Monaco v Martinelli

[2023] NSWSC 375

Supreme Court

New South Wales

Medium Neutral Citation:	Monaco v Martinelli [2023] NSWSC 375
Hearing dates:	4, 5 April 2023
Date of orders:	5 April 2023
Decision date:	14 April 2023
Jurisdiction:	Equity - Duty List
Before:	Kunc J
Decision:	Plaintiffs’ application to continue injunction restraining sale of property refused
Catchwords:	AGENCY — Power of attorney — Revocation — Interlocutory injunction to restrain sale of elderly mother’s home by adult children who were her attorneys and enduring guardians — Whether serious question to be tried that mother still had capacity to revoke appointments — No issue of principle
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), r 25.3
Cases Cited:	Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Category:	Procedural rulings
Parties:	Domenic Monaco (First Plaintiff) Adelina Monaco (Second Plaintiff) Liliana Martinelli (First Defendant) Eugenio Monaco (Second Defendant)
Representation:	Counsel: K Tang (Plaintiffs) T Catanzariti (Defendants) Solicitors: Baker Lover Lawyers (Plaintiffs) Turnbull Hill Lawyers (Defendants)
File Number(s):	2023/108880
Publication restriction:	Nil

Judgment

Summary

1. It is a feature of the Duty List that the urgency which attends some matters means that the Court must do the best it can on the information available, even when the outcome may have substantial and irreversible implications for one or other of the parties. This family dispute is an example of such a case. Without disrespect, I shall refer to the parties by their given names.

2. The first plaintiff (Domenic) is the adult son of the person listed in the Amended Summons as second plaintiff (Adelina). Why I describe her in that way is explained in [30] below. Domenic has cared for Adelina in the family home (the Property) for several years. Adelina is, by survivorship from her late husband, the sole proprietor of the Property.

3. The defendants are two of Domenic’s three siblings, Liliana (referred to as Lilian) and Eugenio. Lilian and Eugenio were appointed enduring guardians and attorneys pursuant to documents signed by Adelina on 13 October 2017 (the Powers). The defendants are selling the Property pursuant to the Powers. These proceedings were commenced two hours before an online auction of the Property was due to take place (the Auction).

4. The underlying dispute is one that is all too familiar to the Court: well-meaning family members unable to agree about the future care of an elderly parent. Domenic wishes to continue to care for Adelina at the Property and says that is also what Adelina wants. The defendants say that Adelina, who has been diagnosed with dementia, now requires a higher level of care than can be provided by Domenic, which must be funded by the sale of the Property at the Auction.

5. As the case was ultimately presented for the plaintiffs, it was accepted that they had no evidence either to impugn the circumstances in which the Powers had been granted, or to challenge the propriety of the impending Auction. The only equity upon which the plaintiffs could rely for the injunctive relief which they sought to restrain the Auction was what they submitted was Adelina’s right and wish to revoke the Powers with the intention that she would continue to live in the Property and be looked after by Domenic. In order to exercise that right, Adelina would have to be shown to have the legal capacity to revoke the Powers. If, as the defendants argued, she had already lost capacity, then it was common ground that according to their terms the Powers could not be revoked if Adelina did not have capacity to do so.

6. Relying on Domenic’s undertaking as to damages, the Court originally restrained the Auction for 24 hours to enable the parties to marshal some proper evidence. At the return of the injunction the next afternoon, the Court declined to continue the restraint, with the result that the Auction was to proceed at 5pm. These are the reasons for that decision.

7. In summary, those reasons were:

1. The evidence, such as it was, strongly favoured the conclusion that Adelina had lost capacity and, therefore, could not validly revoke the Powers. In other words, insofar as there was a serious issue to be tried, the plaintiffs’ case that Adelina could revoke the Powers was a weak one.

2. Conversely, there were strong balance of convenience considerations in favour of the Auction being permitted to go ahead. These included that Domenic is an undischarged bankrupt, such that it became apparent that the undertaking as to damages which he had originally proffered was valueless; there was every reason to think that an immediate online auction with three very interested bidders would produce the most advantageous result in Adelina’s best interests; and, maximising the sale price for the Property was in Adelina’s best interests because she otherwise would have no funds to pay for the ongoing care which the Court was satisfied she now requires.

8. Mr K Tang of Counsel ultimately appeared for the plaintiffs. Ms T Catanzariti appeared for the defendants.

Procedural history

9. The matter first came before me in the Duty List at 3:00pm on Tuesday, 5 April 2023. Ms M Cairns of Counsel appeared for Domenic, who at that time was the only plaintiff. Ms R Gandha, solicitor, initially appeared for the defendants, but during the course of the short hearing, Ms T Catanzariti of Counsel announced her appearance for the defendants.

10. The summons filed in Court sought this relief:

“1. An order that this Summons be filed in Court and that prayers 1 to 4 be returnable instanter.

2. An order for short service of the Summons and Affidavit of Abby Thorne dated today, to be served by email on the solicitor for the First and Second Respondents, Rani Gandha at Turnbull Hill Lawyers at the email address of [email protected] by 4:30pm on 4 April 2023.

3. An order restraining the First and Second Respondents from proceeding with the auction or any other sale of the property at XXX XXX Street, Hamilton South until further order of the Court.

4. An order restraining the First and Second Respondents from taking any steps pursuant to the power of attorney and enduring guardian dated 13 October 2017 in respect of the affairs of Adelina Monaco until further order of the Court.

5. That the orders sought in prayers 1 to 4 above are to be entered forthwith.

6. That the Summons be listed for further directions on 18 April 2023. …”

11. It will be immediately noticed, and I pointed out to Ms Cairns, that the summons contained no prayer for final relief. I asked her what that final relief might be, which led to this exchange (Tcpt, 4 April 2023, p 2(20-36)):

“CAIRNS: I understand what your Honour is putting to me. I suppose we should have another order that seeks, perhaps, leave for our client to commence proceedings to seek final relief.

HIS HONOUR: You don't need leave to do that, but what is the final relief that your client seeks?

CAIRNS: They seek to either modify or do away with the current powers of attorney that is vested ‑ well, sorry, that gives a powers of attorney to the first respondent.

HIS HONOUR: But on what basis?

CAIRNS: I haven't had an opportunity to get proper instructions, but the mother, Adelina, has mild dementia so there could be a competency issue, and I haven't even looked at ‑ I haven't seen the terms. There might be a challenge to their right to sell this property.”

12. Ms Cairns submitted that, at least at that point, Domenic’s application was made under Uniform Civil Procedure Rules 2005 (NSW), r 25.3 which provides that “in proceedings concerning property, … the Court may make orders for the detention, custody or preservation of the property”. She explained to me that Domenic had commenced proceedings in the New South Wales Civil and Administrative Tribunal (NCAT) for guardianship and financial management orders in his favour over Adelina. Those proceedings were listed for final hearing on 28 April 2023 and NCAT had already made clear that it could not interfere with an impending sale by the defendants of the Property. That sale had originally been scheduled to occur on 22 April 2023. What had especially excited Domenic’s concern was that the Auction had suddenly been brought forward to 5pm that evening, 4 April 2023, to be conducted online.

13. Insofar as the Auction was concerned, Ms Gandha, and then Ms Catanzariti, explained that three very interested purchasers had already made offers. The defendants had received advice from their real estate agent that, given the level of interest from those three purchasers, the best price was likely to be achieved by bringing forward the Auction immediately to be conducted online between those three parties.

14. After hearing the parties further, I was satisfied that a 24-hour delay in the Auction (i.e. to Wednesday 5 April 2023, being still one business day before the Easter long weekend) would not prejudice the possibility of an advantageous sale, but would provide the parties with an opportunity to consider their respective positions and for some more detailed evidence to be provided to the Court.

15. The following afternoon, Ms Catanzariti again appeared for the defendants. Mr K Tang of Counsel appeared for Domenic and, by an amended summons which I granted leave to be filed, for Adelina, now added as second plaintiff. The amended summons sought this relief:

“The Court orders:

1. An order that this Summons be returnable instanter.

Interim Relief

2. Sale of all land contained in Folio Number XX/XXXXX also known as XXX XXX Street Hamilton South be restrained, until further order of the Court.

Final Relief

3. The Court declares that the conditions giving rise to the powers granted to the first and second defendants under enduring Powers of Attorney attached to this Summons and marked “A” have not risen.

Account

4. Order for taking of accounts by the defendants in respect of any amounts of money expended from the Plaintiff’s assets.

Indemnification

5. Plaintiff be indemnified for any loss or damage arising from the conduct of the defendants purporting to exercise the powers under the enduring Powers of Attorney.

6. Costs and interest on Costs.”

16. Turning to the final relief sought in the amended summons, I asked Mr Tang what conditions in the Powers it would be contended had “not arisen”. The gravamen of his answer was not that conditions had not arisen, but rather that there was now evidence from Adelina that she did not wish the Auction to proceed. Mr Tang informed the Court that his instructions did not permit him to suggest that there was a basis on which either the granting of the Powers or the process of the sale itself could be impugned.

17. However, he developed the submission that because there was evidence that Adelina did not want the Auction to proceed, the equity which warranted the granting of an injunction was her entitlement to revoke the Powers. He accepted, entirely properly, that this relief in relation to any proposed revocation was not explicitly sought in the amended summons but could be the subject of further amendment, and that it raised as the fundamental factual question whether or not Adelina retained capacity to revoke the Powers. If she no longer had capacity, it was common ground that she could not revoke the Powers.

18. Mr Tang pressed the application for the continuation of the injunction on that basis.

Some uncontroversial facts

19. There was no dispute that Adelina had lived in the Property as the family home for many years and that since 2018 Domenic had been her fulltime carer.

20. Adelina had gone into hospital for a minor operation in January 2023. From that time, the siblings had been in dispute about Adelina’s ongoing care and the relationship between them had seriously deteriorated.

21. In late January 2023, Domenic filed a guardianship application and financial management application in the guardianship division of NCAT. He sought orders to appoint him as the guardian and financial manager for Adelina. The final hearing of those applications was fixed for 28 April 2023.

22. After Adelina had been discharged from hospital in early February 2023, Lilian had assumed responsibility for Adelina’s care. In early March 2023, the defendants had arranged for Adelina to take up residence at an aged care facility known as Scenic Lodge.

23. Acting under the Powers, Lilian and Eugenio had engaged Mr Simon Wall, a licensed real estate agent, to sell the Property. That sale was originally scheduled to occur on 22 April 2023, but was brought forward to 4 April 2023 in circumstances which are set out in what follows.

The plaintiffs’ evidence

24. At the forefront of the plaintiffs’ case was an affidavit made by Adelina (the options of oath/affirmed not being completed in the executed affidavit) on 5 April 2023 which stated in its entirety:

“1. I am currently in a nursing home.

2. I own my own home in Hamilton.

3. My daughter Lilian Martinelli is trying to sell my home.

4. It is my strong wish that my house is not sold and that I return home.

5. I do not want to be in a nursing home.

6. I want to go home to my home in Hamilton.”

25. That affidavit was witnessed by the plaintiffs’ solicitor, Ms Thorne. Ms Thorne swore an affidavit about the circumstances surrounding Adelina’s affidavit which included:

“8. At 1:00pm on 5 April 2023, I attended Scenic Lodge, Mereweather to talk to Adelina. A member of the Nursing staff retrieved Adelina from the lunch area and she came to the hallway to meet me. She was using a walking frame but in my observation, she moved freely and easily. We had a conversation in words to the effect of:

Adelina: “Who are you I don’t know you”

Me: “I’m Abby I’m here to talk to you about your house”

Adelina: “My house, yes I want to go home””

26. Ms Thorne then goes on to set out a conversation she had with Adelina. That conversation included:

“11. …Me: “OK do you know if you did a power of Attorney?”

Adelina: “No, I don’t know””

27. The effect of Adelina’s answers to Ms Thorne was that she did not want to remain at Scenic Lodge, that she wanted to go to her own home, that she wanted to be cared for by Domenic, and that she did not want the defendants to be in charge of her affairs.

28. The affidavit included the conclusion of the conversation and what followed:

“11. … Me: “Would you like to go home and would you like Domenic to live with you”

Adelina: “Yes”

Me: “You don’t want Lili and Eugenio to be in charge”

Adelina: “NO NO nothing I want them to do nothing have nothing no no”

Me: “OK so right now Lili and Eugenio are trying to sell the house”

Adelina: “NO I don’t want to sell the house I want to go home”

Me: “Yes that is ok I am here so that you can tell people that. I need to tell you that this is in court at the moment, right now as we speak, we are trying to stop people from selling your house”

Adelina: “Yes stop them I don’t want my house sold”

Me: “OK, would you sign a document saying that you do not want the house sold”

Adelina: “Yes”

12. At this point I read the affidavit with Adelina, she appeared to me to understand the writing, she asked me to read it again. She then said words to the effect “this is true I want to go home.”

13. After Adelina signed her name, she said to me words to the effect “my son looked after my husband when he was dying, and since then my son has looked after me, I want to go home and be with my son.”

14. I said to Adelina words to the effect “I will talk to you soon I have to take this document to show the court you do not want your house to be sold” Adelina said words to the effect “yes good I want to go home please”.”

29. It appears from Ms Thorne’s affidavit that she took the pre-prepared affidavit for Adelina to Scenic Lodge. Adelina did not appear to know who Ms Thorne was, nor did she appear to know (nor was it explained to her, assuming Ms Thorne’s account of the conversation was complete) that she was, or was to be made, a party to litigation. Adelina could not remember if she had given the defendants a power of attorney. As I develop further below, all of these matters were important in my ultimate assessment of the weight I could give to Adelina’s affidavit, including whether I could be satisfied that she had any real insight into her circumstances or what might be in her best interests.

30. Had the matter gone further, it is appropriate at this point to record that I would have inquired further as to how Adelina had come to be joined as a plaintiff, not least because of the evidence filed by the defendants on the topic of Adelina’s dementia diagnosis. Ms Thorne describes herself in her affidavit as acting for Domenic only. In his affidavit (to which I refer in the next paragraph), Domenic describes himself as “the Applicant”. The title pages of each of these affidavits lists only Domenic as the plaintiff. There was no suggestion that Ms Thorne had prepared Adelina’s affidavit after she had obtained instructions from Adelina. The impression I gained from the various documents filed on behalf of the plaintiffs was that the decision to join Adelina as the second plaintiff in the amended summons came after the affidavits to which I have referred in this section were made. In the events which happened, it was not necessary for me to have pursued further the circumstances of her joinder and whether she was capable of giving instructions, or even knew or had been consulted about becoming a party.

31. Domenic also swore an affidavit in which he set out everything he had done for Adelina when he was caring for her at the Property. He expressed his love for his mother and his determination to continue to care for her fulltime at the Property because that is what he said Adelina wanted. He also gave evidence, some of it undoubtedly contentious, about the particulars of the breakdown of the relationship between himself and his siblings about the care arrangements to be made for Adelina. He set out conversations with her in which she tells him that she wants to go home. His current observation of Adelina appears from this paragraph of his affidavit (but I disregard it for present purposes as not being from an independent witness):

“27. My mother’s quality of life has drastically declined ever since she got placed in a nursing home. I can even just tell by the way she answers her phone now. In the past if you called her on the phone and asked how she was she would say “I’m good, I keep it going” with an optimistic outlook on her situation and finding value in her day. Now that she’s in a nursing home, whenever I call Mum to ask how she is she replies “Well you know, I’m old” she no longer finds purpose in life she has list [sic] her liveliness it is just soul crushing to see this shift.”

The defendants’ evidence

32. The defendants relied on affidavits from Eugenio, Lilian and the real estate agent, Mr Wall.

33. Eugenio’s affidavit includes the Powers. There could be no issue that, provided they are acting jointly as their terms require, the Powers authorise Lilian and Eugenio to sell the Property and, as enduring guardians, to make decisions about her accommodation, healthcare and similar matters, including in relation to the continuation or suspension of medical care at the end of her life.

34. Eugenio’s affidavit also attached four documents to which the Court was taken and the contents of which I accept as independent and expert assessments.

35. First, there was an assessment dated 4 April 2022 of Adelina by a specialist geriatrician, Dr Padmakumar. That report includes (italics added; block print in original):

“Problems:

Advanced Dementia, clinical dementia rating stage ll

Systemic arterial hypertension

Diabetes mellitus

Osteoarthritis

Longstanding vertigo

Falls

Lack of mental capacity to make major life decisions

…

Many thanks for asking me to see Mrs Adelina Monaco. I have seen her today in the company of her daughter and co-enduring guardian, Lilli Martinelli. I understand the request for me to assess her had been made to give family an idea about what the future care holds for Adelina.

As you are aware, I have assessed Mrs Adelina Monaco in the past. The last time I have seen her is September 2018. She was already diagnosed with dementia by myself. As one would expect from a progressive neurodegenerative condition like dementia, her dementia has considerably progressed. Today, MMSE is 8/30. She was not even able to give me an address where she lives. She gave me the address of where she used to live 30 years back. Multiple times during the history taking, her gaps in cognition were evident. However, she comes across as quite pleasant. Very glad to note that there are no behavioural or psychological symptoms of dementia. She is easily manageable at home. Occasionally, she can become a bit abrupt, but no BPSDs have been mentioned. No hallucinations. No tendency to wander, which is good news indeed.

As you are aware, she has four children, one son lives with her. Lilli lives in Adamstown and her brother who lives in Cardiff, jointly hold mother's power of attorney and enduring guardianship. After my assessment today, I have informed Lilli that Adelina does not have the mental capacity to make major life decisions. At this juncture, it is now up to the enduring guardians to act on mother's behalf to ensure her future wellbeing, physical, mental and social health and at the same time to look after her financial side of things as well.

…

I understand there are some family dynamics between the son who lives with Adelina and the rest of the children, but I am told that Adelina is quite happy with the care that has been provided by the son. I understand the family's plan is to keep mother at home with the maximum service as long as possible and at times if the care needs are exceeding then the family will consider placement. I support that decision.

…

Mrs Adelina Monaco has Advanced Dementia. She does not have the mental capacity to make major life decisions. The stage has come for her Enduring Guardians to act on her behalf to ensure her future wellbeing. …”

36. Second, there was a report written shortly after Adelina’s admission to John Hunter Hospital in January 2023 by a social worker from the hospital’s critical care team which included (emphases added):

“It has been recommended by the multidisciplinary team (occupational therapy, physiotherapy, social work and the treating doctors) that Mrs Monaco is not safe to be independently living on her own. I have had multiple discussions with Mrs Monaco and family regarding her discharge planning. Whilst Mrs Monaco has demonstrated a progressive cognitive decline consistent with Dementia, she could demonstrate some level of understanding of what was discussed, and agree that she needs to be supported by other people. lt is recommended that Mrs Monaco's level of care requires 24 hour supervision and support.”

37. Third, Eugenio’s affidavit exhibited a report from the residential care manager at Scenic Lodge dated 16 March 2023 which included (emphasis added):

“… Mrs Adelina Monaco was admitted to Scenic Lodge Merewether for permanent placement [o]n the 1st March 2023.

Adelina is beginning to settle into facility life, attends activities sessions of her choice, socialising with a group of ladies, and has her meals in the dining room with them. Adelina is observed to be enjoying the conversation during meals. Adelina has gained 1kg since her admission.

Her amputation-wound site is healing very well and her mobility is improving each day. The physiotherapist works with Adelina and is supporting her to improve her balance and strength. Adelina has complex Diabetes Management needs with 24 hour monitoring of Blood Glucose Levels and required interventions. …”

38. Finally, there was a report from a consultant neurologist, Dr Caruana, about Adelina dated 28 March 2023 which included (emphases added):

“HISTORY

Background

Lina is an 88-year-old woman of Italian origin, who has immigrated to Australia. She has four children.

She has recently become medically too frail to be able to live at home and has entered the Scenic Lodge She has settled very well there.

She has been using a wheelchair a lot after the amputation of her right toe but is able to walk with a walker and wants to walk.

She is brought in by her daughter, Lili, for some advice about neuropathic sounding pain.

Recent increase in care demands

Lina has multiple highly significant comorbidities and her care demands have recently increased.

This became very obvious in January this year, when she had an osteomyelitis on her right 2nd toe which was a consequence of a painless right popliteal artery occlusion. Adelina did not experience any pain, which reflects her diabetic neuropathy. Her 2nd right toe had to be amputated and she was discharged on 7 February.

No respite care was available and at the time and she, therefore, lived with Lili and Lili's family for a few weeks.

On 8 February, had to represent to John Hunter as her sugar readings were very high at home. ED consulted with the endocrine consultant on call and her insulin regimen was changed at this time, which is the regimen she is currently on.

On 14 February, she again presented to emergency, this time with dizziness, nausea, and vomit. This all reflects that Adelina has become increasingly frail and care dependent.

While Lina was living at Lili's place, two other issues stood out for Lili for which a neurology review was sought.

…

Diagnosis of dementia

As with regard to Lina's dementia, this has not been classified.

There is a definite component of Alzheimer's, as she recalls long-term events quite clearly but her short term memory is poor. I do not see much evidence of apraxia, but I would think, given her vascular risk factors, that she could have an element of vascular dementia as well.

Lina is quite cooperative and can voice her opinion.

…

SUMMARY AND RECOMMENDATION

DIAGNOSTIC SUMMARY

Lina is an 88-year-old woman who has been diagnosed with dementia. Her dementia is progressing. This is an irreversible process.

She has multiple highly significant medical comorbidities with multiple secondary complications such as arterial occlusion, kidney failure, and neuropathy. Lina is at a stage where she needs 24-hour care and supervision.

This consultation was mostly to find a treatment option for her neuropathic-sounding pain on the scalp as well as for her intermittent vertigo.

We decided that we would undertake only the least invasive investigations and focus on management rather than distressing Lina in any way. …”

39. Lilian’s affidavit included:

“16. On or around 22 February 2023 our mother was offered a room at Scenic Lodge and we moved her into that room on or about 1 March 2023.

17. The Plaintiff has remained living in the Property, however the Property will need to be sold to enable payment of the bond (RAD) and daily fees (DAP) for my mother's entry into Scenic Lodge.

…

22.The Property is an old residence which needs renovating and repairs to be carried out. It has three bedrooms, an old bathroom with a shower recess, and free-standing bath which does not have any rails or support for use of the facilities. The entry to the property is uneven, and has a large step to enter through the front door. My mother requires her Walker at all times to move around. The floors within the Property are uneven between rooms with a step up to the laundry and toilet. The toilet itself is too narrow for my mother's Walker and she would need to leave the walker outside the toilet and have to enter unaided. There are no handles or bannisters anywhere in the Property. Annexed and marked "F" is a copy of the photos of the Property from the sale listing.

…

24. Currently the fees charged by Scenic Lodge include a Daily Accommodation Payment (DAP) and an Extra Service Fee, totalling $220 per day. This will continue until my mother's Refundable Accommodation Deposit is paid.

25. My mother does not have sufficient savings or income to cover the cost of her accommodation and the daily fees. Annexed and marked “H" is a copy of her current bank statement. Although the bank account is in my name, I hold the funds on trust for my mother.”

40. Lilian’s current observations of her mother (which, as with Domenic’s, I disregard for present purposes as not being from an independent witness) were:

“28. Since moving into Scenic Lodge, I have noticed the following regarding my mother's health and living arrangements:

She is receiving 24/7 medical supervision and care;

Her diabetes is being managed well and is now stable;

She has had no leg infections (unlike the ongoing infections at her home);

She is gaining weight, over 1.2kg in the first two weeks;

She has joined health programs eg physio twice a week;

She has a clear daily routine which helps with her dementia;

Her medical appointments continue both within Scenic Lodge and externally;

She is more confident using her Walker and is much more stable;

She is integrating extremely well, has joined social activities and made friends;

Family have free access to visit - she has more family visits now than she ever had at her home;

She is safe and comfortable, has access to high quality care and family are provided with regular updates as to her activities and medical treatment/interventions.”

41. Finally, Mr Wall, who has been practising as a real estate agent since February 2008, deposed:

“… 4. Currently, there are three parties who appear to be interested in purchasing the property; each party has made an offer. The offers received from the potential buyers were:

i. $1,XXX,000;

ii. around $1,XXX,000; and

iii. $1,XXX,000.

5. The feedback that I have received from many of the people who have inspected the house is that the property requires far too much maintenance and repair work, and most families valued the property around $1,XXX,000 - $1,XXX,000.

6. Given the feedback that I have received about the state of the property, and the offers received from the three potential buyers, I advised Mr Monaco and Ms Martinelli that my recommendation was to urgently hold an online auction with the three buyers. They agreed with the strategy, and I scheduled an auction to proceed on the afternoon of 4 April 2023 as the buyers were primed and ready to compete for the property that afternoon.

7. I have observed that the real estate market in my local area have been affected by the interest rate rises and the increases to the cost of living in Australia.

8. If the auction does not proceed quickly, I expect the competition will be affected as the buyers will lose interest or purchase alternative properties, and the overall purchase price will be significantly lowered.”

42. I have redacted the figures in Mr Wall’s affidavit because I do not know the result of the Auction. The offers in paragraph 4 of Mr Wall’s affidavit were between $300,000 - $400,000 higher than the values set out in paragraph 5.

43. The final piece of evidence in the defendants’ case was an extract from the National Personal Insolvency Index. This demonstrated that Domenic (who in his affidavit described himself as a “carer”) is an undischarged bankrupt, having been made bankrupt in December 2015 and is not due to be discharged from bankruptcy until December 2023.

Plaintiffs’ submissions

44. Mr Tang’s submissions may be summarised as:

1. There was clear evidence from Adelina herself that she wished to return home to the Property to be cared for by Domenic. If the Property was sold at the Auction, that possibility would be lost forever. Not to grant the injunction would be in substance to determine the proceedings against the plaintiffs.

2. Ms Thorne’s affidavit concerning the circumstances surrounding Adelina’s affidavit provided some evidence in support of the conclusion that Adelina retained capacity.

3. Although there was no evidence, in particular in Ms Thorne’s affidavit referred to in [25] above or in Adelina’s own affidavit, that Adelina intended to revoke the Powers, the Court should infer that from the evidence in those affidavits.

4. While Adelina may have been diagnosed with dementia, Dr Caruana’s report (see [38] above) noted that Adelina recalled “long-term events quite clearly but her short term memory is poor” and that there was not “much evidence of apraxia” (which relates to the loss of ability to carry out skilled movement and gestures despite having the ability and desire to undertake them).

Defendants’ submissions

45. Ms Catanzariti’s submissions may be summarised as:

1. Adelina had been diagnosed with progressive dementia. To the extent that she may have expressed a wish to go home, the Court should take judicial notice that a person with dementia may not necessarily have the insight or the capacity for abstract reasoning to know what is in their best interests. Having regard to the matters identified in [29] above, Ms Thorne’s affidavit concerning the circumstances in which Adelina signed her affidavit could give the Court no confidence that Adelina had any insight into her condition and cast real doubt on the weight the Court could give to Adelina’s affidavit.

2. There was no dispute that Adelina had validly appointed the defendants under the Powers.

3. It was clear that Adelina now required sophisticated 24 hour care. With the best will in the world, Domenic could not provide that care around the clock at the Property.

4. In any event, the Property was no longer suitable for Adelina.

5. The Property had to be sold to provide funds to pay for Adelina’s ongoing occupation and care at Scenic Lodge.

6. There were three active buyers who may be lost if the Auction did not proceed immediately. If the Auction had to be postponed, in particular until after the imminent Easter break, there was a very real prospect that a lower price would be achieved for the Property.

7. Domenic was an undischarged bankrupt. His undertaking as to damages was worthless.

Consideration

46. The contest between the plaintiffs’ evidence of the circumstances surrounding the execution of Adelina’s affidavit and the expert geriatrician’s evidence advanced on behalf of the defendants demonstrated that there was a serious question to be tried as to whether or not Adelina still retained sufficient capacity to validly revoke the Powers. However, I was of the firm view that the plaintiffs’ case that Adelina still retained capacity was very weak.

47. I placed no weight on Domenic’s observations of Adelina given his lack of expertise and obvious interest in and affection for his mother. Similarly, Ms Thorne is a solicitor and not an expert geriatrician.

48. The defendants’ independent evidence set out in [35] to [38] above, while (unsurprisingly) it did not expressly address the specific issue, strongly supported the conclusion that Adelina lacked the requisite capacity to revoke the Powers.

49. Insofar as Adelina’s stated wish to go home and be cared for by Domenic is concerned, the combined effect of the matters referred to in [29] above and the evidence referred to in the preceding paragraph meant that I was not satisfied that Adelina has the insight or capacity to know what is in her own best interests. While I do not doubt that she told Ms Thorne what the latter recorded in her (Ms Thorne) affidavit, I do not accept they were the statements of a person competent to make significant life decisions in their own best interest.

50. In approaching this question, I did not overlook Mr Tang’s submission that, for all practical purposes, if the Court did not restrain the Auction, that would amount to the Court finally determining the substance of the matter in issue, being whether or not Adelina could return home. As such, and doing the best I could on the material available, I also took into account my view of the ultimate result of the case: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 per McLelland J (as his Honour then was). Given the defendants’ evidence referred to in [48] above, my view was that the plaintiffs’ ultimate prospects of success were very low.

51. Notwithstanding that pessimistic assessment of the plaintiffs’ prospects of success, the Court might still grant an injunction if it was satisfied that the balance of convenience nevertheless strongly favoured the plaintiffs’ application or would not cause prejudice to the respondents to the application. That was not this case. It was common ground that, in assessing the balance of convenience, it was not the position of the defendants that mattered, but rather what was in Adelina’s best interests because it was on her behalf that they were acting. On that basis, the balance of convenience strongly favoured the Auction being permitted to proceed immediately for the following reasons.

52. The defendants’ evidence which I have set out above amply demonstrated that Adelina now requires 24 hour care. The Property is no longer suitable for her to live in and it is not possible to see how Domenic, despite his good will and commendable desire to care for his mother, could possibly himself provide the around the clock care that his mother now requires. In order to fund the care which Adelina does now require, and noting how well she appears to have settled in at Scenic Lodge, the Property must be sold. All of these matters firmly pointed to the conclusion that it was in Adelina’s best interests for the Auction to proceed that afternoon among the three interested bidders.

53. To this must be added the effect of Mr Wall’s evidence that, given the presence of three interested parties who had all made offers at a level appreciably higher than that at which others had expressed interest in the Property, there was a very real risk that if the Auction were postponed, a lower price would be the result at any delayed auction. That consideration also clearly pointed in favour of the Auction proceeding immediately.

54. Finally, and related to the preceding paragraph, was the question of the utility of any undertaking as to damages proffered by Domenic. The failure to disclose that he was an undischarged bankrupt at the initial hearing before me would have provided a sufficient reason to discharge the injunction immediately on the next occasion.

55. However, quite apart from that point, as a matter of the Court’s discretion the Court would have required an undertaking as to damages and satisfaction that the undertaking was of substance in order to restrain the Auction any further. This is because Mr Wall’s evidence demonstrates that there was a real risk that any subsequent sale would achieve a lower price than that which could have been achieved at the Auction. This meant there was a real, and not merely theoretical, prospect that the undertaking would be called upon to make good the difference in price. Based on the values referred to in paragraphs 4 and 5 of Mr Wall’s affidavit (see [41] above) that difference would have been a six figure sum which, quite apart from his status as an undischarged bankrupt, there was no evidence that Domenic would have been able to meet.

Conclusion

56. For the foregoing reasons, the Court declined to continue the injunction restraining the Auction from proceeding on the evening of the hearing. While no order as to costs was sought or made, the parties accepted that the defendants were entitled to be indemnified for their costs of the proceedings as an incident of their role under the Powers, to be paid on the indemnity basis out of the proceeds of sale of the Property.

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Decision last updated: 14 April 2023