Daunt v Daunt

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2014 0010

STEPHEN LEWIS DAUNT	Appellant
v
MICHAEL TELFORD DAUNT	Respondent

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JUDGES:	REDLICH, SANTAMARIA & KYROU JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	19 February 2015
DATE OF JUDGMENT:	24 April 2015
MEDIUM NEUTRAL CITATION:	[2015] VSCA 58	1^st Revision: 27 April 2015, par [34]
JUDGMENT APPEALED FROM:	Daunt v Daunt [2013] VSC 706 (Daly AsJ)

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CONSTRUCTIVE TRUST – Transfer of land from parent to adult child – Whether transferor was under a special disability or disadvantage that made her vulnerable – Whether transferor understood the implications of the transfer – Whether transferee exerted undue influence or engaged in unconscionable conduct – Standing of disappointed contingent beneficiary to challenge validity of transfer – Whether by elderly parents’ vulnerability and reliance upon adult child a fiduciary duty was established.

EVIDENCE – Whether determination of VCAT refusing appellant’s application to appoint an administrator admissible – Evidence Act 2008 s 91 – Evidence Act 2008 s 178 inapplicable in absence of certificate.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr MNC Harvey with Dr K Weston-Scheuber	Barristers Duty Scheme
For the Respondent	Dr G Moore	Paul Maginn Lawyer

REDLICH JA
SANTAMARIA JA
KYROU JA:

Introduction

In 2010, Mr Edward Daunt (‘Mr Daunt’) and his wife Mrs Valerie Daunt (‘Mrs Daunt’) were the registered proprietors of a property known as 95 Junction Road, Heathcote Junction, Wandong (‘property’).
Mr and Mrs Daunt had three children: Stephen Daunt (‘Stephen’) (who is the appellant), Michael Daunt (‘Michael’) (who is the respondent) and Helen Rodgers (‘Helen’). Stephen and Michael are identical twins.
The relationship between Mr and Mrs Daunt and Stephen and Helen was strained, as was the relationship between Michael, on the one hand, and Stephen and Helen on the other. It also seems that Michael was the primary carer for his parents. During 2010, it appears that Mrs Daunt’s access to a pension was affected by her joint ownership of the property.
On 16 June 2010, Mr and Mrs Daunt executed a transfer of the Wandong property in favour of Michael and Mr Daunt (‘the transfer’).
On 6 October 2011, Stephen lodged a caveat on the title to the Wandong property.
On 26 October 2011, Mr Daunt died. He was survived by Mrs Daunt.
Had the transfer not occurred, Mrs Daunt would have succeeded to sole proprietorship of the Wandong property by right of survivorship. By reason of the transfer and the later death of his father, Michael succeeded to the sole proprietorship of the property by right of survivorship.
On 22 May 2012, Michael was registered as the sole proprietor of the property by right of survivorship.
In response to the caveat lodged, Michael made an application to Land Victoria pursuant to s 89A(1) of the Transfer of Land Act 1958 for the removal of the caveat.[1]
[1]Section 89A(1) of the Transfer of Land Act 1958 provides: ‘Subject to the provisions of this section, where a recording of a caveat (not being a caveat lodged by the Registrar) has been made pursuant to section 89(2), any person interested in the land affected thereby or in any part thereof may make application in an appropriate approved form to the Registrar for the service of a notice pursuant to subsection (3).’
On 28 December 2012, Stephen issued proceedings against Michael in the Supreme Court of Victoria. He claimed that, in order to defeat his legitimate claims and those of his sister to their share of their father’s estate, Michael had breached fiduciary duties owed to his parents and had misused his position as a fiduciary to procure the transfer of the property to himself. Stephen sought declarations of constructive trust and an account of profits as well as an order for the continuation of the caveat.
On 14 August 2013, Hargrave J referred the hearing of the proceeding to an associate justice pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2005 (‘Rules’).
The trial judge heard the matter in August and September 2013.[2] Stephen represented himself.
[2]Daunt v Daunt [2013] VSC 706 (‘Reasons’).
The trial judge summarised ‘the core’ of Stephen’s claim as follows:
(a)[Michael] owed a fiduciary duty to his parents by reason of him being their power of attorney;
(b)[Michael] misused his position as a fiduciary, and exercised undue influence over his parents, to procure the transfer of the Wandong property to himself; and
(c)the purpose of procuring the transfer was to defeat the legitimate claims of the co-beneficiaries of his parents’ estate, being himself and his sister.[3]
[3]Reasons [13].

In his written submissions at trial, Stephen contended that Michael actively procured a transfer of title to land to himself. In support of this allegation, Stephen relied on the following circumstances: (1) that Michael had admitted that he was actively involved in the preparation of the transfer; (2) the transfer was in Michael’s handwriting; (3) the witness was a family friend of Michael’s; (4) the effect of the transfer was that his mother had gifted her equity to Michael; (5) the joint tenancy of their father’s equity went to Michael; and (6) the total economic effect of the transfer was to benefit Michael and to defeat the claims of his co-beneficiaries to an equitable share of the property.
Stephen said that his mother was not a competent witness on account of her memory loss. He said that she would not permit him to cross-examine her. He also said that her affidavits were composed by Michael, printed or dictated by him, and signed under his supervision.
On 18 December 2013, the trial judge made the following orders:
(a)The proceeding be dismissed;
(b)The Registrar of Tiles be directed to remove caveat number AJ240376M over the title of the property at 95 Junction Road, Heathcote Junction;
(c)Stephen pay Michael’s costs of the proceeding; and
(d)Paragraphs (b) and (c) of these orders be stayed until 4pm upon the date by which Stephen must issue any appeal, or until further order.
Stephen has appealed against the dismissal of his claim. For the reasons that follow, in our opinion, the appeal should be dismissed.
The evidence
At trial, Stephen relied on several affidavits which were affirmed respectively on the following dates: (1) 27 February 2013, (2) 7 May 2013, (3) 30 May 2013, (4) 26 August 2013, (5) 29 August 2013 and (6) 30 August 2013. In large part, his affidavits simply expressed the submissions that he wished to make.
Michael relied upon his own affidavits sworn 20 March 2013 and 5 June 2013, affidavits sworn by Mrs Daunt on 20 March 2013 and on 22 March 2013, an affidavit of Joy Lorraine Carbone sworn 23 March 2013 and an affidavit sworn by his solicitor on 15 April 2013.
Stephen did not cross-examine Michael or any of the witnesses called by him.
In part, the evidence comprised documents that were brought into existence before the transfer; in part, it comprised correspondence that had passed between the adult children of Mr and Mrs Daunt in the period between 14 October 2009 and 12 June 2010.
The correspondence
Not all of the correspondence between the adult children was available on the hearing of the appeal; however, it had been summarised by the trial judge. While no issue was taken as to the accuracy of her summary, it was contended that she had failed to draw the correct inferences from parts of the correspondence and had given the wrong weight to other parts of it. At the appeal, counsel for Stephen paid particular attention to two letters sent to Stephen by Michael. The full text of those letters will be integrated with the summary given of the other correspondence by the trial judge.
The trial judge said:
The letters provided to the Court are illustrative of the circumstances leading up to the execution of the Transfer of Land on 16 June 2010. What can be gleaned from the contents of the letters is as follows:
(a)by October 2009, [Michael] was concerned about some works which were required to be undertaken at the Wandong property in preparation for the forthcoming fire season (it appears that the property was under threat during the Black Saturday bushfires);

(b)[Michael] was requesting whether [Stephen] could provide some assistance with various projects and maintenance issues at the Wandong property;
(c)it appears that there was a pre-existing estrangement between the brothers, and [Stephen] was only prepared to assist if [Michael] was away from the property. [Michael] offered to be absent, and indeed appeared to be seeking some ‘time out’ from the role of being primary carer for their parents.
…[4]
[4]Reasons [19].

In a letter of 23 October 2009, Michael wrote (the emphasis is in the original):
Dear Stephen,
Registered mail is an accepted part of documenting correspondence. My intention is to avoid confusion in my future activities as the person appointed to holding Enduring Power of Attorney for our parents.
I will try to clarify what I understand of your letter of the 19^th of Oct 09.
1. You don’t wish to help because you don’t want to be exploited by me, Mum and Dad or the ‘indifferent’ Rogers. By this I gather you are not feeling naturally drawn to giving time and energy to Mum and Dad.
2. You say the house is insured so the Fire Season is not a problem. From this statement I gather you do not want to give your time to cleaning up the fire risks that surround the house. You have no concern for the contents of the house.
3. You say the improvements I suggest are not necessarily going to add much to the eventual market value of the property. From this statement I gather you don’t wish to do any work on the property.
4. You state, ‘I am prepared to act in “our parents” interest if you are absent. There is no role for me at present’. I AM offering to be absent.
If Mum and Dad are in agreement, you can collect their mail, pay bills and be a taxi driver and an errand person. You can accompany Mum and Dad to their difficult appointments and sit with them in waiting rooms. You can do the paper work with the clinics and Medicare. You can be accountable to the Hostel, the Doctors, the hospitals and Government. You can have the enjoyment of taking them on outings to the shops and local parks etc. You can attend to their health challenges and research medical matters. You can take over maintenance of the property. You can be available for consultations with the Hostel and doctors if there is an emergency. I am not speculating. All the above things are what I am dealing with right now. Will you commit to the above activities if I go back to Mylestom? This is not an ultimatum; it is a process of getting clear communication with you.
5. Contrary to your speculation, I won’t be abandoning my role; I will just be taking time out if you can help. I will continue my daily phone contact with Mum and Dad.
6. If you take time to understand Mum and Dad’s situation it will become evident to you that you won’t be ‘assuming control and solving problems in your own way.’ Mum and Dad are still in control. The Hostel has its own rules you will need to fit in with. Dad is the boss accountant. We have set up Internet banking facilities. Mum and Dad both have bankcards and can see their accounts any time they wish.
7. You say ‘it would be better to extract something of value now than wait for some uncertain event.’ Better for whom? Our parents’ pensions and their eligibility for it and other Government assistance would be significantly diminished by the premature sale of the property. As well, their accommodation fees would be increased. Mitchell Shire Council has devalued their property by a third. The fires of last February have caused a slump in land values.
From your above statement I gather you don’t mind getting a poor return on the sale of the property. It appears you haven’t factored in Mum and Dad’s financial security through the current Global Economic Crisis. Yes I am well researched. You could be too. The Internet is excellent. Government departments are very helpful.
8. In reference to your statements about normal relations: I have separated myself from you because I am troubled by you. It is my problem. I am sorting it out in my own way. Whether you help or not, certain work has to be done. I am not demanding anything of you. You are being kept informed.
I hope I have interpreted your letter, of October 19^th 2009, accurately.[5]
[5]Counsel for Stephen said that this was one of five documents which demonstrated either Mrs Daunt’s inability to understand what was involved in the transfer or of Michael’s undue influence over his parents.
The summary of the trial judge continued:
…
(f)it appears that [Stephen] offered to provide assistance to his parents for a three to four week period in November to December 2009, and [Michael] provided him with information about his parents’ current needs, along with a list of tasks that needed to be carried out at the Wandong property;
(g)it appears that [Stephen] attended at the Wandong property on 16 November 2009, but returned home that day rather than staying the three weeks he agreed to stay, which did not please his parents;
...[6]
[6]Reasons [19].
In his letter of 30 March 2010, Michael wrote:
Dear Stephen,
Centrelink will be including the Wandong property in our parents’ Asset Tests as of February 27^th 2011 onward unless Mum returns home. The property will be deemed to be worth a certain amount. They will put a value on the property if it is not sold. If it is sold then the sale price is taken as the value of the asset.
Do you wish to be a co-owner of the Wandong property? The deposit we need to put down would be in the order of 10% of the value of the property. The settlement date would be soon after the 27^th of February 2011. i.e. two years after their being billeted at Waterdale Hostel while the fire damage to the property was attended to.
Centrelink says they will accept what they consider is a reasonable market value as stated by a licensed real estate agent.
We need to work out what we can afford. (Ref. Mitchell Shire rates notice for rates and valuation) I am prepared to take out a mortgage on my property and return to work.
We would be taking on the role of small-time developers, doing works that make the property more attractive to potential buyers and waiting for a better market.
Mum and Dad will not gift the property to us because it would leave them financially insecure. Centrelink would still deem the property as if it had been sold and Mum and Dad’s pension would be reduced or even withdrawn totally if land prices recover from the fires in the coming years.
Assuming their (sic) will be no collapse of the housing market and the global economy recovers, I am very sure that we will all benefit in the long term by acquiring the property now.
If you decide not to be a co-owner then whatever the property realizes, whether by auction, normal sale through an estate agent or private sale, is what will finally make its way to us (Minus the expenses that Mum and Dad incur during the final years of their lives and the cost of selling the property, stamp duty, probate and executing of the Will).
I wish to emphasize that the main objective of us acquiring the property is to protect Mum and Dad’s pension from further depletion. Without the pension, their financial situation could deteriorate very rapidly back to being dependent again on the pension but this time stripped of their assets.
Please do some research of your own to support any suggestions you wish to make. Mum and Dad have the final say. They have Power of Attorney over each other.
Centrelink provides a financial advice service. There is also the Department of Fair Trading.[7]
[7]This was the second of the five documents referred to by counsel for Stephen.
The summary of the trial judge continued:
…
(i)however, the proposal then became that the Wandong property be gifted to the parties and their sister as tenants in common, on the proviso that it would not be sold before their parents definitely no longer needed it;
(j)however, it appears that neither [Stephen] or the parties’ sister wanted to be involved in what was described as the ‘gifting proposal’ for, among other reasons, the impact of any gift upon their own pension entitlements;
(k)ultimately, on 31 May 2010 [Michael] provided his brother and sister with two weeks to either accept the gifting proposal or to make alternative proposals; and
(l)it appears that [Stephen] rejected the gifting proposal in early June 2010, not long before the execution of the Transfer of Land.[8]
[8]Reasons [19].
Other evidence
Mrs Daunt gave evidence that in April 2010 she was assessed by Dr Coulson, Consultant Psychiatrist of Old Age at North Western Mental Health. Dr Coulson prepared a report dated 20 April 2010 for Dr Doig who was Mrs Daunt’s local medical practitioner. Dr Coulson said that Mrs Daunt was 86 years old and had been living in Waterdale Assisted Living for over 12 months and had shared a room with her husband. In that report he said:
The other issue is that she has three children and is mildly estranged from two of them though the staff report that they are concerned at how over‑involved her son Michael is with her care, though Mrs Daunt sees this as a good thing and she is very appreciative of his input in her care.[9]
Mental state examination showed a reasonably well-presented elderly lady who had a mild wide-spaced gait. She was quite cooperative be it not mildly at times mildly over dramatic (sic). She would frequently talk about her distress at her family etc. There was neither evidence abnormal, perceptions nor delusions and there was no other risk issues identified (sic). On cognition, she scored 28/30 on Folstein MMSE and her planning and sequencing was reasonable and she was able to tend to the task. She had some minor insight into her affective state.
Overall, I feel there is no major psychiatric disorder present. Her mood is mildly decreased and there are some signs that are probably suggestive of a mild to moderate depressive disorder though there is no evidence of any psychosis or pervasive cognitive disorder and I spent some time explaining this. I do feel though that we have a lady with an interesting personality structure that is mildly entitled as well as dramatic, somewhere verging between histrionic and narcissistic at times with some dependent traits. I suspect that we may see that regressed and further exacerbated if there are any depressive symptoms.[10]
[9]This paragraph was the third document referred to by counsel for Stephen as evidencing either Mrs Daunt’s inability to understand what was involved in the transfer or Michael’s undue influence over his parents.
[10]Reasons [29].
Mrs Daunt also gave evidence that, before signing the transfer, both she and her husband, visited Dr Doig of the Ivanhoe Medical Clinic. She said that they did that in order ‘to avoid any suggestion that we did not understand what we were doing when we signed the transfer of land.’ She exhibited to her affidavit a medical certificate prepared by Dr Doig on 11 May 2010, in which he wrote:
This is to certify that I am aware of the past history and present medical state of Mrs Daunt and that she has testomonary (sic) capacity and the ability to understand information and its implications.[11]
He wrote another certificate for Mr Daunt in practically identical terms.
[11]Reasons [28(e)].
On 16 June 2010, Mr and Mrs Daunt executed the transfer. The consideration was described as ‘I desire to make a gift’. The signatures of both the transferors (Mr and Mrs Daunt) and the transferees (Mr Daunt and Michael) were witnessed by Joy Lorraine Carbone. Ms Carbone swore an affidavit. In that affidavit she said that she ‘did not detect any reluctance or lack of understanding by any of the parties who signed the document in my presence’. She was not cross-examined.

On 19 July 2010, Mr and Mrs Daunt executed enduring powers of attorney in favour of Michael. Both powers of attorney were prepared by solicitors in Seymour who were independent of Michael.
Shortly before 14 September 2010, Mrs Daunt asked Dr Baker of the Broadford Medical Centre to provide a certificate as to her competence and also that of Mr Daunt. Mrs Daunt said that Dr Baker had known Mr and Mrs Daunt for many years. On 14 September, Dr Baker prepared a certificate with respect to Mrs Daunt. In that certificate she said:
This is to certify that I am aware of the past history and present medical state of Mrs Daunt and that she has testamentary capacity and the ability to understand information and its implications.
On the 7^th of September 2010, at Broadford Medical Clinic, I had an opportunity to discuss with Valerie and Ted Daunt the matter of Transfer of Land ownership at 95 Junction Road, Heathcote Junction from Edward (Ted) Daunt to his son Michael Daunt.
I have known Valerie, and her husband Ted, for many years now.
I am confident that Valerie and Ted understood and were happy for this above-mentioned Transfer of Land ownership to occur.[12]
[12]Reasons [27(e)].
On 21 September 2010, Mrs Daunt wrote to Stephen telling him of the steps she and her husband had taken to transfer the property to Michael. She wrote:
I’m sorry I got angry with you on the phone.
Dad and I feel, from the letters and texts you have sent to Michael and your last phone call to me, that you mean to make trouble for us and Michael.
We have moved to protect Michael from any future legal challenges from you regarding the Wandong property.
The Wandong property at 95 Junction Road, Heathcote Junction has now been formally excluded from consideration in our wills.
If you don’t wish to help us, then at least, don’t make problems for us.
Trust that things will work out fairly in the end.
It looks as if Dad and I will be around for some years yet.
Mrs Daunt said that Stephen’s response was to issue an application in the Victorian Civil and Administrative Tribunal (‘VCAT’) to have her ‘declared incapable pursuant to Section 43 of the Guardian and Administration Act 1983 (sic) to be disabled, and by reason of that disability unable to make reasonable judgments, and therefore in need of an administrator.’
On 8 February 2011, Mrs Daunt prepared a letter for the attention of VCAT to express her position. In that letter she said:
In the past I have felt misunderstood and cajoled into saying things in an incomplete way. I hope my following statements leave no doubt.
I want the Wandong property to be totally under the control of my son Michael, to do with it what is necessary to keep it as a financial and physical resource for me and my husband.[13]
As a consequence of the Joint Tenancy Agreement that exists between my son Michael and my husband the Wandong property will eventually belong to Michael. He will be free to do with it what he sees fit.
The remaining assets, comprising residential bonds and a bank deposit, will be dealt with in my will.
I realise that Helen and Stephen are not likely to be satisfied with this but it has been their choice to give us no help.
Mrs Daunt said that she had her solicitor, Peter Danlami Cutting of Tehan George & Co Lawyers of Seymour ‘witness the letter for me to avoid any suggestion that I had been coerced or unduly influenced by any other person.’[14]
[13]This paragraph was the fourth document referred to by counsel for Stephen as evidencing either Mrs Daunt’s inability to understand what was involved in the transfer or Michael’s undue influence over his parents.
[14]Reasons [27(h)].
On 10 February 2011, VCAT dismissed Stephen’s application. The order of VCAT contained the following:
The application for an administration order and for orders with respect to an enduring power of attorney is dismissed for the following reasons:
The Tribunal is not satisfied that the proposed represented person has a disability; is unable by reason of that disability to make reasonable judgments about their estate; and needs an administrator; …[15]
[15]Reasons [27(g)].
On 6 October 2011, Stephen lodged a caveat under s 89 of the Transfer of Land Act 1958. He alone was described as the caveator. He claimed an ‘Estate in fee simple’. The grounds of claim were ‘Implied and/or constructive trust’.
Mrs Daunt gave evidence that when she became aware of the caveat, she was ‘deeply upset as there seems to be no end to this trouble’. At about this time, she wrote a note addressed ‘To whom it concerns’.[16] The note was to the following effect:
The gifting of my share of the Wandong property to Michael was unambiguous and legitimate. VCAT upheld my Testamentary Capacity. I would like to make a statement to assist in the removal of the caveat that has been placed on the title of the Wandong property by my son Stephen Daunt.
Stephen and Helen have absented themselves from giving any help to me or Ted. They have refused to help Michael in any way shape or form in repairing and maintaining the Wandong property after the Black Saturday fires of February 2009. This lack of help was evident well before the gifting in June of 2010 took place.
Regarding Stephen’s caveat on the Wandong property, he already knows my thoughts on the matter. I am opposed to it.
Stephen’s advice to Michael to sell the property for whatever it could get in 2009 (post Black Saturday fires) is typical of his long-standing callous attitude towards me and Ted.
Michael has born (sic) the full responsibility of helping myself and Ted since January 2009. He has followed his father’s example in keeping good records of financial matters and all correspondence with Helen and Stephen.[17]
Both Stephen and Helen rejected an opportunity to be share-holders in the Wandong property. They offered no alternative. They both turned down the opportunity to meet with Centrelink. I feel they deserve no consideration now.
The gifting has been very successful. A forced sale of the Wandong property has been averted. I have been enjoying holidays there since early 2009. My pension has been protected. The negative effects of asset testing have been kept to a minimum.
I hope Stephen will quickly accept that he has no valid or legal grounds for a caveat on the Wandong property.
[16]The note is undated.
[17]This paragraph was the fifth document referred to by counsel for Stephen as evidencing either Mrs Daunt’s inability to understand what was involved in the transfer or Michael’s undue influence over his parents.
On 27 April 2012, Michael wrote ‘to the Rodgers family’. In that letter he said:
I acknowledge receipt of Helen’s letter of the 3^rd of January 2012. Helen was sent two texts on the 27^th of October 2011, the morning after our father past (sic) away. One of these text messages requested that she inform Stephen. His mobile is off most of the time and Mum was not up to talking with him anyway. I also informed Rose at the above mentioned time. Mum spoke with Rose. We both assumed she would inform Will. All the Hannah’s were informed. The Daunt side of the family was informed through Trudy.
Helen has chosen to cut all contact with Mum and me. Helen’s letter, mentioned above, was sent to me through Registered Mail and therefore has legal status. I am sending you a copy to remind you.
I have done the very best I can for my parents physical, mental and financial well-being. The gifting process has worked. It has achieved the following outcomes as was predicted by Centrelink.
1.Mum is now receiving close to a full pension and all the entitlements that go with it.
2.The Wandong property is secure and available for Mum to use as a holiday place or as permanent accommodation. This she has been doing for over three years and more so since Dad’s passing.
I am told that the caveat Stephen has put on the Wandong property has no legal basis. His caveat may have breached the Intervention Order. A legal opinion will be sort (sic) on this matter when it serves Mum’s best interests to sell the Wandong property.
Mum is doing very well now. She has survived the grief of losing her partner of 72 years.
The letter was subscribed by Mrs Daunt in her own handwriting. She wrote:
I have read the above letter and totally agree with its contents. Everything it says is true and is carefully documented to my satisfaction. Signed on 27^th of April 2012.
On 18 May 2012, Mrs Daunt wrote to her granddaughter Caeleste (Rodgers). She wrote as follows:
Michael has worked endlessly to support his father and mother. He has written to you and Helen explaining in great detail the responsibility he has had to take, and the options he has presented to you and Helen.
You sent a text message to Michael which asks some questions that I wish to answer.
Regarding my intention in saying I was ‘wiping the lot of you’; I don’t remember putting it in those words to Helen but I can now say that Helen is excluded as a beneficiary in my will. Helen went to VCAT with the claim that I was demented. She has joined with Stephen in his hostility towards myself and Michael.
It is true that I don’t want to see you for the present. As for not seeing you ‘ever again’ I’m sorry. I was upset by your verbal attacks on Michael.
As for your claim that Cognitive Tests are ‘irrelevant’. It is obvious that you have not accepted the VCAT finding.
It is now totally up to Michael as to what help, if any, he gives to Helen and Stephen in the future.
On 6 December 2012, Mrs Daunt wrote to Stephen (the emphasis is in the original):
It is not a matter of my allowing court proceedings. It is your caveat that is interfering with my freedom to acquire a new and more suitable place to live. Your talk of a ‘Constructive Trust’ is irrelevant to my present situation. I have followed Centrelink’s advice regarding gifting. Ted’s advice was sort (sic) also. This is documented on a video. He made it very clear that he supported Michael having ownership of the Wandong property.
You now believe that you can overturn VCAT’s decision and the Public Advocate’s investigation. I am sure that this will not happen. I am told by a solicitor that it is very expensive to run a court case, especially through the Supreme Court. Goodness knows what you would end up having to pay.
Your conclusion that Michael is ‘pitting himself’ against the law and invites anarchy — quickly followed by chaos’ causes me to feel that you need psychiatric help.
I hope that you will get on with your career in aviation and drop the time-wasting ideas of going to court.[18]
[18]Reasons [21].
On 22 March 2013, Mrs Daunt swore a further affidavit. In that affidavit, she said:
At the time of my gifting my half of the property at 95 Junction Road, Heathcote Junction to my son Michael Daunt, there were no conditions or expectations placed on Michael by me, or my husband Edward Daunt, for him to ever hold the above mentioned property in trust for anyone.
I and my husband, Edward Daunt, have, through our understanding and use of Joint Tenancy, given Michael Daunt full title to the above-mentioned property free of any requirement for him to make shares available to anyone.[19]
The affidavit is witnessed by Jane Elizabeth Doornbusch, an Australian Legal Practitioner. Above her signature, the witness has stated: ‘The deponent signed this affidavit in my presence. The deponent appears to be of sound mind and under no duress or undue influence.’
[19]The deponent gave her address as ‘Of Dianella Hostel, Kilmore & District Hospital 185 Rutledge Street Kilmore 3764’.
Reasons of trial judge
The trial judge held that Stephen did not have standing to bring the present proceeding. She said: ‘Any such claim can only be made by or on behalf of Mrs Daunt. It is apparent from her evidence that she has no intention or desire to bring such a claim.’[20] Against the possibility that she was wrong on the question of standing, the judge also considered whether the transfer ought to be set aside on the basis that it was procured by a breach of fiduciary duty, exertion of undue influence, or unconscionable conduct by Michael. She considered the evidence and, in particular, the evidence of the relationship of Michael to his parents at the time that the transfer was made. She dismissed the contention that Michael owed his parents fiduciary obligations: ‘There is no overarching doctrine at law that an adult child otherwise owes a fiduciary duty to his or her parents.’[21] She then considered the claim that Michael had procured the transfer by exerting undue influence. In this regard, she considered the principles articulated by Kaye J in Christodoulou v Christodoulou.[22]She held that by reason of the facts and circumstances of the relationship between Michael and his parents, there was an antecedent relationship between him and his parents such as to raise presumption of undue influence which must be rebutted by him in order to avoid the gift to him effected by the transfer being set aside.[23] However, she found that Michael had discharged the relevant onus: ‘It is apparent from the evidence of Mrs Daunt that she voluntarily gifted her share of the Wandong property to Michael, with a full understanding of the consequences of the transaction, and a rational basis for embarking upon the transaction.’[24]
[20]Reasons [39].
[21]Reasons [47].
[22][2009] VSC 583, [70].
[23]Reasons [51].
[24]Reasons [57].
The trial judge dismissed a claim that the transfer should be set aside on the grounds of unconscionable conduct on the part of Michael. First, she held that neither Mr or Mrs Daunt were under some particular disadvantage that made them vulnerable; on the contrary, she said that Mrs Daunt had given an explanation for the transfer which was ‘lucid and reasoned’.[25] Finally, she held that, were she to have found that Mrs Daunt was under some special disability or disadvantage vis-à-vis Michael, such that there arose a presumption of unconscientious conduct, she found that the transfer was part of a transaction that was fair and reasonable in all the circumstances: ‘Mr Daunt senior and Mrs Daunt were keen to find some mechanism for maintaining Mrs Daunt’s access to the Wandong property while maximising their ability to receive financial assistance from the Commonwealth Government, and it appears that objective has been achieved by reason of the Transfer of Land’.[26]
[25]Reasons [61].
[26]Reasons [65].
Grounds of appeal
On 7 April 2014, Stephen filed a notice of appeal. It is not clear whether the notice was prepared with the benefit of legal advice. However, by October 2014, Stephen had secured the services of pro bono barristers from the Victorian Bar Duty Barrister Scheme.
On 16 October 2014, a proposed amended notice of appeal was served. It contained the following grounds:
1.The learned trial judge erred in finding at [39] of the Reasons that the plaintiff did not have standing to set aside the transfer of Wandong property dated 16 June 2010 (‘the transfer’) on the basis that he had a contingent interest as a potential beneficiary under his mother's will and/or as a potential applicant under s 91 of the Administration and Probate Act 1958.
2.The learned trial judge wrongly admitted in evidence the order of the Victorian Civil and Administrative Tribunal dated 10 February 2011 contrary to s 91 of the Evidence Act and erroneously relied on that order at [61] of the Reasons as evidence that Valerie Gwendolyn Daunt (‘the mother’) was not under any special disadvantage.
3.Further and alternatively to paragraph 2 the learned trial judge applied the wrong test in determining whether the mother was to the defendant's knowledge under a relevant disability or disadvantage such that the transfer amounted to unconscionable conduct by having regard to the mother's capacity only and failing to have regard to the mother's strong emotional dependence or attachment to the defendant (see Reasons at [61]).
4.Further to paragraph 2 and 3 the learned trial judge erred by not finding that the transfer was to the mother's detriment inter alia because she had lost the asset enabling her to acquire a new place to live, contrary to her belief contained in her letter to the plaintiff dated 6 December 2012 and in her letter to VCAT dated 18 April 2011.
5.The learned trial judge wrongly found that letters sent from the defendant to the plaintiff supported conclusions of fact ultimately relied upon that:-
(a)There was any reality to an offer by the [defendant] in a letter to the plaintiff dated 23 October 2009 whereby the plaintiff could reasonably assist in the care of their parents (at [19(c)] of the Reasons).
(b)If the plaintiff had assisted in the care of their parents he would have seen they were in control of their affairs (at [19(d)] of the Reasons).
(c)The plaintiff broke any agreement by arriving and returning home on the one day on 16 November 2009 rather than staying 3 weeks (at [19(g)] of the Reasons).
(d)The defendant by letter dated 30 March 2010 had any real intention in respect of his proposal that the plaintiff become a co-owner of the Wandong property (‘Wandong’) (at [19(h)] of the Reasons) or alternatively the subsequent proposal that the parties and their sister become tenants in common of Wandong (at [19(i)] of the Reasons).
(e)The plaintiff and his sister rejected the proposals referred to in (d) above because of any impact on their own pension entitlements (at [19(j)] of the Reasons).
6.The learned trial judge in not determining that the mother's letter to the plaintiff dated 6 December 2012 and letter to VCAT dated 18 April 2011 demonstrated a fundamental lack of understanding by her of the effect of the transfer of the Wandong land upon her interests, erred in finding the defendant had rebutted the presumption of undue influence (at [57] of the Reasons).
7.Alternatively to paragraph 6, the learned trial judge erred in finding the presumption of undue influence had been rebutted by failing to take into account the effect of the letters dated 6 December 2012 and 18 April 2011 and/or failing to give any adequate reasons explaining the rebuttal consistent with the mother's understanding exemplified by those letters.
8.Further to paragraph 7 above the learned trial judge erred in failing to find that the letters from the defendant to the plaintiff up to 31 May 2010 demonstrated that the defendant was exercising undue influence on both parents by presenting himself as empowered to make ultimatums in respect of the disposition of Wandong (see [19(k)] of the Reasons).
The respondent made no objection to the filing of the amended notice of appeal. Leave to file it was granted.
Did Stephen have standing to challenge the validity of the transfer dated 16 June 2010?
The immediate effect of the transfer was to deprive Mrs Daunt of her interest in the property as joint tenant. The remote effects were more numerous and, to a large extent, speculative. The transfer deprived Mrs Daunt of any expectation that she would acquire the whole of the title by survivorship in the event that she survived her husband. Were she to survive her husband, the property might have formed part of her estate. Then again, it might have been sold before she died, in which case it would not form part of her estate. If the property had remained part of her estate, she might have made provision for it in her will. She might have left it to one or other of her children or to all or a combination. If she failed to make adequate provision for one of her children, that child may have standing to seek further provision under Part IV of the Administration and Probate Act 1958. In the event that such an application was successful, the Court may make orders affecting the title to the property.

Obviously enough, if Mrs Daunt was disaffected by the transfer, she would have had standing to seek relief of some kind. The question is whether Stephen had standing to seek orders consequent upon the circumstances in which his mother parted with her interest in the property? He was not the owner of the property. Whether he ever gained some interest in the property depended upon the contingencies described in the previous paragraph.
In his written submissions, Stephen contended that he had standing either as a potential beneficiary of his mother’s estate or as a potential claimant under s 91 of the Administration and Probate Act 1958 against his mother's estate. Stephen also submitted that he has standing in a representative capacity for his sister (who would have the same grounds as he asserts in paragraph [47] above) and for his mother.[27] Finally, he submitted that this Court should prefer the reasoning of McMillan J in Mataska v Browne[28] to that of Sifris J in Wood v McLean.[29]He submitted that this reasoning should be followed in relation to his claim, notwithstanding the fact that his mother is still alive and that the facts in Mataska v Browne are distinguishable.
[27]The appellant, in his submissions and affidavits, made indirect reference to his sister’s interest in the proceeding. The Statement of Claim also referred to the appellant and his sister as ‘co-beneficiaries’.
[28][2013] VSC 62.
[29](2010) 31 VR 12.
In his oral submissions, Stephen said that he had standing on the grounds of ‘kinship’.
It is a fundamental principle that, in the absence of specific exception, a wrong done by B to A cannot be vindicated by C.
The transfer was a transaction inter vivos; it was not one that was to occur under a testamentary disposition. Accordingly, those authorities that deal with the standing of beneficiaries under a will or contingent beneficiaries under an application for family maintenance or provision under Part IV of the Administration and Probate Act 1958 are of limited, if any, relevance. Mrs Daunt was the person who had standing to seek relief in respect of the transfer. In certain circumstances, a person ‘standing in her shoes’ may be authorised to apply for any relief that she was entitled to. For example, depending upon the terms of the grant, a power of attorney (general or enduring) or the holder of an enduring power of guardianship could bring proceedings in her name. Legal proceedings may be commenced by a guardian or an administrator appointed by VCAT under the Guardianship and Administration Act 1986. Similarly, an application may be made by a person to be appointed a litigation guardian of a person under a disability pursuant to r 15.03 of the Rules.
In the present case, Stephen was not his mother’s power of attorney. Further, his application under s 43 of the Guardianship and Administration Act 1986 had been dismissed. He had made no application under r 15.03 of the Rules to be appointed her litigation guardian. As the evidence stands, it is unlikely to have been successful.
The application was not commenced as a representative proceeding under the Rules. There was no indorsement of representative capacity under r 5.06. No application was made under r 16.01 (representation of unascertained persons); any such application would have failed. Stephen’s sister is identified: her interest is no different from that of Stephen. A representative proceeding cannot be established by mere assertion. And, in the present case, there was not even an assertion that the proceeding was being brought in a representative capacity. And, where A does not have standing, he cannot confer standing upon himself by effecting to be the representative of B, whose entitlement to commence proceedings is no different from that of A.
There are many obstacles to holding that Stephen had standing in the present case. However, as it is clear that Stephen’s claim cannot succeed on other grounds, it is unnecessary to resolve finally the issue of ‘standing’. ‘Standing’ is a topic that has many complex features. The term better expresses a conclusion than it does a principle. While courts are loath to depart from the basic principle that a wrong done by B to A may not be vindicated by C, they are also astute to ensure the protection of the vulnerable from the undue influence or unconscionable conduct of those who would take advantage of them, and to ensure that matters of procedure are not an impediment to the availability of such protection.
We would leave open the question whether a person who has a contingent interest as a potential beneficiary under a will or may be a potential applicant under s 91 of the Administration and Probate Act 1958 has standing to set aside an inter vivos disposition said to be procured by undue influence or unconscionable conduct.
Did the trial judge err in admitting into evidence the determination of the Victorian Civil and Administrative dated 10 February 2011?
The appellant submitted that the trial judge erred in admitting into evidence the determination of VCAT dated 10 February 2011. The trial judge referred to the determination and noted VCAT’s finding that it ‘is not satisfied that the proposed represented person has a disability; is unable by reason of that disability to make reasonable judgments about their estate; and needs an administrator’.[30] The trial judge had also speculated as to evidence that must not have been before VCAT. She said:
In my view, [Stephen’s] claim with respect to unconscionable conduct falls at the first hurdle: that is, in my view, Mrs Daunt was under no special disadvantage when she made the gift of her share of the Wandong property to [Michael]. True it is that there was some evidence that she was suffering from depression, but it was not particularly severe or disabling. Owing to the decision of [Stephen] not to require her to attend court for cross-examination, I did not have the opportunity to assess her presentation or demeanour, but her affidavits filed in this proceeding, and the correspondence exhibited to affidavits filed by her, [Stephen], and [Michael] are lucid and reasoned, some three years after the Transfer of Land. Most importantly, the issue of her capacity to make decisions in her own interests was the primary, if not sole issue before VCAT in February 2011, when Senior Member Scott rejected an application made by [Stephen] and Helen Rodgers for an administrator to be appointed to manage Mrs Daunt’s affairs. This determination was made only eight months after the execution of the Transfer of Land, and, if Mrs Daunt was suffering any relevant special disability or disadvantage at that time, no doubt that matter would have emerged during the course of that proceeding, noting that VCAT is a tribunal with specialist expertise in that field.[31]
[30]Reasons [15].
[31]Reasons [61].
The appellant referred to s 91 of the Evidence Act 2008 which provides:
Exclusion of evidence of judgments and convictions
(1)Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.
(2)Evidence that, under this Part, is not admissible to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose.
Note
Section 178 (Convictions, acquittals and other judicial proceedings) provides for certificate evidence of decisions.
Stephen said that the trial judge had erred in relying on the evidence of the VCAT decision. For his part, Michael referred to s 178 of the Evidence Act 2008. Section 178 provides:
Convictions, acquittals and other judicial proceedings
(1)       This section applies to the following facts—
(a)the conviction or acquittal before or by an applicable court of a person charged with an offence;
(b)the sentencing of a person to any punishment or pecuniary penalty by an applicable court;
(c)       an order by an applicable court;
(d)the pendency or existence at any time before an applicable court of a civil or criminal proceeding.
(2)Evidence of a fact to which this section applies may be given by a certificate signed by a judge, a magistrate or registrar or other proper officer of the applicable court—
(a)showing the fact, or purporting to contain particulars, of the record, indictment, conviction, acquittal, sentence, order or proceeding in question; and
(b)stating the time and place of the conviction, acquittal, sentence, order or proceeding; and
(c)       stating the title of the applicable court.
(3)A certificate given under this section showing a conviction, acquittal, sentence or order is also evidence of the particular offence or matter in respect of which the conviction, acquittal, sentence or order was had, passed or made, if stated in the certificate.
(4)A certificate given under this section showing the pendency or existence of a proceeding is also evidence of the particular nature and occasion, or ground and cause, of the proceeding, if stated in the certificate.
(5)A certificate given under this section purporting to contain particulars of a record, indictment, conviction, acquittal, sentence, order or proceeding is also evidence of the matters stated in the certificate.
(6)       In this section—
acquittal includes the dismissal of the charge in question by an applicable court;
applicable court means an Australian court or a foreign court.
Note
Section 91 excludes evidence of certain judgments and convictions
We agree that the trial judge had erred in relying on the evidence of the VCAT decision. It was for the Court itself to decide whether Mrs Daunt was competent at the time of the transfer. This was not a task that could be abdicated in favour of the determination of some other body. That is the effect of s 91 of the Evidence Act 2008. It reflects the common law. In Ainsworth v Burden,[32] Hunt AJA (with whom Handley and McColl JJA agreed) said:
It is clear that s 91 does not prevent the tender of judgments which contain findings as to the existence of facts relevant to the issues in the trial in which they are tendered. It merely prevents the judgments from being tendered for the purpose of proving the existence of those facts. If they are admissible for some other purpose — as they are in the present case, in order to demonstrate that they would have persuaded any honest-minded person that the defendant’s allegations were false — they may not then be used to prove the existence of those facts, a consequence which would otherwise have flowed from s 60 of the Evidence Act. In any event, the facts which the coversheets would have established were that a company associated with the plaintiff had made an application for a gaming licence, the police had objected to the grant of that licence, the terms of the grounds of objection, the rejection of the objection and the grant of the licence. None of the those facts was ‘a fact that was in issue’ in the Licensing Court proceedings, and s 91 did not exclude the coversheets stating those facts.[33]
[32][2005] NSWCA 174.
[33]Ibid [109] (emphasis in original).
Section 178 is of no assistance. It makes use of a ‘certificate given under this section’.[34] The section contemplates that ‘a judge, a magistrate or registrar or other proper officer of the applicable court’ must provide such a certificate.[35] Michael did not secure any such certificate from any such judicial officer. The order of VCAT was in evidence. But, it was not a certificate given under s 178 of the Evidence Act 2008.
[34]Section 178(3), (4) and (5).
[35]Section 178(2).
Given the error and its clear materiality, this Court must determine whether it should remit the present matter for rehearing or decide the matter for itself. As there was no cross-examination below and as no issue turned on the credibility of any party or witness, this Court is in as good a position as the trial judge to review the evidence, all of which is in writing. Accordingly, we will adopt the latter course.
Did the trial judge err in not finding that Mrs Daunt was under a special disability or disadvantage such that the transfer amounted to unconscionable conduct?
At the hearing of the appeal, the general principles of law were not in dispute. Equity recognises two categories of undue influence: actual undue influence and presumed undue influence. Where the former is established or the latter presumption is not overcome, equity will set aside a gift.[36] In the first category, evidence must be adduced that establishes that the gift was the result of influence expressly used by the donor over the donee. The second category arises ‘when the relations between the donor and donee have at or shortly before the execution of the gift been such as to raise a presumption that the donee had influence over the donor’.[37] In such a case, equity will set aside the gift unless the donee is able to establish that the gift was ‘the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee’.[38] Michael accepted the ruling of the trial judge that, by reason of the nature of his relationship with his mother, there was a presumption of undue influence and that the onus lay upon him to show that the gift was the product of the exercise of an independent and informed will.
[36]This discussion relates solely to inter vivos dispositions. See Matthew Tyson, ‘An Analysis of the Differences between the Doctrine of Undue Influence with Respect to Testamentary and Inter Vivos Dispositions’ (1997) 5 Australian Property Law Journal 38.
[37]Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573, 575. At trial, the judge had applied Christodoulou v Christodoulou [2009] VSC 583, where Kaye J said (at [70] (citations omitted)):
The basic principles relating to the concept of undue influence are uncontroversial. In equity, a transaction, whereby a donor transfers property to a donee (or recipient), is voidable, if it is shown to be the result of undue influence exercised by the recipient over the mind of the donor. There are two categories of cases of undue influence. The first category of cases arises where it has been positively proven that the transaction in question was produced by actual influence exercised by the recipient over the donor. In opening, Mr Ehrlich made it clear that he was not making a case based on the exercise of any actual influence by the first defendant over the plaintiff. The second category of case is where there has been shown to be an antecedent relationship between the donor and the donee, which is such as to raise a presumption that the donee has relevant influence over the donor. In such a case, the court will set aside a voluntary gift, unless it is proven by the donee that the gift was a spontaneous act of the donor in exercise of an independent and informed will. In this category of case, the law has recognised particular relationships which automatically raise a presumption of influence, including the relationship of doctor and patient, solicitor and client, guardian and ward, and parent and child (where the gift is by the child to the parent). However, the classes of relationships, in which the presumption arises, are not fixed and inflexible. In essence, where there is found to be an antecedent relationship between the parties, which gives the recipient of the gift ‘authority or influence over the donor from the absence of which it is proper that he [or she] should be protected’, the law will presume that any gift by the donor to the donee was the result of undue influence exercised by the latter.
[38]Johnson v Buttress (1936) 56 CLR 113, 134 (Dixon J).
It was also contended that the transfer should be set aside by reason of breach of fiduciary duty or unconscionable conduct. In Louth v Diprose,[39] Brennan J said:
The jurisdiction of equity to set aside gifts procured by unconscionable conduct ordinarily arises from the concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-a-vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest.[40]
In Commercial Bank of Australia Ltd v Amadio,[41] Deane J said that, although the equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are ‘closely related’, they are none the less distinct. He described the difference between undue influence and unconscionable dealing: the former looks to the quality of the consent of the weaker party; the latter looks to the conduct of the stronger party dealing with a person under a special disability.[42] In Louth v Diprose,[43] Deane J said:
It has long been established that the jurisdiction of courts of equity to relieve against unconscionable dealing extends generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party to the transaction with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that special disability was sufficiently evident to the other party to make it prima facie unfair or ‘unconscionable’ that that other party procure, accept or retain the benefit of, the disadvantaged party's assent to the impugned transaction in the circumstances in which he or she procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: ‘the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain’ or retain the benefit of it.[44]
[39](1992) 175 CLR 621.
[40]Ibid 626 (citation omitted).
[41](1983) 151 CLR 447.
[42]Ibid 474.
[43](1992) 175 CLR 621.
[44]Ibid 637 (citations omitted).
Stephen submitted that the trial judge erred in not finding that Mrs Daunt was under a special disability or disadvantage such that the transfer amounted to unconscionable conduct. He submitted that the trial judge erred in having regard only to Mrs Daunt's capacity and not to her strong emotional dependence on Michael. He also submitted that the emotional dependence, in combination with the age and frail health of Mrs Daunt, seriously affected her ability to make a judgment as to her own best interests, and Michael must have known of that effect on her. He submitted the transaction was not in her best interests because it effectively resulted in the estrangement of her other two children.
Stephen also submitted that the trial judge should have found that, as well as being under a special disability or disadvantage, Mrs Daunt was not in a position to protect her interests.
The trial judge held that ‘[t]here is no overarching doctrine at law that an adult child otherwise owes a fiduciary duty to his or her parents’.[45] Stephen said that, while that proposition was correct, the issue remained: whether by reason of Mrs Daunt’s vulnerability and her reliance upon Michael, a fiduciary a relationship had none the less been established which prevented Michael from placing himself in a position where his duty to his parents conflicted with his own interest.
[45]Reasons [47].
At the hearing of the appeal, Stephen’s counsel pointed to several pieces of evidence which, he said, showed that Mrs Daunt was under a disability, and, in particular, that she could not have understood the implications of the transfer and that she was acting under the influence of Michael. In his affidavits, Stephen was direct: at one point, he said that his mother had become a ‘decrepit puppet’. Second, Stephen said that, in writing her letters, his mother was simply a cipher for Michael. He gave evidence of a letter from his mother: ‘The style of handwriting is very characteristic of our mother but the thought, the phrasing and wording is most characteristic of my twin brother, Michael Daunt’.

The material before the trial judge also included two DVDs that showed Mrs Daunt speaking. As with all the other evidence adduced by Michael, Stephen discounted this evidence. He said: ‘Her DVD testimony is scripted and produced by [Michael]. Her compliance is the result of undue influence by [Michael]. It was not made under oath. She is not aware of Section 125B(b) (sic) of the Instruments Act 1958’.[46] At the hearing before the trial judge, he said that the DVDs comprised ‘fabricated evidence’.
[46]Reasons [15]. Section 125B (Signature and undertaking of attorney required) forms part of Division 2 (Making an enduring power of attorney) of Part XIA (Enduring Powers of Attorney).
Analysis
Stephen submitted that the letters written by Michael up to 31 May 2010 demonstrated the power he held over Mrs Daunt and that he was effectively treating the property as if he had the power to make arrangements for its transfer and how that should be facilitated. In particular, he referred to the letters dated 23 October 2009 and 30 March 2010 that have been extracted above.[47] He also submitted that the trial judge acted against the weight of the evidence in accepting that letters sent by Michael to Stephen supported her findings of fact as to the circumstances of the family before the transfer took place.[48] He submitted that the trial judge should have found that the offers contained in those letters to Stephen to become a co-owner of the property were not genuine offers and that she erred in treating them as truthful and accurate.
[47]See [25] and [27].
[48]The reference was to the finding in Reasons [19]. That paragraph has been extracted in [24], [26] and [28] above.
However, the letters do not show any such thing. They are typical communications between siblings faced with the need and the obligation to care for very aged parents. The objective of the strategy appears to have been to get their mother off the title while allowing her to continue to have use of the property. It is difficult to see how arrangements could have been made had there not been communications of this sort. And, as the rest of the correspondence summarised by the trial judge showed, one significant cause of the dilemma was Stephen’s unwillingness to come onto the title as it would affect his pension.[49]
[49]Reasons [19(j)].
Stephen also referred to Dr Coulson’s report to Dr Doig dated 20 April 2010. In support of his contention that Michael exercised undue influence over his mother, he drew attention to the part in which Dr Coulson wrote:
The other issue is that she has three children and is mildly estranged from two of them though the staff report that they are concerned at how over‑involved her son Michael is with her care, though Mrs Daunt sees this as a good thing and she is very appreciative of his input in her care.[50]
[50]See also [29] above.
The whole paragraph together with the rest of the report must be considered. Mrs Daunt was alive to the criticisms that Stephen and Helen were making about Michael’s involvement in her life, but she did not share their estimation of it.
Stephen referred to his mother’s letter to VCAT dated 8 February 2011.[51] He said that it showed her confusion about the effects of the transfer. Given that she had transferred her interest in the property, it was not possible for it to be kept as a ‘financial and physical resource’[52] for herself and her husband.
[51]See [36] above.
[52]Ibid; Reasons [27(h)].
Again, the whole letter must be read. It demonstrates that Mrs Daunt understood that, so the requirements of Centrelink could be satisfied, she had to part with her interest in the property but, by transferring it to a member of her own family, she and her husband could continue to have access to it and to enjoy it. The remainder of the letter, particularly its reference to the fact that Michael would get the property on the death of his father and to what would be contained in her estate showed that she fully understood what was involved in the transfer and that she was pleased that she would continue to have access to it.
Much the same must be said of Mrs Daunt’s reference of 6 December 2012 to ‘your caveat ... interfering with my freedom to acquire a new and more suitable place to live’.[53] The whole letter must be read. It is of a piece with all the other evidence of what Mrs Daunt had been saying: she was frustrated with Stephen’s unwillingness to help her and his determination to frustrate the strategy whereby she could do what was necessary to ensure that Centrelink was satisfied that her pension was not prejudiced and at the same time have continued access to the property as it was in the hands of one of her children. Stephen’s contention that Mrs Daunt was confused as to the effects of the transfer is simply not tenable.
[53]See [42] above; Reasons [21].
A further difficulty in all these contentions is that none of them was put to any of the witnesses at trial. Neither Michael nor Mrs Daunt was given any opportunity to comment on them.[54] The transcript of the hearing before the trial judge makes clear that Stephen had made it plain, at one or more directions hearings, that he did not wish to cross-examine any witness and that he wanted the matter determined ‘on the papers’. In fact, there was a hearing. At that hearing, Stephen confirmed that he did not wish to cross-examine any witness. A court must explain to an unrepresented litigant the consequences of not cross-examining a witness.[55] If the evidence of the witness is not challenged, the court is left without having heard what the witness would say in response to the challenge. Counsel were not able to tell the Court exactly what had been said at the directions hearings to Stephen; counsel for Michael said that he had a ‘vague recollection’ that the matter had been explained to Stephen. Stephen was present at the hearing of the appeal; he made no protest when this was said. Moreover, this Court has been able to read the transcript of the hearing before the trial judge and it is clear that Stephen was given every opportunity to say whatever he wished to say.[56]
[54]Browne v Dunn (1893) 6 R 67.
[55]See Downes v Maxwell Richard Rhys & Co Pty Ltd (in liq) (2014) 313 ALR 383.
[56]It was also the case that Stephen was not cross-examined on his affidavits. They comprised mainly his submissions. They also contained his allegations against his mother and Michael. But, these were the very matters that should have been put to those two witnesses.
There was abundant evidence that the transfer was a spontaneous act of Mrs Daunt in exercise of an independent and informed will. Mrs Daunt herself gave evidence. She was able to show the opinions as to her capacities that had been formed by Dr Coulson and Dr Doig a short time before she executed the transfer. Ms Carbone witnessed the execution of the transfer and gave evidence that she did not detect ‘any reluctance or lack of understanding’ on the part of any of the signatories to the transfer. Soon after the execution of the transfer, both Mr and Mrs Daunt had their own solicitor prepare enduring powers of attorney in favour of Michael. A short time later, Dr Baker certified that she was ‘aware of the past history and present medical state of Mrs Daunt and that she has testamentary capacity and the ability to understand information and its implications‘.[57] When Mrs Daunt wrote to VCAT, she had her solicitor witness the letter to ‘avoid any suggestion that I had been coerced or unduly influenced by any other person’.
[57]Of course, the determination whether a person has ‘testamentary capacity’ is for a court. However, the effect of Dr Baker’s certificate is clear enough for present purposes.
In addition, the evidence contained several letters in Mrs Daunt’s own hand. They have been extracted above. The firmness and clarity of her handwriting are striking. Their content is all to the same effect. She wanted the transfer to take place in order to carry out advice that she had received from Centrelink to the effect that her continued ownership of the property was interfering with her pension entitlements. She was frustrated by the refusal of Stephen and her daughter to accept that this is what she wanted.
In our opinion, Michael has rebutted any presumption of undue influence with respect to the transfer. Moreover, we are satisfied that the transfer was fair, just and reasonable when viewed from Mrs Daunt’s perspective, and that Michael did not unconscionably exploit any disability in his mother for his own advantage.
Did the trial judge err in finding that there was no fiduciary relationship between Michael and his mother prior to the execution of the Power of Attorney?
It is unnecessary to determine whether Michael had become a fiduciary for his parents by reason of the care of and responsibility for them that he had undertaken. The basic interests of the parents have been suitably protected under the rubric of ‘undue influence’ which, probably, has a broader reach than the law of fiduciary obligations. That said, we are prepared to proceed on the assumption that Michael was a fiduciary for his mother when it came to the transfer of the property. As such, he was under a duty to ensure that his duties to his mother did not conflict with his interest (as a transferee). But, it is always possible for a fiduciary to favour his own interest if he has the informed consent of his principal. In the present case, the situation was complicated. It was Mrs Daunt who wanted the transfer in order to preserve her pension; but, she wanted the transfer to take place in such a way that she continued to have access to the property. A transfer to her children would achieve both objectives. It is plain that not only did Michael have her consent to the transfer, rather it was his mother who was behind the proposal itself.
In our opinion, none of the grounds of appeal has been made out. Accordingly, the appeal will be dismissed.
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[2015] VSCA 58

24 April 2015