Hillston v Bar-Mordecai [1999] NSWSC 347

New South Wales Supreme Court CITATION : Hillston v Bar-Mordecai [1999] NSWSC 347 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 3240/98 HEARING DATE(S) : 16 April 1999 JUDGMENT DATE : 16 April 1999

PARTIES : Allan David James Hillston (P) Michael Jacob Bar-Mordecai (D) JUDGMENT OF : Master McLaughlin

COUNSEL : Mr. J. B. White (P) Mr. M. H. Southwick (D) SOLICITORS : Shaw McDonald (P) Tribe Conway & Co (D) CATCHWORDS : DECISION :

- 9 - SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Friday, 16 April 1999

3240/98 ALLAN DAVID JAMES HILLSTON -v- MICHAEL JACOB BAR-MORDECAI JUDGMENT

1 MASTER: There is presently before the Court a notice of motion filed by the plaintiff, Allan David James Hillston on 25 November 1998. By that notice of motion the plaintiff seeks the appointment of trustees for sale of certain real property situate and known as 30 Eastbourne Avenue, Clovelly pursuant to the provisions of Division 6 of Part 4 of the Conveyancing Act 1919. 2 The motion is brought in substantive proceedings which were instituted by statement of claim filed by the plaintiff on 22 July 1998. The defendant to those proceedings is Michael Jacob Bar-Mordecai. The plaintiff brings the substantive proceedings in his capacity as the administrator to whom probate of the will of the late Eveline Hillston was granted on 22 October 1998. That grant was made in consequence of substantial and lengthy proceedings conducted in the Probate Division, the trial of which before Einstein J occupied some four weeks. His Honour's judgment extended over 137 pages. 3 In the Probate proceedings the present defendant, Dr Bar-Mordecai was the plaintiff. There were two defendants in the Probate proceedings, Thelma Rockman, the sister of the deceased (who, if it were ultimately to have been held that the deceased died intestate, would as such sister have been entitled to the entirety of the estate of the deceased upon intestacy) and Alex Hillston, who was appointed in a representative capacity as a beneficiary and to represent all other beneficiaries named in the will of the deceased dated 31 August 1989. 4 It was in essence the claim of Dr Bar-Mordecai in the Probate proceedings that that will had been revoked by the deceased during her lifetime, in which event the deceased died intestate. To that point the interests of Dr Bar-Mordecai and Thelma Rockman, the first defendant in the Probate proceedings, were identical. Both were asserting an intestacy. However, Dr Bar-Mordecai in the Probate proceedings further asserted that he was at the time of her death the de facto husband of the deceased, and thus that he, and not Mrs Rockman, the sister of the deceased, was entitled to the entire estate of the deceased upon intestacy. There was no dispute by either of those two parties that the deceased had executed a will on 31 August 1989 but those two parties were unanimous in asserting that that will had been revoked before the death of the deceased and that no later will had come into existence. 5 Neither Dr Bar-Mordecai nor Mrs Rockman had an interest in asserting the validity and efficacy of the 1989 will at the time of the death of the deceased. It was therefore only proper, in the orderly administration of estates of deceased persons, that there should be a party in opposition to assert that the 1989 will had effect. For that reason, therefore, Mr Alex Hillston was joined as the second defendant to the Probate proceedings. 6 In the event, Einstein J concluded that the 1989 will had not been revoked by the deceased, that that was the last valid will of the deceased, and that it was therefore proper that a grant of probate should be made in respect of that will. Since the representative defendant, Mr Alex Hillston ultimately was totally successful in the Probate proceedings, and since he was not a resident within the jurisdiction of the Court, he residing in Greece, the grant of probate of the will was ultimately made to his brother, the present plaintiff, Mr Allan David James Hillston, who resides in Sydney. 7 The costs orders made by Einstein J in the Probate proceedings clearly reflected the view of his Honour that the representative defendant, ultimately and totally successful, should not personally bear his costs of the proceedings and that, to the extent that he might not recover those costs from Dr Bar-Mordecai, he was entitled to resort to the assets of the estate. 8 Dr Bar-Mordecai has instituted an appeal from the decision of Einstein J in the Probate proceedings. No date has yet been fixed for the hearing of that appeal. Nevertheless the hearing had been given by the Court of Appeal what is described in a letter dated 13 April 1999 from the Registrar of the Court of Appeal "a degree of expedition". The appeal will be case managed by Stein JA who will conduct the directions call-over in the matter on 3 May 1999. No indication has been placed before me in the hearing of the present application concerning when it is likely that the appeal will be heard. 9 One of the assets of the estate of the deceased was an interest as to two-thirds therein of the house property at 30 Eastbourne Avenue, Clovelly. The other one-third interest therein is held in the name of the present defendant, Dr Bar-Mordecai. The deceased and Dr Bar-Mordecai held their respective interests in the property as tenants in common. 10 The present plaintiff as the administrator under the grant of probate to which I have already referred is thus entitled to seek relief of the nature contemplated by the Division 6 of Part 4 of the Conveyancing Act and to seek to have appointed trustees for the sale of the property. However, Dr Bar-Mordecai has applied by way of notice of motion filed on 8 March 1999 for an order that the substantive notice of motion of the plaintiff filed on 25 November 1998 be stayed until the determination of his appeal in the Probate proceedings. 11 I have accordingly entertained firstly the application by the present defendant for such a stay of the present plaintiff's application for the appointment of trustees for sale. 12 It will be appreciated that the fact that Dr Bar-Mordecai has instituted an appeal does not of itself affect the orders which were made by Einstein J in the Probate proceedings. Those orders are the final orders of the Court. They are in no way to be regarded as conditional or provisional. They have the entirety of the force of final orders unless and until they are discharged or varied or set aside by the Court of Appeal. There is no presumption that the appeal will necessarily be successful. 13 Indeed to the extent that it is appropriate that I do so in considering the various submissions placed before me on behalf of Dr Bar-Mordecai in support of a stay, it is very clear from the reasons in the judgment of Einstein J, in which he expressed the strongest possible views concerning the evidence of Dr Bar-Mordecai, the manner of his giving of that evidence, his demeanour and the general credibility of his evidence, that the likelihood of his Honour's findings concerning Dr Bar-Mordecai and his evidence being overturned is in my view very slight. 14 It has been submitted on behalf of the defendant that if the Court proceeds to entertaining the substantive application for the appointment of statutory trustees, and if (as the defendant appears to regard as being not unlikely upon such a substantive application) the Court were to make the orders sought for the appointment of such trustees for sale, then the practical consequence would be that Dr Bar-Mordecai would no longer be able to continue to reside in the Eastbourne Avenue residence which has been his home for the past eight or nine years, and that, in the event that he were later to succeed in his appeal in the Probate proceedings, it would be impossible for him to recover that residence. It was submitted therefore on behalf of the defendant that there would be irreversible prejudice to Dr Bar-Mordecai if the Court were not to stay the plaintiff's present application. 15 For the plaintiff however it has been submitted firstly that Dr Bar-Mordecai was totally unsuccessful in the proceedings before Einstein J, and that the consequence of his Honour's decision in the Probate proceedings is that the present plaintiff has the administration of the estate of the deceased. In the course of that administration the plaintiff is a respondent to the appeal which has been instituted by Dr Bar-Mordecai. The plaintiff has incurred and will incur costs in respect of that appeal. The representative defendant in the Probate proceedings has incurred very considerable costs which his Honour's costs orders contemplated should not be borne personally by that representative defendant. 16 The evidence discloses that there are presently outstanding legal costs in the order of $300,000 for which the estate is liable and that the liquid cash assets of the estate currently amount to less than $10,000. The estate cannot pay its accounts without access to the assets of the estate. The nature of those assets is such that the most appropriate one to which the estate says that it should be able to have resort is the interest of the deceased in the Eastbourne Avenue property. 17 The plaintiff also points to the fact that there is one other piece of residential property which is an asset in the estate of the deceased, being a home unit situate at and known as unit 1/6 Mount Street, Clovelly. Thus, in the event that the order sought by the plaintiff for the appointment of trustees for sale of the Eastbourne Avenue residence is made, the practical consequence would not be to deprive Dr Bar-Mordecai of a home, since under the terms of the will of which the plaintiff is the administrator Dr Bar-Mordecai has an entitlement to occupation in that property during his life without any fee or rental. 18 The plaintiff also acknowledges that, were the net proceeds of the interest of the deceased in the Eastbourne Avenue property to be distributed in accordance with the terms of the will to the various beneficiaries named therein, it would be very difficult for Dr Bar-Mordecai, in the event that he were to succeed in his appeal, to recover the amount so distributed, since with the exception of the present plaintiff each of those beneficiaries resides outside Australia. For that reason, therefore, the plaintiff has limited the terms of its substantive application under Division 6 of Part 4 of the Act to orders which would firstly appoint the trustees for sale and require them to sell the property on the statutory trust and thereafter then to hold the net proceeds of sale after payment of all expenses of the sale, including their own fees and expenses, pending the further order of the Court, and that further leave be granted to either party, to a former solicitor of Dr Bar-Mordecai and to the trustees to apply to the Court on seven days' notice. 19 In considering the application by the defendant for a stay of the plaintiff's motion it is necessary for me to perform an exercise of weighing up and balancing the prejudice to Dr Bar-Mordecai if the Eastbourne Avenue property is now sold and if he ultimately be successful in his appeal, with the prejudice to the plaintiff if Dr Bar-Mordecai ultimately be unsuccessful in his appeal and the plaintiff has to wait until the final determination of that appeal before any assets of the estate become available to him to meet the very considerable costs for which the estate is liable in respect to the Probate proceedings through the representative party, Mr Alex Hillston, in those proceedings and in respect to the present appeal. 20 If Dr Bar-Mordecai did not have alternative accommodation available to him there would be very considerable strength in his submissions concerning prejudice. However, since he will not find himself deprived of accommodation if he has to leave Eastbourne Avenue, as he will be able to reside in the Mount Street unit, it seems to me that that prejudice, on balance, is less than the prejudice which would be suffered by the plaintiff in being deprived of the ability to resort to the assets of the estate to pay the very considerable amount of legal costs presently outstanding. Also, as I have already observed, a further factor relevant to this question is the strength of the appeal of Dr Bar-Mordecai. I have already expressed my views that it is unlikely that the Court of Appeal would overturn any of the findings of Einstein J concerning the evidentiary matters at the trial and especially concerning the credibility of Dr Bar-Mordecai. 21 For those reasons therefore I do not propose to grant the stay which has been sought by the defendant, and I propose to dismiss his notice of motion. 22 I make the following orders: (1) I order that the notice of motion filed by the defendant on 8 March 1999 be dismissed. (2) I order that the defendant pay the costs of the plaintiff of the aforesaid notice of motion. (3) I grant leave to the plaintiff to proceed forthwith to assessment of the foregoing costs. 23 I am satisfied that it is appropriate for me to make an order of the nature sought in the notice of motion filed by the plaintiff on 25 November 1998. The plaintiff has prepared short minutes of order, the effect of which is that the disposition of the net proceeds of sale will require further order of the Court. 24 I will have it noted that Mr Whittle of Counsel on behalf of the plaintiff administrator of the estate of the deceased, states that, in accordance with his instructions, if Dr Bar-Mordecai so requests, the premises at Mount Street, Clovelly will be made available for him pursuant to the provisions of the will of the deceased, and that those premises would be made available within a reasonably short time. 25 I make the following orders: (1) I make orders as in the short minutes of order dated 16 April 1999, initialled by me and filed in Court this day. (2) I order that the costs of each party of the notice of motion filed by the plaintiff on 25 November 1998 be paid out of the proceeds of sale of the land referred to in paragraph 1 thereof. The exhibits may be returned. **********