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

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: 1. the gift was: 1. to a relative or close friend of Mr Felton; and 2. of a seasonal nature or because of a special event (including, for example, a birth or marriage); or 1. the gift was a donation of the nature that Mr Felton made when he had capacity or he might reasonably be expected to make, 2. 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: 1. 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 2. 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: 1. To decide where he lived, for example in a hostel or nursing home. 2. To decide what health care he received, for example treating doctor, community healthcare. 3. To decide what other personal services he received, for example home support services. 4. 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. The WIT contacted the police on the morning of 28/08/2013 to see if Police could make the PN leave the house next door as it was causing her father a great deal of stress. Police stated all they would be able to do was speak with the POI [Graeme] and inform him of how his father feels about the situation, and that Police had no right to tell the neighbours to make him leave. Sergeant xxx was in attendance. Yellow card was issued to the WIT as the VIC was too ill to sign. The WIT declined support services. Sergeant xxx attended the neighbours residence to speak with the PN [Graeme] and neighbour, however no persons were home. At 15:50 hrs Police contacted the PN by phone. The PN stated that his sister has found dads Will in the safe and saw that it was unfavourable for her, so she has been attempting to manipulate him while he is currently not of sound mind. He stated that he was staying with the neighbours to protect his dad from his sister. … MENTAL HEALTH & OTHER HEALTH ISSUES: The VIC has just suffered a serious stroke from which he is recovering. … FEARS HELD BY VICTIM: The VIC does not want the PN around him while he is recovering from his stroke. FEARS HELD BY POLICE: Police do not hold any fears. …"
In cross examination, Lesley accepted that the Report substantially accords with what she told the Police. She appears not to have told the Police either that Mr Felton had alleged that Graeme had forced a will upon him or that Graeme had thrown a chair at her.
For his part, Graeme agrees with the accuracy of the Report so far as it records his telephone conversation with the Police, but he disputes Lesley's earlier version of events. In particular, he denies going through Mr Felton's address book and contacting Mr Felton's friends without permission, and he denies having "forfeited" his "power of attorney".
On 28 August 2013, when Graeme and Roxy visited Mrs Felton at Calvary Hospital, they found her (having been moved into a private room on her own) extremely vague and not knowing what was going on.
On 29 August 2013, the neighbours with whom Graeme and Roxy were then staying showed Graeme a letter that they had that day received, ostensibly from Mr Felton. It was in the following terms: "Dear …, It is incredible for me to think that you are harbouring 'guests' who harbour septic thoughts against my daughter, she is being a magnificent nursemaid in my present non healthy condition. Despite whatever your own personal feeling about her may be, I assure you that her attention and care for me has [sic] and is excellent. She is my right arm in regard to the present trauma going through our family. Unfortunately your religious 'do good' attitude has been directed into the wrong arena and caused such upset and trauma for me that I can only reside in my home with doors and windows locked, not an ideal position for somebody in my present state. I would appreciate if you can advise me in the near future when it is safe for me to live in my own home without my being invaded by those who wish to prevail us with their disrespectful thoughts and actions. Please advise me when 'your guests' have departed our area. Thank you, [signed, Clifton F]"
Graeme says that he immediately formed the view that the letter (which was typed, but for a couple of handwritten clerical corrections), and signed by Mr Felton, used words that were not those of Mr Felton, but rather those of Lesley. Graeme may well have been correct in noticing an involvement of Lesley. However, the letter was not the subject of cross examination of either Lesley or Graeme and, accordingly, I approach Graeme's intuitive assessment with caution. What the letter does demonstrate is Mr Felton's antipathy towards Graeme, his emotional identification with Lesley and a lack of inhibition inconsistent with sound judgement.
It was at about this time, at the end of August 2013, that Graeme last saw his parents before the hearing of NCAT proceedings on 15 October 2015.
On 30 August 2013, Mr Felton (driven there by Lesley) attended the office of Mr Hayward, where he made his last will, appointing Mr Hayward as his sole executor, and (upon an assumption that Mrs Felton predeceased him, which she did) naming Lesley and Graeme as his beneficiaries in equal shares. Mr Hayward cannot explain why Mr Felton's will was not executed on 23 August 2013, at the same time as Mrs Felton's will.
Lesley's evidence is that she took Mr Felton to the office of Mr Hayward so that he could execute the new will. She says that she was told to wait in the reception area by Mr Hayward while he spoke to Mr Felton but that, after about 15 minutes, Mr Hayward called her into his office where she listened to a conversation to the following effect between Mr Hayward and her father: Mr Felton: "Bernard, I don't want Graeme in my Will! He's got all my companies and now my clients. He's got his share already!" Mr Hayward: "Clif, if you don't include Graeme he'll take Lesley to Court and it will cost $100,000 in lawyer's fees". Mr Felton: "After Edith's gone I want it all to go to Lesley, Loren and Fletch. I'm not happy about giving Graeme anything!!! And he has no children." My Hayward: "I would leave it equally between Graeme and Lesley, 50/50. I wouldn't be leaving anything to your grandchildren". Mr Felton: "I know what Graeme can be like with money and I don't want Lesley to have to deal with that. But I can do what I want with my money before I die?" Mr Hayward: "Yes Clif, it's your money". Mr Felton: "I don't want to have anything to do with Graeme and neither does Edith".
Mr Hayward does not recall, but neither does he deny, this conversation. He accepts that Mr Felton was angry towards Graeme, that he was likely to have advised Mr Felton to make provision for Graeme so as to avoid post-death litigation, although there was no express discussion of the possibility of a family provision claim; that he may have advised Mr Felton to leave his estate to his children equally, which was the form of the will Mr Felton in fact executed that day; and that Mr Felton may well have observed that he could do what he wanted with his property before his death.
In these circumstances, I accept Lesley's evidence about what passed between Mr Felton and Mr Hayward at the time Mr Felton signed his will. In combination, though, the terms of the will and Mr Felton's simultaneous execution and criticism of it support an inference that Mr Felton was not thinking with clarity of mind, an inference strengthened by the observation that, despite his antipathy towards Graeme, he never revoked or amended the will. Any idea that he signed the will simply to appease Mr Hayward, at the same time reserving to himself a right to dissipate his whole estate before death, raises questions about his capacity for independent, rational thought.
Lesley says that it did not occur to her on 30 August 2014 to say to Mr Hayward that her father believed that he had on 18 August 2013 made a will prepared by Graeme.
Lesley's evidence is that she was at the Oatley Property in September 2013 when Mr Hayward visited her parents, during which attendance she heard a conversation to the following effect: Mr Hayward: "Graeme keeps emailing me asking if I still hold your Wills and if you have changed them." Mr Felton: "It's none of his business. Ignore him".
I accept that an exchange occurred in substantially these terms, whether on the occasion identified by Lesley or at some other approximate time. Mr Hayward's evidence is consistent with Mr Felton having instructed him to ignore Graeme.
On 2 September 2013 Mr Felton, together with Lesley, attended upon Dr William Huynh of Southern Neurology, as a consequence of which Dr Huynh produced a report of the same date which included the following (addressed to Dr Martel, Mr Felton's then general practitioner): "I had the pleasure of reviewing Clifton together with his daughter in followup today for his recent stroke affecting the right occipital lobe. The MRI scan of the brain demonstrated restriction in diffusion that confirmed this as well as an old stroke in the left frontal lobe. This mutlivascular territory ischaemia is likely cardioembolic in origin and is consistent with his history of atrial fibrillation for which he is not fully anticoagulated. I have discussed the options of anticoagulation. Given the fact that Clif remains relatively independent with no overt contraindications, I would be inclined to start him with an oral anticoagulant. In this scenario we have the option of either traditional warfarin or the novel oral anticoagulants, the latter not requiring regular blood monitoring. I have also discussed with Clif and his daughter the potential risk of bleeding complications with these agents. However, prior to embarking on this we need to clarify a few issues. The first issue is regarding his cognitive and functional state as I believe this may be a recent issue that requires addressing. I believe that referral to a geriatrician with potential neuropsychological assessment is beneficial, as is an assessment by a physiotherapist and an occupational therapist with regards to his mobility and to assess whether he is falls risk. In addition, liaising with the vascular surgeon who performed the stent insertion of his lower limb is important in clarifying whether he needs to continue the clopidogrel as he will not be able to use the combination of antiplatelet and anticoagulant if we do decide to start on the latter. His blood pressure was still suboptiomal at 160/95 with a heart rate of 92. He is currently taking metoprolol 25mg twice a day and I have increased that further to 50mg twice a day. He is to stay on all of his medications for the time being."
On 9 September 2013 Graeme sent to Mr Hayward an email (entitled "Re: Felton") in the following terms: "Dear Bernie From our previous conversations of late you advised me that you held Clif and Edith's original will trusts that you prepared sometime around 2003 or 2004. Could you please confirm this in writing [at] your earliest convenience. Regards Graeme Felton"
Graeme did not receive a response to that email. That fact is consistent with Mr Felton having instructed Mr Hayward to ignore Graeme.
In September 2013 Graeme received notice of Mr Felton's revocation of the power of attorney in his favour. It was sent to him under cover of a letter dated 24 September 2013 addressed to him by Mr Hayward, who cannot explain his delay of about a month in notifying Graeme of the revocation.
Graeme was not told that his parents had executed replacement powers of attorney (appointing Lesley, Loren and Fletcher as attorneys) on 22-23 August 2013. He came to know that only during the pendency of NCAT proceedings in 2015.
Lesley's evidence is that she attended the office of Mr Hayward in early October 2013 with Mr Felton when he told Mr Hayward that he and Mrs Felton proposed to move to Ferndale Gardens and requested that Mr Hayward prepare a contract for sale of the Oatley Property to fund payment of nursing home accommodation bonds totalling $720,000.
Between 26 September 2013 and 9 October 2013 or thereabouts Mr Felton was the subject of an ACAT assessment (which may have been requested by Graeme on 28 August 2013). The Aged Care Client Record dated 9 October 2013 as a consequence of that assessment included the following observations: "Mr Felton is a 89 year old man who lives with his wife in their own home in Oatley. He is a retired Accountant and has a DVA Gold card. Daughter recently moved in to assist with parents care needs. Daughter assists with meals, shopping, medication supervision/monitoring and laundry. Mr Felton has been driving but does not do so at present. Mr Felton presents as a well groomed, alert man with some STM [short term memory] loss and occasional repetitious speech. He is oriented in place and person. Further medical testing of his cognition would be beneficial and an appointment with a Geriatrician has been made. Walks without aids. Has had a recent fall. Independent in personal care but would need prompting/reminding on certain days. He is continent. Assessed as suitable for a Home care package level 1/2 which could assist him to remain at home for longer as they have only had community support in past few months. Low level residential respite approval is recommended for the future if home situation deteriorates."
On 9 October 2013 Mr Felton formally instructed Mr Hayward to prepare a contract to permit the Oatley Property to be listed for sale.
In October 2013 Mr Felton wrote two letters to Graeme calling upon Graeme to pay accounts he had received, demanding that Graeme "release" his "control" over Mr Felton's affairs and "allow" him to sign his "own cheques". In the first of those letters Mr Felton wrote: "Why should you control what belongs to me!! After all it is my money!" The first letter was dated 14 October 2013; the second, 21 October 2013.
This claim of ownership by Mr Felton was not explored by the parties. If read with a similar, generic claim of ownership made by Mr Felton in handwritten notes prepared by him on or about 9 July 2015 in connection with the then pending NCAT proceedings, it might support an inference that, in a weakened state of mind, he regarded himself as the person entitled to control all "family" property, as wealth generated by him, even if the subject of a disposition in favour of another family member.
On or about 14 October 2013 an application was made by or on behalf of Mr and Mrs Felton for them to move to Ferndale Gardens, which they did in late October 2013. According to Lesley, the accommodation to which they moved was secured in the sense that they could not "get out because an alarm would go off" and "you needed to know a code to get in". I infer from this that Mr and Mrs Felton were largely dependent upon Lesley for opportunities to leave their nursing home accommodation, unless enjoying a group excursion arranged by the nursing home.
According to Lesley, in or about mid-October 2013 Mr Felton received a bill from a man who had cleaned his pool. He wrote a cheque on a Felton company account and handed it to the pool man in payment of the bill, only to be informed by the pool man a few days later that the cheque had been dishonoured. His cheque having bounced, he blamed Graeme. In a subsequent conversation between the two men, Graeme invited his father to fax to him any bills to be paid, an invitation which Mr Felton found to be offensive.
On or about 21 October 2013 Mr Hayward sent a draft contract to Mr and Mrs Felton and their Real Estate Agent, and the Oatley Property was listed for sale.
According to Lesley, shortly after that listing, she and Mr Felton, in the presence of Mrs Felton, had a conversation in words to the following effect: Mr Felton: "After the bond [payable to Ferndale Gardens for Mr and Mrs Felton's residency there] is paid, use the balance left over to buy yourself a house to live in. It's a gift from mum and I. We are extremely grateful for all you have done and your care. We want you to have a home of your own and this would give us great satisfaction." Lesley: "Wow thank you Mum and Dad, I am so deeply grateful." Mr Felton: "You were there for us when we needed it most and we are deeply grateful to you for that." Lesley: "What is my budget Dad?" Mr Felton: "Whatever you like!"
I accept that a conversation substantially in these terms may have occurred; but the terms of the conversation (if it occurred) do not sit comfortably with: (a) the terms of an email attributed in part to Mr Felton on 12 November 2013 brought to the attention of Mr Hayward; (b) the terms of Mr Felton's unaltered will, the effective operation of which would have been undermined by any substantial transfer of property by Mr and Mrs Felton to Lesley (c) the absence of any resistance on the part of Lesley to a gift which could not easily, objectively be characterised as in the interests of Mr and Mrs Felton; or (d) the absence of any provision to Mr and Mrs Felton of independent advice about the prudence of an open-ended gift to Lesley of a substantial part of their property.
Mr and Mrs Felton relocated to Ferndale Gardens in late October 2013.
Graeme's evidence (which I accept) is that when his parents were at Ferndale Gardens he tried on a number of occasions to contact them, but the manager and staff of the nursing home refused to permit him to speak to them, and he was told that if wanted to speak to them he had to have "authorisation from Lesley".
The evidence of Paul Chapdelaine (an Assistant in Nursing Care at Ferndale Gardens) is that, while at Ferndale Gardens, Mr and Mrs Felton spoke exceeding well of Lesley and disparagingly of Graeme (who Mr Chapdelaine never met), expressing themselves pleased that they had bought Lesley a house. He observed that Lesley visited her parents two-three times a week, often with Loren and Loren's daughter, at which times Mr and Mrs Felton were happy.
On 7 November 2013 Mr Hayward received a telephone call from Val Colyer, a member of his Rotary club, as a consequence of which they had an exchange of emails on 12 November 2013.
The first of three emails was addressed by Ms Colyer to Mr Hayward at 1:12pm on 12 November 2013. With a subject heading of "Clif Felton", it ostensibly forwarded to Mr Hayward an extract of an email from Mr Felton. Ms Colyer's email, incorporating what appears to be an extract of an email from Mr Felton, was in the following terms: "Hello Bernie Further to the conversations that have taken place between myself, Jenny, Clif Felton and your offices … These are the questions that have been raised … and discussed at length … My telephone number is xxx … I will be in QLD from tomorrow till 27 Nov … but am on mobiles and the netbook computer. Many thanks …. Val Colyer I will have money left over from the sale of my home …….. I want this money held in trust for Edith's and my welfare ………. I need assurance that this will happen. Who has my current Power of Attorney? Are the proceeds from the sale of my home PROTECTED? How is this money protected? Can my daughter spend the money without my consent? I want to have (some say) in how this money is spent and eliminate any SIBLING rivalry. Can give a new Power of Attorney to an independent person such as yourself (meaning a solicitor)? How do I do this? How soon can I do this? I would like to be sure my income is protected in the event that WE decide to move to other resident accommodation of a superior quality. CLIF FELTON"
The second email was addressed by Mr Hayward to Ms Colyer and sent at 4:44pm on 12 November 2013. It was in reply to Ms Colyer's email: "Hi Val, There will certainly be money left over - whoever is their power of attorney has a legal obligation to only use it for their best interest - question is always, how is that checked on? His current power of attorney is held by Lesley and her children (Loren and Fletcher - jointly). Not sure what PROTECTED could mean - his powers of attorney can access it - presumably to pay his bills etc - I think I would have to meet with Clif and discuss what he considers protected to mean. He can always revoke the existing power of attorney and appoint another - but it means I will have to send notices to Lesley and her children so she will know. If I am to be appointed power of attorney, Clif and Edith have to see another solicitor as I can't do a power of attorney that appoints me - maybe they are happy to see Jack Jacovou - would have to check with Jack that he is happy to do that - issue will be their capacity?"
The third email was addressed by Ms Colyer to Mr Hayward at 5:54pm on 12 November 2013 in the following terms: "Thank you so much Bernie …... I will explain this to Clif s [sic] he calls me often… He is concerned …. I will explain to him about Jack Jacovou … Clif is still hoping you will see him. I reminded him that you need to be back on deck from your trip …. He is waiting for call from you to set a time and date to see you in person. His direct number to his room [in Ferndale Gardens Nursing Home] is xxx By protected - he 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 … And getting out of the situation BECAUSE there is no checking …... So I suppose it comes back to the rights and obligations and accountability of the PA …… Brain [sic, likely to be Ms Colyer's husband Brian] and I have explained all we can however it still comes back to having an independent PA who has no claim on any of the income derived from sale of property … Oh Bernie it is a sad case … I thought I had seen a lot but this really threw me …… I have been Clif's shoulder for long time …. Know all the story … And Clif deserves much better … Thanks for your time. Val C"
Mr Hayward did not discuss this exchange of emails with Mr Felton, then in his nursing home; and, before this time, he had no concerns as to Mr Felton's capacity to do the things Mr Felton was doing - that is, arranging for the execution of wills favouring a surviving spouse and (in default) children in equal shares, powers of attorney and guardianship appointments and giving instructions for the sale of the family home to fund accommodation bonds required for Mr and Mrs Felton to move to a nursing home. Ms Colyer was not called as a witness in these proceedings.
On 18 November 2013, Dr Kannie Chuang (a Staff Specialist in Geraitric Medicine at St George Hospital) interviewed Mr Felton, in company with Lesley, for a cognitive assessment. At the time of Dr Chuang's assessment, Mr Felton was residing in the Ferndale Gardens nursing home, with low level care respite with his wife, in anticipation of becoming a permanent resident there. In a report of the same date addressed to Mr Felton's general practitioner (Dr Martel) Dr Chuang recorded that Lesley had reported to him that her father had "some mild short term memory loss prior to his cognitive deterioration following his strokes in August" 2013.
Dr Chuang's report included the following passages: "Mr Felton is … undergoing some stressful time for which his house is going to be sold with assistance from his daughter and according to him his son has taken over his company's interests and related finances for which Mr Felton is not happy about. He did not elaborate the exact circumstances however it was clear today he does not wish his son to take charge of his financial matters as he has alcohol related issues and 'estranged from the family'. When questioned he was happy for his daughter to help with current finances and with the sale of his house. Mr Felton also has some insight into his cognitive decline and has already informed his clients in his accounting practice … On Cognitive testing Mr Felton was pleasant and cooperative. He had a reactive mood with no signs of psychotic features. He was vague at times and had evidence of cognitive slowing. He had some difficulty telling me his exact age and his previous address of 60 years. He is fully oriented to his family. I performed an Addenbrooke's Cognitive Examination and an MMSE and he scored 61/100 and 24/30 respectively. He had difficulties in visuospatial activities, language especially word generation and naming. His short term memory was poor 0/3. Impression: I believe Mr Felton has cognitive impairment probable mixed aetiologies of Alzheimer's and vascular. Based on today's assessment his capacity to make complex decisions such as finances may be limited and may need to be supervised. …"
It was through the receipt of invoices in or about November 2013 that Graeme found out (as he puts it) Lesley had moved their parents into Ferndale Gardens. He was not consulted about the move, despite holding a joint guardianship appointment with Lesley. He says that he had always envisaged that his parents would remain at the Oatley Property with a carer to assist them.
At that time, Graeme had still been receiving invoices for household expenses for Mr and Mrs Felton and attending to payment. After he started receiving invoices from Ferndale Gardens he emailed Lesley advising her that he would not pay anymore bills until such time as he received a copy of a statement for Mr and Mrs Felton's joint bank account. He says that despite sending Lesley two emails (respectively dated 19 and 28 November 2013) on the topic, he received no bank statement from Lesley.
On 28 November 2013 Mr Felton wrote to Graeme seeking confirmation that accounts had been paid, and a cheque to cover the pool man's bill.
On 30 November 2013 the Oatley Property failed to sell at auction. It did not reach the reserve price. At the auction, Mrs Felton had a medical emergency which required attendance of an ambulance. Lesley says that, at the auction, Mr Felton said to her: "I'm not happy with Ferndale Gardens or the Doctor [allocated to Mr and Mrs Felton by the nursing home]. Once this [the Oatley Property] sells and you have bought a house, mum and I want to move to some place closer to you". Lesley says that she replied, "Ok Dad that's great".
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 to make the gift of a house to Lesley, given that he and Mrs Felton were emotionally and otherwise dependent upon Lesley.
On 16 December 2013, contracts were exchanged for the sale of the Oatley Property by Mr and Mrs Felton for $2,125,000. Mr Hayward acted for them on the sale.
Lesley's evidence is that, from late 2013 until the eventual demise of her parents: 1. She regularly visited them on several occasions each week. 2. She assisted in preparing the sale of the Oatley Property and grounds. 3. She assisted Mr and Mrs Felton packing up all of their belongings and the remainder of Mr Felton's home office. 4. She cleaned and prepared the Oatley Property for settlement. 5. She organised removalists and storage and helped Mr and Mrs Felton move from the Oatley Property. 6. She took Mr and Mrs Felton to their regular doctors' appointments, to the office of Mr Hayward and anywhere else they wanted to go. 7. She regularly took Mr and Mrs Felton out for lunch or dinner, shopping, drives, haircuts and outings. 8. She arranged for family socials at her home at the Engadine Property. 9. She took Mr and Mrs Felton shopping. 10. She took them to the Rotary Christmas party. 11. She took them to visit family members.
Lesley recalls that on many occasions "since 2013" Mr Felton said to her: "Graeme has done nothing for Mum and I, nothing at all. I am so grateful to have you to care for us. Mum and I want to make sure you're financially secure and supported."
I accept that conversations 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.
On 7 January 2014 the purchasers of the Oatley Property released the deposit paid under their contract ($212,500) and it was paid, by a cheque drawn on the trust account of Mr and Mrs Felton's real estate agent, to Ferndale Gardens as part payment of the Feltons' accommodation bonds, leaving a balance of $507,500 payable.
According to Lesley, on 3 February 2014, during a visit by her to Ferndale Gardens she had a conversation with Mr Felton, in the presence of Mrs Felton, in which Mr Felton said words to the following effect: "When the house settles, I want you to transfer the balance of the monies left over from my account to your own account and buy a house for you to live in. I don't want Graeme getting a whiff of it! He's got his share already. It's my money and I can do what I like with it! ... Can you take me to Hurstville so Mum and I can open an account and get the proceeds [of sale of the Oatley Property] paid into that account. Then you can transfer it to your 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 to gift property to Lesley, given that he and Mrs Felton were emotionally and otherwise dependent upon Lesley.
According to Lesley, at the time of this conversation Mr Felton was aware that she and Loren had Qantas Credit Union accounts. As a result of the conversation, she says, she and Loren, that day, took Mr and Mrs Felton to Hurstville where they opened a Qantas Credit Union account in the joint names of Mr and Mrs Felton.
Records of the Qantas Credit Union record that Mr and Mrs Felton applied on 3 February 2014 to establish accounts in their joint names, and that they, Lesley and Loren were recognised as authorised signatories on those accounts, with any one to sign. The Credit Union documentation has annexed to it a copy of the enduring power of attorney (in favour of Lesley, Loren and Fletcher jointly) signed by Mr Felton on 22 August 2013.
The power of attorney was produced to the Credit Union in aid of establishment of the accounts and recognition of authorised signatories for the accounts. Lesley says she produced the instrument to the Credit Union at the request of Mr Felton.
Mr and Mrs Felton established two accounts with the Credit Union: a "savings account" and a "bonus account", the latter of which attracted a higher interest rate. Funds were transferred from time to time from the savings account to the bonus account.
The sale of the Oatley Property was settled on 10 February 2014 and $1,882,716.70 was deposited into Mr and Mrs Felton's joint account with the Qantas Staff Credit Union. Mr Hayward sent a settlement statement to Mr and Mrs Felton, at Ferndale Gardens, on 11February 2014. He has no record of further contact with Mr or Mrs Felton, or Lesley, before 21 May 2015.
Subject to one qualification, Mr and Mrs Felton appear to have obtained no independent advice, in or about February 2014 or otherwise, from a lawyer, accountant or the Department of Veterans' Affairs about disposal of the proceeds of sale of the Oatley Property, the gifting of substantial sums of money to Lesley or the exclusion of Graeme from involvement in family business.
The qualification is that the evidence includes tax invoices from a financial planner, Sandra Bowley, which suggest that she gave advice to one or the other, or both, of Mr Felton and Lesley on 18 November 2014 and 13 May 2015. The evidence does not explicitly relate what was discussed on 18 November 2014, although the invoice speaks of "aged care advice". According to Lesley, whatever occurred on 13 May 2015 arose as a result of her contacting Ms Bowley and in the context of Mr Felton telling Lesley that he wanted to give Loren and Fletcher $100,000 each. Precisely what was discussed on 13 May 2015 is not the subject of evidence.
No consideration appears to have been given at any time to the retention by Mr or Mrs Felton of a security interest in any property acquired in the name of Lesley with proceeds of sale of the Oatley Property.
Lesley did not invite her parents to obtain independent advice, or to forewarn Graeme, before allowing her to acquire property in her own name using proceeds of the sale. She did not forewarn Graeme or consult him about their parents' welfare or living arrangements.
On her own evidence, Lesley was in attendance with Mr Felton when he spoke to Mr Hayward on a number of occasions prior to and during the sale process of the Oatley Property.
On the day of settlement of the sale of the Oatley Property (10 February 2014), Lesley moved to a rental unit at Stanwell Park.
On 13 February 2014 Lesley caused the balance of the accommodation bonds payable to Ferndale Gardens ($507,500) to be transferred from her parents' Qantas Credit Union (Savings) account to the nursing home.
On 24 February 2014 Mr Felton (in the company of Lesley) was interviewed by Megan Forbes (a clinical psychologist at Calvary Health Care), on a referral by Dr Chuang, for an assessment of his capacity to deal with complex financial matters. Ms Forbes prepared a report of the same date which included observations to the following effect: 1. Under the heading "PSYCHOSOCIAL HISTORY", the report observed: "He [Mr Felton] still has a car but his daughter has taken his keys. He has recently moved into a hostel and is in the proves of selling his house." 2. Under the heading "BEHAVIOUR AT ASSESSMENT", the report observed: "Mr Felton presented as friendly but suspicious. He kept asking who had asked for the assessment and said that he had no recall of the doctor who had asked for the assessment. He was happy to cooperate and appeared to be trying to the best of his ability. He was happy to discuss the difficulties which had recently occurred in his family. He stated that there was nothing wrong with his memory and denied any medical problems except a stroke which resulted in his current living arrangements." 1. Under the heading "SUMMARY", the report included the following observations: "Orientation and Attention: Mr. Felton was alert and oriented to place. He was not oriented for time and was incorrect about his age. He could not name current political figures and was not able to discuss recent current events. His immediate auditory span was within the above range and he had no difficulty with routine mental tasks. Working Memory: Working memory (the ability to simultaneously hold in the memory, and manipulate mental information) was within the average range. Mr Felton was functioning within the above average range of mathematical tasks. Short Term Memory: Acquisition of verbally presented material was within the borderline impaired range and after a delay remained within this range. Prompting did not aid his recall. Acquisition of visually presented material was within the average range and his retention rate was within the borderline impaired range. He was not able to recognise any of what he had seen after a delay. On a simple rote word learning task Mr. Felton performed showed little ability to learn new material and he lost what he had learnt after a delay. Semantic (or long term) Memory: Mr. Felton's long term memory for information about the world was within the average range. His memory for personal details was reasonable. … Executive abilities: Performance on tasks assessing frontal lobe-type functions was indicative of problems. His performance on an oral tracking task was within the average range and on a dual tracking task he was performing within the above average range. His ability to plan and organise his copy of a complex design was indicative of problems. His approach was careless and he omitted several features and seemed unaware of his mistakes. Conclusion: Mr. Felton is an 89 year old married man with an estimated premorbid intellectual ability in the "average" range. Preserved abilities are noted with orientation to place, immediate auditory attention span, working memory, arithmetical skills, long term memory for semantic information about the world, verbal abstract reasoning abilities, and visuospatial abilities. Deficits are noted with orientation for time and person, new learning ability, confrontational word naming abilities, word generation for semantic categories and executive abilities such as planning and organising. Of concern but not yet within the clinical range are short term memory for both verbally and visually presented material and word generation for phonemic categories. This profile is consistent with a diagnosis of a vascular-type dementia. Discussion: Mr. Felton has appointed his daughter and granddaughter as his Enduring Power of Attorney and his Enduring Guardian and he seems to trust them. His daughter has recently organised the sale of their house and is assisting with financial dealings. Mr. Felton is still able to cope with simple mathematical problems but his ability to plan and organise and to recall what has been done is compromised. He would have difficulty dealing with complex transactions. His daughter's input in his financial dealings is appropriate and needed. He expresses anger towards his son and states that he has changed his Will so that his son receives very little. His reasoning about this change appears to be sound. He was not completely settled into the hostel but realises that his wife cannot be at home and he is keen to remain with her. It is likely that he will settle over time but it is doubtful that he will gain insight into his deficits."
Of note, this report suggests that Mr Felton may not have understood his current testamentary arrangements vis-à-vis Graeme or that his grandson Fletcher was also, with Lesley and Loren, an enduring attorney and guardian.
Lesley's evidence is that in February 2014, whilst living in rental accommodation at Stanmore Park, she continued to visit her parents at Ferndale Gardens twice a week, during which visits she showed her parents on her computer what properties she was interested in purchasing and she would get their input.
Lesley says that she attended at Ferndale Gardens on 28 February 2014 and had a conversation with Mr Felton, in the presence of Mrs Felton, in words to the following effect: Lesley said: "I have found a place at Engadine. It's a three bedroom brick place, two bathrooms and a garage. It's neat and tidy and is coming up for auction." Mr Felton said: "That's great. If that's the place you want then buy it." Lesley said: "I'll transfer some money so I can pay the deposit if I'm the winning bid."
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, or that of Mrs Felton, to buy a house for Lesley, given that he and Mrs Felton were emotionally and otherwise dependent upon Lesley.
$50,000 (by separate transfers of $25,000) was subsequently transferred from Lesley's parents' Qantas (bonus) account to her Qantas account to cover payment of any deposit and incidental expenses associated with her prospective purchase, and sundry personal expenses.
On 28 February 2014, $25,000 was transferred from Mr and Mrs Felton's Qantas (Bonus) account to her Qantas Credit Union account. A "bank statement" issued to Lesley in relation to her account records that the transfer was effected by "Telephone Banking". The entry is accompanied by Mr Felton's signature, she says appended as evidence of his consent to the transaction.
Lesley's evidence is that, at about this time and for many months, she (at his suggestion) presented her statements to Mr Felton for his review and, generally, without elaborate discussion or notations on his part, he signed them. The statements were not shown to Mrs Felton. Those presently available are not complete but, as recorded in these reasons, they do include a number of signatures by Mr Felton, some against particular entries, but mostly against the "Closing Balance" of each particular statement.
On 1 March 2014, $25,000 was transferred from Mr and Mrs Felton's Qantas (Bonus) account to Lesley's Qantas account. There is some confusion as to who effected this transfer. In her affidavit evidence, Lesley attributed the transaction to herself; but, in cross examination, she thought that Loren may have effected the transfer, she says, at the request of Mr Felton. The entry in Lesley's statement does not bear Mr Felton's signature, but the "closing balance" on the statement does.
On 4 March 2014 Lesley exchanged contracts for the purchase of the Engadine Property (at an auction) for $813,000, and paid the vendor's agent a $40,650 (5%) deposit funded by the $50,000 transferred to her account on 28 February and 1 March 2014.
As admitted on the pleadings, in or about March-April 2014 Lesley applied other amounts being part of the proceeds of sale of the Oatley Property out of her Qantas Credit Union account for conveyancing expenses and a building report associated with her acquisition of the Engadine Property.
Lesley's evidence is that on 6 March 2014 she had a conversation with Mr Felton to the following effect: Lesley said: "I have exchanged contracts to buy that house at Engadine I was talking about … Warilda Avenue. I'm so excited!!" Mr Felton said: "That's great. When does it settle?" Lesley said: "In six weeks." Mr Felton said: "Well transfer what Mum and I have in our account into your account so you can pay for it. Anything that's left over you can use as you want, and if Mum and I need anything then you've got the money to pay for it." Lesley said: "Ok." Mr Felton said: "Also when you're settled in, Mum and I want to move from here into someplace close-by. I'm not happy here [at Ferndale Gardens]."
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 to make a gift to Lesley, given that he and Mrs Felton were emotionally and otherwise dependent upon Lesley.
On 6 March 2014, $1,320,218.63 (substantially the balance of the funds in the parents' account) was transferred from Mr and Mrs Felton's Qantas Credit Union (Bonus) account to Lesley's Qantas Credit Union account.
There is some confusion in Lesley's evidence about the circumstances in which this transfer was effected.
In her affidavit evidence Lesley says that she effected the transfer personally at a branch of the Qantas Credit Union. She says that, after effecting the transfer, she, at Mr Felton's request, phoned him to confirm that the transfer had been made. He responded, she says: "Thank you, you've put my mind at ease".
In cross examination Lesley said that the transfer was effected at the Qantas Credit Union branch office, with Mr Felton present. She said that, before going to the branch, Mr Felton said to her words to the following effect: "When I go to the branch I want to move this [money] over, I don't want anything in my name. I don't want Graeme to get whiff of it … I want this to be transferred to you."
At some point, although uncertainty attaches to its timing, Lesley said that Mr Felton also said to her that "as Graeme had the companies and ongoing income he [Mr Felton] wanted to transfer [the sum of $1.32 million] to me [Lesley] as my share".
Lesley's confusion about the circumstances in which the transfer was effected extended to her account, in cross examination, of what happened, she says, when she and her father attended the Qantas Credit Union branch. She could not recall whether any (and, if so, what) documentation was required to satisfy the Credit Union to effect the transfer. Nor could she recall whether she and Mr Felton left the Credit Union with evidence of the transfer having been effected. She endeavoured, not convincingly, to attribute to Mr Felton, the prime role in dealing with the Credit Union staff, but ultimately said that she and her father were both involved in effecting the transaction.
Inconsistencies in Lesley's evidence stand in the way of acceptance of either version of events. The fact is that a transfer of $1,320,218.63 was effected, at a Credit Union branch rather than by telephone, in particular circumstances largely unknown.
Lesley's "bank statement" records the transaction simply as a "Transfer", not a transfer effected by "Telephone Banking". The statement (which records the transfer of 1 March 2014 as well as that of 6 March 2014) was signed by Mr Felton against the "Closing Balance" of $1,322,046.00, which is consistent with him having knowledge of the fact of the transfer of $1,320,218.63 into Lesley's account.
This transaction left Mr and Mrs Felton with $5,000 in their Qantas Credit Union (Bonus) account and about $895 in their Credit Union (Savings) account. Lesley's evidence is that Mr Felton told her that he wanted the Credit Union accounts "emptied out".
At that time, Mr and Mrs Felton also had a St George (passbook) account, into which their Department of Veterans' Affairs pensions were paid, with a balance of about $25,000. After they moved to John Paul Village their nursing home accommodation fees were paid from this account by a direct debit.
On 11 April 2014, from those transferred funds Lesley deployed $804,591 from the proceeds of sale of the Oatley Property in her purchase the Engadine Property in her name.
The purchase was settled on 14 April 2014. On settlement, Lesley's solicitors (Wayne Lodge & Associates) provided a settlement statement which recorded that, from the funds provided by Lesley (in the sum of $804,591) payments had been made of the balance of the purchase price ($772,496) and stamp duty ($32,095). There is a discrepancy that suggests that Lesley had provided to the solicitors a further sum of $30, for which they accounted; but the balance of the purchase price and stamp duty match Lesley's deployment of $804,591.
The "bank statement" for Lesley's Qantas Credit Union account records a debit of $804,591 on 11 April 2014, apparently referrable to a cheque drawn in favour of Westpac Bank in connection with Lesley's purchase of the Engadine Property. Mr Felton's signature appears on the statement near the "Closing Balance" of $520,330.11, not far from the entry for 11 April 2014. His signature is consistent with him having knowledge of Lesley's application of $804,591 on 11 April 2014 from the funds deposited in her account on 6 March 2014 in the sum of $1,320,218.63.
That said, for all the business experience and acumen Lesley attributed to Mr Felton, she did not involve him in her dealings with her solicitors, Wayne Lodge & Associates, on the purchase of the Engadine Property. She said "it wasn't appropriate" that she do so.
The evidence is silent as to the circumstances in which Lesley retained the solicitors Wayne Lodge & Associates to act for her on her purchase of the Engadine Property. It was not put to her, by either Graeme or Mr Hayward, that she retained solicitors other than Mr Hayward's firm in order to keep him in the dark about her deployment of Mr and Mrs Felton's funds. I draw no inference against her from her choice of solicitors.
The fact remains that Lesley did not involve her parents, Mr Hayward or Graeme in conveyancing steps associated with her purchase.
On 15 April 2014 the Registrar General issued a certificate of title folio identifier 18/77/244333 (in respect of the Engadine Property) recording the name of Lesley as registered proprietor by reason of an undated Memorandum of Transfer (registered as dealing number AI515421) recording that Lesley paid $813,000 for the property. Wayne Lodge, solicitor, signed the Memorandum of Transfer on her behalf.
A few days after settlement of Lesley's purchase of the Engadine Property, she says that she attended at Ferndale Gardens and had a conversation with Mr Felton in which she said to her: "Can you have a look at some retirement homes around your place at Engadine. Mum and I keep on getting visitors and I want my privacy. We feel like sitting ducks! I reckon some of them are reporting back to Graeme. I don't want anything to do with him! He doesn't care about Mum or I and hasn't bothered to visit or call for months and months. All he is concerned about is our money."
Lesley says that, in the days following, she inspected several aged care facilities, then took her parents to inspect John Paul Village, which they approved. However, shortly after that Mrs Felton had a fall at Ferndale Gardens (on 22 April 2014) which required her to be hospitalised for weeks, so that Mr and Mrs Felton's planned move to John Paul Village was put on hold.
Lesley's evidence is that, in May 2014, she had a conversation with Mr Felton in the following terms: Mr Felton said: "I don't know if Bernard [Mr Hayward] has revoked the Enduring Guardian appointing Graeme." [Lesley explained that she did not know either.] Mr Felton said: "Just get another solicitor to do it. I have already asked Bernard to do this before."
Lesley says that she did not at that time have a copy of the enduring guardianship appointments which, she knew, Mr and Mrs Felton had executed in August 2013.
On 30 May 2014, by arrangement with Lesley, Lynda Babister, a solicitor, attended upon Mr and Mrs Felton at Ferndale Gardens. She is said to have witnessed the execution by each of them of a document styled "Form of Appointment of Enduring Guardian". Only the form executed by Mr Felton is in evidence. It records that he appointed Lesley and her daughter, Loren, as guardians should he, because of disability, become partially or totally incapable of managing his person. It is silent as to whether the appointment was joint or several. The appointment was subsequently accepted by Lesley and Loren, ostensibly on the same day.
By their appointment, in the event of incapacity on the part of Mr Felton, Lesley and Loren were authorised: (a) to decide where he lived; (b) to decide what health care he received; (c) to decide what kind of other personal services he received; and (d) to consent to the carrying out of medical treatment on him in accordance with the Guardianship Act 1987.
The document signed by Mr Felton refers to an "Advance Medical Directive" not reproduced in the evidence.
Ms Babister's "Certificate of Witness" to the appointment records that she witnessed Mr Felton's execution of the Appointment Form and that he "executed the instrument voluntarily and appeared to understand the effect of the instrument."
There is no evidence that the guardianship appointments of 30 May 2014 were accompanied by revocation of the guardianship appointments made on 7 and 16 August 2013. Nor is there any evidence that Ms Babister interrogated the Feltons' about subsisting forms of enduring appointments or their relationship with Graeme.
On 5 June 2014, according to Lesley, Mr and Mrs Felton both attended upon their GP, Dr Martel, who signed a document headed "Statement of Doctor" bearing that date and the signature of Mrs Felton. That document is in the following terms: "1. I have discussed this document with the principal [Mrs Felton] and, in my opinion, he/she is not suffering from any condition that would affect his/her capacity to understand the things necessary to make this directive, and he/she understands the nature and likely effect of the healthcare described in this document. 2. The principal signed this part of the document in my presence. 3. In my presence, the principal instructed another person to sign this part of this form for the principal, and the person signed it in my presence and in the presence of the principal. 4. I am not (a) the person witnessing this Advanced Health Care Directive. (b) or the person signing the Advanced Health Care Directive for the principal. (c) Or an Enduring Guardian of the principal. (d) Or a relation of the principal or an Enduring Guardian of the principal. (e) Or a beneficiary under the principal's will."
Lesley says that Mr Felton (as "principal") and Dr Martel signed a similar document relating to Mr Felton.
No "Advanced Health Care Directive" is in evidence. The "Statement of Doctor", at least in the case of Mrs Felton, appears to have been signed without regard in the text as to whether the document was signed by "the principal" or "another person" instructed by the principal.
There is no evidence as to whether Dr Martel interrogated Mr and Mrs Felton about their personal circumstances or, if he did so, the terms in which he did. The form of the document is consistent with no more than casual attention having been given to its subject matter and surrounding circumstances.
On or about 20 August 2014 each of Mr and Mrs Felton received a letter from the Department of Veterans' Affairs, bearing that date, addressed to them at Ferndale Gardens, notifying them that their service pension had been reduced (with effect from 10 February 2014) consequent upon their sale of the Oatley Property and their taking up residence in a nursing home. The letters' attached statement recorded a payment of $1,320,000 (nominally dated at 10 February 2014) as a payment to Lesley, described as a "Deprived Asset".
According to Lesley, on 9 September 2014 she accompanied her father to the office of Cheryl G Hastie, chartered accounted, who prepared a letter (dated 9 September 2014) sent to the Department of Veterans' Affairs in response to the Department's request for information: "Dear Sir/Madam CLIFTON A FELTON & EDITH M FELTON File Number: xxx I attach a Statement of Circumstances [not reproduced in the evidence] for the above named existing Vet Affairs clients. As a family acquaintance, they and their daughter Ms Lesley Speedy (Power of Attorney previously provided), approach me to assist in the completion of the forms. They have both recently suffered ill health, and it was necessary for them to be placed into care at Ferndale Gardens aged care facility at … Mortdale. Having spoken to your helpline this week, we were advised that they would be treated as an illness separated couple as they were unable to reside together at the family home, and this will be a permanent situation. The family home was then sold, in order to pay for the Residential Bonds for the 2 individuals at this facility. After the sale, and the payment of bonds, interest on unpaid bonds for several months, moving costs, storage costs and repayment of liabilities, the bulk of Mr & Mrs Felton's funds were invested in a bank account in the daughter's name and they also assisted her in the purchase of a property, again in her name. This was due to ongoing family disputes, and their concern that after their death, there would be a very unpleasant fight over the assets. This was Mr & Mrs Felton's way to avoid this. We are aware that these will be treated as their financial assets, with the deemed interest attributable to them as income, and the gifted funds as their assets. Yours sincerely, Cheryl G Hastie Chartered Accountant"
The terms of this letter are consistent with a finding that Mr and Mrs Felton were unable to live independently. The letter speaks of them being "placed into care".
The letter is ambiguous as to the status of the "investment" of Mr and Mrs Felton's funds in a bank account in Lesley's name, although the final sentence of the letter speaks of "the gift of funds".
It was not necessary for the purpose of dealing with the Department of Veterans' Affairs that any ambiguity about beneficial ownership of property in Lesley's name be resolved. Property the subject of a "gift" by Mr and Mrs Felton was deemed to be property attributable to them for the Department's purposes.
According to Lesley, in November 2014 Mr and Mrs Felton were offered a double room at John Paul Village, which they accepted and two weeks' written notice of an intention to vacate was given to Ferndale Gardens. She says that at that time Mr Felton said to her: "I don't want Graeme or any of his friends coming around here [meaning John Paul Village]. I have told Ferndale that if anyone calls asking to contact me or Mum then they are to give them your number."
Lesley adduced in evidence, without elaboration, a tax invoice dated 17 November 2014 (addressed to Mr Felton, care of Lesley, at the Engadine Property) by Ms Bowley, the financial planner. The invoice, for $245.00 plus GST, is said to have related to "aged care advice" and to have represented an "Advice Fee - Initial". The invoice is endorsed "PAID NOV 2014". No evidence has been adduced from Ms Bowley.
On 27 November 2014 Lesley and her daughter Loren moved Mr and Mrs Felton to John Paul Village.
As admitted on the pleadings, on the same day (27 November 2014) $712,056 was deposited in the St George Bank account of Mr and Mrs Felton, being a refund of the accommodation bonds from Ferndale Gardens.
As admitted on the pleadings, on 2 December 2014 the sum of $600,000 was withdrawn by way of cheque from the St George Bank account of Mr and Mrs Felton in payment of the accommodation bonds payable by them for their residence in John Paul Village. This was arranged by Lesley.
On 2 December 2014 $100,000 was credited to the Qantas Credit Union (Savings) account of Mr and Mrs Felton (with an entry in their Qantas "bank statement" that reads "chq e & c felton Deposit"), part of the refund from Ferndale Gardens, which I infer was "transferred" by way of a cheque drawn on Mr and Mrs Felton's St George Bank account, representing a substantial part of the difference between the respective accommodation bonds of Ferndale Gardens ($720,000 of which $712,056 was refunded) and John Paul Village ($600,000). Lesley says that Mr Felton said to her: "Go and move that money over, I don't want it in my name. I want you to have it."
I accept that Mr Felton may have said something along these lines to Lesley; but I doubt whether the words attributed to him represent the expression of a free, voluntary and independent intention on his part to make a gift to Lesley, given that he and Mrs Felton were emotionally and otherwise dependent on Lesley.
On or about 3 December 2014 Graeme learned from the daughter of a friend of Mr and Mrs Felton who was also at Ferndale Gardens that Mr and Mrs Felton had left Ferndale Gardens, for a location unknown.
On 10 December 2014 $100,000 was transferred by Lesley from Mr and Mrs Felton's Qantas Credit Union (Savings) account to Lesley's Qantas Credit Union account. Her "bank statement" records the transaction as a "Transfer", not a transfer by a "Telephone Banking". Mr Felton's signature does not appear against the entry, but it does appear on the statement.
Graeme says that he discovered (via land title searches made by his solicitors, GL Abbott & Co), in or about February 2015, that Mr and Mrs Felton had sold the Oatley Property and Lesley had purchased the Engadine Property. That evidence is accompanied by land title searches of the Engadine Property (dated 15 December 2014) and the Oatley Property (dated 23 February 2015). He was not cross examined about the timing of his discovery; but, based upon his title searches, it may have occurred, in whole or part, in late December 2014 rather than as late as February 2015. Nothing turns on the difference.
On 27 December 2014 Graeme, in his capacity as a son and guardian of Mr and Mrs Felton, wrote to Ferndale Gardens seeking information about the whereabouts of Mr and Mrs Felton. His letter was not answered.
On 11 March 2015 Graeme wrote a letter to Lesley (addressed to her at the Engadine Property) in the following terms: "Dear Lesley RE: AFFAIRS OF CLIFTON ALBERT FELTON AND EDITH MADELINE ROSE FELTON It has come to my knowledge that our parents, Edith and Clifton, are no longer living at Ferndale Gardens. I have contacted Ferndale Gardens in relation to their whereabouts, but have not had a response to date. I am concerned about their welfare and wellbeing. I have not been informed of where they are living or their state of health though I have been appointed their guardian. I am also concerned about how their finances have been applied since the sale of the family home. Please provide copies of the following documentation: 1. Current residential arrangements for our parents; 2. Bank statements from 1 July 2013, tax returns, superannuation statements, any documentation for trusts or company(s) that our parents may have an interest it; 3. Details of any shares held by our parents; 4. Details of the sale of the former property at … Oatley; 5. Income Statement(s) from Centrelink for any payments received by either of our parents; 6. Any current Enduring/General Power of Attorney and Appointment of Enduring Guardian for both of our parents; and 7. Details of the past and current treating doctors for both of our parents. We look forward to receiving the requested documentation within the next 14 days. Yours faithfully Graeme Felton"
On 16 March 2015 Graeme filed with the Guardianship Division of NCAT applications for financial management and guardianship orders affecting Mr and Mrs Felton.
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 1st 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.

Hayward (as Executor of Felton Estate) v Speedy and Felton

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (17)

Cited By (2)