Background
Andrea Makis and Kyriacos Kyriacou disputed their respective entitlements to a residential block of eight units in MacDonald Street, Lakemba, registered in their names as tenants-in-common in equal shares and subject to an ANZ mortgage. Their wider business relationship, also involving their respective spouses, allegedly encompassed activities in Australia and Cyprus between 1995 and 2012. Makis alleged a “global partnership” formed in December 1995 and varied in 2002, and sought its winding-up and an account under s 35 of the Partnership Act 1892 (NSW).
Kyriacou had initially sought specific performance of an unsigned 2012 “Partnership Dissolution Agreement” (PDA). Robb J held in Kyriacou v Makis [2021] NSWSC 60 that the PDA was not an enforceable agreement, principally because it expressly required signatures that were never supplied. However, no formal orders answering the agreed issues were made, apart from an order reserving costs, and no order had been made under UCPR r 28.2 for determination of separate questions. Makis subsequently pursued her cross-claim. Kyriacou denied the global partnership and pleaded an estoppel defence based on representations allegedly made by Makis’s former husband, John Papatheodotou, on her behalf.
Lindsay J rejected the alleged global partnership and upheld the estoppel case. He found that Kyriacou would receive Makis’s interest in the MacDonald Street Units and assume sole responsibility for the ANZ mortgage, while Makis would receive Kyriacou’s interests in other properties. Orders made on 15 September 2025 declared that Makis held her interest on trust for Kyriacou, vested that interest in him, and declared his entitlement to rentals and liability for expenses, including the mortgage. Makis appealed on nine grounds, grouped by the Court into five issues.
The Court’s Holding
The Court—Bell CJ, Ball JA and Griffiths AJA—dismissed the appeal with costs. It upheld Lindsay J’s rejection of the global partnership. His preference for the evidence of Kyriacou and Anastasia Kyriacou over that of Makis and John rested on credibility findings that were open to him and were not “glaringly improbable”. The Court applied the established appellate restraint concerning findings informed by seeing and hearing witnesses, citing Lee v Lee and Fox v Percy.
The Court rejected the argument that Robb J’s earlier findings precluded Lindsay J from considering John’s authority. Although interlocutory determinations can create issue estoppel when they finally determine an issue, Robb J made no orders creating that finality. For the same reason, no Anshun estoppel arose. The Court also distinguished authority to enter into a contract in the PDA’s terms from authority to make representations concerning the contemplated transactions. Lindsay J had correctly found that John possessed actual or ostensible authority to make the latter representations, having regard to Makis’s pleaded case, her longstanding conduct, her knowledge of the PDA and her participation in related transactions.
No procedural unfairness was established. Although the litigation was procedurally unsatisfactory and the estoppel was pleaded as a defence, ownership of the units was central to the dispute, the case was largely fought on that basis, and Makis did not object to the proposed orders as falling outside the litigated issues. On the substantive estoppel issue, the Court held that a clear and unequivocal promise is required for proprietary estoppel by encouragement, consistently with Kramer v Stone and Penya v Penya. It rejected Makis’s assertion that Lindsay J had made no findings about the underlying conversations: fairly read, he accepted Kyriacou’s affidavit evidence and found representations independent of, although broadly corresponding with, the unsigned PDA. Kyriacou’s conveyancing and related conduct supplied cogent evidence of reliance. He suffered detriment by surrendering interests in the Yerrick Road and Wangee Road units without personally receiving sale proceeds and by undertaking responsibility for the ANZ mortgage.
The trust and vesting relief was not disproportionate. The arrangement involved transfer of Makis’s half-interest, not merely Kyriacou’s retention of his existing half-interest, and the relief reflected the bargain, including his assumption of mortgage and other expenses. The Court noted, without deciding a ground raised on appeal, that the orders could not extinguish Makis’s liability to ANZ and might require attention under the liberty to apply if Kyriacou failed to discharge that liability.
Key Takeaways
- Reasons expressing answers to agreed questions did not create issue estoppel or Anshun estoppel without orders finally determining the relevant issues.
- Authority to make representations about proposed transactions was distinct from authority to bind the principal to the unsigned PDA as a contract.
- The estoppel rested on accepted evidence of conversations and conduct, not solely on the unsigned PDA.
- The appeal failed on the partnership, authority, procedure, estoppel and remedial issues; the appeal was dismissed with costs.
Why It Matters
The decision illustrates the importance of formal orders when parties seek final determination of separate issues, and the demanding appellate standard for reversing credibility-based factual findings. It also explains how an unsigned, unenforceable agreement may remain relevant to an estoppel founded on independently proved representations, reliance and detriment.
On remedy, the Court treated transfer of the promised property interest as proportionate in the particular circumstances, while expressly identifying the limits of orders affecting mortgage liabilities owed to a third-party lender.