Katsoulas v Kritikakis; Katsoulas v Apostolatos - [2024] NSWSC 67 - NSWSC 2024 case summary — Zoe

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Katsoulas v Kritikakis; Katsoulas v Apostolatos

[2024] NSWSC 67

Supreme Court of NSW|2024-02-05|Before: Leeming JA, McLelland CJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2024-02-05

Before

Leeming JA, McLelland CJ

Catchwords

[2004] HCA 7 Aleyn v Belchier (1758) 1 Eden 132
37 ACSR 672 Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732
[2016] NSWCA 81 Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279 Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186
[2006] NSWCA 187 Great Investments Ltd v Warner (2016) 243 FCR 516

Source

Original judgment source is linked above.

Catchwords

[2004] HCA 7 Aleyn v Belchier (1758) 1 Eden 13237 ACSR 672 Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732[2016] NSWCA 81 Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279 Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186[2006] NSWCA 187 Great Investments Ltd v Warner (2016) 243 FCR 516[2016] FCAFC 85 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298[2003] NSWCA 10 Ivanovski v Perdacher [2009] NSWSC 913 Lewis v Lewis (2021) 105 NSWLR 487[2021] NSWCA 168 Maguire v Makaronis (1997) 188 CLR 449[1997] HCA 23 Mills v Mills (1938) 60 CLR 150[1938] HCA 4 Mualim v Dzelme [2021] NSWCA 199 Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12398 ALR 658 Pagels v McDonald (1936) 54 CLR 519[2014] NSWCA 310 Taheri v Vitek (2014) 87 NSWLR 403

Judgment (28 paragraphs)

[1]

[5]

The will and power of attorney

The will was executed on 20 October 2016 and may well have been prepared at the same time as the power of attorney which was executed on 6 October 2016. Both documents were prepared in the office of Mr Peter Tsintilas, the solicitor on the record in both proceedings in this Court, who also witnessed the execution of both.
The power of attorney was joint and several, but it did not authorise Zoi or George to give any gifts or benefits to themselves, and to the contrary contained a limitation: I authorise my attorneys to withdraw monies and transfer moneys as between one or more bank accounts from any bank account of which I hold solely or jointly with any other party with any bank and/or financial institution for the purposes of paying all my bills and expenses with respect to day to day living expenses, including but also not limited to withdrawing and/or transferring moneys for my personal and health care needs and expenses including payment of institution care fees. Furthermore my attorneys are empowered to enquire on my behalf with any government agency, medical practitioner, hospital, care institution, financial institution, utility company and with any other service provider who provides services to me. My attorneys are not authorised to act in any other way tha[n] outlined above and in particular my attorneys are not authorised in any way to sell and/or mortgage or pawn any real property and personal property of which I own solely, jointly or otherwise or to withdraw moneys and/or transfer moneys from any bank account mentioned above for any other purpose than that outlined above.
Zoi and George executed the power, and confirmed inter alia that they must hold their own property separate from that of Lakis, must keep reasonable accounts, and could not obtain a benefit from being an attorney.
By his will, Lakis left essentially the entirety of his estate to Tony, and, in the event that Tony predeceased him, to Tony's three children in equal shares. There were specific legacies to Zoi and George, in the amounts of $80,000 and $25,000. There was also a specific legacy of $60,000 to their mother Anastasia (often known as Tasia) who is Anthony's wife. There was a specific legacy of $25,000 to Tony's daughter Diana, and a gift of $10,000 to Ms Maria Felemenga whose relationship with Lakis is not clear on the evidence. All those specific bequests, which total $200,000, were to be satisfied "from the remainder of the monies which may be returned to my estate being the bond monies kept by the aged care facility of which I reside at last prior to my death" [sic]. In the months prior to executing his will, Lakis had entered a retirement village and had paid a bond of $200,000, and on 28 October 2021 the executors received bond monies of $203,827.27 into the estate account.
Clause 4 of the will explained that the monies to be given to Zoi, Anastasia and George were in appreciation and gratitude of: looking after me in my final years with day to day living and care whilst residing at home, especially when I had become housebound and visiting me now that I am residing in an aged care facility.
Clause 5 explained Lakis' reasons for leaving nothing to Tony's sister. I was told she had brought a claim for family provision under the Succession Act 2006 (NSW), which was dismissed following her passing away. It seems clear that she was estranged from her parents.

[6]

The relationship between Lakis and the parties

I did not understand it to be in dispute that Tony was also estranged from his parents, especially, so it seems, from his mother. Mr Morahan, who appeared for Tony, candidly acknowledged as much in closing address. In part that was a result of distance. For many years, he has lived in the United States of America. In the years that his father was in St Basil's nursing home, from 2016 until his death in January 2021, Tony visited him on a number of occasions in December 2019 during a trip to Australia. I did not understand it to be disputed that Tony did not otherwise see his father throughout that period, although there was divergent evidence on how often and when they spoke, and whether Lakis had his son's telephone number and address. The tenor of the evidence of Anthony, Zoi and George was that Lakis had disowned his son, regarding him as not a son at all, and instead treating Zoi and George (who was his godson) as his "real" family. In part it was suggested that Lakis considered that his son was a corrupt police officer when he served in the NSW Police Force. There was some evidence of a lavish lifestyle which Tony enjoyed. It was also the case that at one stage Tony was suspended from his office and was charged with a serious offence based on his having staged a motor vehicle accident (Tony said that this had been an attempt to kill him). Tony has the benefit of a directed acquittal of that charge, following which he relocated to the United States of America, where he holds office as Chief of Police of a community in Texas. It was submitted that a handwritten note of Tony's salary as a police officer, which the deceased had framed and kept for many years, supported the proposition that this was one way in which father and son became estranged.
Another aspect of the distancing was a dislike by Lakis and his wife of Tony's wife, and disappointment that Tony had not named his own son after his father, contrary to what was said to be Greek tradition.
A great deal of attention was given in cross-examination to events of the 1980s and early 1990s, more than thirty years ago. It is not unknown for parents and children to be reconciled in time. Indeed, the defendants tendered (over Tony's objection) documents purporting to be in Lakis' handwriting which have the appearance of drafts of greetings to be written on cards on birthdays and the like which are suggestive of a lonely man who wanted to renew connection with his son and (perhaps especially) his grandchildren. I raised this in final address with Mr Finch, who appeared for Anthony, Zoi and George when he sought to emphasise the estrangement between father and son. Although undoubtedly there had been a falling out in the late 1980s or 1990s, the documents tendered by the defendants also spoke of a father and grandfather who wished to renew a relationship with his son and grandchildren. Anthony gave evidence that in 2016 he was given a bundle of handwritten documents in Greek. Those in the last two decades included birthday and name-day greetings, a request "we would like you to send us a photo of you and the children, so that we can get to know them". There are also none too subtle statements that Tony should contact him if he wished to be included in Lakis' will. The most recent document in the bundle, which is dated December 2009, includes a Greek text which was translated thus: I take this opportunity to inform you that in my Will I leave all my assets that will be found in Sydney, at the time of my death, to my son Antonis, a resident of the United States of America of unknown address, on condition that at least one year before my death he will ALLOW his children (because he now forbids them any contact with us) to approach me, to get to know me, to recognise me as their grandfather. Otherwise, it should all go to the nursing homes of the Greek Community and the Archdiocese in equal shares.
Ultimately, little in this litigation turns on the relationship between Lakis and Tony. It is known that in October 2016, with the benefit of legal advice, Lakis left most of his estate to Tony or Tony's children in the event he predeceased. It is perfectly clear that there was a closer relationship between Lakis and Anthony and Anthony's children, one of whom was Lakis' godson.
There was a deal of evidence that Lakis regularly called Anthony his κουμπάρος, which was often translated as "best man". The word within Greek culture it signified something rather more than its etymological root (namely, that one man was the godfather of the other's child). There is no English counterpart; Anthony said that in Greek culture it signified a close relationship, and while I am sure that is true, I doubt that that fully conveys its meaning. I understood Anthony to be saying by his use of the word that there was a close relationship of trust and confidence between the men.
However, despite what might be anticipated from the foregoing, and despite the lengthy testimonial evidence on both sides on the relationship between Tony and his father Lakis on the one hand, and Lakis and Anthony and Anthony's children on the other hand, neither proceeding involves a claim for family provision under the Succession Act. Instead, lengthy testimonial evidence and cross-examination was directed to establishing the closeness of the relationship between Lakis and the defendants, and the estrangement between Lakis and Tony, ultimately because that was said to bear upon the probabilities that Lakis had authorised Anthony to disburse hundreds of thousands of dollars of Lakis' money.

[8]

Tony's claims against Anthony

Tony's claim against Anthony turned on his being a signatory to Lakis' accounts. The pleading did not make a specific allegation concerning the Commonwealth Bank accounts, but the defence admitted that Anthony was a signatory to one of the accounts.
First, Tony alleged a common law claim. Tony alleged that Anthony became authorised to be a signatory pursuant to an agreement in or about 2016, and that an implied term of that agreement was that Anthony "would at all times, in operating the said account or accounts, act in the Deceased's best interests and not confer upon himself or upon unauthorised third parties a financial advantage to the financial detriment of the deceased". That term was alleged to have been breached by the unauthorised substantial diminution of the term deposit from $1,000,000 to some $120,000.
Separately, the pleading alleged that in acting as a co-signatory, Anthony owed Lakis a fiduciary duty to act honestly and in good faith, to act in Lakis' best interest and not to confer upon himself or upon unauthorised third parties a financial advantage to the financial detriment of Lakis, not to remove monies without authorisation, and to avoid conflicts of interest between Lakis' interest and Anthony's own interest. It was said that he did not act honestly and in good faith and preferred his own interests to those of Lakis.
The pleading included a claim in unjust enrichment. However, it was confirmed that this rose no higher than a claimed entitlement to recover monies advanced by Lakis in breach of the implied term and therefore without authorisation (T 4.6-18). In such circumstances, there is a prima facie obligation upon the part of the person who has received the principal's money paid by an agent without authority to make restitution. That obligation is vindicated by an action for money had and received: see Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552; [2014] NSWCA 310 at [27], where Barrett JA said with the agreement of Bathurst CJ and Ward JA that: If, as the Company contends, the payment by the Company occurred through an unauthorised act of Mr Gould, the payment was made without the Company's assent. The situation is therefore the same as others in which someone receives another person's property in a non-voluntary transaction - for example, through mistake, duress or theft, although without any of the overtones of dishonesty that will commonly be present in those cases. The remedy potentially available to the Company is accordingly by way of common law restitutionary action for money had and received in which a money judgment is sought against the Defendant.
Or, as it was put by a very strong Full Court of the Federal Court in Great Investments Ltd v Warner (2016) 243 FCR 516; [2016] FCAFC 85 at [65], endorsing a proposition from the Restatement: A transfer by an agent, trustee, or other fiduciary outside the scope of the transferor's authority, or otherwise in breach of the transferor's duty to the principal or beneficiary, is subject to rescission and restitution. The transferee is liable in restitution to the principal or beneficiary as necessary to avoid unjust enrichment.
Finally, I should perhaps note that it is clear that claims at common law and in equity for the same transactions can co-exist: Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732; [2016] NSWCA 81; Great Investments Ltd v Warner at [55].

[11]

Procedural issues

No attention was paid to the technical and procedural hurdles to Tony propounding the claims he maintains the executors should have brought against Lakis. There is no difficulty in the parties having adopted that course. However, I should explain why that is so.
It will have been seen that all of Tony's claims against Anthony are claims that Anthony breached duties owed at law or in equity by him to Lakis. They are claims that vest in the executors. Had the administration of the estate proceeded such that the executors became trustees (see for example Pagels v McDonald (1936) 54 CLR 519 at 526; [1936] HCA 15), then Tony's claim against Anthony as residuary beneficiary would correspond with his entitlement to proceed directly against Anthony in accordance with the exception to the general rule that the trustee is the proper plaintiff, as noted in Ramage v Waclaw (1988) 12 NSWLR 84 at 91-93, that a beneficiary may sue directly, so long as the trustee is joined, where there are "special circumstances" which include but are not confined to collusion between the trustee and the third party. Those propositions were endorsed by the High Court in Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109; [2004] HCA 7 at [55]-[56]. Irrespective of whether Zoi and George are executors or trustees, the modern power under UCPR r 7.10(2)(b) to appoint a representative of Lakis' estate for the purposes of proceedings in which Zoi and George have an interest which is adverse to that of the estate is available and appropriate.
Constructively, if as Tony contends Anthony is found to have taken hundreds of thousands of dollars from the deceased in the years prior to his death without authority, then it is common ground that Zoi and George are inappropriate executors to recover such funds from their father, large amounts of which are shown to have been received by them and spent on things like cars, repayments of loans taken by Zoi and George on an investment property, improvements to property owned by them, and personal expenses such as mobile phones and credit card bills. This was confirmed at the outset of the hearing when I raised the point (T11.7-14). Because at all times the defendants have accepted that probate should be revoked if as Tony contends there has been a substantial unauthorised dissipation of Lakis' money, and because Tony is the sole residuary beneficiary, the difficulties of timing to which Hammerschlag J referred in Ivanovski v Perdacher [2009] NSWSC 913 at [49]-[50] do not arise. It might perhaps have been preferable for me to regularise this at the outset by a formal order, although neither side invited me to do so. I return to this at the conclusion of these reasons.
I have already remarked that in a case which turned on the bank transactions alleged to have been effected by the defendants, no subpoena was issued to the bank, although Tony's solicitors complained for years about the non-production or unsatisfactory production of financial records. Nor was any subpoena addressed to the nursing home, so as to provide relatively objective evidence of Lakis' mental state or the times when he was visited by the parties. The plaintiff did not establish by documentary evidence when he visited his father at St Basil's. The defendants' case was also remarkable insofar as there was not a skerrick of documentary evidence from Lakis authorising the transfer of hundreds of thousands of dollars of his money to themselves.
Both proceedings were heard and determined together by me sitting as and exercising the powers of a Judge in that Division in accordance with s 31(3) of the Supreme Court Act 1970 (NSW), with evidence in one proceeding being evidence in the other. This occurred by consent.
Some opening written submissions flagged the questions mentioned by Young J in Re Estate of Dippert [2001] NSWSC 167 at [21], where his Honour referred to the different approaches to construction in equity and in probate. That is well removed from the present case. In substance although not in form, what occurred over five days was the trial of complaint by the principal beneficiary and son of breaches of duties owed at law and in equity to his father by Anthony (as signatory) and Zoi and George (as donees of a power of attorney). It is plain to my mind that the evidence should be admitted in each proceeding.

[12]

General background

Lakis and Anthony had both been born in Greece and migrated to Australia many decades ago. Lakis was born in 1928, Anthony in 1938. Both married women who had been born in Greece and migrated to Australia in the 1950s or early 1960s. Both couples had two children: Helen and Tony, and Zoi and George. The children were all born in Australia.
Lakis worked in various jobs, including managing a record store, managing an electrical shop, and ultimately being employed by the Greek Foreign Office. He concluded his career as Greek Consul in Beijing. He retired in around 1986 and returned to Sydney, where he and his wife lived in Lilyfield. Lakis' wife Martha suffered years of ill health, including chronic bronchitis and severe arthritis. She died in January 2014. Anthony gave evidence that he and his wife cared for Martha over those years, to the effect that Martha was able to remain at Lilyfield. Anthony said that when Martha died, he stayed five or six nights each week at Lilyfield.
An earlier will of Lakis, dated 18 December 2015, resembled the will which was admitted to probate, in that it excluded Helen entirely. However, it gave 30% of the estate to Tony, 20% to each of Tony's sons, and 30% to his daughter. Zoi and George were not beneficiaries under that will. Under that will, Tony and his aunt were executors.
It is significant, as Mr Morahan emphasised in closing address, that both the 2015 and 2016 wills left the bulk of Lakis' estate to Tony and Tony's family - the significance being that that is inconsistent with the running down of Lakis' assets in favour of Anthony and his family.
After Lakis entered the nursing home, Anthony said that he "continued to see him almost daily". He said that he visited Martha's grave "regularly, usually weekly". He said that he and Lakis spoke about "all sorts of things, sports, politics and people", and also poems which Anthony had written.
As noted above, Anthony accepted that he regularly took Lakis to the Marrickville branch of the Commonwealth Bank, and caused many thousands of dollars to be withdrawn from the 8296 account into which his Greek pension and $180,000 which was not reinvested in the term deposit had been credited. Zoi accepted that on numerous occasions - she estimated 20-30 - Anthony gave her an envelope with large amounts of cash, and told her what to do with it.

[13]

The financial transactions in question

Given the dearth of documents which would ordinarily be available, it is all the more important to commence with the incontestably correct context, as recorded in contemporaneous documents, before turning to the almost wholly testimonial evidence which bears on whether the transactions were authorised. That approach accords with what was suggested by Keane JA in Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 at [34], which in turn accorded with what had been said in Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [28]-[29]: Usually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation.
Two reasons for that are the notorious fragility and malleability of human memory, especially when confronted with the litigation process, and the limitations upon judges to discern reliable testimonial evidence from sincerely held but unreliable reconstructed evidence and dishonest evidence. Many authorities are collected in Arizabaleta v R [2023] NSWCCA 217 at [93]-[109]. It suffices to note what was said in Coote v Kelly [2013] NSWCA 357 at [51]: Memory is all too fallible. McHugh J referred to 'the everyday experience of the courts that honest witnesses are frequently in error about the details of events': M v The Queen [1994] HCA 63; 181 CLR 487 at 534. The process of conscious and subconscious reconstruction of what was actually said in a conversation, to which McLelland CJ in Eq referred in Watson v Foxman (1995) 49 NSWLR 315 at 319, is familiar.
Ultimately - albeit only on the afternoon of the second day of the hearing - the majority of the bank statements were tendered. At the conclusion of the third day, unredacted versions of the statements were provided (including as I understand it in some cases for the first time) to the plaintiff. For reasons that do not presently matter, Tony's solicitors had contented themselves with informal requests for production, and a notice to produce, and at no stage issued a subpoena to the Commonwealth Bank. For reasons that do not presently matter, the defendants' solicitors had produced only records of the term deposit which was regularly rolled over, with an ever-diminishing principal amount invested, and no records of some bank accounts until the evening of the first day of the hearing. One aspect of that unhappy background does matter, however, because by way of compliance with Tony's solicitor's requests, by letter of 6 August 2021 the defendants' solicitor provided a "spreadsheet prepared by the executrix with respect of the accounts" saying that "[t]he withdrawals and transfers are explained therein". The letter stated (I have corrected numerous spelling and syntactic errors): The executrix would make transfers into the joint account of hers and her brother, as attorneys and pay bills, including nursing home accounts from that account, hence the transfers. … I am instructed that the late deceased would direct Mr Kritikakis who was also a co-signatory to the account in order to enable Mr Katsoulas to have cash at hand and enable Mr Kritikakis to purchase items on his behalf and accompany Mr Katsoulas on outings to enable Mr Katsoulas to pay. … I am further instructed that Mr Katsoulas would also give cash monies to persons of his choosing and had also given Mr Kritikakis monies as an appreciation of the care and assistance Mr Kritikiakis and his family have given over the years, including since his residing at the nursing home to his death.
The spreadsheet attached to the letter stated that various amounts were taken from the term deposit and credited into a separate Commonwealth Bank account - 062xxx xxxx8296. The document prepared by Zoi disclosed a series of withdrawals benefiting each of the defendants, including $40,000 on 9 and 23 July and 7 August 2019 for "car", $12,000 on 19 June and 8 and 21 October 2019 for "works on property", $3,000 on 10 February 2020 for "George's birthday gift", $3,000 on 21 February 2020 for "television and DVD". There were further withdrawals of $3,000 on 8 and 21 January 2020, 9 and 24 March 2020, 15 April 2020, 11 and 25 May 2020, 9 and 22 June 2020, 6 and 20 July 2020 and $4,000 on 4 August 2020. There were withdrawals of $3,000 on 18 and 27 August, 7 September 2020 described as "gift/Anthony's birthday" and a further $3,000 on 22 September 2020 described as "gift/Paul's birthday gift". I shall return to the descriptions of the purposes of each of these amounts, the large majority of which were precisely $3,000, because in somewhat dramatic circumstances, immediately before Zoi gave evidence, she said that every one of those descriptions was wrong. In at least some respects, the evidence which is now available confirms that she was right to take that course.
The descriptions contained in the defendants' solicitor's letter on instructions from Zoi formed an important part of the case. They were reproduced in Tony's affidavit, and occupied 2 pages of an affidavit the body of which was only 11 pages long. Anthony responded to that paragraph.
No nursing home records were tendered. The banking records revealed that $723.75 was debited on 15 May 2016 with the description "Katsoulas Louranto" and there was other evidence that Lakis first spent some time in Lourantos retirement village. There was some evidence that that was a low care facility operated by the same organisation, in contrast to the residence where Lakis spent most of the final years of his life. At some time in the second half of 2016, he transferred to St Basil's Homes, another facility also in Lakemba and run by the same organisation, in which many of the staff and residents spoke Greek. In what follows I shall simply refer to "St Basil's". The will dated 20 October 2016 which was admitted to probate has as Lakis' address an address which is very similar to that appearing on the tax invoices from St Basils, although the first of those in evidence was dated July 2019. Those invoices show that the "Basic Daily Care Fee" charged was $51.21, leading to fortnightly bills in the order of $1500 (most bills included some minor additional expenses). The last St Basil's invoice is dated 12 January 2021 (when the daily rate had risen to $52.25).
The fees charged by St Basil's roughly corresponded to Lakis' pension. But that is not how they were paid.
The nursing home fees were paid by electronic transfer from a joint account in the names of Zoi and George. The account was always in their names, but its address - the address to which bank statements would be sent - changed. Originally it was given Anthony's address on Illawarra Rd Marrickville. Between July 2017 and August 2018, the address was an apartment in Abbotsford which was where George lived. From September 2018 and thereafter the address reverted to Anthony's home address on Illawarra Rd Marrickville.
Similarly, the address of each of the two accounts in Lakis' name - the term deposit, and the Smart Access account - was at all times Anthony's residential address on Illawarra Rd Marrickville.

[14]

The term deposit which was regularly rolled over - 3109

The banking records for the term deposit were not complete. But it is quite plain, and I did not understand there to be any dispute, that from the proceeds of sale of the Lilyfield home, Lakis made a term deposit of $1,000,000 with the Commonwealth Bank, which was rolled over from time to time, for various terms (ranging from 3 to 11 months). It is inherently improbable that the funds remaining totalled precisely $1,000,000, a point to which I shall return.
What follows is based upon the various "term deposit reinvestment notices" and letters requesting Lakis to review his term deposit before it matures. All documents referred to the same deposit number with a Commonwealth Bank BSB and an account ending in 3109. All were in Lakis' name but gave Anthony's Illawarra Rd address.
Documents were tendered in tranches throughout the trial, and remained incomplete at its conclusion. Those documents disclose the following history: 1. On 2 May 2016, a deposit of $1,000,000 with a term of three months. 2. On 2 August 2016, the $1,000,000 was reinvested for a further three months. 3. On 2 November 2016, $800,000 was reinvested for a term of 6 months from 2 November 2016 to 2 May 2017. 4. An eleven month term deposit of $750,000 from 2 May 2017 until 2 April 2018. 5. A term deposit of $400,000 for 5 months from 2 April 2018 until 2 September 2018. 6. On 2 September 2018 the term deposit plus accumulated interest of $3,940.27 was "placed into the holding facility" where it was to earn 1.1% per annum. 7. The next bank statement relating to this account records a term deposit of $250,000 from 2 May 2019 until 2 October 2019; 8. A term deposit of $200,000 for 5 months from 2 October 2019 until 2 March 2020; 9. A term deposit of $150,000 from 2 March 2020 until 2 August 2020; 10. A term deposit of $121,006.03 from 2 August 2020 until 2 June 2021.
I did not understand there to be any dispute concerning the reductions in principal and the interest earned over the period. In particular, by reference to a table from the plaintiff's closing submissions dated 3 February 2023, the defendants agreed that the total interest earned by the term deposit was $41,203.84. It is also clear that the first, second and third payments of interest (of $7,561.64, $6,553.42 and $8,926.03) were credited to the joint account. I will explain below why I conclude that $6895.62 representing the interest for the period from 2 September 2018 to 2 May 2019 was credited to the 8296 account. What happened to the remainder of the interest (in the order of $11,000) is much less clear.
Most of those diminutions of some $880,000 over a four year period correspond to credits in other accounts, to which I shall now turn.

[15]

The Katsoulas Smart Access account 8296

Lakis opened this account in October 2016. It was in his name, but the address was the same Illawarra Rd Marrickville address where Anthony has at all times lived. It will be recalled that Lakis sold the Lilyfield home and moved into the nursing home around July 2016. The account number ended in 8296.
The transactions made in this account were the transactions which were the subject of Zoi's instructions in Annexure K.
The first deposits into the account were small Centrelink payments. From 17 May 2017 and thereafter every month were overseas deposits (I say this because each attracted an AUD 10 fee) of approximately $1460. The evidence was that they reflected a Greek pension to which he was entitled. Later, there were three further Commonwealth government payments, which reflected stimulus payments made universally available in light of the COVID-19 pandemic.
There was never until May 2019 any substantial balance in that account. Instead, within a few days after the pension was deposited, there was a $1,500 or $1,600 or $1,700 and in one case a $2,000 cash withdrawal from a bank branch at Marrickville (occasionally the branch was described as Marrickville Metro). It is clear from other evidence that those withdrawals do not reflect fees paid to St Basil's. It is also significant that over that two year period, from May 2017 until April 2019, the total withdrawals were only $35,700. In the ensuing 20 months, the pattern changed markedly. As will be seen, $35,000 was withdrawn in May 2019, and another $35,000 in July 2019. I shall return to the significance of this.
There were deposits of $6,895.62 and $150,000 on 2 May 2019. The latter amount corresponds with the diminution in capital of the term deposit rolled over on that date ($400,000 diminishing to $250,000). There is a gap in the term deposit records for the 9 months following the $403,940.27 being placed in a "holding facility" earning 1.1%, but I note that the earlier term deposit rate (that expiring on 2 September 2018) was 2.35% and the rate for the term deposit from 2 May 2019 to 2 October 2019 was 2.4%. As it happens $6,895.62 is consistent with the interest on an amount of $400,000 (or $403,940.26) at a rate between 2.5 and 2.6% (for example, if the $403,940.27 had been invested at 2.55% for 243 days, it would yield interest of 403,940.27 x 243 / 365 x 0.024 = $6857). Another possibility, one which I think is the most likely to have occurred, is that the $403,940.27 was invested at a rate of 1.1% for a relatively short period of time from and after 2 September 2018, after which Lakis or Anthony appreciated that instructions had not been given as to the rollover, following which it was invested for the remainder of the period at a less uncommercial rate of return.
For those reasons I am comfortably satisfied that the $6,895.62 deposited into the 8296 account on 2 May 2019 reflected the interest earned on the $403,940.27 for the period from 2 September 2018 until 2 May 2019. The amount is consistent with the amount of interest which would have been earned, the bank statement refers to the 3109 account number for both deposits made on that day, there is nothing in the evidence suggesting any other source for the money, and the joint account does not disclose a deposit for this interest (in contrast with the interest paid into the joint account on the first, second and third occasions the term deposit matured).
That additional $156,895.62, to which relatively small deposits from Centrelink, the pension and the COVID support must be added, was steadily run down over the next 20 months. That occurred by the following debits, all of which were described as either "Wdl Branch Marrickville" or "Wdl Branch Marrickville Metro" (there was evidence from Anthony that on one occasion he and Lakis were unsuccessful in a transaction at their ordinary branch in Marrickville, and went to a different branch where there was a Greek-speaking woman).
The debits from May 2019 to the end of that year were: 1. 2 May 2019: $8000; 2. 10 May 2019: $13,000; 3. 28 May 2019: $15,000; 4. 11 June 2019: $2,000; 5. 19 June 2019: $5,000; 6. 9 July 2019: $5,000 7. 23 July 2019: $30,000; 8. 7 August 2019: $5,000 9. 9 September 2019: $5,000; 10. 19 September 2019: $3,000; 11. 8 October 2019: $4,000; 12. 21 October 2019: $3,000; 13. 8 November 2019: $3,000; 14. 25 November 2019: $3,000; 15. 9 December 2019: $3,000; 16. 23 December 2019: $3,000.
In the summary of the transactions for the last seven months of 2019 (which total some $110,000), I have omitted reference to a debit and credit on 2 October. Each was in the amount of $52,515.07. The credit identified the term deposit account ending in 3109. It plainly represents the diminution in principal between $200,000 term deposit which expired on that date, and the $150,000 term deposit which commenced on that date, plus interest (the interest rate for the expiring 5 month term deposit was 2.4% and $250,000 x 153 / 365 x 0.024 = $2515.07).
The debit of $52,515.07 on the same day is described as "Wdl Branch MARRICKVILLE", which is the form taken by so many other withdrawals on these bank statements. It is consistent with an electronic transfer of those funds to another account. It is also consistent with a cash withdrawal in that amount, although the facts that (a) it exceeded $50,000 and (b) included a number of cents which was not a multiple of 5 make this seem implausible.
Turning to the transactions in 2020, there is a striking pattern of withdrawals of $3,000 every fortnight, on 8 and 21 January, 10 and 21 February, 9 and 24 March, exceptionally, a withdrawal of $10,000 on 8 April, then the $3,000 withdrawal pattern reverts on 15 and 30 April, 11 and 25 May, 9 and 22 June, 6 and 20 July.
On 4 August 2020, when the balance had been reduced to $21,555.95 and more than $150,000 had been withdrawn, there is a credit of $30,000, which approximates to the $29,000 diminution in the term deposit (from $150,000 to $121,000 on 2 August, which had earned interest of some $3,806).
Thereafter the pattern of withdrawals continued: $4,000 on 4 August, $3,000 on 18 August, $5,000 on 27 August, $3,000 on 7 and 22 September, 2 and 14 and 28 October, 13 and 30 November, $4,000 on 15 December and $3,000 on 5 January 2021. Lakis died a little over a week later.
I shall return to the four largest withdrawals over this time, which are the withdrawal of $52,515.07 when the term deposit matured on 2 October 2019, withdrawals of $13,000 and $15,000 on 10 and 28 May 2019, which were nominated on Annexure K as payments to Tony, and a withdrawal of $30,000 on 23 July 2019 which was nominated on Annexure K as the purchase of Anthony's car. It will be seen that the $52,515.07 stands in a separate category, because it was deposited and withdrawn on the same day. If that withdrawal is put to one side, as I indicated to Mr Morahan in closing submissions I thought it should be because its inclusion led to a double counting of the $50,000, then the total withdrawals from the account from 19 May 2017 to 5 January 2012 is precisely $240,000.
Those withdrawals were funded by pension payments and some small payments from the Commonwealth government, as well as deposits of $150,000 on 2 May 2019 and $30,000 on 4 August 2020, in each case representing the portions of the term deposit which had matured and were not reinvested.

[16]

George and Zoi's Cash Management Call account 3606

Statements of a Cash Management Call account in the name of "Mr G and Miss Z Kritikakis" from January 2016 to December 2021 were tendered (by the third day of the trial, they were provided in an unredacted form). One of the redacted entries was the crediting of $7,561.64 interest from the 3109 term deposit on 2 August 2016. Zoi confirmed she was the person who made that redaction, but was unable to remember why she had done so. It was not the only such redaction.
The redactions should not have occurred. It should not be necessary to do so, but I repeat the characteristically measured criticism of McLelland CJ in Eq in Telstra Corporation v Australis Media Holdings (unreported, Supreme Court of New South Wales, McLelland CJ in Eq, 10 February 1997), which has been applied on numerous occasions: "There is a serious risk that too assiduous a masking of documents on the grounds of irrelevance will create gaps affecting the ready comprehensibility of the remaining portions of the document and of the context in which those portions appear. If for this, or any other, reason, masking on the ground of alleged irrelevance would detract from a proper understanding of the meaning and significance of the admittedly relevant parts of the document, then such masking is not justified. ... unless there is some relevant qualification in the order for discovery, the order requires that the whole document be produced unless there is an agreement to the contrary by the party to which discovery is being made, or unless relief from the requirement, for example by masking certain portions, is obtained from the Court."
The same principles apply to compulsive production such as pursuant to the notice to produce dated 19 April 2023 in this matter. The relevant principles are summarised in Lewis v Lewis (2021) 105 NSWLR 487; [2021] NSWCA 168 at [93]-[99]. In the present case, all of the redacting was wrong. The redaction of the interest credited from the term deposit was especially wrong. Anyone with an understanding of the issues in the case would have realised it was centrally relevant to the main issue: what happened to the $1,000,000 in the deceased's name which were dissipated in the final four years of his life. The plaintiff's solicitor had been writing, repeatedly, seeking an account of the interest earned on the term deposits. It was centrally relevant to know that the interest on the term deposit was deposited to the joint account of the executors.
The account includes the following deposits: 1. On 2 May 2016 there were two deposits of $51,650.29 and $36,960. Both were described as "Chq Dep Branch Marrickville". So far as I can see in more than 130 pages of bank statements, they were the only two cheque deposits. It will be recalled that 2 May 2016 was the inception of Lakis' $1,000,000 term deposit. It is far from implausible that these represented other funds supplied by Lakis, provided with the intention that Zoi and George would use them to pay nursing home expense. Indeed, in closing address Mr Finch invited me to infer that they represented the proceeds of the settlement of the sale of the Lilyfield house. It is regrettable that Zoi saw fit to redact the source of the $51,650.29 deposit in the version of the bank statements supplied to the plaintiff. 2. On 2 August 2016, there is a credit of $7,561.64. In the version of the statement supplied in advance of the trial, the entirety of the entry is redacted (as are all of the running balances). In the unredacted form provided at the conclusion of the third day of the hearing, the amount is disclosed, as is the fact that it is interest from the 3109 term deposit. It corresponds to the interest on the original $1,000,000 term deposit. 3. On 2 November 2016 a credit of $170,000 which refers to the 3109 term deposit account. It will be recalled that a new term deposit of $800,000 was taken out on that day, as opposed to the previous deposit of $1,000,000; what happened to the unaccounted-for $30,000 is unclear. 4. Also on 2 November 2016 is a credit of $6,553.42. The amount of that credit, and that it was interest from the 3109 term deposit was redacted until a clean version was supplied on the third day of the trial. It corresponds to interest on the $800,000 term deposit. 5. On 2 May 2017, there are credits of $8,926.03 and $40,000. Both deposits reference the 3109 term deposit account. Neither was redacted, which shows that the wrong redaction of payments of interest was at least not effected comprehensively. The $8926.03 represents interest on the $750,000 term deposit. 6. On 26 August 2017, a deposit of $150,000 described as "Early TD Withdrawal" followed by the 3109 term deposit account; 7. On 3 April 2018, a deposit of $200,000; again, this transaction references the 3109 term deposit account; 8. On each of 10 May 2019 and 28 May 2019 there are deposits of $10,000. The description of each deposit was masked. When belatedly an unredacted copy was provided, each is described as "Cash Dep Branch Marrickville". It will be noted that those dates correspond to the withdrawals of $13,000 and $15,000 from Lakis' 8296 account on the same days - withdrawals which depart from the usual pattern of $3,000 or $5,000. I raised this immediately before final addresses, and Zoi was recalled to give evidence about it to which I shall return. 9. On 2 October 2019, there is a deposit of $50,000 described as "Cash dep Branch MARRICKVILLE"; this represents the difference between the $250,000 maturing term deposit and the $200,000 reinvested on that day. 10. On 2 March 2020, there is once again a deposit of $50,000 described as "Cash dep Branch MARRICKVILLE"; this represents the difference between the maturing $200,000 term deposit and the $150,000 reinvested on that day.
On 30 January 2017, there was a debit of $50,015. It was common ground that this was a payment to Tony, at his request, at the time he was undergoing medical treatment, of $50,000 plus an international transfer fee.
From the joint account there was a debit on 15 May 2016 with the description "Katsoulas Louranto" which is consistent with a payment of $723.75 of fees to that retirement facility. There are many subsequent debits reflecting electronic transfers of funds to St Basil's. Tony accepts that these are authorised expenses. They add to $179,612.66, being principally, nursing home expenses of $147,187.84. There was no dispute to that calculation, which was found in paragraph 34 of the plaintiffs' submissions dated 3 February 2024.
There are also numerous debits reflecting transactions which have nothing to do with Lakis. They include payments to "Zoes card", $36,500 transferred to another account on 13 and 14 July 2020 with the description "Nissan", many payments of utilities and mobile phone bills, and some larger transactions such as a withdrawal of $10,000 on 7 April 2020 described "Transfer to other Bank NetBank ApostolaKritikiakis".

[17]

The testimonial evidence about who paid attention to the bank statements

Tony repeatedly sought copies of the bank statements both before commencing proceedings, and in the period between the commencement of proceedings and the trial. A notice to produce was served in 2023.
Curiously, Anthony and George sought to disassociate themselves from the bank statements.
Anthony, who lived at the address to which bank statements for both critical accounts were sent (save for the period when the statements for the joint account were sent to George's apartment in Abbotsford) gave this evidence: Q. In these proceedings, Mr Kritikakis, there are a lot of bank statements. Have you been able to look at all these bank statements? A. INTERPRETER: Where, inside the computer, I - I don't know. Q. No, they're not inside the computer, they're printed on pieces of paper. A. INTERPRETER: I - I don't know how - how to use it, if the children use the Q. No, Mr Kritikakis, just listen carefully to my question please. I'm asking you, have you looked at bank statements? A. WITNESS: Bank statement, no, never. Q. You've never looked at-- A. WITNESS: No, no. Q. --to these matters? A. INTERPRETER: My - my koumbaros - he's referring to my best man, he's the one who used to - to check all this. Q. --any bank statements relating-- A. WITNESS: No, no.
The cross-examiner returned to this topic: Q. At the very beginning of your evidence this afternoon, you said that you had not looked at any bank statements in relation to the accounts associated with these proceedings. A. INTERPRETER: Yeah, because even if I look at them, I cannot get a conclusion, cannot understand. Q. But you say in paragraph 229 of your affidavit, "When I received the bank statements, I would go through them." Is the fact that you-- A. I go through them by curiosity. I couldn't understand exactly. Q. You went through them by - sir? You went through them by curiosity, but you didn't understand them. Is that what you're saying? A. INTERPRETER: I knew my goal was to go to the bank and deal with our agent from the day before. He was telling me what time to go and pick him up. I had to go and get him at 10 o'clock in the morning. Q. All right, now you've been looking at bank statements for 50 years, haven't you? You ran a business in Marrickville. Didn't you get bank statements when you were running the business? A. INTERPRETER: Nothing. Q. You've never got a bank statement when you have run these businesses? A. INTERPRETER: I was paying the bank. It wasn't much, it was just a small business. Q. Yes, but the question is, did you get bank statements from the bank when you were running a small business? A. INTERPRETER: I own the building together with my brother and our wives, we're working. My brother was here for years, and he could speak English, and their wives, they were working in the shop, and we were trying to pay our debt. Q. Getting back to my question, did you look at bank statements when you were running small businesses in the past? A. INTERPRETER: Sometimes I will look, but I knew that's what was happening. I would look out of curiosity and knew. First of all my brother's best mate was getting them - it was coming - it had his name, Katsoulas Lights [scil Lakis]. Q. The statements that came had his name on, is that what you're saying? A. INTERPRETER: Look, can I say, we got the money, we went to the bank, he said do this. Q. No, sir, I'm asking about bank statements. HIS HONOUR: You cannot say that. It is not a time for speeches, it is a time to answer the question. MORAHAN Q. The question was, did you look at bank statements that came in for Theo, his bank statements? A. INTERPRETER: When - when I was giving them to him, we were both looking at them, but I wasn't paying attention. Q. You weren't paying attention. A. INTERPRETER: No. Q. So you realise that there's very serious allegations against you in these proceedings, don't you, sir, do you understand that? HIS HONOUR: He's giving an answer. INTERPRETER: My mistake is that he wasn't the one getting the money out, I shouldn't accept without the signature. I never took a dollar from him, and he knows that, that's why he loves me - he loved me. MORAHAN Q. In preparation for these proceedings, didn't you read bank statements? A. INTERPRETER: I don't understand the meaning. It doesn't make a difference if I look at it or not. It doesn't make a difference. A. WITNESS: It - it doesn't matter at all. A. INTERPRETER: He was up to here, my best man, he didn't want to hear about kids, they were dead for him. Q. The question was, sir, in preparation for this hearing, did you not look at bank statements, that's the question; yes or no? A. INTERPRETER: No. No, never. Q. You never looked at bank statements? A. INTERPRETER: Even if I look inside, I - I - I still cannot understand them.
The transcript does not fully reflect the extent to which there were times when the participants were speaking simultaneously. However, it fairly reflects that Anthony was seeking to distance himself from the bank statements, which he claimed never to have read, or alternatively, if he did so, that was out of curiosity, and without understanding what he saw, which in any event was irrelevant to the case.
I do not accept that Anthony was doing his best to tell the truth in giving that evidence. I am conscious of the fact that it is very easy for something to be lost in the translation of the questions asked by counsel and the answers given by the witness. Many aspects of this case lead me to conclude that Anthony was acutely aware of the bank accounts in the names of others which had Anthony's own residential address on them.
First, it is one thing not to read a statement. It is another to read it out of curiosity and not to understand it. Anthony gave repeated evidence that he never read the bank statements. He also gave repeated evidence that he did not understand them. It is difficult to reconcile both propositions.
Secondly, the statements are simple. They reflect payments of the Greek pension and some Centrelink benefits, and otherwise show the withdrawals at Marrickville and in a couple of cases the deposits of much larger amounts when the term deposit matured and a smaller amount was reinvested.
Thirdly, during the cross-examination, I could see Anthony reading the entries in the bank statement. They are numerical, and there was no suggestion he had any difficulty understanding the deposits and withdrawals. The words "Wdl Branch Marrickville" recur dozens of times. I accept that Anthony did not have the benefit of a full education (because of the war he did not go to school, in Kos, at all until in 1947, when he was 8 or 9) and then came to Australia aged 25. However, he ran a milk bar where he worked full time or part time for some 34 years. It was plain to me, not least from the occasions when he answered questions in cross-examination in English, that he has some facility to understand and speak English, and read at least the numerical aspects of a bank statement. In short, his evidence that he found it difficult to understand the 8296 account is implausible.
Fourthly, the fact of the matter is that the statements record the dozens of cash withdrawals made, personally, by Anthony at the Marrickville branch of the bank, and they reflect the deposits of hundreds of thousands of dollars which were not reinvested when Lakis' ever-diminishing term deposit was reinvested. All this was - on his own case - Anthony's doing (albeit that on his case this accorded with Lakis' instructions).
Finally, that is what Anthony had sworn in his affidavit: "When I received the bank statements, I would go through them". That evidence is inherently plausible. And Anthony's response when that was put to him (at the commencement of the second passage reproduced above: "Yeah, because even if I look at them, I cannot get a conclusion, cannot understand" and "I go through them by curiosity. I couldn't understand exactly") was implausible. Anthony's attempt to distance himself from the bank statements, and what he had said of his reading the bank statements sent to his address concerning transactions he had effected, are quite implausible. I do not accept that in giving those answers Anthony was doing his best to tell the truth.
Zoi and George were also asked about the address given to the bank of the joint account in their names. Zoi advised that the Abbotsford apartment was where George at one time lived. George, who was present in court (as was his right) when Zoi gave that evidence, was also asked about the bank statements for the joint account: Q. … [D]id you ever look at the bank statements for the joint account at the time that they were published? A. No, but I did look at one bank account statement that was - because I moved in with a girlfriend of mine at the time at Abbotsford, and I went with my father - with my godfather one day because my godfather wanted to transfer money, and I changed my - my - I had changed my driver's licence to the address at Abbotsford and I also changed my credit card to the Abbotsford address, but I was under the impression at the time, because the woman at the teller recognised my godfather, that she used the wrong account, and she - and she put the address of the bank statements to go to the Abbotsford address. Q. My question to you, sir, was-- A. Sorry. Q. Did you ever look at the joint account bank statements-- A. This is one of them. Q. --around about the time they were published? A. I don't know about what time, but one of them I opened when I was living in Abbotsford. Q. And that's the only time you looked at a bank statement-- A. I recognised - I recognise-- Q. Sir, let me finish the question. A. Yep, sorry. Q. That was the only time that you looked at a bank statement for the joint account, was it? A. Yes.
It will be seen that rather than answering the question whether he looked at the bank statements in his name and sent to his address, George volunteered that the address was a mistake. It is not an especially likely mistake. It would be strange for a bank to have one address for its customer's credit card, and another for a savings account.
At the conclusion of the cross-examination, I directed George to the bank statements for that 13 month period, and there ensued the following evidence in answer to my questions: Q. … [T]here's ten or 12 or so of these bank statements-- A. Yep. Q. --that are addressed at the Abbotsford Address. When Mr Morahan asked you questions about the bank statements, you said there was only one statement that you ever saw. A. It was the first one. Q. Are you saying that you didn't see any of the others that appear to have been sent? A. No, they were sent to me, and then I would hand them directly to my godfather at the nursing home. Q. You're saying you'd hand the unopened letters. A. Yes, and then we would all open them together, and he would tell me on many of the occasions, throw them in the bin. Q. Why would you not open a letter addressed to yourself? A. Because I realised at that stage that it was the account that was my sister's and myself's and my godfather's, all the moneys that was there [sic].
This evidence raises a number of questions. It is plain from the transactions on that account that it was used, mostly by Zoi, to make electronic payments on behalf of Lakis, Anthony, and Zoi and George. It is also plain that the principal source of funds in that account was money owned by Lakis, when his term deposit matured and Anthony caused amounts not to be reinvested but instead to be transferred to that account. Yet it seems that each of Anthony, Zoi and George were concerned that the bank statements of an account in the name of Zoi and George which dealt with Lakis' money be sent not to the address of the man whose money it was, or to Zoi who effected the transactions, or to George who was a joint owner of the account, but to Anthony's address. This does not seem especially plausible.

[18]

To which of Lakis' accounts was Anthony a signatory?

It was at all times accepted that Anthony was a signatory on Lakis' 8296 account. Indeed, he acknowledged that towards the end of Lakis' life, Anthony personally withdrew funds from the account at the Marrickville branch while Lakis waited in the car.
Until closing addresses I had thought it was accepted that Lakis was also a signatory to the 3109 term deposit account. (The fact that there could be an issue about this reflects the failure to obtain production of basal documents from the bank.)
The unchallenged evidence of Tony was that Anthony was a signatory on the term deposit account as well. Paragraph 9 of Tony's affidavit in chief stated that "Anthony was authorised by the deceased to be a co-signatory on his bank account conducted with the CBA account 062xxx xxxx3100 [sic]". That was plainly intended as a reference to the 3109 term deposit account (the seven digits I have replaced by "x" were identical to those of the BSB and account number). Although inadmissible in form, it was uncontroversial, and Anthony in his affidavit (paragraph 272) accepted, in explicit response to that paragraph that "I was appointed as a co-signatory to Lakis' CBA account in the circumstances described above".
However, in closing submissions Mr Finch submitted that Anthony was not a signatory on the term deposit account. Indeed, at first he maintained that there was no evidence that he was (T311.48). After I directed him in terms to paragraphs 9 and 272 of Tony's and Anthony's affidavits, that submission was not pressed. I also observed - as had the cross-examiner - that Anthony had given no evidence of what occurred when the term deposits were rolled over. Rather, he gave undifferentiated evidence of the amounts which were transferred.
However, Mr Finch pointed to the following evidence given by Anthony in cross-examination, which was directed to how $150,000 not reinvested as a term deposit came to be deposited into the 8296 account of which Anthony was a signatory: Q. What was the process of transferring this $150,000? A. INTERPRETER: We - we - we were going to the bank, sometimes we would just walk - walk into the - the window, sometimes he will sit - go back and sit on a chair, everyone knew him, before we - we leave the nursing home from - from the day before, he will tell me we're going to do this. Q. And that was only for the cash withdrawals, wasn't it? A. INTERPRETER: For the big amounts, we were always going together, now, if it was a smaller amount, we would go together, I will get the money out and I would give it to him straight away. Q. Because in your affidavit, you don't say anything about these larger amounts. A. INTERPRETER: Because I'm old, I - I don't - I didn't use to keep notes for everything, I didn't know what was going to happen to me. Q. Because at paragraph 221, go to page 135 of the court book, you described the process of going to the bank with Lakis, and you say, at paragraph 221 on the bottom of 135, "I would take Lakis to the bank, he did not like waiting in the queue for a teller, he would ask me to go to the teller and tell me how much to withdraw, he would sit on a chair waiting"-- A. WITNESS: Yes. Q. --"I would draw the cash as a signatory, and closer to his death, he would stay in the car at the bank while I went in as he did not like getting in and out of the car. I always gave him the cash unless he asked me to use it for a particular purpose that we discussed." A. INTERPRETER: Yes. Q. You don't say anything in your affidavit about going with Lakis to the bank and transferring relatively large sums of money over to his account, do you, yes or no? A. INTERPRETER: Every time we're going together.
It will be seen that Anthony repeatedly asserted that he and Lakis would "always go together" when there was a large transaction. The reference to a large transaction was every time the term deposit matured (because in all such cases, at least $30,000 and often much more was not reinvested but instead was deposited into either the 8296 account or Zoi's and George's joint account). That evidence does not contradict the proposition that Anthony was a signatory on the term deposit account the statements for which were sent to Anthony's address.
I made it clear after this point was raised by Mr Finch that, in a case where so much was in dispute, where the parties had agreed on an issue I would make findings in accordance with the agreed position. There was no application to seek to withdraw the concession in Anthony's affidavit, or to adduce any further evidence from him, and it is clear that there would be substantial difficulties in seeking to do so after the entirety of the case had been run.
I find that Anthony was a signatory on both the term deposit (3109) and smart access (8296) accounts, with power unilaterally to withdraw funds from either account.
Ultimately I do not think that anything turns upon this. If an application had been made to withdraw the admission that Anthony was a signatory on the term deposit (3109) account, then I would not have been minded to accede to that application unless the plaintiff had been allowed to have the substantial reality of the trial brought within the pleadings. If Anthony were permitted to depart from his sworn evidence that he was a signatory on the 3109 account, then I would have permitted Tony to advance a case of undue influence or unconscionable conduct in relation to the diminution of that account. According to Anthony, he attended at the bank with Lakis every time the term deposit matured. There is no dispute that from May 2019 hundreds of thousands of dollars of Lakis' account were transferred either into the joint account of Zoi and George, where it was spent to the benefit of Anthony and his family, or else were transferred to Lakis' 8296 account where most was thereafter withdrawn by Anthony including by causing transfers to be made to Zoi's and George's joint account. Those circumstances would leave Anthony in substantially the same position of having to discharge an onus to prove the righteousness of the transaction as he is in on the findings I have made.

[20]

Tony's claim in contract against Anthony

Tony says that there was an agreement an implied term of which was that Anthony would not use his power as signatory to act in his own interest or to confer benefits upon himself or third parties to the detriment of Lakis. I do not accept this.
First, there is nothing to suggest there was any contract between Lakis and Anthony. Instead, there was the unilateral appointment of Anthony to a power. By nominating Anthony as his signatory, Lakis then and there subjected himself to the possibility that Lakis might exercise the power and cause withdrawals on the account. There could conceivably be a claim in equity based on fraud upon a power based on its exercise for a purpose with an intention beyond its scope: Vatcher v Paull [1915] AC 372 at 378, in accordance with what Dixon J described in Mills v Mills (1938) 60 CLR 150 at 185; [1938] HCA 4 as the "general doctrine" expressed by Lord Northington in Aleyn v Belchier (1758) 1 Eden 132 at 138; 28 ER 634 at 637 thus: "No point is better established than that, a person having a power, must execute it bona fide for the end designed, otherwise it is corrupt and void." But no claim based upon fraud upon a power was advanced. I shall deal with the pleaded case (noting that had a claim in equity based on fraud on a power been advanced, the issues would have substantially resembled those arising on the claim of breach of fiduciary duty which was propounded).
The basic difficult is in identifying any contract. I agree with Mr Finch's submission that "This was not done on a contractual basis where the deceased was engaging them to provide services. It was done as part of a relationship." Thus establishing animus contrahendi is problematic. The relationship between Lakis and Anthony was between trusted friends, not a commercial one.
Consideration is also problematic. Tony submitted that "The consideration for the agreement was, in all probability, a voiced or understood promise … that if Mr Kritikakis performed the duty for him, they could remain friends at the level of friendship which it is said they enjoyed". That proposition need only be stated to be rejected. I do not see how a promise to remain friends is legally meaningful or can amount to consideration. And none of this was put to Anthony.
Alternatively, Tony raised the possibility that the consideration was that Lakis "would make some provision for Mr Kritikakis' wife and family when he made his new will shortly after the co-signatory agreement was put in place". But there was no evidence supporting this, which once again was not put to Anthony in cross-examination.
Further, such rights as an authorised signatory to a bank account enjoys are the creature of the contract between banker and customer. The terms of that agreement were undoubtedly written. They were not tendered, nor was any effort made to establish what they were. It is not unlikely that the terms expressly provide that withdrawals may be made by any signatory, and with no limitation as to the purpose. For that reason, it is difficult to see why the term which Tony sought to imply was so obvious that it went without saying, or consistent with the terms of the contract between banker and customer.
I conclude that this claim is not made out.

[22]

Principles on fully informed consent

In Taheri v Vitek (2014) 87 NSWLR 403; [2014] NSWCA 209 at [115] I said that "As between principal and agent, the agent is a fiduciary, and speaking generally is required not to place himself or herself in a position of conflict, nor to obtain a profit or benefit from the position, without first obtaining fully informed consent". Fully informed consent arises in a number of ways in dealings involving a fiduciary. It may arise when a beneficiary authorises a trustee to do something in breach of trust, and then sues the trustee: see Gilmore Finance Pty Ltd v Aesthete Pty Ltd [2022] NSWCA 279 at [31]-[38]. It may arise when a director seeks to take advantage of a corporate opportunity: Fexuto Pty Limited v Bosnjak Holdings Pty Limited [2001] NSWCA 97; 37 ACSR 672. It may arise when a solicitor and client are negotiating as to the retainer: Rahme v Benjamin & Khoury Pty Ltd [2019] NSWCA 211. There are many other examples. In all cases, fully informed consent is a defence, to be established by the fiduciary: see Xiao v BCEG International (Australia) Pty Ltd [2023] NSWCA 48 at [130]-[143] where numerous decisions to that effect are collected.
The standards imposed upon a fiduciary by equity are exacting. It is not enough for Anthony to prove that the transactions were "fair". The onus lies upon him to establish that the transactions were "open and fair, and free from all objection": Maguire v Makaronis (1997) 188 CLR 449 at 465; [1997] HCA 23. The High Court added that the fiduciary in such circumstances comes under "a heavy duty to show the righteousness of the transaction". In closing submissions, Mr Morahan emphasised "the heavy duty that's referred to [in Maguire v Makaronis], the heavy duty to show the righteousness of the transaction".
The Court of Appeal referred to the heaviness of that duty, when seeking to establish fully informed consent, in Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37 at [111], a decision concerning an employee who was seeking to compete with his employer. At [216], Payne JA, with whom the other members of the Court of Appeal agreed, observed that the fiduciary had not shown the "righteousness" of the transactions the employee was pursuing in breach of fiduciary duty, and at [217] it was observed that a general disclosure of the sort of transaction the employee was pursuing was insufficient: "This type of general disclosure, made without specific reference to the terms of the offer made to Mr Coope by Mr Craddock [set out at [39] above], did not constitute full and frank disclosure of the relevant conflict between interest and duty."
Whether or not a fiduciary will in any particular case discharge the burden is fact dependent. In Atanaskovic Hartnell v Birketu Pty Ltd [2021] NSWCA 201 at [48]-[50], Gleeson JA writing for the Court of Appeal said: The consent must be "fully informed" and what is required "is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent has been given": Maguire at 466. In Harvey, Street CJ said at 170 that there must be: … a conscientious disclosure of all material circumstances, and everything known to him relating to the proposed transaction which might influence the conduct of the client or anybody from whom he might seek advice. The question is whether the client has been "fully informed of his rights 'and of all the material facts and circumstances of the case'": Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211 at [100] (Macfarlan JA, Bathurst CJ and McCallum JA agreeing), citing Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 at 393. Consent can be established "at different times and in different ways", and sufficiency of disclosure can depend on the sophistication and intelligence of the persons to whom disclosure must be made: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [107].
Concerning the allotment of shares by a director to himself, the Court of Appeal said in Mualim v Dzelme [2021] NSWCA 199 at [114]-[115] (the decision was delivered on the same say as Atanaskovic Harntess v Birketu Pty Ltd and I have passed over portions of the statements of principle which are duplicated): In some cases, independent advice may be necessary for the principal to be fully informed; this will depend on the circumstances, including the capacity of the principal and the nature and significance of the circumstances that require disclosure: Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 170-171 (Mahoney JA); O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 209 (Kirby P). Where independent advice is required, it must be "meaningful" advice enabling the person seeking advice to make an independent, intelligent choice concerning the transaction: Rahme v Benjamin & Khoury at [106], citing Bester v Perpetual Trustee Co Ltd [1970] 3 NSWLR 30 at 36 (Street J). The position is accurately summarised by the authors of Meagher, Gummow and Lehane's Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) at [5-130]: If a person occupying a fiduciary position wishes to enter into a transaction which would otherwise amount to a breach of duty, the fiduciary must, if liability is to be avoided, make full disclosure to the person to whom the duty is owed of all relevant facts known to the fiduciary, and that person must consent to the fiduciary's proposal. Consent need not be given expressly. What is required for a fully informed consent is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent has been given. The circumstances of the case may call for independent and skilled advice from a third party. (Citations omitted.)

[23]

The evidence on whether the withdrawals made by Anthony were with Lakis' fully informed consent

Anthony's case was that he and Zoi and George were trusted by Lakis and were like family to a widower who was estranged from his own children. He said that Lakis was always at the bank with Anthony (or, at least, outside in Anthony's car) when withdrawals were made. Concerning the large transactions, whereby $30,000 or $50,000 or $150,000 or $170,000 or $200,000 was transferred to the 8296 account or the joint account of Zoi and George, he submitted that these transactions took place in the presence of Lakis, who was not shown to be of other than sound mind, and who must be taken to have approved them.
Although he did not say so explicitly, I treated these submissions as relying on the propositions that consent need not be express, could be inferred, and depended upon all the circumstances.
Mr Finch emphasised the absence of any evidence that Lakis was of other than sound mind. The tenor of his closing submissions was thus: If one accepts that he is a man of sound mind, and for four years he's getting from somewhere, there is no suggestion that the deceased didn't ever receive any funds, and if he wasn't receiving funds, then one would expect a man of sound mind to say, "What are you doing with my money? Why are we going to the bank? Where's the cash?" So he was closely involved with the transactions, and all that Anthony was doing was facilitating those transactions. On that basis, it is said that there was no need or authorisation in terms of spending the money … because Anthony himself did not spend the money, albeit that the deceased gave money in envelopes to Anthony to give to people. That doesn't constitute Anthony taking the money and spending it himself.
Anthony's case was based on the generalised, undifferentiated testimonial evidence of Anthony. Insofar as it concerned the rolling over of the term deposit, there was no evidence in Anthony's affidavit, and I have earlier reproduced the portion of his cross-examination on which Anthony relied, which turned on the deposit of the portion not reinvested.
Anthony also gave this evidence: In or about 2016, Lakis sold his Lilyfield home. Lakis said words to the effect: I want you to have the money from the sale of the house, put it into your bank account. You and Tasia have been our closest friends; you looked after us both when Martha was ill. My children did not care about us. When people ask [Tony] about his parents he tells them "they are dead". As you and your family have cared looked after us since Martha became ill, without asking us for anything, I trust you as the only people who will care and look after me now I am without Martha and support me until I meet Martha again, to shut my eyes. I told Lakis that I didn't want to take the money, and if we did Tasia and I would lose our pensions. I convinced Lakis to open an account with the Commonwealth Bank of Australia and deposit the proceeds in that bank. At the time, Lakis asked me to be a signature on his account. He said words to the effect: Koumbaro, I want you to take money from the account for yourself and your family whenever and for whatever you want. I want you to treat it as your own. You have been my friends and only family for a long time. You cared for me and Martha. We have paid you nothing. You and Tasia made it possible for us to stay in our own home together until she died. I want to pay you back. Pay my expenses at the nursing home.
That evidence is problematic, and not only because it is a self-serving recollection of a conversation with the deceased many years ago, as to which it was common ground the Court must consider with care.
First, in a case where there are so few documents, it is inconsistent with the best contemporaneous evidence of Lakis' intentions, namely, his wills of December 2015 and October 2016. If Anthony's evidence is to be accepted, the conversations took place after the December 2015 will and before the October 2016 will. Each of those wills leaves Tony and his family as principal beneficiaries of the estate. Each was executed with legal advice, as it happens, from different solicitors, including as it happens the solicitor now acting for Anthony, Zoi and George.
Each will leaves nothing to Lakis' daughter. It is clear that if Lakis' intention were to disinherit Tony and Tony's children, he was aware that he could do so, and that it would be desirable for the will to explain why nothing was being left to Tony.
More importantly, it is abundantly clear from each will that Lakis sought to benefit his granddaughter Diana. His was the will of a millionaire who wanted his granddaughter to receive (directly or indirectly through Tony) more than a $25,000 legacy. The account given by Anthony is irreconcilable with an intention to make a substantial gift to Diana, although on Anthony's account the conversation post-dated the 2015 will and preceded the 2016 will.
Secondly, Tony gave evidence in his principal affidavit that in December 2019 when he visited his father, the pair had this conversation: I asked the deceased: Is Anthony using your money for anything or are you paying him? The deceased responded - I haven't given him a penny. All the money is there. I told Anthony he could have the money left in the St Basil's account after I die. That is all. He (Kritikakis) only comes to visit me out of respect. I have not gifted him anything.
By December 2019 more than half of the fixed term deposit had been withdrawn, and much of that dissipated.
On this point either Tony is to be believed, or Anthony is to be believed, or Lakis told inconsistent things to each man, or both of Tony and Anthony are to be disbelieved. I am conscious that it is necessary to be cautious about accepting evidence of conversation with persons who have deceased, which is inevitably self-serving and coloured by the litigation process and the goals sought to be achieved. This is to be taken into account in assessing the effect of the entirety of the evidence.
Tony also gave evidence that, once again during his visit in 2019: In my discussion with the deceased, the deceased denied authorising Anthony to make any payments apart from the payment to St Basil's Nursing Home.
A formal objection was taken to that evidence, but it was withdrawn when I indicated that I would grant leave to adduce oral evidence of what was said (the objections supplied by the defendants were due four or five days before they were in fact supplied, leaving no time for the preparation of a correcting affidavit). That evidence was also unchallenged.
Those conversations to which I have so far referred involved Lakis, and obviously both sides were hampered in their ability to test the credibility and reliability of that evidence. However, there was also important and unchallenged evidence from Tony of a conversation he had with Anthony. Tony said in his affidavit in chief that he encountered Anthony at the nursing home in December 2019, and the latter trembled. Anthony denied trembling, and asserted that he had been threatened by Tony. In his affidavit in reply, Tony said this: When I returned to the nursing home I was accompanied by my uncle, Con. When he entered the deceased's room Kritikakis was already there. He looked very nervous and the colour went out of his face. I said to the defendant "I know you have been stealing my father's money and I can prove it". The defendant became enraged and said "I have never touched a penny of your father's money;' and to the deceased "You must believe me, everything I do for our is out of love and respect, I have never and would never take or accept money from you." I deny that I said "I still have police friends, I am going to have them hurt you". I do not have any police friends.
Anthony did not respond to that evidence. No objection was taken to it. Tony was not cross-examined on it.
Both Tony and Anthony placed that visit to St Basil's as occurring in December 2019. There is no reason to doubt that Tony had a clear recollection of the encounter between him and Anthony which occurred during the only time he visited Australia while his father was a resident at St Basil's. It is clear that Anthony had been asked to turn his attention to that conversation, which so far as the evidence discloses seems to have been the only time during Lakis' stay at St Basil's that the two men met face to face. It is plain that Anthony was in a position to instruct his counsel as to what was said if he disputed Tony's expanded account in his affidavit in reply (which was made 11 months prior to the trial). The exchange was an important one having regard to the issues in the case. Tony was cross-examined at length, but not on that encounter. Tony's affidavits are relatively short - the substantive paragraphs occupy 11 and 5 pages respectively. I saw Tony give evidence and my impression was that he was genuinely attempting to answer the questions of which he was asked. I formed a favourable view of the reliability of his evidence. I formed the opposite view of the reliability of Anthony's evidence, some aspects of which have been mentioned above.
I conclude that a conversation to the effect as set out in Tony's affidavit occurred. It was of course not true for Anthony to assert that he had never touched a penny of Lakis' money.
Thirdly, on at least one occasion Anthony caused a large transaction involving Lakis' money without obtaining Lakis' consent. This involved the payment of $50,000 to Tony. That occurred on 30 January 2017 from the joint account. I understood it to have been common ground that Lakis found out after the event. This is inconsistent with Anthony's evidence that he and Lakis were both involved in every large transaction.

[24]

Did Anthony discharge the onus resting upon him?

The onus rests upon Anthony to establish that he was entitled to do what he did, to the benefit of himself and his children. However, in demonstrating effective authorisation, Anthony is hampered by the following considerations.
First, there is no suggestion that there was ever any written authorisation from Lakis.
Second, Anthony's own account is extremely general. He gave no specific evidence whatsoever of the particular purposes for which each withdrawal of $3,000 each fortnight in 2019 and 2020 were to be directed.
Thirdly, some of the withdrawals were relatively large. In closing addresses attention was focussed on the three largest withdrawals from the 8296 account. Consider first the vehicle. It is no small thing for Anthony, a man in his early 80s, to be given a car by his close friend, a man in his nineties. He would have been required to be medically assessed each year in order to continue to drive. There can have been no certainty that he would get many years' use from the vehicle. Until the third day of the hearing, the litigation had been conducted on the basis that three withdrawals from Lakis' 8296 account (on 9 and 23 July and 7 August 2019 in the amounts of $5,000, $30,000 and $5,000) had been used to pay for that car, and the generalised evidence of the defendants was that Lakis had authorised that to occur. On the third day of the hearing, that explanation for the $40,000 withdrawn in July and August 2019 was disavowed. The bank statements of the joint account of Zoi and George disclosed payments of $36,500 on 13 and 14 July 2020 for the Nissan vehicle, which Zoi eventually accepted represented the payment for that car.
One consequence is that there is no explanation at all for the withdrawals of $5,000, $30,000 and $5,000 effected by Anthony in July and August 2019 at the Marrickville branch of the Commonwealth Bank from Lakis' bank account.
Another consequence is that there is no satisfactory explanation for why the incorrect account of what were the largest withdrawals from Lakis' account had come to be propounded from August 2021 until the 1 February 2024, immediately before Zoi's cross-examination. Zoi was cross-examined on this at some length along predictable lines (to the effect that she must have known that the transactions were centrally relevant, she must have read Tony's affidavit setting out her comments in Annexure K, and so on), but could not explain why. No application was made to recall Anthony to supplement such evidence as he gave on this topic, even though I permitted him to give oral evidence of the circumstances in which he said he was authorised to spend Lakis' money on a vehicle for himself.
I am comfortably satisfied that Anthony did not attempt to give this Court a candid, truthful account of what occurred in connection with the $30,000 withdrawn on 23 July 2019. I make that finding even though I accept there will have been difficulty, in the absence of documentary records, of recalling what Lakis' instructions were in relation to each of the withdrawals from the Marrickville branch of the bank. But this was the largest single withdrawal.
What in fact happened to the $30,000 withdrawn on 23 July 2019 at Marrickville? It was effected by Anthony. The explanation that it was the purchase price of his car was disavowed. No alternative explanation was given. It is possible that it was withdrawn (in 600 $50 notes or 300 $100 notes) but if so it might be thought that would have been memorable. It is more likely that it was transferred to another account. If so it ought not to be too difficult to identify the account to which the transfer was made, which might shed light upon the purpose and any authorisation given by Lakis. But the defendants made no attempt to do so.
Turning to the second and third largest withdrawals from the 8296 account from the Marrickville branch, they were amounts of $13,000 on 10 May and $15,000 on 28 May 2019. The account had funds sufficient to meet those withdrawals because of the $150,000 deposited earlier that month. Until the third day of the trial, the defendants' case was that those funds were transferred to Tony. That was then disavowed, and other documents now show how the $50,000 was transferred to him a couple of years earlier. The Court is left with no explanation for the circumstances attaching to or purpose for which those two withdrawals were made.
In fact the position is worse. Annexure K claimed that these were payments to Tony. Zoi disavowed this on the third day of the trial, and properly so, in light of the withdrawal of $50,015 on 30 January 2017. But there were $10,000 deposits into the joint account on each of those days. Those deposits were substantially redacted until the third day of the trial, following which it became clear that they were transactions at the Marrickville branch of the Commonwealth Bank. This must have been known to the defendants and those advising them well in advance of the trial. However, it only became apparent to me after the conclusion of Zoi's cross-examination (the unredacted bank statements were tendered on the Thursday afternoon, and without a working copy for me). I raised this at the commencement of addresses on Monday 5 February, and after a short adjournment the defendants reopened their cases without the plaintiff's opposition. Zoi gave this account, which warrants reproduction in its entirety: Q. Did you explain to the Court why you blanked out that entry [scil, the deposit of $10,000 on 10 May 2019]? A. I don't remember. What - what I will say is I went through those statements, sorry, the first time, and I just thought, oh, you know, they only want to see what's relevant to the case or whatever, and I would have - I - I thought that I'd started off crossing all the details, because I thought it's not appropriate that you see things like, you know, I don't know, mum's need or whatever the stuff is, right, or NRMA or whatever the - the stuff is, right, but I also redacted other things which, again, I mean, you can find on the - on the unredacted statements what they are, there's two amounts, like two credits that are also redacted. Why did I redact them, I don't - I don't remember, I just, you know, I don't remember. Q. Now, could you go again to exhibit D, page 54. A. D, yes, page which, 54, oh yes. Q. And you see that on the entry of 28 May, there again appears $10,000. A. Yes. Q. And the transaction is redacted. A. Sorry, oh, yes, yes, that's right, but I've also redacted other ones on page 91 I - I don't remember why I did them, I know that this is 2019. The other ones that I redacted were 2017. Maybe at the time I thought oh, this irrelevant or - and - and clearly, like, you wouldn't be able to deposit, like, 10,000 in cash, I don't think, to the bank now without making some sort of, you know, there's a - a form that you complete when you deposit more cash or particular amounts of cash, so I don't - yeah, I don't know. Q. And I've taken you to page 54, I was taking you to the entry of page 54. A. Yes. Q. And for completeness, I'd ask you to go to page 196 in exhibit F; can you see that? A. Yes. Q. And you see, I think the last entry you'll see is the $10,000, and it says, "cash deposit branch Marrickville". A. Yes. Q. Do you have any further explanation for that? A. I don't, no. HIS HONOUR Q. Ms Apostolatos, there would have been a reason at the time for you redacting some of these entries. I understand your evidence is that now, some years later, you just can't remember what it was. A. No, no, so initially when I redacted them, and you know, I - I - I didn't know what to provide, what to - I thought - I thought they're not going - they're not interested in, you know, sorry, in Eastern Distributor or AGL, I - I - I thought anything that said-- Q. You didn't redact AGL. A. No, I know, what I - what I mean is I thought I - I need to, sort of, there are some stuff that I thought, you know, it's not relevant, I - that's what I would have thought at the time I think, I - and I don't remember. You're talking about 2019 and 2017, and - no, this is 18, sorry, no, that's a different statement altogether.
Zoi's answers were verbose, but not informative.
Significantly, it is plain from the joint account statements that there was no immediate need for $10,000. The account had a running balance of around $300,000 at the time (this only became apparent on the third day of the trial). It follows that this was not a case where there could have been instructions from Lakis given to Anthony and then passed on to George or Zoi to the effect that $10,000 was to be used for a particular purpose then and there.
Zoi said she did not remember why she redacted those entries on the joint account bank statements. I draw the obvious conclusion that by redacting these two deposits, Zoi was seeking to conceal from Tony and his lawyers the fact that $10,000 had been received, twice, into the joint account from Lakis' money. She may or may not have had in mind that that receipt did not sit well with the case propounded by the defendants that while they received thousands of dollars of Lakis' money withdrawn by Anthony, each receipt was accompanied by instructions as to how it was to be spent. To be clear, I do not find that Zoi was consciously lying when she said she did not recall why she had redacted these entries. Nor is the purpose which motivated her or any lawyers assisting her especially relevant. It is sufficient to conclude that the defendants have fallen far short of satisfying me that those amounts of $20,000 taken from Lakis' account on 10 and 28 May 2019 were withdrawn in accordance with Lakis' instructions.
It will be seen that there was a marked change in the pattern of withdrawals after May 2019. They became larger, and as summarised above some cannot be reconciled with an instruction from Lakis that the money was to be spent on a particular purpose. It is possible that this coincided with a confrontation between Tony and Anthony. The evidence was that Tony's confrontation with Anthony at St Basil's occurred in 2019 (although it was said - seemingly based on recollection rather than upon any document in evidence - that it was later in the year, rather than May).
That said, it is not necessary in order to resolve this litigation to make a precise finding as to Anthony's motivation. It was squarely put to Anthony in cross-examination that there was no authorisation from Lakis for the withdrawals. But Tony's claim does not depend upon my accepting that this is a case of conscious deceit.
Anthony may have believed that Lakis genuinely wanted him and his family to benefit from his wealth, and that Tony deserved nothing. He may have acted in the genuine belief that he was attempting to carry out Lakis' wishes. He may also have been concerned that if he did not take steps to distribute Lakis' wealth, Lakis was apt to be preyed upon by others. But what is critical to this case, and which distinguishes it from many, is that this was not a case of a close friend or housekeeper or nurse looking after an elderly person who has little contact with his or her family, to whom the elderly person makes gifts. This is a case where the transfers of wealth were not made by the elderly person. They were made by Anthony in the exercise of his power as agent in relation to Lakis' bank accounts. It is the exercise of that power which gives rise to a fiduciary duty and the stringent standards equity demands of fiduciaries.
To reiterate, it is not necessary in order to resolve this litigation to find that Anthony behaved deceitfully, and I make no such finding. Let it be assumed that Lakis, despite being unable to live independently, remained of sound mind in the whole of the four years prior to his death aged 93. It is sufficient for me to conclude that I am not satisfied by the evidence that Anthony's conduct in withdrawing Lakis' money was authorised by him. In large measure that conclusion turns on the objective facts, including the 2015 and 2016 wills prepared with the benefit of legal advice and the absence of independent legal advice concerning substantial transfers which were to the prejudice of Lakis' granddaughter, notwithstanding the evident desire on the part of Lakis to connect with Tony and, especially, his granddaughter. In part, however, it is informed by the unsatisfactory nature of the defendants' attempts to explain why Anthony did what he did, and in particular their inability to provide any explanation at all for the three largest withdrawals from the 8296 account of which he was a signatory.
It was common ground that Anthony caused all of the cash withdrawals from the 8296 account. I have found that Anthony also caused all of the diminutions in the principal reinvested in the term deposits. Critically insofar as Tony's case is based on a breach of fiduciary duty, I find that Anthony owed Lakis a fiduciary duty in respect of his causing transactions on both of Lakis' Commonwealth Bank accounts, that the duty was breached when hundreds of thousands of dollars - far more than was required for Lakis' medical and nursing home expenses for the foreseeable future - were transferred to the benefit of Anthony and Zoi and George, and that Anthony has failed to establish that those transactions occurred with the fully informed consent of Lakis.
Anthony gave no evidence of the circumstances in which the term deposits were in part rolled over on maturity with the uninvested amount being deposited into the joint account of Zoi and George, or else into Lakis' 8296 account. His counsel's claim was that the diminution of the term deposit account must have been obvious to Lakis if he was of sound mind. I do not regard that as discharging the burden borne by Anthony. I bear in mind Lakis' age, the inconsistency with what occurred to the intentions reflected in his professionally drafted wills and the limitation upon the power of attorney, the fact that the address for the term deposit account was Anthony's own address, not that of Lakis, the absence of independent legal advice, and the inability on the part of Anthony to provide any explanation for the $30,000 and $15,000 and $13,000 withdrawals he effected on the 8296 account using the uninvested $150,000 transferred on 2 May 2019.
It follows that, subject to any applicable discretionary considerations, Anthony is liable to account to the estate for those transactions.
Before quantifying that liability, it is convenient to address Tony's claims against Zoi and George.

[25]

Tony's claims against Zoi and George

At the forefront of the claims in the proceeding brought by Tony against Zoi and George was the power of attorney. It is clear that if transactions were effected on Lakis' accounts by Zoi and George using their power of attorney, then insofar as the money withdrawn was not used to pay Lakis' medical and nursing home expenses, the condition upon the power of attorney was contravened. It is also clear that no attempt was made by Zoi and George to keep such funds separate from their own.
George was cross-examined on the basis that it was Zoi who was almost exclusively concerned with the operation of the joint account, and I shall proceed on the same basis, which accords with George's and Zoi's evidence. I find that George never used the power of attorney.
I also accept Zoi's evidence that the power of attorney was not used to the best of her recollection. I do so notwithstanding the explicit statement by her solicitor, said to be on her instructions, that she acted as attorney, and the less than satisfactory explanation given by her for (a) why it took until immediately prior to her cross-examination for the volte face to occur and (b) how the error came about. For one thing, much in Mr Tsintilas' letter of 6 August 2021 is demonstrably wrong (including what was said about the payments for Anthony's car and the $28,000 said to have been paid to Tony). But the main reason for accepting her evidence is that it is not plausible that the power of attorney was in fact used. It was not necessary to use the power of attorney to cause payments to be made from the joint account to pay St Basil's and Lakis' medical expenses; Zoi was the legal co-owner of the account. There is no suggestion that Zoi or George was involved in the withdrawals of amounts of $1,500 or $1,600 or $3,000 in banknotes from the Marrickville branch of the bank, and to the contrary, Anthony says and I accept that he did so as a signatory on Lakis' account. Nor is there any suggestion that Zoi or George was involved in the events which occurred at the maturity of the term deposit, which took place at the Marrickville (or Marrickville Metro) branches of the Commonwealth Bank with Anthony.
It follows that the claim against Zoi and George insofar as it is based upon the use of the power of attorney must be dismissed.
Separately, paragraph 15 of the statement of claim in Tony's proceeding against Zoi and George alleges that they failed to pursue their father for his role in dissipating Lakis' wealth. Insofar as Tony has been permitted to sue Anthony on that claim, then any failure by them is not causative of any loss unless perhaps it be shown that the delay has meant that the estate cannot fully recover against Tony. That has not been established.
There is also a claim that Zoi and George failed to disclose monies paid to their account and used by them to their own benefit as debts due to the estate. That claim must be upheld. In the case of some receipts, the failure to disclose continued until the third day of the trial (for example, the deposits into the joint account of $10,000 on each of 10 and 28 May 2019, which were made when Anthony withdrew $13,000 and $15,000 from the 8296 account, which Zoi saw fit to redact for reasons she said she could not recall). There were also the redacted credits of interest from the term deposit of $7,561.64 on 2 August 2016, and $6,553.42 on 2 November 2016, which were only provided in unredacted form on the third day of the trial.
The only bank accounts of the executors that were tendered were the estate account and the joint account. Nothing improper was alleged concerning the estate account. On 2 May 2016 there were two deposits into the joint account of $51,650.29 and $36,960. These may plausibly have represented part of the proceeds of sale of Lilyfield - and indeed Mr Finch invited me so to find in closing address (which was the first time they were mentioned in the case). Those deposits may plausibly have anticipated nursing home expenses which Lakis would incur and which it was expected would be paid from Zoi's and George's account. In any event, and dispositively, those deposits are outside the case which Tony has run, which has been based on the dissipation of the $1,000,000 term deposit and the 8296 account. I put these to one side.
The following deposits were within the case propounded by Tony at trial. They are unambiguously sourced from Lakis' funds, either because they reference the 3109 term deposit account, or for reasons which have been explained above. 1. On 2 August 2016, a deposit of $7,561.64. 2. On 2 November 2016, deposits of $170,000 and $6,553.42. 3. On 2 May 2017, deposits of $40,000 and $8,926.03. 4. On 26 August 2017, a deposit of $150,000. 5. On 3 April 2018, a deposit of $200,000. 6. On 10 May 2019 a deposit of $10,000. 7. On 28 May 2019 a deposit of $10,000. 8. On 2 October 2019, a deposit of $50,000. 9. On 2 March 2020, a deposit of $50,000.
Those deposits add to slightly more than $700,000. All came directly from one or other of Lakis' accounts, and in a practical sense all were derived from the interest from the term deposit, or the part of the term deposit which was not reinvested at maturity. For the reasons given above, they were received into the joint account by reason of Anthony's breaches of fiduciary duty. Zoi and George are required to account to the estate for them.
I shall return below to the other money received by Zoi and George.

[26]

Quantification of relief

I do not find that Anthony's breach of fiduciary duty was one of conscious deceit. Mr Morahan confirmed during closing address that I was not asked to make any such finding (T311.11). In those circumstances, it is always open to a fiduciary to ask for a reduction in the amount for which an account must be given by way of a "just allowance". None was pleaded or contended for by Mr Finch, but nonetheless with a candour reflecting the practicalities of the litigation, when I raised this with Mr Morahan he accepted that although there were very real difficulties in quantification, such an allowance might be given. He mentioned $25,000 (T337).
There is an important difference between the common law and equitable claims made by Tony. As was said in Paolucci v Makedyn Pty Ltd [2021] NSWCA 215 at [27]: If a plaintiff can establish a breach of contract which has caused loss or damage which falls within either limb of Hadley v Baxendale then so long as the plaintiff sues within six years, the plaintiff is entitled as of right to damages, irrespective of matters such as delay or hardship which might loom large if the plaintiff sought equitable relief in equity's auxiliary jurisdiction. The notion of a claimant having an entitlement as of right to damages and the possibility of discretionary pecuniary relief is not unfamiliar: consider for example damages and account of profits for copyright infringement, analysed by Lockhart J in Masterton Homes Pty Ltd v LED Builders Pty Ltd (1996) 33 IPR 417 at 424-425, or the right to damages and the discretionary power to make compensation orders under ss 236 and 237 of the Australian Consumer Law noted in Jonval Builders Pty Ltd v Commissioner for Fair Trading (2020) 104 NSWLR 1; [2020] NSWCA 233 at [19], [25] and [39]-[41].
On Tony's own case, he knew that Anthony was taking Lakis' money in 2019. He said at the time that he could prove it; that may or may not have been correct, but it is suggestive of being in a position to commence proceedings. And Tony was correct to allege that Anthony was taking Lakis' money, with the scale of withdrawals increasing markedly from May 2019. Yet Tony did not commence proceedings until 2022.
There is another consideration. There was evidence given, albeit only in general terms, that suggested that on some occasions at least Lakis received large amounts of cash from Anthony. There was evidence that the nurses in the nursing home were concerned about the cash in his possession, for which St Basil's would not be responsible if it were lost. There was a suggestion that Lakis gave money to a Greek community radio station. There was evidence of an occasion when two women extracted Lakis from the nursing home and sought to obtain $25,000 from him (the evidence suggested that their attempt failed, because he did not have such money, but their conduct suggests that from time to time he had banknotes in his possession).
It was for Anthony to establish that he handed over all of the money he withdrew from Lakis' account, and he has failed to do so. However, equitable relief issues here to vindicate the high standards of fiduciaries and to compensate those to whom fiduciary duties are owed; I am bound to hold that it may not issue to punish the fiduciary: Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; [2003] NSWCA 10. I incline to the view that if Anthony were required to account for the entirety of the dissipation of both of Lakis' accounts, the result would be penal.
I would add that there is a qualitative difference between relatively small withdrawals reflecting the monthly pension payments into the account, and the much more substantial withdrawals from May 2019 which drew on the part of the term deposit which was not reinvested. It is one thing to spend the relatively small income of a man in his nineties in a nursing home, and it is another to dissipate the capital accumulated over his lifetime.
Weighing all those considerations together, I will not grant relief against Anthony for the $35,700 withdrawn from the 8296 account between April 2016 and April 2019. I should add that had I been asked to find, and had found, that this was a case of conscious deceit, it is likely that I would not have exercised this discretion differently.
The orders against Zoi and George are confined to the amounts received by them for which they should have accounted to the estate. I am conscious of Zoi's evidence of thousands of dollars of cash in envelopes received by them from Anthony. I accept her evidence to that effect. It is plausible that some and indeed most of this was received in the period between late 2016 and May 2019, in respect of which the discretionary considerations referred to above apply. It is one thing for Zoi or George to have received relatively small amounts of cash to pay particular expenses. It is another thing for hundreds of thousands of dollars from Lakis' wealth accumulated over a lifetime, far exceeding the anticipated costs of his medical and nursing home expenses, to be deposited into their account and thereafter retained, or transferred to other accounts, or else spent on loan repayments, cars, and general household expenses.
Given all those circumstances, I am unpersuaded that Zoi and George should have to account for amounts other than those established to have been deposited into their joint account.
Each defendant is entitled to credit for $179,612.66 of expenses paid from the joint account, plus $50,015 paid to Tony. I understood these amounts to be agreed. Tony claimed an amount of $983.42 which was a bank fee apparently charged in the financial year ended 30 June 2017 connected the early breaking of the term deposit (see Exhibit D p 8). No submissions were addressed to why this was not an authorised expense. It may have had to do with the need to provide the accommodation bond. I do not accept this element of Tony's claim.
The result of the above is that Anthony must account to the estate in the amount of $880,000 (the running down of the term deposit) plus $41,203.84 (the interest earnt from the term deposit) plus the unauthorised withdrawals from the 8296 account to the extent they exceeded the amounts of principal and interest from the term deposit which were deposited into the 8296 account. It may be that I misunderstood Tony's claim in the last three pages of his closing written submissions, but I do not accept that Anthony must compensate (a) for the transfer of $150,000 and $30,000 from the term deposit to the 8296 account and also (b) for the withdrawals from the 8296 account which were not authorised and which were only possible because of the $150,000 and $30,000 deposits. Even if the transfer from the term deposit to the 8296 account and the subsequent withdrawal from the 8296 account were both unauthorised, there is only a single loss to the estate. I should add that I may have misunderstood the submission and what I have summarised in the previous two sentences may not in fact have been claimed by Tony.
From the total of unauthorised withdrawals of Lakis' money thereby calculated must be deducted $179,612.66 of authorised expenses paid from the joint account as well as a further $50,015 paid to Tony.
Zoi and George are jointly and severally liable to account to the estate in the amount of just over $700,000 less $179,612.66 of authorised expenses paid from the joint account and less the $50,015 paid to Tony.
To be clear, Tony (standing in the shoes of the estate) is not entitled to double recovery. Thus insofar as the amounts withdrawn by Anthony are in fact recovered from Anthony, to that extent the recovery will operate to discharge the judgment against Zoi and George. Another way of putting this is that every dollar for which Zoi and George are required to account as recipients is a dollar which Anthony is required to account as the person who caused the transfer from Lakis' account.
It also follows that Anthony on the one hand, and Zoi and George on the other, will to the extent that one pays more than his or their fair share, have rights of contribution as between each other.
I understood it to be common ground at the conclusion of the trial that if I found in favour of Tony, the parties should be heard further in relation to interest.

[27]

Conclusion and orders

For those reasons, I have concluded that Tony in substance succeeds against all defendants, albeit only on one of the causes of action he has advanced. It is clear that Zoi and George should be removed as executors. As presently advised, I see no reason why Tony should not be appointed in their place, and I did not understand the defendants to submit to the contrary. However, at present I shall merely make an order, backdated to the commencement of the trial, authorising Tony to bring these proceedings pursuant to UCPR r 7.10.
It is true that Tony has failed in his main claim against Zoi and George based on the power of attorney. However, in circumstances where until the third day of the trial, the defendants had positively propounded a case that Zoi as attorney caused Lakis' money to be withdrawn and spent not only on nursing home expenses but also on other expenses in accordance with (so it was said) Lakis' instructions, it was reasonable for Zoi and George to be sued for contravening the limits of the power of attorney. The defendants should pay Tony's costs in each proceeding, on the basis that there was a single set of costs incurred by Tony.
Very little attention was given in the litigation to the administration of the estate. Instead, the litigation turned upon breaches of duty alleged against Anthony, Zoi and George while Lakis was alive. It seems likely that there are no or no significant costs attributable to the administration of the estate, as opposed to the defence of the claims against Anthony, Zoi and George for their conduct while Lakis while alive. Another way of putting this is that Zoi and George were sued primarily as Lakis' attorneys and as recipients of money withdrawn by Anthony while Lakis was alive, rather than as his executors after his death. However, it will be open to Zoi and George to apply for a further order if so minded that some part of the costs of the litigation ought to be borne by the estate. Plainly any such application would be one as to which Tony, as primary beneficiary of the deceased estate, would be entitled to be heard.
I make the following orders:
Pursuant to UCPR r 7.10, order with effect from 30 January 2024 that the plaintiff in each proceeding be appointed as representative of the deceased estate of Theodore Katsoulas (known as Lakis) who died on 16 January 2021.
Direct the plaintiff to supply proposed short minutes of order reflecting (a) the revocation and grant of probate and (b) the pecuniary relief he seeks in each proceeding by email to my Associate copied to the defendants within 7 days of today, including a short explanation of the calculations.
Direct the defendants to supply within 14 days of today a note identifying any aspects of the plaintiff's proposed orders with which they disagree, and any orders which they seek, and a short explanation of the reasons therefor.
I shall advise the parties what steps will be taken thereafter in the event there are matters remaining in dispute.

Katsoulas v Kritikakis; Katsoulas v Apostolatos

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