Sion & Ors v NSW Trustee and Guardian [2012] NSWSC 949 | Case summary

Judgment 1The three plaintiffs, Ezekiel Haiem Sion, Louisa Joseph and Hilda Mordecai, are respectively a nephew and nieces of the late Meda Chamita (Meda). For ease of reference and without intending any disrespect I will refer to the plaintiffs separately as Ezekiel, Louisa and Hilda. The defendant, NSW Trustee and Guardian, is the Administrator of Meda's Will. 2The plaintiffs claim that "in or about mid 1997" Meda and her husband, the late Abraham Chamita (Abe) made an agreement with them that in consideration for them "taking care of" Meda and Abe and taking care of "their affairs", Meda and Abe would leave their estates to the plaintiffs (the Agreement). The plaintiffs claim that although they took care of Meda and Abe and took care of their affairs, Meda breached the agreement by failing to leave her estate to the plaintiffs. In the Statement of Claim filed in July 2010 the plaintiffs sought a declaration that the defendant holds the whole of Meda's estate on trust for them. They also sought an order that the defendant distribute the whole of Meda's estate to them. However during final submissions the relief sought was limited to three-elevenths of the value of Meda's estate. This adjustment was made on the basis that the plaintiffs' claim that Meda promised to leave her estate to all her nieces and nephews. 3The plaintiffs also make a claim that in or about 1997 Meda represented to the plaintiffs that she did not have a Will and that if the plaintiffs cared for her and Abe and looked after their affairs, she would leave her estate to the plaintiffs. It is claimed that the plaintiffs relied upon these representations to their detriment and that Meda knew that they were so acting in reliance upon the representations. The plaintiffs claim that the defendant is bound by the representations and that it would be inequitable for the defendant not to be so bound. The claim as pleaded in the Statement of Claim is that "subject to the principles of equitable or proprietary estoppel" the defendant is bound by Meda's representation. 4The defendant claims that the plaintiffs' evidence of the conversation with Meda and Abe does not establish that Meda intended to enter into a legally binding relationship with the plaintiffs. This claim is based partly on the terms of the conversation and partly on the difficulty in ascertaining the terms with any certainty. The defendant also claims that at the time of the alleged conversation Meda was suffering from dementia such that she would not have had the requisite intention to enter into a binding legal agreement. Background 5Meda was the daughter of Ezra and Kitty Messiah. She had two brothers, Mordecai and Joseph, and a sister, Sophie. Meda was born in Calcutta, India (on 4 August 1921). She lived her early life in Singapore with her parents and siblings and after the death of her mother the family immigrated to Australia. Meda's sister, Sophie, married Sion Ezekiel in 1938. Mr and Mrs Ezekiel had 8 children being the three plaintiffs, Katie, Rachel (now deceased), Ezra, Joseph and Solomon. 6Meda met Abe in Sydney and they married on 17 January 1954. They did not have any children and for the whole of their married life they lived in Clyde Street, Bondi until they moved into an aged care facility in Waverley (Meda in 1998 and Abe in 2001) known as Phillip House. 7It is apparent that in 1968 an investment block of flats in Gould Street, Bondi (Gould Street) was purchased in Meda's name. On 26 September 1968 Meda executed an undertaking and agreement addressed to Abe that provided that in consideration of Abe advancing to Meda the sum of $7,000, she would provide security over Gould Street for the principal sum and interest at the rate equivalent to the rate charged by the Commonwealth Trading Bank of Australia on first mortgages (the Loan Agreement). The Loan Agreement also provided that Meda would repay the principal sum by instalments of $250 on each of the last days of March, June, September and December each year with the first instalment being payable on 31 December 1968. It also provided that Meda would repay the whole balance of the $7,000 together with interest by 30 June 1975. 8On 29 September 1966 Meda and Abe executed mutual Wills in accordance with which they left each other their estates; or if one or other predeceased the other, to any children of the marriage in equal shares; and if there were no children of the marriage then to Zsyfra Aptekarz (Zsyfra), Abe's cousin, and such of Zyfra's children who survived Meda. Zsyfra died on 16 September 1995 and is survived by her husband Naftali Aptekarz (now aged 81 years), and four children. I am satisfied that these Wills were made to honour an obligation that Abe felt he had to his cousins for saving his life and protecting from the Nazis during the Second World War (referred to later). 9On 24 January 2001 Abe executed a new Will revoking all former Wills and appointing Victor Gross and Ezekiel as his executors. That Will included the following provision: IF my wife MEDA survives me then I GIVE her all the net income from my estate during her lifetime. It is my wish that the care of my wife remain with my nephew (by marriage) EZEKIEL. 10The balance of the Will provided for 1% of the estate to go to the Spastic Centre of New South Wales with the residue of 99% going to Abe's nieces and nephews as to 77% shared equally between Louise, Katie, Hilda, Ezekiel and Solomon; 11% as between Ezra (as to 5%) and his two children (3% each); and the balance of 11% on trust for Joseph. Abe died on 25 July 2005 and Meda died on 15 May 2009. The Conversation 11Ezekiel, his wife Sophie, and Louisa gave evidence of the conversation that the plaintiffs allege occurred in 1997 with Meda and Abe upon which the plaintiffs rely to claim that they are entitled to the relief sought. Ezekiel's evidence 12Ezekiel arrived in Australia in approximately 1965 aged 18 years. Ezekiel married his wife, Sophie, in 1969. They lived in Dulwich Hill for approximately five years and then moved to Turramurra in 1974 where they still reside. From 1974 to 1998 Ezekiel worked in the Commonwealth Public Service, firstly at the Australian Bureau of Statistics and then at the Commonwealth Employment Service (CES). Ezekiel and his wife have two sons, the first born on 8 September 1975 and the second born on 30 March 1977. 13Between 1974 and 1997 Ezekiel "rarely" or "hardly ever" visited Meda and Abe at their home. There was some evidence that telephone calls may have occurred from approximately 1987, however they also appear to have been rare. Ezekiel claimed in his affidavit evidence that "in early to mid 1997" Meda telephoned him and said, "we want you and your sister Louisa to visit us, we wish to talk to you about our future". Ezekiel's affidavit evidence was that when he, his wife Sophie and Louisa visited Abe and Meda, the following conversation took place: Abe: We want your assistance in managing our affairs. We're getting on and we're not well. Meda: Yes, please, we want you to do this. Ezekiel: What do you want us to do, do you want us to look after your affairs or organise help? Meda: That's what we want you to do, I'm not well and can't cook much. Louisa: Who are you going to leave your estates to in your Wills. Abe: To you, to do this. Meda: Yes, to you. Abe: There is no one else. 14Ezekiel, gave further affidavit evidence that in October 1997 there was another conversation in the following terms: Meda and Abe: We need more of your help in managing our affairs. Abe: I'm having difficulty coping with Meda's poor health and with routine matters such as paying bills and shopping. This is exacerbated by Meda having her arm in a sling. Meda: I'm not well, I've got my arm in a sling. I can't cook and I can't look after myself. 15Ezekiel claimed that after the conversation with Abe and Meda in early to mid 1997 he and Louisa committed themselves to keeping a "close eye" on Meda and Abe by telephoning and visiting them and by keeping regular contact with them. He said that he did not wish to intrude too much because he wished "them to continue to feel empowered in managing their lives". Ezekiel claimed that he would visit them each weekend and telephone them during the week. However in October 1997 when he visited Clyde Street he noticed that Meda's arm was in a sling and plaster. Meda informed Ezekiel that she had fallen and broken her arm. It was after the conversation in about October 1997 referred to above that Ezekiel decided to assist Meda and Abe to a "greater extent". He said he could do this because of his pending redundancy from work that would provide him with more time to assist them. He also claimed that he was "encouraged" to provide a higher level of assistance because they had said that they would leave their estates "to you to do this". His affidavit evidence was that he did not request any payment from Meda and Abe for the effort involved because they had promised to leave their estates to him and his siblings. 16Ezekiel was made redundant on 27 April 1998 at the age of 55 years. At that time he had the option of making application to be deployed in other divisions of the Commonwealth Public Service. However he claimed that in order to provide the high level of assistance necessary for Meda and Abe he was "unable to engage in full-time employment" to provide "for my wife and family and our future". He also claimed that he "felt that my financial future was taken care of with the eventual bequest" from Meda and Abe and he therefore "felt able to assist them with the level of assistance they required, unfettered by any financial concerns". 17Ezekiel gave evidence that in late 1997 he requested Meda and Abe to prepare Powers of Attorney and Wills if they did not have Wills. His evidence was that neither Abe nor Meda informed him that they had existing Wills or Powers of Attorney. It was not until late 1998 that Abe executed a Power of Attorney in favour of Ezekiel and he did not execute his Will until 24 January 2001. Ezekiel's affidavit evidence was that by January 2001 Meda was "too ill with Dementia" to prepare a Will. 18Ezekiel also gave affidavit evidence that from 1997 he concentrated on improving the "quality of life" of Meda and Abe and for the "next 12 years" he attended to their needs. He claimed that he would visit them at least once a week and more frequently if there were medical or other appointments to be attended. He claimed that from 1 July 2001 he assisted Meda and Abe in a range of matters listed in an Annexure to his affidavit sworn on 17 June 2010 (the List). The List was prepared from memory for this litigation (tr 27). It is headed "Matters attended to by Zeke for and on behalf of Meda (and Abraham) Chamita from 1 July 2001". It includes matters that would not have occurred or been necessary after Meda (in July 1998) and Abe (in 2001) moved into Phillip House (tr 27, 28). The List does not specify the time the activities might have taken and in most instances it does not specify how often the activity occurred. However, there are some exceptions, for instance, there is the claim of visits to Meda and Abe at "the nursing home (at least once a week)". In cross-examination Ezekiel said that it was his practice to visit Phillip House on Mondays from about 11.00 am to about 2.00 pm (tr 20). There are also claims mail was collected "at least once a week" and that "monthly" budgets were maintained and "monthly rentals" from the Gould Street property and later the Clyde Street property were banked. 19His affidavit of 7 September 2011 states that prior to his redundancy he had decided that he would commence a Professional Recruitment Consultancy because the CES was then vacating that field. He claimed that he would have been able to capitalise on his experience with the CES where he had been the manager of its Professional Employment Service for about fourteen years. During this time he obtained industry knowledge, extensive professional development and a wide range of industry contacts. He prepared a business plan for a business to be operated under the name "EZYEmployment". That business plan included set up costs of $100,000 ($50,000 from his own funds and $50,000 by way of bank overdraft). He had hoped to earn an annual income of about $130,000 in the first year of operation based on a remuneration of $90,000, fringe benefits of $7,000 and business profit of $33,000. His affidavit of 7 September 2011 included the following (par 10): Because of aunt Meda's and Abe's wishes I did not pursue the private sector option but spent from 1997 to 2009 looking after aunt Meda's and Abe's affairs. 20Once both Meda and Abe were living in Phillip House the tasks were limited to visiting them, attending to some of their needs from time to time (including some shopping), attending to the books and dealing with the rentals from the Gould Street property and later the Clyde Street property, paying bills and liaising with the staff at Phillip House. I accept that there were some weeks in which Ezekiel had to spend more time looking after the affairs of Meda and Abe, for instance, when Abe moved out of the Clyde Street property into Phillip House. Furniture had to be moved and cleaning had to occur so that the property could be rented. This was obviously a significant task. 21Ezekiel was asked in cross-examination whether after July 1998 (when Meda was admitted to Phillip House) the amount of time that was needed to look after Meda's and Abe's affairs "dropped off". He said that after July 1998 "it increased" (tr 22). However when pressed about his claim that he was spending "more time" after July 1998 he said that he was "spending as much time". He justified this claim by suggesting that although Meda was no longer living at Clyde Street her affairs were still his responsibility (tr 23). He then claimed that he was working on her affairs "a lot of the time" albeit that he was not able to claim that it was "the majority of the time" (tr 26). 22Ezekiel also gave the following evidence in cross-examination (tr 28-29): Q. You would have visited your aunt or uncle whether or not there had been any conversations about looking after them, wouldn't you? A. Not with the frequently (sic) that was required to do it when I took on this task to look after them. Q. So you would have visited them regularly? A. Not regularly. 23In December 2001 Ezekiel made an application to the Guardianship Tribunal for appointment as the manager of Meda's financial affairs. The Guardianship Tribunal made orders appointing Ezekiel as Meda's financial manager on 8 January 2002. The reasons for that decision noted that Ezekiel had informed the Tribunal that "because of his financial background and his position as the eldest nephew he had been assisting" Meda and Abe "over the past few years with management of their finances". The Tribunal referred to the investment property owned by Meda (Gould Street) with an estimated value at that time of $1.4 million with net rental returns of approximately $48,000 per annum. It was also noted that the Clyde Street property was in Abe's name and the investment property was in Meda's name but their income and expenditure had always been pooled. 24The Tribunal recorded that Ezekiel had informed it that there was no plan to sell the properties but that there was a need for someone with legal authority to authorise payments in relation to the investment property and to ensure that funds were available to meet Meda and Abe's ongoing needs. It also noted that Ezekiel had pointed out to the Tribunal that Abe's Will, that named Ezekiel as joint executor, stated that it was Abe's "wish that the care of my wife remains with my nephew, Ezekiel". 25The Tribunal also noted a number of other matters of which Ezekiel advised it. They included the following: He advised that although Mrs Chamita has several nieces and nephews, because of his financial background and role as the eldest nephew, he has been informally assisting Mrs Chamita with her finances. On a more formal level he has been managing her husband's finances as his appointed attorney. Mr Sion told the Tribunal that he is a retired economist with accountancy training and his wife is tax accountant. He is currently managing his cousin's substantial estate. 26Ezekiel was cross-examined as to why it was that he did not advise the Tribunal of the agreement into which he and his co-plaintiffs had allegedly entered with Meda and Abe in 1997. That cross-examination included the following (tr 30-32): Q. Do you agree with the proposition that you did not tell the Guardianship Tribunal of any arrangement, to use a general word, that had been entered into with regard to the Will or the estates of Meda or Abe? A. I mentioned to the Guardianship Board that Abe had indicated to me that he - that Abe had written into his Will, rather, that I would look after Meda in the event that he was not able to or in the event that he passed away. ... Q. Do you agree that you did not point out to them any arrangement or agreement or conversations that you had with Abe or Meda whereby, if certain things happened, you and family members would receive their estates? A. The issue did not arise, so I did not see fit to point this out to them. Q. You did not disclose anything about that subject? A. It did not appear to be necessary to - for me to do so. ... Q. But you did point out to them what was in your uncle's will? A. That he wanted me to look after Aunt Meda in the event that he was unable to. Q. But you didn't go on and say "They had told me that if I looked after uncle Abe and Aunt Meda I and my siblings, and perhaps some cousins, would get everything"? A. I didn't see the relevance of it at the time. ... Q. You put yourself forward as appropriate to be the financial manager because you were, amongst other things, the eldest nephew; correct? A. That's right, yes. Q. That you were taking on some honourable family responsibility as the eldest nephew looking after the ageing and sick aunt; correct? A. Yes. Q. And you told them you had been managing her husband's affairs as the attorney? A. Yes. Q. But you didn't think it was relevant, or it didn't cross your mind to say, "Well, by the way, I should also tell you that they've promised me and my family that we will get their whole estate when they die"? A. There was nothing sinister in me overlooking that, sir. Q. You say you overlooked it? A. I said I didn't - I didn't mention it at the time, no. 27I accept that Ezekiel attended to the matters he describes in the List but I am not persuaded that they were so burdensome or time consuming that he was unable to pursue other activities. Indeed, as noted by the Guardianship Tribunal at the time Ezekiel made the application in 2001 to become Meda's financial manager, he was "managing his cousin's substantial estate". This matter was not the subject of any explanation or cross-examination but it is clear that Ezekiel was not impeded from that management task by the time he was devoting to Meda's and Abe's affairs. 28On 6 April 2010 Ezekiel submitted a Claim Form to the defendant in respect of Meda's estate. That Claim Form included the following certification: I hereby certify that the sum of $503,830.95 is justly and truly due to me from the abovenamed Estate, and that no portion of the said amount has been paid to me since the death of the said deceased, and that I hold no security whatever in respect of the said claim. 29That Claim Form included the following: 1998 to 2009 Estate administration - Meda Chamita - 499,200.00 1998 to 2009 inclusive - averaging 2 days per week: 52 x 2 x 8 x 12 = 9,984 HRS at 50 ph = May 2009 to March 2010 As per attached log sheet: 3,700.00 Time: 74 hours at 50 ph 930.95 Out of pocket expenses 503,830.95

Sion & Ors v NSW Trustee and Guardian

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