Tawil v Public Trustee of NSW; Estate of Michael Pavlovich Biriukoff

Supreme Court of NSW|2009-02-19|Before: Brereton J

CITATION : Tawil v Public Trustee of NSW; Estate of Michael Pavlovich Biriukoff [2009] NSWSC 256

HEARING DATE(S) : 19 February 2009 JURISDICTION : Equity Division

DECISION : Proceedings dismissed with costs

(NSW) Civil Procedure Act 2005 LEGISLATION CITED : (NSW) Supreme Court Rules 1970 (NSW) Wills Probate & Administration Act 1898

Birch v Treasury Solicitor [1950] 2 All ER 1198 Cormack v Permanent Trustee Co Ltd (1903) 4 SR (NSW) 17 Delgoffe v Fader [1939] 3 All ER 682; [1939] Ch 922 European Hire Cars v Armstrong [2007] NSWSC 629 Ferella v Otvosi [2005] NSWSC 678; [2005] 63 NSWLR 523. Harneiss v Public Trustee (1940) 40 SR (NSW) 414. Hudson v Spencer [1910] 2 Ch 285. Moore v Darton (1851) 4 De G & Sm 517; (1851) 64 ER 938 CASES CITED : Newmont Pty Limited v Laveton Nickel NS (No 2) [1981] 1 NSWLR 221 Plunkett v Bull (1915) 19 CLR 544. Porter v Walsh (1985) 1 I R 284 Public Trustee v Bussell (1993) 30 NSWLR 111 Public Trustee v Young (1940) 40 SR(NSW) 233 Re Andrews (1902) 2 Ch 394 Re Dillon (1890) 44 Ch D 76 Re Lee [1918] 2 Ch 320 Re Weston [1902] 1 Ch 680

PARTIES : Yousef Tawil (plaintiff) Public Trustee of NSW (defendant)

COUNSEL : J R Wilson SC (plaintiff) P Hallen SC w B Townsend (defendant)

SOLICITORS : E H Tebbutt & Sons (plaintiff) Public Trustee NSW (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1446/08 Tawil v The Public Trustee of New South Wales; Estate of Michael Pavlovich Biriukoff JUDGMENT (ex tempore) 1 HIS HONOUR: Michael Biriukoff died at St Vincents Hospital on 21 April 1996 having been driven there from his lodgings at Strathfield the previous evening by the plaintiff Yousef Tawil. Mr Tawil says that when the deceased entered his car at Strathfield on the evening of 20 April 1996 he had with him some bags, including a black shoulder bag, and on the journey from Strathfield to the hospital made statements that he wished Mr Tawil to have everything in the black shoulder bag if anything should happen to him. Mr Tawil says that, on arrival at the Hospital, the deceased left the black shoulder bag in Mr Tawil's possession, and after Mr Biriukoff's death he found that it contained keys to two motor vehicles and a number of bank documents - including some that related to accounts with the Bank of the West, San Francisco, California, with funds amounting to about $US190,000. 2 Mr Biriukoff left no Will. Letters of Administration in respect of his intestate estate were granted to the defendant, the Public Trustee of New South Wales, on 16 November 1998. The gross value of the estate in New South Wales at the date of death was estimated at $14,796, but moneys held in various overseas bank accounts - those in California and also some in the United Kingdom and Switzerland - were said to total some $420,000. The Public Trustee has since collected all of the overseas accounts, and as at 12 February 2009 the estate comprises about AUD486,644, $318,000 of it capital and $150,000 of it income, held in the Public Trustee's Common Fund. 3 Upon his death, Mr Biriukoff's closest surviving relative was an aunt Nina Georgievna Stimpson, who herself died on 1 January 1999. The Public Trustee filed a probate election in respect of her estate on 9 February 1999, and the sole beneficiary of her estate is her daughter, Mary Cross. 4 By Summons filed in this Division on 10 November 1997, Mr Tawil sought a declaration that he was absolute owner of the funds held on behalf of the deceased in the various bank accounts in Australia and overseas, and of the two motor vehicles. The Summons named as defendant the Public Trustee, although he had not yet obtained letters of administration. The Summons was heard by Hodgson CJ in Eq, as his Honour then was, the then Chief Judge in Equity, on 1 July 1998. His Honour declined to make the declaration sought, and having observed that "unless the plaintiff satisfies me that there is some reason to keep these proceedings alive, I would propose to dismiss the proceedings", in due course he dismissed the proceedings accordingly. 5 By the present Summons filed on 12 February 2008, Mr Tawil has again commenced proceedings in this Division, again naming the Public Trustee as defendant, and seeking substantially the same relief, although as the case was ultimately presented somewhat more limited in its scope as to the bank accounts the subject of the application. The main issues are, first, whether Mr Tawil is barred by the dismissal of the 1997 proceedings from maintaining these proceedings, and secondly whether the delivery by the deceased to the plaintiff of bank statements of accounts and deposit certificates in the name of the deceased constitute a donatio mortis causa of the moneys in the relevant bank accounts.

Are the proceeding barred by the dismissal of the 1997 proceedings? 6 In the proceedings that were ultimately heard by Hodgson CJ in Eq, the plaintiff relevantly claimed a declaration that he was the absolute owner of funds on deposit with Bank of the West, San Francisco, account 042-XXX942, account 042-XXXXXX847 and account 042-XXXXXX854. The plaintiff further claimed an order that the defendant pay to him the balance held in those accounts. As I have recorded, the named defendant was the Public Trustee. 7 In the judgment given on 1 July 1998, Hodgson CJ in Eq noted that although the Public Trustee had been joined as a defendant, it had not appeared. His Honour said that, as a bare repository of title under (NSW) Wills Probate & Administration Act 1898, s 61, the Public Trustee was not an appropriate contradictor of the plaintiff's claim, which position the plaintiff then apparently accepted. His Honour was not prepared to dispense with a contradictor, saying "There would need to be evidence of the taking of these steps [that is to say, appropriate search and inquiry for next-of-kin] or evidence explaining why these steps had not been taken" before the Court could dispense with a contradictor. However, his Honour accepted that there might be some utility in making a declaration if there were a proper contradictor. 8 His Honour then turned to the question of donatio mortis causa and concluded that, on the evidence before him, which is the same as the evidence before me, there was not an effective donatio mortis causa of the bank accounts, but there apparently was of the two motor vehicles. His Honour then expressed the conclusion, which I have already mentioned, and thereafter dismissed the proceedings. 9 At that time, (NSW) Supreme Court Rules 1970, Pt 40 r 8, provided relevantly as follows: (1) Where ... under these rules … the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the order for the dismissal shall not, subject to any terms or conditions on which the order for dismissal is made, prevent the plaintiff or claimant from bringing fresh proceedings or claiming the same relief in fresh proceedings. 10 However, that rule did not operate to permit fresh proceedings to be brought where there had been a trial on the merits [Newmont Pty Limited v Laveton Nickel NS (No 2) [1981] 1 NSWLR 221 as noted at (1978) 3 ACLR 945; see also Ferella v Otvosi [2005] NSWSC 678; (2005) 63 NSWLR 523, 527 [11]]. 11 Now, (NSW) Civil Procedure Act 2005, s 91, relevantly provides as follows: (1) Dismissal of: (a) any proceedings, either generally or in relation to any cause of action, or (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. (2) Despite subsection (1), if, following a determination on the merits in any proceedings, the court dismisses the proceedings, or any claim for relief in the proceedings, the plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that or any other court. 12 Whether the current issue is to be approached by reference to Pt 40 r 8 of the former rules which was operative when the dismissal took place, or s 91 of the current Act, the question is whether Hodgson CJ in Eq's decision amounted to a determination "on the merits" of the claim. 13 The merits of a claim, naturally enough, involve its legal merits as well as its factual merits. A determination on the merits is normally to be distinguished from a determination by default or by consent or by a dismissal for non-prosecution which does not involve examination of the merits. In this case, what took place before Hodgson CJ in Eq on 1 July 1998 was the final hearing of a summons for a declaration. While no contradictor was present, the evidence in support of that declaration was put before the Court and considered by the Judge. The Judge did not dismiss the case for want of prosecution, but because on the merits his Honour came to the conclusion that the plaintiff was not entitled to the relief sought. That that is so is, I think, reflected in the conclusion which I have already recorded. Essentially, his Honour offered the plaintiff the opportunity to establish some reason to keep the proceedings alive, but was plainly not satisfied that any such reason was shown, and proceeded to dismiss them. His Honour did so having determined, on the merits, inter alia that there was no donatio mortis causa. 14 The 1998 proceedings were between the same parties as the present proceedings. The issues were the same as in the present proceedings. It follows that that judgment gives rise to a res judicata and that these proceedings cannot be sustained. 15 That said, the legal issues have been fully argued, and it is much more satisfactory to decide these proceedings on the substantive ground argued than on the technical res judicata basis, and I shall proceed to consider the substantive issues. Donatio Mortis Causa 16 The elements of a valid and effective donatio mortis causa were enunciated by Luxmoore LJ in Delgoffe v Fader [1939] Ch 922; [1939] 3 All ER 682 and repeated by Cohen J in Public Trustee v Bussell (1993) 30 NSWLR 111, 115 as follows: There are three essential matters required to constitute a donatio mortis causa . They are: (1) the gift must be made in contemplation of the donor's death, although not necessarily in expectation of death; (2) there must be delivery of the subject matter of the gift to the donee or a transfer of the means or part of the means of getting at the property, or, as has been said, the essential indicia of title; and (3) the gift must be conditional upon it taking effect on the death of the donor, being revocable until that event occurs; Harneiss v Public Trustee (1940) 40 SR (NSW) 414 at 416-417; 57 WN(NSW) 157 at 157-158; Dufficy v Mollica {1968] 3 NSWR 751 at 758; Sen v Headley [1991] Ch 425 at 431. 17 The application of this test in the context of bank credits is not without its difficulties. In this case I have been assisted not only by the comprehensive arguments by counsel on the issue, but also by the article of Mr R Else Mitchell, as that later distinguished judge then was, "Donationes Mortis Causa of Bank Credits" (1943) 17 ALJ 167. 18 In Moore v Darton (1851) 4 De G & Sm 517; (1851) 64 ER 938, a document executed when a deposit of money was made acknowledged the receipt of the money, expressed the terms on which it was held, and showed what the contract between the parties was. The result was that the delivery of the document was held to be a good donatio mortis causa of the money deposited, as Cotton LJ observed in Re Dillon (1890) 44 Ch D 76, which considered a bank deposit receipt, his Lordship concluding that such a receipt was capable of being, by delivery, the subject of a valid donatio mortis causa, notwithstanding that the intervention of the Court to compel the completion of the gift by requiring the executors to perfect it would be necessary. His Lordship observed that it was established that, in a case of donatio mortis causa, the Court would intervene to perfect an imperfect gift, notwithstanding its usual refusal to do so. 19 Simple fixed deposit receipts were thereafter held to be subject of valid donationes mortis causa [Porter v Walsh (1985) 1 I R 284; affirmed (1896) 1 I R 148; Hudson v Spencer [1910] 2 Ch 285; Cormack V Permanent Trustee Co Ltd (1903) 4 SR(NSW) 17; Public Trustee v Young (1940) 40 SR(NSW) 233. Mr Else Mitchell pointed out that in those cases the deposit receipts in question generally contained the full terms of the contract between the bank and the depositor, and their production was necessary to withdraw the deposit, so that they could be said to be "documents of title" to the moneys deposited. 20 It has also been held that the deposit book for a bank savings account is a sufficient indicium of title for its delivery to constitute a valid donatio mortis causa [Re Weston [1902] 1 Ch 680; Re Andrews (1902) 2 Ch 394; Re Lee [1918] 2 Ch 320; Public Trustee v Young; Harneiss v Public Trustee 40 SR(NSW) 414]. While Mr Else Mitchell doubted the extension of the doctrine to these cases, in most of them at least it appears that presentment of the passbook to the bank at the time of withdrawal was at least stipulated to be a necessary requirement to obtain a withdrawal, even if the bank might from time to time waive that requirement. It seems to me that the number, and antiquity now, of those authorities, makes it too late to consider that the passbook of a savings account could not be the subject of the valid donatio mortis causa. 21 In respect of other types of bank accounts, however, the cases appear to be uniformly to the effect that the statements of a cheque account or the like are not capable of constituting a valid donatio mortis causa. Mr Else Mitchell wrote (at 168): When one comes to consider the pronouncements on deposits or credits in bank accounts other than savings banks the position is different, but not illogical. Pass books of such trading or current accounts cannot in general constitute indicia of title in the sense in which that expression is used in the savings bank cases, as they are merely used to record transactions on the account. Even if they contained the full terms of the contract between banker and customer they could not under any circumstances be regarded as indicia of title so that delivery might support a donatio mortis causa [ Delgoffe v Fader (supra)]. 22 It is true that the requirements of a donatio mortis causa, at least so far as it was once said that the document must include all the terms of the contract or chose in action, the subject of the suggested gift, have been relaxed [Birch v Treasury Solicitor [1950] 2 All ER 1198]. But of Lord Evershed MR (at 1205), having asked what would sufficiently amount to a donatio where actual transfer did not or could not take place, answered: As a matter of principle, delivery of the indicia of title (viz., the document or thing the possession or production of which entitles the possessor to the money or property purported to be given), as distinct from mere evidence of title, should satisfy Lord Harwicke's condition.

23 The examination of the authorities which his Lordship then undertook highlighted the requirement that the documents handed over amount to the indicia of title. His Lordship concluded (at 1207): In our judgment, and having regard to the circumstances of the case, Cotton LJ, cannot be taken as laying down that, in a case of alleged donatio of a chose in action such as a sum of money on deposit with a bank, the deposit note or book must contain all, or all the material, terms of the contract. Neither Lindley LJ or Lopes LJ gave any support, in their judgments, for that proposition. Both these learned judges confined themselves to disposing of the argument based on the endorsed form of cheque, and, having disposed of that argument, treated the deposit note as having been established by authority as a good subject matter of a donatio mortis causa . In our judgment, accordingly, Byrne J in Re Weston and Luxmoore LJ in Delgoffe v Fader went further than was necessary in stating that a record of all the essential terms of the contract in the document handed over was a condition or test of the validity of the donatio mortis causa . For reasons which we have attempted to give, we think that the real test is whether the instruments handed over is the essential indicia or evidence of title, possession or production of which entitles the possessor to the money or property purported to be given, so that delivery of the instrument 'amounts to a transfer'. We must not, however, be taken to be casting any doubt on the correctness of the decision in Delgoffe v Fader , for as Luxmoore LJ observed ([1939] 3 All ER 687), on the evidence before him the deposit book there in question '… was in no way essential to be produced if the depositor had required to withdraw her money … [the donor] had no current account, but she in fact operated her deposit account by making deposits and drawing cheques upon it, just as she would have operated a current account. 24 His Lordship then turned to consider the documents in issue in that case. It was contended that the deposit book there in question was an ordinary bank passbook, and that production was a prerequisite for the withdrawal of funds. The evidence supported that proposition, although admitting that there were circumstances in which the bank would or might waive the requirement His Lordship concluded (at 1208): In the result, counsel for the defendant failed, in our judgment, to prove any such general practice as would lead to the conclusion that the contractual term as to production of the book in either case had become a dead letter, and certainly there was no evidence of any particular arrangement with the deceased. We think, accordingly, that in the case of both banks the condition stated on the face of the deposit books must be taken to have remained operative, ie, that the book was and is the essential idicia of title and that delivery of the book 'amounted to transfer' of the chose in action,

It followed that there was a valid donatio mortis causa . 25 In his Honour's judgment on 1 July 1998, Hodgson CJ in Eq said: It is generally recognised that the doctrine of donatio mortis causa is anomalous: It makes a gift effective even though the requirements for a will are not satisfied, and even though the delivery requirements for a gift inter vivos are not satisfied. I do not think the doctrine should be extended to apply where what is handed over are merely bank statements which are in no sense indicia of title or even evidence of title ... . 26 The documents in question in the present case are twofold. The first to be found at page 25 of Mr Tawil's affidavit is entitled "Statement" and refers to two accounts, account 042-XXXXXX847 and Certificate of Deposit account 042-XXXXXX854. Although it may have been suggested in the plaintiff's written submissions that this was, in fact, a Certificate of Deposit, I did not understand that to be pressed in oral argument. In any event, I would have found that is not a certificate of deposit properly so-called, but a statement of an account described as a Certificate of Deposit account, which states the opening balance, the closing balance, and interest accrued during the interval as well as the interest rate. The second document, at page 42 of the affidavit, has the appearance of a slip notifying the account holder that the deposit is about to mature and containing particulars of the account including the issue date (which was five years earlier on 15 April 1991) and the maturity date. It bears the words "Certificate of Deposit", but it is not a certificate of deposit properly so-called; again, these words describe the type of account. Neither of these documents was issued as a receipt or a record of the contractual terms contemporaneous with the relevant deposit being made. In this respect, they are markedly distinguishable from the document referred to in Public Trustee v Young. It could not be suggested that presentation of either of these documents was essential to allow withdrawal of the funds in question. If anything was required for that purpose, it would have been the original certificate issued at the time of the deposit being made. I do not think either of these documents can conceivably be regarded as indicia of title in the sense in which that term is used in the context of donatio mortis causa. 27 In my view, whatever relaxation of the requirements for a donatio mortis causa has occurred, and I accept that the doctrine now apparently extends to share certificates, they do not extend this far. In any event, a share certificate would ordinarily be regarded as an indicia of title to the shares. That is the function of scrip, which is often treated as a document to be held with security and care. Bank statements are not in that class. If I were to accept the evidence of Mr Tawil, therefore, it would be insufficient to establish the second critical requirement of a donatio mortis causa. Mr Tawil's evidence 28 Mr Tawil's evidence was that, in the course of the driving the deceased to the hospital, the following took place: 19. I drove him to St Vincents Hospital. He had said to me that we should go to St Vincents Hospital. On the way the deceased was holding a bag in front of him. It was a black shoulder bag with brown tubing. We then had a conversation to the following effect:- Deceased: "Yousef, you know I love you always as my son, and you know that I have no relatives, so if anything happens to me I want you to have all that is in this bag. You will find details of my bank accounts, the car keys and all my other papers. Everything I own is yours if anything happens to me". Me: "Don't strain yourself by talking like this. You are going to be alright".

Deceased: "I want you to have everything if I die and the papers are all in the bag".

He then gave me his bag. Deceased: "…I packed it specially so that I could give it to you. If anything happens to me, please arrange the necessary things with the church for my funeral and make sure that a tombstone is built over my grave". 29 That evidence is preceded by recitation of a request by Mr Tawil to take him urgently to the hospital, and statements by the deceased that he had called a priest and subsequently that the priest had been and left. In that context, the statements attributed to the deceased "I want you to have everything if I die ..." would sufficiently establish that the gift was made in contemplation of death, and the conditional words "if I die" that any such gift was conditional on death. 30 Whether I would be persuaded, to the requisite degree, of the accuracy of Mr Tawil's evidence, however, is another matter. Courts subject to close scrutiny claims against the estates of deceased persons based on the evidence of the claimant of an arrangement or agreement said to have been made during life [Plunkett v Bull (1915) 19 CLR 544, 548-9]. It is important to consider whether the claim is clearly made out, albeit that the standard of proof does not rise higher than the ordinary civil standard of the balance of probability [European Hire Cars v Armstrong [2007] NSWSC 629 [4]]. An important aspect of this is whether the relevant evidence is corroborated.

31 In the present case, the important aspects of Mr Tawil's evidence as to what happened during the trip to the hospital and what was in the bag when it was allegedly handed over are not corroborated. Significantly, what was in the bag when it was handed over was capable of corroboration by three witnesses, none of whom was called. I think, in those circumstances, I must infer that the evidence of Mr Tawil's mother, brother, and wife would not have assisted his case. Secondly, Mr Tawil's rebuttal of the possibility that the subject documents had not been handed over in the bag, but collected from the deceased's lodging during the evening after his death was capable of corroboration by his brother and by the manager of the accommodation, one Nick, referred to in the evidence. Again, neither of them was called to corroborate that, and again I think the same inference follows.

32 Next, the affidavit evidence of Mr Tawil that a bundle of documents attached to his affidavit were all in the bag when handed over was demonstrably incorrect, because the dates which some of those documents bore post-dated the deceased's death. This was remedied by Mr Tawil in supplementary oral evidence when he was called, but this serious error in his affidavit, which had been allowed to remain uncorrected for 12 years, does not assist resistance of the close scrutiny which the circumstances demand.

33 Then, as to the one critical document, at page 42, Mr Tawil, in his supplementary oral evidence, first was adamant that it was not in the shoulder bag, when his affidavit evidence was to the effect that it was; then he said that all the Bank of the West documents (of which it was one) were in the bag; then he said that he received some Bank of the West documents after Mr Biriukoff's death and had given them variously, to the Public Trustee or his own solicitor, or that he had them at home; ultimately, he was unable to say whether or not page 42 was in the bag. As Mr Wilson submits, for Mr Tawil, the date of page 42 makes it more likely than not that it was in the bag if there was a bag, but in the whole context of the cross-examination and the evidence, this casts further doubt on the reliability of Mr Tawil's evidence. 34 Further, when closely examined as to the actual circumstances of delivery of the bag by the deceased to him, Mr Tawil's evidence became vague and uncertain and he could not explain, though asked repeatedly, how it could have been delivered to him while he was driving the car. His ultimate position appeared to be that it was handed to him while he was at the wheel during the trip, and somehow then placed on the rear seat.

35 Also, he incorrectly swore in an affidavit - apparently in connection with the Public Trustee's application for administration - that he was present when the deceased died. 36 Finally, his affidavit was inaccurate in the further respect that he asserted that an annexed note of material said to have been taken from the deceased's premises had been "compiled by Nick", when as it transpired it had been compiled by himself. I readily accept that errors are made in affidavits, that witnesses often rely on solicitors to get them correct, and that there may be innocent explanations for all the matters to which I have referred. But I must be satisfied on the balance of probabilities, subjecting the claim to close scrutiny, that Mr Tawil's version is the correct one. In circumstances where significant aspects of it were capable of corroboration but were not corroborated, and other aspects are manifestly unreliable, I am not so satisfied. Accordingly, I would not have been persuaded to the requisite standard of Mr Tawil's version of the conversation with the deceased in which the gift was said to have been made.

Conclusion 37 For all those reasons, but primarily because, even accepting Mr Tawil's version, the documents emanating from the Bank of the West could not be indicia of title for the purpose of the doctrine of donatio mortis causa, the proceedings must be dismissed. I order that the proceedings be dismissed with costs.

38 The defendant applies for indemnity costs on two bases. The first can be disposed of shortly. The circumstance that the Court was not persuaded to the requisite standard of the facts for which the plaintiff contended, and in subjecting the plaintiff's evidence to close scrutiny raised doubts as to its reliability does not achieve that level of delinquency in the prosecution of proceedings as would justify an indemnity costs order. 39 The more troubling issue is that this proceeding was, in effect, a second bite at the cherry for a plaintiff who was, or at least ought, properly advised, have been aware of the risks, having regard to the outcome of the proceedings before Hodgson CJ in Eq. But it is not a delinquency attracting an indemnity costs order to prosecute proceedings attended with a relatively high degree of risk, although it may be such a delinquency to prosecute proceedings which are obviously doomed to failure from the outset. 40 There is some force in Mr Wilson's observation that the res judicata point was not earlier raised. Had it been, the argument for indemnity costs may have been a stronger one. But I am unpersuaded that there was sufficient delinquency in the prosecution of these proceedings - notwithstanding the outcome of the earlier proceedings in which, after all, the Public Trustee, though a party, was not represented and did not for that reason incur relevant costs - to make an indemnity costs order against the plaintiff, although the defendant is entitled to be indemnified by the estate. 41 I order that, to the extent that the defendant's costs are not recoverable from the plaintiff, they be paid on an indemnity basis out of the estate of the deceased.

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