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Hallmark case against elder abuse

Gill v Garrett & Ors [2020] NSWSC 795

Slattery J

Facts: This case concerned various claims made by a friend of the deceased who moved in with the deceased. The friend claimed that the deceased promised to leave him his Paddington property, if he cared for the deceased until his death. In the meantime, the friend borrowed money from the deceased (which remained unpaid), left him alone and uncared for at times, withdrew cash from his bank account and used the deceased's credit card for his own benefit.

The deceased was an Australian medical scientist who died in November 2015, leaving a will executed in 2008. From late 2003, the plaintiff, Jason, lived in the deceased’s Paddington terrace house (‘the Paddington Property’). The plaintiff claimed that in 2009 the deceased promised him the title to the Paddington Property on the deceased’s death, provided the plaintiff cared for the deceased until then.

Amongst other things, the deceased’s 2008 Will left a legacy to the plaintiff of $200,000 and the residue of the estate to the defendants in equal shares. The executors of the deceased’s estate were his three children Jemima, Catherine and Tom (the defendants). The gross distributable estate was said to be approximately $4.5m. At the time of the hearing, the Paddington Property was the primary remaining asset in the estate, forming part of the residue. The market value of the Paddington Property was estimated at approximately $2m.

By way of brief summary, the deceased met the plaintiff in around 1998, four years after the sudden death of his wife. At that time, the deceased needed day-to-day companionship that could not be fulfilled by his busy children or his friends. The plaintiff filled this gap in the deceased’s life. In around 2003, the plaintiff was left without accommodation after he was forced to leave his rental premises. Around this time, he was declared bankrupt, although the deceased was unaware of this. The deceased suggested that the plaintiff move in with him. The deceased intended his home would provide temporary accommodation to the plaintiff, however the plaintiff lived with the deceased up until his death and remained in the Paddington Property until the hearing. The reasoning behind the plaintiff’s extended stay is likely attributed to the deceased’s declining mental competence and the deceased’s generosity of spirit.

From early 2004, the deceased’s mental and physical capacity began to decline. Despite this, the deceased and the plaintiff were regulars down at the local pub where they met with a small group of friends, often inviting the group back to the Paddington Property after the pub closed. The deceased’s physical decline continued to progress in 2006, although he continued to drink heavily with the plaintiff. From this time, the plaintiff claimed his role transitioned from companion into carer and inadvertently created a relationship of mutual dependence.

By 2007, the deceased asked his daughter Jemima, who he had appointed as his attorney, to take over the preparation of his tax returns. This request was significant as the deceased was known to be proud of his financial independence. At this time, Jemima became aware of the various loans the deceased had made to the plaintiff and the regular expenses he was incurring on the plaintiff’s behalf. As early as 1999, the deceased started loaning money to the plaintiff. At the time of the deceased’s death, the plaintiff owed him approximately $150,000. It was also not uncommon for the plaintiff to encourage the deceased to make loans to their friends and the plaintiff had access to the deceased’s credit cards, which he often used for his sole benefit.

In 2008, the deceased made a Will which included a gift of $200,000 to the plaintiff from which the outstanding balance of the loan was to be deducted. He also included a short narrative to his solicitors describing the nature of his relationship with the plaintiff. However, in late 2008, the deceased suffered a stroke. From this point, his mental capacity began to markedly decline. Jemima began to take more control over the deceased’s finances as the deceased was diagnosed with dementia in 2011.

The plaintiff alleged that at some time after February 2009, the deceased expressed his gratitude towards the plaintiff for his assistance and promised to leave him the Paddington Property provided he continued to care for him so that could remain living in his home. No one else was present during this alleged conversation between the deceased and the plaintiff and the deceased took no legal action to give effect to his purported intentions. However, the plaintiff contended that the deceased raised this topic with several of their friends at various stages after the conversation took place.

As the deceased’s physical and mental capacities continued to decline, the plaintiff was required to increase his care for the deceased. However, evidence was given that the plaintiff would often leave the deceased at home alone and go to the pub for the night, not returning until early in the morning. Several times, the deceased was found wandering around the streets in his socks. By July 2011, carers were hired to assist the deceased with his personal care duties. As these duties increased, the care provided by the hired carers also increased and the assistance required by the plaintiff shifted to nightly duties, including at times cleaning the deceased after periods of incontinence. Although the care provided by the plaintiff was considered inadequate for the deceased’s needs, he provided companionship and a familiar face for the deceased and the family was cautious to remove him from the home at the risk of upsetting the deceased.

In July 2015, Tom and his wife moved into the Paddington Property to provide care for the deceased. At this time, it was no longer considered necessary for the plaintiff to remain at the Paddington Property and so the family made the decision to ask him to leave. It was at this time that the family became aware of the alleged ‘deal’ made between the deceased and the plaintiff.

Issues: The plaintiff claimed the alleged promise made between him and the deceased constituted a contract and he was entitled to the Paddington Property either in contract or pursuant to the doctrine of equitable estoppel. In the alternative, the plaintiff claimed if he failed to establish the alleged promise was made, he should be granted restitution for the value of the care services he provided to the deceased. He also claimed an order for further provision out of the estate of the deceased should be made in his favour. It was not in dispute that the plaintiff was an eligible person on the basis that he lived in the same household as the deceased and was dependent on him.

The defendants filed a cross-claim against the plaintiff for possession of the Paddington Property. In the alternative, if the plaintiff was successful in his claim to the Paddington Property, the defendants claimed restitution for the amounts spent on various improvements they made to the property in the belief it was theirs.

Decision: Slattery J considered each of the plaintiff’s claims and the defendants’ cross-claims separately, as outlined below. Overall, his Honour considered the plaintiff to be an unreliable witness who often resorted to vagueness to avoid the difficulties confronting his case. By contrast, his Honour found Jemima to be an excellent witness who had recorded highly detailed accounts of events throughout her father’s lifetime and was able to rely on them to aid her recollections. Further, his Honour found both Catherine and Tom to be reliable witnesses who gave honest answers.

The alleged promise made by the deceased

The Court considered the circumstances surrounding the alleged promise, namely that it was made during a conversation to which only the plaintiff and the deceased were present and that it was made after the time the deceased’s mental capacity had begun to markedly decline. Slattery J considered evidence given by the plaintiff’s and the deceased’s friends which outlined various times during which the deceased referred to an agreement between himself and the plaintiff, in relation to him gifting his property to the plaintiff in exchange for his care and companionship. Although the Court found all of the witnesses to be honest and reliable, very few considered there to have been a decline in the deceased’s cognitive abilities after 2009, a view which was in stark contrast to the medical evidence given by Professor Brennan who had examined the deceased in mid-2011 and diagnosed him with dementia.

Further, the Court noted these comments were often made in the context of loud social settings, in front of the plaintiff, where alcohol was almost always involved. His Honour was not satisfied that the deceased was aware of the provision he had made for the plaintiff in his 2008 Will during these conversations in front of friends and was of the impression the plaintiff had encouraged the deceased to engage in these conversations with friends to support his future claim.

In relation to the plaintiff’s claim that the children were aware of the alleged promise made by the deceased, his Honour considered that if this were the case, the children would have likely consulted a solicitor to obtain legal advice as they had done previously when their father expressed an intention to benefit the plaintiff in his will. For these reasons, his Honour did not accept the alleged promise between the deceased and the plaintiff ever took place.

That the Plaintiff relied on the promise

The Court also did not accept that the plaintiff relied upon the alleged promise or that he was induced to stay at the Paddington Property and look after the deceased. The Court also did not accept that the plaintiff’s care of the deceased prevented him from returning to part-time work. This view was taken by the Court based on the fact that during the first five years that the plaintiff lived with the deceased (from 2004-2009), he showed no interest in returning to work despite the limited care required by the deceased. The Court was of the view that the various reasons given by the plaintiff as to why he did not take up the opportunity to run his business from the Paddington Property were not credible. Further, the Court took the view that the plaintiff remained at the Paddington Property due to the immediate benefits of that arrangement to him without any promise of obtaining the Paddington Property after the deceased’s death. The Court considered the fact that the plaintiff had stayed from 2003 to 2008 without such a promise as supportive of this view.

The Court was also not persuaded by the plaintiff’s contention that, had the deceased not made the alleged promise, he would have applied for public housing. The lifestyle that the plaintiff had enjoyed as a result of living in the Paddington Property with the deceased, including frequent dinners out and fine wines, interest free loans, free entertainment and accommodation, would have been put at risk had he left the Paddington Property. On cross-examination, the plaintiff was unable to name the public housing list he was contemplating joining, which led the Court to the opinion that leaving the Paddington Property to live in public housing was well down his list of priorities.

Finally, were the plaintiff to leave the Paddington Property he would have had to confront the issue of the outstanding loans to the deceased, which were then in excess of $100,000. Given that the plaintiff had no income, no assets and was bankrupt, leaving the loans outstanding suited him. Based on these reasons, as well as the Court’s view that the plaintiff felt he was privileged to be in the deceased’s company, the Court inferred that the plaintiff would have stayed in the Paddington Property until the deceased died, irrespective of any alleged promise made to him.

The plaintiff’s contract claim

The plaintiff claimed that the alleged conversation that took place with the deceased after February 2009 constituted an oral contract between the two parties. As the Court did not accept that this conversation took place, the principal elements of the contract pleaded by the plaintiff were not made out.

The plaintiff’s equitable estoppel claim

The plaintiff argued that he acted upon the alleged representation made by the deceased to his detriment by staying at the Paddington Property, caring for the deceased, and providing him with companionship. Due to this, the plaintiff argued that it would be inequitable for the estate to go back on this mutual assumption upon which he and the deceased acted and that equity should provide a remedy by giving effect to the assumption. As the Court did not accept that this conversation took place, the first element of the plaintiff’s equitable estoppel case (the representation made by the deceased) was not made out. His Honour also noted that a number of other elements of the plaintiff’s equitable estoppel case were also not made out, including that he had relied on the expectation that he would obtain the Paddington Property and that his purported reliance was known to the deceased. Notably, the Court found that in 2009 and 2010, the period of time during which the alleged promise was made, the deceased’s memory and executive functioning were so poor that his conscience could not be bound in equity and thus the doctrines of equitable estoppel could not be attracted.

The plaintiff’s remuneration claim

In the event that his contract or equitable estoppel claim failed, the plaintiff further claimed he should be paid remuneration based on his contribution to the deceased’s way of life. The plaintiff calculated his claim for live-in care and companionship from 2008 until the deceased’s death to be $1,895.338. The Court took the view that the plaintiff’s claim could not succeed as he had failed to establish the main elements of restitution. The Court was not prepared to infer the deceased’s life had been enriched at the plaintiff’s expense for several reasons. The first reason was that the plaintiff’s services were not comparable to commercial services and they were quite often deficient in quality and as such the Court could not place a market value on them. The second reason was that the services provided by the plaintiff contrasted with his claim were very uncertain and the third was that the value of the benefits obtained by the plaintiff likely outweighed the services he provided to the deceased.

The plaintiff’s family provision claim

The plaintiff sought an order for further provision out of the deceased’s estate. The Court was satisfied the plaintiff was an eligible person but required him to show factors warranting the making of his claim. In arguing against the plaintiff’s establishment of factors warranting, the defendants contended the plaintiff made the decision to go to lunch and drink with the deceased instead of obtaining gainful employment and this led to his dependence on the deceased, which does not of itself make the plaintiff the natural object of the deceased’s testamentary bounty. Further, his Honour considered it hard to accept that, due to the very substantial benefits incurred by the plaintiff, community standards and expectations would assume the plaintiff would still be a natural object the deceased’s testamentary bounty. For these reasons, the Court found the plaintiff failed to satisfy the requirements of s 59(1)(b) of the Succession Act and subsequently his family provision claim must fail.

The defendants’ claim in relation to the Paddington Property

The defendants claimed possession of the Paddington Property. Due to the Court’s determination on the plaintiff’s claim to any equitable interest in the property, the plaintiff had no defence to the defendants’ Cross-Claim for possession of the property. Therefore, the Court entered judgment for possession in favour of the defendants.

The defendants’ claim of breach of fiduciary duty and unconscionable conduct

The defendants claimed the deceased and the plaintiff were in a fiduciary relationship and the plaintiff breached the fiduciary duties he owed to the deceased. In the alternative, they claimed the deceased suffered loss by reason of the plaintiff’s unconscionable conduct. They sought to recover equitable compensation for the alleged breaches of fiduciary duty and the alleged unconscionable conduct. The defendants contended that by withdrawing the deceased’s funds to pay ‘household expenses’, the plaintiff had accepted office as a fiduciary to act for, on behalf of and in the interests of the deceased and for his benefit in expending those funds. Further, the defendants contended the deceased was in a position of special disadvantage due to his diminished cognition, physical disabilities and the plaintiff’s control over him and that the plaintiff knew this to be the case. The total value claimed by the defendants was $186,431.14 and the Court held the amount of $142,100 plus interest was recoverable from the plaintiff by way of equitable compensation.

Slattery J considered the plaintiff to have been entrusted with the withdrawal of cash on the deceased’s behalf due to the deceased’s vulnerable position meaning he was incapable of attending to this himself. In performing this specific role, the plaintiff was therefore the deceased’s fiduciary. The Court also held even if the defendants had failed to establish the plaintiff was acting as fiduciary for the deceased, the amount claimed would have been recoverable due to the plaintiff’s unconscionable conduct in undertaking those transactions.

The reason for the difference in amounts is that $43,155.64 of the defendants’ total value claimed related to storage costs incurred by the plaintiff on the deceased’s card without his permission. The Court did not accept this as a breach of fiduciary duty as the facts were such that this was an existing liability incurred when the deceased was fully mentally competent and continued to be incurred until his death. As it was a continuing liability, it did not involve any specific withdrawal of monies under a delegation of a task by the deceased to the plaintiff. However, the Court found these charges were recoverable against the plaintiff by way of equitable compensation as the Court considered the plaintiff to have taken unconscientious advantage of the deceased’s weakness from late 2009 when he failed to cancel the charges despite being explicitly requested to do so. The Court ordered this amount to be recoverable from the plaintiff.

In conclusion, the Court dismissed all the plaintiff’s claims and ordered judgment in favour of the defendants for possession of the Paddington property. The defendants’ costs were paid out of the estate on the indemnity basis and that the plaintiff pay the defendants’ costs on the ordinary basis. No order was made as to the plaintiff’s costs meaning he was left to pay his own costs.