Selem v Selem

[2003] NSWSC 757

CITATION:	Selem v Selem [2003] NSWSC 757
HEARING DATE(S):	8 August 2003
JUDGMENT DATE:	8 August 2003
JURISDICTION:	Probate
JUDGMENT OF:	Austin J
DECISION:	Defendant ordered to pay plaintiff the balance of her entitlement without deduction in respect of cross-claim, plus interest and costs; defendant not to be indemnified out of assets of estate in respect of costs.
CATCHWORDS:	WILLS - testamentary gift of estate including testator's home to three children in equal shares, upon trust for sale with postponement of the sale until one of the beneficiaries 'shall cease to live therein' - defendant ceased to live in testator's home after alleged threats by plaintiff - whether postponement of trust for sale thereby ended - whether defendant's cross-claim for damages or equitable compensation for duress or unconscionable conduct entitled him to reduce plaintiff's distribution out of proceeds of sale of testator's home
LEGISLATION CITED:	Wills Probate Administration Act 1898 (NSW) s 84
CASES CITED:	In the Will of Clinton (1910) 10 SR (NSW) 465
PARTIES :	Susan Selem (P/XD) Marcus Jeffrey Selem (D/XC)
FILE NUMBER(S):	SC 113438/02
COUNSEL:	K Morrissey (P/XD) T Bland (D/XC)
SOLICITORS:	Stockman & Evans (P/XD) F D Hammond & Associates (D/XC)

IN THE SUPREME COURT
OF NEW SOUTH WALES
PROBATE DIVISION

AUSTIN J

FRIDAY 8 AUGUST 2003

113438/02 SUSAN SELEM V MARCUS JEFFREY SELEM

JUDGMENT (ex tempore; revised 12 August 2003)

1 HIS HONOUR: Roland Alfred Selem died on 16 December 1999. Probate of his last will was granted to the defendant on 9 April 2002. Mr Selem's wife pre-deceased him and so clauses 3 and following of his will governed the distribution of his estate. He appointed his son, the defendant, as his executor, and gave the whole of his estate in equal shares to his three children, the plaintiff, the defendant and Kay Bohn, each of whom have survived him.

2 Clause 5 of his will provided that his son, the defendant, was permitted to live in his property at 3 Auburn Street, Parramatta until the son attained the age of 30 years, provided he paid municipal and water rates and premiums for insurance. The defendant was born on 4 December 1975 and, therefore, he will attain the age of 30 years in December 2005. Clause 5 continued by providing that the defendant, as executor, was permitted to postpone the sale of the home "until he shall cease to live therein pursuant to this clause", and then providing that when the defendant should "cease to live in my said home" it would form part of the estate to be dealt with in accordance with the later provisions of the will. Clause 6 authorised the defendant, as executor, to hold the Parramatta property on trust for sale, and made provision, not now relevant, to permit the son to elect to purchase the shares of his sisters in the property at a value to be determined by external valuation.

3 What, in fact, happened was that in March 2001, the defendant ceased to live in the property at Parramatta and has not resided there since that time. The present proceeding is an application for orders that the defendant pay the plaintiff the residuary bequest given to her by the will, together with an order that interest be paid on the unpaid residuary bequest in accordance with the rates prescribed by the Wills Probate and Administration Regulation 1998, and an order that the plaintiff's costs be paid by the defendant.

4 In written submissions delivered to me before the commencement of the hearing, the plaintiff said that this application was made under s 84 of the Wills Probate and Administration Act 1898 (NSW). That section provides that:

“If the executor or administrator, after requesting in writing, neglects or refuses to:
(a) sign such acknowledgement, or
(b) execute a conveyance of land devised to the devisee, or
(c) pay or hand over to the person entitled to any legacy or residuary bequest,
the Court may, on the application of such devisee or person, make such order in the matter as it thinks fit.”

5 There is evidence that a request in writing was made on behalf of the plaintiff, and although $30,000 was paid to the plaintiff on 29 October 2002, and $60,000 was paid into Court on 16 and 20 June 2003, the whole of the amount of the residuary bequest has not yet been paid by the defendant to the plaintiff.

6 Section 84 is not available where an executor has completed administration and is holding the estate as trustee: In the Will of Clinton (1910) 10 SR (NSW) 465. It appears probable on the evidence, though it is not entirely clear, that the defendant has completed the administration of his father's estate and that the property he now holds, being part of the proceeds of the sale of the Parramatta property paid to him as the plaintiff's share, is held by him as trustee. In such a case an equivalent order is available to be obtained under Pt 68 of the Supreme Court Rules. The proper course, in my opinion, is to treat the application as an application against a trustee under Pt 68.

7 By his defence and cross-claim filed on 29 January 2003, the defendant admits that the plaintiff is entitled to a residuary bequest, but denies that, on the proper construction of the will, and in the events that have happened, she is entitled to payment of her bequest at the present time. In my opinion, that defence is unsuccessful. It appears to me plain, according to the wording of clauses 5 and 6, that in the events that have happened, the plaintiff has come to be entitled to the payment of her bequest, subject to two matters to which I shall return.

8 The relevant events are these. After the death of the testator, the defendant lived in the house at Parramatta until March 2001, when he left and did not return. That is evidence that he has ceased to live in the home for the purposes of clauses 5(b) and 5(c) of the will. Once that occurred, then according to the will, the Parramatta property formed part of the estate to be applied or dealt with in accordance with the trust for sale established by clause 6. The property was sold. The purchase price appears, from evidence of the transfer, to have been $356,000. Settlement took place in June 2002.

9 By a letter dated 12 September 2002, the defendant's solicitor wrote to him as executor setting out calculations of the amount finally divisible between himself and his two sisters, comprising the balance of the settlement moneys and deposit less costs of the conveyance. The letter explained that the solicitor had provided the defendant with a cheque for $110,000 in favour of his sister Kay Bohn. It said that the defendant had received $110,000 by various payments, together with a payment towards the cost of maintenance and repairs to the property.

10 On 26 June 2002, the solicitor furnished the defendant with a trust account cheque for $110,000 in his favour, being the share of his sister, the plaintiff, "subject to your own claim against her". The letter advised that the funds should be invested by the defendant as trustee for the plaintiff pending settlement of the claim. The defendant gave oral evidence today that he paid that cheque shortly afterwards into a cash management account with the National Australia Bank in his name. He said that the $30,000, which has been paid to the plaintiff, was taken out of that account, and the further $60,000 paid into court was also taken out of the account, and there remains about $20,000 in the account. In those circumstances, the trust for sale in clause 6 of the will has been executed and, subject to the two points to which I have adverted, the defendant is under an obligation as executor to complete the distribution of the estate, and as trustee to account to the beneficiary of the cash management account, in each case the plaintiff, for moneys held on her behalf.

11 When a demand for payment was made in about July 2002, the solicitor for the defendant informed the plaintiff's solicitor that his client had some concern about the plaintiff's mental capacity and ability to give a good discharge in relation to any payment to be made to her. The solicitor for the defendant also said that his client might have a claim for damages arising out of some incident which caused him to leave the property in Parramatta prior to his attaining the age of 30 years.

12 The plaintiff's solicitor responded by letter dated 18 July 2002. So far as the question of capacity to give a good discharge was concerned, the letter enclosed a medical assessment of the plaintiff by Dr Thomas Clark, a consultant forensic psychiatrist, dated 28 June 2002, expressing the opinion that the plaintiff did not at that time suffer from any psychiatric disorder and she was capable of managing her own financial affairs. As far as the claim for damages was concerned, the letter denied any such claim. Having regard to the evidence of capacity provided on 18 July 2002, my opinion is that, again subject to the two points to which I have yet to turn, the plaintiff was at that time immediately entitled to receive the distribution provided for her by the will of her father.

13 The first of the two matters is this. Paragraph 2 of the defence says that the plaintiff caused loss and damage to the estate by way of physical damage to the dwelling necessitating payment by the estate of an amount of $3,637.30. The plaintiff's counsel conceded that if it was shown that his client caused deliberate damage to the Parramatta house necessitating repairs by the executor, the executor was, in law, entitled to deduct the cost of those repairs from her share of the estate.

14 The question is not a question of law, but a question of evidence. The sum that I have mentioned appears to have been derived from a letter written by the defendant's then solicitors to the plaintiff's solicitors on 21 October 2002, which said that the amount that would have been due to the plaintiff was $110,000 less two deductions amounting to that sum, namely, a deduction for an air-conditioning unit damaged by the plaintiff in the sum of $2,998 and a deduction for the cost of maintenance and repairs due to the plaintiff's damage to the premises in the sum $3,637.30. The letter said that the solicitor would shortly be forwarding affidavits.

15 I take those affidavits to be the two affidavits upon which the defendant relied at the hearing, namely, the affidavit of the defendant, dated 18 October 2002, and the affidavit of Kay Bohn, dated 23 October 2002. What is striking is that those two affidavits do not purport to justify the figures claimed in the letter for deductions for the cost of repairs attributable to the plaintiff. There is no evidence at all with respect to a damaged air-conditioning unit. There is some evidence with respect to deliberate damage done to the Parramatta property by the plaintiff, but the cost of repair is not quantified.

16 All that I have to go on is the assertion in the letter of 21 October 2002 that the two figures there mentioned were repair costs due to the conduct of the plaintiff. Yet, in the letter dated 12 September 2002, the second of the two claims, $3,637.30, is referred to as an amount paid to the defendant towards the cost of maintenance and repairs to the property, and no mention is made in that letter that the amount is attributable to some misconduct by the plaintiff.

17 The defendant's own evidence was to the effect that he had incurred substantial expenditure cleaning up the property and repairing it before it was sold, but he made no attempt in his oral evidence to quantify what part of that cost was attributable to the plaintiff. In fairness, I should say there was an application to ask some further questions with respect to matters of cost, which I denied because it was a late application, well after the trial had commenced.

18 My conclusion, therefore, is that the cost of repairing damage done by the plaintiff to the Parramatta property has not been quantified. As I shall explain, the plaintiff herself admitted to breaking a pane of glass in a door, but admitted to no other damage. It seems to me that this deliberate act of damage to the property should reduce her entitlement, but not by anything like the sum of $3,637.30 claimed in the defence. Counsel for the plaintiff submitted that, in order to avoid further disputation, the Court should make an assessment of the likely cost of repair of such a pane of the glass. I am prepared to do so in order to avoid further argument. It seems to me the correct figure ought to be $500.

19 The second matter that has been advanced as a qualification to the plaintiff's right of recovery of her residuary bequest is the cross-claim, to which I shall shortly turn. The cross-claim is a claim for damages or equitable compensation based upon duress or what is referred to as unconscionable conduct (although the correct equitable doctrine may be the doctrine of pressure). The cross-claim is an assertion of a right put forward by the defendant as cross-claimant in his personal capacity and not as executor of the will of his father. No basis was advanced in the submissions for the view that recovery on the cross-claim would entitle the defendant, as executor, to reduce the amount of the distribution to which the beneficiary of the estate was otherwise entitled, or that would entitle him, in the capacity of trustee of the cash management account, to make any such deduction. In those circumstances, whatever the strength of the cross-claim, I cannot see how any entitlement under it provides a defence to the plaintiff's claim for a distribution of her beneficial interest in her father's estate.

20 Therefore, the first of the two matters leads to a reduction of $500 in her entitlement, and the second of the two matters is unsuccessful by way of defence. My conclusion is that the plaintiff has established her entitlement to the distribution of a one-third net interest in the proceeds of sale of the Parramatta property. On the evidence before me, the correct figure to which she was entitled, as from 18 July 2002, is $109,500.

21 The amended summons claims an order that the defendant pay interest on the unpaid amount in accordance with the rates prescribed under the Wills Probate and Administration Regulation. It seems to me proper that interest on the whole of the unpaid amount should be recoverable by the plaintiff for the period from 18 July 2002 to 29 October 2002 when the defendant paid the plaintiff $30,000. From the latter date until the time of payment of the $60,000 into Court, the interest should be on the unpaid amount less the $30,000, and from the time of payment into Court until the time of the making of my orders, the interest should be on the residual amount. The rates should be as prescribed in the Regulation.

22 I turn now to the cross-claim, in respect of which I heard rather more evidence today. The cross-claim asserts that the plaintiff made various threats to the defendant to the effect that she would kill him or otherwise bring him harm if he did not sell the property so as to accelerate her entitlement to be paid her residuary interest. As a result of those threats, according to the cross-claim, the defendant sold the property and suffered loss accordingly, by virtue of being deprived of his valuable right of occupation until December 2005. It is asserted that the threat constituted duress and/or unconscionable conduct.

23 In my opinion, the cross-claim must fail. The principal reason for my reaching this conclusion is that the evidence does not establish that the threats alleged to have been made by the defendant were the occasion of the defendant ceasing to live in the Parramatta property and subsequently, selling it. Additionally, I am not persuaded, on the balance of probabilities, that the specific threats alleged by the defendant in paragraphs 15, 20, 22, 25 and 31 of his affidavit of 18 October 2002 were made.

24 It is plain from the evidence, and sadly so, that the plaintiff has been in dispute with the defendant and her sister since before her parents died. The plaintiff's sister, Kay Bohn, gives evidence that though she had a good relationship with the plaintiff until the plaintiff left home, the relationship deteriorated after that time.

25 The plaintiff admits to taking marijuana during her life. In the late 1980s, the plaintiff was living in a Housing Commission home at Wentworthville, and on one occasion, according to Kay Bohn's evidence, she told her sister, "You've got to get off the drugs, Susan, and clean up your act for the children. You shouldn't be selling drugs. You'll go to jail if you don't stop. You'll get busted." Kay Bohn said the plaintiff replied, "I know what I'm doing. I've contacts in the police". The plaintiff denied that she gave any such reply Given that denial, and the absence of any other basis for preferring the evidence of one witness to another, I am not persuaded that the statement attributed by Ms Bohn to the plaintiff was made by her, but not much turns on that. The significance of the conversation is that it relates to drugs and the plaintiff has admitted to taking them. The plaintiff's son, Matthew, born in May 1988, was, according to the plaintiff's oral evidence, taken into the hospital when he was about six weeks old and after he was discharged from hospital, he was placed in the care of Ms Bohn and her then husband.

26 The deceased and his wife made their wills in March 1996. Ms Bohn gave evidence of a conversation at The Entrance shortly after that time, when her mother explained the contents of the will. The plaintiff denied that she replied to her mother in the manner claimed by Ms Bohn, which amounted to an offensive objection to the contents of the will and an assertion that she would not wait until her brother was 30 before she got her money. Clearly enough, there was a discussion about the will shortly after it was made. I infer that all three children were aware of its contents. Again, in view of the denials made by the plaintiff, I am not able to find positively that any of the evidence of Ms Bohn as to threats made by the plaintiff against her mother during her lifetime were, in fact, made.

27 It appears to me likely, however, that there were discussions between the plaintiff and other members of the family in which the plaintiff expressed some form of unhappiness from time to time, that the effect of the will would be to prevent a distribution of the estate until her brother turned 30 in 2005.

28 Ms Bohn gave evidence that after her father died, there were discussions in which the plaintiff expressed her aggression in various ways against her brother and, according to Ms Bohn's evidence, made threats upon his life. Again, this evidence is in the category of the earlier evidence, in that it was denied by the plaintiff in circumstances where I am not able to find, given a sheer conflict of evidence of conversations, that the matters alleged by the defendant as cross-claimant and to be proven by him have been established on the balance of probabilities.

29 I should also say that the threats of which Ms Bohn gave evidence were not, according to her evidence, in conversations in which the defendant participated, and neither she nor her brother gave any evidence that the contents of those threats was communicated to him.

30 The defendant's evidence of threats identifies some aggressive statements made during the lifetime of his parents. The only one that amounts to a specific threat is his evidence that in June 1999 the plaintiff told him over the telephone, "I will kill you and then you will not have to worry about the will". This was denied by the plaintiff. Again, it is a case of a simple conflict of evidence where my conclusion is that the defendant, as cross-claimant, has not proved his case that the threat was made.

31 Then, about a week after his father died, the defendant, according to his evidence, had a conversation with the plaintiff in which the defendant said he intended to live in the house until he turned 30 and the plaintiff said, "You don't have to worry about that. You won't see that." That conversation is in the same category as the conversation of June 1999, and my conclusion is it is not proven.

32 The reason that I have reached the view that I should not prefer the evidence of either the defendant or Ms Bohn to the plaintiff's evidence is that the plaintiff struck me as giving honest evidence in answer to the questions put to her, and I did not detect any inconsistencies or other basis for disbelieving her. She admitted she had taken drugs. She admitted she had broken a panel in the door of the Parramatta property.

33 It was submitted that I should disbelieve her evidence for two reasons. First, it was said that in her oral evidence she recanted with respect to the location and ownership of the deceased's tools. Considering her evidence as a whole, including her evidence in re-examination, I do not accept that submission. She admitted in re-examination that she had (though she said she did it with her father's consent) pawned his tools and they were later redeemed when money was provided by Kay Bohn. I do not see any inconsistency in that evidence that would weaken the credibility of the plaintiff's evidence overall.

34 The second basis for disbelieving her, according to counsel for the defendant, was that there had been evidence given by her as to the destination of items of property other than the Parramatta property, which she said formed part of the deceased's estate. Evidence on those matters given by Kay Bohn and the defendant was different and tended to explain the plaintiff’s allegations, by saying the items of property in question had been disposed of by the deceased inter vivos and there was no legitimate claim by the estate to them or their proceeds. In the end, the picture was rather confused. The evidence was entirely oral evidence, emerging first in the cross-examination of the plaintiff, which led to evidence given in chief by the defendant and Kay Bohn, without pre-warning in their respective affidavits. Ms Bohn's evidence was given while the defendant was in Court. The chattels in question are not the subject of any claim in this proceeding. In all the circumstances, I do not regard any of this evidence as warranting any conclusion adverse to the credit of the plaintiff.

35 The cross-claim is a claim asserted by the defendant in his own right and obviously, the assertions in it must be proven. They need only be proven on the balance of the probabilities, but because they are serious assertions of threats of violence and even threats of death, the Court has to consider the evidence carefully before reaching its conclusion. It is up to the defendant, as cross-claimant, to make out his case and, in respect of all of the threats to which I have referred so far, he has not done so.

36 There are three other threats that need to be considered. In each case they are distinguished from the others because there is evidence of the complaint to the police.

37 In November 2000, according to the defendant, the plaintiff contacted him to have a meeting about the will. When the defendant declined because, he said, he was worried about what she would do to him, the plaintiff said, "You don't have to worry about meeting me. That can happen anywhere." Then, when the defendant asked whether that meant a threat to kill him, she said, "Anything's possible."

38 A police report dated 27 November 2000 appears to be related to that incident. It is significant, however that the defendant appears to have informed the police he did not want any formal proceeding at that stage, and he would apply for an Apprehended Violence Order later, if the need should arise. Apparently, he only wanted the incident to be recorded.

39 I infer from this evidence that there was a conversation between the plaintiff and the defendant in which the plaintiff made some sort of threat, but the evidence does not enable me to conclude that the threat was specifically a threat to kill the defendant. On the other hand, the evidence suggests, to my mind, that the defendant did not regard what was said to him as an occasion for doing anything other than having the incident recorded by the police.

40 The second occasion was on about 19 February 2002. The defendant's evidence is that when he returned to the property, the rear side laundry window had been smashed and the rear garage door had been forced. No entry appeared to have been gained or property removed. Some clothes left hanging out to dry were missing, and on the ground next to the clothes hoist was a hospital gown with his sister's name on the name tag. In her oral evidence, the plaintiff admitted to the fact that she had entered upon the land and taken some clothes from the clothes line, and that she did so after leaving Cumberland Hospital in her hospital gown.

41 There is a Police Incident Report in respect of that matter, in which it is recorded that the defendant was informed about Apprehended Violence Orders and was advised to attend the Local Court to obtain one, and he said he would consider applying for one. The police report refers to actual malicious damage to property of a value of $100 by physical force. The plaintiff did not admit to causing any physical damage to the property of the kind described by the defendant, and it appears to me, in the circumstances, that the evidence does not prove that the physical damage that occurred was caused by her. There was other evidence given orally by the defendant to the effect that the property was in a bad state.

42 The third event is identified in a fairly jumbled way in the defendant's affidavit, but it appears to have occurred on about 22 February, because there is a police report referring to an incident at that time. The police decided after the report that they would not apply for an Apprehended Violence Order. The incident was described in the report as "domestic violence, no offence". I infer that the incident in question involved the plaintiff kicking in the glass panel at the bottom of the door of the premises, as she admitted in her oral evidence.

43 Those are the matters upon which the defendant relies as evidence of the threats which, he says, created fear on his part sufficient to cause him to decide that he should leave the home in March 2001 and live with his cousin. I should note that the clothes taken from the washing line in February were apparently returned to the defendant some time later.

44 What is notable about this evidence, to my mind, is that the evidence of physical threats to the defendant is limited to a period of time up to November 2000. The two incidents in February 2001 were not occasions of physical threats, but were both occasions where the defendant discovered that damage had been done to the property. It is also relevant that, in respect of the report to the police in November 2000, the defendant himself decided not to take the matter further, but simply to record it, suggesting he was so fearful at that stage of remaining in the house that he would find it necessary to leave.

45 So far as the two incidents in February 2001 are concerned, the content of those incidents, emerging from the evidence, was not such as to persuade the police to make an application for an Apprehended Violence Order (the police themselves drawing attention to the fact that the physical threats had occurred some time ago). It seems to me simply implausible for the defendant to assert, on that evidence, that he was forced to decide to leave the home in March 2001.

46 My conclusion is that the causative element between the threats (to the extent they have been established on the balance of probabilities) and the defendant’s departure from the property, has not been shown. Even if the threats were made as alleged by the defendant in his affidavit, I would reach the same conclusion on causation.

47 It is impossible for the Court to ascertain and set out comprehensively, in reasons for judgment, everything that has actually happened between the parties in a bitter family dispute of this kind. The Court can act only on evidence relevant to the claims before it. My decision is that the cross-claim has not been proven.

(Counsel made submissions on costs.)

48 I have decided the proper order for costs will be that the defendant pay the plaintiff's costs of the proceeding, and the defendant as cross-claimant, pay the plaintiff's costs as cross-defendant in the cross-claim. I have reached that conclusion having regard to the manner which the matter has emerged, and by reference to an important principle. What seems to have happened is that, because of other aspects of a bitter family dispute, the defendant has regarded himself as justified in withholding the distribution to the plaintiff to which she was clearly entitled, in July 2002 and at all subsequent times. The cross-claim would never have been a proper basis for withholding that distribution, even if it had succeeded.

49 The maximum offsetting amount asserted in the defence was $6,635.30. It was necessary for the plaintiff to commence this proceeding in view of the attitude disclosed on the defendant's part, summarised in the plaintiff's solicitor's letter written on 18 July 2002. Even after an order was made on 24 February 2003 for payment of $60,000 into Court, the money was not paid into Court until June 2003.

50 It seems to me the Court's order should reflect the consistent denial by the defendant, acting in a fiduciary capacity, of the plaintiff's entitlement.

51 The cross-claim was always destined to be difficult to prove, unless there was persuasive evidence of the threats and causal relationship between the threats and what was alleged to be the loss. The defendant's evidence, particularly with respect to the question of causation, fell well short of what would be needed to establish a case on the balance of the probabilities.

52 My view is that this is a proper case for an order for costs in favour of the plaintiff. It seems to me, as well, that I should make an order that, to the extent that the defendant acted as executor and trustee, his costs as such ought not be costs recoverable out of the estate or the trust property.

53 In summary, I intend to

(1) Order the defendant to pay the plaintiff the balance of her entitlement of $109,500 after deduction of the sum of $30,000 already paid.

(2) Order that the sum paid into Court of $60,000 be released to the plaintiff. The intention of those orders is that the defendant will be obliged to pay the balance.

(3) Order that the defendant pay the plaintiff interest in accordance with the Regulation, in the manner I have outlined in this judgment.

(4) Order that the defendant pay the plaintiff's costs of the proceeding.

(5) As to the cross-claim, cross-claim dismissed.

(6) Order that the cross-claimant pay the cross-defendant's costs.

(7) Order that the defendant be not indemnified out of the assets of the estate or moneys held in trust by him in respect of these orders.

(8) Direct the plaintiff by 12 noon on Tuesday 12 August 2003 to supply to the defendant and my Associate draft short minutes of order to reflect these reasons for judgment.

(9) Direct the defendant to make any submissions with respect to the draft by no later than 12 noon on Wednesday 13 August, noting it is my intention to make the orders in chambers thereafter, unless further contention arises.

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Last Modified: 09/05/2003