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Hillston v Bar-Mordecai

Hillston v Bar-Mordecai

Case [2003] NSWSC 89 28 February 2003

Wills, Probate & Administration

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CITATION: HILLSTON v BAR-MORDECAI [2003] NSWSC 89

HEARING DATE(S): 9-12, 16-19, 23-24 & 30 September 2002;
1-5, 9-11, 14-18, 21-25 and 28-31 October 2002;
18-22, 25-29 November 2002.

JUDGMENT DATE:
28 February 2003

JURISDICTION:
EQUITY

JUDGMENT OF: Bryson J at 1

DECISION: Gifts set aside. Family Provision claim and claim to remove Administrator dismissed. see [274] - [276]

CATCHWORDS: FRAUD MISREPRESENTATION AND UNDUE INFLUENCE - Undue Influence - medical attendant - de facto relationship- F aged 72 and M aged 36 lived in shared households from about 1983 until she died in 1994 aged 83 M was medical practitioner and GP attending F throughout- treated her, referred her to Specialists and allowed access to medications- she gave him sums of money gifts, surgery, property by series of transactions including sale without payment of expressed consideration and later discharge of her mortgage, she paid purchase price of home purchased in his name as to one-third - no independent advice - no rebuttal of presumption of undue influence - M claimed (1) de facto relationship and (2) this answered the claim of undue influence. On large body of evidence of behaviour of M & F and knowledge and perceptions of relatives, friends and associates, held that there was no de facto relationship- further that relationship of H & W if it existed did not rebut presumption of undue influence. - FAMILY PROVISION - Claim by M failed- prescribed period exceeded and no cause shown to extend- not eligible person- on merits no prospect of success. - WILLS PROBATE AND ADMINISTRATION - Claim to remove administrator based on alleged false evidence relied on in proceedings in which administration granted- dismissed.

LEGISLATION CITED: Family Provision Act 1982
Wills Probate and Administration Act 1898
Property (Relationships) Act 1984

CASES CITED: Plunkett v. Bull (1915) 19 CLR 544
Johnson v. Buttress (1936) 56 CLR 113
Watkins v. Combes (1922) 30 CLR 180
Poosathurdi v. Kanappa Chettiar [1919] LR 47 IA 1
Linderstam v. Barnett (1915) 19 CLR 528 at
Haskew v. Equity Trustees Executors and Agency Co. Ltd (1919) 27 CLR 231
Hartigan v. International Society for Krishna Consciousness Inc [2002] NSWSC 810
Mitchell v. Homfray (1881) 8 QBD 587
Dent v. Bennett (1839) 4 My.&Cr.269
Gibson v. Russell (1843) 2 Y&CCC 104, 63 ER 46
Blackie v. Clark (1852) 15 Beav. 594
Ahearne v. Hogan (1844) Drury temp. Sug. 310
Billage v. Southee (1852) 9 Hare 532
Quek v. Beggs (1990) 5 BPR 11761
Yerkey v. Jones (1939) 63 CLR 649
Garcia v. National Australia Bank Ltd (1998) 194 CLR 395
Jenyns v. The Public Curator (Queensland) (1953) 90 CLR 113
Royal Bank of Scotland v. Etridge (No.2) [2001] 3 WLR 1021
Lewis v. Lewis [2001] NSWSC 321

PARTIES :
Allan David James Hillston - Plaintiff in 3240/98 and Defendant in 1709/99 and 3039/02
Michael Jacob Bar-Mordecai - Defendant in 3240/98 and Plaintiff in 1709/99 and 3039/02

FILE NUMBER(S): SC 3240/98; 1707/99 and 3039/02

COUNSEL: J. Whittle SC & B. Burke for A. Hillston
M. Bar-Mordecai in person

SOLICITORS: Shaw McDonald for A. Hillston
M. Bar-Mordecai in person

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON J.

3240/98 - ALLAN DAVID JAMES HILLSTON V MICHAEL JACOB BAR-MORDECAI & ANOR

1707/99 - MICHAEL JACOB BAR-MORDECAI V ALLAN DAVID JAMES HILLSTON

3039/02 - MICHAEL JACOB BAR-MORDECAI V ALLAN DAVID JAMES HILLSTON

FRIDAY 28 FEBRUARY 2003

JUDGMENT

1 INDEX

The litigation and the parties

Gifts and claims of Undue Influence

Influence and Independent Advice

Husband-and-Wife Transactions and the Law

Johnson v. Buttress

Yerkey v. Jones

Garcia

Jenyns v. Public Curator

Issues, Side Issues and Credit

Sex, Ethics and Probabilities

Eveline Hillston’s Ability and Property

Some Details of Events

Evidence of Hillston Family Members

Witnesses called by Allan Hillston

Witnesses called by Mr Bar-Mordecai

Evaluation of the Relationship

Public authorities and written records

Family Provision Claim

Lewis v. Lewis

Claim to revoke Letters of Administration

Claims based on Undue Influence

Conclusions and Orders

2 The Litigation and the Parties: Eveline Hillston late of 30 Eastbourne Avenue, Clovelly, New South Wales, died there on 25 June 1994 aged 83 years. On 22 October 1998 this Court granted to Allan David James Hillston letters of administration of her estate with a copy of her last will dated 31 August 1989 annexed. Mr Allan Hillston was one of many beneficiaries under the will. He is the plaintiff in proceedings 3240 of 1998, and the defendant in two other proceedings heard with them. He is one of the two sons of Simon Hillston, a brother of Jack Henry Hillston, who died on 4 August 1983 and was the husband of Eveline Hillston; hence Mr Allan Hillston and his brother Alex Hillston were and were treated by Eveline Hillston as her nephews. The will appointed Michael Jacob Bar-Mordecai as executor and trustee of the will, but this Court did not grant probate to him as he was regarded as unsuitable to exercise the office of executor. Although the grant of probate is dated 22 October 1998 Mr Allan Hillston held earlier interim grants from 21 July 1998 on.

3 In proceedings 3240 of 1998 Mr Allan Hillston sued Mr Michael Bar-Mordecai to set aside and obtain remedies against a number of gifts made by Eveline Hillston to Michael Bar-Mordecai in her lifetime on the ground that the gifts were obtained by the presumed exercise of undue influence by Mr Michael Bar-Mordecai as Eveline Hillston’s medical advisor. In proceedings 1707 of 1999 Mr Michael Bar-Mordecai claims further provision out of the estate for himself alleging that he is an eligible person within the definition in s.6(1)(a)(ii) of the Family Provision Act 1982 as in force at the time Mrs Eveline Hillston died. His claim under the Family Provision Act is a claim against a deceased estate and his evidence should be considered with the special care required by the decision in Plunkett v. Bull (1915) 19 CLR 544: see Isaacs J at 548-549.

4 The definition of “eligible person” in s.6(1)(a)(ii) is in these terms:“eligible person”, in relation to a deceased person, means -

(a) a person who -… (iii) where the deceased person was a woman, was a man who, at the time of her death, was living with the deceased person as her husband on a bona fide domestic basis;

5 What Mr Bar-Mordecai claimed was that, in every-day language, he was living in a de facto relationship with the deceased. He made a further claim under paragraph (d) of the definition of “eligible person”, which relates to a dependent member of a household; but he did not press this claim at the hearing.

6 Mr Michael Bar-Mordecai claimed, in the probate proceedings which the Court (Einstein J) decided in 1998, that he was entitled to administration on intestacy as the de facto husband of Mrs Eveline Hillston in the meaning given to that expression by s.32G of the Wills Probate and Administration Act 1898; that definition has a strong general similarity to the definition of “eligible person,” although there are differences of expression. He claimed that the will of 31 August 1989 had been revoked, and that he as de facto husband was entitled to Mrs Eveline Hillston’s estate on intestacy; Einstein J determined that the will had not been revoked. This decision was affirmed on appeal. His Honour also found that Mr Michael Bar-Mordecai was not Mrs Eveline Hillston’s de facto husband, although that decision was not essential for the outcome.

7 In the Summons in proceedings 3039 of 2002 Mr Michael Bar-Mordecai claimed an order that the letters of administration granted to Mr Allan Hillston be revoked, that Mr Allan Hillston be removed as administrator and that Mr Michael Bar-Mordecai be appointed administrator. He filed a Statement of Claim in those proceedings; the Statement of Claim makes various claims for damages, costs and interest, on the basis of allegations which contain much material which is obviously extraneous; the Statement of Claim when taken as a the whole cannot be understood, and it cannot be treated as a pleading of facts which support the claims in the Summons.

8 All three proceedings were heard together from 9 September 2002 to 29 November 2002, 47 sitting days, although on three of those days Mr Michael Bar-Mordecai did not attend, or obtained adjournments on the ground that he was ill. Mr Bar-Mordecai conducted the hearing in person throughout.

9 The foundation of the claim of undue influence is that from about August 1983 until Mrs Eveline Hillston’s death Mr Bar-Mordecai was her treating general medical practitioner; this is admitted on the pleadings. Mr Bar-Mordecai was a registered medical practitioner conducting a general practice throughout the relevant events and thereafter until he was struck off by order of the Medical Tribunal on 6 September 2000. He is referred to at many places in the evidence as Dr Bar-Mordecai. His medical file relating to Eveline Hillston Exhibit 4 records 8 attendances up to and on 23 August 1983. Mrs Eveline Hillston also consulted doctors in the City until she ceased work and sold her business in 1982. From 1983 onwards Mr Bar-Mordecai was her only general practitioner; she also saw many specialists. His recorded medical attendances on her are very numerous; for example, in Exhibit CS one record shows 59 attendances from 3 August 1984 to 27 July 1987; another shows 22 from 7 August 1987 to 29 April 1988; another record shows 28 attendances from 19 September 1989 to 7 July 1992. Exhibit 30 shows 56 attendances from 9 March 1993 to 25 June 1994; 33 of these occurred from January to June 1994. His recorded attendances were frequent throughout the relationship and became more so as time progressed. Mrs Eveline Hillston was a patient at the Wolper Jewish Hospital in Woollahra from 10 to 24 April 1994 suffering from chronic airways limitation. In the hospital’s records Dr Bar-Mordecai’s name appears as her medical attendant, and his signature appears as her medical attendant at a number of places.

10 Mr Bar-Mordecai submitted that the de facto relationship which he alleges did not commence as a consequence of a doctor-and-patient relationship, but as a result of an initial social relationship. This submission is contrary the evidence he first gave on the subject, which shows clearly that his initial contact with Mrs Eveline Hillston arose from her requesting him to see and treat her husband, which he then did for some years from 1979 until her husband’s death in 1983, and that during that time he also gave Mrs Eveline Hillston some medical treatment. He later sought to withdraw from this but in my finding his first account was probably correct. Mr Bar-Mordecai’s acquaintance with Mr Jack Hillston and Mrs Eveline Hillston came into existence in the context of his treating Mr Jack Hillston, and later Mrs Eveline Hillston, and he first entered their home and spent time in her company in the context of professional attendances. Before Mr Jack Hillston died the relationship of medical attendant and patient between Mr Bar-Mordecai and Mrs Hillston was well established. It was not correct in fact to contend that the relationship, allegedly a de facto relationship, arose as a result of an initial social relationship. The question whether Mr Bar-Mordecai’s first or early contacts with Mrs Hillston took place in a social context or in a professional context of her asking him to give medical attention to her husband is not of real importance. The presumption of undue influence arises where the recipient of a gift is the donor’s medical attendant, no matter how the recipient came to be the medical attendant. It was in breach of the well-known ethics of the medical profession that he embarked on a sexual relationship with her and took benefits of substantial economic value from her. His conduct was also in breach of ethical principles which restrain emotional and economic exploitation of aged women who have recently been widowed, and these principles are not special to the medical profession.

11 The fact that Mr Bar-Mordecai was a medical practitioner and Mrs Eveline Hillston’s usual medical attendant and general practitioner was always central to the relationship between them. Her usual mode of address to him in the presence of others, and of reference to him in his absence, was “Doctor,” an expression she used with every show of respect. She had very ready and convenient access to him for his advice and treatment, as they shared dwellings and associated in the course of each ordinary day, including her attendance at the surgery to perform office work there. She had ready access to medications through Mr Bar-Mordecai, including ready access to medications in the drug cupboard at the surgery, not effectively controlled by him and in disregard of legal requirements. If he had not been a medical practitioner it is not possible that Mrs Eveline Hillston would have given Mr Bar-Mordecai so much attention, shared her dwellings with him and conferred large gifts on him, over a number of years.

12 Mrs Eveline Hillston was given privileged access to prescription drugs without the degree of supervision which it was appropriate for her medical attendant to exercise. This signal advantage of the relationship to her is an aspect of the existence and exercise of undue influence by him over her. She had free access to drugs including drugs described by Mr Bar-Mordecai as hypnotics, some of which were capable of being dangerous, depending on how they were used; she used hypnotics sometimes to assist her with sleep. The evidence does not show that she suffered any addiction, or used any prescription drugs to excess, and does not show that her conduct in relation to any of the gifts was affected by her having ingested any drug.

13 Mr Bar-Mordecai did not keep a written drug register in accordance with the law in force at the time. He maintained that he kept a more comprehensive record as a computer record, but acknowledged that he did not comply with what the law required. Mrs Eveline Hillston had ready access, not in a practical way controlled by Mr Bar-Mordecai, to drugs kept in his surgery and used in his practice, including dangerous drugs referred to as Schedule 8 drugs, subject to stronger restrictions and required to be kept in a locked cupboard; there was no locked cupboard. Mr Bar-Mordecai’s inability to see, or unreadiness to acknowledge the impropriety of his not maintaining controls over Mrs Eveline Hillston’s access to drugs illustrates his inability to take an objective view of her interests; and indeed of his own interests.

14 Mr Bar-Mordecai submitted: “It is submitted that a medical practitioner does not pay his patients’ household expenses, home renovation costs, or mortgage repayments, nor would he discharge a large mortgage repayment, with principal and interest, accruing interest to May 2002 to over $1,600,000, except in the circumstances as in these current where the recipient of the benefaction is his de facto wife who might also be his patient.” As will appear from these reasons, I do not accept all the assertions of fact in this submission. The consequences for the law relating to Undue Influence of the admitted fact that he was her treating general medical practitioner would not be altered by a showing that there were other ties and relationships between them.

15 Gifts and Claims of Undue Influence. Mr Allan Hillston claims to set aside a number of gifts including these gifts of sums of money:in 1983, a gift of $30,000in 1984, a gift of $20,000in August 1985, a gift of $25,000in January 1986, a gift of $20,000

16 It is admitted that these gifts were made. The pleadings show that the first gift of $30,000 in 1983 was a gift to purchase a computer and that the gift of $25,000 in August 1985 was a gift to purchase an Altos computer; the gift of January 1986 of $20,000 was a gift to purchase a second-hand Altos computer. Mr Michael Bar-Mordecai’s evidence was to the effect that he told Mrs Eveline Hillston to give away $130,000 in cash which he says she had with her in her unit in August 1983; the first gift, of $30,000 in 1983, was then given to him. He also said that $20,000 was given to him for payment of legal fees for his divorce; this appears to be the second gift alleged.

17 Mr Allan Hillston also alleges (FASC 21C) that about 1988 or 1989 Mrs Eveline Hillston gave Mr Bar-Mordecai $40,000 as a contribution towards building a new waiting room at the surgery.

18 Mr Allan Hillston alleges that a series of events dealing with a building at 212 Clovelly Road Clovelly, usually referred to as the surgery, constituted a gift of the surgery by Mrs Eveline Hillston to Mr Bar-Mordecai. These events took place over a number of years. They began with a contract for sale of the surgery from Mrs Eveline Hillston to Mr Bar-Mordecai dated 21 October 1987 for $360,000, completed on the same day by a transfer which was registered on 13 January 1988; no part of the purchase price was then paid, $250,000 was secured by a registered mortgage back to Mrs Eveline Hillston and $110,000 remained unpaid and unsecured, and dealt with by an undated acknowledgement of indebtedness. No evidence explained why the $250,000 and the $110,000 were dealt with in different ways. As the acknowledgement speaks in terms of a present debt, not of repayability subject to call, the balance of $110,000 was probably extinguished by operation of the Limitation Act 1969 in October 1993. There was no provision for interest to be payable on the $110,000. Another acknowledgement signed by Mrs Eveline Hillston provided for the $110,000 to be released on her death. The mortgage was discharged without payment by a discharge signed by Mrs Eveline Hillston on 8 July 1993 and registered on 13 September 1993. These dealings with the surgery occurred in the context of earlier events in which she acquired the surgery and leased it to him on favourable terms: I refer to these events later. As well as contending that these dealings, although extending over almost six years, and including, at least in form, several contracts, constituted overall a gift of the surgery, the plaintiff claimed alternatively that various elements in the events were also gifts. Mr Michael Bar-Mordecai did not in his final submissions dispute but conceded that the substance of the events was that there was a gift of the surgery, as in my view there plainly was.

19 Mr Michael Bar-Mordecai’s evidence does not explain how these transactions originated and what preliminary discussions or negotiations there were, if there were any. The sale of the surgery to him was very unusual in the respect that it was completed by transfer on the same date as the contract; this is consistent with haste and the absence of deliberation or reflection, and has not been explained. There is no evidence that Mrs Eveline Hillston consulted any independent person or received any advice about whether to make a gift of the surgery, or about the strange arrangements about the purchase price; and it should be concluded that she had no advice from anyone other than Mr Michael Bar-Mordecai about whether to make the gift. Mr Bar-Mordecai explained the selection of $360,000 as the price in a strange way. He said that he had information from a local real estate agent that the property was worth about $320,000 to $330,000, and $360,000 was stated as the price to create a higher cost base so that on any future sale the incidence of capital gains tax payable by Mr Bar-Mordecai would be reduced. This explanation makes it doubtful that Mr Bar-Mordecai ever intended to pay all the $360,000. As events turned out, he paid very little of it.

20 The mortgage provided for interest at 10% per annum, and principal and interest were payable by monthly payments of $2,645 to begin on 21 October 1987, $31,740 per year, over 15 years. The market rate was 15% per annum for such a mortgage at the time. According to the terms of the mortgage repayment was to take 15 years with a final payment on 20 October 2002. Interest was to be calculated at six-monthly rests. Mr Bar-Mordecai did not conform with the requirement for monthly payments. If the scale of monthly payments had been complied with, interest during the first six months would have been $12,500 and payments would have been $15,870, producing a reduction in principal of $3,370. Evidence of Mr Selinger shows that Mrs Eveline Hillston’s tax return to the 30th of June 1990, which he prepared on information supplied by her, showed as income $15,072 as interest received from Mr Bar-Mordecai on a mortgage. This would suggest that much of the interest for that year was left unpaid. The evidence does not enable the amount of principal repaid to be calculated. It is alleged in the pleadings that the defendant paid the instalments up to 30 June 1990 meaning, I take it, the instalments payable up to 30 June 1990; the defendant’s oral evidence suggested that payment may have been made only for two years or thereabouts, to about October 1989, but I accept what the pleadings establish.

21 The plaintiff alleges and the defendant admits that Mr Michael Bar-Mordecai paid $31,740 in the year up to 30 June 1991, and that the same sum was received back by him on 1 July 1991; and that the same thing happened the following year; he paid $31,740 on or by 30 June 1992 and received back the same amount on 1 July 1992. The plaintiff then claims that the two sums of $31,740 were also gifts. I see Mrs Eveline Hillston’s foregoing these sums not as further gifts but as part of the demonstration that there was in substance a gift of the surgery. The defendant explained the transactions as a round-robin between husband and wife to minimise tax. The minimisation effect appears to be his treating the interest component of the mortgage instalments as a deduction in the assessment of his professional income; the interest then formed part of her assessable income and would be liable for tax, presumably at a lower rate than the tax on his income (depending on what his income was); however he got back the amount he paid, and was not out of pocket. There would be a minimisation effect only if their interests were regarded as identical. The gap between the mortgage interest at 10% per annum and the then current market rate for such a mortgage of 15% per annum represented, on the initial principal of $250,000, an annual advantage of $12,500 to Mr Bar-Mordecai. If it were right to perceive the round robin arrangement as a tax minimisation measure, the concessional interest rate would represent a considerable neglected opportunity for tax minimisation.

22 Mrs Eveline Hillston and Mr Michael Bar-Mordecai as purchasers entered into a contract dated 30 November 1988 to purchase the house property 30 Eastbourne Avenue Clovelly for $665,000. The terms of the contract showed that she was to have two-thirds and he was to have a one-third interest as tenants in common. Financing was obtained from ANZ Bank; this operated at least as to part of the purchase price as bridging finance, and within a few months, in transactions which have not been proved in detail, Mrs Eveline Hillston raised and paid all moneys required to pay for the Eastbourne Avenue house. However the house remained subject to successive mortgages to banks. The plaintiff claims that the one-third interest as tenant in common obtained by Mr Michael Bar-Mordecai was in substance a gift to him by Mrs Eveline Hillston. As she paid the whole of the purchase money it plainly was a gift.

23 Each of these gifts was a very substantial gift, out of the order of ordinary tokens of regard or affection.

24 Influence and Independent Advice. Mrs Eveline Hillston conferred her confidence on Mr Michael Bar-Mordecai very fully, and dealt with her property in accordance with his interests, from very early in their relationship. This is shown in a full and clear way by her purchasing the surgery, committing her resources to it, equipping it for his use and granting him a long term lease in September 1983, by her taking his advice about giving away a large sum of money which she kept in the home unit, by her making gifts of significant sums to him in 1983, 1984 and 1985, by her providing him with housing and by the fact that by the middle of 1984 he was aware of everything she owned and its approximate value. On 16 August 1984 Mr Bar-Mordecai was given authority to operate Mrs Hillston’s Commonwealth Savings Bank account at the Clovelly Branch – Exhibit 46. Authority dated 30 August 1983 to operate the account of Michael Bar-Mordecai Pty Ltd at the Commonwealth Trading Bank Clovelly – Exhibit 45 names Mr Bar-Mordecai as Director (as well as others) and names Mrs Hillston as Secretary. The copy in evidence is too indistinct to show whether two signatures were required or whether she was authorised to sign documents alone. His influence and dominance over her dealings with her property were established early, and from then on all significant dealings by her with her property were shaped around his interests, and every significant investment or disposition of property by her was favourable to his interests. There was no other person in whom she placed corresponding confidence, and no other person whom she made a practice of consulting for advice or on whom she conferred large benefits, although she could if she chose have consulted her nephews, who were men of business, and she could readily have found a source of independent advice from a solicitor, an accountant or in some other way. There are a few slight indications here and there of discontent on her part, but discontent was never expressed in any truly independent action. Her conduct of her affairs in matters relating to her property presents a picture of dominance by Mr Michael Bar-Mordecai from August 1983 onwards.

25 There was no evidence that Mrs Eveline Hillston at any point received independent advice from a solicitor, accountant or any other professional or non-professional person who might be thought to have been in a position to give her independent advice or to bring her mind to bear, independently of Mr Bar-Mordecai and his influence, on any decision to make any of the gifts. Evidence about the evolution of decisions to make the larger gifts is slight at the most and for some of the gifts of money there is no evidence about the circumstances in which Mrs Eveline Hillston decided to make them.

26 At different times Mrs Eveline Hillston had access to lawyers at a number of firms who conducted legal business for her. These included Mr Hulme of Hattersley & Hulme, who had earlier advised Mr Bar-Mordecai and acted for her on the purchase of the surgery, Messrs Peter Wise & Co. who acted for her in obtaining probate of her late husband’s will, and Mr Freeman and his assistant at Blessington Judd Solicitors who acted for her in the preparation of several wills, in the purchase of the Eastbourne Avenue property, and in the sale of the surgery to Mr Bar-Mordecai. There is no evidence that any of these lawyers, or any other lawyer or professional person, gave her any independent advice in relation to any of the gifts, or received any information or had any dealings with her which could support the view that independent advice overcame any undue influence in any of the gifts.

27 Mr Freeman gave no evidence of having given independent advice to Mrs Hillston in relation to any transactions. There is no reason to think that he was consulted for independent advice, and there is no reason to think that he was given sufficient information about the transaction to bring the subject to his mind as one for possible consideration. He was not told that Mr Bar-Mordecai was Mrs Hillston’s treating general medical practitioner, and there is no evidence that he was told sufficient circumstances of the transactions to enable him to see that they had the character of gifts. Mr Bar-Mordecai said that Mr Freeman directly asked whether there was a de facto relationship. This evidence is not borne out by Mr Freeman’s evidence and I disbelieve it. In Mr Freeman’s observation they were caring towards each other, and Mrs Hillston was concerned about Mr Bar-Mordecai’s welfare. Mr Selinger the accountant was also not told that Mr Bar-Mordecai was her treating general medical practitioner, and was not told circumstances which made it appear that the transactions with real property were gifts. He advised her against selling the surgery, which advice she did not accept. This advice was not directed to whether or not she should make a gift of the surgery; it related to whether it was a good business proposition to sell it or to retain it. Mr Selinger’s evidence showed that Mrs Hillston did not ever tell Mr Selinger to the effect that she and Mr Bar-Mordecai were living as husband and wife, or lovers; and Mr Bar-Mordecai did not ever say anything to that effect to Mr Selinger. This is particularly significant in relation to Mr Selinger, whom she knew over a number of years and with whom she exchanged correspondence on a personal level after her husband’s death. There is no basis on which it could be found that Mr Freeman, Mr Selinger or any other person gave Mrs Hillston any relevant advice about whether she should make any gift. The fact that she did not look for or seek advice from them or so far as it appears from any other source is an indication of the extent of Mr Bar-Mordecai’s influence over her and her decisions. She did not even have enough independence to raise the subject with professional advisors.

28 There was no lawyer or other possible adviser who was sufficiently informed of Mrs Eveline Hillston’s circumstances, or of any facts and circumstances relating to any of the gifts, to be in a position to give her any advice which could qualify as independent advice so as to overcome a presumption of undue influence; no-one who could possibly be thought of as fully informed. In the course of closing submissions I said:

I don’t think it is appropriate to search the judgments for a complete prescriptive statement of what is and what is not sufficient, because the jurisdiction is a jurisdiction to deal with exceptions and/or mitigations and it deals with them by a judgment which evaluates the facts of the instant case and not by applying any highly prescriptive body of rules. It is for that reason that attempts to bring rigour to bear on what one finds in judgments about what advice must be given, run out in the sand. They can usually be confounded by an attempted comparison with other also apparently well reasoned and authoritative expositions.

29 So in summary Mr Allan Hillston relies on the fact that Mr Bar-Mordecai was, at the times of all the gifts, Mrs Eveline Hillston’s medical attendant, and also relies on the presumption of undue influence which arises in those circumstances. Mr Michael Bar-Mordecai’s position, to state it very shortly, is to the effect that the gifts are explained as ordinary transactions between wife and husband, and were not the product of exercise of undue influence, or of the relationship of medical advisor and patient.

30 Husband-and-Wife Transactions and the Law. Mr Michael Bar-Mordecai took the broad position that the de facto relationship explains the gifts and does so in a full way which excludes any undue influence exercised by him, and excludes any ground related to his being her medical advisor for inferring that there was undue influence. He characterised the gifts as “… husband and wife transactions set in motion to minimise taxation and to assure the surviving partner was well cared for under all possible future contingencies.” (Written Submission 6, para 18). He repeatedly and vehemently referred to himself as Mrs Eveline Hillston’s husband, and to her as his wife, and treated that relationship as overcoming any basis for a conclusion that the gifts had been produced by undue influence. His position does not reflect the law about gifts by a wife to a husband. Mr Bar-Mordecai’s written submissions included “The Plaintiff’s presumption in law operates in light of the defendant’s admission that he was the deceased’s treating medical practitioner. However the presumption is negated if the medical practitioner has been shown to be the Deceased’s de facto husband, as is the case in these proceedings.” (Written Submission 6 para 7). There is no legal basis for the contention that the presumption is negated in those circumstances; Mr Bar-Mordecai did not refer to any basis for this contention.

31 A deep anomaly of Mr Bar-Mordecai’s case is that if he and Mrs Eveline Hillston had truly seen that their interests were identical because each thought of them as husband and wife, it is difficult to see any reason why any property of hers would be transferred to him during her lifetime. It was obviously a possible future contingency that he might predecease her.

32 In Johnson v. Buttress (1936) 56 CLR 113 134-135 Dixon J explained the grounds on which equity intervenes to set aside gifts produced by undue influence:

The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor’s will or freedom of judgment in reference to such a matter. The source of power to practise such a domination may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party. If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act. But the parties may antecedently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed and that he has obtained a substantial benefit from the other. A solicitor must thus justify the receipt of such a benefit from his client, a physician from his patient, a parent from his child, a guardian from his ward, and a man from the woman he has engaged to marry. The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree. But while in these and perhaps one or two other relationships their very nature imports influence, the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes towards another a position naturally involving an ascendency or influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position. He may be taken to possess a peculiar knowledge not only of the disposition itself but of the circumstances which should affect its validity; he has chosen to accept a benefit which may well proceed from an abuse of the authority conceded to him, or the confidence reposed in him; and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour. But, except in the well-recognized relations of influence, the circumstances relied upon to establish an antecedent relation between the parties of such a nature as to necessitate a justification of the transaction will be almost certain to cast upon it at least some measure of suspicion that active circumvention has been practised. This often will be so even when the case falls within the list of established relations of influence.

33 Later in the same judgment Dixon J at 135-136 said:

Further, when the transaction is not one of gift but of purchase or other contract, the matters affecting its validity are necessarily somewhat different. Adequacy of consideration becomes a material question. Instead of inquiring how the subordinate party came to confer a benefit, the court examines the propriety of what wears the appearance of a business dealing.

34 These passages have become a classic source of Australian law. They do not stand alone and are well supported, for example by the observations of Latham CJ at 119-120. In some authorities the burden placed on the recipient of justifying the gifts is stated in rather stronger language than that used by Dixon J. In Watkins v. Combes (1922) 30 CLR 180 at 194 Isaacs J cited with approval the passage in a judgment of the Privy Council – Poosathurdi v. Kanappa Chettiar [1919] LR 47 IA 1 which includes the following statement:

… the person in a position to use his dominating power has the burden thrown upon him, and it is a heavy burden, of establishing affirmatively that no domination was practised so as to bring about the transaction, but that the grantor of the deed was scrupulously kept separately advised in the independence of a free agent.

35 As Isaacs J said in the first part of this passage, the burden is heavy. It was not however Isaac J’s view, and is not in my opinion correct in principle that independent advice is absolutely required; see Linderstam v. Barnett (1915) 19 CLR 528 at 531, Haskew v. Equity Trustees Executors and Agency Co. Ltd (1919) 27 CLR 231 at 235.

36 In Hartigan v. International Society for Krishna Consciousness Inc [2002] NSWSC 810 I had occasion to consider undue influence in relation to religious advisors and religious beliefs. I made some observations in the judgment about the basis on which the Court acts and the position of a donor. At [28] I said:

Characteristically persons claiming this relief have made gross errors of judgment, obvious to any objective outsider. Finally, an owner of property is entitled to dispose of it, even to dispose of it in a very imprudent way, but the Court requires to be satisfied that the transaction is not unconscionable after examining the events and circumstances closely.

The focus of attention on public policy and prevention of abuse is important for understanding why the law is as exacting as it is, which is not well understood by focussing on the position of the donor, who in the nature of things has behaved foolishly and has brought about a transaction against his own interests.

37 The inclusion of physician and patient among the relationships for which the burden of disproof is imposed on the donee is well established. It was accepted in the Court of Appeal in Mitchell v. Homfray (1881) 8 QBD 587; and the relationship is usually mentioned in judgments which give lists of confidential relationships giving rise to a presumption of undue influence, although actual examples of litigation against medical attendants were more common in the Nineteenth Century than they have later been. See Dent v. Bennett (1839) 4 My.&Cr.269; 41 ER 105, Gibson v. Russell (1843) 2 Y&CCC 104, 63 ER 46, Blackie v. Clark (1852) 15 Beav. 594, 51 ER 669, Ahearne v. Hogan (1844) Drury temp. Sug. 310 (a decision of Sugden LC in Ireland) and Billage v. Southee (1852) 9 Hare 532, 68 ER 623. These cases underlie the ready acceptance of the relationship in Mitchell v. Homfray, and the inclusion of the doctor and patient relationship in the list of established categories in Johnson v. Buttress; and in lists in Billage v. Southee at p540, and in Quek v. Beggs (1990) 5 BPR 11761.

38 In law the relationship of husband and wife does not explain, excuse or justify gifts which other circumstances of the relationship of the parties show were brought about by undue influence, and does not alter the consequences of any other relationship in which the burden of justifying a gift falls on the donee. That this is so appears clearly from the survey of equitable remedies available to a wife against transactions into which she entered for the benefit of her husband made in the judgment of Dixon J in Yerkey v. Jones (1939) 63 CLR 649. Dixon J gave an account of the principles underlying equitable remedies available to a wife in a lengthy historical survey at pp670 to 684. Yerkey v. Jones related to a voluntary benefit conferred by the wife in becoming surety for a debt of her husband. This forms part of a wider subject of relief in Equity for a wife against voluntary benefits conferred on her husband, and direct gifts of property to her husband are included in those benefits. Dixon J’s historical survey showed that the interventions made in Equity and the form of the modern rules were profoundly affected by the underlying common law disabilities and incapacities of a wife, by her disadvantageous position having regard to her husband’s control of her property, and by developing protection extended by Courts of Equity, passing through changes of opinion and shifts in the intensity of protection over many generations. The modern period begins with the Married Womens Property Act 1882 (United Kingdom) and similar legislation in Australia with which the protection available in Equity to a wife’s separate estate was made generally available to her property.

39 After reviewing many authorities of the Eighteenth and Nineteenth Centuries Dixon J said to the effect that the assimilation of dispositions by a wife in favour of her husband to transactions between strangers was not complete. Dixon J said (at 674):

It was not supposed that they dealt at arm’s length. Story (Equity Jurisprudence (1835), sec. 1395) said: - “The doctrine is now firmly established in equity that she may bestow her separate property, by appointment or otherwise, upon her husband as well as upon a stranger. But at the same time, courts of equity examine every such transaction between husband and wife with an anxious watchfulness and caution, and dread of undue influence.

40 At pp675-676 Dixon J said:

In In re Lloyds Bank Ltd.; Bomze and Lederman v. Bomze (1931) 1 Ch. 289, at p. 302 the present Lord Chancellor (Lord Maugham), speaking of gifts by a wife to her husband, said that it is well settled that the relation is not one of those in which the doctrine of Huguenin v. Baseley (1807) 14 Ves. 273 [33 E.R. 526] applies, “but where there is evidence that a husband has taken unfair advantage of his influence over his wife or her confidence in him, it is not difficult for the wife to establish her title to relief.” The reason for excluding the relation of husband and wife from the category to which the presumption applies is to be found in the consideration that there is nothing unusual or strange in a wife from motives of affection or even of prudence conferring a large proprietary or pecuniary benefit upon her husband. The Court of Chancery was not blind to the opportunities of obtaining and unfairly using influence over his wife which a husband often possesses. But in the relations comprised within the category to which the presumption of undue influence applies, there is another element besides the mere existence of an opportunity of obtaining ascendancy or confidence and of abusing it. It will be found that in none of those relations is it natural to expect the one party to give property to the other. That is to say, the character of the relation itself is never enough to explain the transaction and to account for it without suspicion of confidence abused.

The distinction drawn between large gifts taken by a man from the woman to whom he is affianced, as case to which the presumption applies, and similar gifts by a wife to her husband, a case to which it does not apply, a distinction sometimes condemned, is explained by this consideration and also, perhaps, by the consideration that the rule is one of policy and, upon a balance, policy is against applying it to husband and wife. But while the relation of a husband to his wife is not one of influence, and no presumption exists of undue influence, it has never been divested completely of what may be called equitable presumptions of an invalidating tendency.

In the first place, there is the doctrine, which may now perhaps be regarded as a rule of evidence, that, if a voluntary disposition in favour of the husband is impeached, the burden of establishing that it was not improperly or unfairly procured may be placed upon him by proof of circumstances raising any doubt or suspicion. In the second place, the position of strangers who deal through the husband with the wife in a transaction operating to the husband’s advantage may, by that fact alone, be affected by any equity which as between the wife and the husband might arise from his conduct. In the third place, it still is or may be a condition of the validity of a voluntary dealing by the wife for the advantage of her husband that she really obtained an adequate understanding of the actual nature and consequences of the transaction.

41 The first and third of the “equitable presumptions of an invalidating tendency” to which Dixon J referred have application in the present case. Of the first of them, relating to shifting the burden where circumstances raise any doubt or suspicion, Dixon J said at 677:

Of the three suggested rules or presumptions to which I have already referred, the existence of the first appears to be beyond question, but it is somewhat vague and indefinite. It may amount to no more than saying that the opportunities which a wife’s confidence in her husband gives him of unfairly or improperly procuring her to become surety for his debts or to confer some other benefit upon him is recognized as a matter of fact and taken into account with other facts as a reason for calling upon him to explain or justify a given transaction.

42 With the third, relating to the wife’s really obtaining an adequate understanding of the actual nature and consequences of the transaction, Dixon J dealt at some length at p678-680. As in other parts of this subject, there have been significant shifts in judicial opinion over time, and Dixon J was concerned, it seems to me, to repel overstatement of the need to show that the wife really obtained an adequate understanding of the actual nature and consequences of the transaction, and also to repel a view that the onus of proof of an adequate understanding passes, or readily passes to the husband as donee.

43 If it were assumed that the principles with which Dixon J dealt in Yerkey v. Jones apply to de facto relationships there is nothing in the principles with which Dixon J dealt which would exclude from consideration or deprive of effect a special relationship of influence such as that between medical advisor and patient between persons who were also husband and wife. The relationship of husband and wife has no generally exempting effect, notwithstanding that that relationship is not of itself presumed to be a relationship of influence (as to which see Dixon J at 678). Where, as in this case, the gifts are very substantial, and the husband is the medical advisor of the wife, the fairly easy path – “proof of circumstances raising any doubt or suspicion” – into the application of the first of the presumptions of an invalidating tendency to which Dixon J referred has been travelled.

44 The majority judgment (Gaudron McHugh Gummow and Hayne JJ) in Garcia v. National Australia Bank Ltd (1998) 194 CLR 395 shows that the opinions of Dixon J in Yerkey v. Jones continue to establish principles applicable notwithstanding large changes in the role of women in society since his Honour spoke in 1939, and still more since the Nineteenth and earlier centuries during which the doctrines evolved. Observations of their Honours at 404 show that extension of the protection for wives under the principles in Yerkey v. Jones to persons in relationships other than marriage is at least open to consideration. Their Honours said at 404:

Yerkey v. Jones

45 Notwithstanding views expressed by Kirby J in Garcia at 422 to 429 no extension of the principles to de facto relationships has occurred. It would not be simple to discern what form an extension would take. The High Court has authoritatively rejected dismantling the protection afforded in equity to wives, and it is hardly likely that an extension would take the form of applying to de facto relationships the part of the doctrine in which there is no presumption of undue influence without also applying at least the first of the presumptions of an invalidating tendency to which Dixon J referred. However that may be, there is no authoritative basis for any extension, and in my view, having regard to the evolution of the protection available to wives and its relation to their legal position in former times of relative disadvantage and lack of capacity and to measures taken by Courts of Equity and later by legislatures to overcome these disadvantages, there is no ready path of extension. Women in de facto relationships have never been in the same position of legal disadvantage and incapacity as wives formerly were, and have never had or needed the same protection in equity. In my view there is no reason in principle for regarding the existence of a de facto relationship as explaining or justifying a substantial gift, or as depriving of effect any circumstance of the parties which would otherwise give rise to a presumption of undue influence.

46 If (contrary to my opinion) the law expounded by Dixon J in Yerkey v. Jones is applicable, the first of Dixon J’s equitable presumptions of an invalidating tendency under which the burden shifts where there are circumstances raising any doubt or suspicion plainly applies to all the transactions. There are many circumstances which raise doubt or suspicion about the voluntary dispositions. These circumstances include, most prominently, the fact that Mr Bar-Mordecai was the medical attendant for Mrs Eveline Hillston and her late husband from 1979 onwards, and that his relationship with her arose out treating her husband and later herself. The circumstances in which Mrs Eveline Hillston acquired the surgery soon after her husband’s death and leased it to Mr Bar-Mordecai on terms disadvantageous to her, but very advantageous to him, create doubt and suspicion not only for that transaction but also for all later transactions with the surgery. Nothing ever happened to dispel the general air of suspicion and doubt, and suspicion and doubt are enhanced by there being a continuing series of transactions, from time to time over many years, disproportionate to any contributions or advantages flowing the other way. The arrangements made for payment of the purchase price of the surgery were obviously of far less value than simply paying the purchase price of $360,000 would have been; the acknowledgment and counter-acknowledgment relating to the $110,000 show that there was no real expectation that it would ever be paid, while the mortgage was at a favourable interest rate well below the market rate. Payments under the mortgage were not always made; for several years they were negatived by what Mr Bar-Mordecai calls the round-robin transactions. For the discharge of the mortgage there is the absence of any significant involvement of any lawyer or of any person other than Mr Bar-Mordecai evidence explaining the preparation and registration of the form of Discharge and Mrs Gudas, who had no overall understanding and acted only as a witness. The general air of suspicion and doubt was never dispelled, and there has never been shown to have been any person other than Mr Bar-Mordecai in whom Mrs Eveline Hillston placed overall confidence for advice or from whom she received any advice. Throughout the whole relationship her assets were severely depleted and her income was diminished in an extremely marked way, for reasons directly traceable to her dispropriation of herself in favour of Mr Bar-Mordecai; these things of themselves create suspicion and doubt.

47 In my opinion the existence of a de facto relationship between donor and donee would not furnish the answer to an inquiry into whether a gift should be set aside on the ground of undue influence; the history of the gift and the facts and circumstances of their relationship take their place in the wide array of facts and circumstances which must be addressed in each case, in accordance with the detailed address to those facts required when this jurisdiction in invoked. On the need for precise examination of the particular facts see Jenyns v. The Public Curator (Queensland) (1953) 90 CLR 113 at 118-119 (Dixon J):

The jurisdiction of a court of equity to set aside a gift or other disposition of property as, actually or presumptively, resulting from undue influence, abuse of confidence or other circumstances affecting the conscience of the donee is governed by principles the application of which calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the donor. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell’s generalisation concerning the administration of equity: “A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case”: The Juliana (1822) 2 Dods. 504, at p. 522.

48 In Royal Bank of Scotland v. Etridge (No.2) [2001] 3 WLR 1021 at 1031 [18] Lord Nicholls of Birkenhead gave an account at p.1030 para 13 to para 19 of the burden of proof and presumptions in undue influence cases. His Lordship gave an account of the law in which what is spoken of as a presumption of undue influence is a rebuttable evidential presumption in some instances, but at para 18 distinguished from an evidential presumption a different form of presumption which arises in the case of relationships within a special class. His Lordship said:

Examples of relationships within this special class are parent and child, guardian and ward, trustee and beneficiary, solicitor and client, and medical advisor and patient. In these cases the law presumes, irrebuttably, that one party had influence over the other. The complainant need not prove he actually reposed trust and confidence in the other party. It is sufficient for him to prove the existence of the type of relationship.

49 In my opinion the characterisation of the relationship between Mrs Eveline Hillston and Mr Bar-Mordecai as a de facto relationship is not itself determinative for the claim to set aside gifts; what are of significance are an examination, so far as evidence admits, of the precise circumstances of the parties and of each gift and consideration of how the intention of Mrs Eveline Hillston to make each gift was produced. Characterisation of her relationship with Mr Bar-Mordecai as a de facto relationship or as analogous to a marriage is not the central subject for consideration, and is not a ground of defence.

50 Statutory definitions of de facto relationships have the importance given to them by the statutes in which they are found. A showing whether or not any of those statutory definitions applies has no particular legal significance for the availability of equitable remedies against the gifts. In Mr Michael Bar-Mordecai’s claim under the Family Provision Act it is however important to apply the definition of “eligible person” and the provisions of that Act bearing on de facto relationships. In the probate litigation before Einstein J evidence and the disposition of the case dealt with the strongly similar but not identical definition in s.32G of the Wills Probate and Administration Act 1898. Another similar but not identical definition was, during Mrs Eveline Hillston’s lifetime, found in subs.3(1) of the De Facto Relationships Act 1984, now the Property (Relationships) Act. These similar statutory definitions are not identical, either in terms or purpose, with the definition of “eligible person”; none of them is applicable in Mr Allan Hillston’s claim to set aside the gifts.

51 Issues, Side Issues and Credit. Mr Michael Bar-Mordecai bears the burden of showing in relation to each gift that the gift was not produced by undue influence or, in the words of Dixon J, “… that it cannot be ascribed to the inequality between them which must arise from his special position.” The hearing was lengthy because Mr Michael Bar-Mordecai’s case took the Court to many facts and circumstances relating to the lives of Mrs Eveline Hillston and himself and their association, and to the circumstances in which the gifts were made. In doing so he dealt with many circumstances which, while not entirely irrelevant, could not be regarded as of great significance, and also with a number of circumstances which, although his sense of their importance was obvious, do not in reality have any bearing on what the Court is to decide. His presentation of the case was affected by evidently strong antipathies which he feels towards the Hillston family, particularly Mrs Eveline Hillston’s late husband, and also Mr Allan Hillston, his brother Mr Alex Hillston and their mother Mrs Jane Hillston, widow of the late Jack Hillston’s brother Simon Hillston. Although Mr Michael Bar-Mordecai called many witnesses, to a large degree his case depends upon facts and events for which his own evidence is the only significant basis. Mr Bar-Mordecai’s evidence and submissions contained many assertions of misconduct by other witnesses or persons otherwise involved in the narration. It is very difficult to sort out relevant passages in his evidence from the maze of incidental expressions of hostility and of marginally significant and frankly irrelevant matter in which relevant matter which he had to put was often enveloped. Mr Bar-Mordecai pursued strange antipathies and vendettas ornamented with assertions of conspiracy, perjury and other misbehaviour for which there was little or no apparent basis. He asserted that Mrs Jane Hillston and Mrs Betty Connell came to the Eastbourne Avenue house as spies. He spent considerable time in giving evidence of facts and circumstances adverse to Mr Jack Hillston, although it is difficult to see any importance those matters had. His hostilities extended to persons closely related to him, including both his parents, whom he asserted were senile. It was his evidence that he had accused them of swindling him in a transaction relating to family property. He called them to give evidence and relied on their evidence, not in retrospect with great success, as some of what they said was adverse to his case.

52 So far as appears from evidence, including evidence of Mr Bar-Mordecai himself, Mrs Hillston was very attached to her husband Mr Jack Hillston and showed every sign of concern and devotion when he was disabled by a stroke and in a vegetative condition, visiting him frequently, ensuring that he was receiving proper attention, and showing Mr Bar-Mordecai signs of being in a desperate state when confronted with difficulties in visiting him at a distant hospital. After his death in a letter Exhibit CD of 10 August 1983 to Mr Selinger she acknowledged his sympathy and compassion and spoke of the event as “… the most tragic moments of one’s life.” Mrs Hillston reserved a niche next to the crematorium niche in which the late Mr Jack Hillston’s ashes were deposited. She used to visit the site where the ashes were deposited every month until about the middle of 1993 when her health began to decline; Mr Bar-Mordecai says that he accompanied her. In her will Mrs Hillston did not provide for the reserved niche to be used for deposit of her remains, but directed that her ashes be scattered on the waters at Clovelly. Mr Bar-Mordecai caused Mrs Eveline Hillston’s body to be buried notwithstanding her wish, stated in her will, that her body be cremated.

53 A great deal of time and attention was given during the hearing to issues relating to Mr Bar-Mordecai’s credit. On many subjects he was shown by cross-examination, or even by comparison of evidence which he has given at different places, to be an unreliable witness. He has often given evidence which contradicts his evidence in other places or which introduces qualifications or supplementary explanations so far-reaching as to disavow evidence which he has given elsewhere. From time to time, when confronted with some adverse evidence, he produced new affidavits, with new explanations of conduct or events which he could well have produced earlier, if they were true. He did not produce the evidence of persons whom, in a complete and convincing presentation of his case, it would reasonably be expected that he would call. He left significant parts of the events with little or no explanation; his case was particularly unsatisfactory in not giving credible circumstantial explanations of the evolution of decisions of Mrs Eveline Hillston to make gifts, and his own participation in their evolution.

54 Mr Bar-Mordecai gave evidence which was generally unsatisfactory or incomprehensible to explain the course of events in which he had made a correcting affidavit, but had not put all of the correcting affidavit into evidence after tendering in evidence the affidavit which it corrected. This affected the important question whether, during the last four years of Mrs Hillston’s life, he generally paid for all her medical expenses, or for some of them – t.1034-1038. The cross-examination, which continued for many days, produced many similar debacles and was destructive of his credibility.

55 Mr Bar-Mordecai made many claims that he was under difficulties in presenting his evidence because he suffered memory loss as a result of an injury in a motor accident in January 1992; however he produced no medical evidence which confirmed the existence of any such memory loss, or explained how it might have arisen, although very often challenged by the plaintiff’s counsel to produce such evidence. He described it as intermittent memory loss (t990 l26) and described his short term and long term memory defects. He very often explained himself in evidence by reference to his alleged memory loss. However on many occasions he gave evidence, or made statements during submissions which showed striking capacity for recollection (if indeed the recollections which he then apparently displayed were genuine). He professed to have remarkably detailed and complete recollections of many events, even in the distant past, and he produced such recollections on occasion with great speed, although on other occasions he professed to have extreme difficulty in calling to mind circumstances which may well have been quite important both at the time and since.

56 I do not accept that Mr Bar-Mordecai has any disability or condition which has diminished his powers of recollection. In my finding he simulates memory loss when it is suitable to him to do so, and on the whole he has rather better powers of recollection than the average person, although he is not frank or sincere in what he claims to recollect, or not to recollect.

57 Mr Michael Bar-Mordecai gave evidence, without any apparent sense of anomaly, of behaviour of his own in various respects which show that he is an unreliable person. Striking examples of this are his behaviour and attitude to sexual relationships with women patients, including Mrs Eveline Hillston, and his making in 1986 and keeping a videotape in which he recorded extremely explicit statements by him and by her about their sexual conduct together which no self-respecting person would wish to have permanently recorded. Statements by her recorded in that videotape show that she was not aware while it was being made that a permanent record was being made, and that when she found that it was she requested him to destroy it. His disregarding her request and keeping the videotape, available for production in court 16 years after it was made, show that he was quite faithless in his relationship with her and in his attitude to her personal life and her feelings. Although there are statements by Mrs Eveline Hillston on the videotape which can properly be referred to in evidence as tending to support the existence of a de facto relationship, there are few other statements in evidence attributable to her which might have that effect; three or four witnesses speak of statements by her which might be thought to do so, but there is no written record of any social, official or business communication by her to any person which bears out in any way the existence of a de facto relationship or other relationship analogous to marriage between her and Mr Bar-Mordecai, either in her perception or in reality. Whenever any written material from her deals with anything which could be regarded as approaching the subject, that material invariably tends against the existence of a de facto relationship.

58 Mr Michael Bar-Mordecai dealt with this large difficulty by including Mrs Eveline Hillston among the many persons of whom he said that their statements adverse to his case were lies. In his written submissions Mr Bar-Mordecai submitted that the litigation has arisen out of several facts, and among those he included:

(b) The deceit perpetrated by the Deceased to her:

(i) Professional advisors;

(ii) Her family members;

(iiii) The hospital administrators

59 Although in evidence he professed profound respect for and emotional involvement with Mrs Eveline Hillston and deep grief at her loss, his treatment of material in evidence emanating from her and his inclusion of her among the persons to whom he attributed lies tends strongly against acceptance of any view that he truly respected her or regarded her highly.

60 Mr Bar-Mordecai in evidence used high-flown language about his relationship with Mrs Eveline Hillston and described her as “my soul mate, a tower of strength, a woman of valour.” Recurringly during the hearing, when giving evidence and also when addressing the court he expressed the depths of his feelings for Mrs Eveline Hillston and of his grief, displaying signs of being emotionally overcome, unable to continue speaking and shedding tears. I do not regard these as true expressions of his feelings. Events in the course of the relationship, during which he accepted large gifts amounting to most of her property, his relationships with other women, the way he spoke of Mrs Eveline Hillston to patients and other persons and his moving with no real interval into a passionate physical relationship with Ms Viola Yakovleva after Mrs Eveline Hillston’s death show that his true feelings cannot have been those he affected to display.

61 On a number of subjects Mr Bar-Mordecai gave evidence, and adhered firmly to positions which appear inherently improbable, although they were not all definitively shown to be untrue. Of course many things happen in life which are improbable, and no one can protect himself against the occurrence of improbable events as part of facts and circumstances which are important for the establishment of his rights; if improbable things have happened, one must give evidence of them. However a cumulation of many such events is a difficulty for acceptance, by a tribunal of fact, of evidence of a person who has encountered what come to seem too many of them. Something of this difficulty can be understood from considering the circumstance that there is nothing in writing from Mrs Eveline Hillston confirming the existence of a de facto relationship, and a number of documents which are either inconsistent with it or which contain expressions which it is improbable she would have made if there was one; yet on the other hand evidence attributes to her ready oral acknowledgment, to slight acquaintances and persons who were not particularly good friends, of intimate aspects of her personal life.

62 Sex, Ethics and Probabilities. An important part of his claim as he presented it was his evidence to the effect that until what he says was the initiation of their sexual relationship on 23 August 1983, less than three weeks after the death of her husband ended a marriage which had lasted fifty years, Mrs Eveline Hillston had not previously experienced sexual intercourse; his evidence is that she was sexually initiated, at the age of 72, by him at the age of 36, and that his medical expertise equips him to attest to her then state of virginity. There is no kind of confirmation from her of this account of her sexual history and experience. His evidence would show further that after she then embarked on a sexual relationship with him, that relationship continued for almost 11 years, with great frequency and vigour of sexual intercourse. Mr Bar-Mordecai alleged, in his verified Defence para 2(b) to the effect that Mrs Eveline Hillston and he had sexual intercourse four times a week for the duration of the relationship. At several points in his oral evidence he asserted to the same effect. He made a similar statement in her Medical Records in his practice. He claimed that their sexual relationship continued with frequency and vigour even in the last year of her life, when a written statement by her shows that she felt that she was suffering from significant ailments and in such a poor state of health that she wished for euthanasia. It is possible that all this may be true, it has not been incontestably proved to be untrue, but the improbabilities, in my appraisal, are very great.

63 Mr Bar-Mordecai gave evidence (affidavit 24/5/98, paras 49 and 50) to the effect that in response to questioning from Mrs Hillston about Euthanasia in about June 1993 he told her that she was terminal in view of her cardiac and respiratory status and that from then on she told him “I want to die. The pains are becoming unbearable in my right knee and in my chest with the angina.” She also told him (para 52) “I don’t want a long slow painful death and I certainly don’t want to end up in hospital like Jack in a vegetative state.”

64 Mrs Hillston wrote out in her handwriting and signed, in the presence of Mr and Mrs Gudas, who signed as witnesses, a document headed “To whom it may concern” dated 30 August 1993, referred to as the euthanasia letter, Exhibit X. Mr Bar-Mordecai assisted her in the preparation of this letter and after it was signed it was kept in his medical file relating to Mrs Hillston. It is in these terms:

30 August 1993

TO WHOM IT MAY CONCERN

This is to certify that I EVELINE HILLSTON of 30-32 Eastbourne Ave, Clovelly, am 82 years of age. I was born in Romania on 21.12.1910.

I have lived a long, varied and interesting life. For a few years I have become more and more distressed with my breathing. I am able to walk only for 10-20 meters at a time and need to have somebody next to me on whom I can rely because I become severely short of breath and unsteady on my legs. I am also breathless on waking up in the morning, and suffer of nocturnal breathlessness.

I also suffer continuously of severe pain in my right knee and less severe in my leg and hip. I cry out in pain when I move my right knee, even when I am in deep sleep. Sometimes the pain is of such intensity that it wakes me up and I stay wake for hours thereafter. This condition has been aggravated by various falls. On the 24th of this month I fell down again onto a concrete surface and nearly sustained a fracture of my hip. I have been offered a right knee replacement by Dr L. Kohan but have no stamina to endure the pains associated with the post-operative care for the following few months.

Besides, I know now that I suffer of intractable angina; my cardiologist mentioned that it may be advisable to decide on cardiac surgery. It will not however, in the best of cases, help me with my arthritis condition, with all the pains and suffering. I have started to lose my long term memory, and am unable to calculate or care for myself as I used to. I am gradually losing my hearing and my eyesight. Because of all that I am convinced that I should not contemplate any operation.

I witnessed my husband’s demise over a period of years, with two strokes in 1982 and 1983. I cannot accept to undergo the degradation he suffered in the Repat. Gen Hospital “Concord”, and the other private Hospitals that cared for him.

In view of my continuous and painfully obvious deterioration on ALL FRONTS I have requested the option of Euthanasia feeling that I should no longer have to endure continuous and daily suffering, and realising that in view of my respiratory as well as cardiac condition I am terminal.

I have discussed Euthanasia with my medical practitioners, as well as Leah Gorbatov, a medical student, to whom I explained at length my needs for Euthsanasia.

I have struggled through life, working hard and always trying my best. I now wish to die with dignity.

Yours faithfully,

65 Mrs Hillston was a patient in the Wolper Jewish Hospital from 10 April 1994 to 24 April 1994 suffering from chronic airways limitation and pre-infarction angina (hospital records in exhibit 17).

66 Mr Bar-Mordecai said on affidavit that they had a very active sex life, referring to the whole relationship to the end of her life, and made a self-serving entry in his medical records relating to her which on its face would bear this out. He claimed that notes in her diaries which are objectively incomprehensible in some way record that this is so. Mr Bar-Mordecai’s basis for claiming that the diary entries had this meaning was (t982) “It was recorded in my presence, it was recorded after discussion with Eveline why it should be marked in such a way, and she did it usually after intercourse in bed.” Notwithstanding this answer he was unable to explain the meaning of the markings. His evidence of what led to her making the record (affidavit 24 May 1998, paras 45-48) was to the effect that he took her medical history of health care indicators including sexual activity:

We discussed sexual frequency and I documented that we had intercourse four times per week since 1983 on the average. Sometimes it would be twice a day but that would only be counted as one sexual episode per 24 hours.

242 In relation to subs.16(3) Mr Bar-Mordecai did not in truth offer any evidence of a cause for the application not having been made by 25 December 1995.

243 During the prescribed period Mr Bar-Mordecai actively pursued a claim to be appointed administrator of Mrs Eveline Hillston’s estate on the ground that she died intestate and that he was her de facto spouse under s.32G of the Wills Probate and Administration Act and hence was entitled to the whole of her estate on intestacy, having regard to s.61B(1)(ii) read with s.32G. If that claim had been successful there would have been no need for him to make any application under the Family Provision Act, or to establish that he was an eligible person within subs.6(1), which closely resembles the definition in s.32G. It was open to him to make a claim under the Family Provision Act within the prescribed period, at the same time as he claimed administration or otherwise, so as to obtain consideration of his claim in the obvious contingency that he might not succeed in showing that there was an intestacy; the proposition that there was an intestacy depended on showing that the will of 31 August 1989 had been revoked. The outcome of the probate proceedings (to reduce the very elaborate outcome to a short statement) was that Mr Bar-Mordecai did not establish that the will had been revoked and that there was an intestacy; for that reason the question whether he was Mrs Eveline Hillston’s de facto spouse within s.32G was not determinative of the probate proceedings, but much evidence was given, many witnesses were called, much hearing time was given and findings were made by Einstein J on the question whether Mr Bar-Mordecai was the de facto spouse within s.32G; his Honour found that he was not.

244 Plainly if Mr Bar-Mordecai had brought a claim under the Family Provision Act within the prescribed period both proceedings, if managed in any reasonable way, would have been heard together and the issue whether he was an eligible person would have been tried at the same time as the issue whether he was a de facto husband under s.32G; would have been determined on the same body of evidence, and would not have been successful. The estate and the other persons interested in the estate, including Mr Allan Hillston would have been involved in one hearing, not two hearings on the two closely similar definitions, would have been put to the trouble and expense of obtaining a decision once only and not twice, and would have incurred the expense of one hearing and not of two hearings. By not commencing the proceedings within the prescribed period Mr Bar-Mordecai has brought about the result that he has been able to go through two trials on substantially similar issues whereas if he had acted within the prescribed period the outcome would have emerged in a way which (although not simple), would have been far simpler than the process through which Mr Allan Hillston and the estate have now been taken. Mr Bar-Mordecai has found a way to litigate a second time an issue which he has already taken through a lengthy trial and has lost.

245 Mr Bar-Mordecai consulted solicitors about the estate of Mrs Eveline Hillston in July 1994 and received from them written advice. A letter (Exhibit D) written by Mr David Tonge, a partner of Messrs Barkus Pearson, to Messrs Clayton Utz on 6 July 1994, a copy of which was sent to Mr Bar-Mordecai recorded that Mr Bar-Mordecai had been referred to Barkus Pearson by Mr John Lees solicitor in the belief that there appeared to be Family Provision Act problems. The terms of the letter show clearly that the possibility was brought to his attention of his making a claim under the Family Provision Act if disputes about claims against the estate arose.

246 In Exhibit F is a letter of advice written to Mr Bar-Mordecai by Mr Richard Toltz a partner of Messrs Clayton Utz on 7 July 1994. This letter reviewed Mr Bar-Mordecai’s rights in relation to the will of 31 August 1989, a copy of which Messrs Clayton Utz had seen. The letter reviewed what his rights would be if the will had been revoked and if it had not been. As well as advising on rights as de facto husband if the will were revoked the letter said “Under her will dated 31st August, 1989 you have the right to remain in occupation of Unit 1/6 Mount Street, Randwick during your life without any fee or rental; and otherwise except for the furniture and contents of that property you have no beneficial entitlement under the will. In these circumstances we note that in view of your eleven year relationship as her de-facto husband you may consider making an application under the Family Provision Act for additional benefits from her estate.” Exhibit F also includes a follow-up letter of 19 July 1994 indicating that no action would be taken until further instructions; Mr Bar-Mordecai did not further instruct Messrs Clayton Utz.

247 Mr Bar-Mordecai did not call the evidence of Mr Gerard Kodomichalos, the solicitor who acted for him early in the Probate proceedings and may well have been in a position to give evidence about whether or not Mr Bar-Mordecai was given advice by Mr Gerard Kodomichalos or by counsel, or otherwise when Mr Kodomichalos acted for him, about whether or not he could or should make a claim under the Family Provision Act. He called the evidence of Mr Kodomichalos’ elderly father, whose evidence in chief was peripheral at best, but showed that there was no reason to think that there would be difficulty in calling his son. I infer that the evidence of Mr Gerard Kodomichalos would not have assisted Mr Bar-Mordecai’s application for an extension of time.

248 It was also shown in cross-examination that Mr Bar-Mordecai had given evidence in the Probate proceedings that on Saturday 25 June 1994, the day Mrs Hillston died, he met a solicitor in Bondi Junction who gave him advice about Mrs Hillston’s will, and advised him that he should only discuss the fact that Mrs Hillston had destroyed her will in front of him with his solicitors; he met the solicitor on the pavement outside a coffee shop in Bondi Junction, did not know who he was, his name, address or where he practised; he had not seen him before or since and did not receive a bill; and as far as can be understood Mr Bar-Mordecai did not follow the advice and it was not until late in 1995 or early 1996 that he discussed with lawyers the destruction of the will. This is a subject on which Mr Bar-Mordecai gave evidence which was grossly improbable.

249 There were some curious events in the history of the probate proceedings which are very discreditable to Mr Bar-Mordecai. On 15 August 1994 Mr Gerard A. Kodomichalos, solicitor then acting for Mr Bar-Mordecai maintained on his behalf, in a letter Exhibit C to Australian and New Zealand Banking Group Ltd, that he was the administrator of the estate, that he was the de facto spouse and had instructed the solicitor that Mrs Eveline Hillston did not leave a will, that he intended to apply for letters of administration and that he wished to inspect the contents of her safe custody box for that purpose. Endorsed on the letter was a statement by Mr Bar-Mordecai that he was the administrator. Mr Bar-Mordecai applied in common form for letters of administration by Summons filed on 23 December 1994 in which Mr Kodomichalos acted for him. In support of that application he filed his affidavit of 23 December 1994 entitled “Affidavit of Applicant for Administration”, which he read in these proceedings, and on which he was cross-examined. In that affidavit he swore that he was the de facto husband of Eveline Hillston and said “3. I believe the deceased did not leave a will or document purporting to embody the testamentary intentions of the deceased” and went on to state a number of searches which he had made, in her private papers and through his solicitor leading to the statement “4(e) My own searches and those of my solicitor have not located any will made by the deceased.” The affidavit dealt with the will of 31 August 1989 only by producing a letter from Messrs Blessington Judd which showed that they forwarded it to her on 17 September 1990 and she gave an acknowledgement by letter.

250 This affidavit was entirely lacking in frankness. Mr Bar-Mordecai knew that Mrs Eveline Hillston had made the will of 31 August 1989 as he participated in her preparation to make it; he also knew that she had uplifted the will from her solicitors in September 1990 and kept it at her home as he participated in those events. However there was no mention of his part in uplifting the will or keeping it at the house; no frank account of his searches could have failed to mention his knowledge of those events. Nor was there any mention of the event which he later came to allege in which he was present when Mrs Eveline Hillston revoked the will by tearing it up. Thus the case he put forward when applying for letters of administration was to the effect that the will had been returned to her by her solicitors and had not been found on search after her death from which it should be inferred that she had in some manner revoked it. This continued to be the case he put forward to the Court and to his opponents until late 1997.

251 The probate proceedings became contentious and Mr Bar-Mordecai by Messrs Minter Ellison solicitors who were then acting for him filed a Statement of Claim (Ex CM) in the Probate proceedings on 18 September 1995, verified by his affidavit of that date. The Statement of Claim alleged that the deceased died intestate. In his Defence and Cross-claim filed on 3 October 1995 (Ex Z) Mr Allan Hillston, who was the second defendant, denied that the deceased died intestate and cross-claimed for probate of the will giving its date as 30 August 1989 (Ex CN). In his Defence to the Cross-claim (Ex AA) filed on 8 November 1995 and verified by his affidavit of 6 November 1995 Mr Bar-Mordecai pleaded “3. In answer to the whole of the Cross Claim, the Cross Defendant says that the deceased is presumed to have destroyed the said Will, with the intention of revoking it” and gave particulars showing that she had obtained the original will from her then solicitors about 17 September 1990 and “The original Will has not been able to be located since the death of the deceased.” These verified particulars are quite inconsistent with the case of revocation by destruction which Mr Bar-Mordecai later advanced.

252 In an affidavit Mr Bar-Mordecai made in the Probate proceedings on 9 January 1997 he said to the effect that Mrs Hillston had told him that she had destroyed her will, but did not refer to the fact (as he later alleged to be the fact) that he had seen the will torn up in front of himself; and he did not put that account of what had happened forward in any way known to the Court or to his opponents until he made an affidavit saying to that effect on 20 August 1997.

253 Mr Bar-Mordecai claimed in evidence before me that he told lawyers who were then acting for him, late in 1995 or in 1996, that Mrs Eveline Hillston had destroyed the will in his presence, and that he did not raise that case because he was told that no-one would believe him. He called the evidence of Mr Hallen SC and of Ms Rebecca Lynch solicitor with a view to establishing that this was so. Much of what they said was inconclusive; Mr Hallen’s evidence was based on recollection from events from well over six years before, unaided by notes; Ms Lynch had some assistance from notes.

254 It is clear that Mr Bar-Mordecai told Ms Lynch on 30 January 1996 that Mrs Eveline Hillston destroyed her will; Ms Lynch’s note Exhibit CN says: “Mrs H Destroyed Will Feb 1992 when B-M at home with two broken legs after argument with Jane Hillston in kitchen.” This subject may have been mentioned at a conference with counsel. This account is not the same as that in his affidavit of 20 August 1997 in which he says that the will was torn up in July 1992, some months after Mr Bar-Mordecai was at home with two broken legs (or, he preferred to say, broken ankles).

255 Assisting his credit may have been Mr Bar-Mordecai’s object in giving and calling evidence that he had told lawyers that the will had been destroyed a considerable time earlier than he brought that allegation forward in a way known to other parties. I do not think that these circumstances do in any way assist his credit; these circumstances would not overcome disadvantages for his credit arising from the fact that he first advanced and verified a case that the will should be presumed to have been revoked because it was last known to be in her possession and was not found after her death, whereas the case he later came to maintain meant that that case was not true or not frank. He supported the case which he later disavowed by his own affidavit evidence, as he later supported his later case. Calling the evidence of Mr Hallen and Ms Lynch did nothing to improve my adverse view of Mr Bar-Mordecai’s credit based on his affidavits, verified pleadings and manner of conducting the probate proceedings and bringing forward what, finally, was his position about revocation. However that may be, the exercise did nothing to improve his case on sufficient cause and allowance of an extended period for Family Provision proceedings.

256 Mr Bar-Mordecai’s oral evidence would suggest that in fact he did not make searches for Mrs Hillston’s will. The position is very confused, as in an early affidavit in the probate proceedings he said he had conducted searches for the will, in a later affidavit in the Probate proceedings he corrected this and said to the effect that no searches were ever made; before me he did not read that passage in the correcting affidavit but when challenged in cross-examination he adhered to the correction, not to the passage which he had put in evidence. It is difficult to know what to make of this; if he had actually known that the will had been revoked because he had been present when it was torn up, it is hardly possible that he would have searched for it. These difficulties have contributed to my view that his evidence generally is unreliable.

257 There were inconsistencies in his affidavit evidence at different places relating to his having made or not having made a search among Mrs Hillston’s private papers for a will – t.1022-1023. This led him to give this uncomfortable answer (t.1033, l.24-28):

Q. So you are a person, are you, who is prepared to put in a lie in an affidavit to be placed before the Supreme Court of New South Wales because your solicitor tells you. Is that the kind of person you are?

A. That’s the kind of person that I was then.

258 When dealing with the circumstances of his making a false affidavit in the Probate proceedings he said (t1034, l.6):

A. I didn’t know the significance of any litigation because I had never been involved in any litigation.

259 It is altogether clear that the availability of the opportunity to make an application under the Family Provision Act if the will was not revoked but took effect was brought to Mr Bar-Mordecai’s attention by lawyers in July 1994. Throughout the probate proceedings he maintained, without success, the claim that the will had been revoked; although what he put forward in support of this was not consistent throughout. His case that the will had been revoked was rejected by Einstein J whose decision conclusively establishes that the will was not revoked in any manner, and in particular establishes that it was not revoked by being torn up by Mrs Eveline Hillston in Mr Bar-Mordecai’s presence, as his case came to be. As this has been established it is clear that Mr Bar-Mordecai did not act reasonably in maintaining that the will had been revoked in his presence, and in continuing to do so, falsely, for several years. It should be inferred that the reason for his not bringing proceedings under the Family Provision Act in 1994 or 1995 was or included that he preferred to maintain a different but false claim which if it had succeeded would have brought him the whole of the estate on a clearer basis. He had full opportunity to bring forward a claim under the Family Provision Act within the prescribed period as an alternative claim. What he did caused great prejudice to the estate and persons interested in it by involving the estate in protracted litigation in probate, and this prejudice has been greatly compounded by his attempt to raise much the same matter in his claim under the Family Provision Act. It should be found that there was not sufficient cause for his not making his claim by 25 December 1995.

260 If Mr Bar-Mordecai’s claims were to be considered under s.7 there is in my view no real prospect that the court would decide that it should order provision to be made for him or that the court should be of the opinion that provision ought to be made for his maintenance or advancement in life having regard to the circumstances of the present time. In Mr Bar-Mordecai’s circumstances at the time of Mrs Eveline Hillston’s death, he was a medical practitioner with a long-established busy and successful medical general practice, and (although his position on this subject has not been consistent) I infer that he had high earnings, in all respects sufficient for his own maintenance and advancement in life. No-one was dependent on him. He had liabilities to the estate in respect of his ownership of a one-third interest in the Clovelly house, the surgery and gifts of money which, as determined elsewhere in this judgment, the estate was entitled to have set aside. His evidence does not establish what other resources he then had, or that he had no other resources, and in view of his capacity for earnings over the years it is not at all likely that he had no other resources. The provision made for him in Mrs Eveline Hillston’s will was, in his circumstances, generous and included provision for his housing for his lifetime in the home unit, and an entitlement to the furniture and contents of the home unit. He was also given a five percent interest in the residue of her estate, and a right to purchase assets at market value. He had not behaved well towards Mrs Eveline Hillston in her lifetime, as by the exercise of undue influence he had gained the apparent ownership of much of her property, subject to her entitlement in equity to have the gifts set aside, and his doing so had greatly reduced her income. He had significant obligations to Citibank, and although he has maintained that those obligations were incurred, wholly or partly, for repairs and renovations to the Clovelly property he has not proved that this was so and I have found that the true view of the obligation to Citibank is the explanation Mrs Eveline Hillston gave for it, that is that it was a personal loan to him. He had quite sufficient resources for any discernible needs and he was an undeserving claimant.

261 His affairs are now in a very poor state but that arises out of his having maintained unsuccessful litigation against the estate on a false basis and having incurred large obligations for costs, and also out of his name’s having been removed from the medical register on the ground of his own professional misconduct. In these circumstances there are in my view no real prospects that, if an extension of time were granted, he would obtain any significant further provision. In my judgment I should not, having regard to all the circumstances of the case, by order allow a further period for his application in accordance with subs.16(2). In any event I am required by subs.16(3) not to make an order as sufficient cause has not been shown for the application’s not having been made by 25 December 1995. For these reasons proceedings 1707 of 1999 will be dismissed.

262 Claim to revoke Letters of Administration. It is very difficult to identify what were claimed in proceedings 3039 of 2002 to be grounds on which Mr Allan Hillston should be removed as administrator of the estate. My interpretation of Mr Bar-Mordecai’s submissions, which were difficult to relate to the terms of the Summons or of the Statement of Claim, is that he contends that Mr Allan Hillston misconducted himself by being a party to and a witness in the probate proceedings, in which Mr Allan Hillston and the interests related to his were altogether successful; the contention was to the effect that success was obtained unjustly with the use of evidence which Mr Allan Hillston knew to be false. It was claimed that he had knowingly put forward false evidence of himself, Alexander Hillston, Professor Kraemer, Mrs Betty Connell and of others with the object of claiming Mrs Eveline Hillston’s estate. The proof that it was false is that it conflicted with Mr Michael Bar-Mordecai’s evidence. There is no substance whatever in this part of the case; the issues of fact in probate were tried to a conclusion, Mr Bar-Mordecai’s evidence was rejected and the evidence which he claims Mr Allan Hillston should not have put before the Court was found to be true. There is no basis on which I should find that Mr Allan Hillston knowingly relied on false evidence in the Probate proceedings. There were further complaints to the general effect that Mr Allan Hillston had misconducted himself by bringing the present proceedings, by spending money of the estate on them, and by opposing Mr Bar-Mordecai on the gifts, the de facto relationship, his claim under the Family Provision Act and generally. These contentions were made without any regard to the duty of the administrator to uphold the interests of the estate and to put forward for adjudication any case reasonably available in opposition to claims such as Mr Bar-Mordecai makes and in the interests of the persons who are entitled under the will, such as the claim to set aside gifts. There is no basis whatever for concluding that Mr Allan Hillston has not acted properly as administrator, or that he ought to be removed. For these reasons proceedings 3039 of 2002 will be dismissed.

263 Claims based on Undue Influence. Mr Bar-Mordecai has not rebutted the presumption of undue influence in relation to any of the gifts of money or other transactions which Mr Allan Hillston seeks to set aside. Demonstration that the gifts were produced by undue influence goes far beyond a rebuttable but unrebutted presumption: undue influence is, on the findings I have made, the true and only explanation for the gifts. Mr Bar-Mordecai did not put in evidence any credible account or any real explanation of the acts or events which led up to the making of the gifts of money or the evolution of Mrs Hillston’s intention to make them. All the gifts and transactions should be set aside and he should be treated as holding his interest in the surgery and the Eastbourne Avenue property as trustee for Mrs Eveline Hillston and for her estate.

264 This court in proceedings under s.66G of the Conveyancing Act 1919 appointed trustees for the sale of the property at 30 Eastbourne Avenue and those trustees effected its sale by an agreement of 4 April 2001 for $1,955,000. On completion of the sale on 17 May 2001 the trustees realised a net amount of $1,839,368.80 and on 20 June 2001 under the directions of the court they paid the greater part of that amount to the plaintiff as administrator of Mrs Eveline Hillston’s estate and retained $579,557.46 referrable to Mr Bar-Mordecai’s one-third interest as tenant in common. The trustees still hold that amount in investment at interest and subject to the direction of the Court. For the purposes of equitable remedies the amount invested and interest thereon should be identified with the interest in the Eastbourne Avenue property which was given to Mr Bar-Mordecai.

265 The same trustees were appointed by order of the Court made on 15 December 2000 to sell the surgery property, which they sold on 12 December 2001 for $2,855,000. An interlocutory order made on 16 February 2001 required possession to be given up by 23 February 2001, and as the trustees were able to complete the sale soon after that date it should be taken that the order was complied with. They completed the sale on 6 March 2002 and their net realisation, after payment of costs and expenses including GST associated with the sale, was $2,209,186.29, which they retain in investment at interest and subject to the control of the court. There may be further proceeds from a fund of $10,000 set aside to meet any remaining expenses of or incidental to the sale, referred to in para 4 of the affidavit of W.A.K. Hart of 7 March 2002. Those investments with interest should be treated for the purpose of equitable remedies as representing in part the surgery the gift of which is now set aside. However the amount realised was reduced by the need that the trustees for sale should pay out to Citibank $439,978.42 to discharge obligations under Mr Bar-Mordecai’s mortgage to Citibank over the surgery, and Mr Bar-Mordecai is further chargeable with that amount, together with interest from 6 March 2002.

266 In 1988 or 1989 Mrs Eveline Hillston gave Mr Bar-Mordecai $40,000 as a contribution towards building a new waiting room at the surgery; the new waiting room was in fact constructed. It should be taken that the amount of $40,000 was in fact used for that purpose, and for that reason Mrs Eveline Hillston’s estate should not recover any remedy in respect of that payment.

267 The plaintiff makes a claim, consequent on its claim that the sale of the surgery should be set aside, for the amount of rent which would have been payable to Mrs Eveline Hillston and her estate under the lease of the surgery dated 9 September 1983. The commercial lease ceased to operate and the equitable leasehold interest and obligation to pay rent came to an end by merger when Mr Bar-Mordecai became the registered proprietor of the surgery soon after the contract and its completion both of which occurred on 21 October 1987. Mr Bar-Mordecai gave evidence that Mrs Eveline Hillston orally terminated the lease in November 1987. His evidence on this matter is not corroborated and there are no circumstances which make it probable that such an event happened. It would have been superfluous to terminate the lease as it was brought to an end by merger. I do not believe Mr Bar-Mordecai’s evidence about the oral termination. The grant of equitable relief against the gift of the surgery involves treating the lease as having continued in effect. In consequence Mr Bar-Mordecai remained liable for the rent until expiry of the term on 9 September 1999, and should be treated as if he continued to be liable for the amount of the rent while he remained in possession, as he did until 23 February 2001.

268 The plaintiff claims $196,752.24 for rent at $282.69 per week from 21 October 1987 to 23 February 2001. It was conceded in the plaintiff’s counsel’s closing submissions that payments made on account of the mortgage should properly be allowed against the claim for rent and I will act on this concession. The pleadings establish that mortgage instalments were paid up to 30 June 1990: this means that 32 monthly instalments of $2645 were paid, a total of $84,640. Later payments under the mortgage were neutralised by what Mr Bar-Mordecai calls the round-robin and no allowance should be made for them. Mrs Hillston’s estate should recover $112,112.24 for rent.

269 If the discharge of the mortgage for $250,000 over the surgery stood alone I would have set it aside as a gift produced by undue influence; however it takes its place as one of the circumstances showing that the transfer of the surgery was itself a gift which should be set aside.

270 Mrs Eveline Hillston received all the rent available while the Eastbourne Avenue property was leased from 12 October 1989 to 30 May 1990. She received rent for a little less than 8 months of the period between acquisition on 5 December 1988 and occupation on 1 February 1991. The property was leased during a later and shorter period during which all rent received went into Mr Bar-Mordecai’s account. Rent deposited to Mr Bar-Mordecai’s account totalled $37,382.71. Evidence in Exhibit A shows that he received the whole $37,382.71 and not one-half as alleged in the pleadings. Mrs Hillston’s notes for Mr J. Selinger dated 6 October 1990 Exhibit L confirm this. The plaintiff’s remedy should accord with the evidence notwithstanding its departure from the pleadings. As the conferral of an interest in the property on him was a gift which is now set aside, he is liable to Mrs Eveline Hillston’s estate for the rent he received.

271 The plaintiff claims an account of Mr Bar-Mordecai’s dealings with the assets of the deceased during the period he was in practical control of them. His control in various forms extended up to the times in 2001 and 2002 when possession of the Eastbourne Avenue house and the surgery was recovered from him. He gained and maintained control under colour of claims to represent the estate and to be entitled to a grant of administration, and of claims to be the owner of the surgery and of a one-third interest in the Eastbourne Avenue house, whereas he held these on trust for Mrs Eveline Hillston and her estate, and he is accountable accordingly. I will direct an inquiry and payment of any sums found to be due.

272 Mr Bar-Mordecai sought to raise, in para 23 of his Defence, some contention to the effect that Mr Allan Hillston’s claim is barred or estopped by reason of delay. There was no significant delay as the proceedings could not be commenced before Letters of Administration were granted, and were commenced soon after Letters of Administration ad litem were granted late in the hearing of the Probate proceedings.

273 There may be some special considerations affecting costs, having regard to the earlier proceedings and to the very extensive interlocutory proceedings in this case. I will defer consideration of all questions of costs until the parties have had an opportunity to consider these reasons and to make any application for appropriate orders about costs.

274

Mr Allan Hillston is entitled to these remedies.

(1) Judgment for money amounts to which the estate is entitled:
gifts of money $ 95,000.00
rent on the surgery $112,112.24
rent on Eastbourne Avenue $ 37,382.71
Citibank mortgage on surgery $439,978.42
$684,473.37

(2) The plaintiff claims that the estate should be allowed interest under s.94 of the Supreme Court Act and in my view it is appropriate to award interest and to adopt the rates of interest allowed upon judgment debts from time to time. For the claims for gifts and rent which total $244,494.95 I adopt the date of commencement of the Undue Influence proceedings on 22 July 1998 as the date from which interest should be calculated. Some of the rent on the surgery is calculated by reference to later periods, but far more of the rent and all of the other money claims arose much earlier and in my view it is a fair basis for allowing interest to allow it from the commencement of the proceedings. For $439,978.42 paid by trustees for sale to redeem the Citibank mortgage on the surgery interest should be allowed from 6 March 2002 when that sum was paid. Interest up to the date on which these reasons are published will be included in the sums for which judgment is given.

(3) Declarations and orders setting aside the gift of the surgery and requiring payment to the administrator of the estate by the trustees for sale of the proceeds of sale and the moneys earnt on their investment.

(4) Declarations and orders setting aside the gift of a one-third interest in the house at 30 Eastbourne Avenue Clovelly and requiring payment to the administrator of the estate by the trustees for sale of the proceeds of sale and the money earnt on their investment.

275 I make these orders in proceedings 3240 of 1998:

(1) Give judgment for the plaintiff Allan David James Hillston against the defendant Michael Jacob Bar-Mordecai for $684,473.37 together with interest of $140,887.14 so that the sum for which judgment is given is $825,360.51.

(2) Declare that the transfer by the late Eveline Hillston to the defendant dated 21 October 1987 of the property at 212 Clovelly Road Clovelly known as the surgery being the land in Folio Identifier 13/1/2507, the discharge of mortgage X300156 over that land and other dealings between the said Eveline Hillston and the defendant relating to the surgery were a gift by the said Eveline Hillston to the defendant of the surgery obtained by the exercise by the defendant of undue influence over the said Eveline Hillston and further declare that the said gift is now set aside.

(3) Declare that the transfer to the defendant dated 5 December 1988 of a one-third interest in the property at 30 Eastbourne Avenue Clovelly being the land in Folio Identifier 17/5559 and other dealings between the said Eveline Hillston and the defendant relating to the property at 30 Eastbourne Avenue Clovelly were a gift by the said Eveline Hillston to the defendant of the said one-third interest in that property obtained by the exercise by the defendant of undue influence over the said Eveline Hillston and further declare that the said gift is now set aside.

(4) Order that the proceeds of the sales of the surgery and of the property at 30 Eastbourne Avenue Clovelly including the proceeds of investment now held by trustees appointed by this Court for the sale of those properties be now accounted for and paid over by the trustees to the plaintiff.

(5) Reserve to the plaintiff liberty to apply for further orders giving effect to and carrying out declarations 2 and 3 herein.

(6) Order that an account be taken of all assets of the deceased that the defendant got in, converted, paid out or otherwise dealt with on or after 25 June 1994.

(7) Order that it be referred to the Registrar in Equity to take the account referred to Order 6 and to certify to the Court the entitlements of each party to or relating to assets, money or other property which may appear upon taking the account.

(8) Reserve liberty to apply for orders for the enforcement of any entitlement of the plaintiff for or relating to assets, money or other property or otherwise which may appear on taking of that account.

276 I make these orders in proceedings 1707 of 1999:

(1) The proceedings are dismissed.

277 (1) Give judgment for the defendant.

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Last Modified: 03/17/2003

Details

AGLC: Hillston v Bar-Mordecai [2003] NSWSC 89
Case: [2003] NSWSC 89
Decision Date: 28 February 2003

CaseChat Overview and Summary

The parties to this case were Hillston (F) and Bar-Mordecai (M). The dispute involved claims of undue influence, family provision, and the removal of an administrator. The matter was heard in the Supreme Court. F and M lived in a shared household from approximately 1983 until F's death in 1994. M, a medical practitioner, provided medical care to F throughout her life. F made various financial transactions to M, including the purchase of a home, without receiving independent legal advice. M argued that a de facto relationship existed, which would rebut the presumption of undue influence. M also sought family provision and attempted to remove the administrator.

The primary legal issues were whether M's conduct constituted undue influence, whether the relationship between F and M constituted a de facto relationship, and if so, whether it rebutted the presumption of undue influence. Additionally, the court had to determine if M was eligible for family provision and if the claim to remove the administrator was valid. The court examined the evidence related to the relationship between F and M, including their behaviour, and the knowledge and perceptions of relatives, friends, and associates. The court also assessed the merits of M's family provision claim and the validity of the claim to remove the administrator.

The court held that there was no de facto relationship between F and M. It further found that even if such a relationship existed, it would not rebut the presumption of undue influence. The court dismissed M's family provision claim, stating that the prescribed period had expired, and no cause was shown to extend it. M was deemed not to be an eligible person under the relevant legislation. Additionally, the claim to remove the administrator was dismissed as it was based on alleged false evidence. The court concluded that there was no merit in M's claims.

As a result of the court's decision, M's claims for undue influence, family provision, and the removal of the administrator were dismissed. The administrator remained in place, and M was not entitled to any family provision. The court's ruling effectively concluded the litigation between the parties, affirming the validity of the transactions between F and M and the administrator's role in the estate.

Orders