Yesilhat v Calokerinos

1. [1]

   HIS HONOUR: This is an application for summary dismissal of a family provision claim and consequential relief. The proceedings concern the estate of the late George Sclavos who died on 13 August 2013 aged 65. The deceased was not married and had no children. His closest relatives are two nieces, being daughters of his brother. The defendant, Ms Calokerinos, is one of those nieces.

2. [2]

   On 5 December 2013 probate was granted to the defendant of an informal will of the deceased dated 16 October 2012 which appointed the defendant as the deceased’s executor and left his estate to his nieces in equal shares. The inventory of property attached to the grant of probate estimated the value of the estate to be in excess of $3 million.

3. [3]

   On 17 December 2013 Ms Calokerinos as executor of the deceased’s estate filed a statement of claim naming as defendants Mr Okan Yesilhat, Mr Gokan Yesilhat, and Australia’s Best Tyres & Auto Pty Ltd (“Australia’s Best Tyres & Auto”), a company of which they are or were directors. In substance, Ms Calokerinos alleged that one or other of Mr Okan Yesilhat or Mr Gokan Yesilhat had withdrawn $206,500 from the deceased’s bank accounts in the evening on the day of his death. She sought to recover those moneys for the estate. By an amended statement of claim filed on 23 June 2014 Ms Calokerinos also alleged that the deceased had lent $386,100 to the defendants between 8 March 2011 and 1 August 2013 and that the defendants had repaid only $82,000 of the amounts advanced. She sued for the difference of $304,100.

4. [4]

   In the defendants’ defence to that statement of claim Mr Okan Yesilhat (“Mr Yesilhat”) pleads in substance that the deceased provided him with the passwords, login details and account numbers for his bank accounts to permit him and the company, Australia’s Best Tyres & Auto, to share the funds in the deceased’s account. He pleads that he had the deceased’s authority to operate on the account and to use the deceased’s money for his own benefit and the benefit of the company. He denies that the amounts received from the deceased were loans. He alleges that they were gifts. He alleges that the deceased’s authority for him to have access to and use of the funds in the accounts was not revoked by the deceased’s death.

5. [5]

   In support of the defence to those proceedings Mr Yesilhat affirmed a lengthy affidavit containing considerable circumstantial detail of what he says was his relationship with the deceased. The deceased owned a pharmacy at Leppington. Mr Yesilhat affirmed that his association with the deceased involved his spending on average at least three to four days per week after work for anywhere between three to five hours with the deceased during the first two years after they first met. He says that in about 2001 he and the deceased began a sexual relationship. His evidence as to his relationship with the deceased will evidently be relied upon to support his claim that payments made during the deceased’s lifetime to him and to the company of which he was a shareholder and director were gifts and not loans, and that the deceased’s authority for him to operate on his bank account somehow was not revoked by the deceased’s death.

6. [6]

   On 18 July 2014, Mr Yesilhat instituted a fresh proceeding by filing a summons that sought an order for provision in his favour out of the deceased’s estate pursuant to Pt 3.2 of the Succession Act 2006 (NSW). The summons was subsequently amended to include a claim for revocation of the grant of probate. An order was made that Mr Yesilhat’s claim be pleaded. In his statement of claim filed on 8 September 2014 Mr Yesilhat seeks an order for revocation of the grant of probate of the purported will of the deceased dated 16 October 2012 to Ms Calokerinos. He seeks a grant of letters of administration to him. He also seeks an order that provision be made for his maintenance, education and advancement in life pursuant to Ch 3 of the Succession Act out of the estate or notional estate of the deceased. He seeks an order (presumably a declaration) that he is an eligible person who may apply for a family provision order in respect of the deceased’s estate pursuant to s 57(1)(b) or s 57(1)(f) of the Succession Act. The statement of claim also alleges that he is an eligible applicant for a family provision order pursuant to s 57(1)(e).

7. [7]

   Section 57 of the Succession Act relevantly provides:

8. [8]

   Section 21C of the Interpretation Act 1987 (NSW) relevantly provides:

9. [9]

   The defendant to these proceedings, Ms Calokerinos, contends that it is not seriously arguable that Mr Yesilhat is an eligible applicant for a family provision order. She submits that on Mr Yesilhat’s evidence, taken at its highest, it is not seriously arguable that he and the deceased were living in a de facto relationship (s 57(1)(b)), or that Mr Yesilhat was ever a member of the household of which the deceased was a member (s 57(1)(e)(ii)), or that Mr Yesilhat was a person with whom the deceased was living in a close personal relationship at the time of his death (s 57(1)(f)).

10. [10]

    If Mr Yesilhat’s claim for a family provision order is summarily dismissed, then he would have no standing to seek revocation of the grant of probate and the whole of the relief claimed by him should be dismissed. Although Mr Yesilhat deposes that the deceased told him that he would make provision for him in a will, and although Mr Yesilhat deposes to a belief that a will was made but has been concealed, he does not make, and on his evidence could not make, any claim to be entitled to any part of the deceased’s estate under a will. He has no entitlement on intestacy.

11. [11]

    The application for summary dismissal is made pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW). Ms Calokerinos submits that it is clear from the statement of claim and the evidence served by Mr Yesilhat in support of his claim that no reasonable cause of action is disclosed. She also submits that the proceedings are vexatious and an abuse of the process of court. But the allegation that the proceedings are vexatious and an abuse of process depends upon Ms Calokerinos’ demonstrating that no reasonable cause of action is disclosed.

12. [12]

    There is no dispute as to the principles applicable on such an application for summary dismissal. The defendant must show that the plaintiff’s claim is not seriously arguable. The lack of a cause of action must be clearly demonstrated. Various formulations have been used to describe the clarity that must exist before a claim can be summarily dismissed (see for example, Burton v Shire of Bairnsdale (1908) 7 CLR 76 at 92; Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner For Railways (NSW) (1964) 112 CLR 125 at 128–129; Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 at 99; Agar v Hyde [2000] HCA 41 ; (2000) 201 CLR 552 at [57]; Spencer v Commonwealth [2010] HCA 28 ; (2010) 241 CLR 118 at [24]; and O’Brien v Bank of Western Australia Ltd [2013] NSWCA 71; (2013) 16 BPR 31,705 at [67].) If there is a real question either of fact or of law, then the application for summary dismissal must fail (Dey v Victorian Railways Commissioners at 91).

13. [13]

    Applications for summary dismissal are rarely brought in family provision claims and, if brought, are rarely successful. In Snow v Snow [2015] NSWSC 90 Hallen J said (at [31]):

14. [14]

    In Spencer v Commonwealth French CJ and Gummow J (at [21]) quoted with approval Lord Hope of Craighead in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2001] UKHL 16; [2003] 2 AC 1 at [95] in relation to the equivalent power in England for summary disposition when his Lordship said:

15. [15]

    The caution that should attend the making of an order for the separate trial of issues must also attend the making of an order for summary dismissal. In Tepko Pty Limited v Water Board [2001] HCA 19; (2001) 206 CLR 1 Kirby and Callinan JJ observed that:

16. [16]

    In the present case more than 30 affidavits have been prepared which are proposed to be read for the executor. I was told that over 25 notices to produce or subpoenas had been issued by the executor. Mr Yesilhat’s affidavits in both proceedings contain a great deal of circumstantial detail. I understand that almost all of his version of the facts will be disputed.

17. [17]

    Unless Mr Yesilhat’s claim is summarily dismissed, the two proceedings will be heard together. Ms Calokerinos deposed that the parties had estimated that if the two proceedings were heard together, the estimated time for hearing was 10 days or more, but if Mr Yesilhat’s proceedings were dismissed, the estimated time for hearing of the “debt” claim was two to three days. That is disputed.

18. [18]

    I was told by counsel for Ms Calokerinos that all but one of the affidavits that have been served in her case would be relied upon in the “debt” proceeding. That is because Ms Calokerinos will be disputing the details of the matters deposed to by Mr Yesilhat as to the nature of his relationship with the deceased. Mr Yesilhat relies on that evidence both to seek to establish that he is an eligible applicant for a family provision order out of the estate, and for his contention that the payments made by the deceased to him, or to the company of which he is a shareholder and was a director, during the deceased’s lifetime, were not loans, but gifts, and for his contention as to the nature of the authority the deceased gave him to operate the deceased’s bank accounts.

19. [19]

    I am not persuaded that summary dismissal of the family provision claim would materially reduce the length or scope of the hearing. There is a slight qualification to this in that if the application for summary dismissal were successful, no issue would arise as to the authenticity of the will which has been admitted to probate. The relevance of that will to the family provision proceeding may be marginal as the same persons inherit under the will and on intestacy. But the parties apparently accept that the issue has potential relevance. (The will, if authentic, could be relevant to testing Mr Yesilhat’s claims that the deceased promised to him a testamentary benefaction and that could be relevant to his claim for a family provision order if he is an eligible applicant.) Determining the authenticity of the will would require the preparation of a report, probably of a single expert, and there will be cross-examination at the hearing on that issue. Nonetheless, the additional time and costs associated with that issue do not appear to me to be likely to be significant compared with the costs spent in the proceedings to date and which would be spent even if Mr Yesilhat’s claim is dismissed.

20. [20]

    Doubtless there may be some reduction in time and cost if the application for summary dismissal succeeds. Against that has to be weighed the possibility of a successful appeal from an order summarily dismissing Mr Yesilhat’s proceeding. The reason experience has shown that it is often counter-productive to order the trial of a separate issue in the hope that its resolution will lead to a quicker and cheaper determination of the whole proceeding, is that sometimes appellate courts take a different view from that of the primary judge.

21. [21]

    If the claim were summarily dismissed but Mr Yesilhat sought leave to appeal, there would be two possibilities. One is that the hearing of the “debt” proceeding would be delayed until the application for leave to appeal and any appeal were determined. The other, as contended for by counsel for Ms Calokerinos, is that the debt proceeding would be set down for hearing. If the debt claim were heard before the application for leave to appeal or any appeal were determined, and if an appeal against an order for summary dismissal were successful, there would be a second hearing which would cover many of the same facts, the resolution of which would be complicated by questions of issue estoppel, but with the possibility of conflicting findings.

22. [22]

    It is in recognition of these practical considerations that applications for summary judgment are sometimes not even entertained. Thus para 62 of Practice Note SC Eq 3 dealing with the Commercial List and Technology and Construction List states that:

23. [23]

    Nonetheless, the defendant has been allowed to bring the present application and to have it set down for hearing and it must be entertained. But the matters referred to above illustrate the need for a high degree of caution in dealing with the application.

Mr Yesilhat’s pleading and evidence

1. [24]

   Mr Yesilhat deposes that he met the deceased in about mid-1999 when he was aged 17 and the deceased was 50 or 51 years of age. He pleads that during the 14-year period of their relationship the deceased guided him in various “life decisions”, including the purchasing of properties and a business and about cultural pressures on Mr Yesilhat to marry and have children. He pleads that during this period the deceased treated the pharmacy at Leppington as his home. He says that the deceased routinely ate at the pharmacy, slept there, remained until the early hours of the morning and sometimes overnight, and conducted most of his social activities at the pharmacy. Mr Yesilhat pleads that from 1999 until the deceased’s death, he routinely visited the deceased at the pharmacy after work on his own three to four times per week and stayed with the deceased until the early hours of the morning, rarely leaving before 2:30am and often staying later. He says in substance that he and the deceased did not hold themselves out to the world as a couple, but this was because they needed to keep their homosexual relationship a secret from their family, friends and business associates.

2. [25]

   In his affidavit of 20 September 2014 Mr Yesilhat, apparently speaking of a time before his first marriage, deposed that he arrived at the deceased’s pharmacy any time between 7:00 and 10:00pm, although sometimes up to midnight. He deposed that although the pharmacy was open there were few customers after 10:00pm. There would be one pharmacist and one shop assistant working until midnight, but if it were quiet, according to Mr Yesilhat, the deceased would let them leave earlier and remain at the pharmacy on his own. He deposed that the deceased would lock the sliding glass door to the pharmacy from approximately 7:00pm but when customers arrived they would knock and be let in. He deposed that after midnight, and I infer before midnight on occasions when employees in the pharmacy had been released early, he and the deceased would be alone until the early hours of the morning, that he would leave between 2:30 or 3:30am, but many times would stay much longer and sometimes he and the deceased would leave together at around 4:00 or 5:00am in the morning.

3. [26]

   In his earlier affidavit of 24 April 2014 affirmed in defence of the “debt” proceeding, Mr Yesilhat deposed that during the first two years of his relationship with the deceased he stayed on average at least three to four days per week after work for anything between three to five hours with the deceased.

4. [27]

   He deposed that owing to family pressure but with the deceased’s encouragement he married, in either 2001, or 2002 or 2004 – it is not clear from his affidavits. Mr Yesilhat deposed that after his marriage he visited the deceased on average two to three times a week and would be with him up to five hours until the early hours of the morning. He deposed that the deceased would sometimes go to his home and sleep for a few hours and then drive back to work, but he really lived his life in the pharmacy and on many occasions would sleep at work.

5. [28]

   Mr Yesilhat deposed that he enrolled to become a police officer in December 2007 and stayed at the academy in Goulburn for four nights a week. He deposed that he would spend time with his wife on the Friday evening and on the Saturday or Sunday he would see the deceased, either during the day or at night and spend many hours with him, have dinner and talk about the events that had occurred during the course of the week.

6. [29]

   Mr Yesilhat deposed that he divorced his first wife in 2010. He married a second time in September 2011. He deposed that his relationship with the deceased continued after his second marriage and after the birth of his daughter. He said that his sexual relationship with the deceased continued, although he said that his relationship was “far deeper than that”. It appears from his second affidavit that according to him he saw the deceased at the pharmacy three to four times a week and would go to the pharmacy late at night at around 10.00-11.00pm.

7. [30]

   Hence, Mr Yesilhat’s evidence is to the effect that either four to five times per week or three to four times per week he would spend up to four to five hours, sometimes longer, with the deceased in the deceased’s pharmacy which the deceased treated as a second home. There were cooking facilities there. Mr Yesilhat deposed that his relationship with the deceased at the pharmacy was kept secret. Mr Yesilhat said that when he and the deceased were together at the pharmacy they would talk, watch television, listen to music and eat. The deceased would settle his accounts with Mr Yesilhat’s assistance. They would both assist in the preparation of meals. Mr Yesilhat said that he would do the washing up. At many times he said he would vacuum the shop. He said that the deceased lived his life in the pharmacy and on many occasions would sleep at work. Mr Yesilhat deposed that there were many times, particularly towards the latter years, when he would shave the deceased so as to tidy him up. He deposed that in the latter period of the relationship he massaged the deceased’s legs and put ointment on his legs when scabs had developed and carried out other actions of personal care. His counsel submitted that these were all intimate acts of persons in a relationship where they lived as a couple. Sometimes, according to Mr Yesilhat’s evidence, at least on one construction of the evidence, he and the deceased would be together at the pharmacy for up to 10 hours a night.

8. [31]

   Mr Yesilhat gave other evidence on which he would rely to establish at least that he and the deceased were living in a de facto relationship. This included evidence of expressions of a love, the making of gifts, and the financial dependence of Mr Yesilhat on the deceased.

9. [32]

   The focus of the defendant’s submissions was on the requirement for the existence of a de facto relationship that the de facto partners lived together as a couple. The defendant’s submissions ranged more widely. For example, the defendant stressed that on Mr Yesilhat’s case his relationship with the deceased was not an exclusive relationship. The plaintiff had two wives during the course of that relationship. But this is not to the point, at least on an application for summary dismissal, because it is clear that a de facto relationship need not be an exclusive relationship. A person can be married and also be in a de facto relationship. (Interpretation Act, s 21C(2)).

10. [33]

    Ms V Culkoff who appeared for Mr Yesilhat submitted that it was an open question as to whether a shared residence or a shared household was necessary to establish a de facto relationship. She also submitted that if that were a necessary requirement, it was satisfied in the present case because Mr Yesilhat’s evidence was that he and the deceased shared a residential setting at the pharmacy, albeit of an unconventional kind. She submitted that on Mr Yesilhat’s evidence it could be found that the pharmacy was the deceased’s primary home and that Mr Yesilhat shared that home for many hours on many days per week. The fact that both the deceased and Mr Yesilhat had other homes did not necessarily preclude a finding that they lived together for substantial periods of time at the pharmacy which could be treated as a residence if it were necessary to do so.

11. [34]

    In Hayes v Marquis [2008] NSWCA 10 at [83] McColl JA cited with approval the statement of Barrett J in Peterson v Gregory [2007] NSWSC 8 (at [11]) that the concept of living together as a couple was of a “personal commitment that is mutually acknowledged and of an emotional kind transcending the mere fact of the shared residential setting”.

12. [35]

    This assumes that there is a shared residential setting. Section 21C(2)(a) requires that for a person to be in a de facto relationship with another person they must have a relationship as a couple “living together”. However, s 21C(3) provides that in determining whether two persons have a relationship “as a couple” for the purposes of subs (2) all the circumstances of the relationship are to be taken into account, including “the nature and extent of their common residence”, but that no particular finding in relation to any of the matters listed in s 21C(3) is necessary in determining whether two persons have a relationship “as a couple”.

13. [36]

    Having regard simply to the text of s 21C I think it is arguable that persons may have a relationship “as a couple living together” (s 21C(2)(a)) even if they do not share a “common residence”. This is because under s 21C(3) the nature and extent of a couple’s common residence is not a matter the determination of which is necessary for deciding whether two persons have a relationship as a couple. Thus two persons may be a couple having regard to other matters, without regard to the nature and extent of their common residence. It is a requirement of s 23C(2) that the parties to a de facto relationship have a relationship “as a couple living together” and hence it is necessary that they “live together”. It is arguable that a couple may live together even though they do so only for limited periods in a place which is not their common residence.

14. [37]

    This is not a question which has been the subject of a determinative ruling. In NSW Trustee and Guardian v McGrath [2013] NSWSC 1894 Young AJ said:

15. [38]

    In Jonah v White [2011] FamCA 221; (2011) 258 FLR 236 Murphy J summarised relevant authorities as follows:

16. [39]

    Persons may be in a de facto relationship even though they do not live together all the time. In Vaughan v Hoskovich [2010] NSWSC 706 I held that the parties were in a de facto relationship even though they shared a common residence only on two or three days a week. There were many factors other than the degree of common residence that influenced that decision. In FO v HAF [2006] QCA 555; (2007) 2 Qd R 138 Keane JA, with whom McMurdo P and White J agreed, said:

17. [40]

    In this paragraph the Queensland Court of Appeal acknowledged that there may be an exceptional case where two people who had not lived in a common residence and had not made actual provision for their mutual support might nonetheless be said to have been “living together as a couple on a genuine domestic basis”.

18. [41]

    I think it arguable that this may be such an exceptional case. It would not be appropriate for me to express any view on the strength of that case. There is a variety of circumstances relevant to a decision as to whether or not two persons are living together as a couple. If, as Mr Yesilhat says, the deceased treated his pharmacy as his home, and if, as Mr Yesilhat says, he regularly spent many hours with the deceased in his pharmacy where they carried out essentially domestic activities and behaved towards each other as a same-sex couple in a de facto relationship might customarily do, then I think it is arguable that Mr Yesilhat and the deceased were in a de facto relationship, notwithstanding the limited periods in which they were together in the deceased’s pharmacy. The length of time for which they were together might not be determinative. There may be people in a married or de facto relationship who would be together for fewer hours than the hours Mr Yesilhat deposes he spent with the deceased. If, as Mr Yesilhat deposes, his relationship with the deceased was a loving one and had all of the characteristics which he described, then I think it arguable that a de facto relationship might have existed between Mr Yesilhat and the deceased. Having regard to the generality of the matters to be considered under s 21C(3), the fact that none of the matters referred to in s 21C(3) is determinative of the relationship of two persons as a couple, the possibility of its being found that a couple might live together although they do not share a common residence, and to the evaluative nature of the judgment that must be made in deciding whether parties were or were not in a de facto relationship, I do not consider that the issue raised is an appropriate matter for summary judgment.

19. [42]

    It is unnecessary to decide whether it is clearly unarguable that Mr Yesilhat and the deceased were not members of the same “household” or were not “living in a close personal relationship” at the time of the deceased’s death.

20. [43]

    For these reasons I will dismiss Ms Calokerinos’ application that Mr Yesilhat’s application for a family provision order be summarily dismissed.

21. [44]

    Ms Calokerinos made an alternative claim. She sought an order that Mr Yesilhat provide security for costs. Mr Yesilhat is a resident in New South Wales. Initially, counsel for Ms Calokerinos submitted that the application was made pursuant to r 42.21(1)(e) of the Uniform Civil Procedure Rules. That rule applies only if a plaintiff is suing not for his own benefit but for the benefit of some other person. In this case Mr Yesilhat is suing for his own benefit. There is no statutory power to order security for costs. Counsel for Ms Calokerinos submitted that the Court had inherent jurisdiction to order security for costs against an individual person notwithstanding that he or she was resident in the jurisdiction. Accepting that to be so (Rajski v Computer Manufacture & Design Pty Ltd [1982] 2 NSWLR 443), such jurisdiction is to be exercised only in an exceptional case. This is not such a case. Indeed, there is no evidence that Mr Yesilhat would not be able to meet an adverse order for costs. The evidence relied on by Ms Calokerinos in support of her application for security for costs was essentially evidence that her costs had been increased because Mr Yesilhat had not complied with procedural orders for the preparation of the case. That is not a sufficient basis for making an order for security for costs. To the extent appropriate, costs orders against Mr Yesilhat could have been sought and could still be sought in respect of alleged defaults. That does not mean that he should be required to provide security for costs.

22. [45]

    Accordingly, the application for security for costs should also be dismissed.

23. [46]

    For these reasons I order that the defendant’s notice of motion filed on 12 November 2014 be dismissed. I order that the defendant pay the plaintiff’s costs of the notice of motion.