Schwanke v Alexakis; Camilleri v Alexakis [2024] NSWCA 118

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Schwanke v Alexakis; Camilleri v Alexakis [2024] NSWCA 118 Hearing dates: 25 – 27 March 2024 Decision date: 22 May 2024 Before: Ward P at [1]; Gleeson JA at [5]; Adamson JA at [9] Decision: (1) Allow the appeals and the cross-appeal on costs. (2) Otherwise dismiss the appeals and the cross-appeal. (3) Set aside order (2) made by Henry J on 23 June 2023 and, in lieu thereof, order that the defendants' costs on the ordinary basis be paid out of the estate of the late Raymond John McClure (deceased) from the gift of the residue and remainder under clause 2(D) of the deceased's will dated 10 July 2017. (4) Order the appellants and the cross-appellant to pay the first respondent's costs of the appeal. Catchwords: EQUITY — unconscionable conduct — whether equitable principles of unconscionable conduct apply to testamentary gifts as they apply to inter vivos transactions — where testator suffers from special disability — where beneficiary was aware of testator's special disability — whether it was unconscionable for beneficiary to retain the benefit of a testamentary gift made in the course of a doctor/patient relationship EQUITY — undue influence — whether equitable principles of undue influence apply in probate as they do to inter vivos transactions — whether presumption of undue influence arises in circumstances where testator leaves substantial gift to treating physician — protection of testamentary freedom in testamentary dispositions EVIDENCE — credibility — whether primary judge erred in accepting evidence of testator's treating physician who was also principal beneficiary under testator's will — whether physician was a dishonest witness — where there were minor inconsistencies in physician's evidence SUCCESSION — contested probate — lack of knowledge and approval — suspicious circumstances — where testator in poor health left substantial gift to treating physician — whether there was a quid pro quo arrangement between testator and beneficiary — whether beneficiary knew of the contents of testator's will — onus of proof on beneficiary to prove that testator knew and approved of the contents of his wills SUCCESSION — contested probate — undue influence — whether testator was subject to undue influence — where testator in poor health left substantial gift to treating physician — where treating physician recommended solicitor to testator to draft his will — whether will represented testator's true intention — onus of proof of undue influence in probate — whether presumption of undue influence arises in probate — whether general equitable principles of unconscionability apply in probate SUCCESSION — costs — whether appellants were entitled to have their costs paid out of the estate Legislation Cited: Civil Liability Act 2002 (NSW), s 16 Civil Procedure Act 2005 (NSW), s 98 Evidence Act 1995 (NSW), s 140 Probate Rules 1862 (UK) Succession Act 2006 (NSW), s 42 Trade Practices Act 1974 (Cth), s 51A Wills, Probate and Administration Regulae Generales, 1898, Sch B Cases Cited: Aboody v Ryan [2012] NSWCA 395; (2012) 17 BPR 32,359 Alexakis v Masters (No 2) [2023] NSWSC 509 Alexakis v Masters (No 3) [2023] NSWSC 694 Baker v Batt (1838) 2 Moo PCC 317; 12 ER 1026 Barry v Butlin (1838) 2 Moo PCC 480; 12 ER 1089 Blendell v Byrne; Estate of Noeline Joan Blendell [2019] NSWSC 583 Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81 Boyce v Bunce [2015] NSWSC 1924 Boyse v Rossborough (1857) 6 HL Cas 2; 10 ER 1192 Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66 Briginshaw v Briginshaw (1938) 60 CLR 334; [1938] HCA 34 Brown v Guss [2014] VSC 251 Browne v Dunn (1893) 6 R 67 (HL) Buckley v Maddocks (1891) 12 LR (NSW) Eq 277; [1891] NSW LawRp 72 Buckley v Millar (1869) 8 SCR Eq 4 Callaghan v Myers [1880] NSWLawRp 84; (1880) 1 LR (NSW) 351 Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; [1993] FCA 456 Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14 Constable v Tufnell (1833) 4 Hag Ecc 465; 162 ER 1516 Craig v Lamoureux [1920] AC 349 Dent v Bennett (1839) 4 M & C 269 Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78 Dickman v Holley; Estate of Simpson [2013] NSWSC 18 Durling v Loveland (1839) 2 Curt 225; 163 ER 393 Durnell v Corfield (1844) 1 Rob Ecc 51; 163 ER 961 Estate of Marjorie Donald Phillips Deceased; Legg v Duncan (Supreme Court (NSW), Needham J, 11 March 1987, unrep) Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Greville v Tylee (1851) 7 Moo PC 320; 13 ER 904 Hendy v Jenkins (1900) 21 LR (NSW) B & P 43; [1900] NSW LawRp 102 Hindson v Weatherill (1854) 5 De GM & G 301; 43 ER 886 Huguenin v Baseley (1807) 14 Ves 273 In the Estate of Gertrude Martha Elizabeth Hacke; Public Trustee v Wilson (Supreme Court (NSW), Powell J, 13 November 1985, unrep) Jenyns v Public Curator (Qld) (1953) 90 CLR 113; [1953] HCA 2 Johnson v Smith [2010] NSWCA 306 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Jones v Godrich (1844) 5 Moo PC 16; 13 ER 394 Lewis v Lewis (2021) 105 NSWLR 487; [2021] NSWCA 168 Low v Guthrie [1909] AC 278 at 283 Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 Mayer v Coe [1968] 2 NSWR 747 Morris v English, Scottish & Australian Bank Ltd (1957) 97 CLR 624; [1957] HCA 93 Nicholson v Knaggs [2009] VSC 64 Nitopi v Nitopi (2022) 109 NSWLR 390; [2022] NSWCA 162 Nock v Austin (1918) 25 CLR 519; [1918] HCA 73 Nye v Sewell (1894) 15 LR (NSW) B & P 18; [1894] NSW LawRp 43 O'Neill v Medical Benefits Fund of Australia Ltd (2002) 122 FCR 455; [2002] FCAFC 188 Parfitt v Lawless (1872) LR 2 P & D 462 Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 Small v K & R Fabrications (W'gong) Pty Ltd [2016] NSWCA 70 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306 The Queen v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 Trustee for the Salvation Army (NSW) Property Trust t/as the Salvation Army v Becker [2007] NSWCA 136; (2007) 14 BPR 26,867 Winter v Crichton; Estate of Galieh (1991) 23 NSWLR 116 Woodley-Page v Simmons (1987) 217 ALR 25 Texts Cited: Australian Law Reform Commission, Discussion Paper 83 on Elder Abuse (December 2016) Australian Law Reform Commission, Report 131 Elder Abuse – A National Legal Response (June 2017) New South Wales Law Reform Commission, Uniform Succession Laws: The Law of Wills (April 1998) Prof J Campbell, "Estate Litigation to Challenge Tainted Dispositions", Blue Mountains Law Society Succession Conference – 12 & 13 September 2020 Victorian Law Reform Commission, Succession Laws (October 2013) Category: Principal judgment Parties: Proceedings 2023/179691 Hildegard Schwanke (First Appellant) Irmgard (Marianne) Schwanke (Second Appellant) Peter Alexakis (First Respondent) Gary Robert Masters (Second Respondent) Frank Camilleri (Third Respondent)