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Supreme Court 28 February 2003

HILLSTON v BAR-MORDECAI

[2003] NSWSC 89

Fraud & dishonesty
UNDUE INFLUENCE MEDICAL ATTENDANT DE FACTO RELATIONSHIP THIRD NO INDEPENDENT ADVICE FAMILY PROVISION

Citation: Hillston v Bar-Mordecai [2003] NSWSC 89
Court: Supreme Court of New South Wales (Equity Division)
Date: 28 February 2003
Judge(s): Bryson J

Background

Eveline Hillston died in June 1994 aged 83, leaving a will that had appointed her GP, Michael Bar-Mordecai, as executor and trustee. The Court declined to grant probate to him on the basis that he was unsuitable. Letters of administration were instead granted to Allan Hillston, one of Eveline's nephews by marriage, who then brought proceedings seeking to have a series of gifts set aside.

The gifts were made during a period in which Bar-Mordecai, then in his mid-thirties, lived in shared households with Eveline from around 1983 until her death. At the time the relationship began, Eveline was approximately 72. Throughout the period, Bar-Mordecai acted as her treating GP, referred her to specialists, and controlled her access to medications.

Over the course of the relationship, Eveline transferred significant assets to Bar-Mordecai. These included sums of money, a medical surgery (transferred without payment of the stated consideration, with her later discharging the mortgage over it), and a one-third interest in a residential property at Eastbourne Avenue, Clovelly, the purchase price of which she funded. Bar-Mordecai received no independent legal or financial advice in these transactions, nor did Eveline.

  • Whether the gifts of money, the surgery, and the property interest were obtained through the exercise of undue influence by Bar-Mordecai over Eveline Hillston
  • Whether Bar-Mordecai and Eveline were in a de facto relationship, and if so, whether that rebutted the presumption of undue influence arising from the doctor-patient relationship
  • Whether Bar-Mordecai was an eligible person under the Family Provision Act 1982 to make a claim on Eveline's estate, and whether the prescribed period for such a claim should be extended
  • Whether the grant of letters of administration to Allan Hillston should be revoked on the basis that false evidence was relied upon when administration was granted

Decision

Undue Influence

Bryson J found that the doctor-patient relationship between Bar-Mordecai and Eveline gave rise to a presumption of undue influence. Bar-Mordecai was her GP throughout the entire period; he treated her, controlled referrals, and managed her access to medications. Eveline received no independent advice in connection with any of the transactions. The presumption was not rebutted, and the gifts were accordingly set aside.

The De Facto Relationship Defence

Bar-Mordecai argued that he and Eveline were in a de facto relationship akin to marriage, and that this explained and legitimised the transfers. Drawing on a large body of evidence from relatives, friends, and associates, Bryson J rejected this contention. The Court found that no de facto relationship existed on the facts. Bryson J went further and held that, even if such a relationship had existed, it would not have rebutted the presumption of undue influence arising from the medical attendant context.

Family Provision Claim

Bar-Mordecai's family provision claim failed on multiple grounds. The prescribed period under the Family Provision Act 1982 had expired and Bar-Mordecai did not establish sufficient cause for an extension. He was also found not to be an eligible person within the meaning of the Act. On the merits, the Court found there was no prospect of success in any event, noting that the relationship had been one of economic exploitation rather than mutual support.

Claim to Remove the Administrator

The claim to revoke letters of administration granted to Allan Hillston, which was based on allegations that false evidence had been relied upon in the original proceedings, was dismissed. Bryson J found no sufficient basis to disturb the grant.

Orders Made

In proceedings 3240 of 1998 (undue influence claims):

  • Judgment for the plaintiff in the sum of approximately $825,360.51
  • Declaration that the transfer of the surgery at 212 Clovelly Road, Clovelly, the discharge of the mortgage over it, and related dealings were gifts obtained by undue influence, and that those gifts are set aside
  • Declaration that the transfer of a one-third interest in 30 Eastbourne Avenue, Clovelly, and related dealings were a gift obtained by undue influence, and that gift is set aside
  • Order that proceeds from the sales of those properties, including investment proceeds held by court-appointed trustees, be paid to the plaintiff
  • Liberty reserved to the plaintiff to apply for further orders giving effect to the declarations
  • Order for an account of all estate assets that Bar-Mordecai got in, converted, paid out, or otherwise dealt with on or after 25 June 1994, to be referred to the Registrar in Equity
  • Costs reserved

In proceedings 1707 of 1999 (Bar-Mordecai's family provision claim): Dismissed.

In proceedings 3039 of 2002 (claim to revoke letters of administration): Judgment for the defendant (Allan Hillston).

Key Takeaways

  • A presumption of undue influence arises from the medical attendant relationship and, where the patient has conferred substantial gifts on their treating GP without obtaining independent advice, that presumption is not easily rebutted.
  • The existence of a de facto or spousal relationship does not automatically displace the presumption of undue influence in a doctor-patient context; Bryson J held that the two principles operate independently.
  • Where a claimant under the Family Provision Act 1982 is not an eligible person and has not established cause for extending the prescribed period, the claim fails at a threshold level without reaching the merits.
  • Sufficient cause for extending a family provision limitation period requires more than an unexplained or unexplored delay; in this case the Court found Bar-Mordecai could have applied within the prescribed period but did not.
  • The court's assessment of credit was central to the de facto relationship finding: Bar-Mordecai's evidence was found to be unreliable in material respects, including on questions of cohabitation, shared sleeping arrangements, and the nature of the parties' emotional bond.

Legislation and Cases Referenced

Legislation:
- Family Provision Act 1982 (NSW)
- Wills Probate and Administration Act 1898 (NSW)
- Property (Relationships) Act 1984 (NSW)

Cases:
- Johnson v Buttress (1936) 56 CLR 113
- Watkins v Combes (1922) 30 CLR 180
- Plunkett v Bull (1915) 19 CLR 544
- Linderstam v Barnett (1915) 19 CLR 528
- Haskew v Equity Trustees Executors and Agency Co Ltd (1919) 27 CLR 231
- Jenyns v The Public Curator (Queensland) (1953) 90 CLR 113
- Yerkey v Jones (1939) 63 CLR 649
- Garcia v National Australia Bank Ltd (1998) 194 CLR 395
- Royal Bank of Scotland v Etridge (No 2) [2001] 3 WLR 1021
- Hartigan v International Society for Krishna Consciousness Inc [2002] NSWSC 810
- Lewis v Lewis [2001] NSWSC 321
- Mitchell v Homfray (1881) 8 QBD 587
- Quek v Beggs (1990) 5 BPR 11761
- Poosathurdi v Kanappa Chettiar [1919] LR 47 IA 1