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La Selva v La Selva

La Selva v La Selva

Case [2025] NSWSC 78 20 February 2025

Unconscionable Conduct

Breach of Fiduciary Duty

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Supreme Court

New South Wales

Medium Neutral Citation: La Selva v La Selva [2025] NSWSC 78
Hearing dates: 2 – 4 December 2024
Date of orders: 20 February 2025
Decision date: 20 February 2025
Jurisdiction: Equity
Before: Pike J
Decision:
(1)   Direct the parties to confer and seek to agree final orders to give effect to these reasons, including as to costs.
(2)   Direct the parties to provide any agreed orders, or competing orders, to my Associate by no later than 5pm on 3 March 2025.
(3)   In the event there is no agreement, including as to costs, direct the parties to provide to my Associate by no later than 5pm on 3 March 2025 any submissions and supporting material, such submissions not to exceed 3 pages.
(4)   Direct the parties to provide to my Associate by no later than 5pm on 10 March 2025 any submissions and supporting material in reply, such submissions not to exceed 3 pages, whereupon the remaining issues will be determined on the papers.

Catchwords:
EQUITY – unconscionable conduct – recovery of monies paid from elderly mother’s account to carer son – whether mother was under a special disadvantage – whether this impacted her ability to make a judgment that is in her best interests – whether son took unconscionable advantage – whether transactions were fair, just and reasonable – no question of principle
CONTRACTS – unjust contract – whether agreement supported by consideration - whether agreement voidable at general law or under Contracts Review Act 1980 (NSW) – agreement between elderly mother and carer son to transfer funds – funds then used to pay refundable accommodation deposit in nursing home – deposit then refunded to son upon mother’s death via estate – finding that the agreement was an unjust contract
EQUITY – breach of fiduciary duty – son appointed enduring power of attorney – various transactions carried out purportedly by elderly mother – whether son was subject to usual fiduciary duties having accepted power of attorney – whether breach of fiduciary duties by obtaining unauthorised benefit and being in a position of conflict

Legislation Cited:
Contracts Review Act 1980 (NSW) ss 4, 7, 9(1) and 9(2)

Cases Cited:
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14
Hanna v Raoul [2018] NSWCA 201
Hospital Products v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64
Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21
Jenyns v Public Curator (Qld) (1953) 90 CLR 113; [1953] HCA 2
Kakavas v Crown Melbourne Limited (2013) 250 CLR 392; [2013] HCA 25
Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61
Mentink v Olsen [2020] NSWCA 182
Nitopi v Nitopi (2022) 109 NSWLR 390; [2022] NSWCA 162
Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36
Rydzewski v Rydzewski [2024] NSWSC 802
Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading La Selva v La Selva

Details

AGLC: La Selva v La Selva [2025] NSWSC 78
Case: [2025] NSWSC 78
Decision Date: 20 February 2025

CaseChat Overview and Summary

In the case of La Selva v La Selva, the parties involved were the appellant, who was the son of the deceased, and the respondent, who was the deceased's estate. The dispute arose from the transactions that took place between the deceased mother and her son. The mother, who was elderly and suffering from dementia, transferred substantial sums of money to her son. The son used these funds to pay a refundable accommodation deposit for a nursing home, which was later refunded to him upon the mother's death. The son's actions were challenged by the deceased's estate, leading to this legal dispute. The case was heard in the Supreme Court of New South Wales.
The legal issues the court had to determine included whether the transactions between the mother and son were fair, just, and reasonable. Additionally, the court needed to decide whether the son had taken unconscionable advantage of his mother's special disadvantage, which impacted her ability to make a judgment that was in her best interests. Another issue was whether the agreement between the mother and son was supported by consideration and whether it was voidable at general law or under the Contracts Review Act 1980 (NSW). Furthermore, the court had to assess whether the son, as an enduring power of attorney, was subject to the usual fiduciary duties and whether he breached those duties by obtaining an unauthorised benefit and being in a position of conflict.
The court found that the transactions between the mother and son were not fair, just, and reasonable. The mother was deemed to be under a special disadvantage due to her advanced age and dementia, which impacted her ability to make a judgment that was in her best interests. The court concluded that the son took unconscionable advantage of this special disadvantage. As for the agreement, the court found it to be an unjust contract and voidable under the Contracts Review Act 1980 (NSW). The son, as an enduring power of attorney, was subject to fiduciary duties, and the court found that he breached those duties by obtaining an unauthorised benefit and being in a position of conflict. The court ordered that the funds transferred by the mother to her son be returned to the estate.
The final orders of the court were that the funds transferred by the mother to her son be returned to the estate, and the son's claim for the refund of the nursing home accommodation deposit be dismissed. The court also found that the son had breached his fiduciary duties as an enduring power of attorney and ordered that he account for any unauthorised benefits obtained.

Orders