitle the plaintiffs to any relief. There was no relevant delay in bringing these proceedings and, even if there had been a delay, no credible suggestion that there had been any prejudicial change of position or other detriment on the part of the defendants or Garry that would not have occurred but for the delay.

The proceedings will be dismissed. Subject to any application any party may wish to make, the plaintiffs will be ordered to pay the defendants’ costs.