Hrycenko v Hrycenko [2020] VSCA 324

1 On 18 August 2020, Pedley JR in his capacity as Registrar of the Court of Appeal refused an application to extend time for filing an application for leave to appeal. Pursuant to r 64.42(8) of the Supreme Court (General Civil Procedure) Rules 2015, the applicant on 10 September 2020 sought a redetermination of the decision.

2 For the reasons set out below, the application must be dismissed.

3 The proceeding in respect of which the applicant wishes to seek leave to appeal was brought in the Trial Division by his late father, George Hrycenko, who was 96 years old at the time of judgment. The proceeding concerned the management of George's financial affairs by his son Victor, the applicant. During the course of the trial, which began in October 2018, the trial judge became concerned about the capacity of George to conduct the proceeding, and in December 2018 a litigation guardian was appointed to act on his behalf. George died after judgment was delivered and his other son Nick, in his capacity as George's legal representative, is the respondent to the present application.

4 Relevantly for present purposes, George alleged in the proceeding that, when Victor was in charge of his financial affairs, Victor engaged in unconscionable conduct and exercised undue influence over George in relation to payments made to Victor totalling $2,250,000. Victor admitted receiving the payments but said that they were made to him by George by way of gift. Victor acknowledged that a presumption of undue influence arose because of the relationship between George and him during the period in question, but submitted that George had made his own judgment and exercised free will in relation to the payments. Victor submitted that there was a plan devised by George to give Victor his 'share' of George's estate during George's lifetime, taking into account various benefits which Nick had already received. Victor also contended that George had received independent legal advice about the payments on 10 October 2017 when a new will was drafted which recorded that George had given Victor his inheritance during his lifetime and left the balance of his estate to Nick. Victor submitted that, as a result of receiving this advice, even if the payments had involved a breach of duty, George had ratified them and waived any breach. Alternatively, George was estopped from bringing a claim against Victor in respect of them.

5 The judge held that Victor had not rebutted the presumption of undue influence by establishing that the payments were made by George exercising his own free will and judgment, and understanding their effect and significance. In addition, the judge found that Victor had in fact exercised undue influence over George in respect of the payments. The judge further held that the payments were procured by Victor in circumstances where he unconscientiously took advantage of George's special disability arising from his reliance on, and trust and confidence in, Victor. Finally, the judge held that George did not ratify or waive any breach of duty by Victor relating to the payments, nor was he estopped from bringing a claim against Victor in respect of them.

6 Reasons for judgment to this effect were published by the trial judge on 23 October 2019.[1] On 29 November 2019, the judge published supplementary reasons which dealt with an additional amount of $21,192.97 that had formed part of George's claim.[2] The judge held that Victor had not established that this payment was made with George's fully informed consent. As a result, George was entitled to repayment of that sum as well.

7 On 31 January 2020, the judge made orders by consent following the giving of reasons. It was ordered that Victor pay George the sum of $2,646,365.97 together with interest in the amount of $441,727.28. Of the principal judgment sum, $375,173 concerned transactions under a power of attorney which are no longer the subject of dispute. The proposed appeal relates only to the balance, together with the interest in respect of that sum. Enforcement of the judgment was stayed, by consent, until 17 February 2020.

8 The proposed appeal would rely on six grounds. The application itself was filed on 30 June 2020, along with a written case and list of authorities, and the application for an extension of time within which to seek leave to appeal.

9 It is convenient first to outline the scope of the proposed appeal. The six grounds set out in the application for leave to appeal are as follows:

(1) The learned trial judge erred in finding that the ... late George Hrycenko ... was under a special disadvantage in relation to the applicant due to, inter alia, his 'physical and mental condition' or 'mental capacity'. Mental incapacity, which was central to the Court's finding that [George] was under a special disability (and the claim that unconscionable conduct had been made out), was not an issue raised on the pleadings and was not the subject of any expert evidence. A finding of mental incapacity, even if pleaded, is inconsistent with and inherently improbable or glaringly improbable having regard to the findings of fact and uncontested facts;

(2) [George's] desire to help his sons and [susceptibility] to the influence of each son is not a special disadvantage;

(3) Absence of independent advice is not a special disability;

(4) The learned trial judge erred in finding that the applicant had failed to discharge the onus of establishing that the presumption of undue influence is rebutted. The applicant contends that the erroneous finding that [George] lacked physical and mental capacity and that [George's] judgment was significantly impaired in respect of his Honour's finding as to special disability has affected the finding that the applicant failed to rebut the presumption;

(5) His Honour's error in finding [George's] physical and mental condition or incapacity in the context of finding [George] had a special disadvantage affected his Honour's finding of undue influence. Again, physical and mental incapacity were not pleaded as constituting undue influence. Further, physical and mental incapacity was not the subject of expert evidence, and physical and mental incapacity is contradicted by and inconsistent with the findings of fact and uncontroverted facts. Similarly, any lack of understanding and lack of voluntariness and independence on the part of [George] in respect of the impugned transactions is contradicted by and inconsistent with the findings of fact and uncontroverted facts; and

(6) Alternative to each of the foregoing grounds, the trial judge has made a slip in the calculation of the amount based on the claims brought. The amount of the judgment is $2,646,365.97 [but should have been calculated as $2,625,173].

...

10 As mentioned above, Victor filed a written case in support of the proposed grounds. We refer to the content of that written case later in these reasons.

11 The application for an extension of time contended that Victor had delayed filing due to a lack of access to the court book and a lack of funds as the result of a costs dispute with his former solicitors and his inability to use properties owned by him to provide security to raise funds for an appeal. It was said that the respondent had not suffered any prejudice and, by reason of security he had over Victor's properties, he would not suffer any prejudice as to costs. In addition, Victor volunteered to pay the costs of the appeal irrespective of the result.

12 Victor relied on an affidavit dated 30 June 2020.[3] In that affidavit, he set out the background to the proceeding. He referred to a charge which arose as a result of an undertaking provided by him to the Court in favour of George, to secure the payment of the total amount of $2,578.873 across four properties owned by Victor and a company of which he was a director. The affidavit set out details of the charged properties and Victor's belief as to their current market value.

13 Victor also gave evidence of steps taken after the trial judge delivered his principal reasons on 23 October 2019. He said that, between that time and 10 February 2020, his solicitor, Adam Birch, was engaged in discussions with James O'Donnell, George's solicitor, as to the appropriate form of orders to be made. He said that he did not understand the effect of the consent orders that were initially agreed. He said that he had had multiple discussions with Mr Birch about lodging an appeal. Mr Birch had questioned his instructions on the basis that he had not had funds to proceed with an appeal. Victor said that Mr Birch told him that he did not 'believe in the appeal'. He said that he told Mr Birch that he needed to find a suitable barrister but that Mr Birch was not prepared to assist while his fees remained unpaid.

14 Victor said that, since he could not rely on Mr Birch to progress the appeal, on about 10 February 2020 he engaged Jessop & Komesaroff Lawyers to assist. He said that he had numerous discussions with Julie Sillato of that firm in relation to a possible appeal. He said that Ms Sillato had advised him that she would need to seek advice and guidance from senior counsel on a proposed appeal and that he should consider devoting any available resources towards satisfying the judgment. Victor said he was aware that Ms Sillato had not been able to gain access to the court book and says that he was therefore not able to obtain any meaningful advice from senior counsel in relation to the appeal. He therefore attempted to obtain the court book from his previous lawyers, without success. He had also sought to source funding for the appeal but was unable to raise funds by way of security against his properties. In the meantime, George served a bankruptcy notice on Victor on 20 March 2020. George also commenced a Supreme Court proceeding in respect of properties subject to the charge, on 25 March 2020.

15 Victor said that, in early April 2020, he engaged NOH Legal to act for him. Shortly afterwards, Mr El-Hissi of that firm had preliminary discussions with Mr Clarke QC about the proposed appeal. Victor contacted the registry with a request to inspect the file but various safety protocols implemented by reason of the COVID-19 pandemic made this difficult. In the meantime, he was engaged in ongoing disputes with his previous lawyers about legal fees. However, he was able to obtain a copy of a USB drive containing court documents through the registry and provided it to Mr El-Hissi on 9 or 10 April 2020. Mr El-Hissi required that money be placed in trust to enable him to review the documents and obtain advice from senior counsel. In the meantime, proceedings relating to the bankruptcy notice remained on foot.

16 In late April 2020, Victor said, he was able to secure some funding from a friend, but those funds were applied towards the costs of an application to set aside the bankruptcy notice and various steps taken in the proceeding relating to the properties. The funding was not sufficient for the purposes of the appeal. In mid to late May 2020, Victor secured sufficient funding by way of a personal loan from a friend to fund the costs of the appeal and was able to confirm Mr El-Hissi's engagement.

18 The application was also supported by an affidavit of Mr El-Hissi sworn 30 June 2020. He confirmed having been engaged by Victor in early April 2020 in respect of the properties proceeding and the bankruptcy notice. He told Victor he would need to secure funding for the appeal, having formed the view that the matter justified the engagement of senior counsel. He had preliminary discussions by telephone with Mr Clarke in relation to the broad issues involved.

19 On 19 May 2020, Mr El-Hissi emailed Mr O'Donnell confirming that he was in the process of finalising a notice of appeal. He asked Mr O'Donnell for copies of the material filed with the Court. On the next day, Mr O'Donnell responded suggesting that he contact Victor's previous solicitors. Mr El-Hissi did so without success.

20 Mr El-Hissi swore that the USB drive provided to him by Victor was not complete and that he had been unable to locate the court book and various exhibits to affidavits or written submissions, among other documents. In the circumstances, he could not advise Victor on the prospects of the appeal. Mr El-Hissi also sent an email to the trial judge's associate on 20 May 2020 seeking assistance with obtaining a copy of the court book. Upon confirmation that the previous solicitors did not object, the trial judge was content for Mr El-Hissi to be provided with an electronic copy of the court book held by the Court. This took place on 1 June 2020.

21 Before the judicial registrar, the respondent relied on the affidavit of Mr O'Donnell sworn on 15 July 2020. In this affidavit, Mr O'Donnell gave evidence as to efforts to enforce the judgment, which he estimated had cost the respondent approximately $120,000 since 28 February 2020. Victor had been served with a bankruptcy notice on 20 March 2020, which was served again on 7 April 2020 due to technical defects in service. On 25 March 2020, the properties proceeding was commenced, seeking judicial sale of properties owned by a company controlled by Victor and charged with payment of the judgment debt. Final submissions had been made, but the final determination of that proceeding had been postponed due to George's death. On 28 April 2020, Victor applied to the Federal Circuit Court to set aside the bankruptcy notice. The application stated that Victor would 'lodge an appeal' in the present matter.

22 Mr O'Donnell also deposed to Victor's financial circumstances. He said that, despite an oral examination, Victor had not provided any documents, including bank statements, to account for his use of the $2.2 million balance of funds received by him from George. He said that, apart from Victor's own oral testimony, he knew of no reason why Victor did not have access to the bulk of that sum.

23 Mr O'Donnell said that, when the stay of judgment was being negotiated. Mr Birch told him that the purpose of the stay was to enable Victor to consider his position in respect of any appeal. Mr Birch told him that Victor intended to engage Mr Bearman of counsel in respect of a potential appeal.

24 Mr O'Donnell referred to a letter received on 28 February 2020 from Jessop & Komesaroff, in which Mr Komesaroff wrote that Victor required time to effect a sale of various properties to allow him to satisfy the judgment. By a letter dated 31 March 2020, Mr Komesaroff confirmed that Victor intended to satisfy the judgment but required sufficient time to effect a sale of properties to do so. Mr O'Donnell said that Victor had given instructions for these communications to be sent knowing them to be untrue, because Mr El-Hissi had sworn an affidavit in the Federal Circuit Court in which he said that Victor gave him instructions on about 1 April 2020 to file a notice of appeal with respect to the judgment and that he expected the notice of appeal to be finalised by 15 May 2020.

25 Mr O'Donnell further referred to an email Mr El-Hissi sent to Matthews JR on 3 May 2020 advising that Mr Clarke had been engaged and had identified a number of grounds of appeal that Victor would seek to pursue. The email said that Mr El‑Hissi believed that Mr Clarke would be in a position to finalise the notice of appeal within 14 days. Mr O'Donnell stated in his affidavit that these documents appeared inconsistent with the evidence of Mr El-Hissi to the effect that he had told Victor that he would need to secure funding for the appeal.

26 Mr O'Donnell exhibited an email from previous solicitors for Victor dated 22 May 2020 providing an electronic copy of the court book, and noted that the fact of this receipt had been omitted from Mr El-Hissi's affidavit which was otherwise very detailed in this regard.

27 As part of his application before the judicial registrar, Victor filed a written submission. It was said that a candid explanation had been given for the delay, that the duration of the delay was short, that Victor was prepared to accept a condition that he pay the costs of the appeal regardless of its outcome, and that there was no prejudice to the respondent. In that regard, Victor relied on his 'extensive property portfolio' which was subject to caveats and an undertaking given to the Court.

28 As far as the merits of the case were concerned, the submission stated that the trial judge had found that George's special disability was his physical and mental incapacity, but that this was neither pleaded nor the subject of evidence. It was said that the same grounds relied upon in respect of unconscionable conduct were relied upon in respect of the claim for undue influence. The submission contended that mental incapacity was a finding which was glaringly improbable having regard to the evidence of George's solicitor as to the wills that he had prepared for him and his detailed file notes as to George's testamentary capacity. It was submitted that the erroneous finding that George had a mental incapacity had infected the entire judgment, including the finding that Victor had not rebutted the presumption of undue influence. In addition, there was said to be a clear arithmetic error in respect of the judgment sums.

29 In the submissions filed by the respondent, it was said that Victor knew of his appeal rights but contacted no barrister and took no other steps prior to the expiration of the appeal period, which was said to be on 28 February 2020.[4] Ms Sillato had written two letters on 28 February 2020 and 31 March 2020 assuring Mr O'Donnell that Victor intended to pay the judgment debt, and had initially made a similar submission to Matthews JR. However, on 1 April 2020, Victor had engaged Mr El-Hissi to prepare a notice of appeal. It was said that Mr El-Hissi had filed inconsistent affidavits as to when he commenced work on the proposed appeal.

30 The respondent submitted that Victor had four months in which to prepare for an appeal between the date when reasons for judgment were published on 23 October 2019 and 28 February 2020 (when time for an appeal was said to have lapsed), but had given no explanation why preparations were not made during that period. It was said that Victor's explanation that there was no money was not persuasive. He had property available to be used as security and had chosen not to approach conventional lenders. There was no reason to believe that Victor was impecunious. In addition, there had been no accounting for $2.2 million of the money received from George.

31 The respondent also submitted that the appeal was without merit. In short, it was submitted that the Court made no finding of mental incapacity and that this meant that proposed grounds of appeal 1 to 5 must all fail. The supposed arithmetical error the subject of proposed ground 6 was disproved by the supplementary reasons delivered on 29 November 2019.

32 It is convenient at this point to refer also to some additional affidavits upon which the parties sought to rely in the hearing before us. Rule 64.42(9) provides that, except with leave of the Court of Appeal, an application for an order under r 64.42(8), such as the present application, shall be dealt with on the basis of the application, written cases (if applicable) and documents filed by the parties prior to the decision of the Registrar. Leave is therefore required to rely on the affidavits to which we refer below.

33 First, Victor sought leave to rely on a second affidavit dated 22 September 2020. This was filed about a month after Pedley JR delivered his reasons for refusing an extension of time.[5] In this affidavit, Victor said that he made a number of enquiries of Mr Birch about the appeal and the time of filing it, as well as about the prospects of success. He says that, on the advice of Mr Birch, on about 20 November 2019, Mr Bearman of counsel was briefed in relation to the appeal, originally to review the judgment only without going through all the documents in the court book. Victor says that he put funds into Mr Bearman's clerk's trust account for this process to commence. He says that he continued to make regular enquiries with Mr Birch and that on 20 November 2019, he advised him that he would rely on Mr Bearman to determine the prospects of any appeal. He says that Mr Birch told him that the appeal must be filed by 21 November 2019, and that if it was filed after that date the consent of the Court would be required. Victor says that Mr Birch expressly advised him that he was confident that the Court would grant leave to file out of time in the circumstances. He says that he understood this to mean that the time of filing the appeal was not critical.

34 Victor also said that his health and mental wellbeing in November and December 2019 were very poor and that Mr Birch expressed his concern about his ability to provide him with instructions and to understand his advice.

35 Victor said that on 3 December 2019, he attended at Mr Birch's office for a telephone conference with Mr Bearman, in which Mr Bearman said that he could not provide conclusive advice without going through the court book. Victor stated in the affidavit that he did not understand what was happening at the time but could not afford the amount quoted for this work to be undertaken. He says that Mr Birch refused to engage Mr Bearman without funds in trust.

36 Victor then said that, having undertaken further searches since his first affidavit, he discovered that he engaged Ms Sillato on 5 December 2019. At that time she proposed to engage Mr Panna QC but he was not available until after Christmas. Ms Sillato advised him that Mr Panna would require a copy of the court book to provide his advice. He agreed for her to engage Mr Panna and said that she needed to search the court file. She subsequently advised him that the court file was not available for inspection because the matter was still ongoing. On 21 January 2020, Mr Birch said that he would not continue to act for Victor. After that time, Victor continued to engage with Ms Sillato about the appeal. She told him that she had been unable to obtain a copy of the court book from the registry and impressed on him the requirement to secure funding. He says that, as a result, he was unable to progress the appeal with Ms Sillato. Mr Birch declined repeated requests to provide a copy of the court book so that the appeal could be progressed. Victor went on to describe events connected with the estate of George following his death in June 2020 and to Nick having filed a creditor's petition in the Federal Circuit Court seeking sequestration of his estate.

37 In response to Victor's second affidavit, Mr O'Donnell swore a second affidavit himself on 9 October 2020. Among other things, Mr O'Donnell referred to affidavits sworn by Victor in the bankruptcy proceedings indicating that he had a term deposit of between $1.4-1.5 million with the Commonwealth Bank of Australia.

38 Mr O'Donnell's second affidavit produced responses from both Victor and Mr El-Hissi.

39 By Victor's third affidavit, dated 11 November 2020,[6] he referred to sworn evidence in an oral examination in which he had confirmed that he no longer held the Commonwealth Bank term deposit. He explained how this was said to have been spent. He also dealt with various miscellaneous matters raised by Mr O'Donnell in his second affidavit.

40 In Mr El-Hissi's second affidavit, sworn on 1 November 2020, he responded to some matters in Mr O'Donnell's first affidavit. He also referred to legal costs Victor had incurred in various proceedings other than in respect of the appeal.

41 It is convenient to deal immediately with the question of leave to rely on the additional affidavits. The filing of additional material in an application under r 64.42(8) is not to be encouraged. Nor is it to be thought that the obtaining of leave for the filing of such material is a mere formality. Ordinarily, good reason ought to be shown why it is in the interests of justice that material which was not placed before the Registrar when the matter was first heard and determined should nonetheless be considered by the Court of Appeal when it revisits the matter.

42 The problem in this matter started with the filing of the second affidavit of Victor dated 22 September 2020.[7] In large part, that affidavit deposed to events that took place around the time of the delivery of the trial judge's reasons and the making of the orders. This evidence, which also concerned the instructions given by Victor in respect of a proposed appeal, ought to have been placed before the Registrar and no explanation has been given as to why this was not done. It is of some concern, moreover, that Victor's second affidavit gives an impression of the efforts he made in relation to an appeal that is quite different to that conveyed by his first affidavit. In particular, it was not until the second affidavit that Victor gave evidence of Mr Bearman having been engaged to advise in relation to an appeal in November 2019. This appears to have been prompted by mention of Mr Bearman in Mr O'Donnell's first affidavit. We leave that matter to one side for present purposes. On balance, the significance of that evidence is such that, notwithstanding the very unsatisfactory circumstances in which the evidence has been adduced, leave should be granted for it to be relied upon. In that context, it is important that the respondent has not been prejudiced by the filing of the affidavit, and has indeed gone into evidence in response to it. The second affidavit of Mr O'Donnell should therefore be accepted also.

43 This leaves the third affidavit of Victor and the second affidavit of Mr El‑Hissi, both of which seek to respond to matters raised by Mr O'Donnell. To the extent that the affidavits respond to matters in Mr O'Donnell's second affidavit, leave should be granted for them to be relied upon. Mr El-Hissi's second affidavit also seeks to respond to matters in the first affidavit of Mr O'Donnell. Ordinarily, that would be quite unacceptable, given that this too could have been done before the judicial registrar and there is no explanation as to why this was not done. However, nothing turns on the matter and in the circumstances the expedient course is to grant leave in respect of all the additional affidavits.

44 Turning to the merits of the application itself, in deciding an application for an extension of time within which to seek leave to appeal, it is necessary to take account of several factors, including the length of the delay, the reasons for that delay and the extent of any prejudice suffered by the respondent or any third party if the extension were to be granted. It is also well established that an extension of time will not be granted if the proposed appeal is 'so devoid of merit that it would be futile to do so'.[8]

45 Mr Clarke submitted on behalf of Victor that he had lacked the financial means to apply for leave to appeal. He lacked income and could not raise funds on the security of properties he or his company owned. It was submitted that the delay was readily explained and was not lengthy when compared to many other cases where extensions had been granted. It was emphasised that the Court has an unfettered discretion.[9] The question is whether justice between the parties is best served by granting or refusing the extension.[10]

46 In respect of the merits of the proposed appeal, apart from relying on the written case that had been filed, Mr Clarke submitted that the judge had found that George suffered from a mental incapacity affecting his judgment and that this finding must have influenced the judge's decision that Victor had not displaced the presumption of undue influence.[11] If George's mental capacity had been pleaded or otherwise put in issue, Victor could and would have called medical evidence, and Victor and others would have given evidence as to what they knew of George's mental capacity. George's solicitor would have been cross-examined on the subject. Similarly, the case regarding undue influence would have been approached differently.

47 The written case elaborated on these arguments. In respect of proposed ground 1, it contended that the judge erred in finding that George was under a special disadvantage in relation to Victor by reason of, among other things, his 'physical and mental condition' or 'mental capacity'. Mental incapacity was not pleaded and a finding to that effect was said to be, in any event, glaringly improbable having regard to other evidence. Under proposed ground 2, it was contended that George's desire to help his sons, and being susceptible to their influence, did not constitute a special disadvantage.[12] Nor did the absence of independent advice (proposed ground 3).

48 In relation to proposed ground 4, the applicant submitted in his written case that the finding made in respect of the question of special disability, that George lacked physical and mental capacity and that his judgment was significantly impaired, affected the finding that Victor failed to rebut the presumption of undue influence. The finding of actual undue influence was similarly challenged (proposed ground 5). Finally, the written case outlined an alleged calculation error in the sum of $21,192.97 (proposed ground 6).

49 Mr Magee QC, for the respondent, submitted that Victor had been legally advised at all relevant times of his ability to seek leave to appeal, and had obtained a stay so as to decide whether to do so, and told the respondent through their respective solicitors that he intended to satisfy the judgment. Victor had not fully disclosed his financial position. He contradicted himself in his affidavits as to whether he was advised of a time limit or had advice about an appeal more generally. In addition, in an email to Victor dated 6 December 2019 provided pursuant to a notice to produce, Mr Birch confirmed that Mr Bearman 'could not find a clear and likely successful avenue of appeal which was apparent' from reading the judgment, and further confirmed that Victor had asked Mr Birch to obtain a second opinion. Victor's first affidavit said nothing about having been advised in pessimistic terms by Mr Bearman, and the Court should have grave concerns about Victor's veracity. The evidence of Mr El-Hissi had failed to say that an electronic copy of the court book had been obtained on 22 May 2020. Rather than delaying filing by reason of financial difficulty, it should be concluded that Victor's delay was on account of him deciding whether or not to appeal and seeking different advice on that question. In the meantime, the respondent had spent a considerable sum pursuing recovery, which would not have happened if it had been known that an appeal was proposed.

50 In relation to the merits of the proposed appeal, Mr Magee submitted that the judge made no finding as to mental incapacity, and references to George's mental capacity could not be read as amounting to such a finding. It was submitted that the judge was plainly aware of the distinction between a finding of mental incapacity, on the one hand, and having regard to mental capacity, on the other.[13]

51 The length of the delay in this case is not insignificant. The time for filing an application for leave to appeal expired 42 days after the judge's orders were made on 31 January 2020, namely on 13 March 2020.[14] It was not until 30 June 2020, some three and a half months later, that the application was filed. While the applicant rightly pointed out that extensions have been given in cases involving much longer delays, reference to other cases for the purpose of comparison of this kind is not especially helpful. Each case depends on its own constellation of circumstances and the cases reveal, if nothing else, that a myriad of different factors may bear on the question whether an extension should be granted.

52 It is incumbent on any applicant for an extension of time to advance an explanation for the failure to act in a timely way, and the burden is apt to be heavier in cases where the delay is greater. Here, the explanation is somewhat unsatisfactory. It is disturbing that Victor's first affidavit made no mention of having obtained advice from Mr Bearman, rather giving the impression that his lack of access to funds had prevented him from obtaining advice. Although the role of Mr Bearman was mentioned in Victor's second affidavit, even then no reference was made to his preliminary advice that he could not see an obvious avenue of appeal. The email of 6 December 2019 provided pursuant to the notice to produce also referred to other possible barristers who could be briefed for a 'second opinion' and included a statement that 'urgency is paramount'. Taken with the lack of material put forward about Victor's financial position, we are far from satisfied that there has been full disclosure about the reasons for the delay.

53 On the other hand, we are not persuaded by the respondent's assertion of prejudice, constituted by having spent money pursuing recovery of the judgment debt. There was no evidence that the respondent relied on any understanding that there would be no appeal before undertaking the actions in question, or that the respondent would not have done so had an appeal been foreshadowed. Nor was there evidence of particular expenditure beyond a bald estimate by Mr O'Donnell as to the total amount spent. In the circumstances it would be a matter for speculation were we to attempt to identify particular prejudice of the kind alleged. Moreover, the fact that Victor is prepared to pay the costs of the appeal irrespective of its outcome would also have to be weighed in the balance although the existence of the bankruptcy proceedings against Victor may also be relevant to this consideration.

54 In the end, we do not need to come to a view as to any of the above matters. That is because we are firmly of the view that the proposed appeal would be bound to fail. As such, an extension of time would be futile.

55 We have reached that conclusion because, in our opinion, the judge made no finding that George suffered from a mental incapacity.

56 Questions regarding George's mental condition arose at several points in the judge's reasons. At an early point in the reasons, the judge explained that, in the course of George giving evidence, he observed that he seemed less able to give sensible or responsive answers to questions. The judge then ordered that George undergo a neuropsychological assessment to determine whether he had the capacity to continue to conduct the proceeding himself as a party. As a result of that assessment, the judge decided that George did not have that capacity, and a litigation guardian was appointed. However, the judge decided that George should continue to give evidence and that he would determine the weight to be given to that evidence subsequently. In that regard, the judge concluded:

I closely observed George give his evidence in October 2018 and in February 2019. I formed the view that George was a hardworking, decent, honourable and honest man. George's evidence had some limitations given his age and mental state. He had little recollection of the detail of events which were the subject of his evidence. His answer did not always address the question asked. He sometimes had difficulty with more complex questions. From time to time, he confused one event with another. This is all understandable given his age and mental state. As a result, I relied very much upon the contemporaneous documents in assessing his evidence.

However, on matters that were important to George, I found that his evidence was clear and consistent. For example, George maintained throughout his evidence that he only wished his sons to get along. It caused him great distress that his sons were fighting and that this proceeding was necessary at all. George also maintained that he did not lend money to his family: if a family member needed or wanted money and George had it, he gave it to that person. I accept that evidence.[15]

57 The next reference to George's mental functioning was made in the context of considering whether George was aware of his asset position during the relevant period. The judge said:

There was no evidence that Victor informed George of his asset position from time to time, particularly after the release of the proceeds of sale of the family home and the distribution of the proceeds of the family trust. Victor suggested that he did not need to do so as he said George was always aware of his financial position: he was 'pretty good with money ... He's never used a calculator'. That is not the view I formed of George in 2018 and 2019 when he gave his evidence. I acknowledge that George's mental function is likely to have deteriorated between 2016 and when he gave his evidence at trial. But, in his evidence before me, he had little appreciation of his actual financial position during the relevant period, particularly as assets were converted from real estate to cash. This is in a context where it was difficult for George to track his financial position as Victor was receiving the bank statements.[16]

58 These are the only references upon which the applicant relied in those parts of the judgment which addressed the question whether Victor had rebutted the presumption of undue influence. They are anodyne references to George's age and mental state, which might be thought unsurprising about a man in his 90s. They fall well short of saying that George laboured under a mental incapacity.

59 The judge went on, for the sake of completeness, and noting that it was unnecessary to do so, to address the question whether Victor unduly influenced George as a matter of fact into making the challenged payments. He observed that it was necessary to consider all the relevant facts, including 'the nature of relationships and mental capacities and idiosyncrasies of the parties'.[17] The judge stated that he had reached the conclusion that Victor unduly influenced George into making the payments in light of ten circumstances which he set out.[18] The second of those circumstances was 'the age and physical and mental condition of George during the relevant period'. The judge stated that, in light of those circumstances, he had formed the view that 'the judgment capacity of George in respect of the transactions was significantly impaired or substandard vis-à-vis Victor during the relevant period'.[19] Again, this finding relies on George's mental condition in a generalised way in the course of reaching a conclusion regarding his 'judgment capacity'. It was no part of the judge's reasoning, in reaching that conclusion, that George was mentally incapacitated.

60 Next, the applicant relied on some references made by the judge when he came to consider the question of unconscionable conduct. Again, the judge prefaced the analysis by observing that it was unnecessary for him to consider those issues, but that he did so for the sake of completeness.[20]

61 In the context of considering whether George suffered from any special disadvantage in respect of Victor, the judge noted that counsel for Victor had submitted that the factors relied upon by counsel for George were not in and of themselves a special disadvantage, naming among those factors 'George's physical and mental state'.[21] We interpolate to note that Mr Clarke submitted that, in this part of the judgment, the judge did not address the case as it was pleaded and argued by counsel for Victor at trial. However, nothing turns on that point for present purposes: the issue is whether the judge decided the case on the basis of George's mental incapacity, which it is accepted was not pleaded or argued. We note that the particulars of special disadvantage commenced 'The plaintiff was in his 90s'.

62 The judge concluded that George was under a special disadvantage in relation to Victor, basing that conclusion upon the same circumstances as those upon which he made his finding as to undue influence, including 'the age, and physical and mental condition of George during the relevant period'.[22]

63 Thus, the only discussion of any degree of mental incapacity was that near the beginning of the judgment where the judge addressed the ability of George to conduct the proceeding and to give evidence about the events in question at trial. That is different to asking, still less finding, that George laboured under a mental incapacity. It is apparent that the judge considered that George's capacity to conduct the proceeding declined as the trial proceeded. At the same time, the judge accepted evidence on matters that were important to George, which he described as being 'clear and consistent'. In other words, even by the time of the trial, the judge did not make a finding that George suffered from any mental incapacity such as to prevent him from giving evidence. The judge made reference to George's condition having deteriorated in the time between the making of the payments and the trial.[23] If the judge had considered that George suffered from mental incapacity at the time of the payments, his approach to George's evidence, given some years later, would surely have been different.

64 It is true that the judge referred to George's deteriorating mental condition in the context of observing that, in his evidence, George had little appreciation of his actual financial position during the relevant period.[24] However, a deteriorating mental function is not the same as a want of mental capacity. George was 95 years old when he gave his evidence, and it is not surprising that observations about deteriorating mental function, or the effect of age more generally, were made by the judge.

65 By the time the judge reached his conclusion that Victor had not displaced the presumption of undue influence, his reasons had therefore not relied to any extent upon a finding of mental incapacity. The applicant submits that subsequent parts of the judgment revealed that the judge did make such a finding. He further submits that this finding would have 'infected' the earlier finding regarding the failure to displace the presumption. However, again, the references in question fall well short of a finding of mental incapacity.

66 First, the finding that there was actual undue influence was based on circumstances including the 'age and physical and mental condition' of George. This amounts to no more than a description of the effect of age on the physical and mental condition of a man in his nineties. The judge relied on this, and nine other circumstances, to form the view that 'the judgment capacity of George in respect of the transactions was significantly impaired or substandard'.[25] As already mentioned, that is not a finding of mental incapacity. It is a finding as to the effect of a combination of circumstances identified by reference to the evidence in the case upon the capacity of George to make judgments in his own interest. The judge's analysis of the question of actual undue influence therefore takes the matter no further.

67 The same can be said about the consideration of the question of special disadvantage. Again, the judge referred to 'George's physical and mental state' and his 'age, and physical and mental condition' during the relevant period.[26] He also referred to the 'mental capacity and idiosyncrasies of George', giving as an example his desire and need to get on with Victor.[27] It can be seen that these findings are closely connected with those made in relation to the question of actual undue influence and, to the extent that they rely on the physical and mental state of George, the observations made above have equal application.

68 The result is that the judge made no finding that George lacked mental capacity at the time of the relevant payments. As such, that was not a matter he took into account. Further, even if it were to be assumed that the references to physical and mental state or condition in the later parts of the judgment reflected a view about mental incapacity on the part of George, we do not accept that those findings can be seen to have 'infected' the earlier finding that Victor had not displaced the presumption of undue influence. Mr Clarke sought to draw support from a misleading and deceptive conduct case, in which the New South Wales Court of Appeal found that a failure to deal with evidence in respect of one claim may have affected the judge's findings as to the reliability of two witnesses, and therefore his overall assessment of their evidence.[28] This case is very different.

69 Although the state of George's mental condition was relevant to the various ways in which his case was advanced, the fact that undue influence was presumed meant that there was no need for him to point to any want of mental capacity in that context. The question was rather whether Victor could displace the presumption. The finding that Victor had failed to do so was made without regard to any notion of George having lacked mental capacity. It was no part of the judge's analysis that the onus was heavier as a result of any incapacity on the part of George. Victor's evidence about the circumstances in which the payments were made was simply not accepted.[29] Another matter relied on by the judge was the absence of legal advice from George's solicitor as to relevant payments. The judge concluded that Victor did not inform the solicitor of those payments at the time they were made in order for George to obtain independent legal advice. He stated that, in reaching that conclusion, he had particular regard to the degree of George's reliance on, and confidence and trust in, Victor during the relevant period and that he had carefully considered 'the nature of that relationship and the mental capacity and idiosyncrasies of George, in particular, his desire and need to get on with Victor given his practical estrangement from Nick during the relevant period'.[30]

70 No doubt, as Mr Clarke submitted before us, the judge's finding as to George's lack of 'judgment capacity', made in the context of considering whether the case of actual undue influence was made out, would have been relevant to the question whether the presumption of undue influence had been displaced. However, that finding was not based on any finding of mental incapacity. It was a finding based on ten circumstances including George's age and physical and mental condition. The fact that the conclusion about George's capacity for judgment, reached in this manner, bore on the whole case does not show that the finding regarding the presumption was tainted by a finding about mental incapacity.

71 Further, and in any event, the findings in respect of actual undue influence and specific disadvantage were all made with the specific proviso that they were matters unnecessary for the Court to decide in light of its conclusion, already made, relating to the presumption of undue influence.

72 It follows that each of grounds 1, 4 and 5 of the proposed appeal has no prospect of success. Proposed grounds 2 and 3 concern the question of what amounts to a special disadvantage or disability. In circumstances where the finding as to undue influence is not successfully challenged, nothing would be achieved by pursuing an appeal in respect of the finding as to special disadvantage or disability. An appeal on those proposed grounds would therefore be likewise bound to fail. Proposed ground 6, concerning the alleged slip in the calculation of the amount of the judgment, appears to have resulted from overlooking the supplementary reasons in which the judge explained that he had himself overlooked a claim in the amount of $21,192.97 concerning Victor's legal fees.[31] That ground also would therefore be bound to fail.

73 In the ordinary case, an extension of time application is not the occasion to enter into detailed analysis of the proposed grounds of appeal and their merits. However, as noted earlier, where a case is so devoid of merit that it would be futile to grant an extension of time, an extension should be refused. For the reasons given, this is such a case.

74 The application for an extension of time is therefore refused.

[1] Hrycenko (by his litigation guardian Michael Kornitschuk) v Hrycenko [2019] VSC 700 ('Reasons').

[2] Hrycenko (by his litigation guardian Michael Kornitschuk) v Hrycenko [No 2] [2019] VSC 746 ('Supplementary Reasons').

[3] This affidavit was unsworn. A copy sworn on 16 November 2020 was filed after the hearing in this Court.

[4] This was mistaken. See [51] below.

[5] An unsworn copy of the affidavit was filed on 22 September 2020, with a copy sworn on 16 November 2020 filed after the hearing.

[6] This affidavit was filed unsworn. A copy sworn on 16 November 2020 was filed after the hearing.

[8] Leeworthy v Registrar of the Licensing Appeals Tribunal [2017] VSCA 353, [20] (Tate and McLeish JJA); Kambouris v Kiatos [2016] VSCA 266, [23] (McLeish JA and Riordan AJA); Jackamarra v Krakouer (1998) 195 CLR 516, 519-23 (Brennan CJ and McHugh J); Muto v Secretary, Department of Planning and Community Development [2013] VSCA 85; (2013) 38 VR 293, 296 [13] (Nettle AP and Neave JA).

[9] Dix v Crimes Compensation Tribunal [1993] VicRp 21; [1993] 1 VR 297, 302 (Brooking J, Fullagar J and Tadgell J agreeing at 297 and 303).

[10] Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VicRp 27; [1978] VR 257, 263 (McInerney J).

[11] Reference was made to Reasons [30]-[32], [158], [470]-[472], [481], [483], [485].

[12] Mackintosh v Johnson [2013] VSCA 10; (2013) 37 VR 301, 316 [77]-[79] (Buchanan and Whelan JJA and Hargrave AJA).

[13] Reference was made to Reasons [30]-[32].

[14] Rule 64.05(1)(a).

[28] Timms v Commonwealth Bank of Australia [2002] NSWCA 298, [148] (Beazley JA, Handley JA and Santow JA agreeing at [1] and [168]).