Hayward (as Executor of Felton Estate) v Speedy and Felton - [2021] NSWSC 943

Supreme Court

New South Wales

Medium Neutral Citation: Hayward (as Executor of Felton Estate) v Speedy and Felton [2021] NSWSC 943
Hearing dates: 6, 7, 8 and 9 April 2021
Decision date: 30 July 2021
Jurisdiction: Equity
Before: Lindsay J
Decision:
The donee of gifts from her elderly parents (now deceased) is required to account for them to the deceased estate of her father (the survivor of her parents, the beneficiary of his wife’s estate), on the ground that she procured the gifts by an exercise of undue influence.

Catchwords:
EQUITY — Undue influence — Relationships giving rise to presumption of undue influence — Rebutting presumption of undue influence — Presumption not rebutted

Legislation Cited:
Evidence Act 1995 NSW
Guardianship Act 1987 NSW
Powers of Attorney Act 2003 NSW

Cases Cited:
Bridgewater v Leahy (1998) 194 CLR 457
Chan v Zacharia (1984) 154 CLR 178
Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; 73 ACSR 252
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417
Hewitt v Gardner [2009] NSWSC 1107
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Jones v Dunkel (1959) 101 CLR 298
Johnson v Buttress (1936) 56 CLR 113
Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432
Maguire v Makaronis (1997) 188 CLR 449
Quek v Beggs (1990) 5 BPR 11,761
Ramage v Waclaw (1988) 12 NSWLR 84
Spellson v George (1992) 26 NSWLR 666

Category: Principal judgment
Parties: Plaintiff: Bernard Edward Hayward as Executor of the Estate of Clifton Albert Felton
First Defendant: Lesley Ann Speedy
Second Defendant: Graeme John Felton
Cross claimant: Graeme John Felton
First cross defendant: Bernard Edward Hayward as Executor of the Estate of Clifton Albert Felton
Second cross defendant: Lesley Ann Speedy
Representation:
Counsel:
Plaintiff/First cross defendant: PP O’Loughlin
First Defendant/Second cross defendant: J McIntosh
Second Defendant/Cross claimant: RD Wilson SC
Solicitors:
Plaintiff/First cross defendant: B Hayward & Co Lawyers
First Defendant/Second cross defendant: JNT Legal
Second Defendant/Cross claimant: GL Abbott & Co

File Number(s): 2017/00129730

Judgment

INTRODUCTION

In substance, these proceedings concern a dispute between a brother, Graeme (the second defendant) and a sister, Lesley (the first defendant) as to the proper disposition of the proceeds of sale of the home of their deceased parents, Mr and Mrs Felton, in Annette Street, Oatley (“the Oatley Property”), appropriated by Lesley (she contends, with the consent of her parents and, in particular, her father, the survivor of the parents), inter alia, in her purchase of a home for herself in Warilda Avenue, Engadine (“the Engadine Property”).
The Oatley Property was sold by a contract exchanged on 16 December 2013 and completed on 10 February 2014, providing funds for the payment of accommodation bonds upon Mr and Mrs Felton’s admission to a nursing home plus a surplus (most of which found its way to Lesley).
The proceeds of the sale of the Oatley Property were the ultimate source of funds of Mr and Mrs Felton, totalling $1,470,218.63, transferred from a Qantas Credit Union account in their names to Lesley (she says as a gift):

as to $25,000, on 28 February 2014;

as to a further $25,000, on 1 March 2014;

as to $1,320,218.63, on 6 March 2014; and

as to $100,000, on 10 December 2014.

Lesley applied the transferred funds, inter alia, in:

the purchase in her name of the Engadine Property (by a contract exchanged on 4 March 2014, following an auction, and completed on 14 April 2014); and

establishment of an investment fund, or funds, held by Lesley in a Qantas Credit Union account in her name (transferred, in whole or part, to a joint account in the names of Loren and herself on 19 February 2016) with a current balance of several hundred thousand dollars.

The precise amount held by Lesley in liquid form is not clear on the evidence presently before the Court. Evidence given by Lesley in cross examination suggests that it might be a little less than $400,000. In Graeme’s closing written submissions a figure of “about $296,000” is mentioned. This will need to be clarified before final orders are made unless those orders include a general order for accounts to be taken.
Graeme challenges the propriety of the transfers totalling $1,470,218.63, contending that Lesley procured them by an exercise of undue influence over her parents or in breach of fiduciary obligations owed by her to her parents as their attorney and carer.
Mrs Felton predeceased Mr Felton, leaving him as her sole beneficiary. Upon his death, his estate passed to Lesley and Graeme in equal shares.
It is agreed between the parties, on the pleadings, that the estate of Mr Felton “succeeds to any claims or causes of action” to which Mrs Felton was entitled as at the date of her death.” Accordingly, as no person other than the parties has an interest in the estates of Mr and Mrs Felton, it is not necessary for the estate of Mrs Felton to be separately represented in these proceedings.
On behalf of the deceased estate of Mr Felton, Graeme claims:

a declaration that Lesley holds the Engadine Property on trust for the estate;

a declaration that Lesley holds the funds presently in her Qantas Credit Union account on trust for the estate; and

consequential orders for that property to be vested in the executor of the estate (Mr B.E. Hayward, solicitor) for administration in accordance with Mr Felton’s will, the terms of which provide for an equal division of the estate between Graeme and Lesley.

Neither Graeme nor Mr Hayward seeks in these proceedings, on behalf of the estate of Mr Felton, to recover the amounts of $100,000 paid to each of Lesley’s children, Loren and Fletcher, on 2 November 2015 ($200,000 in total) from the Qantas Credit Union fund held in the name on Lesley, who contends that the payments were made by her at the request and direction of Mr Felton.

THE COURSE OF PROCEEDINGS

By an arrangement between Graeme, Lesley and the executor of the respective estates of both parents (Mr Hayward), Graeme has carriage of the proceedings on behalf of Mr Felton’s estate.
Shortly before her death, and about 20 months before the death of Mr Felton, the NSW Trustee was appointed by the NSW Civil and Administrative Tribunal (NCAT) as Mr Felton’s financial manager.
The current proceedings (numbered 2017/00129730) were commenced on 1 May 2017 by the filing of a statement of claim naming the plaintiff as Mr Felton “by his tutor the NSW Trustee”. Lesley (at that time the only defendant) filed a defence on 4 July 2017.
Following the death of Mr Felton later that month Mr Hayward was granted probate of his will.
On 23 November 2017, with the consent of Lesley, Mr Hayward was granted leave to file an amended statement of claim which named him as plaintiff in substitution for Mr Felton “by his tutor the NSW Trustee”.
Having assumed the role of plaintiff in the current proceedings, Mr Hayward (in separate proceedings numbered 2018/00229118) on 26 July 2018 filed a summons seeking judicial advice as to whether he would be justified in continuing the current proceedings against Lesley.
In answer to that summons Lesley filed a document styled “Defence” on 30 August 2018 the effect of which was to oppose the continuation of any proceedings against her and, incidentally, to contend that Mr Hayward should not be indemnified from the estate of Mr Felton if he chose to continue proceedings against her.
Having earlier declined to provide Mr Hayward with an indemnity as to costs should he continue proceedings against Lesley, on 9 January 2019 Graeme filed a notice of motion in the current proceedings seeking to be joined as a party to the proceedings and to be given carriage of the proceedings.
The judicial advice proceedings were resolved on 20 February 2019 on the basis of an agreement between Mr Hayward, Graeme and Lesley that Graeme would assume carriage of the claims for relief to be made by Mr Felton’s estate against Lesley.
Orders made by Henry J in the current proceedings at the time the judicial advice proceedings were resolved on 20 February 2019 included orders to the following effect:

Order that Graeme be joined as a second defendant to the proceedings.

Note the agreement of the parties that Graeme shall conduct the proceedings on behalf of the deceased estate of Mr Felton.

Note the further agreement of the parties that, except in relation to the cost of his notice of motion for joinder filed on 9 January 2019, Graeme shall not seek indemnity from the estate in respect of his costs to the intent that the proceedings will be conducted at his own risk.

Grant leave to further amend the statement of claim, such further amended statement of claim to be filed within 21 days.

Order that the costs of Mr Hayward on the notice of motion filed 9 January 2019 be paid out of the estate of Mr Felton on the indemnity basis, with the costs of Lesley and Graeme being paid out of the estate on the ordinary basis.

Pursuant to an order made by the Registrar on 2 April 2019, Graeme filed a statement of cross claim on 15 April 2019.
With a minor clerical difference, Graeme’s statement of cross claim mirrors Mr Hayward’s amended statement of claim.
On 8 May 2019 Lesley filed a defence to the cross claim.
Accordingly, the hearing of these proceedings has been grounded upon Graeme’s statement of cross claim filed 15 April 2019 and Lesley’s defence to cross claim filed 8 May 2019.
Mr Hayward’s amended statement of claim filed on 23 November 2017 remains formally on foot, but the parties’ understanding is that their dispute is to be determined on the cross claim, leaving Mr Hayward to play the dual role of a witness and a trustee in proceedings contested by others. In final submissions, his counsel formally adopted the submissions of Graeme.
No application has been made by either Lesley or Graeme for a family provision order affecting one or the other of the estates of Mr and Mrs Felton.

THE PARTIES’ COMPETING CONTENTIONS

The substantial contest is between the siblings, Graeme and Lesley. There is no challenge to Mr Hayward’s occupation of the office of executor and trustee of the estate of Mr Felton. Graeme’s conduct of the proceedings on behalf of the estate, with Mr Hayward joined in the proceedings as the formal representative of the estate, is consistent with Ramage v Waclaw (1988) 12 NSWLR 84; Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432; and Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; 73 ACSR 252.
As earlier noted, Graeme contends that Lesley holds on a constructive trust for the estate of Mr Felton the Engadine Property (her purchase of which was funded from the proceeds of sale of the Oatley Property) and a fund, or funds, held by her traced from the proceeds of sale.
Lesley contends that the Engadine Property was purchased with funds made available by Mr Felton because: (a) she had a close and loving relationship with her parents as a daughter and carer; (b) the Oatley Property had to be sold to fund the parents’ move to a nursing home; (c) because she had been living with her parents, and was impecunious, a likely consequence of the sale was that, without assistance from the parents, she would be without anywhere to live, and without funds to support her; (d) her parents determined to assist her by funding her purchase of the Engadine Property; and (e) such a determination was all the more natural because there was an estrangement between Graeme and his parents or, more particularly, Mr Felton.
Lesley contends that she was given funds in excess of the purchase price of the Engadine Property because: (a) her parents wanted to assist her beyond merely funding the purchase of the Engadine Property; (b) they took the view that Graeme had already received sufficient assistance from them in earlier years; (c) they were estranged from Graeme, who they believed had acted against their interests; and (d) they trusted her, as a dutiful daughter, to look after their ongoing interests.
In support of the estate’s claims for relief against Lesley, Graeme advances a case that Lesley procured for herself the proceeds of sale of the parents’ home by an exercise of undue influence over the parents (particularly Mr Felton) or in breach of fiduciary obligations owed by her to the parents as a carer and an enduring attorney. Graeme did not plead unconscionable conduct in the sense of a catching bargain, and Lesley has held him to his pleading.
Although Lesley advances a positive case that any and all the property acquired by her was a gift from her parents, no party has made submissions of any kind about the operation of a presumption of advancement, although invited by the Court to do so. All parties have approached the case on the basis of a factual enquiry as to the circumstances in which property of Mr and Mrs Felton was acquired by Lesley.
The evidence includes observations about, or bearing upon an assessment of, the mental capacity of Mr and Mrs Felton in and from mid-2013, from about the time that they each experienced a medical episode; Mrs Felton fell and broke her hip on 29 July 2013, Mr Felton suffered a stroke on 2 August 2013. Because Mrs Felton had a long history of acquiescence in Mr Felton’s business decisions, and she predeceased him leaving everything to him, attention has been focused upon Mr Felton’s mental capacity.
No party has shown an interest in the question whether any authority Mr Felton may have had to speak on behalf of Mrs Felton terminated with her descent into mental incapacity. The question whether (and, if so, when) she lost mental capacity has been largely unexplored. The parties have been content to conduct the proceedings upon the basis of an assumption that Mr Felton was at all times duly authorised by Mrs Felton to speak on her behalf.
There is no allegation in the proceedings that business transacted by Mr Felton was void or voidable for a want of mental capacity. The way the proceedings have been conducted Mr Felton’s capacity, or want of capacity, bears upon the questions of undue influence and fiduciary obligations.
No party has adduced evidence from a forensic medical expert. The medical evidence before the Court is confined to reports made by treating doctors.

THE LAW

Upon an exercise of equity jurisdiction, the Court recognises subtley, but important, different paths to a finding that a person (notionally, a “stronger party”) has, against good conscience, received or retained property of another (notionally, a “weaker party”) in circumstances in which the stronger should be held liable to account to the weaker for that property.
The parties’ competing submissions can be accommodated by reference to the equitable principles governing:

undue influence summarised by McLelland J (as his Honour then was) in Quek v Beggs (1990) 5 BPR 11,761 at 11,764-11,675, informed particularly by the observations of Dixon J in Johnson v Buttress (1936) 56 CLR 113 at 134-136; or

a fiduciary’s acquisition of property of the fiduciary’s principal and the need for the fiduciary to obtain the fully informed consent of the principal to the fiduciary’s retention of any unauthorised gain from the transaction (Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 67-69 and 96-97; Chan v Zacharia (1984) 154 CLR 178 at 198-199; Maguire v Makaronis (1997) 188 CLR 449 at 466-467; and Spellson v George (1992) 26 NSWLR 666 at 670G).

The gravamen of the concept of “undue influence”, in equity, can be understood by contrasting it with the concept of “unconscionable conduct” (commonly described by reference to Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447) in the nature of a “catching bargain”, a construct of English legal history explained in Bridgewater v Leahy (1998) 194 CLR 457 at [75].
Undue influence looks to the quality of the consent or assent of the weaker party, whilst unconscionable conduct looks to the attempted enforcement or retention by a stronger party of the benefit of a dealing with a person under a special disadvantage: Amadio (1983) 151 CLR 447 at 474. Another important difference is that undue influence may be established by means of a presumption in some cases whereas no presumption is available in support of an allegation of unconscionable conduct.
“Undue influence” denotes an ascendency by the stronger party over the weaker party such that an impugned transaction is not the free, voluntary and independent act of the weaker party; it is the actual or presumed impairment of the judgement of the weaker party that is the critical element in the grant of relief on the ground of undue influence. “Unconscionable conduct” focuses more on the unconscientious conduct of the stronger party. It is a ground of relief which is available whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is taken of the opportunity thereby created: Bridgewater v Leahy (1998) 194 CLR 457 at [71]-[76].
The concept of a fiduciary relationship, and the obligations of a fiduciary attendant upon such a relationship, provide another contrast with the concept of undue influence in equity.
For present purposes, the critical feature of a fiduciary relationship, and the attendant obligations of a fiduciary, can be identified by reference to the observations of Mason J in Hospital Products (1984) 156 CLR 41 at 96-97:

“The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence or confidential relations (cf. Phipps v Boardman [1967] 2 AC 46 at 127), viz., trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and partners. The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. The expressions ‘for’, ‘on behalf of’ and ‘in the interests of’ signify that the fiduciary acts in a ‘representative’ character in the exercise of his responsibility ...
It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed. …”

The categories of fiduciary relationship are not closed. Fiduciary relationships are of different types, carrying different obligations and they may entail different consequences: Hospital Products at 68-69 and 96. An example of this is the relationship between a guardian (by whatever name known) and a person under care of the guardian where the guardian is entrusted with funds to be expended in the maintenance and support of the person under care. The guardian is not liable to account as a trustee, but has a liability to account assessed by reference to whether the purpose of his or her appointment has been served. A guardian may be relieved of the obligation of accounting precisely for expenditure and, if he or she fulfils the obligation of maintenance of the person under care, in a manner commensurate with the property available to him or her for the purpose, an account will not be taken: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.

Fiduciary obligations may be owed to a person under care (such as Mr or Mrs Felton) by a carer who holds (as did Lesley) appointments as the person’s enduring attorney and enduring guardian and who (as the facts of this case lend themselves to a finding) occupies a position of ascendency over the person under care: Hewitt v Gardner [2009] NSWSC 1107 at [99]-[102] and [70].
The equitable principles governing undue influence can readily accommodate the parties’ competing submissions in the current proceedings because: (a) there is no dispute that substantial funds of Mr and Mrs Felton were transferred to Lesley otherwise than in the ordinary course; (b) those transfers of property took place when Mr and Mrs Felton were elderly, in ill health, transitioning to life in a nursing home and vulnerable to exploitation; (c) as Lesley conceded in cross examination, Mr and Mrs Felton were dependent upon her emotionally and for all activities of their lives; (d) the dependency of Mr and Mrs Felton on Lesley was confirmed by their conferral upon her of the powers of an enduring attorney and an enduring guardian, her routine accompaniment of them to their medical appointments, their reliance on her for social engagement with family members and their delegation to her of business tasks such as liaising with Mr Hayward; (e) Lesley claims that each of the transfers was a gift by her parents to her, authorised by Mr Felton on behalf of his wife and himself; (f) viewed from the perspective of Mr and Mrs Felton, but objectively, the transfers of property were so substantial that they are open to characterisation as improvident; (g) the transfers were effected in circumstances in which Mr Felton, as the decision maker for himself and his wife, was motivated by an antagonism towards Graeme which is open to characterisation as delusional; (h) for her own benefit, Lesley encouraged Mr Felton in his antagonism towards Graeme, encouraged Mr and Mrs Felton to live in isolation from Graeme, and encouraged them to transfer their wealth to her; and (i) Mr and Mrs Felton did not obtain (nor were they advised by Lesley to obtain) independent advice regarding transfers of property to Lesley.
Graeme’s allegation that Lesley breached the obligations of a fiduciary adds nothing of substance to his allegation of undue influence. Admittedly, Lesley’s relationship with her parents is as capable of characterisation as a fiduciary one as it is of characterisation as a relationship of ascendency for the purpose of the principles governing undue influence. However, to analyse the case in terms of fiduciary law is, ultimately, to focus attention on the quality of any intention on the part of Mr and Mrs Felton to make gifts in favour of Lesley, the very issue under focus on Graeme’s allegation of undue influence. Did Mr and Mrs Felton “authorise” the impugned gifts to Lesley? Did they give their fully informed consent to her receipt, and retention, of gifted property? In substance, these questions can be accommodated, on the application of undue influence principles, upon a consideration of whether Mr and Mrs Felton knew and understood what they were doing, and whether they were acting independently of any influence arising from Lesley’s ascendency, in making the impugned gifts.
Despite evidence of intent on the part of Mr Felton (accepted by the parties as representing himself and Mrs Felton) to make gifts to Lesley, there is also: (a) evidence of an apprehension on Mr Felton’s part of a need to protect the interests of himself and Mrs Felton in property and income under management by Lesley as their attorney; and (b) evidence that, as late as July 2015 or thereabouts, Mr Felton continued to regard property the subject of gifts to Lesley as his own, highlighting uncertainty about his capacity to protect his own interests and those of Mrs Felton.
For the purpose of these proceedings I adopt the following observations of McLelland J in Quek v Beggs:

“Undue influence
… Legal principles
Generally speaking, the law permits a person of full age and capacity to dispose of his or her property by gift or otherwise in such manner as he or she may choose. However in certain recognised categories of case, principles of equity intervene to render such a gift liable to be set aside by the court. One of those categories is where the donor makes the gift as a result of “undue influence” of the donee. In this context “influence” means a psychological ascendancy by the donee over the donor, and “undue influence” means the donee’s taking improper advantage of such ascendancy: Union Bank of Australia Ltd v Whitelaw [1906] VLR 711 at 720. It is not necessary that the ascendancy amount to domination: Goldsworthy v Brickell [1987] Ch 378 at 402-6.
A donor (or if he or she is deceased, a representative of his or her estate) will prima facie be entitled to have a gift set aside on the ground of undue influence upon proof of:
(a)   facts establishing that the gift was made by the donor as a result of undue influence of the donee; or
(b)    facts that give rise to a presumption that the gift was so made, unless the donee rebuts the presumption in the manner mentioned below.
A presumption of undue influence arises if it is proved:
(a)   that at the time the gift was made there existed a relationship between the donor and the donee of such a nature as to involve reliance, dependence or trust on the part of the donor resulting in an ascendancy on the part of the donee; and
(b)   that the gift is so substantial, or so improvident, as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act: Allcard v Skinner (1887) 36 Ch D 145 at 185; Johnson v Buttress (1936) 56 CLR 113 at 134-5; Yerkey v Jones (1939) 63 CLR 649 at 675; Goldsworthy at 400-1.
In such cases, ‘the Court interferes, not on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy, and to prevent the relations which existed between the parties and the influence arising therefrom being abused’: Allcard at 171 per Cotton LJ, applied in Inche Noriah v Shaik Allie Bin Omar [1929] AC 127 at 133; Bank of New South Wales v Rogers (1941) 65 CLR 42 at 85; Antony v Weerasekera [1953] 1 WLR 1007 at 1011, PC. The donee ‘has chosen to accept a benefit which may well proceed from an abuse of his position of ascendancy and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour’: Johnson at 135.
The relationships capable of giving rise to the presumption include certain well defined categories (such as parent and young child, solicitor and client, doctor and patient) but are not limited to those categories…
The donee may rebut the presumption of undue influence, when it arises, by proving that the donor (i) knew and understood what he or she was doing; and (ii) was acting independently of any influence arising from the ascendancy of the donee. See Lancashire Loans Ltd v Black [1934] 1 KB 380 at 409; West v Public Trustee [1942] SASR 109 at 119; Inche Noriah at 135; Wright v Carter [1903] 1 Ch 27 at 52, 57.
It is not sufficient to prove only the first of these elements. In the frequently quoted words of Lord Eldon LC in Huguenin at 300 [ER 536], ‘The question is, not, whether she knew what she was doing… but how the intention was produced’, to which Sir John Romilly MR added in Hoghton v Hoghton (1852) 15 Beav 278 at 299; 51 ER 545 at 553, ‘and though the donor was well aware of what he did, yet if his disposition to do it was produced by undue influence, the transaction would be set aside’. See also Harris v Jenkins (1922) 31 CLR 341 at 368; Bank of New South Wales v Rogers (1941) 65 CLR 42 at 54, 85; Zamet v Hyman [1961] 1 WLR 1442 at 1447; Whereat [v Duff [1972] 2 NSWLR 147].
Nor in relation to the second element is it necessarily sufficient to prove that the proposal to make the gift came from the donor (Spong v Spong (1914) 18 CLR 544 at 549; Whereat at 169) or that the donee took no active steps to procure the gift; Allcard at 183-4, 185-6; Wright at 52-3.
The matters which in a particular case will need to be proved in order to rebut the presumption will depend upon the nature and incidents of the relationship on which the presumption is founded, since the influence which arises from different kinds of relationships varies in kind and degree: Johnson at 134...”

The intervention of equity (to prevent effect being given to an unconscionable transaction) may be justified, not by the fact that a donee has brought about a transaction, but in his or her accepting it and the benefits of it, albeit at the invitation of the donor: Stivactas v Michaletos (No 2) [1994] ANZ ConvR 252; (1993) Aust Contract R 90-031; (1993) NSWLR Conv R 55-683; BC 9301874 per Mahoney JA. Accordingly, even if Lesley’s evidence is accepted (that her parents, through Mr Felton, initiated transfers of property to her, and she merely acquiesced in the transfers) that in itself is no answer to an allegation of undue influence.
The following observations of Dixon J in Johnson v Buttress (at 134-136) inform the judgment in Quek v Beggs:

“The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter. The source of power to practise such a domination may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party. If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act. But the parties may antecedently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but 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. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed and that he has obtained a substantial benefit from the other. A solicitor must thus justify the receipt of such a benefit from his client, a physician from his patient, a parent from his child, a guardian from his ward, and a man from the woman he has engaged to marry. The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree. But while in these and perhaps one or two other relationships their very nature imports influence, the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position. He may be taken to possess a peculiar knowledge not only of the disposition itself but of the circumstances which should affect its validity; he has chosen to accept a benefit which may well proceed from an abuse of the authority conceded to him, or the confidence reposed in him; and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour. But, except in the well-recognized relations of influence, the circumstances relied upon to establish an antecedent relation between the parties of such a nature as to necessitate a justification of the transaction will be almost certain to cast upon it at least some measure of suspicion that active circumvention has been practised. This often will be so even when the case falls within the list of established relations of influence. Because of the presence of circumstances which might be regarded as presumptive proof of express influence, cases outside the list but nevertheless importing a special relationship of influence sometimes are treated as if they were not governed by the presumption but depended on an inference of fact. Scrutton LJ has remarked on the inclination of common law judges ‘to rely more on individual proof than on general presumption, while considering the nature of the relationship and the presence of independent advice as important, though not essential, matters to be considered on the question whether the transaction in question can be supported’ (Lancashire Loans, Ltd. v. Black [[1934] 1 KB at 404]). Further, when the transaction is not one of gift but of purchase or other contract, the matters affecting its validity are necessarily somewhat different. Adequacy of consideration becomes a material question. Instead of inquiring how the subordinate party came to confer a benefit, the court examines the propriety of what wears the appearance of a business dealing. These differences form an additional cause why cases which really illustrate the effect of a special relation of influence in raising a presumption of invalidity are often taken to decide that express influence which is undue should be inferred from the circumstances.”

PERSONAL RELATIONSHIPS INFORM FACTS

An assessment of the evidence in these proceedings requires an appreciation of the personal relationships between members of the Felton family and, incidentally, the relationship between Mr Felton and Mr Hayward.
Mr and Mrs Felton had a long and happy marriage attended by gender roles typical of their generation. Mr Felton was born on 28 July 1924, Mrs Felton on 28 December 1921. Mr Felton attended to business. Mrs Felton attended to family. In matters of business, Mrs Felton routinely followed the lead of Mr Felton.
That was the experience of Mr Hayward. In matters of business Mr Felton invariably spoke for himself and his wife. Mr Hayward’s conversations with Mrs Felton focussed on family. Thus it was that Mr Felton gave to Mr Hayward not only instructions for the preparation of legal instruments for execution by himself, but also instructions for the preparation of similar instruments to be signed by Mrs Felton. In 2013, they signed mirror wills and enduring powers of attorney and enduring guardianship appointments in substantially similar terms.
Until mid-2013 Mr and Mrs Felton appear to have had good relationships with each of Lesley and Graeme, and Lesley and Graeme appear to have had a tolerable relationship as siblings. Lesley was born on 25 December 1952, Graeme on 30 July 1955.
In mid-2013 Graeme and his wife (Roxayne or “Roxy”) lived at Coramba on the north coast of NSW, near Coffs Harbour, and Lesley had been living with her parents, on and off, for about a year. Graeme had no children. Lesley had two adult children, Loren and Fletcher and (by Loren) a granddaughter. Loren is presently aged 41 years, Fletcher 33.
Loren worked for an airline affiliated with Qantas, as a result of which her family members were entitled to join the Qantas Credit Union, accounts with which feature in this judgment. In 2016 the Credit Union was rebranded as “Qudos Bank”.
Until mid-2013, Graeme maintained a working relationship with Mr Felton in partnership as accountants over several decades, although Mr Felton had largely retired many years earlier and had maintained only a small list of ongoing clients. Early in 2013 (in about February 2013) Lesley “house sat” for Graeme and Roxy for a period of six weeks when they travelled to Japan. When on 29 July 2013 Mrs Felton was hospitalised with a fractured hip, and on 2 August 2013 Mr Felton suffered a stroke, Graeme and Lesley were both content, despite summering discontent, to accept joint appointments as enduring attorneys and guardians for both parents.
The “happy family” relationships within the Felton family unravelled quickly in the aftermath of Mrs Felton’s hospitalisation and Mr Felton’s stroke. Both parents were vulnerable because of their advanced age and ill health. Both were experiencing the onset of dementia. Mr Felton lacked insight about his limitations, fearing a loss of control of his personal affairs. Mrs Felton, further advanced in her dementia than her husband, remained passive in matters of business. An early indication of Mrs Felton’s cognitive decline is a score of 23/30 in a Mini Mental State Examination conducted at St George Hospital on 10 October 2012.
Graeme believed that his father was no longer able to make sound business judgments, and that he had a personal obligation to take control of his parents’ finances, in their interests. Lesley, who had returned to live with her parents (on and off) a year or so earlier, believed that she had a special role in taking care of them. Both Graeme and Lesley were concerned to ensure that their parents’ affairs were in order, in anticipation of incapacity and death: with current wills, powers of attorney and guardianship appointments.
In combination, these various factors produced of form of paranoia affecting Mr Felton, Lesley and Graeme. Lesley and Graeme each suspected the other of seeking financial advantage in dealing with their parents’ wealth. According to Lesley, Mr Felton confided in her his fears of physical and financial abuse at the hands of Graeme. She did nothing to assuage those fears or to moderate her father’s mounting hostility towards Graeme.
Although ostensibly able to give instructions to Mr Hayward for the preparation of wills, powers of attorney and guardianship appointments, and for sale of the Oatley Property as a preliminary move by himself and his wife to nursing home accommodation, Mr Felton was irrationally suspicious of Graeme’s endeavours to assist him.
Envious, perhaps, of what she perceived to be Graeme’s success in business, and conscious of her own impecuniosity, Lesley fed Mr Felton’s fears about Graeme to her own advantage. She and Graeme are very different personalities. In temperament, he is business-like; she is artistic, although she worked as a lease manager for Equity Lease Finance Pty Ltd (under the supervision of Mr Felton) between 1979-1994. Under pressure of dealing with parents approaching incapacity and death, they clashed. Lesley became increasingly involved as her parents’ carer and routinely attended to their business. They became increasingly dependent upon her. She acquiesced in Mr Felton’s rejection of any family contact with Graeme and eschewed contact with Graeme herself.
Mr Hayward (who had known Mr and Mrs Felton for more than a decade) did not consciously notice any deterioration in Mr Felton’s mental capacity at any time before completion of Mr and Mrs Felton’s sale of the Oatley Property on 10 February 2014. Although he was aware of Mr Felton’s stroke, and Mrs Felton’s hospitalisation with a fractured hip, in mid-2013 he took no steps to have them medically examined before acting upon their instructions. This was despite the fact that he had at least contemplated the existence of an issue as to Mr Felton’s capacity in an email exchange with a mutual friend (Ms Val Colyer) on 12 November 2013. Upon settlement of the Oatley sale in February 2014, he took steps for proceeds of the sale to be deposited in Mr and Mrs Felton’s Qantas Credit Union account, leaving them to make their own arrangements with the money. He first became specifically concerned about their capacity to manage their own affairs when he subsequently became aware that Lesley had bought the Engadine Property in her own name using her parents’ funds.

Having been ostracised by his father after an altercation on or about 18 August 2013 (in my assessment, for reasons associated with the conduct of family business in light of Mr Felton’s stroke), Graeme was dramatically marginalised from decision making about family affairs. He had earlier arranged for Mr and Mrs Felton to have an ACAT assessment on 26 August 2013, but he was not involved in arrangements for sale of the Oatley Property, selection of Ferndale Gardens Retirement Village, at Mortdale, as nursing home accommodation for his parents or their subsequent move to John Paul Village, in Heathcote.
Lesley was personally actively involved in the sale of the Oatley Property, disposition of the proceeds of sale and arrangement of her parents’ nursing home accommodation. On her evidence, she merely acquiesced in proposals of her parents (essentially proposals of Mr Felton on behalf of himself and his wife) for all their wealth to be conferred upon her, in large measure, expressly, as a means of punishing Graeme for perceived offences towards Mr Felton. Lesley did not keep Graeme informed of developments.
In the context of a poisoned personal relationship with Graeme, Mr Felton (and, so far as she was mentally able to acquiesce, Mrs Felton), often but not only in the presence of Lesley, told third parties that they had bought the Engadine Property for Lesley and that Graeme was persona non grata.
During this time, attempts by Graeme to contact his parents were unsuccessful. With her acquiescence, Mr Felton (says Lesley) instructed each of the nursing homes in which he and Mrs Felton were resident (first, Ferndale Gardens, then John Paul Village) to shield them from any contact with Graeme.
When he discovered that the Oately Property had been sold and that (despite her impecuniosity) Lesley had purchased the Engadine Property without a mortgage, he applied to the Guardianship Division of NCAT in March 2015 for orders for protective management of the affairs of Mr and Mrs Felton.

FACTS

Introduction

Although there is no dispute between the parties to these proceedings about many facts of the case in broad outline, Graeme and Lesley have markedly different perspectives of the facts. Each alleges that the other had an avaricious personal interest in their parents’ wealth, financial affairs and testamentary arrangements. Each denies any suggestion that they personally had such an interest.
Graeme accuses Lesley of turning their parents against him. This, she denies. For her part, she accuses him of attempting to control their parents’ affairs, challenging particularly the autonomy of Mr Felton. Graeme denies this, but says that, after his father had a stroke on 2 August 2013, Mr Felton lost capacity to manage his affairs. Lesley maintains that Mr Felton generally maintained his mental capacity, although he took a while to recover from his stroke and he sometimes had bad days, for example, when he was tired.
Mr Hayward appears to have endeavoured to confine himself to the conduct of what he perceived to be relatively uncontroversial legal business on the part of Mr and Mrs Felton: preparing enduring powers of attorney, enduring guardianship appointments and wills that favoured Lesley and Graeme in equal shares; and attending to conveyancing work associated with Mr and Mrs Felton’s sale of the Oatley Property as a necessary preliminary to their residence in a nursing home. The apparently routine nature of the legal business entrusted to him, and his respect for Mr Felton, blurred his vision of the vulnerability of Mr and Mrs Felton and the significance of the tensions unfolding within the Felton family.
The near virtual exclusion of Graeme from contact with Mr and Mrs Felton from the second half of 2013 until mid-2015 stands in stark contrast with the active involvement of Lesley with her parents during the same period.
In my assessment, each of Graeme, Lesley and Mr Hayward gave their evidence honestly, according to their lights. However, each had an unconscious bias which needs to be borne in mind in assessing their evidence. In my opinion, Graeme’s concern for the welfare of his parents was genuine and consistent, though he may not have catered for his father’s impaired cognitive function and pride as empathetically as was required in August 2013. In my opinion, Lesley, had a genuine regard for her parents’ welfare, but she was blinded by Mr Felton’s overreaction to Graeme’s well-intentioned attempts to help his parents and by her own self-interest, taking advantage of Mr Felton’s antipathy towards Graeme, and her parents’ increasing emotional dependence upon her, to secure her future and to assist her children.
Lesley’s insistence that Mr Felton was at all times unimpaired in his transaction of business counsels caution in acceptance of her evidence generally, having regard to the fact of his (second) stroke on 2 August 2013, his irrational thinking about Graeme, the nature of the transactions effected in favour of Lesley despite the terms of his will and the reports of his treating doctors. Her evidence about the mechanics of the transfer of funds from her parents to herself, and associated events, is not altogether consistent or reliable.
Lesley’s evidence about statements made to her by Mr Felton is largely corroborated by documents written, or signed, by Mr Felton and evidence of statements made by Mr Felton to other persons. However, the corroborative evidence generally suffers from Lesley’s close proximity when statements supportive of her were made by Mr Felton and her influence upon him in the preparation of documents written, or signed, by him cannot be excluded. If (as I find) he was emotionally and otherwise dependent on Lesley, and susceptible to her influence, the probative force of evidence about statements made by him is much diminished. It is further diminished by Mr Felton’s statements being affected by persistent, irrational observations about Graeme and comments which suggest that he may have believed that he had retained ownership of “gifts” made to Lesley.
Evidence of statements made by Mr Felton cut both ways. Lesley relies upon it as a manifestation of an intention of Mr and Mrs Felton to confer upon her gifts of property. Graeme relies upon it as a manifestation of Lesley’s undue influence over their parents.
On balance, it is difficult to disassociate Mr Felton’s words of gift from the dependency of Mr and Mrs Felton on Lesley and her influence over them. Although she may genuinely believe that she was a passive recipient of their generosity, it is more probable than not that she played a more active role in soliciting gifts from her parents than she herself recognises. An objective fact is that, when her parents sold the Oatley Property as a means of funding their move to nursing home accommodation, she returned to living in rental accommodation pending her purchase of the Engadine Property. A related fact may be that, in discussions with a Rotary Club friend (Ms Val Colyer) in or about early November 2013, Mr Felton expressed concern that proceeds of the sale of the Oatley Property might need protection from use by Lesley as an attorney, for example, in the purchase of a home. In any event, within a short time thereafter, Lesley did in fact purchase a home with the benefit of her parents’ funds, with a surplus. The frequency of offers of gifts which Lesley says that Mr Felton made, and the open-ended terms upon which Lesley says she was offered substantially all of her parents’ wealth, can also be taken as factors against her case, whether or not Lesley’s evidence is in all respects accepted. Viewed as a whole, these various strands of evidence are consistent with a conclusion that Mr and Mrs Felton, then emotionally and otherwise dependent upon Lesley, succumbed to her charms, and her power over their lives, and intuitively sought to keep her on side with proposals for “gifts” she unhesitatingly accepted and implemented.
Each of Graeme and Lesley made submissions, by reference to Jones v Dunkel (1959) 101 CLR 298, about absent witnesses. Graeme confined his submissions to the absence of Lesley’s daughter, Loren. Lesley confined her submissions to the absence of Graeme’s wife, Roxy. Such submissions could have extended to a number of other witnesses whose presence might have aided an understanding of facts; but the absence of witnesses beyond Mr Hayward, Graeme and Lesley was not presented by the parties as a major factor in the case, and it does not appear to me to be so.

Chronological Presentation

At the time controversy descended upon the Felton family in 2013, Mr Felton had practised as an accountant for about 60 years and had long been involved in other business ventures.
Mr Felton and Graeme had worked together as accountants for about 30 years (between 1984-2013) during that time.
In 2000 Graeme, with the concurrence of Mr Felton, became the sole director of Felton family companies.
In or about late 2003 or early 2004 Mr Felton was promoting the use of will trusts by his clients and friends. At about that time, he and Mrs Felton may have executed wills providing for testamentary trusts; but such wills, if made, cannot be found.
In or about the financial year ended 30 June 2009, Mr Felton began transferring his clients to Graeme and, for a time thereafter, he focused his attention on playing the stock market or (between 2011 and mid-2013) following Forex Trading, leaving accounting and tax work to Graeme.
Sometime in 2012 (then in receipt of a widow’s pension) Lesley moved into the Oatley Property to live with Mr and Mrs Felton, but (before mid-2013) she was away from time to time doing “house sitting” or the like.
Between 28-31 July 2013 or thereabouts Graeme and Roxy visited Mr and Mrs Felton for customary birthday celebrations and to allow Graeme to attend a seminar held in Sydney for superannuation advisors during that week. In earlier years Mr Felton had attended that seminar, but by 2013 he had lost interest in doing so.
On 29 July 2013 Mrs Felton fell, fractured her hip and was hospitalised, first, in St George Hospital and, then, in Calvary Hospital. Her accident occurred during a dinner engagement at which she and Mr Felton, Graeme and Roxy celebrated the respective birthdays of Mr Felton (on 28 July) and Graeme on (30 July) in accordance with family custom. The evidence of Graeme, in cross examination, is that (as I accept) there was no discussion over dinner about the respective wills of Mr and Mrs Felton; there is no evidence to the contrary.
Mrs Felton had another fall about a year after her fall on 29 July 2013, a fact consistent with her general frailty of health. That fall occurred on 22 April 2014 when, in the presence of Lesley, she fell out of her bed at Ferndale Gardens and lost consciousness for 20-30 seconds. She was taken to St George Hospital, the notes of which (referable to 22 April 2014) record: “Knows she is on [sic] Hospital but unclear as to why she is here”.
On 2 August 2013 Mr Felton suffered a stroke, but he remained at home with Lesley, without hospitalisation. At about 4:30pm on 2 August 2013 Graeme rang Mr Felton from his home on the central coast to confirm that he and Roxy had arrived home safely from their trip to Sydney. Their conversation included an exchange to the following effect:

Mr Felton said: “I don’t know how to turn the computer on … I don’t know how to use my mobile phone … My mind is empty.”
Graeme said: “Are you ok?”
Mr Felton kept saying: “My mind is gone”.

It is common ground that, for at least a few weeks after his stroke of 2 August 2013, Mr Felton suffered short term memory loss, although Lesley contends that he recovered thereafter.
At the time Mr Felton suffered this stroke, the principal asset of himself and Mrs Felton was the Oatley Property and such, if any, any interest they had in Felton family companies or trusts then under Graeme’s management. Mr Felton routinely drew cheques on a family company account to pay living expenses of himself and Mrs Felton. The legal basis upon which he did so was not explored in the evidence or submissions. He and Mrs Felton also received a pension from the Commonwealth Department of Veterans’ Affairs as a result of his service in World War Two.
The evidence adduced in these proceedings identifies Felton family companies and trusts under Graeme’s management, but it (and the submissions for parties to the proceedings) stop short of enabling the Court to make precise findings about the economic value, if any, of the respective interests of family members in the companies and trusts from time to time. The Inventory of Property attached to the Grant of Probate issued on 9 March 2016 in respect of Mrs Felton’s estate recorded that, at her death on 14 December 2015, her property was limited to a refundable accommodation bond payable by John Paul Village in the sum of $295,697, together with shares (in companies other than Felton family companies) valued, in the aggregate, at $7,806.18, making up an estate with a total estimated value of $303,503.18. The Inventory of Property attached to the Grant of Probate issued on 20 September 2017 in relation to Mr Felton’s estate recorded that, at the date of his death on 30 July 2017, his estate had a total estimated value of $623,825.88, comprising a John Paul Village accommodation bond refund ($289,408), a bank account credit of $204.43 and funds held by the NSW Trustee as his financial manager ($334,213.45). Neither Inventory identified an interest in a family company or trust. Neither made any allowance for property held on trust by Lesley as a consequence of payment to her of proceeds of the sale of the Oatley Property.
During the course of his cross examination, Mr Hayward deposed that, apart from any property recovered in these proceedings, Mr Felton’s estate comprises a fund of about $450,000 presently held by him in trust, subject to any cost orders that might be charged against the fund.
On Sunday 4 August 2013 Graeme received a telephone call from Lesley, who advised him that Mr Felton had woken up on Friday 2 August 2013 in a disoriented state; that Mr Felton’s general practitioner, Dr Jock Martel, had attended the Oatley Property on Saturday 3 August 2013 and Sunday 4 August 2013 to check on Mr Felton; and that Dr Martel had said that it was highly likely that Mr Felton had suffered a stroke, but there was no necessity for him to go to hospital.
According to Graeme, in their conversation on 4 August 2013 Lesley raised with him the issue of a power of attorney and enquired whether he knew the combination of Mr Felton’s safe and the location of Mr Felton’s will. Graeme says that, as a result of Lesley’s enquiry about Mr (and Mrs) Felton’s will(s) he became suspicious of her, recalling that she had previously asked him about their parents’ wills. Graeme’s evidence is contested by Lesley. She denies, in particular, asking about Mr and Mrs Felton’s Wills.
On 5 August 2013, Dr Ian Schmaman provided to Dr Martel a radiologist’s report of a CT brain scan performed on Mr Felton that day. It recorded evidence of “[a] non recent infarct in the left parietal lobe” and in “[the] right occipital lobe, a large recent infarction”, confirming that Mr Felton’s stroke of 2 August 2013 was his second.
When the first of his strokes occurred is uncertain, but Lesley’s understanding is that the two strokes occurred within a short time of each other.
On 5 or 6 August 2013, Graeme spoke to Mr Hayward, enquiring as to the location of Mr Felton’s will. Mr Hayward’s belief at that time was that he held in safekeeping wills made by Mr and Mrs Felton in or about 2003, but he has since been unable to locate any wills other than those admitted to probate, and he cannot recall the terms of any earlier wills. Graeme’s evidence is that he contacted Mr Hayward on 5 August 2013 (not on 6 August 2013, as Mr Hayward recalls) and that their conversation included words to the following effect:

Graeme said: “Are you holding the original Wills for my parents, Clif and Edith Felton?”
Mr Hayward said: “Yes I am holding the original signed Wills but I can’t say what is in them”.
Graeme said: “I don’t want to know what’s in them but are they in the form of a Will Trust?”
Mr Hayward said: “Yes”.
Graeme said: “Dad had a stroke on Friday and Mum had a fall and went into hospital on 29 July”.

Nothing of consequence turns on whether such a conversation took place on 5 or 6 August 2013.
On 6 August 2013 Mr Hayward received a telephone call from Mr Felton who, he says, in clear terms, instructed him to prepare an enduring power of attorney and an enduring guardianship appointment in favour of Lesley and Graeme.
On 7 August 2013 Mr Felton (in the company of Lesley, at Mr Hayward’s office) executed an enduring power of attorney, and an enduring guardianship appointment, in favour of Lesley and Graeme. At the time of signing of his documents, Mr Felton instructed Mr Hayward to prepare similar documentation for execution by Mrs Felton, then in St George Hospital.
The power of attorney was in the form prescribed pursuant to section 8 of the Powers of Attorney Act 2003 NSW. The powers conferred by the instrument were conferred upon Graeme and Lesley jointly, subject to their acceptance of their appointment. As contemplated by section 9 of the Act, the instrument was expressed to confer on Graeme and Lesley as Mr Felton’s attorneys “the authority to do on behalf of the principal [Mr Felton] anything that the principal may lawfully authorise an attorney to do”. Recognising the constraints on self-dealing by a fiduciary, it also authorised Graeme and Lesley acting jointly: (a) to give reasonable gifts as provided by section 11(2) of the Act; and (b) to confer benefits on Graeme and Lesley to meet their reasonable living and medical expenses as provided by section 12(2) of the Act. It did not confer on Graeme and Lesley power to confer benefits on third parties as provided by section 13 of the Act.
The power of attorney was not limited to operate only if Mr Felton lacked mental capacity. It was expressed to operate from the time of acceptance by Graeme and Lesley of their appointment and “with the intention that it will continue to be effective if [Mr Felton lacked] capacity through loss of mental capacity” after its execution.
By operation of section 11(2) and clause 1 of schedule 3 of the Act, the power of attorney authorised Graeme and Lesley, acting jointly, to give a gift only if:

the gift was:

to a relative or close friend of Mr Felton; and

of a seasonal nature or because of a special event (including, for example, a birth or marriage); or

the gift was a donation of the nature that Mr Felton made when he had capacity or he might reasonably be expected to make,

and the gift’s value was not more than what was reasonable having regard to all the circumstances and, in particular, Mr Felton’s financial circumstances and the size of his estate.

By virtue of section 12(2) and clause 2 of schedule 3 of the Act, the power of attorney authorised Graeme and Lesley, acting jointly, to confer a benefit on themselves only if:

the benefit met (whether in whole or in part) any expenses incurred (or to be incurred) by them in respect of housing, food, education, transportation and medical care and medication; and

the benefit was not more than what was reasonable having regard to all the circumstances and, in particular, Mr Felton’s financial circumstances and the size of his estate.

In accordance with the Guardianship Act 1987 NSW, the instrument appointing Graeme and Lesley as Mr Felton’s enduring guardians appointed them to act as guardians, jointly, “if because of a disability [Mr Felton was] partially or totally incapable of managing [his] person”.
By that instrument Graeme and Lesley were authorised to exercise the following functions on Mr Felton’s behalf:

To decide where he lived, for example in a hostel or nursing home.

To decide what health care he received, for example treating doctor, community healthcare.

To decide what other personal services he received, for example home support services.

To give consent, subject to the provisions of the Guardianship Act for any minor and major treatments.

Mr Hayward’s recollection is that Graeme attended his office on 7 August 2013, at which time both he and Lesley formally accepted their appointments. Graeme’s evidence is that he and Roxy did not return to Sydney until 12 August 2013 and that he did not learn of Mr Felton’s execution of documents on 7 August 2013 until 16 August 2013 when he, Roxy, Mr Felton and Lesley met Mr Hayward at Mrs Felton’s hospital. Nothing of substance turns on this conflict in the evidence.
Graeme’s evidence is that he and Roxy went to visit Mr Felton on 12 August 2013 and, during that week, took him each day to see Mrs Felton at St George Hospital. He says that when he visited his father on 12 August 2013 he found that Mr Felton had, uncharacteristically, a large pile of unpaid bills requiring attention. He found during his visit in August 2013 that Mr Felton could not retain information from documents just read and that he struggled at the Oatley branch of the St George Bank to deal with the logistics of withdrawing money from his account.
Graeme’s concern about his father’s mental health at that time was heightened by his observations that Lesley had restricted Mr Felton’s access to television and cancelled his long-time (home delivery) subscription to the Sydney Morning Herald and the Financial Review. He was concerned, also, that he had observed Lesley sitting on Mr Felton’s bed with him and repeatedly saying in the same tone of voice, “What are your wishes Dad, what are your wishes?”
Lesley concedes that that she cancelled Mr Felton’s newspaper subscription. She says that he asked her to do so.
Implicit in Lesley’s evidence is an acceptance that Mr Felton ceased to watch television as he once had. She says that he told her that he didn’t want newspapers, or television, because he simply wanted peace and quiet. She did not turn her attention to the possibility that, having suffered a stroke, he was not confident of his ability to operate a television unaided.
On 16 August 2013, Mrs Felton executed an enduring power of attorney, and an enduring guardianship appointment, in favour of Lesley and Graeme. They were in substantially the same terms as the instruments executed by Mr Felton on 7 August 2013.
The documents had been prepared by Mr Hayward on instructions earlier given to him to by Mr Felton. At the time instructions were given and the documents were executed Mrs Felton was in hospital. Mr Hayward supervised execution of the documents, witnessing their execution by Mrs Felton and the simultaneous acceptance of their appointments by Lesley and Graeme.
Graeme told Mr Hayward on 16 August 2013 that he was uncomfortable signing his parents’ power of attorney and guardianship appointments because of Mr Felton’s recent stroke and Mrs Felton’s mild dementia, but Mr Hayward said that it was ok to do so because the documents he had prepared provided for joint, not several appointments.
On Sunday 18 August 2013 Lesley returned to the Oatley Property from an afternoon’s bushwalking with a friend to find Mr Felton upset and to have a conversation with him to the following effect:

Mr Felton said: “I have been waiting for you to get home. Graeme showed me a Will he said he had drafted.”
Lesley said: “What Will was that?”
Mr Felton said: “It was a Will leaving everything to Graeme and his wife!”
Lesley said: “So where is it?”
Mr Felton said: “Graeme has it.”
Lesley said: “Did you sign it?”
Mr Felton said: “He forced me to sign. I was bullied!!”

To Lesley’s observation, Mr Felton appeared angry as he spoke these words.
Lesley cannot vouch for the truth of what Mr Felton told her. She was not present when Graeme allegedly forced Mr Felton to sign a will. She is a witness to the fact of Mr Felton’s allegation, not its truth.
Graeme emphatically denies preparing a will for Mr Felton or asking Mr Felton to execute a will. No form of will leaving Mr Felton’s whole estate to Graeme and his wife has been located. In my assessment, Graeme’s denial should be accepted.
The implausibility of Mr Felton’s allegation that Graeme forced him to sign a will is reinforced by the absence of any evidence, or allegation, to the effect that Graeme sought to have Mrs Felton sign a will at this, or any other, time.
The evidence is silent as to whether Mr and Mrs Felton owned the Oatley Property as joint tenants or tenants in common. However, either way, a will signed by Mr Felton alone would have been entirely futile to pass an interest in the Oatley Property to Graeme and his wife (if Mr and Mrs Felton owned the property as joint tenants) or, at its highest, sufficient to pass only a limited interest in the absence of a complementary will passing Mrs Felton’s interest in the property, if she and her husband owned it as tenants in common. As accountants of many years’ standing, both Graeme and Mr Felton might be assumed, in ordinary times, to have understood this.
Although a confrontation may be accepted to have occurred on 18 August 2013, it is more likely than not to have related to expressions of concern on the part of Graeme about Mr Felton’s remaining a signatory on bank accounts of Felton family companies following Mr Felton’s stroke. Graeme had serious doubts about his father’s mental capacity, doubts not shared by Mr Felton.
The words attributed to Mr Felton by Lesley say nothing about whether Mr Felton’s alleged execution of a will was witnessed by any person or, if so, the identity of any witness. Nor is there evidence that Graeme’s wife witnessed Graeme’s alleged encounter with Mr Felton.
Lesley did not confront Graeme about what Mr Felton had said. Nor did she ask Graeme for a copy of any alleged will. She had not herself at that time made a will and, I infer, she was unfamiliar with any requirement for the execution of a will to be witnessed.
She says, rather, that late that evening (18 August 2013) she sent a text message to Mr Hayward in the following terms:

“Dear Bernie, this is Clif Feltons daughter Zazen (aka Lesley), my dad is VERY UPSET @ what my brother has done today re His Will! He told me that Graeme brought a new Will home after seeing u today & then he (Graeme) FORCED him to sign it, which he did as my said he wasnt quite himself & he was being Bullied! dad can’t sleep with the worry of it all & said he will phone u tomoro (Monday) to rectify the matter plus he would ask Graeme to give the Will, back to him! i am concerned for my dads health & am horrified @ my brothers behaviour! It seems my mum isnt included either! Isnt this Fraud? Dad said he wld be telling my brother & his wife to leave tomoro! I asked dad if he was afraid of Graeme & he said ‘yes’… thanks Bernie”

Mr Hayward does not recall receiving such a text, although he does not deny that he may have received it. He has no recollection of speaking to any member of the Felton family on Sunday, 18 August 2013, and it was not his practice to work on a Sunday. Although he had a social connection with Mr Felton, through their common membership of a local branch of Rotary, the Rotary branch was largely inactive at the time. The Rotary connection is unlikely to have involved contact between him and Mr Felton on 18 August 2013.
As Lesley conceded in cross examination, she may not, in fact, have successfully transmitted her text to Mr Hayward. In any event, her evidence is that she received no reply from him to her text, and she did not follow it up with him. She did not speak to him about it when, with Mr Felton, she attended his office on 22 August 2013. More probably than not, if the text was sent (which is doubtful), it was not received by Mr Hayward and it was not ever, in terms, brought to his attention by Lesley.
The probability that Lesley had a conversation with Mr Felton on 18 August 2013 in which he complained about being confronted by Graeme with a will for execution is confirmed by Graeme’s evidence. He says that, on Monday 19 August 2013, Mr Felton became aggressive towards him and, when he was on the phone talking to Dr Martel to make medical appointments for Mr Felton, Mr Felton grabbed the phone off him and yelled, “And that Will I signed yesterday leaving everything to Graeme, you can put it in the bin” before slamming the phone down and walking away. He says that on Tuesday 26 August 2013, during an ACAT assessment conducted by Ms Caroline Nolan in his presence, Mr Felton said words to the effect: “Those people out there come down from the country you know … He [brought] a Will down leaving everything to him and made me signed it … I think they’ve got marriage problems and financial problems too”. Graeme says that he reassured Ms Nolan that what Mr Felton had said was not true.
Lesley’s evidence is that on the morning of Monday, 19 August 2013 Mr Felton said to her words to the effect:

“I didn’t sleep well last night. I am sick to the stomach. I am furious!!! Graeme wants to control everything. Can you take me to see Mum today? … He [referring to Graeme] intimidates me. Mum is still recovering from her operation and I’m recovering too. He just can’t leave us alone!”

Lesley says that on the afternoon of 19 August 2013 she and her father visited Mrs Felton in hospital (without Graeme, who may have expected to accompany them), after which she accompanied Mr Felton (at his invitation) to dinner. She says that when they returned to the Oatley Property, Graeme was there waiting, appearing angry. She says that they had a conversation in the following terms:

Graeme: “Where have you been!!! What have you been doing for so long!!!”
[Lesley says that Graeme, yelling these words, picked up and threw a chair in her direction]
Graeme: “I am revoking my appointment as your [Mr Felton’s] attorney and guardian. I can’t work with you [Lesley] ever and it’s irrevocable, I’m handing it over to the Guardianship Tribunal!!!”
Mr Felton: “You’re throwing me to the dogs.”
[Lesley says that Graeme then turned to her, yelling]
Graeme: “If you don’t remove all of your stuff out of the garage [of the Oatley Property, where it was stored] in three days, I’m going to throw it all out!!!”
Mr Felton: “You have no right to make these threats!!!”

Lesley says that she and her father were very, very upset by Graeme’s outburst. She says that Graeme looked angry. She was worried her father would have another stroke and she tried to calm him down. She says that a short time later her father approached Graeme and said, “You and Roxayne [Graeme’s wife] can leave now!!! Get out!!!”
Lesley says that Graeme ignored Mr Felton, who repeatedly told Graeme and Roxayne to leave, but, she says, they continued to ignore him and then went to bed.
Graeme denies Lesley’s version of events. He denies issuing any threats of any kind to Mr Felton or Lesley. He denies throwing a chair at or towards Lesley. He admits that he was told by Mr Felton to leave the Oatley Property, but he says that it was too late at night to comply. He admits that he did say to Lesley, in the presence of Mr Felton, that he could not work with Lesley and that he would go to the Guardianship Tribunal, a course which, he says, Mr Felton said that he did not want. He denies, however, that he renounced his appointments as attorney or guardian.
Graeme’s evidence is that the next morning (Tuesday, 20 August 2013) Mr Felton did not remember any of the conversation that had occurred the night before; that he told Mr Felton that he and Roxy could not stay at the Oatley Property with Lesley living there because of their conflict with her; and that he and Roxy left the property (to stay with neighbours) on affectionate terms with Mr Felton.
Lesley’s evidence is that on the morning of 20 August 2013 she observed Graeme and his wife on the balcony of the Oatley Property going through Mr and Mrs Felton’s phone directory and then Graeme on the telephone talking to someone. She says that that same day Mr Felton again told Graeme and Roxayne to leave the Oatley Property, which they eventually did but only to relocate to a next door neighbour’s place, where they stayed another 10 days. Graeme denies accessing his parents’ phone directory.
Lesley’s evidence is that on or about 21 or 22 August 2013 she and Mr Felton returned to the Oatley Property after visiting Mrs Felton in hospital. She says that when they returned Mr Felton went to his home office and shortly thereafter said to her, “Someone’s been here and taken my company records!!!” She says that he angrily said to her, “Graeme’s done this. I can’t believe he would do this behind my back!!!”
Graeme’s evidence is that he accessed no records at the Oatley Property, but his own, noting the fact he and his father had, until their falling out, been in partnership.
Because of that partnership there is an element of ambiguity about resolving any difference between Mr Felton’s reported complaint of Graeme accessing “his” records, and Graeme’s explanation. Lesley adduced in evidence a lengthy list of names she asserted was Mr Felton’s “client list”; but, without more evidence about the provenance of the list, and collateral enquiries about what (if any) work was in fact done by Mr Felton for particular clients, it provides no reason to doubt Graeme’s evidence that Mr Felton had substantially retired from active practice of his profession. Although Mr Felton, having fallen out with Graeme, was inclined to see the sinister in the mundane, I am not inclined to attribute any bad faith to Graeme on account of Mr Felton’s complaint. In my assessment, it is more likely than not that Graeme, having formed the view that his father was no longer able to deal with the complexity of business, was intent upon doing what he believed necessary for family business to be conducted in an orderly way, and Mr Felton (lacking insight into his condition following his stroke) reacted impulsively in taking offence. Even at the age of 89 years, and more than a decade after he had passed a baton to Graeme, he was not ready to concede the necessity for a full retirement or protective intervention.
On 22 August 2013 Mr Felton attended the office of Mr Hayward and there executed a document revoking his power of attorney dated 7 August 2013 and executed a replacement enduring power of attorney that appointed as his joint attorneys Lesley, her daughter Loren and her son Fletcher, who simultaneously accepted their appointment. Arrangements were then made for Mr Hayward to attend upon Mrs Felton, at the Oatley Property to execute similar documentation.
The following exchange between counsel for Graeme and Lesley in her cross examination bears upon her understanding of her obligations as an attorney:

“Question:   It’s not beyond the realms of possibility to accept that they [Mr and Mrs Felton were dependent upon you as elderly people who didn’t enjoy good health?
Answer:   Dad’s health was much better than mum’s but yes, they were appreciative of help after mum’s fall and mum required extra community help as well at that time [in August 2013]. Does that answer your question?
Question:   Yes. The trust that you enjoyed in your parents’ eyes was reflected in the fact that the power of attorney, jointly granted to you and Graeme was revoked and a new power of attorney in favour of you and your two children was put in place?
Answer:   Dad felt that he could, that Graeme didn’t serve their interests and he requested that we fulfil that role for he [sic] and mum.”

The form of the replacement power of attorney was substantially the same as that executed by Mr Felton on 7 August 2013, save that his nominated attorneys were Lesley, Loren and Fletcher, and Graeme’s name was omitted from the list of attorneys.
At their meeting on 22 August 2013, Mr Felton told Mr Hayward that he had fallen out with Graeme. Mr Felton said that he had previously transferred the benefit of two companies (Felton Securities Pty Ltd and Equity Lease Finance Pty Ltd) to Graeme on the understanding that Graeme would provide living expenses to Mr and Mrs Felton as needed, but (Mr Felton said) Graeme was apparently resiling from that understanding and refusing to provide funds.
Mention was also made of a trust, presumably the Felton Family Trust, the discretionary objects of which (I infer) may have included Mr and Mrs Felton, Lesley and Graeme.
On 23 August 2013, by that time at home at the Oatley Property, Mrs Felton made her last will, appointing Mr Hayward as her sole executor, and (in the events that happened) naming Mr Felton as her sole beneficiary. The will was executed under the supervision of Mr Hayward and witnessed by two neighbours.
On the same day (23 August 2013) Mrs Felton revoked her previous enduring power of attorney and executed a new one, appointing as her joint attorneys Lesley and her children, Loren and Fletcher. They accepted their appointments on 28 August 2013.
The terms of the replacement power of attorney were in substantially the same terms as that executed by Mr Felton on 22 August 2013.
Lesley does not submit in these proceedings that the terms of the powers of attorney executed in her favour (jointly with Loren and Fletcher) authorised her to appropriate to herself the funds of her parents transferred to an account controlled by her, and used by her, inter alia, in the purchase of the Engadine Property. Her case is that the funds of her parents transferred to her by or at the direction of Mr Felton (on behalf of himself and Mrs Felton) were expressly, in each case, transferred as a gift.
In late August 2013 (on a date not now known), Graeme went to Mr Felton’s safe and found that the wills of Mr and Mrs Felton (which Mr Felton had much earlier told him were in the safe) were missing. He did not speak to his father about this. Nor did he, or Lesley, speak frankly with one another about such things.
On 26 August 2013 an ACAT assessment of Mr Felton was conducted by Ms Caroline Nolan at the Oatley Property. While she was there, a locksmith attended the property to change the locks, as arranged by Lesley (Lesley says) at the request of Mr Felton.
On 28 August 2013 Lesley (she says, at the request of Mr Felton) lodged a complaint against Graeme with the Police, to enlist their support to have Graeme and Roxy depart from the residence of the Feltons’ neighbours. The police attended the neighbours’ residence, but no one was home. A police officer later contacted Graeme by phone. No police action, beyond the phone call, was taken.
A Police Incident Report summarises competing contentions of Lesley and Graeme; notes that Mr Felton was too ill to sign police documentation, so it was issued to Lesley; and noted that Lesley had declined support services.
The Incident Report was obtained by Lesley in 2015 for the purpose of proceedings then pending in NCAT. Part of the Report in evidence in these proceedings (under the heading “Narrative Details”) was redacted by the solicitor acting for Lesley in the Tribunal proceedings.
The following summary of the incident is extracted from the Police Report:

“Approximately 3 weeks ago the VIC [Mr Felton] suffered a serious stroke, and about three days after that [sic] his wife broke her hip and was also hospitalised. The WIT [Lesley] who has been living at her parents home for the past 12 months contacted her brother (PN) who resides near Coffs Harbour and told him about their father’s stroke. The PN and his wife Roxayne came down to Sydney and were staying at the VIC’s home for a number of days.
After the VIC returned home from hospital, he found out that the PN had gone through his address book and contacted numerous family friends of the VIC’s without his permission. The VIC also found that the PN had made an appointment to see the VIC’s lawyer which further incited the argument and the PN was asked to leave the premises. The PN then spoke to his dads neighbour … who was a close friend of the VIC and has been staying there for the past 10 days, which infuriated the VIC. Apparently the VIC felt betrayed by his friends for taking his son and daughter in-law in against his wishes. The PN subsequently forfeited his Power of Attorney over dads estate during this time to the Guardianship Tribunal. The WIT then had her daughter [Loren] made the new Power of Attorney.

On 23 March 2015 Mr Felton (not Lesley) replied to Graeme’s letter dated 11 March 2015 by a letter which Lesley says was first written by Mr Felton as a draft and then, at his request, typed by her daughter Loren. It was in the following terms:

“Dear Graeme,
Re: Affairs of Clifton Albert Felton and Edith Madeline Rose Felton
In reply to your letter dated 11 March 2015 [addressed to Lesley, not Mr Felton personally], I would remind you that you renounced your guardianship in the year 2013.
You have no need to be concerned about our welfare as the rest of the family has been considerate in that department. The mere fact that you haven’t even attempted any contact with us for 20 months is evident [sic] that you have no care for us.
I do remember your intrusion into our home and office, of your ransacking through my business affairs and stealing confidential information, which avoided me from placing my clients on the market for sale to other accredited operators.
I am aware that you have utilised my own personal money for your own aggrandisement and you stopped my signature from being accepted in paying my affairs.
You have disowned yourself from our family and we no longer wish to further communicate.
Yours faithfully
Clifton A Felton”

Lesley’s evidence is that Mr Felton insisted that he be the one to reply to Graeme’s letter dated 11 March 2015. I accept that that may have been so, but I doubt whether the letter represents the expression of a free, voluntary and independent intention on the part of Mr Felton, then emotionally and otherwise dependent upon Lesley and, with her encouragement, irrationally ill-disposed towards Graeme. Mr Felton’s complaint that Graeme had not attempted to contact him or Mrs Felton for an extended period is inconsistent with the fact that Mr Felton had overtly ostracised Graeme and, with the acquiescence of Lesley, taken steps to exclude Graeme from company with other family members.
According to Lesley, in May 2015 Mr Felton said to her words to the following effect: “Edith and I want to give Loren and Fletch $100,000 each. Fletch can use the money towards buying a house and Loren towards paying off part of her mortgage. This is something that your Mum and I have discussed and we both want to do. Lesley can you please transfer these amounts.”
I accept that a conversation substantially in these terms may have occurred; but I doubt whether any such words attributed to Mr Felton represent the expression of a free, voluntary and independent intention on his part given that he and Mrs Felton were emotionally and otherwise dependent upon Lesley, the mother of Loren and Fletch.
On 13 May 2015 the financial planner Ms Bowley met with Lesley. The evidence is not clear whether Mr Felton was present during that meeting. However, Ms Bowley’s invoice dated 13 May 2015 was addressed to Mr Felton, care of Lesley at the Engadine Property. $260.00 plus GST was charged as “advice fee – ongoing”. Precisely what was discussed at that meeting is not the subject of elaboration. However, in an affidavit, Lesley records that, at the time of the meeting (13 May 2015) Fletcher was living in rented premises and was looking to purchase a residence but had not found anything suitable. Nothing appears to have been done to transfer money to Fletch and Loren until early October 2015.
As at 31 May 2015 Lesley’s Qantas Credit Union account had balance of $606,992.37. That is confirmed by a “bank statement” entry under which Mr Felton’s signature appears.
In cross examination, Lesley agreed that she held that amount ($606,992.37) subject to any instructions she may receive from Mr Felton, but with his permission to use it however she saw fit. Without a complete set of bank statements then available to her she could not be precise; but it appears from her evidence that the only substantial payments charged against the amount of $606,992.37 may have been payments of $100,000 to each of Loren and Fletcher on 2 November 2015, leaving a current balance of about $400,000 in Lesley’s account. As earlier noted, there is a need to clarify the state of this account before final orders are made.
In cross examination, without reference to records, Lesley deposed to the payments to her children being made in 2017. However, the correct date appears to be 2 November 2015.
On 21 May 2015 Mr Hayward had his first contact with the Felton family since accounting to Mr and Mrs Felton for settlement of their sale of the Oatley Property on 10 February 2014. He received a telephone call from an officer of NCAT who advised him that Graeme had applied to the Tribunal for protective orders and the Tribunal needed Lesley’s address to serve documents. He telephoned Lesley and obtained her address and her consent to disclose her address to the Tribunal.
He also telephoned Mr Felton and advised him of Graeme’s application(s). Mr Felton told him that he was aware that Graeme had written to Lesley. He said that he would oppose any order being made by the Tribunal and that Mr Hayward was not to disclose his whereabouts. In Mr Hayward’s assessment, Mr Felton appeared to be clear and coherent in their conversation.
According to Lesley, on 9 June 2015 she and Mr Felton were discussing the pending Tribunal proceedings when he said to her words to the effect: “I had better write something down about the monies held in your account and get a JP to witness it”.
Lesley says that she subsequently located a JP, Markella Xerri at John Paul Village, following which Mr Felton wrote the following note, which the JP witnessed and (in common with MR Felton) dated 9 June 2015:

“I confirm and authorise my permission concerning my wife Edith, and myself Clifton that the remaining funds following to [?] the sale of our house at … Oatley to be transferred to the account of my daughter, L Speedy.”

Mr Felton’s notation was made on a Qantas Credit Union brochure which Lesley says she obtained from Qantas Credit Union in late May 2015 when she and Mr Felton were discussing available interest rates.
On 19 June 2015 Mr Felton attended upon Dr Danielle McMullen, of Engadine Medical and Allied Health Group. I assume that he was accompanied by Lesley because she deposes to Dr McMullen, during the appointment, signing a letter in the following terms:

“GUARDIANSHIP TRIBUNAL
To whom it may concern
Re: Clifton Felton
DOB: 28/7/1924
This letter is to certify that, in my opinion, Mr Clifton Felton understands the ramifications of power of attorney and enduring guardianship documents, and has the capacity to make decisions surrounding such documents at this time. He is able to express clear and consistent wishes about who he would like to handle his affairs in the event that he cannot. I have known Mr Felton since 13/2/2015. I last reviewed him on 19/6/15.
Should any of the above need clarification, please feel free to contact me on telephone xxx
Yours sincerely,
Dr Danielle McMullen”

Dr McMullen was not called as a witness in the current proceedings. Her letter was directed to the proceedings then pending in the Guardianship Division of NCAT. The extent to which she may have relied upon information provided to her by Lesley was not explored in the evidence in the current proceedings. Nor was her understanding (if any) of events that preceded her first contact with Mr Felton on a date no earlier than 13 February 2015. Her knowledge of Mr Felton postdates the last of the impugned transactions.
On 7 July 2015 Graeme swore an affidavit in the NCAT proceedings in which he deposed that, at that time, he had no knowledge of the whereabouts of his parents, their state of health or how they were doing financially.
I infer from a handwritten note by Lesley in a notebook she says she gave to Mr Felton that the proceedings then pending in NCAT were the subject of a directions hearing on 9 July 2015. I infer, further, that at or about that time Lesley arranged for Mr Felton to meet with Ms Babister in connection with the Tribunal proceedings. The notebook contains an entry, apparently addressed by Lesley to Mr Felton, in the following terms: “Pick you up @ 9:30am meeting Lynda @ 10am.” Whether that entry relates to the date 9 July 2015 is not apparent on the face of the notebook.
The notebook does however contain another entry, near that one, that identifies Mr Hayward as “CAF’s lawyer” and records Mr Hayward’s telephone number, said to be “direct line to Bernie”.
Against a reference to 9 July 2015 the notebook contains what appears to be an entry by Mr Felton: “I OWN EVERYTHING. ClifF”, an entry I attribute to Mr Felton.
The notebook includes 10 pages of notes, in Mr Felton’s hand, reciting Mr Felton’s complaints against Graeme (including allegations that Graeme sought to force a Will upon him and threw a chair at Lesley) and his endorsement of Lesley as a dutiful daughter. The notes include the following observations:

“… My plan at the time, after my stroke and my wife’s falls it was my decision, with Lesley’s help to find [a] suitable aged care facility for us to dispose of our house …
I wished to buy my daughter a house and advised her after this had been done and settled …”

The precise circumstances in which Mr Felton’s notes were prepared is unclear. Lesley deposes to having found the notes amongst stored documents when served with a notice to produce in 2019. She and Graeme were each cross examined about particular entries in the notes, but the provenance of the notes was not explored in any depth.
On 24 July 2015, Dr Peter Gonski (Director of Geriatric Medicine at Sutherland Hospital) reported of Mr Felton:

“… The major problem is his dementia. He has moderate cognitive impairment. Given his vascular risk factors this is at least in part due to vascular disease. On testing his mental state examination showed a score of 23/30. Interestingly visuospatial testing with clock drawing was quite poor. This would be consistent with vascular dementia.
There were no symptoms of depression or anxiety.
He walks without aid. He had a regular heart rhythm with an aortic stenotic murmur but no signs of heart failure.
He is on Clopidogrel for his vascular risk factors. I wouldn’t change any of his treatments.
Decision-making would require assistance particularly for financial and medical decisions. …”

On the same day (24 July 2015) Dr Gonski prepared a report on Mrs Felton that included the following:

“I reviewed Mrs Felton at John Paul Village …
She is a 93-year-old female who suffers from severe dementia. Clearly I was unable to get a history from her or her husband. …
She lives in John Paul Village high care and resides in the same room as her husband.
She is a retired shorthand secretary.
On mental state testing she performed very poorly. She was completely disoriented. Short-term memory is very poor. She could not write which is significant particularly given her previous occupation.
She walks with a four-wheel walker but needs standby assistance. …
Currently she seems quite settled. Her dementia is such that she really cannot make decisions for herself with regard to finances or medical problems. …”

On 16 August 2015 Mr Hayward signed a written statement, apparently prepared for presentation to NCAT, in which (making allowances for a number of clerical errors) he made statements to the effect that: (a) he had acted for Mr and Mrs Felton since 2007, a date subsequently revised to about 2002; (b) Mr Felton had been clear in his thinking and able to discuss his assets and claims on his estate when he gave Mr Hayward instructions about wills for Mr and Mrs Felton in August 2013; and (c) Mrs Felton had been lucid and clear in her wishes when she gave instructions for a will and for revocation and replacement of her enduring power of attorney on 23 August 2013.
On or about 8 September 2015 Dr John Jacob provided to the Guardianship Division of NCAT a report on Mr Felton in the following terms:

“Mr Clifton Felton has severe cognitive impairment. He has seen a geriatrician and reports have been forwarded to the tribunal. At present his health needs are satisfactorily being met. He is unable to make any informed decision about his health.”

On or about the same day (8 September 2015) Dr Jacob provided NCAT with a report on Mrs Felton in substantially the same terms.
According to Lesley, in or about early October 2015 Mr Felton said to her: “Lesley, can you please put something down in writing about Mum and I giving $100,000 each to Fletch to Lol [Loren]. Bugger the tribunal. I’ll do what I want.”
On or about 13 October 2015 Lesley prepared a document, bearing that date, which Mr Felton signed. The text of the document was in the following terms:

“I, Clifton Albert Felton, hereby gift to my
Grandson, Fletcher Blake Prescott the sum of $100,000 and
Granddaughter, Loren Lesley Manderson the sum of $100,000
And this money is to come from the Q Saver account.
…
Clifton Albert Felton
Date: 13 October 2015
Note: That these monies were to assist Fletcher as a home purchase deposit, and Loren with mortgage.”

On 2 November 2015 Lesley transferred $100,000 to each of Fletcher and Loren, $200,000 in total.
In the meantime, following a contested hearing, on 15 October 2015 the Guardianship Division of NCAT made a number of orders affecting each of Mr and Mrs Felton in separate proceedings heard together. The effect of those orders was that the NSW Trustee was appointed as financial manager for each of Mr and Mrs Felton and the Public Guardian and Lesley were appointed, with limited separate functions, as their guardians. Incidentally, the Tribunal revoked the appointments of Graeme and Lesley as enduring guardians and dismissed Graeme’s application for a review of the revocation of the powers of attorney granted in his favour in August 2012.
Graeme and Lesley were both represented at the Tribunal hearing by a solicitor. Lesley’s solicitor was Ms Babister, who had prepared guardianship appointments for Mr and Mrs Felton on 30 May 2014 and who appears to have conferred with Lesley and Mr Felton, in relation to the Tribunal proceedings, on or about 9 July 2015. No evidence has been adduced from Ms Babister in the current proceedings.
The depth of antipathy between Graeme (on the one hand) and Mr Felton and Lesley (on the other hand) is evident on the face of the guardianship orders made in respect of Mr and Mrs Felton respectively. The Public Guardian was interposed between Graeme and his parents, with Lesley’s role limited to health care. Each order, in substantially the same terms, allocated functions to the Public Guardian and to Lesley, here reproduced in the form of the order relating to Mr Felton:

The Tribunal orders:
1. A guardianship order is made in respect of Mr Clifton Albert Felton.
2. The Public Guardian and Ms Lesley Speedy of … Engadine … are appointed separately as the guardians.
3. This is a continuing guardianship order for a period of 12 months from the date of this order.
4. This is a limited guardianship order giving the guardians custody of Mr Clifton Albert Felton to the extent necessary to carry out the functions below.
FUNCTIONS: THE PUBLIC GUARDIAN
5. The Public Guardian has the following functions:
Contact with Mr Graeme Felton
To make decisions about:
(1) The provision of information to Mr Graeme Felton in relation to Mr Clifton Felton’s place of residence and circumstances;
(2) Contact between Mr Graeme Felton and Mr Clifton Felton.

This includes the power to access information from Mr Clifton Felton’s aged care facility in relation to his health and other circumstances.

FUNCTIONS: MS LESLEY SPEEDY
6. Ms Lesley Speedy has the following functions:
(a) Healthcare
To decide what healthcare Mr Clifton Albert Felton may receive.
(b) Medical and Dental Consent
To make substitute decisions about proposed minor or major medical or dental treatment for where Mr Clifton Albert Felton is not capable of giving a valid consent.

CONDITION
7. The condition of this order is:
Before making significant decisions, the guardians shall take all reasonable steps to bring Mr Clifton Albert Felton to an understanding of the issues and to obtain and consider his views”

The separate Reasons for Decision published in support of the orders made respectively affecting Mr and Mrs Felton understandably contained several paragraphs in substantially the same terms.
The evidence adduced in the current proceedings does not include a transcript of proceedings before NCAT. Nevertheless, no party to the proceedings objected to reference being made to the Tribunal’s Reasons as an aid to understanding the course of the Tribunal proceedings or the nature of evidence given before the Tribunal. Lesley, in particular, was cross examined about what was said and done at the Tribunal hearing.
Upon a consideration of what happened in the Tribunal, I am mindful that section 91 of the Evidence Act 1995 NSW provides, inter alia, that “[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.” The Dictionary given legislative force by section 3 of the Evidence Act 1995 defines an “Australian or overseas proceeding” to mean “a proceeding (however described) in an Australian court or a foreign court.” The expression “Australian court” is defined to include “a person or body authorised by an Australian law, or by consent of parties, to hear, receive and examine evidence”. Although NCAT is not required to apply “the laws of evidence” it is authorised to hear, receive and examine evidence.
Section 91 does not preclude the admission, or consideration, in these proceedings of what occurred in the Tribunal proceedings affecting Mr and Mrs Felton, but it does operate as an impediment (if any be needed) to adoption by the Court of “a finding of fact” made by the Tribunal as proof of “the existence of a fact that was in issue” in the Tribunal proceedings.
The cross examination of Lesley in the current proceedings focused attention on a small number of paragraphs (principally those numbered 26, 27 and 38 and, incidentally, 37 and 45) of the Tribunal’s Reasons relating to Mr Felton:

“[26] In the hearing, Clifton showed clear cognitive problems. He said that he was aged about 98. He had great difficulty seeking to explain the role of an attorney or enduring guardian and did not recall that he had signed any such documents. He thought Mr Hayward had been the family doctor rather than solicitor. He did not know what his medications were for. He was aware that he had paid an accommodation bond but saw himself as having no other assets. He thought he had sold his home for about $60,000 and all of that money had gone to the aged care facility. With little prompting he recalled that he and his wife had purchased a house for Lesley. He was vague in his recall of family companies.
[27] Lesley, who has considerable contact with her father, said that his cognition does fluctuate but when you discuss things with him he is right there with you. He may need triggers. He was tired today and so a little but not himself. …
[37] Clifton and Edith each have bonds of $300 [sic] paid to their current aged care facility. They receive a joint Veterans’ Affairs part pension which goes into a joint account with St George Bank which currently holds approximately $22,000. Edith owns a small parcel of shares.
[38] There is also a Qantas Credit Union Qsaver account in the name of Lesley which at 31 May 2015 had a balance of $606,992.37. Lesley was clear in the hearing that this remains her parents’ money, though held by her at her father’s request. However, a letter from the Department of Veterans’ Affairs dated 20 August 2014 shows a deprived asset of $1.32 million basically comprising the money given to Lesley to buy her home and money in the Qsaver account. In a letter dated 9 September 2014, Cheryl Hastie, chartered accountant, wrote to the Department having been approached by Edith, Clifton and Lesley. The letter suggests that the investment belongs to Lesley. …

[45] The Tribunal was very clear that someone needs authority on behalf of Clifton
- to resolve the lack of clarity around ownership of the savings held by Lesley which she acknowledges to be her parents’ money but which had been treated differently by Veterans’ Affairs, and
- to resolve what interests and powers Clifton may have in the family trusts and companies. …”

In making recommendations to the NSW Trustee about future management of Mr Felton’s estate the Tribunal noted, in passing, that “Clifton saw himself as completely in step with Lesley in relation to the proceedings” before the Tribunal.
In cross examination directed to the Tribunal’s Reasons, Lesley said that she recalled that Mr Felton had misstated his age as 98 years, rather than 92 years; that he had mistaken Mr Hayward for the family doctor rather than solicitor; that he thought he had sold the Oatley Property for about $60,000; and that when he gave evidence before the Tribunal he was tired and not quite himself. She did not recall that he required prompting before recalling the purchase of a house for her. She resisted the idea that she had stated clearly to the Tribunal that the sum of $606,992.37 (identified as held by her in a “Qsaver account” in her name) remained “her parents’ money, though held by her at her father’s request.” With some hesitancy, she stated her belief that the money was held by her for her parents and herself. She reported that, in or about 2017, she paid $100,000 to each of her two children for their own use and benefit at the request of Mr Felton. This may, in large measure, explain why the current balance of the Qsaver account is just shy of $400,000.
Mrs Felton died on 14 December 2015.
On 11 February 2016 Mr Hayward sent a letter to Mr Felton, care of Lesley at the Engadine Property, seeking instructions for documentation in support of his application for a grant of probate in respect of Mrs Felton’s estate.
According to Lesley in February 2016 she and Mr Felton were having discussions about the balance of the money held in her Qudos Bank (formerly Qantas Credit Union) Savings Account when he said to her words to the following effect:

“If that account is just in your name and something was to happen to you, then I want to make sure that either Fletch or Lol [Loren] can access that account. Probably best to have that as a joint account.”

I accept that a conversation substantially in these terms may have occurred; but I doubt whether any such words attributed to Mr Felton represent the expression of a free, voluntary and independent intention on his part, given that he was emotionally and otherwise dependent upon Lesley.
Lesley says that she then spoke to Fletcher and Loren, and they agreed that she would set up a joint account with Loren so if something were to happen to her, Loren could still access the monies.
On 19 February 2016 Lesley transferred $391,091 from her Qudos Bank (formerly Qantas Credit Union) Account into a Qudos Account which she had established with Loren as joint account holders.
On 9 March 2016 probate of Mrs Felton’s will was granted to Mr Hayward.
On 14 March 2016 Mr Hayward sent a letter to Mr Felton, care of the Engadine Property, advising him that probate of Mrs Felton’s will had been granted on 9 March 2016 and that he was taking steps to administer her estate.
There is no evidence suggesting that, in connection with the application for a grant of probate in Mrs Felton’s estate, or in any other connection, Mr Felton asserted that his wife’s estate included an interest in a Felton family company or a Felton family trust. The absence of any such suggestion is not of great significance. However, it is consistent with Graeme’s ownership and control of Felton family companies.
On 2 August 2016 John Paul Village paid to Mr Hayward, as executor of the estate of Mrs Felton, the sum of $302,684.36 as a refund of her accommodation bond.
On 16 August 2016 as executor of the estate of Mrs Felton, Mr Hayward paid to Mr Felton (care of the NSW Trustee as his financial manager) the sum of $307,610.94 by way of a distribution of estate funds.
On 30 October 2016 Mr Felton (witnessed by Ms M.G. Page, not called as a witness) signed a typed letter addressed to Graeme in the following terms:

“Dear Graeme,
You miserable shit!
Nothing to be proud of!
Who would have thought you would betray your mother and I by doing what you have done.
You have deceived us numerous times and I am abhorred by you and your behaviour to your parents and family. You really are of shallow character.
It seems to me that your original father/son relationship to me was so false that it was all lies. Who would want a so-called son as disappointing as you have been.
What a scapegoat you have made me feel in the minds of so-called family friends after you poisoned their minds with your lies. Your egotistical type of mind has not endeared you to the rest of the family and consequently I am just unable to continue a father/son relationship during my lifetime.
As for now, after I have passed on, you should learn to really understand the benefits of a loving family which I have endeared in my lifetime.
You are a forgotten family member, not that you care.
You were sent to a 1^st class private school to give you a good education and your inattendance [sic] with no family appreciation for what was intended for your benefit, which was to no avail. All wasted!
Your lifestyle situation of heaving drinking and your ignorance of good family relationship with the rest of the family are appalling, consequently you have been dismissed and good riddance. It is something that should exercise detriment in your mind.
So go and get stuffed. You are a fraud.
Thank goodness for the rest of the family who have been with me all the way because they have been fantastic supporting friends. Whereas you have simply abandoned us (mum and I) and you’re not worth a crumpet.
You are the son that nobody wants to contemplate.
You are an utter disgrace.
Clifton Albert Felton”

Although the letter is typed, Mr Felton appears to have written in his own hand Graeme’s name, exclamation marks at the end of the first too sentences, the first two instances of underlining and a marginal mark highlighting the paragraph commencing “Thank goodness for the rest of the family …”. Ms Page endorsed the letter expressly as a witness.
When Mr Hayward was shown the letter in cross examination he observed that the vulgarity of the language was inconsistent with his experience of Mr Felton, not a person known by him to swear. It struck him as evidence of a deterioration in Mr Felton’s mental health. That is likely to be correct.
Mr Felton died on 30 July 2017.
On 20 September 2017 probate of Mr Felton’s will was granted to Mr Hayward.
There is no evidence that the inventory of property attached to the grant of probate in respect of Mr Felton’s estate should have included an interest in a Felton family company or a Felton family trust. I do not attach great significance to this; but it is consistent with Graeme’s contention that Felton family companies were owned and controlled by him.

ANALYSIS

The transactions under challenge in these proceedings were effected between 28 February 2014 and 10 December 2014, inclusive. All involved the transfer of a significant capital sum by or on behalf of Mr and Mrs Felton to Lesley. Lesley was instrumental in effecting each transfer. The first three transfers to Lesley’s Qantas Credit Union account (on 28 February 2014, 1 March 2014 and 6 March 2014) were related to her purchase of the Engadine Property in March-April 2014, but went beyond what was necessary for her to fund the purchase. The fourth transfer to her account (on 10 December 2014) was part of a refund of Mr and Mrs Felton’s accommodation bonds when they moved from Ferndale Gardens to John Paul Village.
Throughout the time that the impugned transactions were effected (and for a period before and after that time, commencing in August 2013 and terminating with the respective deaths of Mr and Mrs Felton):

Lesley was the holder of appointments as an enduring attorney and an enduring guardian for each of Mr and Mrs Felton;

Mr and Mrs Felton were both elderly, frail, cognitively impaired and vulnerable to exploitation;

Mr and Mrs Felton were both (commencing in October 2013) residents of a nursing home, living together in secure accommodation;

Mr and Mrs Felton were dependent upon Lesley emotionally and for all activities of their lives, including attendance at medical appointments and social activities with family members; and

Mr and Mrs Felton trusted Lesley to act in their interests, bearing in mind, particularly, that they were estranged from Graeme.

Particular manifestations of Lesley’s active involvement in conduct of the affairs of Mr and Mrs Felton throughout the time that the impugned transactions occurred are:

the establishment of Qantas Credit Union accounts in the joint names of Mr and Mrs Felton on 3 February 2014 and (upon production of Mr Felton’s appointment of Lesley and Loren as attorneys) nomination of Lesley and Loren as authorised signatories on those accounts, with any one to sign; and

Lesley’s active participation in the impugned transfers from a Qantas Credit Union account of Mr and Mrs Felton to her Qantas Credit Union account on each of 28 February 2014 ($25,000), 1 March 2014 ($25,000), 6 March 2014 ($1,320,218.63) and 10 December 2014 ($100,000).

At the time of these events Lesley was on notice of Mr Felton’s cognitive decline. An illustration of this can be found in the report of Megan Forbes (a clinical psychologist) dated 24 February 2014, shortly before the date of the first impugned transaction. It records that Mr Felton was interviewed for the purpose of that report, on that date, in the company of Lesley. Lesley was evidently actively involved in the interview, the report of which confirms a diagnosis of dementia and Mr Felton’s difficulty dealing with complex transactions. At the time Lesley took steps to facilitate transfers of money to her by her parents Lesley had actual knowledge of the frailty of her parents, the spokesman for whom was a debilitated Mr Felton.
A measure of Lesley’s social control over her parents is the fact that, no later than 24 February 2014 (as recorded in Megan Forbes’ report), and perhaps as early as 9 October 2013 (the date of an ACAT assessment of Mr Felton), she took steps to prevent Mr Felton from driving. She took away from him the keys to his car.
At the time each impugned transaction was effected Lesley’s relationship with her parents was such as to involve, on their part, reliance upon Lesley, dependence on her and trust in her, resulting in her having a psychological ascendency over them.
The fact of ascendency might be inferred from the fact that, within four months of the enquiries made by Mr Felton of Mr Hayward through their mutual friend, Ms Colyer, on or about 12 November 2013 (highlighting an apprehension on the part of Mr Felton that funds might need protection from Lesley), Lesley had purchased the Engadine Property at auction (on 4 March 2014), used funds of Mr and Mrs Felton (transferred to her on 28 February 2014 and 1 March 2014) to pay the deposit, and appropriated (on 6 March 2014) more of the funds of Mr and Mrs Felton than was necessary to complete the purchase. The specificity of Mr Felton’s questions of Ms Colyer (recorded in her first email to My Hayward) is striking. They evidence a concern that the proceeds of sale of the Oatley Property be held in trust for the welfare of Mr and Mrs Felton, that the proceeds be protected, that Lesley not be able to spend money without Mr Felton’s consent and that money be spent in a way to eliminate any sibling rivalry. Ms Colyer’s second email to Mr Hayward is even more striking in that it records an elaboration of Mr Felton’s concern that the proceeds of sale be “protected”. “By ‘protected’ [Ms Colyer explained to Mr Hayward] – he [Mr Felton] means ensuring that one cannot just take proceeds and then buy another home ‘because they have nowhere to live’ … or using monies for other than Clif and Edith …”
Lesley’s ascendency over Mr and Mrs Felton was built upon their frailty, Mr Felton’s unsubstantiated belief that Graeme had forced him to sign a will on 18 August 2013, Graeme’s exclusion from contact with Mr and Mrs Felton from late August 2013, and the refusal or failure of Lesley to consult with Graeme about their parents’ affairs. If Lesley did not actively promote Mr Felton’s antagonism towards Graeme (which she may well have done), her acquiescence in Mr Felton’s antagonism towards Graeme was instrumental in the establishment, and maintenance, of her ascendancy over the old couple. By these means, she kept Graeme at a distance and her parents close at hand.
As she conceded in cross examination, Mr and Mrs Felton were dependent upon her emotionally and for all activities of their lives.
Accepting Lesley’s evidence that each impugned transaction was preceded, or accompanied, by words of gift, the gifts were so substantial, and so improvident, as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act. The transactions deprived Mr and Mrs Felton of most of their wealth. They undermined the prospective effect of Mr and Mrs Felton’s respective wills, each of which contemplated an equal distribution of the parents’ wealth between Graeme and Lesley. Even if it be assumed that, resident in a nursing home and in receipt of a pension, the material needs of Mr and Mrs Felton were being met without resort to other funds, the fact that the transactions ostensibly cut Graeme out of any substantive participation in their estates (despite the terms of their wills) justifies characterisation of the transactions as not able to be reasonably accounted for in ordinary experience.
At the time of each of the impugned transactions, the relationship between Mr and Mrs Felton (on the one hand) and Lesley (on the other hand) was such as to give rise to a presumption that the gifts made in favour of Lesley were effected by an exercise of undue influence on her part over her parents.
The presumption of undue influence that arises from Lesley’s ascendancy over her parents, and the character of the gifts made to her, is a rebuttable presumption; but it has not been rebutted.
To rebut the presumption, Lesley bears the onus of proving that: (a) Mr and Mrs Felton knew and understood what they were doing in making the impugned gifts to Lesley; and (b) they were acting independently of any influence arising from Lesley’s ascendency over them.
The way these proceedings have been conducted, the Court has been invited to assume that whatever was known and understood by Mr Felton was known and understood by Mrs Felton as well. On that basis, the fact that Lesley obtained Mr Felton’s signature on bank statements recording the impugned transactions might be taken, on the face of the statements, to show that he was aware of the money transfers at or about the time they occurred.
There are at least four reservations to such a conclusion. First, Mr Felton’s signatures on bank account statements are unaccompanied by any evidence, independent of Lesley’s evidence of conversations with him, indicative of knowledge and an understanding of transactions; they are bare signatures. Secondly, Lesley’s inadequate and conflicting explanations about the circumstances in which $1,320,218.63 was transferred to her account on 6 March 2014 does not provide a firm foundation for a finding that Mr Felton knew and understood what happened that day, let alone that he acted independently of any influence on the part of Lesley. Thirdly, uncertainty on the part of Lesley as to the terms upon which she was to hold money sourced from Mr and Mrs Felton, surplus to what was required to purchase the Engadine Property, counsels caution against a finding that Mr Felton had a better understanding of their arrangement. Fourthly, Mr Felton appears from time to time (including in a letter dated 14 October 2013 addressed to Graeme and in a notebook entry made by Mr Felton in or about July 2015) to have believed that he continued to own property the subject of dispositions within his family.
A major problem for Lesley is in establishing that, in making the impugned gifts to her, Mr and Mrs Felton were acting independently of any influence arising from her ascendency over them. I am not satisfied, on the evidence, that she has succeeded in doing this. Mr and Mrs Felton were dependent on her, emotionally and in all things. She took them to medical appointments and organised their living and social arrangements. With her acquiescence, if not active encouragement, all contact between Graeme and themselves had been terminated. This, despite the fact that Graeme had played an active role in managing their financial affairs, in retirement, for several years before mid-2013.
Mr and Mrs Felton received no independent legal advice about the prudence or otherwise of gifts made to Lesley or alternative ways they might have assisted her in a manner more consistent with protection of their interests. Lesley did nothing to encourage them to obtain such advice. Even if (as she says) she did not originate any idea that she receive the impugned gifts, she did not resist the idea that she be given the gifts. Her acquiescence in the idea that she be given the gifts was, in practical reality, an active embrace.
Given Mr Felton’s concern (as expressed to Ms Colyer on or about 12 November 2013) to “eliminate any sibling rivalry”, a demonstration that Mr and Mrs Felton made the impugned gifts to Lesley independently of any influence arising from her ascendency over them might well have required that Mr Felton be disabused of the dark thoughts he had about Graeme. He could not otherwise have given an informed consent to the gifts.
In my opinion, the correct finding for the Court is that, the presumption of undue influence not having been rebutted, each of the impugned gifts must be taken to have been procured by an exercise of undue influence on the part of Lesley, and Mr Felton’s estate is entitled on that ground to have them set aside or, more particularly, to be granted declarations to the effect that the gifted monies were held on trust for Mr and Mrs Felton, with consequential relief. It would be unconscionable for Lesley to retain the benefit of gifts procured by an exercise of undue influence on her part.

CONCLUSION

For these reasons, declarations and consequential orders should be made, in the nature of those sought by Graeme on behalf of Mr Felton’s estate, requiring Lesley to account for the funds totalling $1,470,218.63 transferred to her between 28 February 2014 and 10 December 2014 inclusive, including a declaration that Lesley holds the Engadine Property on trust for Mr Felton’s estate.
I will allow the parties an opportunity to make submissions about the form of orders to be made and costs.

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Decision last updated: 30 July 2021

Medium Neutral Citation:	Hayward (as Executor of Felton Estate) v Speedy and Felton [2021] NSWSC 943
Hearing dates:	6, 7, 8 and 9 April 2021
Decision date:	30 July 2021
Jurisdiction:	Equity
Before:	Lindsay J
Decision:	The donee of gifts from her elderly parents (now deceased) is required to account for them to the deceased estate of her father (the survivor of her parents, the beneficiary of his wife’s estate), on the ground that she procured the gifts by an exercise of undue influence.
Catchwords:	EQUITY — Undue influence — Relationships giving rise to presumption of undue influence — Rebutting presumption of undue influence — Presumption not rebutted
Legislation Cited:	Evidence Act 1995 NSW Guardianship Act 1987 NSW Powers of Attorney Act 2003 NSW
Cases Cited:	Bridgewater v Leahy (1998) 194 CLR 457 Chan v Zacharia (1984) 154 CLR 178 Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; 73 ACSR 252 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 Hewitt v Gardner [2009] NSWSC 1107 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Jones v Dunkel (1959) 101 CLR 298 Johnson v Buttress (1936) 56 CLR 113 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 Maguire v Makaronis (1997) 188 CLR 449 Quek v Beggs (1990) 5 BPR 11,761 Ramage v Waclaw (1988) 12 NSWLR 84 Spellson v George (1992) 26 NSWLR 666
Category:	Principal judgment
Parties:	Plaintiff: Bernard Edward Hayward as Executor of the Estate of Clifton Albert Felton First Defendant: Lesley Ann Speedy Second Defendant: Graeme John Felton Cross claimant: Graeme John Felton First cross defendant: Bernard Edward Hayward as Executor of the Estate of Clifton Albert Felton Second cross defendant: Lesley Ann Speedy
Representation:	Counsel: Plaintiff/First cross defendant: PP O’Loughlin First Defendant/Second cross defendant: J McIntosh Second Defendant/Cross claimant: RD Wilson SC Solicitors: Plaintiff/First cross defendant: B Hayward & Co Lawyers First Defendant/Second cross defendant: JNT Legal Second Defendant/Cross claimant: GL Abbott & Co
File Number(s):	2017/00129730