Lai See Law by her Tutor the Protective Commissioner of New South Wales v Yan Mo

Lai See Law by her Tutor the Protective Commissioner of New South Wales v Yan Mo - [2009] NSWSC 639 - NSWSC 2009 case summary — Zoe

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… 7. I continued to visit Mr & Mrs Law regularly. I also visited Mrs Law's son, Albert Wong, weekly. Albert has disabilities which prevent him form (sic) leaving his house. I cooked for him and left meals in the fridge so that he only needed to heat them up. I also helped clean his unit." 6 By 2001 the plaintiff's short-term memory had declined to a point that her general practitioner referred her to a specialist Geriatrician for her dementia and to assess whether she was a suitable candidate for the medication, Aricept. She was reviewed regularly by her specialist during the period 2001-2004 and became increasingly dependant on Mr Law. Although arrangements were made, the plaintiff refused to move into a nursing home. 7 There was no evidence from the plaintiff as her health has declined since suffering a stroke in 2006. There was evidence from the defendant and from a number of witnesses in the defendant's case in relation to communications with the plaintiff and Mr Law in 2004 and 2005. In the absence of evidence from the deceased and the plaintiff it will be necessary to approach the claims with caution and to review the whole of the evidence and the contemporaneous documents to assess the defendant's claims in relation to those communications. 8 The defendant claimed that in 2004 Mr Law informed her that it was very difficult for him to continue looking after the plaintiff and he wished to make plans so that he and the plaintiff could move into a house together with the defendant and her husband. The defendant claimed that a suitable property was found in Doonside and that her husband agreed to borrow money from relatives to purchase that property (the Doonside property). The defendant claimed that Mr Law informed her that after he sold the Property he would use the proceeds to pay off the mortgage and personal loans on the Doonside property and that her ex-husband would transfer the Doonside property into the defendant's name. 9 Mr Law became unwell in 2005 and required regular chemotherapy. The defendant claimed that Mr Law advised her that he wished to put the Property on the market and in August 2005 both he and the plaintiff moved into the Doonside house with the defendant and her husband. At that time Mr Law entered into an Agency Agreement with a real estate agency for the sale of the Property by private treaty at a sale price of $1.2 million. 10 Feng Ling Li, gave evidence that in July 2005 when she visited the plaintiff and Mr Law at the Property, the plaintiff informed her that Mr Law was very sick and not able to look after her and that it was impossible to continue living without assistance. Mrs Li claimed that the plaintiff advised her that she and Mr Law had decided to move in with the defendant and her family and that the defendant would look after them "to the end of our lives". Mrs Li claimed that the plaintiff informed her that they had to sell the Property and use the funds from the sale to pay off the loan on the Doonside property and to pay their living expenses and those of the defendant's family. Mrs Li claimed that the plaintiff advised her that this would enable the defendant to look after herself and Mr Law fulltime. 11 On 10 August 2005, Mr Law and the defendant attended Frankie Chan, Mr Law's solicitor. Mr Chan's file note of that meeting records that Mr Law instructed that the plaintiff could not look after herself and that he had cancer. Mr Law wanted to ensure that the defendant would have the right to decide "his" well-being. (The note is somewhat difficult to read and it may well be that it records "her" (meaning the plaintiff's) well-being). The note also records that Mr Law wanted to leave "all" his estate to the defendant. It appears that there was also a discussion about the Property but the detail is not recorded. 12 The defendant gave evidence that on about 18 September 2005 Mr Law advised her that he was concerned that Phyllis Law, his daughter-in-law, would come and "snatch" the Property and that was why he wanted to sell it and use the proceeds to pay off the defendant's husband's mortgage. 13 Mr Law became increasingly unwell in late September 2005. On 18 September 2005, with the assistance of Mr Chan both Mr Law and the plaintiff signed General Powers of Attorney in favour of the defendant to operate "immediately". In the case of Mr Law's Power of Attorney, the defendant was authorised to confer benefits on the plaintiff to meet her reasonable living and medical expenses as provided by s 13(2) of the Powers of Attorney Act 2003. Mr Chan provided a certificate under s 19 of the Powers of Attorney Act in respect of both the plaintiff and Mr Law. 14 Mr Chan's file note of 30 September 2005 records a telephone call from the defendant asking if the Powers of Attorney had been finalised and advising that Mr Law had been admitted to hospital the previous evening. The note records the following:

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Met Mrs Law again at 4.35pm after she got access to ANZ Safe Deposit Box. Collected original C.T. and attended to signing of Notice of Death. 21 The Statutory Declaration records the plaintiff's place and date of birth and her name; that she was married to Mr Law in Hong Kong on 15 October 1973; that after she and her husband migrated to Sydney in about 1976 she had been using her married name in all formal documents; and that in 1981 she and Mr Law purchased the Property in which they had resided until his death on 6 October 2005. 22 On 31 October 2005 the defendant and her sister attended Mr Chan's office and asked to collect the plaintiff's original documents. Mr Chan telephoned the plaintiff and asked her why the defendant was at his office. Mr Chan's note records that the plaintiff said she wanted the defendant to collect her documents for her. Mr Chan asked the plaintiff why she required the original documents and the plaintiff apparently responded that she wanted to keep the documents herself. Mr Chan informed the plaintiff that she must look after the original documents. Mr Chan then gave the defendant the original Certificate of Title, a cancelled Certificate of Title, the plaintiff's Will dated 9 October 2005 and the Powers of Attorney and the Appointments of Enduring Guardian dated 18 September 2005. 23 The defendant claimed that shortly after Mr Law's death, the plaintiff advised her that she did not have the strength or the will to renovate the Property and sell it. She also claimed that the plaintiff said that she wanted to give the Property to the defendant so that she could renovate it and then, if the price was right, to sell it. The defendant claimed that the plaintiff advised her that she would have to mortgage the Property so that she could pay for the renovations and that if the Property could not be sold for a good price they could move back in when the renovations were completed and wait until the market was right. 24 Between September and October 2005 John Sheh-Chau Chang, then working as a sales associate with Century 21 Real Estate agency, acted for the plaintiff and Mr Law in marketing the Property. The offers that he received, around $750,000, were below expectation. 25 On 7 November 2005 Mr Chang spoke to the defendant on the telephone about renewing the Agency Agreement for the sale of the Property. The defendant said that the plaintiff was next to her and that she needed to see what the plaintiff wanted. She asked Mr Chang to wait for a moment. A few minutes later the defendant said, "Mrs Law said let's terminate the Agency Agreement now. She wishes to renovate the property before putting it onto the market again. This is Mrs Law's decision. Mrs Law asked me to tell you that because she can't hear you well over the phone". 26 Although the defendant gave affidavit evidence that on 15 November 2005 the plaintiff said to her, "Ask a conveyancer or a solicitor to come to see me. I like to transfer my Killarney Heights Property to you", it was on 10 November 2005 that she telephoned Ms Daisy Thai, a conveyancer, and instructed her that the plaintiff wished to sell the Property and instructed her to prepare a contract for that sale.

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27 Ms Thai's file note dated 13 November 2005 records that the defendant telephoned and advised her that the plaintiff had changed her mind and she no longer wished to sell the Property. The defendant advised Ms Thai that the plaintiff had decided to give her the Property for $1 because she had looked after the plaintiff for a long time. Ms Thai advised the defendant that, although the transfer was for $1, a valuation report would still be necessary. Later that day the defendant went to Ms Thai's office to pay the fee for the valuation. On that occasion the defendant provided Ms Thai with a copy of the Will, a copy of a Power of Attorney, and an order of the Form of Appointment of Enduring Guardian appointing the defendant as the plaintiff's guardian. Ms Thai asked the defendant whether the plaintiff had a solicitor and the defendant advised her that the plaintiff would rather instruct Ms Thai because of the cheaper fees. 28 Subsequent to the telephone call from the defendant, Ms Thai prepared a Transfer and a document entitled "Acknowledgement and Instructions". She attended the Doonside property at about 3 or 3.30pm on 16 November 2005 with those two documents and her Client Service Agreement. The defendant introduced Ms Thai to the plaintiff as "the conveyancer" who was there to attend to the documents for the transfer of title on the Property. Ms Thai gave evidence that she then spoke with the plaintiff separately from the defendant in an upstairs living area at the Doonside property. The defendant claimed that she was present at the conversation between Ms Thai and the plaintiff but that she was unable to recall what was said. 29 Ms Thai gave evidence that she explained to the plaintiff that she was not a solicitor and that she was a conveyancer dealing only with the transfer of title and with no other laws. Ms Thai asked the plaintiff if she had instructed for her title to be transferred wholly and solely to the defendant. The plaintiff said, "Yes". Ms Thai asked the plaintiff whether she understood that once she transferred the Property in whole, she no longer owned the Property and the defendant could sell, mortgage, lease, renovate, demolish and do whatever she liked with the Property. The plaintiff said, "Yes". Ms Thai asked the plaintiff whether she was transferring the Property to the defendant for a sum of money and the plaintiff said "No, I am giving the property to Miss Yan Mo and I do not want anyone else to have that property". Ms Thai then asked the plaintiff why she wanted to transfer the Property to the defendant. The plaintiff said that the defendant had looked after her for a long time and that she trusted her. She said that she did not want to deal with solicitors or real estate agents, signing documents and the like because she was very weak. Ms Thai gave evidence that the plaintiff kept repeating herself about her signature, that her hands were shaking, that she was not able to sign the document. Ms Thai assured the plaintiff not to worry and to do her best. Ms Thai's evidence was that she then met with the defendant and witnessed her signature on the Transfer. 30 Ms Thai was cross-examined in relation to the Acknowledgement and Instructions document as follows (tr 128-131):

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34 The plaintiff's signature on this document was purportedly witnessed by Mr Liu and the defendant's signature was witnessed by Ms Thai. 35 Zeng Xiong Liu gave evidence that he attended upon the plaintiff at the defendant's request on 16 November 2005 at about 6pm. He gave evidence that he spoke with the plaintiff for around 6 or 7 minutes on the second floor in the living room of the Doonside property. He said that he explained to the plaintiff that the defendant had asked him to come over to the Property to be a witness. He asked the plaintiff why she wanted to transfer the Property to the defendant and the plaintiff said she was very old and she would not be able to deal with the Property. She also said that after she transferred the Property to the defendant "all the things after her death will be taken care of" by the defendant. 36 Mr Liu gave evidence with the assistance of an interpreter. It was clear from his evidence that he spoke some English but as he said "not very well". He said he read English but not very well, but when he was asked to read the Transfer his response was that he could not read it because it was just "too small" and he was far-sighted. His evidence was that when he first saw the Transfer the plaintiff had already signed it and that the plaintiff signed the Transfer four times in his presence. He denied putting a line through or crossing out any of the plaintiff's signatures. He asked the plaintiff to sign on the second occasion because he thought that her signature was "a little bit different from her signature" and he asked her to sign again. Although this aspect of his evidence was not taken further, there is no evidence before me to suggest that Mr Liu had ever seen the plaintiff's signature prior to her signing the Transfer in his presence on the first occasion. After Mr Liu signed the document and witnessed the plaintiff's signature, he gave it to the defendant. Mr Liu also gave evidence that when he received the Transfer to place it before the plaintiff, the defendant's signature was not on it. He then gave the following evidence (tr 120) (omitting reference to the interpreter):

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Q: Did you witness, Mrs Law, sign this document at page 87? A: No. 38 When this document was shown to Mr Liu he sat silently for a number of minutes before providing a response. There was no re-examination of Mr Liu to clarify his evidence that it was not his signature and that he did not see the plaintiff sign it. 39 After the Property was transferred to the defendant, she borrowed funds from the Westpac Banking Corporation, secured by a registered Mortgage over the Property. The defendant commenced drawing down those funds in December 2005 and continued to do so until the Protective Commissioner became involved in the management of the plaintiff's affairs. 40 On 18 December 2006 the Guardianship Tribunal made an Interim Financial Management Order under the Guardianship Act 1987 that the plaintiff's estate be subject to management under the provisions of the Protected Estates Act 1983 for a period of two months and that the management of the estate be committed to the Protective Commissioner. On 15 February 2007 the Guardianship Tribunal made a Financial Management Order and a Limited Guardianship Order in respect of the plaintiff. 41 Prior to making the Limited Guardianship Order on 15 February 2007 the Guardianship Tribunal received a statement from the defendant in which she described her friendship with the plaintiff and Mr Law. The defendant described Mr Law's suspicions of his daughter-in-law and made allegations that his daughter-in-law failed to support Mr Law and the plaintiff. That statement included the following: When he was alive long ago, Mr Law had expected that Mrs Phyllis Law would be sure to come and snatch their property and that I would suffer losses. That's why Mr Law wanted to and planned to sell their house and come to live with my family and I in order to protect him and his wife from the harassment of Mrs Phyllis Law and also provide them with a peaceful life. On the 18 th of September 2005, Mr Law had an appointment with a solicitor at my place and in clear minds, willingly signed the documents, giving me the power of enduring guardian and attorney so I could do anything in order to accomplish their will and protect the interest of every one of us.

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Mrs Phyllis Law forced us to give to her the Killarney heights property each time she visited. She also said that she would take God mother away to live with her and let God mother distribute to them all that belongs to her. God mother was very shocked when hearing this. In order to foil her ambitious desire and avoid falling into her trap as a result of a long delay that may give rise to many a hitch, God mother determinedly asked to me get the solicitor and gave me as a gift the Killarney Heights property without delay. She asked me to take it to the bank for mortgage and use part of the money for the renovations, part of the money for the daily expenses and what remained for the payment of her son's carer from the community volunteers. When the renovations are completed, we would all move back. I did what she asked me to. 42 The statement then outlined the further medical problems suffered by the plaintiff in 2006 and the regime of treatment at the aged care centre. It also included a claim that the defendant would bring the plaintiff "home for continued care" if the doctor thought it was permissible for her to be discharged from the aged care centre. 43 The defendants ex-husband, Zhi Qiang Jiang, gave evidence that after Mr Law's death he was present at a conversation between the plaintiff and the defendant in which he claimed the plaintiff said that she did not have the strength to go through all the troubles of renovating the Property and that it was "even difficult for me make a signature". He claimed that the plaintiff said that she wanted to transfer the Property to the defendant so that she could apply for a loan and to obtain funds to pay for "our daily living costs" and renovation of the Property. Mr Jiang also claimed that the plaintiff said that when the renovations to the Property were completed, it could be sold and the mortgage on the Property and the mortgage on the Doonside property could be paid off and the remainder could be used to "cover all our living expenses". 44 There is no evidence that the plaintiff was ever made aware of the amount of the mortgage on the Doonside property. Mr Jiang claimed that he borrowed approximately $500,000 and that whilst the plaintiff and Mr Law were living at the Doonside property, Mr Law was sharing part of the payments with him. Mr Jiang claimed that he is a pensioner, that he does not work and that the mortgage payments have not been made since late 2005. There is no evidence at all in relation to the present amount outstanding on the mortgage for the Doonside property, the loan details or any detail of the repayment requirements. 45 Mr Jiang was asked whether the defendant was helping him with the mortgage payments on the Doonside property. His response to that question was that the defendant was "in difficulty herself, how could she help me? She couldn't deal with that herself. And she needed to pay off her own mortgage" (tr 154). Mr Jiang was then cross-examined as follows (tr 154): Q. In paragraph 30 you say "she stopped helping me to meet the mortgage payments". You were there referring to Mrs Mo helping you meet the mortgage payments on the Doonside property, weren't you? A. Well, it happened like that. Around the 20 th of August when Mr Law moved in he helped me in paying off the mortgage but when he moved away he stopped helping me paying the mortgage back to the bank and after the renovation and after he moved out I had to take on the whole mortgage thing myself.

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Medical Evidence 55 The plaintiff has had multiple medical problems, both physical and mental. Dr Ernest Tam, her Treating Consultant Physician and Geriatrician, gave evidence of his observations and diagnosis of the plaintiff since he commenced treating her in April 2001. On 7 April 2001 Dr Ng Jit Seng referred the plaintiff to Dr Tam for evaluation of "her dementia and whether she is a suitable candidate for Aricept". On 28 April 2001 the plaintiff and Mr Law attended Dr Tam in relation to a decline in her short-term memory. Dr Tam conducted the Mini Mental State Examination (MMSE) in which the plaintiff scored 23/30. Both Dr Tam and the expert called by the defendant, Dr Tuly Rosenfeld, gave evidence of the limitations of the MMSE, particularly for non-English speaking people. Be that as it may, the test has to be performed if a medical practitioner is to prescribe Aricept for dementia and/or Alzheimer's disease. During the period 2001 to 2004, Dr Tam reviewed the plaintiff a number of times and wrote reports to her general practitioner, Dr Seng. 56 On 2 June 2001 Dr Tam reported to Dr Seng that the plaintiff had presented with a "year history of short-term memory loss" and that she had frequently misplaced things. Dr Tam advised, inter alia, that he had prescribed Aricept "hopefully to improve her cognitive function". His letter included the following: Her dementia is multi-factorial, probably contributed by an underlying Alzheimer's Disease, vascular dementia and a mild normotensive hydrocephalus. At the age of 85, I think it is worthwhile to observe her progress, rather to subject her to operative intervention including shunting. 57 On 30 June 2001 Dr Tam advised Dr Seng that the plaintiff had presented with Mr Law on that day for review and that Mr Law had said she responded very well to Aricept and accordingly the dosage was increased from 5mg per day to 10mg per day. On 3 November 2001 Dr Tam reported to Dr Seng that the plaintiff had scored 25/30 in the MMSE on 27 October 2001 compared to the 23/30 on 2 June 2001. He also advised that he had asked the plaintiff to continue with her Aricept at 10mg per day. The MRI of the brain that was performed on 1 November 2001 showed cerebral atrophy and ischaemic gliosis. 58 Dr Tam saw the plaintiff in 2002 but did not write any further reports to Dr Seng. The first report was dated 31 May 2003 in which Dr Tam noted the plaintiff's condition was "better, but not settled". The next report was dated 4 October 2003 in which Dr Tam said that there had not been "any significant cognitive deterioration". He advised that the plaintiff was dependant in activities of daily living and referred to her various medications and other physical problems. A further report of 8 November 2003 referred once again to there being "no significant cognitive deterioration". Dr Tam advised that the plaintiff required high-level care but that her husband preferred to look after her at home with support. 59 Later in 2003 the plaintiff was apparently reviewed by the aged care assessment team and was given approval for high-level care in a nursing home. There was an attempt to admit the plaintiff to Abrina Nursing Home in Ashfield but this did not meet with the plaintiff's approval.

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60 Dr Tam saw the plaintiff again on 7 August 2004 with Mr Law. On that occasion Dr Tam noted that there was "increased dependency" and he once again prescribed Aricept. 61 On 5 February 2005 Mr Law attended upon Dr Tam and advised him that the plaintiff was too frail to attend. He advised Dr Tam that Sydney Home Nursing Service was attending twice a week and the Community Aid was attending two hours twice a week to assist the plaintiff. 62 Although the note is somewhat ambiguous Dr Tam said that the plaintiff attended with Mr Law and her granddaughter, Lisa, on 6 August 2005. Dr Tam noted "dependent, repeat treatment, advise care". Dr Tam said this note meant that the plaintiff was in such a debilitated cognitive and physical state that she needed nursing home care. His evidence was that it was a reflection of the plaintiff's very poor or very frail condition, cognitively and physically since 2003 (tr 71). This was the last time that Dr Tam saw the plaintiff. 63 Dr Tam received a letter dated 25 November 2006 from Mrs Phyllis Law. That letter advised Dr Tam that her father-in-law and the plaintiff had moved into the defendant's property because the defendant had claimed that she was a trained nurse and would take good care of the plaintiff and Mr Law. The letter advised Dr Tam that the plaintiff had been in a nursing home and requested Dr Tam to give a professional letter to state how long the plaintiff had been seeing him and to provide the medical history "so that we can obtain guardianship of her". Mrs Phyllis Law attended upon Dr Tam on 25 November 2006 at which time he noted that Mr Law had demised on 6 October 2005 and that the defendant had paid $1 to buy "all their belongings". 64 Dr Tam wrote a letter dated 1 December 2006, which was apparently provided to the Guardianship Tribunal. That letter advised that the plaintiff had been Dr Tam's patient since 28 April 2001 and had been diagnosed with "dementia predominantly Alzheimer's Disease with cerebral atrophy since that time". After referring to the physical problems the letter continued: Aricept was started on 02.06.01 for treatment of her dementia. Her Mini Mental Examination score had improved from 23 on 28.04.01 to peaking at 25 on 27.10.01. Then her cognitive and physical functions were deteriorating rapidly, with increasing shortterm and long term memory loss, dyspraxia, gait disorder, double incontinence and dependency in self care and activities of daily living. Her MMSE score was 19 on 12.04.03 and fell below 10 on 04.10.03 …

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Q: Now, what do you mean by "legal capacity" in that term, doctor? A: Is she has failed mental capacity in the context of failed to communicate in terms of the context, failed to communicate in terms of the analysis and also understanding of the complications and also executions of her judgment. She had failed judgment also as reflected by many times as she was making unrealistic demands for her care and she was driving her husband mad in terms of the care situation. She was making her husband not coping. She did not have insight into how she was coping. She was dependent in terms survival in relying on people feeding her - I mean giving her food, relying on people to dress her, relying on people to look after her bowel incontinence. She was in a state of a failed mind that she was not able to understand in her interests or to carry out any logical thoughts in terms of managing her affairs, including financial affairs and personal affairs. These are all reflected in so many years - I mean, in the years of a dementia and of the behaviours and also the assessment as judged by me at that stage. 66 Dr Tam also gave evidence that people with severe dementia have speech ability but may speak without using the mind, "without knowing the consequences of her - what she's saying". Dr Tam said that patients with severe dementia can still verbalise in what he described as a "friendly way or compliance way" (tr 79-80). He also highlighted the fact that people without expert training in assessing people with dementia would often be mislead by the ability of a regimented person verbalising things. He gave evidence that this was not communicating one's intellectual thinking or comprehension of situations but rather a particular pattern that had been built into what he described as the "brain software" over many years. He gave evidence that people with dementia could execute a conversational pattern without actually thinking of the consequences (tr 80). 67 The defendant called Dr Rosenfeld, also a Consultant Geriatrician and Physician. I should say that both Dr Tam and Dr Rosenfeld are experts in their field and have practised for many years in their specialty. A drawback for Dr Rosenfeld is that he has not ever seen the plaintiff and has relied very heavily on documentary material and parts of affidavits that were provided to him. Dr Rosenfeld concluded that by the end of 2005 the plaintiff was suffering from dementia. He expressed the opinion that the presence of dementia, per say, does not however extinguish capacity to undertake a range of legal or financial tasks. He emphasised that it was the nature and complexity and the tasks in the context of the severity and nature of the underlying dementia, which determine capacity to undertake that task. Dr Rosenfeld also concluded that it was probable that the plaintiff suffered from vascular brain disease, which has a different clinical course to that of Alzheimer's disease. The clinical course is marked by episodes of deterioration and then improvement and that a characteristic of vascular disease is the focal nature of the impact of small (or larger) strokes. 68 Dr Rosenfeld reported that areas of the brain that have been spared, even relatively in extent compared to other parts of the brain, will retain function. Having made these observations Dr Rosenfeld's report included the following:

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80 Mr Chan's file note of 30 September 2005 records that the defendant advised him that Mr Law wanted to have a guardian appointed for both the plaintiff and her son. From this conversation it is clear that the defendant knew that, at least to Mr Law's mind, there was real concern that the plaintiff was not capable of looking after herself and/or her affairs. It is also clear that there was a similar concern in relation to the plaintiff's son. On the day of Mr Law's death, 6 October 2005, the defendant spoke to Mr Chan about what she could do to obtain money to meet the expenses for looking after the plaintiff. In this conversation the defendant advised Mr Chan that the plaintiff would be reluctant to use her own money for daily expenses because she had to look after her son. It is clear from this conversation that the defendant knew that the plaintiff wished to look after her son financially. 81 Although the conversation between Mr Chan and the plaintiff on the day she made her Will, 9 October 2005, consists mainly of suggestions being made by Mr Chan with the plaintiff adopting them in monosyllabic responses, the effect of it confirms the plaintiff's continuing desire to look after her son financially. 82 The defendant's affidavit evidence made no reference to her telephone call to Ms Thai, purportedly on the plaintiff's behalf, on 10 November 2005, instructing her to prepare a contract for the sale of the Property. Indeed Ms Thai's affidavit made no mention of it either. The defendant's affidavit evidence suggests that the first time contact was made with Ms Thai was on 15 November 2005, the day before the Transfer was signed. The defendant's evidence was that the plaintiff asked her to have "a conveyancer or a solicitor" to go to see her so she could transfer the Property to her. Even though the defendant had been in regular contact with Mr Chan from early August 2005 and Mr Chan was a person with whom the plaintiff appeared comfortable, the defendant did not make contact with him but rather instructed a conveyancer, Ms Thai. The first instruction to Ms Thai was on 10 November 2005, just three days after the defendant had informed Mr Chang that the plaintiff intended to renovate the Property before putting it back on the market. There was no explanation given by the defendant as to why it was that she instructed Ms Thai on 10 November 2005 that the Property was to be sold. Indeed there was no explanation or detail of the conversation between the plaintiff and the defendant that resulted in the defendant advising Ms Thai that the plaintiff had "changed her mind" and had decided to transfer the Property to her. Such evidence could have been given by recalling the defendant but this was not done. The only reason the conversation between the defendant and Ms Thai on 10 November 2005 came to light was because the plaintiff had subpoenaed Ms Thai's records and there was a file note of that conversation. 83 The circumstances of the day on which the Transfer of the Property was signed are somewhat extraordinary. Firstly, it appears that Ms Thai left the Transfer with the defendant on the morning of 16 November 2005. Ms Thai claimed that she witnessed the defendant's signature on the Transfer that morning. Mr Liu's evidence was that only the plaintiff's signature was on the Transfer when he saw it later that morning. Ms Thai gave evidence that she had a conversation with the plaintiff in which the plaintiff advised her that she did not want any payment for the transfer of the Property to the defendant because the defendant had looked after her for a very long time. Ms Thai's affidavit evidence was that the plaintiff said that she did not want any legal complications with the Property in the event of her death and wanted to give the Property to the defendant "and no one else". Ms Thai's affidavit makes no mention of any discussion with the plaintiff in respect of the matter that she admitted in cross-examination had crossed her mind, that is, that the plaintiff may have been influenced by the defendant. Ms Thai knew very well that there was a conflict in acting for both the plaintiff and the defendant, but failed to arrange for an independent adviser for the plaintiff. 84 Mr Liu's evidence was also quite extraordinary. Mr Liu gave evidence that when he first saw the Transfer the plaintiff had already placed a signature upon it. The plaintiff then signed the Transfer a further four times in Mr Liu's presence. The only explanation given for so many signatures was that her signature did not look like her usual signature and Mr Liu asked her to sign again. The other peculiar aspect of the Transfer is that four of the five signatures are crossed out and there is no evidence as to who crossed them out. There is then the extraordinary evidence that Mr Liu did not know who Ms Thai was, that he denied that it was his signature on the Acknowledgement and Instructions document and that he denied that he had ever seen that document before he was in the witness box. There does appear to be a difference in the signature on that document, at least to the untrained eye. As I have said earlier there was no re-examination of Mr Liu and I accept his evidence that he did not sign that document, that he did not witness the plaintiff's signature on that document and that he had not seen that document before it was shown to him in the witness box. 85 The Transfer was registered on 22 November 2005 with Duty of $24,290 paid on the Dutiable Amount of $640,000. There is no evidence of the provenance of those funds. 86 The actions of the plaintiff in making a Will to ensure that her son would have the benefit of half of her estate and within weeks divesting herself of the whole of that estate, at a time when her son was, according to the defendant's evidence, sending her "beautiful letters" and visiting her on a weekly basis, suggests that she was not in command of a full understanding of the consequences of her actions at the time she transferred the Property to the defendant unconditionally. I do not accept that the plaintiff understood that when she was transferring the Property to the defendant her aim for her son to have half of her estate would not be able to be achieved because the whole of her estate had been transferred unconditionally to the defendant. The defendant did not give any evidence of any discussion with the plaintiff at the time of the transfer of the Property in relation to what was to happen regarding the plaintiff's son. 87 An interesting aspect of the defendant's affidavit evidence extracted earlier in this judgment is that as early as 1999, only two years after meeting the plaintiff and Mr Law, she expected that in return for looking after the plaintiff and Mr Law in their old age she would be provided for in their wills. The fact that the defendant has acted in such a cavalier fashion in relation to the loan moneys for which the Property is security, can be taken into account in assessing the circumstances of the transfer of the Property. It may be a very different situation had the defendant provided financial support to the plaintiff's son, however there is no suggestion that any of the money was used to assist him. The defendant's conduct was totally inconsistent with the plaintiff's desire to ensure proper care for her son. There is no reliable information as to what the defendant did with these loan moneys. There are certainly no records detailing any expenses incurred in caring for the plaintiff and the defendant's evidence about the use of the loan moneys was simply incredible.

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88 I am satisfied that the defendant took advantage of the plaintiff. I am not satisfied that when the plaintiff executed the Transfer she understood the consequences of her decision, in particular as they related to her son. 89 I am not satisfied that the defendant has rebutted the presumption of undue influence. There will be an order setting aside the Transfer of the Property to the defendant. The cross-claim 90 The Cross-Claim verified by the defendant on 14 August 2008 claims that in December 2004 an agreement was reached between the plaintiff and Mr Law and the defendant and her ex-husband in the following terms: (1) that the plaintiff and Mr Law would sell the Property; (2) that the defendant and her ex-husband would purchase a house of sufficient size to accommodate the plaintiff and her husband and the defendant and her ex-husband; (3) that the plaintiff and Mr Law would move into that property; (4) that the defendant would care for the plaintiff and Mr Law for the remainder of their lives; (5) that the plaintiff and Mr Law would apply the proceeds of the sale of the Property: (a) to discharge the loan that the defendant and her ex-husband would take out to purchase the larger property; and (b) to contribute to the living expenses of the plaintiff, Mr Law, the defendant and her family in the sum of $1,000 per week for the remainder of the plaintiff and Mr Law's lives (the December 2004 Agreement). The December 2004 Agreement 91 Although the verified Cross-Claim alleges that the agreement was entered into in December 2004, there was no evidence of any relevant conversation in December 2004. The conversations relied upon by the defendant are in April 2004 and August 2004. The affidavit and oral evidence is that the defendant's ex-husband purchased the Doonside property in December 2004, but there is no documentary evidence in relation to that purchase. The plaintiff and Mr Law remained at the Property until August 2005, yet the purchase of the Doonside property was in December 2004. The conversations relied upon by the defendant were that the reason for the purchase of the Doonside property was so that the plaintiff and her husband could move in with the defendant and her husband because Mr Law could no longer look after the plaintiff by himself. The explanation for there being no attempt to sell the Property until that latter half of 2005 was that Mr Law said that the market was not right at that time. Even if that were true there would have been no impediment to the plaintiff and Mr Law moving in with the defendant and her ex-husband when the Doonside property was purchased in December 2004. There was no explanation as to why that did not happen. 92 It appears that the defendant's ex-husband purchased the Doonside property, but there is no document in evidence in relation to the date of the purchase, the purchase price, or any mortgage or loan that was entered into at the time of the purchase. There is no document setting out the terms of the alleged agreement with Mr Law. There is no explanation as to why the Doonside property was purchased in the ex-husband's name only. The conversation that is relied upon to support this aspect of the alleged agreement is also curious. It was that Mr Law would pay the mortgage off on the Doonside property and then it could be transferred into the defendant's name (par 17; defendant's affidavit; 31 March 2009). The defendant's ex-husband made no mention in his affidavit of such an arrangement having been made with Mr Law, whereby he would transfer the Doonside property to the defendant. Nor did he give any oral evidence of it. However he did give some evidence of his present situation and the possibility of his ex-wife buying his house (tr 155).

[123]

96 The Cross-Claim alleged that in furtherance of the December 2004 Agreement: the defendant and her husband purchased the Doonside property; the plaintiff and Mr Law moved into that property in August 2005; and the Property was listed for sale in August 2005. 97 The purchase of the Doonside property at a time before the listing of the Property for sale tends to suggest a disconnection with the alleged agreement as does the fact that Mr Law and the plaintiff did not move into the Doonside property when it was purchased. That did not happen for nearly nine months after the Doonside property was purchased and coincided with the very serious decline in Mr Law's health. 98 There were a number of reasons for the plaintiff and Mr Law to move into the Doonside property. The first was that Mr Law's health was in serious decline and he was finding it very difficult at that time to look after, not only himself, but also the plaintiff. The second was that the defendant had been spending longer hours at the Property by reason of the decline in Mr Law's health and the relocation of the plaintiff and Mr Law into the Doonside property meant that the defendant did not have to travel to and from the Property. The third was the need to present the Property for inspection in the sale process without the presence of Mr Law and the plaintiff. The act or acts of part performance must be unequivocal and sufficient of themselves that they are only consistent with the assumption of the existence of a contract: Khoury v Khouri (2006) 66 NSWLR 241 per Bryson JA at 263-268 with particular reference to Maddison v Alderson (1883) 8 App Cas 467 per Lord O'Hagan at 485. In my view the conduct of the plaintiff and Mr Law in moving into the Doonside property does not fall within this description. 99 There was a conversation that Mrs Li claimed she had with the plaintiff in July 2005 in which the plaintiff said that the difficulties they had "now" left them with "not (sic) other choices" but to sell the Property and use the funds from the sale to pay off the loan on the Doonside property and to pay the living expenses for herself and Mr Law and the defendant and her family. This does not support an agreement in December 2004 or earlier but rather the presentation of a situation in July 2005 in which it was allegedly said that there was no other choice available. The varied agreement 100 The Cross-Claim also alleges that at a time shortly before 16 November 2005 the plaintiff and the defendant varied the terms of the December 2004 Agreement as follows: (1) the plaintiff would transfer the Property to the defendant; (2) the plaintiff would meet the cost of the stamp duty payable on the Transfer; (3) the defendant would borrow money on the security of a mortgage over the Property; (4) the defendant would apply the money borrowed firstly to renovate the Property with a view to listing it for sale and secondly for the living and medical expenses of the plaintiff, the defendant and her family until the Property was sold; (5) that the Property would then be listed for sale; (6) that when the sale of the Property was finalised the proceeds of sale would be utilised to discharge the mortgage on the Property, then to discharge the mortgage over the Doonside property and then for the living and medical expenses of the plaintiff, the defendant and her family (the varied agreement).

[129]

Other claims 107 The Cross-Claim alleges that the defendant expended $145,440 on substantial renovations to the Property, purchased a Mercedes Benz for the transport of the plaintiff and for visiting the plaintiff in the aged care centre and expended personal time and effort since November 2005 of which the plaintiff has had the benefit. The defendant claims that she has not been fully reimbursed for such expenditure and time and effort. 108 The defendant's claim for payment of the balance of $234,560 (from the total indebtedness of $380,000) is a rather vague claim unsupported by any real evidence of expenditure. However there is an aspect to the defendant's claim akin to a quantum meruit claim, albeit not specifically pleaded in this way as the defendant spent many hours caring for both Mr Law and the plaintiff. The cavalier manner in which the defendant dealt with an asset, half of which, she knew the plaintiff wished her son to share, leaves the defendant in a position of being unable to establish what was done with the loan moneys. 109 It is apparent that the defendant has benefited over the years, in particular over the last 3 years at least, from living in the Property without paying any amounts by way of rent and the like. On the other hand there is no evidence that the defendant was paid any amounts for the care that she provided to the plaintiff and Mr Law during the period 1998 to 2006. There is no evidence of how many hours per week the defendant spent in providing that care and assistance. Certainly in the period 1998 to 2001 it appears that the visits to the plaintiff and Mr Law were much more of a social nature than of a caring nature, albeit that at times there was the provision of Chinese medicine and massage. The plaintiff's health, in particular her mental health, did not really decline until about 2003. It was not until 2005 that the more intensive care was needed when Mr Law became unable to care for the plaintiff. The plaintiff has been in the aged care centre since June 2006. 110 The defendant has not called any evidence of what a carer in her circumstances might expect to receive by way of remuneration. The plaintiff was only totally dependent upon the defendant for a period of approximately ten months, from the time Mr Law's health seriously declined in August/September 2005 to the time of her admission to the aged care centre in June 2006. The defendant did not call any evidence to prove that she paid any amounts for the plaintiff's medications in that period nor has she called any evidence to prove any other specific expenditure in caring for the plaintiff. However it is obvious that she must have paid some amounts for the plaintiff's medications and living expenses during that period.

[131]

112 It is very difficult to know the true position because it is clear the defendant has made repayments on the Westpac account since taking out the loan in December 2005. For instance the Westpac records disclose a regular direct credit each month identified as "DR675714" from January 2006 to January 2009. The total of these credits is $66,562.84 apparently for payments of interest on the loan. The provenance of these payments is unknown. During the same period there were a number of large deposits, for instance $50,000 on 31 August 2007; $50,000 on 12 September 2007; $10,000 in October 2008; and $20,000 in November 2008; totalling $130,000. The provenance of these funds was not explored or explained in the evidence. 113 The defendant withdrew $60,000 in the week 22 December 2005 to 29 December 2005. Between 13 January 2006 and 21 April 2006 the defendant withdrew $106,000. Between 3 May 2006 and 17 July 2006 the defendant withdrew $40,000. Between 6 September 2006 and 21 December 2006 the defendant withdrew $39,700. In the period 9 January 2007 to 26 April 2007 the defendant withdrew $30,000. Between 15 May 2007 and 3 September 2007 the defendant withdrew $72,000. On 4 September 2007 the defendant withdrew $61,102.58. Between 15 October 2007 and 28 November 2007 the defendant withdrew $38,345. Between 24 December 2007 and 12 December 2008 the defendant withdrew $53,715.38. The total of these withdrawals is $500,862.96. 114 The plaintiff did not put any evidence before the Court in respect of the alleged renovations. The plaintiff did not put to the defendant that there were no renovations, rather the cross-examination was seeking to test the claim that was outlined in Exhibit E for $145,440, particularly in the absence of any source documents such as invoices and receipts. It is not possible to know whether the renovations as claimed in Exhibit E were carried out for the prices clamed. I am satisfied that the defendant is entitled to be paid an amount for the renovations. If the plaintiff's Will is not challenged, the defendant will ultimately have half the benefit of those renovations, but this is somewhat uncertain at this stage. In the absence of proper proof of any of the amounts in Exhibit E and having regard to the defendant's evidence in cross-examination, I will award an amount of $50,000 to the defendant for the renovations.

At a glance

Court

Decision date

Before

Source

Judgment (133 paragraphs)

Parties

Cases Cited (2)

Cited By (1)