Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos

[2017] NSWSC 666

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos [2017] NSWSC 666

Hearing dates:

1, 2, 3, 4, 5, 8, 9, 10, 11,12, 16, 18, 19, 23 February, 7, 8, 10 March, 7, 27 April, 10 May & 1 June 2016

Date of orders:

09 June 2017

Decision date:

09 June 2017

Jurisdiction:

Equity

Before:

Slattery J

Decision:

(i) Deceased executed informal will of October 2012 that is already admitted to probate and he knew and approved its contents. Deceased intended informal will to embody his final testamentary intentions. Application for revocation of grant of probate to the defendant refused.
(ii) A de facto relationship found not to exist between the plaintiff and the deceased. The plaintiff was not dependent upon or in a close personal relationship with the deceased. The plaintiff is not an eligible person to make a claim under Succession Act, s 57 against the deceased’s estate. The plaintiff’s Succession Act claim fails.
(iii) Plaintiff must repay all monies the deceased advanced to him before the deceased’s death, which were all loans, not gifts. Plaintiff must restore to the estate all monies he transferred from the deceased’s estate to himself after the deceased’s death, which were transferred without authorisation and fraudulently.

Catchwords:

PROBATE – informal will signed by the deceased - informal will is not compliant with Succession Act, s 6 formal requirements – informal will made ten months before the deceased’s death – informal will admitted to probate - challenge to informal will – whether the informal will was fabricated by the executrix named within it and one of the beneficiaries under it – whether the informal will was the deceased’s instrument – whether the informal will represented the deceased’s testamentary intentions.

 

SUCCESSION – Claim for family provision - plaintiff alleges same-sex relationship for fourteen years with the deceased – deceased’s will gives the whole of his estate to his only two nieces – claimed eligibility as a partner in an alleged de facto relationship – claimed eligibility due to alleged dependency on the deceased in a shared household – claimed eligibility due to alleged close personal relationship with and living with the deceased – nature of plaintiff’s relationship with the deceased.

  DEBT – estate seeks recovery from plaintiff/cross-defendant of monies allegedly loaned to the plaintiff by the deceased before his death – whether the funds advanced were a loan or a gift - estate also seeks recovery of substantial funds allegedly fraudulently misappropriated from the deceased’s bank accounts on the day of his death but after his death and in the period of approximately one month after his death – whether or not the funds withdrawn after the deceased’s death were withdrawn from the deceased’s bank accounts with authority – whether or not the funds withdrawn after death were withdrawn fraudulently – whether plaintiff should repay or restore to the estate the funds withdrawn before the deceased’s death and after the deceased’s death and on what basis.

Legislation Cited:

Crimes Act 1900, s 192E
Civil Procedure Act 2006, s 100
Evidence Act 1995 (NSW), ss 91, 128, 130, 140
Family Provision Act 1984, s 6 (repealed)
Interpretation Act 1987, s 21C(3)
Personal Property Securities Act 2009 (Cth)
Probate and Administration Act 1898, s 18A
Property (Relationships) Act, s 5
Succession Act 2006 (NSW), ss 3, 6, 8, 57, 59, 60, 104 and 105

Cases Cited:

Amaca Pty Ltd v Novek (2009) 9 DDCR 199
Ball v Newey (1988) 13 NSWLR 489
Bashit v Versace Australia's Best Tyres, Automotive Services and Repairs [2010] FWA 8790
Bell v Crewes [2011] NSWSC 1159
Bechara v Bechara [2016] NSWSC 513
Benney v Jones (1991) 23 NSWLR 559
Black v S Freedman & Co (1910) 12 CLR 105
Bouts v Ellis (1853) 51 ER 978
Briginshaw v Briginshaw (1938) 60 CLR 336
Christine Anne Lumsden v Ian Ross Sumner as Executor of the Estate of the Late Dorothy Jean Lawliss [2012] NSWSC 1140
Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246
Coghlan v SH Lock (Australia) Ltd (1985) 4 NSWLR 158
Cornish v O’Dell; In the Estate of O’Dell [2010] NSWSC 678
Dridi v Fillmore [2001] NSWSC 319
Drury v Smith [2012] NSWSC 1067
Estate of Johnston [2010] NSWSC 382
Estate of Masters (1994) 33 NSWLR 446
Evans v Levy [2011] NSWCA 125
George v Howard (1819) 146 ER 1089
Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6
Harkness v Harkness [2011] NSWSC 1421
Hatsatouris v Hatsatouris [2001] NSWCA 408
Hayes v Marquis [2008] NSWCA 10
Heperu Pty Limited v Belle (2009) 76 NSWLR 230
Heydon v The Perpetual Executors Trustee and Agency Company (W.A.) Ltd (1930) 45 CLR 111
In re Hodgson (1885) 31 ChD 177
In the Estate of Masters (deceased); Hill v Plummer (1994) 33 NSWLR 446
Jonah v White (2011) 258 FLR 236
Jones v Dunkel (1959) 101 CLR 298
Jurd v Public Trustee [2001] NSWSC 632
Kingsland v McIndoe [1989] VR 273
Marando v Rizzo [2012] NSWSC 739
Markulin v Drew (1993) DFC 95-140
National Australia Trustees Ltd v Fazey; The Estate of Nancy Elaine Lees [2011] NSWSC 559
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Noonan v Martin (1987) 10 NSWLR 402
NSW Trustee and Guardian v McGrath & Ors [2013] NSWSC 1894
Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400
Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520
Petrohilos v Hunter (1991) 25 NSWLR 343
Pink v Pink [1912] 2 Ch. 528
Plunkett v Bull (1915) 19 CLR 544
Re Trethewey (2002) 4 VR 406; [2002] VSC 83
Robb Evans v European Bank Ltd (2004) 61 NSWLR 75
Sadiq v NSW Trustee and Guardian [2015] NSWSC 716
Schmierer vTaouk [2004] NSWSC 345
Scott v Pauly (1917) 24 CLR 274
Sharpless v McKibbin [2007] NSWSC 1498
Singer v Berghouse (No.2) (1994) 181 CLR 201
Stone & Drabsch v Pinniger [2011] NSWSC 795
Sze Tu v Lowe [2014] NSWCA 462
Telfer v Telfer (2014) 87 NSWLR 176
The Estate of Keith Joseph Cook [2011] NSWSC 881
Thompson v Public Trustee of New South Wales [2010] NSWSC 1137
Varma v Varma [2010] NSWSC 786
Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41
Vigolo v Bostin (2005) 221 CLR 191
Vincent Zang v Deborah Middleton [2011] NSWSC 881
Voce v Deloraine [2012] NSWSC 1187
Weeks v Hrubala [2008] NSWSC 162
Whitehouse v BHP Steel Ltd [2004] NSWCA 428
Yesilhat v Calokerinos [2015] NSWSC 1028

Category:

Principal judgment

Parties:

2013/358168
Plaintiff: Cleopatra Sclavos Calokerinos, as executor of the estate of the late George Sclavos
First Defendant: Okan Yesilhat
Second Defendant: Gokan Yesilhat
Third Defendant: Australia’s Best Tyres & Auto Pty Ltd ACN 151 629 131

  2014/212466
Plaintiff: Okan Yesilhat
Defendant: Cleopatra Sclavos Calokerinos, as executor of the estate of the late George Sclavos

Representation:

Counsel:
Plaintiff/Cross-Defendant: M.B. Evans
Defendants: V. Culkoff

  Solicitors:
Plaintiff: Angela Coombs, Aston Reid Lawyers
Defendants: Salvatore Russo, Russo & Partners

File Number(s):

2013/358168; 2014/212466

Publication restriction:

No

Judgment

The Parties’ Contentions in the Administration/Family Provision proceedings

Credibility of the Parties and their Siblings

Conversations with the Deceased, the Deceased’s Relationships and the Onus of Proof

Evidence Act 1995, s 140(2)(c)

The Narrative of Findings - George Sclavos, his two nieces and Mr Yesilhat

The Deceased and the Sclavos family – until the early 1990s

Mr Yesilhat’s story - as he tells it

The Credibility of Some Other Witnesses

The Deceased’s Strathfield Home

The Deceased’s Relationship with his Nieces

George’s Relationship with Ms Anne Sklavos – early 1980s to early 1990s

Did Mr Yesilhat meet George in 1999 or later?

Mr Yesilhat’s marriage to Susan Katri – 2004 to 2009

George’s Relationship with Liz Curtis – 2005 to 2008

Mr Yesilhat’s Second Wife, Ms Gursoy – 2009 to 2013

Did George live at the Pharmacy?

Intimacy at the Pharmacy in the later years? – 2010 to 2013

Mr Yesilhat’s Close Knowledge of George – Pharmacy and Strathfield Cash?

George Supports the Purchase of Australia’s Best Tyres – Early 2011 to 1 July 2011

Loans or Gifts? – the Deceased’s Loan Card System

The Bank Accounts of Mr Yesilhat and the Deceased

Cheque Transfers Between March 2011 and July 2011

Linkage of the Deceased’s and Mr Yesilhat’s Bank Accounts – July/August 2011

Financial Transactions after Account Linkage – August 2011 to August 2013

George and his Nieces Discuss his Advances to the Yesilhat Brothers – April 2011

Anna Sclavos-Lahana and her Husband Visit Australia’s Best Tyres – 27 April 2013

George and his Nieces Discuss Loans Further – April 2011 to July 2013

Mr Yesilhat’s Loan Repayments up until George’s Death on 13 August 2013

George’s Death – Early to Mid-Afternoon, 13 August 2013

Were the Yesilhat Brothers at the Pharmacy Mid-Afternoon on 13 August 2013?

Financial Transactions on the Afternoon of George’s Death – 13 August 2013

The Yesilhat Brothers Go to the Pharmacy – 13 August 2013

At Strathfield, Wills, More Transfers & Mr Middlebrook goes – 14 to 20 August 2013

The Deceased’s Funeral – 21 August 2013

Mr Efstathiou Discovers the Informal Will – 13 August to 31 August 2013

Mr Yesilhat’s Dealings After George’s Funeral – 23 August to 13 September 2013

The Probate and Debt/Trust Proceedings – 13 September to December 2013

The Administration/Family Provision Proceedings – January to July 2014

Some Pre-Trial Contests – May 2014 to February 2016

The First Pre-Trial Contest – The Deceased’s Diary

The Second Pre-Trial Contest - The Greek Properties

The Third Pre-Trial Contest – Gathering Evidence from Pharmacy Employees

The Fourth Pre-Trial contest – The missing wages book

The Fifth Pre-Trial Contest – The Alleged Missing Pharmacy Computer

The Sixth Pre-Trial Contest - The Night Shift Employees

The Administration Proceedings: the Challenge to the Informal Will

Validity of the Informal Will – Analysis of Mr Yesilhat’s Case

Validity of the Informal Will – the Expert Evidence

Validity of the Informal Will - Provenance of the Document

Conclusions on the Administration Claim

Should Probate of the Informal Will Be Confirmed?

The Family Provision Proceedings

Applicable Legal Principles

De facto relationship - Succession Act, s 57(1)(b)

Dependant - Succession Act, s 57(1)(e)

Close Personal Relationship - Succession Act, s 57(1)(f)

Factors Warranting Provision from the deceased’s estate – Succession Act, s 59(1)(b)

Adequate Provision

The Debt/Trust Proceedings

Monies Paid Before the Day of the Deceased’s Death

Monies Paid On and After 13 August 2013

Mr Yesilhat’s Authority Defence

Estoppels Based on George’s Alleged Representations

Conclusion and Orders

1. George Sclavos died suddenly on 13 August 2013 at the age of 65, leaving an estate of approximately $6 million. He had never married. He had no children and no surviving siblings or parents.

2. On 5 December 2013 this Court granted probate of an informal will signed by the deceased and dated 16 October 2012. That informal will gave the whole of the deceased’s property to his closest surviving relatives, his two nieces, Cleopatra Sclavos Calokerinos and Anna Sclavos-Lahana, the daughters of the deceased’s late and only brother. The deceased appointed Ms Calokerinos as his executrix.

3. The plaintiff, Mr Okan Yesilhat brings these proceedings against Ms Calokerinos, claiming that he maintained an intimate same-sex relationship with the deceased for a period of approximately 14 years before the deceased’s death, a relationship that he says is sufficient to qualify him as the deceased’s de facto partner. Mr Yesilhat further contends: that Ms Calokerinos, or someone associated with her, destroyed a will the deceased made in his favour; that she then fabricated the October 2012 informal will; that probate of the October 2012 informal will should now be revoked; and, that as the deceased’s long-standing de facto partner, he is now entitled to a grant of administration of, and to the benefit of the whole of, the deceased’s intestate estate. Ms Calokerinos contests all of these claims.

4. In the alternative, if probate of the informal will were not revoked, Mr Yesilhat seeks orders for family provision out of the deceased’s estate under Succession Act 2006. Whether or not the October 2012 informal will is valid, Mr Yesilhat says that he is an “eligible person” under Succession Act, s 57, and entitled to claim against the deceased’s estate: either as a de facto spouse, or as a dependent who lived with the deceased for a period, or as someone in a close personal relationship living with the deceased.

5. There are three sets of proceedings before the Court. In November 2013 the executrix, Ms Calokerinos, commenced proceedings 2013/358168 (referred to throughout these reasons as “the debt/trust proceedings”) seeking the return of monies totalling some $380,000 that were transferred from the deceased’s bank accounts to Mr Yesilhat before the deceased’s death on 13 August 2013, on the day of his death, and in the month after his death, on the basis that they are held on constructive trust for his estate, or in the alternative, are owed in debt to the estate. Ms Calokerinos alleges all the withdrawals made just before the deceased’s death were not authorised by the deceased. Mr Yesilhat says they were general gifts to him, or specific gifts to assist him in setting up a motor vehicle tyre sales and service business known as ‘Australia’s Best Tyres’, with his brother Gokan. Ms Calokerinos alleges that the withdrawals after the deceased’s death were all fraudulent misappropriations of funds from the deceased’s estate. Mr Yesilhat says these withdrawals were authorised.

6. The debt/trust proceedings were heard together with the second set of proceedings (2014/212466) commenced in May 2014, in which Mr Yesilhat mounts a challenge to the informal will, seeks a grant of administration of the deceased’s estate and brings his claim for family provision (referred to throughout these reasons as “the administration/family provision proceedings”).

7. The history includes yet a third set of proceedings. In October 2013 Ms Calokerinos applied for, and shortly afterwards was granted without contest, probate of the October 2012 informal will. These proceedings are referred to in these reasons as the “the probate proceedings”.

8. After Mr Yesilhat commenced the administration/family provision proceedings, the debt/trust proceedings were transferred into the Family Provision list so the two proceedings could be managed and then heard together, as they ultimately were between February and June 2016.

9. The administration/family provision proceedings and the debt/trust proceedings were ready to be set down for hearing together in late 2014. But on 12 November 2014 Ms Calokerinos filed a motion seeking to strike out the family provision claim. The strike out motion came before White J and was dismissed with costs: Yesilhat v Calokerinos [2015] NSWSC 1028.

10. In these reasons it is convenient to refer to Okan Yesilhat, the plaintiff in the administration/family provision proceedings (but a defendant in the debt/trust proceedings), as “Mr Yesilhat” or at times Okan Yesilhat, to distinguish him from his brother Mr Gokan Yesilhat and to refer to the executrix, Cleopatra Sclavos Calokerinos, the defendant in the administration/family provision proceedings (and the plaintiff in the debt/trust proceedings), as “Ms Calokerinos”. The parties very often referred to the deceased just as “George”. Without intending any disrespect to the deceased, these reasons will from time to time do the same. Again, without intending any disrespect, for convenience at times other persons are occasionally referred to by their first names during the narrative.

11. The trial of both proceedings occupied 21 hearing days. Throughout the trial Ms V. Culkoff of counsel appeared for the plaintiff and Mr M. Evans for the defendant. The parties produced an extensive amount of evidence in this 21 day period. It is not possible to refer to it all in these reasons, without their becoming more unmanageably long than they already are.

12. What follows in these reasons is a narrative of the relevant history of the parties, covering the deceased’s family history and the nature of the relationship between Mr Yesilhat and the deceased and the more important financial transactions between them. The narrative represents the Court’s findings on the matters covered except to the extent that the context indicates that only the parties’ allegations are being recorded. The narrative includes findings relevant to all three sets of proceedings. But for reasons of economy this narrative does not always include references to competing versions of the facts that the Court has rejected.

13. This narrative contains at times confronting findings about individuals. But this case represented an unusually spirited contest about the way of life of the deceased and the quality of his relationships with Mr Yesilhat on the one hand and with his nieces on the other. In such a contest it is not possible to do justice without actually expressing findings that may at times seem harsh to some parties and some witnesses.

14. But before this narrative of findings commences, first it is necessary to examine a little more detail of the allegations in the administration/family provision proceedings, then to examine the credibility of some of the principal witnesses, and finally to record a note about evidence, including of conversations with deceased persons.

The Parties’ Contentions in the Administration/Family Provision proceedings

15. Mr Yesilhat alleges he had a 14-year same-sex intimate sexual relationship with the deceased from about 1999. Mr Yesilhat says that this relationship was conducted entirely in secret and exclusively in private part of the deceased’s usual place of work, the deceased’s pharmacy in Leppington in western Sydney (“the Leppington pharmacy”). He says his relationship with the deceased was close and loving and that the deceased had always been his principal mentor in life.

16. The executrix, Ms Calokerinos contests that there was any such relationship. Moreover, she contends: that there was no same-sex relationship between the deceased and Mr Yesilhat at any stage of the deceased’s life; that the deceased never displayed any interest in sexual activity with other males, was not bisexual and had a number of long term sexual relationships with women during his lifetime.

17. Ms Calokerinos’ case is that the relationship between the deceased and Mr Yesilhat was, at the highest, one of mere casual acquaintance or friendship and that even that level of relationship only commenced in about September 2007, not back in 1999 as Mr Yesilhat claims. At the time of the hearing Mr Yesilhat was married and had been married once before. Ms Calokerinos says Mr Yesilhat met the deceased in 2007 through Mr Yesilhat’s first wife, who was the daughter of two regular customers at the Leppington pharmacy. Ms Calokerinos further says that, Mr Yesilhat himself became a customer of the deceased by about March 2008.

18. Mr Yesilhat further alleges that the deceased financially supported him by advancing him substantial amounts of money over many years; and, points to the substantial advances to Mr Yesilhat that appear in the deceased’s bank statements from March 2011 until his death.

19. Ms Calokerinos does not contest the existence of transfers from the deceased’s bank accounts to Mr Yesilhat’s bank accounts from about March 2011. But she says the proper explanation for these funds transfers is that Mr Yesilhat borrowed money from the deceased in the context of their friendship and that was the full extent of the relationship.

20. In the contest on these issues the parties drew upon very private aspects of their family and personal histories. They revealed material that in most cases would remain well hidden from public view. But the Court has been required to analyse this personal family history because the issues the parties contested demand that level of analysis.

Credibility of the Parties and their Siblings

21. Next, some preliminary observations about the credibility of the parties and their siblings are useful. Observations about the credibility other witnesses are made later in the narrative of events.

22. Okan Yesilhat. Mr Okan Yesilhat was a complicated witness. But ultimately the Court reached the view that he was an individual upon whom no reliance could be placed, unless his evidence was corroborated by independent evidence, coincided with uncontested facts or was supported by other objectively reliable materials. These reasons abound with examples of the Court’s assessment of the poor quality of Mr Yesilhat’s evidence. It is not required to do more at this point than explain some of the difficulties in assessing him as a witness, and why the Court first began to doubt him.

23. Mr Yesilhat is a highly calculating individual. He has an acutely well-developed sense of other peoples’ weaknesses, gullibility and of how events can be exploited to his advantage. In my view everything is strategic for him: telling the truth is but one of his available options but not necessarily his first option. If he assesses that a false invention will serve him better, then that will be his choice over the truth.

24. Mr Yesilhat reads other people extremely well. In my view he is highly manipulative. He survives and thrives purveying misinformation and inventing stories. There are many examples of this in these proceedings. The two most prominent are described in detail later in this judgment. First, he invented a conversation between himself and Ms Sclavos-Lahana and her husband Mark at a meeting at Australia’s Best Tyres in April 2013. His second invented story arises out of a conversation with Mr Torrisi, as to why he, Mr Yesilhat, did not go to the deceased’s funeral. His accounts of both these events are not entirely invented. They are based in small part upon actual meetings and conversations with the persons concerned. This judgment examines the detail of both those meetings to illustrate Mr Yesilhat’s immense capacity for dishonest invention.

25. It is with this in mind that the Court looks at all his evidence: including whether he was same-sex attracted to George and was in a same-sex relationship with George. In the end the Court does not accept anything Mr Yesilhat says about having a same-sex attraction to George. It is as much likely to be an invention as are the other invented parts of his evidence. The Court is not prepared to infer: that any of his conduct is to be explained as trying to keep his same-sex relationship with George secret from his and George’s family; or anything he says about engaging in private consensual sexual activity with George. The Court simply cannot trust a man with Mr Yesilhat’s dishonest inventive capacity.

26. Mr Okan Yesilhat professed a profound and intimate affection for the deceased; and said that the deceased returned his affection in equal measure. But Mr Yesilhat’s case lacked the usual supporting accoutrements of such a close personal relationship: he advanced no physical evidence of affectionate communication with the deceased in the form of emails, text messages, cards, or gifts; and he had a limited number of photographs of himself and the deceased together. The photographs and a short video (taken from about 2010 onwards) evidence himself and the deceased together but the deceased is asleep, slumped on a table, doing pharmacy work, or just standing near Mr Yesilhat. In one Mr Yesilhat is posing with his arm over George’s shoulder. But even that photograph does not unequivocally show the affection of one intimate partner for another.

27. Mr Yesilhat was cold, very cold. The Court was struck by the contrast between the personal warmth for the deceased expressed within Mr Yesilhat’s affidavit and the figure who gave stilted and colourless oral evidence. It was difficult to reconcile the man the Court saw, who seemed to calculate everything he did in relation to the deceased, with the picture of the affectionate individual he portrays in his affidavits.

28. The Court soon began to doubt Mr Yesilhat. Early in his evidence he explained how he deliberately deceived his first wife about his alleged relationship with George. Without a flicker of shame he elaborated upon a cynical scheme to mislead his first wife, Ms Susan Katri, into believing he was not with George at night. His story of lying to his first wife is barely worthy of credit. But the fact that Mr Yesilhat was prepared to parade such studied trickery carries its own significance. Why would one who shamelessly avowed deceit of a spouse, not practise deceit on this Court?

29. Mr Yesilhat’s case had to reconcile how he could spend as much time with the deceased as he claims, without his first wife becoming suspicious. His answer was simple: he lied to his wife. He said he created documents to mislead her as to where he was at night. He says he created a false documentary alibi so he could account to her for where he was. He says that he used to visit a poker club at night and obtain an entry slip to evidence his whereabouts from a particular time. Then, without actually participating in the club’s poker games, he says he left and went over to the Leppington pharmacy to see the deceased. Were his first wife ever to ask him to explain his nocturnal interests away from her, the poker club entry slips were his false alibi. He volunteered that the slips were a device to mislead her to believe he was at the poker club, not seeing George. Advancing this was thoroughly discreditable and began the Court’s loss of confidence in Mr Yesilhat.

30. He propounded a case that he was oppressed by cultural and family expectations to conceal his same-sex relationship with George. Such pressures can be understood in general terms. But the Court here is not prepared to accept his primary evidence that he had any same-sex interest in George.

31. Gokan Yesilhat. The plaintiff’s younger brother, Mr Gokan Yesilhat (“Gokan”), gave evidence in his case. The Court approached Gokan’s evidence with caution. Parts of his evidence were quite credible. Other parts were not. Gokan looked up to his older brother. He regarded his older brother as his senior not only in years but also in authority. Throughout Gokan’s evidence his attitude to his older brother was entirely uncritical. Gokan felt unable to question his brother about many things. He was diffident about asking his older brother any questions, especially for example about his brother’s sexuality, though this may have been out of respect for his privacy.

32. Several factors prevented Mr Gokan Yesilhat from being an objective witness about his older brother. Gokan owed his current good fortune as a joint owner of the Australia’s Best Tyres business to Mr Yesilhat’s brotherly generosity towards him. Mr Yesilhat received funds from the deceased, so both Mr Yesilhat and Mr Gokan Yesilhat could purchase this business jointly in July 2011. Since the purchase, the brothers have worked closely together managing the business on a daily basis: with Gokan Yesilhat working front-of-house, managing the counter and dealing with the customers; and with Mr Yesilhat managing the finances, stock and logistics. They both worked in the business all day, every day. Gokan confessed that working side by side in this way had brought him much closer to his brother.

33. Cleopatra Sclavos Calokerinos. Ms Calokerinos was passionately committed to the defence of her uncle’s true character and to defeating what she saw as a fraudulent attempt by Mr Yesilhat to take his estate and to distort the truth about the man that she knew. Her passion in this cause was undoubted. She wept openly in Court during Mr Yesilhat’s account of his alleged same-sex physical activity with the deceased. She was grievously distressed when Mr Yesilhat’s case was pressed to suggest that the deceased had only walked her down the aisle at her wedding out of a reluctant sense of duty and had to overcome his distaste for the role. She became indignant when cross-examined to suggest that she was greedy in her wish for her and her sister to retain the deceased’s estate.

34. Under cross-examination Ms Calokerinos was accused of serious and deliberate malfeasance: the destruction of the deceased’s true will, the fabrication of a false will, the concealment of the deceased’s properties in Greece and the deliberate misuse of the Court’s processes to thwart Mr Yesilhat’s claims. But perhaps it is no surprise that such allegations were made in this high stakes contest: after all, her own case contended that Mr Yesilhat had falsely manufactured a de facto relationship with the deceased.

35. Ms Calokerinos was both an honest and reliable witness. Her passion for her uncle’s cause did not cause her to exaggerate. A consistent feature of her evidence was that even when the most trying allegations were being put to her, she maintained her objectivity and made admissions against interest when the circumstances required. There is no substance whatsoever in any of the allegations of fraud or dishonesty against her. The Court finds she did not destroy a will of the deceased. Nor did she manufacture the informal will of October 2012. Nor did she do any of the other dishonest things alleged against her.

36. The subtext of Ms Calokerinos’ evidence was as important as its substance. Mr Yesilhat claimed the deceased despised his nieces and preferred to have little to do with them. Ms Calokerinos repelled that inference with the sheer detail of her description of the deceased’s contact with and appreciation of his wider family and her insightful observations about his quirky character. Her observations about George created images with deep colours that were wholly consistent with the mostly reliable observations of his many employees and acquaintances. She showed a generous capacity to accept her uncle’s weaknesses and foibles, as part of the man she so well described. To her they were just one part of the complicated character that she had always tried to understand and dearly loved after the death of her own father.

37. Except in some very minor aspects of detail, identified from time to time in these reasons, I wholly accept the evidence of Ms Calokerinos. The truth was important to her. She remained faithful to it throughout her evidence.

38. The contrast between the principal protagonists to these proceedings could not have been starker. When pressed, Mr Yesilhat commonly cloaked his answers in ambiguity. In contrast, Ms Calokerinos was prepared to add ever-consistent detail that would flesh out what she was saying.

39. Additional insight can sometimes be gained into the character of accusers from their failed allegations. Mr Yesilhat alleged that Ms Calokerinos was hunting for the deceased’s will on the night of his death. But the Court wholly accepts her explanation that on that night: she was just grieving for her uncle; was not thinking at the time of his death about any will he might have made; and certainly, was neither looking for it on the night of his death. As will be seen she made some general inquiries about a will in the days that followed but nothing like the relentless search that he imagines. But in his evidence and submissions, Mr Yesilhat persisted in this unfounded contention.

40. Why? In part because he assessed both nieces as people in the thrall of limitless greed. He seemed incapable of understanding that there could be any other explanation for their conduct after George’s death. In pressing this contention he inferred from, and thus revealed, his own interior thoughts: that this is how all humanity behaves. His oral evidence constantly demonstrated a failure to comprehend that there are high-minded people in the world, who act not out of greed but from affection for relatives and fidelity to the truth about them.

41. Anna Sclavos-Lahana. Ms Calokerinos’ sister Anna Sclavos-Lahana was an intelligent and helpful witness, who was careful to present a truthful account of relevant events to the Court. She thought about her answers and was only prepared to comment on matters of which she had actual knowledge. She had no hesitation in giving a simple ‘yes’ or ‘no’ answer when appropriate. She was genuinely startled at the propositions put to her that she or her sister were involved in will destruction and will fabrication. She was enthusiastic, articulate and insightful about her uncle. She threw valuable light upon Sclavos family dynamics and relationships, and upon the deceased’s lifestyle and personality. And she could give a thorough account of many events after the deceased’s death. She explained that she stepped in to the breach after the deceased’s death to try and relieve her then-pregnant sister of as much estate administration as possible.

42. Ms Sclavos-Lahana gave a satisfactory explanation of everything she was asked. She was often spontaneously able to draw upon her own mental picture of events and add copious amounts of consistent detail to enrich her account. She was able to do this particularly effectively when her version of interacting with Mr Yesilhat at Australia’s Best Tyres in about Easter 2013 was challenged.

43. This characteristic of Ms Sclavos-Lahana’s evidence was often on display. It was evident when she explained that the deceased socialised at their mother’s house and did not entertain at home at Strathfield. She well described his hoarding mentality. She gave a clear and consistent account of visits to deceased’s Strathfield house after his death and of the exact way the informal will came to light. She gave a convincing account of going through the deceased’s belongings on Saturday 24 August 2013 and Saturday 31 August 2013 and being present when the informal will was found. She was the family member who communicated with their Greek attorney Ms Christina Antonopoulos in the second half of 2013, concerning certain Greek properties owned by the deceased.

44. It is to be observed before leaving this separate examination of their credibility, that Ms Calokerinos and Ms Sclavos-Lahana showed no element of homophobia in their testimony. The sense of their evidence was not that George having same-sex interests would itself be damaging to his reputation. Rather, their conviction was that Mr Yesilhat’s account of the deceased was not the uncle George they knew so well.

Conversations with the Deceased, the Deceased’s Relationships and the Onus of Proof

45. Finally before the narrative of findings commences, it should be observed that the evidence adduced by Mr Yesilhat, Ms Calokerinos and other witnesses recounts many conversations with the deceased. The Court exercises caution in assessing evidence about alleged conversations with deceased persons. This principle has been stated in many authorities. For example, in Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 (“Clune”), at 253, Wilcox J said:

“[I]t is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death. Of course, that is not to say that such evidence cannot be true; it obviously may. But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in any way”

46. Moreover, in Varma v Varma [2010] NSWSC 786; 6 ASTLR 152; at [418] – [419] (“Varma”) Ward J (as her Honour then was) stated that “careful scrutiny is required” by the Court in cases where a claim is based on an assurance made by a deceased person: Plunkett v Bull (1915) 19 CLR 544; Clune at 253). Citing Weeks v Hrubala [2008] NSWSC 162 at [20], in Varma her Honour explained that the Court generally looks for corroboration of those claims: In re Hodgson (1885) 31 ChD 177; Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41.

47. Next, the evidence in this case raised the specific issue of whether the deceased was involved in a same-sex relationship with Mr Yesilhat. It was put against that conclusion that he was exclusively heterosexual in his sexual orientation. The Court well accepts there can be many other human relationships and that purely binary reasoning in this area is not necessarily valid. But whilst taking other possibilities into account, in order to address the precise issues raised by these parties, the Court dealt with the contest as it was presented.

48. The Court acknowledges that a great diversity of personal relationships exist between couples. In Sadiq v NSW Trustee and Guardian [2015] NSWSC 716 Hallen J, when considering the meaning of the term “de facto relationship”, stated (at [212]), “In reaching the conclusion about the existence of the relationship, the court must also be aware of the concept of the diversity of relationships that exist between couples within our society and must not be lulled into social stereotyping”.

Evidence Act 1995, s 140(2)(c)

49. Finally, allegations of a very serious nature, amounting indeed to potential criminal conduct have been made by and against both parties and others in these proceedings. In those circumstances the Court bears in mind Evidence Act, s 140(2)(c) which is generally regarded as giving effect to the principles stated by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34, at 362. The application the principles in a will case are discussed by the Court of Appeal in Telfer v Telfer (2014) 87 NSWLR 176; [2014] NSWCA 186 at [68].

50. Dixon J’s observations are generally understood as reflecting conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach is appropriate that a Court should not lightly make a finding that on the balance of probabilities a party to civil litigation has been guilty of such conduct: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449 at 2.

51. This Court takes these principles into account for the benefit of both of the parties and a number of witnesses who are said in these proceedings to be involved in fraudulent activity.

The Narrative of Findings - George Sclavos, his two nieces and Mr Yesilhat

The Deceased and the Sclavos family – until the early 1990s

52. Angelo Sclavos, George’s father, first migrated from Kythera to Australia in the late 1930s. George was born in Stanmore in 1948. He went to school at Newington College, graduating with the leaving certificate in 1964. Between 1960 and 1983 he lived in Auburn above the milk bar that the family operated, “The Auburn Milk Bar”, initially with parents and his brother and later after his brother married, with his sister-in-law, Chrisanthy, and then his two nieces.

53. George matriculated in 1965 and in 1966 commenced studying for a degree in pharmacy at the University of Sydney. At university, George had a girlfriend, Pola, although the relationship did not last. George graduated in pharmacy in March 1973 having finished his studies in 1972.

54. George’s brother married Chrisanthy in Kythera in September 1973. The newly married couple returned to Australia to live over the Auburn Milk Bar.

55. George dated another girl during the 1970s, Leia, and in the course of their relationship, he spent some time living with her family in Vaucluse.

56. In 1972 the Sclavos family purchased a property in Newton Road, Strathfield. Quite independently George was interested in purchasing real property himself from shortly after he left university. He first purchased properties in 1974 and 1975.

57. Anna Sclavos-Lahana was born in August 1974 and her sister Cleopatra in December 1976. When George’s nieces were young he operated savings bank accounts on their behalf. He was involved in their family in many informal ways: including assisting teaching his sister-in-law Chrisanthy to drive to complement her formal driving lessons.

52. George’s older brother suddenly passed away in March 1980, leaving Chrisanthy, then aged 26, with two daughters aged five and three. In late 1983 George and his father moved from Auburn to live in the property his father had purchased in Newton Road Strathfield, the same house George owned until his death.

53. George opened the Leppington pharmacy business in the late 1980s. He engaged Mr Allen Middlebrook as an accountant for the business at about the same time. The business was well established by the early 1990s.

54. George’s mother died in in 1979. His father, Angelo, died in September 1992.

55. George kept a detailed diary of his life. Some parts of his history that are reflected in his diary are referred to later in these reasons. But it is evident from the diary that George was involved in his nieces’ lives in various ways including: celebrating his birthdays with them, attending their 21st birthday parties, teaching them to drive a manual car, and inspecting their new vehicles, and visiting family members with them. Disputes about George’s other involvement with them is referred to later in these reasons.

56. Following the death of their father, Ms Calokerinos and her sister remained close to the deceased and their grandfather, his father. They continued to live above the Auburn Milk Bar until the business was sold in or around late 1983 or early 1984.

57. Although the deceased was not a “fatherly type”, the two nieces nevertheless looked up to him as a father figure. Ms Calokerinos recalled the deceased was a heavy smoker. Indeed he smoked right up to his death. I accept that even with this habit he could entertain his nieces: he would do tricks with the smoke he exhaled, whilst both nieces watched.

58. After the family moved out from living above the Auburn Milk Bar they would still see the deceased once or twice a week at either their house or at the deceased’s home in Strathfield. Ms Calokerinos claimed, and I accept as correct, that in spite of their physical separation into two households that she, her sister, and their mother, Chrisanthy, retained close family ties with George.

Mr Yesilhat’s story - as he tells it

65. The plaintiff Mr Yesilhat propounds a case that largely depends upon a narrative of events he relates that took place between himself and the deceased. It is important first to set out the substance of that narrative as a unified and connected story, even though much of the narrative is disputed and the Court does not accept Mr Yesilhat as a witness of truth. Later these reasons examine the detail of the principal parts of Mr Yesilhat’s narrative in the face of conflicting evidence. This is therefore only a summary of what he says.

66. Mr Yesilhat is now a qualified motor mechanic. He is one of the shareholders in the company Australia’s Best Tyres and Auto Pty Limited, trading as “Australia’s Best Tyres”. Both the company and the business it operates are referred to throughout these reasons as “Australia’s Best Tyres”. It operates the business of a motor mechanics’ workshop and tyre fitting service in Canterbury Road, Roselands. He manages that business with his brother Gokan. His involvement as an owner of Australia’s Best Tyres only dates from mid-2011. He claims that he has known the deceased since mid-1999.

67. Mr Yesilhat was born in 1982 and is of Turkish descent. He lived until his early 20s in Marrickville with his family until about the time of his first marriage to Ms Susan Katri. He says that he realised at an early age, and was able to discuss with George after he met him, that his sexual orientation was towards men. But he says that his same-sex attractions were repressed by his family and cultural background. He says that George opened up to him that he had the same experience during his own life.

68. Mr Yesilhat says that his ex-wife, Ms Katri, and his mother-in-law were good friends of the deceased and were also customers at his pharmacy at Leppington. Mr Yesilhat says that through that association he became close to the deceased.

69. From as early as 1999 and 2000 in the first two years after meeting the deceased, Mr Yesilhat says that he and the deceased saw much of one another. He says he spent about three or four days a week after work, for anywhere between three to five hours each time with the deceased and that they came to know each other well. He said he was living at his parents’ home in Marrickville at that stage.

70. Mr Yesilhat says that by 2001 he and the deceased had became very close and they commenced a personal intimate same-sex relationship, including a sexual relationship. Mr Yesilhat says that whilst he was with the deceased, George would talk to him about his own life and how he had built up his business, and his sexual orientation toward men and the reasons why he never married. Mr Yesilhat says that George said to him that even though he had two nieces they knew that he (George) was alone, and he would say to Mr Yesilhat, “I hardly ever see them”.

71. Mr Yesilhat says that the deceased would normally have dinner with him and that either the deceased or he would cook, or indeed they would cook together. Occasionally too Mr Yesilhat says that he would bring food into the pharmacy from outside and they would sit and have dinner together. Mr Yesilhat says that he would help the deceased to do the pharmacy books, stock shelves in the pharmacy and generally talk about life and how difficult it was.

72. Mr Yesilhat says that his physical intimacy with George was very close and that George let Mr Yesilhat attend: to shaving George; to applying ointments and creams to George’s skin and to aspects of George’s personal grooming.

73. Mr Yesilhat says that the deceased would always encourage him and give him advice about how to get ahead. He said the deceased gave him money and when early in their relationship Mr Yesilhat tried to protest at this, saying “You don’t have to give me any money”, George said back to him, “Okan I feel like I am your father. I know I am older but you must understand I have very strong feelings for you”. Mr Yesilhat says that he expressed his appreciation back to the deceased and that he recalls George said to him in this conversation, “Well I have got no-one else to leave it to and you are the only person who takes any interest in me and I want to look after you and help set you up for life”.

74. The clear implication of this early alleged conversation between George and Mr Yesilhat is that George did not have strong family affiliations with his nieces and that his principal affections and his ultimate testamentary intentions were already directed towards Mr Yesilhat. Mr Yesilhat says that over the years of their relationship that he and George “built up a very strong bond and a personal relationship with each other”. This bond is said to have grown in part out of a shared understanding that their mutual same-sex attraction had to be kept a complete secret because it was culturally disapproved by people in each of their backgrounds.

75. Mr Yesilhat recalls, according to his narrative, that in about 2001 when he was about 19 and about to enter his first marriage, to Ms Susan Katri, that he spoke to George about where he would live after he married. He says that he confessed to the deceased that he would like to buy real estate but did not have any money and that his family did not have much money either. To this he says George said, “Don’t worry. If you need help, I will help you. And I’m there for you. You are the only person who cares about me and is prepared to spend time with me”. Mr Yesilhat’s recollection was that in response to this he said, “George I don’t want you to think of any obligation to me, I am very close to you and I consider you like my father, even though I have one”.

76. At this Mr Yesilhat recalls the deceased took out a pen and paper and started doing some back-of-the-envelope calculations to advise Mr Yesilhat on how to acquire real property. George’s explanation for spending this time on him, according to Mr Yesilhat, was “Okan I don’t have any children and my family hardly ever come to see me at all. I want to help you. You are the closest thing I have to a son”.

77. Mr Yesilhat recalls that a few months later he became aware that a residential property in Prestons was for sale. He met George at his pharmacy and showed him a brochure about the property. He says that he and George drove out to and looked at the property together and walked around it and within a week George said to him, “I want you to purchase this property…go to the bank and apply for a loan, if there is any issue let me know. I will go as a guarantor for you and buy this property if you need it. This will be a good investment”.

78. Mr Yesilhat says he was resistant to George’s offers. He claims that he said to George “My father could never help me like you do”. To this he says that George said, “Okan I love you and you are also like a son, you can see I am alone and I look forward to seeing you when I do”.

79. It turned out that Mr Yesilhat did not need George as a guarantor to help finanice his acquisition of the Prestons property, his first matrimonial home. But he says that George did help him arrange the finance for the purchase. And Mr Yesilhat says that in due course George taught him how to budget effectively.

80. Mr Yesilhat says that about three months after purchasing the Prestons property he was retrenched and his mortgage repayments fell into arrears. After a discussion with George about his problems he says that the deceased gave him about $4,000 in cash which Mr Yesilhat applied to his mortgage repayments. He says that once he obtained a job again he saved up the amount that he had been given by the deceased and offered to give it back.

81. To this he claims that George said, “No I don’t want it. I was happy to help you. The money was a gift and I don’t want it back”. This was said to be the first large gift of money that George gave to Mr Yesilhat, who says, “It was at this stage that I understood that George really did love me, both as a person and as a son”.

82. According to Mr Yesilhat the cash gifts continued. In about 2002 he says George gave him the sum of $10,000 cash as a wedding gift to buy furniture for his home. He says that the sexual relationship between himself and George continued after Mr Yesilhat’s marriage to his first wife, Ms Katri. Mr Yesilhat’s comment in his affidavit about George’s attitude to Mr Yesilhat’s first marriage is that “George felt he was competing with my then wife for attention”.

83. Mr Yesilhat says that as he was then married he could only visit George on average two or three times a week. But Mr Yesilhat says he could nevertheless be with him for up to five hours and into the early hours of the morning. He says that at the Leppington pharmacy they talked and were together and watched television shows such as, “Top Gear”, and listened to Elvis Presley’s music.

84. But Mr Yesilhat says that notwithstanding the lesser frequency of their visits to one another, “we would also call or message each other every week”. Mr Yesilhat says that George would, “spend most of his time at work” and again that George “would sometimes go home to Stanmore (sic) and sleep for a few hours and then drive back to work but he really lived his life at the pharmacy”. The evidence on this subject and other contested issues is discussed in more detail later in these reasons.

85. According to Mr Yesilhat, George’s comments to him about him being “a good son” continued but often now that their relationship was more mature, they included the statement, “I will always look after you, remember this”.

86. According to Mr Yesilhat, a regular and important theme in his conversations with the deceased was the deceased’s poor relationship with his nieces. The deceased’s statements to him were apparently peppered with statements like “I have no family, I see my nieces about once a year at Greek Easter and some years not at all”. And again, the deceased is said to have commented “I am so disappointed with my nieces and their attitude towards me that if they weren’t my nieces I wouldn’t talk to them”. And yet again Mr Yesilhat says that after Geoge spoke to his nieces George would say to him, “They are like vultures waiting for me to die. I can’t stand them”. The Court assesses this and similar evidence critically later in these reasons. For the present the conversations are simply recorded as part of Mr Yesilhat’s narrative.

87. Mr Yesilhat says that the deceased taught him how to do MYOB bookkeeping and shared with him much about the operations of the deceased’s own business, including how to enter prescriptions. The deceased owned a number of properties in Sydney. Mr Yesilhat says that the deceased also discussed with him “the large number of properties that he [the deceased] owned in Greece”. The deceased explained to Mr Yesilhat, according to the latter, that the deceased had inherited most of these properties. Mr Yesilhat recalls driving with the deceased on many occasions to visit properties the deceased owned, including at Palm Beach, Vaucluse, Prestons and, as Mr Yesilhat described it, “the Stanmore property (sic) which was the one he lived in”.

88. Mr Yesilhat says that when he was at the pharmacy each evening he would settle the EFTPOS accounts with George and that George would entrust Mr Yesilhat to settle the accounts and gave him the pin number for his EFTPOS machine. This also gave Mr Yesilhat some knowledge of the takings of George’s business.

89. Mr Yesilhat says that in the second half of 2007 his marriage to his first wife was failing and at the same time he was thinking of becoming a police officer. George commended that career course and gave him advice about his marriage break-up. Mr Yesilhat says he was concerned about how he would survive financially during this period and that George said to him “Don’t worry about that. If that is what you want to do [go to the Police Academy], I will support you as much as you need”.

90. In December 2007 Mr Yesilhat did enrol at the Police Academy in Goulburn. He says that the deceased assisted him with his assignments for the Police Academy and that on a regular basis, George paid expenses which Mr Yesilhat had incurred at Goulburn, including accommodation during the week and his petrol and Academy course expenses. Mr Yesilhat says that when he graduated from the Police Academy he asked George to come to the graduation. George was unable to do so because of his commitments in the pharmacy business. But Mr Yesilhat says that he and George had a celebration over dinner instead.

91. Mr Yesilhat says that George kept large amounts of cash in the pharmacy and claims he would see “as much as $30,000 in cash, if not more, in the back room” and that George “would leave me with the money whilst he attended to customers”. Mr Yesilhat claims that George would often in his presence put cash into disused medicine jars and place them on the shelf or in filing cabinets, in his drawers and in medical packets. Mr Yesilhat says that while George was handling this money in front of him, he would give Mr Yesilhat some of it and say that he did not want Mr Yesilhat to struggle, adding “I don’t want you to ever be afraid to ask me for money”. Mr Yesilhat claims that George also said to him that “I have a bit over $200,000 in cash sitting at home”, presumably meaning the Strathfield property.

92. Mr Yesilhat says that the deceased would always give him cash on a regular basis, in amounts between $200 to $1,000, and place it in his hand or in his pocket to take away. Mr Yesilhat says that he only ever asked the deceased for money when his financial position “got out of hand” with unexpected bills.

93. On one occasion, which must have been about 2010 according to the chronology of Mr Yesilhat’s evidence, he says that George put $2,000 into his pocket and in response to this gesture Mr Yesilhat declared “George, I don’t come here for money. I come here because I love you”. And he says that he further declared to George, “I look up to you like my father”. In a lengthy response, that Mr Yesilhat attributes to George, he has George saying to him, “If I didn’t think you were honest and loved me like a father, I would never have let you into my life”. George is then said to go on and say, “Had my nieces given me even one tenth of the time, affection and care that you have given me then they might be deserving of getting something. But they are greedy and don’t care about me at all”. George is then said to conclude “I want you to know that I will always look after you even when I am gone. I promise”. Mr Yesilhat says that he was overwhelmed and became emotional at this and embraced the deceased and from then on realised how emotionally attached to the deceased that he was.

94. Mr Yesilhat says that while he was working full time as a police officer he found secondary employment as a manager at Australia’s Best Tyres, when it was in previous ownership. But towards the middle of 2011 he said he became aware that the Australia’s Best Tyres business was available for sale by the owner, a Mr Versace. Mr Yesilhat says that he and George then spent many days over the next two or three months discussing the business and that over a period of eight to 12 weeks, they put together the profile of the business, including working capital and cash flow requirements and the other logistical requirements of the business to decide whether it was worth purchasing at what price. When the time came for Mr Yesilhat to buy the business he declared to the deceased that “there is no way that I would be able to afford it”. To this Mr Yesilhat says that the deceased said, “You let me worry about that”.

95. A short while later Mr Yesilhat said that he reported back to George that the vendor wanted $750,000 in total for the Australia’s Best Tyres business, including an upfront deposit. Mr Yesilhat said that George then said to him, “I want you to buy it. I will give you the money. You will do well there. You will make money”. Mr Yesilhat says that he was somewhat incredulous that George would give him the money but George said, “I am happy to do this for you” and again Mr Yesilhat says that when he expressed concern that the business might fail George said to him, “I don’t want you to worry about that. I just want to see you do well. I am not asking for it back. It’s from me to you. Just work hard and you will be fine. What is mine is yours. That’s what fathers are for”.

96. Mr Yesilhat said that he did not even have funds to buy stock or the money to engage a solicitor to do the paperwork to acquire the business but that George said to him, “Do what you need to do and start making money. I will take care of the rest”. Mr Yesilhat says that George expressed confidence in him and advised him to go and see Galluzzo Lawyers to get them to act on the business purchase contract. Mr Yesilhat says that he spoke to Mr Vince Galluzzo at that firm at George’s suggestion.

97. Mr Yesilhat says that he discussed the contract for the purchase of the business with George and the commitment that he was contemplating, over a number of days over dinner. These discussions were said to include what his obligations were under the contract.

98. The time came to sign the contract. Mr Yesilhat says that George gave him two cheques, one from the Commonwealth Bank of Australia (“CBA”) and one from Westpac Banking Corporation (“Westpac”) totaling $130,000 for the deposit monies. Contracts were exchanged through Mr Vince Galluzzo. Mr Yesilhat recalls that the outgoing owner confirmed that vendor finance could be provided to complete the purchase. Mr Yesilhat’s understanding of the deal that had been made was that he had to continue to meet payments to the vendor after taking possession of the business.

99. Mr Yesilhat recalls that “just after taking possession of the business” George came to the business and they had a conversation in which Mr Yesilhat asked George, “where am I going to get money to buy the stock?”

65. In answer to that Mr Yesilhat says, in what became an important conversation in Mr Yesilhat’s narrative, he and George had the following exchange:

“George   Don’t worry about that. I told you that I would make sure that you had enough money to run the business and you have money to build up the business. What I am going to do, is that I am going to give you access to some of my accounts so that when you need to pay for stock, you will be able to pay for that stock with money I have in my account and they can be linked to your account.

Okan      How am I going to do that?

George   I will go to the Bank and sort out the authorities and put you down to have authority to draw money from my accounts as and when you need it. These are the passwords and Client numbers”.

101. As a result of this conversation Mr Yesilhat says that George handwrote passwords and account numbers and the login details on a blank sheet of paper and gave them to him. Such a note is attached to his first affidavit of 24 April 2014.

102. In a second related transaction, Mr Yesilhat says that George visited him at the shop every few weeks and one day George handed him some forms that were to be provided to the CBA. The form concerned was signed by George and dated 1 August 2011. It gave Mr Yesilhat full signing authority over two of George’s accounts, namely accounts with the final four digits 2401 and 2428. When giving this signed document to Mr Yesilhat, George said according to Mr Yesilhat, “Sign this and hand it back to the bank if you want. It’s just another way for you to pull out money”. Such a signed form also exists.

103. Mr Yesilhat says that a few days later after giving him the passwords to both the CBA and Westpac accounts, that George confirmed that Mr Yesilhat had authority to access his accounts and indeed that this could be done in both directions.

104. Mr Yesilhat says that as a result of that discussion he believes he had full authority to access those accounts when necessary and that when he did access those accounts he would usually either tell George in person or ring him to explain that he had transferred some money into or out of George’s accounts. Amongst this activity George, who owned a number of motor vehicles, would bring them to be serviced at Australia’s Best Tyres.

105. Mr Yesilhat specifically characterises the money that he was allowed to take from George’s accounts as other than loans. He says that “there was never any agreement that any of the monies I would draw were a loan or that there was any obligation for me to pay it back”. He said he used the accounts to purchase stock. Then he says that “As money built up I would put the money back in and use the accounts like a running account”. In his own mind George’s bank accounts were just an extension of his.

106. Mr Yesilhat says that the deceased would regularly discuss the business with him and give him assistance and advice and would even refer customers from his pharmacy to Mr Yesilhat’s business.

107. Mr Yesilhat says that in November 2011 the deceased began to talk to him in quite definite terms about including him the deceased’s will. Mr Yesilhat claims that George said to him words to the effect, “You have been there for me whenever I have needed you, and you have to understand that I will always be there for you, even after I die. I will make sure that I will put you in my will”.

108. Allegedly on one occasion about this time, after praising Mr Yesilhat for his knowledge of the deceased’s properties, George said to him about the subject of inheritance from him, “I can’t take any of it with me and my nieces don’t need it”.

109. A few weeks later, at a time that must have been close to Christmas 2011 Mr Yesilhat says an important conversation took place himself and the deceased, which was apparently designed to orchestrate a meeting between Mr Yesilhat and George’s two nieces. The essence of the conversation was as follows:

“George   My nieces are probably coming over for Christmas. I am going

to tell them that they have to introduce themselves to you. So if anything happens to me, they will know who to give the money to.

Okan      What do you mean?

George   I have made provisions for you in my Will so that you are looked after if something happens to me. I don't want anybody to take away what you have got.”

110. Mr Yesilhat says that after this conversation George confirmed to him every so often, “Okan I have put you into my will, so don’t worry about being looked after if something happens to me”.

111. In July 2012 after Mr Yesilhat had been in the Australia’s Best Tyres business for almost a year, he says that the deceased suggested to him that he, Mr Yesilhat, could import tyres rather than buy them locally, to earn maximum profit on sales, and that George in the course of a number of conversations over two or three weeks discussed with him the concept of bringing containers full of tyres into Australia. Mr Yesilhat explains that the arrangement between him and George to facilitate the purchases of the containers was that Mr Yesilhat could “just order it and take whatever we need out of the account”. Mr Yesilhat says that he paid approximately $65,000 for a container of stock which arrived and the tyres were onsold. He says he then saved for the next container in George’s account, using it as an informal savings account. Mr Yesilhat claims that he undertook tyre container acquisition transactions about six or seven times, especially during holidays when the demand for tyres was high.

112. In early 2013 Mr Yesilhat says that he and George discussed the possibility of acquiring for about $3,000,000 the freehold of the business premises over which Australia’s Best Tyres held a lease to operate its business. Mr Yesilhat says that George gave advice about how much to offer the owner of the freehold and offered to fund Mr Yesilhat to put up the deposit for the purchase. The logic of the proposed purchase was apparently to reduce the rent the business was paying. But this transaction did not go forward before George died.

113. Then a most important conversation occurs in Mr Yesilhat’s narrative. He says in April 2013 whilst having coffee with George, that George opened up again with him the subject of a possible meeting with George’s nieces. In his narrative, Mr Yesilhat has George saying to him, “I want them to meet you”. To this Mr Yesilhat says he replies to George, “But you have never spoken highly of your nieces”. In response George is alleged to say, “Yes I know but I don’t want them to interfere with what I have given you”.

114. That conversation is said to precede a meeting between Ms Sclavos-Lahana and her husband on the one side and Mr Yesilhat on the other. Such a meeting actually took place. The conversation that occurred is heavily disputed but is sufficiently set out later in these reasons and need not be repeated here.

115. Mr Yesilhat says that in early August 2013 he had a further conversation with George about bringing in two containers from the United States. This conversation is also heavily disputed and is set out later in these reasons, when that subject is addressed.

116. Finally, Mr Yesilhat says that he continued to use George’s CBA accounts with George’s consent, “like a running account” in which he would deposit money and take it out and that George never raised any issue about the use of those funds and George never discussed that the funds “were to be repaid” or “were a loan” or that he “had any obligation to repay the monies at any time”.

117. Various other incidents between Mr Yesilhat and other parties that are referred to in his affidavits occurring at and after the time of the deceased’s death are referred to later in these reasons, which now return to the competing evidence in the overall chronology.

The Credibility of Some Other Witnesses

118. The focus of this narrative of findings now moves beyond family history to a more detailed examination of the evidence that supports or contradicts Mr Yesilhat’s case that he had a same-sex domestic relationship with the deceased at the pharmacy for 14 years and that the deceased despised his nieces. On these questions the credibility of other witnesses, persons who did business with Mr Yesilhat and George, persons related to the pharmacy in different ways, and persons who were friends of the deceased, becomes of greater relevance. Before entering upon analysis of further facts, this section examines the credibility of some of those other witnesses.

119. Gino Elasi. Mr Gino Elasi with his brother, John Elasi, ran a takeaway store and a newspaper store near the pharmacy in the ten years before George’s death until about 2011. He was also the landlord of the deceased’s pharmacy, along with his brother. Mr Gino Elasi interacted almost daily with the deceased. With others he found the deceased on the day of his death. He was a direct and somewhat blunt witness. He knew exactly what he recalled about his friend George. He gave concise “yes” and “no” answers whenever he could. He was a witness of truth and was generally an accurate observer of events.

120. Mr Gino Elasi saw nothing in George’s behaviour to indicate that George was sexually interested in men at all. Quite the contrary, he observed, and I accept, that George had an overt and strong sexual interest in women. Mr Gino Elasi confirmed that George talked to him about Ms Anne Sklavos (sometimes referred to as “Anna”) as his “girlfriend” and that he would make comments about women, not men, as objects of George’s sexual interest. Mr Yesilhat says that George never let his true sexual attraction to men slip to others. But Mr Gino Elasi was insightful and knew George extremely well and never saw the slightest hint of a same-sex interest from George. Nevertheless, his and similar evidence should be analysed cautiously as George’s comments about women and his behaviour towards them are not determinative of his sexuality.

121. John Elasi. Mr John Elasi is the brother of Mr Gino Elasi. John and Gino’s parents were the original landlords of the shopping strip of which the Leppington pharmacy is just one shop. Like his brother Gino, John had had close contact as a fellow shopkeeper with George in their little strip of Leppington shops.

122. Like his brother, Mr John Elasi was a good and reliable observer of events. Again, like his brother his observations did not always coincide with those of other witnesses. But in my view his evidence can mostly be accepted.

123. Charles Versace. Mr Charles Versace was the vendor of the Australia’s Best Tyres business to the Yesilhat brothers. In the course of the sale he dealt with George and Mr Yesilhat. He was a witness of substantial truth. He was proud of his skill as a specialist European car mechanic.

124. Mr Versace was somewhat angry about the way that Mr Yesilhat and his brother had treated him in the course of the transaction. But in my view his anger did not affect the reliability of his evidence; rather it made him a more willing witness to the truth. He only committed himself to what he saw, and he readily acknowledged that some of his evidence was based only on what he heard, rather than what he had seen directly. He gave clear and compelling evidence that he believed George was heterosexual and that Mr Yesilhat had admitted to him (Mr Versace) that the deceased had loaned (and not gifted) to Mr Yesilhat the money to buy the business.

125. It was suggested to Mr Versace that he had fabricated his evidence in order to get revenge on Mr Yesilhat for what he thought was Mr Yesilhat’s ill treatment of him at the time of the sale of the business. Mr Versace strongly countered, and I accept as accurate, that although he admitted he had his differences with Mr Yesilhat he did not fabricate any of his evidence. He was a wholly honest and impressive witness.

126. Salman “Sam” Cameron. Mr Sam Cameron was meticulous, not only as a pharmacist working part-time at the deceased’s pharmacy. He also tried to be as precise as he could as a witness. Although he only worked on Fridays, Mr Cameron worked in the pharmacy for about two years before the deceased’s death. His regular work at the pharmacy meant he was in an excellent position to observe the deceased’s business practices, way of life and friends. His evidence was reliable and I mostly accept it.

127. Boguslava Wosik. Ms Boguslava Wosik emerged as a witness of outstanding importance in these proceedings. She had worked for the deceased for 18 years before his death. He had first taken her on as a pharmacist’s sales assistant. She had seen him in later years struggling with doing the pharmacy account books. So she offered to help him out as a bookkeeper. He accepted. She then performed both jobs successfully, until she was injured in a motorcycle accident, after which she could no longer satisfactorily perform retail duties.

128. But it is clear that she continued to work with the deceased, primarily because she liked him as an employer. Her empathy and affection for the deceased came through her testimony with startling clarity. I accept her evidence that he confided in her about some aspects of his private life. I accept there were few barriers to discussion between her and the deceased. She was perceptive, intuitive and inquisitive: a person from whom the deceased probably could not hide things. She was not the deceased’s age but she was older than the other pharmacy assistants and had children of her own. She had a mature understanding of life and was neither prudish nor resistant to receiving information the deceased chose to impart to her about his sex life, whether accidentally or otherwise.

129. The Court found her to be a highly credible witness. She did not have any obvious interest in supporting one or other side of the case. She knew of the deceased’s nieces, Ms Calokerinos and her sister Ms Sclavos-Lahana, because of the way the deceased spoke about them positively. She had the occasional interaction with Ms Sclavos-Lahana. No credible reason was posited as to why she would dislike Mr Yesilhat.

130. Her evidence was given without hesitation and included colourful testimony: that the deceased’s sexual attentions were overt and were all directed at women, not men. Indeed she said, and I accept, that the deceased noticed Ms Wosik herself. And she noticed that he did.

131. Ms Wosik’s evidence also contained a key that explains a great deal about the deceased’s character. Her evidence hints at what in my view was the nature of the deceased’s personal and financial relationship with Mr Yesilhat. She said that the deceased was an extraordinarily generous man who found it difficult to say “no” to people who asked him for money. She explained that the deceased’s kindness was spread widely. The deceased gave some “down and out” people, who lived in a nearby caravan park, extended credit in the pharmacy. But when they came and asked him for loans he would still give them money. George enjoyed the company of his customers and of these people from the neighbourhood.

132. Ms Wosik’s evidence confirms the evidence of Mr Cameron who said that George would frequently give medications to a nearby “gypsy” community. According to Ms Wosik the deceased would socialise with these customers and locals at the pharmacy after hours enjoying their company, whilst no doubt suspecting some of them were taking advantage of him financially. The deceased could tolerate and maintain friendships with people, who he, and indeed others, would judge to be exploiting him.

133. Leanne Vassallo. Ms Leanne Vassallo owned a hairdressing salon in the same strip of neighbourhood shops as George’s pharmacy. She was the one who raised the alarm that George may be unwell on the day he died. She was a very direct witness who tried to answer questions as precisely and concisely as she could. She said no more than was necessary and had a matter-of-fact approach to her observations.

134. Ms Vassallo said she never saw anything in George’s behavior that indicated to her that George was, as she said, “gay”, or led a bisexual lifestyle. She was a witness of truth and was a mostly reliable narrator of events.

135. Mr Jason Loader. Jason Loader was the butcher in the same strip of shops. He was a good and truthful witness whose evidence I mostly accept. He was a man of clear opinions and he gave his evidence without exaggeration. He had a good appreciation of George as a fellow businessman in the neighbourhood shops.

136. Mr Loader never saw anything in the deceased’s conduct that gave him any indication that the deceased’s occasional earthy comments about women were being feigned to deceive others from concluding that George’s interests were really same-sex. Mr Loader knew what he saw. He was strongly of the view that George’s interests were heterosexual. He was quite prepared firmly to disagree with questions put to him to suggest to the contrary.

137. Danijela Dacic. Ms Danijela Dacic was a young retail assistant and manager with ambitions to go further in the retail industry. She had an excellent and precise recollection of her work colleagues, work hours and work conditions at the pharmacy. Her father was a close friend of the deceased, so she called the deceased “Uncle George”. She was fond of the deceased with all his foibles and she felt safe with him. She was quite ready to deny versions of events with which she disagreed. She would not commit herself beyond what she was sure of. She gave compelling evidence of George’s interest in women, particularly young women such as herself. She too could see not the slightest evidence that George was, as she said, “gay”.

138. Ms Dacic vigorously repelled the suggestion that she had invented her evidence. She composed the first draft of her affidavit and took ownership of its narrative herself. There was no impropriety in the production of her evidence, or that would undermine her credibility.

139. Mr Ivor Wall. Mr Ivor Wall repaired one of George’s Porsche motor vehicles; he had several. Mr Ivor Wall was a careful witness who gave a very clear picture of the deceased’s personality and life habits. He interacted with George less than many other witnesses did but he was a good observer during that contact. His recollections were firm, and given without exaggeration. I mostly accept them. His testimony was understated in a way that engendered confidence in him.

140. I accept that many of these witnesses, John and Gino Elasi, Ms Palmer, Mr Torrisi, Mr Efstathiou, Mr Cameron and Ms Wosik had their evidence preparation co-ordinated through Ms Calokerinos. She was the point of contact for them. But in no case in my view is there any basis to conclude that she took control of the content of their evidence or altered any of their evidence. Rather, their evidence emerged in quite a different way. The evidence presented in their affidavits was expanded consistently and in more detail in their oral evidence in a way that showed that what they had deposed in writing was faithful to their true recollections.

141. The credibility of other individual witnesses is dealt with below, where they appear in the course of the narrative of findings.

The Deceased’s Strathfield Home

142. For about thirty years before the deceased’s death and for the whole of the period of Mr Yesilhat’s alleged relationship with him, the deceased lived in the same house in Newton Road, Strathfield (“the Strathfield property”).

143. Mr Yesilhat did not allege a domestic relationship at the Strathfield property. Rather, he contends the relationship was conducted entirely at the pharmacy. An incidental matter in issue was why the relationship was conducted in this manner. Mr Yesilhat’s explanation was that the deceased did not live at his Strathfield property but at the pharmacy.

144. Ms Calokerinos contested this. She says the deceased always lived at the Strathfield property, which was the only household that he maintained, from 1983 until his death. Ms Calokerinos contends that the deceased in no sense ever lived at the Leppington pharmacy, which was only his workplace.

781. First, the Court must consider whether or not the provision made in favour of Mr Yesilhat by the deceased either during the deceased’s lifetime or out of the deceased’s estate was “inadequate for the proper maintenance, education and advancement in life of the eligible person”. Secondly, the Court must consider “what provision (if any) ought to be made in favour” of Mr Yesilhat, taking into consideration the matters outlined by s 60: Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520; 12 ASTLR 268 at [89].

782. Whether the two-step test operates with the same full vigour in the current legislation has been recently discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. But such considerations are not an issue in this case.

783. For these family provision purposes Mr Yesilhat’s primary assets include two properties in Spring Farm and Prestons respectively, which have an approximate total value of $1.14 million. He also has superannuation and a $200,000 share in the Australia’s Best Tyres business. The total asset pool is approximately $1,361,920.00. His liabilities include mortgages over the two properties, personal loans to the CBA and “family”, HECS debt, legal costs and a loan from the business. These liabilities amount to a net sum of $185,720.00. In his statement of assets and liabilities annexed to his 20 September 2014 affidavit, the following statement appears: “the plaintiff has not included $206,500.00 held in a Commonwealth Bank of Australia account in his name”. 

784. It is not necessary to decide this issue as Mr Yesilhat is not an eligible person.

The Debt/Trust Proceedings

786. Ms Calokerinos claims all money paid to Mr Yesilhat before and after George’s death is held on constructive trust for the estate and in the alternative is owed in debt to the estate. She seeks to recover all the money so paid with interest.

Monies Paid Before the Day of the Deceased’s Death

787. The Court’s overall conclusions in the debt/trust proceedings may be shortly stated. The narrative of findings shows that the monies the deceased advanced to Mr Yesilhat before his death were loans. But the deceased was well aware of these advances and he agreed to make them to Mr Yesilhat. I find no basis to conclude that Mr Yesilhat went behind the deceased’s back and fraudulently procured account linkages and passwords to use the deceased’s accounts and authority to operate on those accounts, without the deceased’s knowledge. It is impossible to accept that the deceased was unaware that Mr Yesilhat was able to use the account linkage between July 2011 and July 2013. The deceased would almost certainly have become aware of the linkages. Accordingly, the estate is in a position to recover the monies the deceased advanced to Mr Yesilhat before 13 August 2013, less the repayments Mr Yesilhat made as loans due to the estate.

788. Executors not uncommonly find themselves in the position of alleging that money paid by a deceased person to another was a loan, only to encounter a defence that the money paid was a gift. The High Court considered just such a situation in Heydon v The Perpetual Executors Trustee and Agency Company (W.A.) Ltd (1930) 45 CLR 111 (“Heydon”), a case often cited as authority for the proposition that a plaintiff bears the onus of proof of the loan in such circumstances.

789. In Heydon an executor trustee company brought an action for 150 pounds allegedly loaned by a testatrix to the defendant, Heydon or alternatively an action for money had and received by the defendant as trustee for the plaintiff. The defence was that the testatrix had given the money to the defendant. At first instance the trial judge had held the burden of establishing a gift was on the defendant. The defendant gave evidence of the circumstances that she said showed that the payment was a gift. The plaintiff gave evidence as to the payment, but did not establish a loan. The defendant was disbelieved and on the evidence the trial judge held that the defendant had failed to establish her case of a gift due to its own inherent weakness and entered judgment for the executor with costs, which judgment was confirmed on appeal.

790. The unsuccessful defendant appealed to the High Court which unanimously (Gavan Duffy J, Rich, Starke, and Dixon JJ agreeing) reversed the judges below and decided that “‘the burden of proving the facts in support of either one or other cause of action set out in the statement of claim lies on the plaintiff”. The plaintiff, the respondent to the appeal in the High Court, to support the decisions of the judges below cited cases such as Scott v Pauly (1917) 24 CLR 274, at 281, Pink v Pink [1912] 2 Ch. 528 at 540 and Bouts v Ellis (1853) 17 Beav. 121, 51 ER 978 and to argue that a voluntary payment of money to a stranger raises a presumption of resulting trust. But Dixon J said in the course of argument that the correct principle was that chattels which passed by delivery are not within the rule and a presumption arising from the voluntary delivery of chattels is that a gift was intended in the absence of circumstances to the contrary. The course of argument in the case Dixon J referred counsel for the respondent to George v Howard (1819) 7 Price 646, at 651, 146 ER 1089 at 1090, where Richards CB said “If I deliver over money…to another, even although he should be a stranger, it would be prima facie a gift”.

791. The decision Heydon has been frequently applied. Recently in this Court White J referred to Heydon in Schmierer v Taouk [2004] NSWSC 345 at [63] (Shmierer). Lindsay J has also referred to it in Voce v Deloraine [2012] NSWSC 1187 at [12] (“Voce”). These cases confirm that the plaintiff in such actions bears the onus of proving that the payment should be characterised as a loan or in some way other than as a gift. And Shmierer (at [59]) makes clear that the onus of establishing the monies were a loan always lies upon the plaintiff and that onus is not discharged by mere proof of the payment itself.

792. In my view this is a case where the deceased’s estate has established on the balance of probabilities that all monies paid prior to the date of George’s death were loans and not gifts. The executrix establishes that though the many different indications that the Court has examined in the factual narrative that the advances were loans. Principal among the findings are: the October 2012 informal will which is inconsistent with the deceased having a domestic relationship with Mr Yesilhat; conversations between the deceased and third parties where he indicated they were loans; conversations between Mr Yesilhat and Ms Sclavos-Lahana and her husband in which he did not dispute that loans had been advanced; the pattern of regular repayments commencing shortly before the deceased’s death, which is a strong indicator of the repayment of a loan; and, overall the fact that the deceased was sloppy about his financial affairs with many people did not mean that he was giving money away to Mr Yesilhat. All of this is in the context that the Court accepts none of Mr Yesilhat’s evidence on which he relies to assert that these monies were gifts. The onus lies on the estate but in my view it has been discharged. In the circumstances the estate can recover all the monies proven to be advanced to Mr Yesilhat or Australia’s Best Tyres before the deceased’s death, less the monies that were repaid to the deceased.

793. No interest rate was fixed for these loans between George and Mr Yesilhat. The Court will order Mr Yesilhat to pay interest on the outstanding monies under Civil Procedure Act 2005, s 100 at the applicable rates. The parties are directed to agree upon calculations of interest and bring in short minutes of order to give effect to those calculations.

Monies Paid On and After 13 August 2013

794. But on and from the day of the deceased’s death the position is different. The Court has found that Mr Yesilhat transferred all the funds on 13 August 2013 and on the separate occasions thereafter knowing the deceased was dead. In my view Mr Yesilhat could not have had any genuine belief that he had any legitimate authority to transfer those funds when he did. I do not accept he was ever told by the deceased that a will was made in his favour or that he would be the deceased’s executor. Nor did Mr Yesilhat apart from these transactions behave as though he had any authority over the deceased’s estate.

795. The money so transferred was in my view fraudulently transferred from the estate of the deceased. In these circumstances an institutional constructive trust will ordinarily be implied in the estate’s favour in respect of the monies so transferred.

796. The decision of the High Court in Black v S Freedman & Co (1910) 12 CLR 105 supports the estate’s claims that monies paid by Mr Yesilhat on and from the date of the deceased’s death are all held on constructive trust for the estate. In that case the appellant, Mr Black, paid sums of money stolen from his employers into his personal bank account. He subsequently withdrew monies from his bank account and paid them into an account in his wife’s name. The question before the High Court was whether the employers could recover against Mr Black’s wife. In this context O’Connor J stated (at 110):

Where money has been stolen, it is trust money in the hands of the thief, and he cannot divest it of that character. If he pays it over to another person, then it may be followed into that other person’s hands. If, of course, that other person shows that it has come to him bona fide for valuable consideration, and without notice, it then may lose its character as trust money and cannot be recovered. But if it is handed over merely as a gift, it does not matter whether there is notice or not.

797. This statement of principle has recently been restated by the Court of Appeal in Sze Tu v Lowe [2014] NSWCA 462 at [141] (Gleeson JA, Meagher and Barrett JJA agreeing). Gleeson JA continued at [147]-[150]:

“Whether the trust based on a Black v Freedman claim is more properly characterised as a resulting trust: (Robb Evans at [112]-[117]); or a constructive trust: (Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] NLJR 877; AC 669 at 716 (Lord Browne-Wilkinson)), the trust is properly viewed as being of an institutional rather than simply a remedial character. It arises because the conscience of the thief is bound: Heperu at [154]-[155]; Wambo Coal Pty Ltd v Ariff [2007] NSWSC 589; 63 ACSR 429 at [40] (White J).

In Robb Evans, Spigelman CJ said (at [113]) that the thief holds any property into which the stolen property has been converted on trust in a manner which should be seen as automatic. That is, a trust arises immediately upon the acquisition of the property, not when recognised by a court. He continued (at [115]):

If appropriately characterised as 'constructive', the trust that arises upon receipt of stolen funds by an active participant in the theft is of an institutional rather than remedial character. [Emphasis added.]

The authors of Jacob's Law of Trusts in Australia (7th ed, LexisNexis Butterworths) observe (at [1310]) that there is a remedial flavour about various constructive trusts, including that in Black v Freedman. Nonetheless they state (at [1311]) that "it does not follow that the constructive trust in such cases is 'remedial' in the sense that it first has existence and effect only upon the Court making its decree". The authors point out that in Black v Freedman, O'Connor J meant (at 110) that the thief became a trustee forthwith.

The institutional character of such a constructive trust may be seen as "connoting a relationship which arises and exists under the law independently of any order of the Court": Muschinski v Dodds [1985] HCA 78; 160 CLR 583 at 614 (Deane J), although his Honour doubted (at 613) that there was any perceived dichotomy between institutional and remedial constructive trusts, preferring to view a constructive trust both as an institution and a remedy.”

798. The question in Sze Tu v Lowe was whether the trial judge erred in failing to consider whether proprietary relief was appropriate, on the basis that the facts of the case (the purchase of real properties using misapplied partnership funds) could only give rise to a remedial (as opposed to an institutional) constructive trust (at [156]). The appellants in that case placed reliance on a statement of the Full Federal Court in Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [255] as suggesting that the principle of appropriateness has application to a claim based on Black v S Freedman & Co in respect of assets in the hands of a volunteer.

799. The Court of Appeal held in Sze Tu v Lowe that the trial judge did not err in concluding that the claim based on Black v S Freedman & Co “gave rise to an institutional constructive trust over the partnership monies or their traceable product” (at [162]). Gleeson JA (at [157], [238]) emphasised the remarks of Allsop P (Campbell JA and Handley AJA agreeing) in Heperu Pty Limited v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 at [154]-[155] to the effect that “the trust rests on the existence of property rights and in that sense is not purely remedial”.

800. In coming to this conclusion, Gleeson JA acknowledged at [155] that it has been suggested in the United Kingdom that it is not strictly correct to speak of the fraudster as a “trustee”, even though the fraudster may be “liable to account as if they were” (Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 per Lord Millett). I note in this context that Spigelman CJ in Robb Evans v European Bank Ltd (2004) 61 NSWLR 75; [2004] NSWCA 82 at [115]-[116] also questioned whether the trust that arises upon receipt of stolen funds by an active participant in the theft is properly characterised as a constructive trust, as opposed to a presumed or resulting trust.

801. Subject to the defences pleaded, it is unnecessary for the Court to resolve these analytical debates.

Mr Yesilhat’s Authority Defence

802. Mr Yesilhat mounts a defence based on the Authority for Business Accounts Form and the terms and conditions for access to Netbank. Those documents relevantly provide as follows.

803. The signed 1 August 2011 Authority for Business Accounts Form, which listed both the deceased and Mr Yesilhat as ‘authorised signatories’ contained the following statement, extracted in part from the section titled “5. Persons authorised to open the above account(s). This is your declaration and acceptance of the Terms and Conditions”:

“I/We have read a copy of the Terms and Conditions for this/these account(s) and agree that those Terms and Conditions (including the section on 'Privacy') govern the operation of this/these account(s), by signing below and returning this form.

I/We request you to recognise and act upon this authority or any variation of this authority until the branch of the Bank where the account/s is/are conducted receives notice in writing from us, or any one of us (In accordance with the method or operation), of the cancellation of this authority. The Bank has received for Inspection the current documentation relevant to the type of entity…”

804. The deceased’s name, his description as a ‘sole trader’ and signature appear below the acceptance extracted above.

805. Mr Borg’s affidavit sworn on 30 December 2015 annexed a number of Commonwealth Bank documents including information available on Netbank under the heading “Give someone online access to my accounts”. Under the information relating to adding a person to allow them account access, the following text appears:

“Important: You must not enter the person's client number yourself Sharing client numbers constitutes a breach of the Electronic Banking Terms and Conditions (PDF 291KB). You/this person may be held liable for any unauthorised transactions on their account.”

806. There were also “Terms & Conditions” which related to providing another person with bank account access. The deceased was also required to tick a box confirmed he had read those “Terms & Conditions”:

“By ticking this box I acknowledge that:

The added person(s) is/are authorised by me to transact on my account(s) using their own NetBank facility. I am aware that their daily NetBank payment limit may be higher than mine.

The added person(s) may not give access to my account to anyone else.

Any transactions completed on my account(s) by me or person(s) authorised by me are done subject to the Bank's present and future Transaction Savings and Investment Accounts Terms and Conditions (PDF 440KB) to which I have agreed.

I may cancel this authority at any time by clicking the 'Remove access' or 'Remove person' link however I acknowledge that this cancellation will not take effect immediately and I will continue to be liable for all transactions until my request is processed. Alternatively, for immediate removal I can cancel this access by calling 13 2221 or visiting any Commonwealth Bank branch.”

807. Those additional account terms and conditions were not before the Court. Like Bryson J in the factually similar case of Noonan v Martin (1987) 10 NSWLR 402 (at 406G) (“Noonan”), I will proceed on the assumption that those unseen provisions do not bear on the issue of authorisation now before the Court.

808. The complete documentation including the “Electronic Banking Terms and Conditions” and the “Transaction, Savings and Investment Accounts Terms and Conditions” were not before the Court for consideration. Nevertheless, it is clear from the information on the Netbank facility above, that the CBA required notification before an authority could be removed.

809. Mr Yesilhat submits that because the CBA was only notified of the deceased’s death on 9 September 2013, that the Court must draw an inference that the plaintiff was permitted to transact on the linked bank accounts, as a matter of contract law, until the CBA became aware of the death of the deceased.

810. The estate submits on the other hand that the Court should find that the deceased did not give Mr Yesilhat authority to withdraw moneys from his bank accounts for any purpose and without specific permission on each occasion. The estate further submits that the Court should find that if any authority was provided, it terminated upon the death of the deceased on 13 August 2013.

811. The estate relies upon the decision of Bryson J in Noonan and says any authority the deceased might have conferred on Mr Yesilhat to operate his bank accounts died with the deceased.

812. In my view it is important to distinguish between the relationship between the deceased and his bankers and the relationship between the deceased and Mr Yesilhat. As between the deceased and his bankers, the two documents above to which Mr Yesilhat points do indicate that the authority would continue until cancellation. As between the estate and the CBA the estate cannot be heard to complain that Mr Yesilhat’s use of these authorities was unauthorised.

813. But that in my view does not govern the position between the deceased and Mr Yesilhat and this is the point, which in my view, Mr Yesilhat’s submissions have missed. This case in my view is very like Noonan. At the minimum the deceased gave an authorisation to Mr Yesilhat to withdraw money from his accounts. It did not purport to be an assignment to Mr Yesilhat of the debt represented by the deceased’s bank account. It was a mere authorisation. In my view what was said in Noonan is true of this case and is how the bare relationship between the deceased and Mr Yesilhat should be understood. Bryson J said in Noonan at 408B-C:

“What she intended to give him and gave him was the opportunity to do these things; that opportunity depended for its effect on the existence of her authorisation to him to do them and would be brought to an end if that authorisation were brought to an end in any manner, including its being brought to an end by her death, which would be the end of the existence of her legal personality and of all authorisations which it had created”

814. In my view any authority to Mr Yesilhat to use either of these authorisations ended with the death of the deceased.

815. In my view Mr Yesilhat was not aware of these terms and conditions between George and the CBA. If he were he would have contacted the executrix and attempted to ascertain whether the authorities would be continued or cancelled. He did not do that. All he had was a simple authority from the deceased, which he could act upon whilst the deceased was alive.

816. In my view the circumstances of Mr Yesilhat’s withdrawals on the evening of 13 August 2013 and their lack of commercial substance and the lack of any colour of consistency with a real commercial transaction are powerful indications that he had no belief in any continuing authority to use George’s accounts in the same way that he had whilst George was still alive and that his conduct in so doing was dishonest.

817. In accordance with the principles stated in Black v S Freedman & Co and restated in Sze Tu v Lowe, I am satisfied that Mr Yesilhat dishonestly diverted to himself or for his benefit all the funds transferred from the deceased’s accounts on and from the day of the deceased’s death and that the circumstances of the present case give rise from the date the funds were fraudulently obtained to an institutional constructive trust in favour of the estate over the proceeds that thereby came into and remain in Mr Yesilhat’s hands. The Court will make declarations accordingly if requested in short minutes of order. The position of the other defendants was not fully addressed in the parties’ submissions so I will reserve it for further consideration.

Estoppels Based on George’s Alleged Representations

818. Both Yesilhat brothers and the company Australia’s Best Tyres and Auto Pty Ltd, the defendants in the debt/trust proceedings, in part defend the proceedings by claiming that the deceased represented to them that he would give them all the funds required for the acquisition of and running of the tyre business to be purchased by the company. They contend that in reliance upon those representations that both brothers terminated their secure employment, caused the company to purchase the business and they committed to the long-term obligations and expenses associated with running the business. They contend that because of those representations that Ms Calokerinos as the executrix of George’s estate is now estopped from claiming the funds from any of these three parties which were used for the acquisition of and running of the business. They further contend that the Yesilhat brothers and the company should not be restricted from the continual use of the funds in the deceased’s CBA accounts for the ongoing running of the business and that Ms Calokerinos holds the funds on trust for them.

819. Mr Yesilhat also submits that he has the benefit of estoppels arising out of George’s alleged representations that he would assist him, Mr Yesilhat, with the purchase of his properties. There is an issue between the parties as to whether this latter part of the estoppel may yet require leave to amend the pleadings. But that issue does not have to be decided because of the Court’s factual findings.

820. Mr Yesilhat’s estoppel by representation claim relies upon statements made in Whitehouse v BHP Steel Ltd [2004] NSWCA 428 at [39] – [40] and Coghlan v SH Lock (Australia) Ltd (1985) 4 NSWLR 158 at 167. It is not necessary to develop the argument in support of this case any further.

821. All of this part of the Yesilhat brothers and the company’s case depends upon various statements that George is alleged to have made to them. Statements such as “I want you to buy it. I will give you the money...I am not asking for it back, it’s from me to you”. And again, “You have been there for me whenever I have needed you and you have to understand that I will always be there for you, even after I die. I will make sure that I will put you in my will”. And again, “I told you that I would make sure that you would have enough money to run the business and you have money to build up the business. What I am going to do is that I am going to give you access to some of my accounts so that when you need to pay for stock you will be able to pay for that stock with money that I have in my account…”. There are many more examples of these statements in Mr Okan Yesilhat’s evidence. But the problem with all of them is that they depend upon the Court accepting Mr Okan Yesilhat as a witness of credit. The Court is not prepared to accept any of this evidence and the estoppel by representation case must fail.

822. The estoppel by representation case concerning Mr Yesilhat’s acquisition of the two real estate properties was much the same. He allegedly promised Mr Yesilhat “I will help you”, “I want you to purchase this property”, “I will go guarantor for you”, “don’t worry if you need some money to pay the mortgage, I am more than happy to make sure you don’t fall behind”, “I never want you to struggle and I don’t want you to ever be afraid to ask me for money. I have a bit over $200,000 in cash sitting at home”.

823. I do not accept that the deceased said any of this. This defence fails.

Conclusion and Orders

824. The outcome of these proceedings may be shortly summarised. First, the deceased himself executed the informal will of October 2012 already admitted to probate and he knew and approved its contents. His testamentary capacity is not in issue. The grant of probate to the defendant Ms Calokerinos will not be revoked.

825. Secondly, no de facto relationship existed between Mr Yesilhat and the deceased at the time of his death or at any time before. Nor was the plaintiff dependent upon or in a close personal relationship with the deceased. And the plaintiff did not share a household or live with the deceased. The plaintiff is not an eligible person to make a claim under Succession Act, s 57 against the deceased’s estate and the plaintiff’s Succession Act claim fails.

826. Thirdly, Mr Yesilhat must repay all monies the deceased advanced to him before the deceased’s death, which monies were loans, not gifts. Mr Yesilhat must restore to the estate all monies transferred to the plaintiff after the deceased’s death which were fraudulently transferred without any colour of authority and which he now holds on constructive trust for the estate.

827. If any party believes the Court has not decided any issue in these proceedings which still needs decision then that should be notified in the short minutes of order.

828. The Court orders and directs:

1. The plaintiff’s claim for family provision out of the estate of the late George Sclavos is dismissed.

2. The plaintiff’s claim to revoke the grant of probate to the defendant of the will of the late George Sclavos dated 16 October 2012 is dismissed.

3. Direct the parties to bring in short minutes of order to otherwise give effect to these reasons.

4. Reserve for further consideration all issues of costs and issues that this judgment indicates should be so reserved.

5. Direct the parties to file any submissions on costs and further orders by 27 June 2017.

6. Grant liberty to apply.

**********

Amendments

15 June 2017 - [59] - Change “1900s” to “1990s”.

[155] - Change “Nor do accept” to “Nor do I accept”.

[363] - "Sclavos-Lahana” be Sclavos-Lahana’s”?

[694] Change “as" to “a”.

[607] Change “1980” to “1947”

[828] Change (1) and (2) “Sklavos” to “Sclavos”.

13 June 2017 - Catchwords
Within SUCCESSION catchwords: hyphen
Within DEBT catchwords: first line, “estate seeks recovery of monies” changed to: “estate seeks recovery”

[4]: Change “… will was not revoked” to “will were not revoked”

[15]: Change “…was close and loving and hat the deceased” changed to “..was close and loving and that the deceased”

[24] Change “Yesilahat” to “Yesilhat”

[25]: Change “…he is same-sex attracted…” to “he was same-sex attracted”

[44]: Change “Yesilat” to”Yesilhat”

[49]: last line, delete per Dixon J.

[79]: Change “help finanice his acquisition” to “…help finance his acquisition…”

[86]: Correct spelling of “George”

[94]: Change “..including working and cash flow requirements” to “including working capital and cash flow requirements”

And change “…able to afford it” to this Mr Yesilhat says…” to “…able to afford it”. To this Mr Yesilhat says”

[147]: Change “case contails some…” to “…case contains some…”

[155]: Change “Yeslihat” to “Yesilhat”

[166]: Change “risque” to “risqué”

[185]: Change “and Ms Sklavos reaxed and seated…” to “…and Ms Sklavos relaxed and seated…”

[210]: Change “Secondly, such an alibi was..” to “Thirdly, such an alibi was..”

Change “Thirdly, Mr Yesilhat’s case, of…” to “Finally, Mr Yesilhat’s case of…”

Change “elsewhwere” to “elsewhere”

[219] and [226]: Correct spelling of “Yesilhat”

[229]: Change “government authorites are not determnative” to “government authorities are not determinative”

[262]: Change “if” to “of”

[281]: Correct spelling of “Yesilhat”

[302]: Correct spelling of “Calokerinos”

[311]: Change “But the last word on this should go to Mr Torrisi. His perceptive…” to “But the last word on this should go to Mr Torrisi, with his perceptive observations…”

[327]: delete ID number and insert [ID number not published]

[338]: Change “becase” to “because”

[339]: Change “…George gave him his bank passwords and direct numbers for the CBA and Westpac.” to “…George gave him his bank passwords and login numbers for the CBA and Westpac”.

[340]: Change “Netbank” to “NetBank”

[347]: Change “I can mostly accept this evidence: there are…” to “I can mostly accept this evidence: yet there are…”

[357]: Correct spelling of “Yesilhat”

[358]: Correct spelling of “Ms Sclavos-Lahana”

[367]: change “(Apparently mistaking her for her sister…” to “(apparently mistaking her for her sister…”

[372]: Correct spelling of “Yesilhat”

[385]: Change “between he and George” to “between him and George”

[421]: Change “strategm” to “stratagem”

[423]: Correct spelling of “unusual”

[424]: Change “ and $10,000 was withdrawn” to “ and $10,000 were withdrawn”.

[436]: Change “…an amount of $5,000 from Mr Yesilhat’s personal account…” to “…an amount of $5,000 was paid from Mr Yesilhat’s personal account…”

[454]: Change “given” to “give”

[467]: “I accept that he mad phone calls to…” to “I accept that he made phone calls to..”

And change “Leppington pharmacy window as there was” to “Leppington pharmacy window, as there was” and change “organize” to “organise”

[476]: Change “…pending in investigation…” to “…pending an investigation…”

[478]: Change “…Ms Calokerinos urgent need to…” to “…Ms Calokerinos’ urgent need to…”

[479]: Change “says and I accept she” to “says, and I accept, she…”

[481]: Change “…because all George had only said to her was…” to “…because all George had said to her was that…”

[488]: Change “…I don’t think I even though about it’” to “…I don’t think I even thought about it’”

[502]: Change “…Mr Middlebrook said then and repeated to the Court that his…” to “Mr Middlebrook said then, and repeated to the Court, that his…”

[503]: Change “…and again on 24 August 2013. But on nether occasion…” to “…and again on 24 August 2013, on neither occasion…”

[515]: Correct spelling of “Sclavos-Lahana”

[551]: Correct spelling of “Efstathiou”

[534]: Change “sending the original…” to “handling the original…”

[560]: Change “favouring Mr Yesilhat, becomes…” to “favouring Mr Yesilhat, it becomes”

[570]: Change “Notwithstanding that the…” to “Notwithstanding that, the…”

[573]: Change “’cash crisis’ in fact as Ms Calokerinos” to “’cash crisis’ in fact, as Ms Calokerinos”

[594]: Change “…late 2013 she deliberately…” to “late 2013 deliberately”

[598]: Change “Ms Yesilhat” to “Mr Yesilhat”

[606]: “...registries; the deceased” to “registries: the deceased”

[618]: Correct spelling of “Antonopoulou”

[623]: Change “I accept as true the way she repelled this contention. But Ms Sclavos-Lahana” to I accept as true the way Ms Sclavos-Lahana repelled this contention. But she…”

[625]: Change “applciations in Greece” to “applications in Greece” and “Court in Greece” to “Courts in Greece”

[628]: Change “stance for the proposition” to “stands for the proposition”, add full stop.

[636]: Change “issue comes is:” to “issue is:”

[656]: swap (3) and (4)’s sequence

[658]: Change “hypothesize” to “hypothesise”

[672]: Change “…Best Tyres it might be said” to “Best Tyres might be said…”

[684}: Change “this Court’s Probate form 112” to “this Court’s Probate Form 112”

[700]: Change ”gave evidence that he” to “gave evidence that she “

[724]: Change “…addressed to ‘Public Health Authorities’” to “addressed to public health authorities…”

The level of heading above [728] “Should Probate of the Informal Will Be Confirmed?” changed (unbold, italicised)

[739]: insert sub-paragraph (f)

[744]: Add “(as his Honour then was)”

[791]: add spacing

[792]: Add spacing:“death,which” to “death, which”

[817]: Change “…accordingly if reqwuested” to “accordingly if requested”

[818]: Change “brothers in the company should not…” to “brothers and the company should not…”

Decision last updated: 15 June 2017