Jewish National Fund of Australia Ltd v Bar-Mordecai

The case for the defendant

1. Mr Bar-Mordecai sought to call into question JNF's title. He submitted that in his Will, Mr Cohen had left the remainder after the expiration of Ms Morris' life estate to Keren Kayemeth LeIsrael (KKL) and not to "JNF of Australia" (8.25T). He also submitted that "by trickery, I think, the [JNF] got its name on the Certificate of Title and I have asked for proof that [JNF] is entitled to possession of a unit not left to it." He also referred to a "big swindle" by JNF (9.9T). And said Mr Cohen lacked testamentary capacity because of "dementia" and as he was "nearly blind" (9.12T).

Resolution of the claim for possession in the Unit 5 proceeding

1. Rule 13.1 Uniform Civil Procedure Rules 2005 (NSW) is in the following terms: (1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief - (a) there is evidence of the facts on which the claim or part of the claim is based, and (b) there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed. (3) In this rule, a reference to damages includes a reference to the value of goods.
2. The principles governing the exercise of the power conferred on the Court by r 13.1 Uniform Civil Procedure Rules are well known and require no exposition here. They were summarised by Macfarlan JA in O'Brien v Bank of Western Australia Limited [2013] NSWCA 71 (at [3]). The High Court decision in Spencer v Commonwealth [2010] HCA 28 ; 241 CLR 118 was concerned with s 31A(2) of the Federal Court Act 1976 (Cth) but the following principles stated in it are of general application: (a) On a summary judgment application, the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded (at [23]). (b) The critical question can be expressed as whether there is more than a "fanciful" prospect of success (at [25]) per French CJ and Gummow J) or whether the outcome is so certain that it would be an abuse of the process of the Court to allow the action to go forward (at [54] in the judgment of the plurality). Demonstration of the outcome of the litigation is required, not an assessment of the prospect of its success (ibid). (c) Powers to summarily terminate proceedings must be exercised with exceptional caution (ibid at [55]; see also French CJ and Gummow J at [24]). For present purposes "the critical question" is whether the matters raised by Mr Bar-Mordecai in defence have "more than a 'fanciful' prospect of success". It is apparent that Mr Bar-Mordecai impugns the factual basis of JNF's title and by his use of the language of "trickery" and "big swindle" raises the prospect of fraud.
3. There are a number of difficulties with his position. First, in my judgment it is wrong to say that Mr Cohen did not "leave" the property to JNF. Probate (with the Will attached) of Mr Cohen's last Will of 8 January 2013 is attached to Ms Vallejo's first affidavit as Annexure "A". By Clause 4 he made the following provision: I devise my home unit known as Unit 5, 79 O'Donnell Street, North Bondi together with the furniture and furnishings therein to my sister Seemah Morris for her use and exclusive enjoyment and benefit during her lifetime … AND I DIRECT my Trustees to pay all rates, taxes, maintenance, utilities and other periodic outgoings from my residuary estate, and after my sister's death to the Jewish National Fund, full details of which appear in Clause 8.(b) of this my Will. …. I LEAVE all the rest and residue of my Estate of whatsoever kind and wheresoever situate including any superannuation death benefit to my Trustee UPON TRUST: - (a) … (b) As to the balance after making such payments and provisions to KEREN KAYEMETH LEISRAEL, JERSUALEM, ISRAEL (also known as "the Jewish National Fund") represented in Australia by the Jewish National Fund of Australia Inc … (c) … AND I DECLARE that the receipt of the Treasurer or other authorised officer for the time being of the said Jewish National Fund of Australia Inc. shall be a full and sufficient discharge to my Trustee. With respect to Mr Bar-Mordecai's argument, it is fanciful to suggest by reference to the express terms of the Will that it was not Mr Cohen's testamentary intention that Unit 5 vest in JNF after his sister's death. It is clear he wished to benefit KKL. But he wished to do so through its Australian representative JNF. It is the receipt of JNF and not of KKL which operates as "a full and sufficient discharge to [his] Trustee".
4. More importantly, however, with one exception, the question of the "root" of JNF's title is not an element of JNF's cause of action. Although a unit in a strata plan, Unit 5 is Torrens title "land" governed by the provisions of the Real Property Act 1900 (NSW). In Cassegrain v Gerard Cassegrain & Co. Pty Ltd (2015) 254 CLR 425; [2015] HCA 2 at [16], French CJ, Hayne, Bell and Gageler JJ said: …. a central and informing tenet of the Torrens system is that it is a system of title by registration, not a system of registration of title. The title which a registered proprietor has "is not historical or derivative. It is the title which registration itself has vested in the proprietor". I have omitted footnote references to the leading case of Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70 at 385 and 386 (Barwick CJ). Their Honours pointed out that there are exceptions expressed in the Act and it is evident that Mr Bar-Mordecai purports to invoke the fraud exception in s 42(1) Real Property Act.
5. Section 42(1) is in the following terms: Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded. (Emphasis added) Other exceptions provided for not here quoted are not relevant in the present circumstances. The plurality emphasised that the estate of a registered proprietor is "paramount" (at [18]).
6. Clearly JNF's title by registration under the Real Property Act would be defeasible if it could be shown it was acquired by reason of fraud that could be brought home to it.
7. There are two difficulties here. The first is procedural. Mr Blank pointed out Mr Bar-Mordecai's defence does not plead fraud by JNF in its acquisition of the title. Rather it pleads that Ms Morris made a gift of the home unit to him, which gift was not perfected, but by implication takes priority over JNF's title. It does not otherwise impugn JNF's title. But Ms Morris was in no position to make such a gift in any event. Effect was given to the late Mr Cohen's Will by transmission application Dealing No. AM633214W (as Mr Bar-Mordecai admitted). A copy of the dealing is attached as Annexure B to Ms Vallejo's first affidavit. And a search of the Register attached as Annexure C demonstrates that as at 24 January 2019, Ms Morris was the registered proprietor of a life estate only and JNF of an estate in remainder.
8. Secondly, in his judgment of 15 April 2020 [2020] NSWSC 384, Davies J refused Mr Bar-Mordecai leave to bring a cross-claim calling into question the grant of probate of Mr Cohen's Will of 8 January 2013, asserting that in that event, Ms Morris as the surviving next of kin was entitled to an estate in fee simple and seeking to raise the imperfect gift she allegedly made in his favour on 22 January 2019. It is not necessary to summarise his Honour's reasons for his decision (see [77] - [101]), but essentially for the detailed and comprehensive reasons, with respect, that his Honour gave, Mr Bar-Mordecai had not demonstrated "that there [was] a prima facie ground for bringing" his cross-claims and that his Honour was obliged to dismiss the application under s 15 of the Vexatious Proceedings Act 2008 (NSW), Mr Bar-Mordecai being a person to whom that legislation applies. For the same reason his Honour held that the proposed cross-claims did not "disclose a reasonable cause of action" (at [101]).
9. In the circumstances as between him and JNF for the purpose of the present proceedings it is not open to Mr Bar-Mordecai to invoke the fraud exception to defeat JNF's title. Moreover, were it otherwise, he would not be able to establish a superior title for the reasons given by Davies J.
10. I am of the view that JNF is entitled to summary judgment in the Unit 5 proceedings.

Unit 7 proceedings

1. In the Unit 7 proceedings Mr Blank relied upon the evidence read in the Unit 5 proceedings and an additional affidavit of Ms Vallejo sworn on 30 January 2020.
2. By his defence filed on 14 June 2019, Mr Bar-Mordecai admitted to each of the averments in paragraphs 1, 2, 4, 5 and 6 of the Statement of Claim which I will set out below. In relation to paragraph 3 he raised Ms Morris's gift to him of Unit 7. The averments are: 1. Seemah Morris ("the Deceased") died on 30 January 2019; 2. The Deceased made a Will dated 27 July 2016 of which probate was granted to Samuel Benjamin and Yael Shudnow … ("Executors") on 15 April 2019 ("the Will"). 3. The Executors disclosed in the inventory of property attached to the grant of probate of the Will that as at the date of the Deceased's death, the Deceased was the registered proprietor of the property located at Unit 7 … being the whole of the land in Certificate of Title Folio Identifier 7/SP 568 ("Property"); 4. Clause 4 of the Will bequeathed the property to Keren Kayemeth LeIsrael, Jerusalem, Israel also known as the "Jewish National Fund" represented in Australia by the plaintiff. 5. On 15 April 2019, the Property vested in the Executors pursuant to section 44 of the Probate and Administration Act 1898. 6. On 10 May 2019, by Transmission Application Dealing Number AP242973, the plaintiff became the registered proprietor of the Property.
3. In his defence, Mr Bar-Mordecai also set out what he said were the facts underpinning the steps taken by Ms Morris to perfect her gift to him. Again, I will point out there is no pleading of any fraud on the part of JNF.

Application for summary judgment

1. By Notice of Motion filed on 14 May 2020, JNF seeks judgment for possession of the land under r 13.1 Uniform Civil Procedure Rules, leave to issue a writ of possession and a gross sum costs order under s 98 Civil Procedure Act.
2. JNF relied upon the grant of probate of the Will Ms Morris dated 27 July 2016 which was Annexure F to Ms Vallejo's first affidavit. By Clause 4, Ms Morris provided: I give and bequeath my home Units known as Units 5 and 7 … to KEREN KAYEMETH LEISRAEL, JERUSALEM, ISRAEL (also known as "the Jewish National Fund") represented in Australia by the Jewish National Fund of Australia Inc … .
3. Annexure G to Ms Vallejo's affidavit was a title search in respect of Unit 7 which referred to the dealing AP242973 and named the Jewish National Fund of Australia Limited as the registered proprietor (in fee simple).

Mr Bar-Mordecai's argument

1. Mr Bar-Mordecai criticised the conduct of third parties which he submitted frustrated Ms Morris's intention to take all steps necessary to perfect the gift of Unit 7 which she intended to make to him. Notwithstanding his formal admission that JNF was KKL's representative in Australia, Mr Bar-Mordecai raised the same point about the derivation of JNF's title and amplified his position in relation to Ms Morris's gift.

Resolution of the Unit 7 proceeding

1. Largely following the same path of reasoning set out above in relation to the Unit 5 proceedings, I am satisfied that JNF is entitled to summary judgment in respect of Unit 7.
2. JNF is the registered proprietor of the land. I am prepared to understand Mr Bar-Mordecai's submissions in relation to the fraud of JNF as extending to Unit 7 in as much as he argued that the conduct of the third parties of which he complained was performed for the purpose of preserving the interest of JNF as the expectant beneficiary of Unit 7 under Ms Morris's Will. However, the defence does not plead fraud by any party, let alone JNF, in the acquisition of the title to Unit 7. And simply put, there is no evidence indicating a possible underlying case of fraud.
3. Moreover, Davies J refused leave for Mr Bar-Mordecai to file a cross-claim seeking relief against JNF on the basis Ms Morris intended to, and had taken, all necessary steps to make the gift of Unit 7 (see [90] - [101]) because there is no prima facie basis for bringing a cross-claim on that ground. In my opinion this is an insurmountable barrier in the way of Mr Bar-Mordecai maintaining that he has an underlying defence or cross-claim capable of defeating JNF's title for the reasons I gave in the unit 5 proceedings
4. I am satisfied to the high degree of certainty required that the plaintiff is entitled to summary judgment.

Costs question

1. In each matter JNF seeks a "specified gross sum" costs order under s 98(4)(c) Civil Procedure Act. In this regard it relies principally upon the affidavit of Ms Vallejo of 22 May 2020. In her careful affidavit, Ms Vallejo has set out the rates charged by each of the solicitors who worked on the file for JNF and the rates charged by counsel for his work. It is unnecessary for me to set those rates out in this judgment. They are detailed at [6] of Ms Vallejo's affidavit. I am satisfied that they are reasonable. Indeed, my impression is that they are perhaps at the lower end of the scale likely to be charged by lawyers of similar experience, expertise and seniority.
2. In calculating the amount of professional costs claimed for work done by the solicitors, Ms Vallejo has made a 25 percent discount to reflect the difference between solicitor and client costs, on the one hand, and costs on the ordinary basis, on the other. She has claimed disbursements and counsel's fees as incurred. She gives evidence, that in her experience of cost assessment, provided counsel's rate is reasonable and the work is reasonably necessary, counsel's fees are allowed without deduction for a solicitor and client component. At least that is what I infer from her evidence at [22] of her affidavit.
3. Given the two proceedings are related, a body of the work done was common to both and she has apportioned that part of the charges equally between the matters. The amounts claimed on the ordinary basis are: Unit 5 proceedings Solicitor's professional costs $17,083.13 Counsel's fees $10,700.00 General disbursements $7,427.19 Total $35,210.32 plus GST Unit 7 proceedings Solicitor's professional costs $23,405.63 Counsel's fees $13,100.00 General disbursements $7,698.99 Total $44,204.62 plus GST When her affidavit was sworn on 22 May 2020 the matter had already been fixed for hearing and Ms Vallejo included an estimate of "anticipated costs" until judgment.
4. Mr Bar-Mordecai did not take issue with the Court's power to make a specified gross sum order, but submitted that the costs were unreasonable. In particular, he said that the nature of the proceedings did not warrant the various engagement of more than one solicitor and it was unnecessary to retain the services of counsel. These matters were developed somewhat in oral submissions.

Resolution

1. The power to make an order under s 98(4)(c) is more commonly invoked these days than in former times. As in all matters relating to costs, the Court has a wide discretion, which must be exercised judicially bearing in mind the principles which inform the exercise of the costs discretion generally. For present purposes, principles relevant to the Court's discretion include the desirability of avoiding the expense, delay, aggravation and possible futility of requiring a formal assessment of costs: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [28] - [29].
2. I am satisfied that it is appropriate to exercise the power to award costs on a specified gross sum basis. I am of the view that such an order is appropriate in circumstances where Mr Bar-Mordecai is self-represented and the delay and expense of formal assessment is likely to unnecessarily prolong the proceedings. There is no evidence one way or the other whether Mr Bar-Mordecai is in a position to discharge a liability for costs with appropriate promptitude, but I have borne the possible futility of a formal assessment in mind..
3. As I have said, I am satisfied that the rates at which the professional work has been charged are reasonable. I am also satisfied that the discount of 25 percent in respect of solicitors costs is appropriate to reflect the difference between costs on the solicitor and client basis and costs on the ordinary basis. I am satisfied that Mr Blank's fees are themselves reasonable reflecting appropriate charges for costs assessed on the ordinary basis. I am not satisfied that there is any degree of over-servicing. Each of the items for which charge is raised is appropriate work performed as a matter of reasonable necessity in furtherance of JNF's rights. The proceedings were complicated and prolonged somewhat by largely unsuccessful interlocutory proceedings initiated by Mr Bar-Mordecai and to which JNF was required to respond appropriately. As Davies J's reasons make clear Mr bar-Mordecai read six affidavits and criticised the conduct of a number of strangers to the proceedings. JNF was required to meet what was raised.
4. My one reservation about the matter was the factor of anticipated costs. However, the amounts set out at [20] and [23] of Ms Vallejo's affidavit, having regard to the work obviously done since 30 March 2020, seem modest enough to me. Allowing for a small degree of rounding down, I will make an order in the Unit 5 proceedings in the sum of $35,000 plus GST and in the Unit 7 proceedings of $44,000 plus GST.

Orders

1. As I have said it seems that Mr Bar-Mordecai has already surrendered possession of Unit 5 and in the circumstances, it is unnecessary for a writ to issue. A writ should issue in respect of Unit 7, but it may lie in the Registry for a period of 28 days to allow Mr Bar-Mordecai to vacate before enforcement is necessary. Other relief is sought in each Statement of Claim and I will reserve liberty to apply on short notice exercised within 14 days by application to the Possessions List Judge.
2. My orders are:

In proceedings No. 2019/96140 1. Summary judgment for the plaintiff for possession of the land comprised in Folio Identifier 5/SP568, being the land situated at and known as 5/79 O'Donnell Street, North Bondi in the State of New South Wales (the property); 2. Pursuant to s 98(4)(c) Civil Procedure Act 2005 NSW, the defendant to pay the plaintiff's costs in the sum of $35,000 plus GST; 3. Liberty to apply in respect of the balance of relief claimed by application to the Possessions List Judge made within 14 days of the date hereof;

In proceedings No. 2019/162728 1. Summary judgment for the plaintiff for possession of the land comprised in Folio Identifier 7/SP568, being the land situated at and known as 7/79 O'Donnell Street, North Bondi in the State of New South Wales ; 2. Leave to the plaintiff to issue a writ of possession at the expiration of 28 days from the date hereof; 3. Pursuant to s 98(4)(c) Civil Procedure Act 2005 NSW, the defendant is to pay the plaintiff's costs in the sum of $44,000. 4. Liberty to apply in respect of the balance of relief claimed in the Statement of Claim by application to the Possessions List Judge within 14 days of the date hereof.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 September 2020