Plaintiff v Defendants

2 Mr James Nott is a director of Principle Focus and he, along with Kevin Roache, a partner of Coulter Roache, both oppose the relief sought by Mr Abi Ghosn. They are joined in that opposition by Ms Sophie Moussi, Antoine Moussi's daughter, who, on her application, was joined to the proceeding as a party.

3 I also ordered at a previous hearing that Mr Moussi be joined as a party and served with the relevant documents. He, through his counsel, supports Mr Abi Ghosn's applications.

4 Although there are a number of side issues which need to be resolved, the central issue is that of Mr Moussi's capacity to execute the Powers of Attorney, two in Arabic which were signed on 7 August 2008 in a Beirut hospital where Mr Moussi was a patient, the third in English signed on 18 September 2008 at the Australian Embassy in Beirut.

5 It might be thought that where the donor and the Attorney both contend that the Power of Attorney is valid, the resolution of the application would be relatively straightforward. This is not such a case. Mr Moussi, although represented, did not give evidence either in person or by video link. Mr Abi Ghosn, for reasons which I will set out later, is not a witness of credit and I propose to make recommendations to relevant regulatory bodies in relation to his conduct.

6 Much, if not all, of the evidence that I am about to set out was not in dispute between the parties.

7 Antoine Moussi was born in Lebanon in 1932 and came to this country at a young age. From what were apparently humble beginnings, he became an extremely successful businessman both in Melbourne and Geelong. He owned and operated a large number of hotels, restaurants, function centres and the like over many years. He amassed a considerable fortune. Since 1974, Mr Nott has acted as his accountant and would meet with him at least weekly, if not more often.[1] Mr Roache was his solicitor over the past year, and has known him for over 50 years.[2] Both were responsible for providing him with commercial advice.

8 Mr Moussi married whilst in Australia, however he and his wife, Nina, separated in October 2003. Their daughter, Sophie, lived with her mother after the separation. She is now 21 years of age and is a student.

9 In the years preceding Mr Moussi's departure for Lebanon in May of 2008, he had set up a number of discretionary trusts. In particular, the Antoine Moussi Family Trust No. 2, established in December 1995 of which Huitre Pty Ltd was the trustee and the Antoine Moussi Discretionary Trust of which Ferndown Pty Ltd was the trustee established in February 2002. Neither company traded in its own right. In each case, Mr Moussi was the appointer of the trust and the sole director of the two trustee companies. Each company owned a significant asset. In the case of Huitre, it was the registered proprietor of the Carlton Hotel located in Mallop Street, Geelong, with an estimated value of somewhere between $8 million to $10 million. In the case of Ferndown, it was the registered proprietor of Comfort Inn, also in Geelong, which was estimated to be worth approximately $3 million. [3]

10 On 4 September 2002, Mr Moussi executed a "global" Power of Attorney to Louis Fleyfel, a Lebanese resident who in earlier years had been a prominent restaurateur in Melbourne.

11 On 10 January this year, a new Will was executed by Mr Moussi, as well as an enduring Power of Attorney (financial) appointing James Nott as his attorney.[4] This Power of Attorney conformed with Part XIA of the Instruments Act 1958 (Vic).

12 Prior to Mr Moussi's departure to Lebanon, there is no suggestion of any incapacity, lack of mental functioning, nor any change of his approach to the conservation of his assets.

13 On 5 May 2008, Mr Moussi left Melbourne and went to Lebanon for a holiday. He has not returned since and has clearly become quite unwell. By 9 May, he had been admitted to Hospital St Charles and subsequently has been in and out of hospitals in Beirut.[5] Although it is not altogether clear, it appears that he is having cardiac problems and difficulties with shortness of breath which require constant administration of oxygen via nasal tubes. Between May and July 2008, Sophie Moussi spoke on occasions to her father, as did Mr Nott.

14 From 13 July 2008 to 9 August 2008, Mr Moussi was confined to hospital.[6]

15 On 7 August 2008, and whilst a patient at the St Martine Hospital, Mr Moussi executed two Powers of Attorney: "a general, total and absolute Power of Attorney No. 122241/2008 "and "an irrevocable Power of Attorney for selling real estate, valid to be used in both Lebanon and Australia, No. 12242/2008" to his nephew, Mr Abi Ghosn.[7] At the time of the execution of the two Powers of Attorney, a number of his relatives were present at the hospital, including Mr Abi Ghosn and Mr Eli Moussi, Mr Moussi's brother. Mr Moussi was, prior to the signing of the Powers of Attorney, examined by a Dr Saliba, who subsequently gave evidence by video link from Lebanon. A notary, a Miss Daoud, was also present and notarised the original and the copies, which were ultimately certified by the Australian Embassy in Beirut.

16 On 16 August 2008, Mr Abi Ghosn left Lebanon and travelled to Melbourne, arriving on the 18th. He immediately met with a Mr Salim Nahour, a developer, Mr Alex Vovos, an accountant, and his lawyer, Ms Hina Pasha of Starnet Legal[8]. On the same day, Mr Moussi spoke with his daughter Sophie by telephone.[9]

17 On the next day, the 19th, Mr Abi Ghosn executed a number of transfers purporting to use the Lebanese Powers of Attorney. By means of a search, he identified companies in which Mr Moussi had shareholdings and transferred all the shares in those companies into his own name. A number of the companies, including Ferndown and Huitre, were sole director companies. Mr Abi Ghosn then removed Mr Moussi as the sole director and appointed himself to that position. He appointed himself as secretary of each of the companies. He also removed Mr Nott, who was the secretary of several of the companies. He changed the registered address of the companies from that of Principle Focus, Mr Nott's company, to that of Meridian Financial Services. In all the documents submitted to ASIC, he gave his address as 7 Blue Ridge Drive, Mooroolbark, apparently the address of Mr Nahour.[10]

18 On 20 August, Mr Abi Ghosn, with an associate, went to Mr Nott's offices in Geelong and demanded company and personal documents of Mr Moussi.[11] He produced a letter purportedly from Mr Moussi, but in fact signed by Mr Abi Ghosn, authorising release of the documents. Mr Nott was overseas at the time. Mr Abi Ghosn was not provided with documents from Mr Nott's office understandably, as Mr Nott still held his own Power of Attorney for Mr Moussi.

19 In the afternoon of 20 August, Huitre sold the Carlton Hotel to Mirayco Pty Ltd (a company apparently controlled by Mr Nahour) for the sum of $1 million with $1,000 deposit paid in cash. At the same time, Ferndown sold the Comfort Inn to Mirayco for $800,000 with $1,000 deposit in cash.[12] Mr Abi Ghosn executed the contracts of sale on behalf of the two companies. On that day, Mirayco lodged a caveat over "all estate and fees simple" of both properties.[13]

20 On 25 August, Mr Abi Ghosn transferred $140,035 from four of the former Moussi companies into Starnet Legal's trust account.[14] On the following day, Starnet requested delivery up of Mr Moussi's files to Mr Abi Ghosn. It sought release of the files by 3.00 p.m. that day.

21 The following day, Mr Abi Ghosn issued a generally endorsed writ seeking a declaration in relation to the two Lebanese Powers of Attorney and an order requesting the defendants to deliver up all documents belonging to Mr Eli Moussi. On the same day, a summons was issued seeking a declaration in respect of both Powers of Attorney and an order directing delivery up of all documents belonging to Mr Antoine Moussi. It was returnable in the Practice Court that afternoon.

22 Mr Abi Ghosn swore an affidavit on 26 August in support of the application. The affidavit gave his address as 7 Blue Ridge Drive, Mooroolbark, and deposed to the circumstances surrounding the execution of the two Lebanese Powers of Attorney and the demand made upon Mr Nott for delivery up of the documents. There was no mention in the affidavit of Mr Abi Ghosn's correct address, the transfer of the shares, the change of directorship, Mr Nott's removal as secretary, or the sale of the two trust properties.

23 The matter came on before Vickery J in the Practice Court in the afternoon of the 27th. Counsel for Mr Abi Ghosn, at the outset of the hearing, stated that the sole purpose of the hearing was to obtain an injunction compelling delivery up of all documents belonging to Mr Moussi. It was said to his Honour that there were urgent circumstances justifying the order, a matter that was queried by his Honour. In fact, it was counsel for Mr Roache and Mr Nott, who appraised the Court of the fact that Mr Abi Ghosn had appointed himself as director of the Moussi companies and had "got rid" of Mr Nott.[15] When the matter was stood down, counsel for Mr Abi Ghosn advised the other parties of the sale of the two properties, and the judge was then informed. His Honour declined to make the orders sought by Mr Abi Ghosn; undertakings were given by Mr Abi Ghosn in relation to the moneys transferred from Mr Moussi's account, and as to the exercise of his powers as a director or secretary and the provision of copies of the contracts of sale.

24 In late August and early September, Mr Nott tried to speak to Mr Moussi from France, where he was vacationing, but was told Mr Moussi was not well enough to talk. Mr Nott had several conversations with Mr Moussi's brother, Lee, prior to speaking to Mr Moussi on 5 September by telephone in company with Mr Roache. I shall refer to that conversation in greater detail later as I shall to a conversation that Mr Moussi had with his daughter, Sophie, that evening.

25 On 2 September, Mr Moussi revoked the Power of Attorney that had been granted to Louis Fleyfel in September 2002.[16] On the same day, he was examined again at his home by Dr Saliba.[17]

26 Meanwhile, Mr Abi Ghosn had returned to Lebanon. He told me that he had spoken to Mr Moussi about the sale of the properties and I shall also refer to that evidence in a little more detail later.

27 On 7 September, Mr Moussi completed a videotape declaring his satisfaction with Mr Abi Ghosn's actions and confirming his role as his attorney.[18]

28 On 9 September, Mr Moussi signed a revocation of Mr Nott's enduring Power of Attorney.[19] On the same day, Mr Moussi signed a document in which he stated that he was aware of the sale of the two properties and that he was "happy and satisfied for the sale to proceed, and it is my wish that Mr James Nott or Kevin Ro[a]che do not interfere or try to prevent the sale to go through".[20]

29 On the following day, the 10th, Mr Moussi signed a petition written in English requesting that moneys which had been the subject of the freezing order be released and stating that "all the drafts, money transfers made previously by my attorney, Mr Jean Michel Abi Ghosn have been made with my full, comprehensive, unrestricted and definitive knowledge, approval and will - without any objection or any reserve".[21]

30 On 17 September, this application came before me in the Practice Court. I directed that Miss Moussi be served with the relevant documentation and that the funds that had been frozen be forwarded to Mr Moussi in Lebanon.

31 On 18 September, Mr Moussi executed a general Power of Attorney in favour of Mr Abi Ghosn. [22] It appears to conform with the Instruments Act and it was sworn by him at the Australian Embassy.

32 On 19 September, on the application of Sophie Moussi, I ordered that she be joined as a party to the proceeding. I also ordered that Mrs Moussi be joined as a party and fixed the date for trial on 21 October. On that day (the 19th), Sophie Moussi spoke again by phone to her father in Lebanon. I shall say more about this conversation later.

33 On 1 October, Mr Anger of counsel, who appeared with Mr Houghton QC for Mr Moussi at the trial, met Mr Moussi in Lebanon and conferred with him on several occasions during that week.[23]

34 On 2 October, Dr Abi Akl, a medical practitioner, examined Mr Moussi at his house and subsequently provided a report in relation to his examination.[24] Dr Abi Akl later gave evidence by video link from Lebanon.

35 Mr Abi Ghosn swore one affidavit on 25 August 2008 and gave further oral evidence at the hearing. He also gave viva voce evidence-in-chief and was cross-examined. Ms Sophie Moussi swore two affidavits. She also gave some viva voce evidence-in-chief and was cross-examined. Mr Roche swore two affidavits and was cross-examined on a particular issue which was not the subject of submissions in final addresses. Mr Nott swore two affidavits and was not cross-examined. Evidence by video link was given by Dr Saliba and Dr Abi Akl, resident in Lebanon and their medical reports were tendered.

36 In this country, Powers of Attorney fall into two categories; general and special. A general Power authorises the Attorney to do all things which the principal can do and which are capable of delegation. A special Power is one restricted to authority to do specified things or classes of things.[25] At common law, the loss of mental capacity by the donor results in the immediate revocation of the Power of Attorney. However, Part XIA of the Instruments Act (Vic) permits the making of an enduring Power of Attorney which provides, in essence, that an Attorney's authority will continue notwithstanding that the donor becomes incapacitated.

37 In this case, there are two relevant enduring Powers of Attorney executed under Australian law, namely that executed by Mr Moussi in favour of Mr Roache on 10 January, purportedly revoked on 9 September 2008, and a general Power of Attorney executed by Mr Moussi at the Australian Embassy in favour of Mr Abi Ghosn on 18 September. It was not suggested in the course of argument that, at least in a formal sense, either Power of Attorney did not conform with the Instruments Act provisions.[26]

38 Copies of the originals[27] of the two Lebanese Powers of Attorney executed by Mr Moussi on 7 August were notarised by Vera Daoud, a public notary in Jbeil, Lebanon. The Powers of Attorney were stipulated as being intended for use in both Lebanon and Australia. The Powers of Attorney were certified by her as true copies of the originals executed by Mr Moussi. The Australian Embassy in Beirut then certified the signature of an officer of the Legislation Office of the Ministry of Foreign Affairs and the seal impressed on the documents appears to be the official seal of the Lebanese Ministry of Foreign Affairs. A translation of each of the Powers of Attorney has also been certified.

39 Victorian Courts have, in the past, made declarations as to the validity of instruments executed in foreign countries, although not, as far as I can determine, in respect of Powers of Attorney.[28] I accept that there is a common law power to recognise the validity of a foreign Power of Attorney.

40 No evidence was adduced by the parties as to Lebanese law concerning either the formal validity of the Power of Attorney or as to requirements relevant to the capacity of the donor of a Power of Attorney and how that power may be affected under Lebanese law if the donor's capacity is impaired. In these circumstances the Court assumes that foreign law is the same as the law of the forum.[29]

41 Ultimately the formal validity of the Powers of Attorney was not an issue. The central issue is that of the capacity of Mr Moussi to execute the respective powers. This is to be determined under Victorian law.

42 Mr Abi Ghosn swore an affidavit on 25 August and gave viva voce evidence before me. In his affidavit he deposed as to Mr Moussi's capacity at the time that he executed the Power of Attorney, having been present in the hospital room with others when it was executed on 7 August. He also deposed as to his arrival in Australia and demands made upon Mr Nott of Principle Focus in relation to handing over Mr Moussi's documents. In his viva voce evidence, he gave evidence as to the sale of the two trust properties which he had entered into, having become the sole director of the two relevant companies.[30] He said that this was part of a larger scheme involving a Mr Nahoum, who was the principal of the purchaser, Mirayco Pty Ltd. It was a $60 million development.[31] He accepted that the sale prices of the two properties were nothing like their real value, but said that this was because there was, notwithstanding the terms of the contracts of sale, a 50-50 deal with Mr Nahoum and that other properties were to be developed as part of an ongoing venture. He said that part of the deal was to allow for Mr Moussi to be a joint venturer, in effect, with Mr Nahoum in a project at Ringwood. This arrangement was the basis for the discounted prices of the two properties. He accepted that there was not a jot in writing in relation to the arrangement with Mr Nahoum,[32] but produced some documentation related to the development about which he seemed to have known very little - indeed, in answer to a question from me he could not even tell me where in Ringwood the development was located despite having visited the property.[33] He said that upon his return to Lebanon, he had seen Mr Moussi and had discussed the sales of the properties with him and had received, in effect, his blessing for the sale.[34]

43 I do not accept any of Mr Abi Ghosn's evidence unless there is reliable independent verification of the facts that he has deposed to. The following matters are relevant to this finding:

(a) In the only affidavit he swore in this court he provided a false address, namely, that of Mr Nahoum at 7 Blue Ridge Drive, Mooroolbark. He has never lived or carried on business at this address.[35] That affidavit was sworn before a solicitor of this court with whom he conferred on the day on which he arrived in Melbourne from his home in Lebanon.

(b) When he arrived in Australia, he arranged for company searches to be undertaken.[36] This does not accord readily with an Attorney who has a clear knowledge of the donor's financial affairs as he suggested. In any event, having conducted those searches, he determined that he would transfer the shares in each company held by Mr Moussi into his own name and also take over the directorship of those companies, a number of which were sole director companies. He provided a totally implausible reason for engaging in this conduct within a day of his arrival in Australia, namely, that he was shocked to find that Mrs Moussi, Mr Moussi's divorced spouse, held 49% of the shares in one of the companies. Accordingly, to use his words, for "ease of control"[37] he transferred the shares in all the companies held by Mr Moussi of which he was aware into his own name using the Lebanese Powers of Attorney. I regard his explanation for this conduct as absurd, particularly when he removed Mr Nott, Mr Moussi's accountant for 30 years, as company secretary of several of the companies. Clearly the true purpose was to give himself total control of the companies.

(c) When he transferred the shares into his own name, he gave a false address, the address of Mr Nahoum at 7 Blue Ridge Drive, Mooroolbark. He gave this as his address as a shareholder, director and secretary of the relevant companies. This is particularly relevant to the transfers in relation to the two trustee companies, which were sole director companies; the rules of ASIC require that a sole director be an Australian resident.[38] He was a resident of Lebanon. I think it clear that he lied again in relation to the address so that he could be registered as a sole director of these companies.

(d) The affidavit he filed in this court seeking urgent interim relief failed to disclose many matters relevant to the disposition of that application. He did not depose as to his correct address, the transfer of shares, the transfer of directorship and secretary, the sale of the two properties effected by him, nor was there any mention of the fact that these companies were trustee companies with attendant fiduciary obligations. This was at a time when he was seeking urgent relief from the court in relation to the delivery up of documents belonging to both Mr Moussi and, it would seem, to the companies controlled by him. I do not regard these significant omissions as matters that were simply overlooked in haste as contended by his counsel. Rather it is consistent with his determination to conceal his activities whilst in this country.

(e) His evidence about the deal with Mr Nahoum concerning the Ringwood property was inconsistent and, to a large extent unbelievable. It was not disclosed in his affidavit. It only emerged when he gave viva voce evidence. At times, he has sworn that Mr Nahoum or his companies had only received a 50% interest in the properties[39] when, in fact, the contracts of sale reflected a sale of the total interest of the two trustee companies to the Mirayco, Nahoum company[40] - as does the caveat lodged by Mirayco.[41] Despite the production of some documentation which supported the proposition that Mr Nahoum was involved in a development at Ringwood, it went no further than that. There was no documentation relating to any of the Moussi companies being involved in the development[42], nor any documentation of the Moussi interests in relation to the sale of the two Geelong properties being in some way interlinked with the Ringwood development, notwithstanding the sale of assets worth up to $10 million. The expression he used of a "gentlemen's agreement" was extraordinary given that he was dealing with trust properties.[43]

(f) There is no rational explanation for the urgency which Mr Abi Ghosn said was necessary to carry out the deal with Mr Nahoum. He met Mr Nahoum on the 18th, executed the share transfers on the 19th and the companies sold the properties on the 20th. He had little, if any, knowledge about the development and no familiarity with those documents that existed. At no time did he give any valid explanation for the haste in which the sales were effected. He has not paid a cent to his uncle for the sale of the shares.

(g) Assuming that Mr Abi Ghosn was a properly appointed Attorney of Mr Moussi, I accept that it may have been within his power to transfer the shares and the directorships and then execute the sales at significant discounts, nevertheless the manner in which the whole exercise was carried out causes one to have real doubts about Mr Abi Ghosn's credit in the light of the other matters I have referred to. Within two days of his arrival in Australia, he had sold two properties on behalf of Mr Moussi for $1.8 million when their combined value was no less than $11 million. Not a word to the long standing accountant who was the other person holding a Power of Attorney. Not only that, but the properties were owned by trustee companies with consequent fiduciary obligations of which he professed ignorance.

44 I should say, although it is by no means determinative, Mr Abi Ghosn's demeanour and approach in Court was such that one could have no confidence whatsoever in the answers he gave.

45 In short, I do not accept any part of his evidence and any facts deposed to by him and, as I have said, I would only be prepared to accept his evidence on particular matters provided there was reliable independent evidence. The practical effect of this finding is his evidence as to Mr Moussi's capacity and approval of his dealings with the trust properties is to be put to one side.

46 On the other hand, I think that his cousin, Ms Sophie Moussi, gave reliable and honest evidence. Although I agree with the submission made by Mr Houghton QC that her motivation for involvement in the proceeding is primarily a concern with the sales of the properties by Mr Abi Ghosn (she is a beneficiary of the trusts), I think that she does have a genuine perception that her father lacks understanding and is being prevailed upon by those in Lebanon, and particularly by her cousin Mr Abi Ghosn. Not only was she a convincing witness, but on occasions when challenged in cross-examination, it was clear that her version of events was correct, particularly as to the content of the phone calls to her father in September and October of this year.

47 Her unchallenged affidavit evidence is that she spoke to her father in July of 2008 after he had been re-admitted to hospital; he "seemed confused and forgetful" and was unable, at times, to recognise her voice and repeatedly asked "Who?". He told her that he was in hospital in Melbourne, Australia, and remained adamant notwithstanding her advising him to the contrary.[44] I accept this evidence.

48 I also accept that on 29 August she spoke to her father and told him of the sales of the Comfort Inn and Carlton Hotel, to which he replied "That's not right, that's not right", and then asked Ms Moussi to have Mr Nott and Mr Roache call him.[45]

49 Ms Moussi was cross-examined about the telephone conversation on 5 September with her father. It was put to her that certain aspects of the conversation were incorrect. The cross-examination appeared to be based upon detailed instructions as to what was said or not said during the course of the phone call. In fact, it transpired that Ms Moussi had recorded the conversation on her mobile phone. The relevant parts were as follows:

"SOPHIE: Johnny sold the Carlton Hotel for $1 million.

ANTOINNE: Five million?

SOPHIE: One, one.

ANTOINNE: No, not that.

SOPHIE: And he sold the Comfort Inn for $800,000.

ANTOINNE: Nothing's sold, Sophie.

SOPHIE: It has been sold.

ANTOINNE: Who?

SOPHIE: It's been sold to Elie's partner Salim Naoul.

ANTOINNE: No.

SOPHIE: Salim Naoul, it's been sold.

ANTOINNE: No, no, is it? I'll check it over."

"SOPHIE: Did you make an affidavit, did you sign a power of attorney to Johnny?

ANTOINNE: He told me nothing's been sold, everything's still there. I'll check with him.

SOPHIE: Who told you?

ANTOINNE: Johnny.

SOPHIE: Dad, do you really believe what he's telling you?

ANTOINNE: Well, I don't know, we'll have to check.

SOPHIE: Dad, who are you going to believe? Me, your own daughter that's never lied to you, or your lawyer, or this scumbag that has been scamming?

ANTOINNE: Tell Kevin Roach to ring me.

SOPHIE: I will.

ANTOINNE: OK? If they did that, I put them in gaol.

SOPHIE: Dad, we're working on it, believe you me.

ANTOINNE: Huh?

SOPHIE: We're working on getting them in gaol, don't you worry.

ANTOINNE: All right, OK."[46]

50 It also emerged in the cross-examination that Ms Moussi had recorded a further telephone call with her father on 15 October. In the course of that phone call, Mr Moussi told her "I don't want anybody to interfere in my business except for Johnny" and reminded by Ms Moussi of the sale of the properties, said "I'm aware of all of this. It's nobody's business".[47]

51 The evidence relating to the two phone calls cuts both ways. Whilst it demonstrates Sophie Moussi's accuracy in terms of her version of the phone calls it also illustrates that her father had, at least on the second occasion, an awareness of the events surrounding this hearing and the sale of the properties.

52 I accept the evidence of both Mr Nott and Mr Roache which was not the subject of challenge. The significant parts of their evidence can be stated succinctly. Mr Nott had been appointed as Mr Moussi's Attorney earlier in the year with an enduring Power of Attorney.[48] Up until Mr Moussi's departure for Lebanon, there had not been a suggestion that Mr Moussi was unhappy or dissatisfied with Mr Nott, who had been an advisor, confidante and friend for several decades.[49] Nor was there any suggestion of a change of heart in terms of the arrangements set in place at the start of the year. After Mr Abi Ghosn's unannounced visit on 20 August, both Mr Nott and Mr Roache endeavoured to get in contact with Mr Moussi to determine his wishes. In a phone call on 5 September when Mr Moussi was at the hospital, each of them regarded him as being confused. Mr Roache's unchallenged evidence of the conversation (to which both he and Mr Nott were a party on a loudspeaker phone) is as follows:

"He asked me what was going on and I asked him whether he wanted James and myself to continue to act on his behalf and he stated quite definitely that he did, that he had not authorised the sale of either the Carlton Hotel or the Comfort Inn and that he did not authorise the transfer of any money from his accounts. Without any warning, he asked if I could ring him back in fifteen (15) minutes.

I returned the call after about seventeen (17) minutes and the telephone was answered by his brother Lee Moussi ("Lee") who said Antoine was too sick to speak to me, he was being attended to by the medical staff and that I should ring back in a couple of days.

Approximately one (1) hour later when I was in my car travelling to Melbourne I took a call on my mobile phone and it was Antoine who said rather hurriedly that John was to be responsible but that he wanted James to continue to be his Accountant and he would like to sit down with James and John and sort everything out. The call ended after the brief comments but during that conversation and the first conversation with Antoine, there were voices in the background."

53 I accept their evidence on this issue. I also accept their evidence in relation to the difficulties they have had in getting in touch with Mr Moussi whilst in Lebanon, which seems, in the absence of a desire by others to prevent contact with him, to be difficult to comprehend.

54 I have significant reservations about the several documents signed by Mr Moussi which endeavour to explain the conversation with Mr Nott and Mr Roache as being due to medical treatment or, assert his desire to remove Mr Nott as his attorney.[50] For reasons that I will explain shortly, I have no confidence in these documents being a true expression of his intentions, albeit that I accept that the documents bear his signature.

55 Dr Saliba examined Mr Moussi on 7 August, 2 September and 26 October. Two of his medical reports were tendered,[51] and he also gave evidence via video link. Dr Saliba appears to be a general practitioner with no specialist qualifications in neurology or neuropsychology. He does not appear to have any specialty experience in the assessment of the mental capacity of aged patients. He was not a treating doctor and had no knowledge of Mr Moussi until that day. He had, however, reviewed Mr Moussi's hospital file.

56 Dr Saliba was requested by members of Mr Moussi's family to attend the hospital and examine Mr Moussi on 7 August. He described Mr Moussi as being in hospital for dyspnoea and chest pain. He said that he was in good general health and that he was -

"fully conscious, he answers all questions precisely and clearly, he also has normal will and awareness which makes him capable of commitment and responsible of every act, procedure and contract he makes. He has infallible memory, he remembers the far and near past. He is also aware of his properties and the way he wants to use the same. He is well directed in time and space, he knows the current day, month, season and year. He knows where he lives and the people living with him."

57 He concluded that Mr Moussi enjoyed normal mental and psychological capacity and was capable of legally performing any procedure or contract.[52] Dr Saliba examined Mr Moussi again on 2 September 2008 at his home and reached the same conclusion. He stayed on with him after the examination and discussed politics.[53] He saw him again on 26 October and was of a similar view.

58 Dr Saliba did not carry out a physical examination. No tests to determine his mental functioning were carried out.[54] His evidence is based on questions and answers of Mr Moussi.[55] Mr Moussi told him that he had properties in Australia, was divorced with a daughter and wanted to make a Power of Attorney in case his condition worsened.

59 Dr Abi Akl examined Mr Moussi on 2 October 2008 at his residence.[56] He also has, as far as I can tell, no specialist qualifications other than that of a doctor of internal diseases. His evidence was that Mr Moussi had, at that time, full knowledge of time and place, enjoyed all his mental powers and he had the capacity to execute legal procedures such as executing Powers of Attorney with full awareness, consciousness and responsibility.

60 Dr Abi Akl carried out a physical examination, however no tests to determine his mental functioning were administered. He, it appears, simply asked Mr Moussi a series of questions concerning date and place of birth, certain events and his current circumstances.

The first issue: Did Mr Moussi have the relevant capacity to execute the three Powers of Attorney?

61 Mr Panna SC, who appeared for Mr Abi Ghosn, correctly pointed out that the issue was not the manner in which Mr Abi Ghosn had exercised his Powers of Attorney, nor was it related to whether there was any breach of his duty. He submitted that the central issue was that of Mr Moussi's capacity at the time of the execution of the three Powers of Attorney. If the court was satisfied that Mr Moussi had the relevant capacity, then it should make declarations accordingly and order delivery up of the documents held by Coulter Roache and Principle Focus. He argued that the appropriate test for determining capacity was that set out by the High Court in Gibbons v Wright[57] which required the donor to understand the nature of the transaction relative to the particular instrument being executed. He contended that there was no cogent evidence that Mr Moussi did not understand the nature of the Powers of Attorney that he was executing. He relied upon the evidence of Dr Saliba and Dr Abi Akl. He asserted that the discussions between Sophie Moussi and her father by telephone which became exhibits[58] demonstrated that, far from being confused, Mr Moussi knew what was going on. He pointed out that Sophie Moussi's opposition was not so much based upon a real issue as to capacity but rather as to the disposition of properties in which she had, at least, an arguable interest being a beneficiary under the discretionary trusts. He also argued that parts of Mr Abi Ghosn's evidence and Sophie Moussi's evidence demonstrated ratification of the actions of Mr Abi Ghosn. Finally, he contended that provided the court was satisfied as to capacity, then there was no good reason for it not to make the declaration sought by his client.

62 Mr Houghton QC, who appeared with Mr Anger for Mr Moussi, adopted the arguments of Mr Panna and posited that the relevant test as to capacity was that the court only need be satisfied that the mind and memory of Mr Moussi was sufficiently sound to enable him to know and understand the purport of the respective Powers of Attorney at the time he executed them. Any suggestion that the understanding should be more specific was, he contended contrary to authority. He contended, relying upon the evidence of the medical practitioners, Mr Moussi had more than adequate mental capacity at the time he executed the two Powers of Attorney on 7 August 2008 and on 18 September 2008. He pointed to certain aspects of Dr Saliba's various examinations. He submitted that the Court should draw no adverse inference from Mr Moussi's failure to give evidence by video link, contending also that one should infer that he was not capable of giving such evidence.

63 Mr McNab who appeared for Principle Focus and Coulter Roache, accepted that Gibbons v Wright was the starting point on the issue of the capacity, but that the decisions in Re K[59] and Ranclaud v Cabban[60] refined the test and that this court should give effect, particularly, to the test posited by Young J in Ranclaud. This required the donor to know not only of the general effect of the Powers of Attorney but also the specific things that could or could not be done without further reference to the donor. The nub of his submission was that if the donor's affairs are complex, the question of capacity needs to be determined in the context of an understanding of specific transactions that might be entered into by the Attorney. It was on this issue, he contended, the evidence led to support the proposition that Mr Moussi had capacity should be analysed closely. He pointed to the evidence of both Mr Nott and Mr Roache, which was in effect unchallenged, as to conversations they had with Mr Moussi which demonstrated a degree of confusion. He also pointed to inconsistencies in Mr Moussi's conduct in relation to the revocation of Mr Nott's Power of Attorney, as well as deficiencies in the detail of the medical evidence. He also argued that, in addition to determining the question of capacity in relation to the execution of the three Powers of Attorney, it was also necessary to resolve whether Mr Nott's Power of Attorney had been validly revoked. He also submitted that it was necessary to determine whether the purported exercise by Mr Abi Ghosn of the Powers of Attorney was for the proper purpose of the Powers. He concluded his submissions by reciting the valid concerns (in my view) of each of his clients as to the actions of Mr Abi Ghosn but accepted that if the court finds that the Powers of Attorney are valid, then his clients will deliver up documents as required by the court.

64 Mrs Marks, on behalf of Ms Moussi, initially contended that there was an issue surrounding the formalities of the execution of the two Lebanese Powers of Attorney. I understood her ultimately to accept that the documents before the court were notarised as true copies of the original and not to persist with this submission. In relation to capacity, she also pointed to a number of inconsistencies in the behaviour of Mr Moussi and emphasised his failure to give evidence. She focused, as had Mr McNab, on the behaviour of Mr Abi Ghosn and his lack of credibility. She, like Mr McNab, contended that the medical evidence did not take the plaintiff's case far enough. The issue was more than that of a general capacity to understand what he was doing, she said, but that he needed to understand exactly what specific transactions Mr Abi Ghosn was entering into on his behalf. There was no legal basis, she argued, for a ratification of the powers of attorney if the donor did not have capacity at the time of execution of the power. In any event she disputed that any of Mr Moussi's subsequent actions could constitute a ratification of the Power of Attorney.

65 In Kantor v Vosahlo,[61] Ormiston J, in the context of an argument as to the capacity of a testator, said as follows in relation to the burden of proof:

"... if circumstances are shown to have existed which throw doubt on the capacity of a testator or testatrix validly to have executed a will, whether raised by evidence of old age, mental infirmity, suspicion of undue influence or of fraud, or the like, then that prima facie case of the propounder will be held not to be sufficient to justify a grant to the propounder. As the High Court said in Worth v Clasohm, 'A doubt being raised as to the existence of testamentary capacity at the relevant time, there undoubtedly rested upon the plaintiff the burden of satisfying the conscience of the court that the testatrix retained her mental powers to the requisite extent".

"One starts with the proposition that, for a deceased to have acted with testamentary capacity, he or she must have acted with sound mind, memory and understanding with reference to the particular will. In Bull v Fulton[62], Williams, J. put it succinctly when he said - 'Usually the evidence is such that the question upon whom the onus of proof lies is immaterial, but it is clear to my mind that, although proof that the will was properly executed is prima facie evidence of testamentary capacity, where the evidence as a whole is sufficient to throw a doubt upon the testator's competency, then the court must decide against the validity of the will unless it is satisfied affirmatively that he was of sound mind, memory and understanding when he executed it...'

As indicated, there is ample authority of long standing to justify this statement of the law... [In] Symes v Green... Cresswell, J. said... "If a will, rational on the face of [it is] shewn to have been executed and attested in the manner prescribed by law, it is presumed, in the absence of any evidence to the contrary, to have been made by a person of competent understanding. But if there are circumstances in evidence which counterbalance that presumption, the decree of the Court must be against its validity, unless the evidence on the whole is sufficient to establish affirmatively that the testator was of sound mind when he executed it."[63]

67 I note, in passing, that McKenzie J, in Caldwell v McClelland,[64] took a differing view in relation to a Power of Attorney executed under the Powers of Attorney Act 1988 (Qld), but under that Act there was a statutory presumption in favour of lawful execution.

68 In relation to the burden of proof there is no reason, as far as I can see, for the purpose of determining capacity to distinguish between testamentary capacity and the capacity to execute a Power of Attorney. I will apply, therefore, the approach taken by the Court of Appeal in Kantor. Accordingly, once the question of Mr Moussi's capacity to exercise the Power of Attorney is challenged and there is prima facie evidence to support the challenge, then the onus of proof rests upon Mr Abi Ghosn to demonstrate that Mr Moussi had the capacity to execute the Powers of Attorney. Mr Nott had known Mr Moussi for over 30 years and was one of his closest business confidantes. Mr Roache also knew him well. I am satisfied on the basis of the unchallenged evidence of Mr Roache and Mr Nott as to the contents of the phone call of 5 September, as well as Ms Moussi's evidence as to the state of her father's mind in July and August that there is a genuine doubt as to Mr Moussi's capacity to understand what he was authorising when he executed the various Powers of Attorney in August and September 2008.

69 In Gibbons v Wright,[65] Dixon CJ, Kitto and Taylor JJ said as follows:

"that the mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument and may be described as the capacity to understand the nature of that transaction when it is explained... Ordinarily the nature of the transaction means in this connection the broad operation, the 'general purport' of the instrument; but in some cases it may mean the effect of a wider transaction which the instrument is a means of carrying out".

70 Gibbons stands for the proposition Mr Houghton and Mr Panna argued, that the Court need only be satisfied that Mr Moussi at the time of execution of each of the relevant Powers of Attorney had an understanding of the general purport of the relevant Power of Attorney and no more. However, the qualification contained in the closing words means that the rule is not without exceptions.

71 In two cases decided since Gibbons in the context of Powers of Attorney in the United Kingdom and New South Wales, somewhat differing approaches have been taken to the test.

72 In Re K,[66] Lord Hoffman held that the understanding of the nature and effect of an enduring Power of Attorney will be satisfied if the donor understood:

• that the attorney would have complete authority over the donor's affairs;
• that the attorney could do anything with the donor's property that the donor could have done himself or herself;
• that the authority would continue if the donor became mentally incapacitated; and
• in that event, the power would become irrevocable without confirmation by the court. [67]

73 His Lordship referred to two extreme examples. At one end of the scale the donor could not be expected to pass an exam on the provisions of the Enduring Powers of Attorney Act. On the other hand, it would not be sufficient if all that was appreciated was that "It gave Cousin William power to look after his property".[68]

"Such a power permits the donee to exercise any function which the donor may lawfully authorise an attorney to do. When considering whether a person is capable of giving that sort of power one would have to be sure not only that she understood that she was authorising someone to look after her affairs but also what sort of things the attorney could do without further reference to her."[69]

"It would seem that no one explained to these doctors before they gave their opinion the words of Cockburn CJ in his classical exposition of the law in Banks v Goodfellow (1870) LR 5 QB 549, 565, 'It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect ...'.[70]

75 In Gibbons v Wright, the High Court referred with apparent approval to what was said by Hodson LJ in In the Estate of Park[71]:

"One cannot consider soundness of mind in the air, so to speak, but only in relation to the facts and the subject-matter of the particular case."

76 In a recent article in "Mental Capacity Powers of Attorney and Advance Health Directives",[72] the authors suggest that if the Ranclaud test is to be applied, it necessitates the following considerations:

• the nature and extent of the assets to be managed (at least in a broad sense);
• the decisions likely to be made on the donor's behalf; and

• the ability of the attorney to carry out the tasks involved.

77 If the general Gibbons test is applied, then the question is, did Mr Moussi understand the purport of the Power of Attorney at the time of execution on 7 August 2008 and 18 September 2008. On the other hand, if the Ranclaud test was to be applied, I would need to be satisfied that Mr Moussi had a more intricate understanding of the consequences of the Powers of Attorney, and in particular the actions that could be taken by Mr Abi Ghosn in relation to the companies and the trust properties.

78 In my view, the Ranclaud test should be accepted. It is consistent with Re K in requiring more than just an appreciation of the purport of a Power of Attorney and is not inconsistent with what was said in Gibbons particularly in the light of the reference to In the Estate of Park. Each instrument and its execution is to be examined in accordance with the accompanying circumstances. Indeed, the facts of this case demonstrate amply why the Ranclaud test should be applied in relation to complex matters. The two properties which have been sold are the property of two trustee companies which owe fiduciary obligations to the beneficiaries. As Mr Moussi was the sole director of the companies, he in a practical sense was the trustee. Application of the Ranclaud test means, I think, that it must be proved that Mr Moussi knew that when he executed the Powers of Attorney, he was giving Mr Abi Ghosn control over trust properties in a real, if not legal, sense. He did not, in my view, need to understand all the intricate parts of the transactions that Mr Abi Ghosn was about to enter into. But given that there were significant assets, it was necessary that he understood at the time of the execution of the Powers of Attorney that Mr Abi Ghosn would have the ability to transfer the shareholdings and the directorship of the trust companies to others (including himself) and to effect the sale of the properties which were the subject of the trust deed at a price determined by Mr Abi Ghosn.

79 The medical evidence of the two doctors is highly relevant to the determination of Mr Moussi's capacity. I do not accept the submission made by counsel for Ms Moussi and Messrs Nott and Roache that a doctor should necessarily elicit from the person an understanding of every aspect of the particular financial transactions which may be undertaken on his behalf pursuant to the Power of Attorney. However, the Court must be affirmatively satisfied, based on the medical and any other evidence, that the donor had the requisite capacity to understand the matters I have set out above.[73]

80 Essentially, Mr Abi Ghosn's case on this issue turned on acceptance of the medical evidence of the two doctors in preference to any other contradictory evidence as to Mr Moussi's mental state between July and September.

81 Both Dr Saliba and Dr Abi Akl were satisfied that Mr Moussi had a full understanding of what was going on around him and was aware of the consequences of the documents signed by him. Unequivocal acceptance of their opinions would mean that Mr Moussi had the requisite level of understanding.

82 The question then is the extent to which I can rely upon these medical witnesses, absent Mr Moussi, as to the level of Mr Moussi's understanding. The reality is that Dr Abi Akl and Dr Saliba each saw him for a short period of time in his hospital room or at home surrounded by relatives. Neither were responsible for his treatment. Neither gave me any real insight as to the nature of his condition. It would have been of far more assistance to have evidence from a doctor or doctors treating Mr Moussi at hospital. Such doctors could have provided information as to his overall medical condition and their assessment of his mental capacity, having seen him over, one assumes, several months, including the times at which there was apparent confusion and lack of understanding.[74] No such evidence was led.

83 There are other significant qualifications attending their opinions as to his capacity. First, Dr Saliba had no familiarity whatsoever with Mr Moussi's past history or condition, other than inspecting the hospital file on the day he was summonsed to the hospital. Dr Abi Akl is in the same position, perhaps less informed, as he did not have the hospital file.

84 Secondly, neither Dr Saliba or Dr Abi Akl has neurological or neuropsychological qualifications or any specialty in aged care which would enable one to place greater confidence in their opinions as to the capacity of a 76 year old to exercise proper mental functioning, particularly if that functioning related to business matters. Although Mr Houghton placed considerable significance upon the fact that Dr Saliba had visited Mr Moussi's house subsequently and conversed with him about politics, I am not sure this takes his evidence much further. The ability to discuss politics does not convince me that he was of sound mind.

85 Thirdly, it does not appear that there was any physical examination carried out by Dr Saliba and the extent of Dr Abi Akl's examination is not clear. More importantly no neuropsychological or neurological tests were undertaken.[75] Both doctors simply asked a series of questions and obtained responsive answers. Dr Abi Akl's examination appears to have been similar to that of Dr Saliba; no tests, just a number of questions about dates, places and persons.

86 Fourthly, Dr Saliba who had access to the hospital file could not remember if there was any evidence in the hospital file as to forgetfulness although he thought it would be in his report; but he had not kept any notes of his examination with Mr Moussi. Indeed he could not remember what particular medication Mr Moussi was taking.[76] None of this encourages confidence in his opinion.

87 Finally and critically, it is impossible to reconcile the accounts of Dr Saliba as to "infallible memory" and "memory of the far and near past" and that of Dr Abi Akl that "he enjoys all his mental powers", with that of Ms Moussi, Mr Nott and Mr Roache which demonstrate inconsistent behaviour, confusion and forgetfulness, all consistent with failing mental capacity.[77]

88 In summary, whilst I accept that there was an ability on the part of Mr Moussi to answer certain questions posed by the doctors, I do not think the evidence is any stronger than that.

Mr Moussi's "evidence" and his failure to give evidence on oath

89 Mr Anger, junior counsel for Mr Moussi, travelled and conferred with Mr Moussi in Lebanon. During the course of the trial, after I ruled that their reports were inadmissible under s. 55 of the Evidence Act, Drs Abi Akl and Saliba gave evidence by video link. Mr Moussi did not. Vickery J, at the first hearing in the Practice Court, suggested that the easiest way to resolve the question of the capacity of Mr Moussi was to arrange a video link. Nothing was done by Mr Abi Ghosn to arrange such a link.

90 Mr Moussi was represented by Senior Counsel and junior counsel. Mr Abi Ghosn was represented by Senior Counsel. Mr Moussi's and Mr Abi Ghosn's counsel made common cause in supporting the application. No explanation was proffered for his absence in giving evidence by video-link. During the course of the trial and during closing submissions, I inquired as to the absence of Mr Moussi. Mr Moussi could have been called by Mr Abi Ghosn or by his own counsel. His evidence could, one way or another, have assisted in resolving his current mental capacity and by inference his likely capacity in the past three months as well as addressing a number of other specific matters which I will refer to in a moment. I readily conclude that a considered forensic decision was made for him not to give sworn evidence. By comparison, it is worth noting that in Ranclaud, the donor gave evidence and his Honour's impression of her condition and mental capacity was a significant matter in the consideration of the trial judge.

91 The unchallenged evidence of Ms Moussi was that in July her father was confused and forgetful. The evidence of Mr Nott, Mr Roache and Ms Moussi as to their conversations on 5 September demonstrates a real lack of understanding on the part of Mr Moussi as to what had transpired with his affairs and in particular the sale of the two properties. That evidence is also inconsistent with the documents signed by Mr Moussi in the days after 5 September.

92 Mr Moussi's evidence could have explained or qualified his telephone discussions with Ms Moussi between July and October; and his telephone discussions with Mr Nott and Mr Roache. Moreover, he could have confirmed that he understood at the time of executing the respective Powers of Attorney what Mr Abi Ghosn was authorised to do, particularly in respect of the transfer of shares and directorships in the companies and the sale of the trust properties. Notwithstanding invitations from the Court to take what seemed to be an obvious course to resolve the issue as to his capacity, he chose not to give evidence and Mr Abi Ghosn chose not to call him as a witness.

93 In my view, in a case such as this, a Jones v Dunkel[78] inference may readily be drawn on the basis that Mr Moussi would not have assisted the case for Mr Abi Ghosn in demonstrating the adequacy of Mr Moussi's mental capacity at the time of the execution of the Powers of Attorney. There was in this case the direct evidence of Ms Moussi, Mr Nott and Mr Roache which point to a lack of capacity on the part of Mr Moussi at the relevant times. As I have said, I accept their evidence. The failure to call Mr Moussi to contradict that evidence permits increased weight to be given to it and allows inferences to be more confidently drawn in favour of the case put by Ms Moussi, and Messrs Nott and Roache.[79]

94 However, the failure of Mr Moussi to give evidence, which I have concluded to have been the subject of a careful and considered forensic decision, is more significant than just the drawing of these inferences. Where a person has within his or her knowledge the power to contradict a contrary version and fails to give evidence, then that is a matter to be taken into account in evaluating all the evidence. This proposition was stated more than 200 years ago by Lord Mansfield in Blatch v Archer[80] and has been reaffirmed by the High Court recently in Swain v Waverley Municipal Council[81] and Russo v Aiello.[82] It is of real significance when the contest involves a determination of the extent of the knowledge or understanding of the person not called.[83]

95 In this State the principle was stated by Lush J in the following terms in Earle v Castlemaine District Hospital[84]:

"The principle discussed by the majority judges in Jones v Dunkel, supra, goes, however, beyond acceptance of evidence or of suggested inferences of evidence and extends to the resolution of doubts and ambiguities. In Tozer v Kemsley & Millbourn (A'sia) Ltd. V Collier's Interstate Transport Service Ltd,[85] at p. 282 Fullagar J. said: "The silence of one party cannot, of course, fill the place of actual evidence on an issue, but it may serve to resolve a doubt or an ambiguity, especially where the facts are peculiarly within the knowledge of the silent party".

96 The failure of Mr Moussi to give evidence is not of such little weight that it may be brushed aside, as was faintly suggested by his counsel. Whilst it is true that I have had the benefit of seeing a video[86] taken of him in hospital shortly after the execution of the Power of Attorney, it does not assist me, as I agree with the submission by Mr McNab and Mrs Marks that Mr Moussi appeared to be reading from a script. I also place little store in the documents signed by Mr Moussi evidencing satisfaction with Mr Abi Ghosn's actions and endorsing the removal of Mr Nott and Mr Roache.[87] I think it fair to assume that these documents were not drawn up by Mr Moussi and whilst his signature is appended to them, I have little, if any, confidence in whether that these reflect his true wishes. Indeed, his failure to give evidence highlights the inadequacies of documents prepared by others and which he has signed.

97 The two tape recordings of his conversations[88] with his daughter, Sophie, were relied upon by Mr Houghton. I think that there is some force in the submission that Mr Moussi, on both occasions, may have been simply trying to assuage his daughter, who had understandable concerns about the behaviour of her cousin, Mr Abi Ghosn. My impression of the second phone call was that Mr Moussi was endeavouring to convince his daughter to refrain from getting involved in this proceeding. On the other hand, the first phone call is open to two interpretations, namely, a lack of understanding on the part of Mr Moussi as to what was going on or, alternatively, endeavouring to put his daughter off the scent. Given that the conversation occurred on the same day as the conversation with Mr Nott and Mr Roache, I think that there was real confusion on the part of Mr Moussi. Again, the true picture may have emerged if Mr Moussi had given evidence.

98 I reject the suggestion of Mr Houghton that Mr Moussi's evidence could not have assisted me materially in determining his level of mental capacity. To the contrary I think his evidence would have been highly relevant. On the basis of a report of a Dr Chami[89] I accepted that Mr Moussi could not travel to Australia. However I reject the suggestion that I should infer that he was incapable of giving evidence by video-link. Dr Saliba, Dr Abi Akl and Dr Chami did not suggest that he was so infirm as to be unable to give such evidence. He was able to travel to the Australian Embassy in September. He conferred with Mr Anger in Lebanon. There is no acceptable explanation for his failure to give evidence by video link.

99 In my view, the failure to call Mr Moussi is significant and is not readily explained by references to bits and pieces of unsworn and untested evidence. It is important in assessing the divergent accounts of Mr Moussi's mental state at the relevant times.

100 I am conscious, in determining the issue of the capacity of Mr Moussi, that I must put to one side the actions of Mr Abi Ghosn other than those relevant to his credit which contaminates his evidence relevant to capacity. As Young J stated in Re C (TH) and the Protected Estates Act:[90]

"There is no room in the legislation for benign paternalism. A person is allowed to make whatever decision she likes about her property, good or bad, with happy or disastrous effect, so long as she is capable."

101 I need to be satisfied that when Mr Moussi signed the Powers of Attorney he understood not only the nature of the instrument but also the practical consequences in a general sense. He needed to understand that Mr Abi Ghosn had an enduring power to transfer the shares and control of the trustee companies to others, including himself. He had to understand that the assets held by these companies could be transferred by Mr Abi Ghosn to anyone including Mr Abi Ghosn himself at any price he saw fit.

102 In my view, the degree of confusion and lack of understanding as to the sales and Mr Nott's appointment deposed to by Ms Moussi, Mr Nott and Mr Roache points to a clear lack of relevant understanding and cognitive function. The failure of Mr Abi Ghosn to call Mr Moussi is significant, as I have tried to explain. He of all people could have spoken as to his understanding of what was going on in July, August and September, and particularly what he considered he was authorising. I am not, as I have said, persuaded by the evidence of Dr Abi Akl and Dr Saliba. I cannot reconcile their accounts of his understanding with the evidence of Mr Nott, Mr Roache or Ms Moussi who knew him far better than the doctors. The lack of any evidence from a treating doctor as to his level of mental acuity during this time reinforces my acceptance of the evidence of those who know him well consistent with the principles set out in Jones v Dunkel[91].

103 The burden of proof rests with Mr Abi Ghosn in establishing that Mr Moussi had the requisite capacity and in my view it has not been established.

104 It is not necessary for me to address the question of proper purpose of the exercise of the powers given my conclusion. In any event given the nature of the declaration sought I am not convinced that such a determination is within the scope of this hearing.

The second issue: Ratification of the Powers of Attorney

105 Mr Panna argued that, even if Mr Abi Ghosn executed the transfers of the shares and the directorships and therefore the consequent sales of the property without authority, his actions had been ratified by Mr Moussi's expressions of approval of his actions.

106 This proposition can, I think, be rejected at the outset. The authorities are clear that if a donor lacks capacity at the time of execution of the Power of Attorney actions taken pursuant to that power cannot be subsequently ratified by the donor. As McNair J put it in Kuenigl v Donnersmarck[92]:

"... the short answer in my judgment is that no one can ratify an agreement or adopt an act which could not lawfully have been made or done at the time when the agreement was purported to be made or the act to be done on behalf of the person ratifying".

107 In any event the matters relied upon by Mr Panna do not, in my view, amount to ratification. He relied upon Mr Abi Ghosn's evidence that when he returned to Lebanon, he explained to Mr Moussi his actions and why he had carried them out, particularly the Ringwood deal and received his blessing. [93] Absent other reliable evidence (of which there is none) for the reasons I have set out, I do not accept Mr Abi Ghosn's evidence as to discussions he had with Mr Moussi upon his return. Not only is his credit in issue but this is not consistent with Mr Moussi's statements to his daughter and accountant.

108 Mr Panna also relied upon subsequent statements by Mr Moussi as constituting ratification. As I have already said, I regard exhibits P5, P6, P7 and P8 as being of little assistance, particularly in the absence of Mr Moussi giving sworn evidence. I also reject the proposition that the discussion by Mr Moussi with his daughter, Sophie, on 15 October 2008[94] may amount to ratification of Mr Abi Ghosn's actions. That conversation needs to be looked at in context, as I have already indicated. It is inconsistent with a number of earlier conversations and again, absent Mr Moussi giving sworn evidence, I do not think that it amounts to any more than Mr Moussi telling his daughter to get out of the case.

109 There was no ratification by Mr Moussi of Mr Abi Ghosn's actions.

Third issue: Revocation of Mr Nott's Power of Attorney

110 Although this issue was not squarely before me, counsel for both Mr Abi Ghosn and Mr Nott sought that I resolve this issue.

111 On 6 September, Mr Moussi executed a revocation of James Nott's Power of Attorney in Arabic.[95] On 9 September, Mr Moussi revoked Mr Nott's enduring Power of Attorney under Part 11 of the Instruments Act.[96]

112 Section 125I of the Instruments Act provides for an approved form by which to revoke an enduring Power of Attorney. However, s 125H provides:

"(1) This division does not limit the events by which or the circumstances in which an enduring Power of Attorney -

(a) is revoked whether orally or in writing or in another way; or

(b) is terminated by implication or operation of law."

Sub-section (2) provides that an enduring Power of Attorney may be revoked in any way that a Power of Attorney may be revoked.

113 In Collier and Lindsay Powers of Attorney in Australia and New Zealand, the following is said:

"It appears established that a power given by deed need not be revoked by deed, that may be revoked informally, even by parole."[97]

114 The deed of revocation witnessed in Lebanon by Elie Sadek and Tony Saliba on 9 September states that the revocation has been freely and voluntarily entered into by Mr Moussi in their presence and that at the time of signing it appears to each of the witnesses that Mr Moussi had the capacity necessary to make the revocation.

115 Mr Panna submits that it is clear in the light of the two revocations executed by Mr Moussi that Mr Nott no longer has a Power of Attorney and that Mr Moussi's intention is apparent. I do not agree. The two revocations were signed within only a short time of the two telephone conversations of 5 September, which demonstrated a totally different view on the part of Mr Moussi not only as to the sale of the properties (in the conversation with his daughter) but also as to the termination of the services of Mr Nott (in the conversation with Mr Nott and Mr Roache). What is clear is that there was a flurry of activity in Beirut in the next five days after that conversation to endeavour to make it apparent to the world that Mr Moussi intended to revoke Mr Nott's Power of Attorney - the execution and signing of the various documents and the video tape of Mr Moussi.[98] I have already indicated my reservations as to the adequacy of these materials.

116 The question of Mr Moussi's intention to revoke Mr Nott's Power of Attorney was a matter well within the knowledge of Mr Moussi if he had chosen to give evidence himself or had been called by Mr Abi Ghosn. None of the other witnesses to the revocation or to the various documents have been called to give evidence. The case on this point rests on the two documents of revocation and the documents apparently drawn up by others and signed by Mr Moussi, and what appears to be a stage managed video. None of this material, when viewed in the light of all the evidence, satisfies me that Mr Moussi had the relevant capacity to revoke Mr Nott's Power of Attorney. I think his actions at or around that time are clouded with confusion and lack of understanding.

117 I propose to make a declaration that I am not satisfied that the documents executed on 6 September 2008 and 9 September 2008 validly revoke Mr Nott's enduring Power of Attorney executed on 10 January 2008.

118 Mr Abi Ghosn has not persuaded me that Mr Moussi had the capacity to execute the Powers of Attorney. I decline to make the declaration sought by Mr Abi Ghosn, in paragraph 1 of the amended generally endorsed writ and that application is dismissed.

119 I also reject the claim by Mr Abi Ghosn to have Principle Focus and Coulter Roache deliver up documents belonging to Mr Moussi. That application is dismissed.

120 I will make a declaration concerning the revocation of the Powers of Attorney as I have set out.

121 In my view, there is a prima facie case that Mr Abi Ghosn has perjured himself in relation to the affidavit sworn in this Court. I direct that these reasons, the transcript and a copy of his original affidavit be provided to the Director of Public Prosecutions. I also think that it is likely that the documents filed with the Australian Securities and Investments Commission are false insofar as they represent that he resided at an address in Mooroolbark. I direct that these materials also be provided to ASIC for its consideration in relation to infringements of the Corporations Law. The relevant exhibits will be retained on the court file.

[1] Affidavit of Mr Nott p.1-2 [2] - [5]

[3] Supplementary affidavit of Mr Roache [2] - [8]

[4] Exhibit JN1 to the affidavit of Mr Nott

[10] Exhibits KR14 to KR20 to the supplementary affidavit of Mr Roache; T70 and T71

[11] The accounts of Mr Ghosn's behaviour differ markedly but are of no real relevance. Affidavit of Mr Abi Ghosn [12], Affidavit of Mr Nott p.2-3 [3] and [4]

[13] Exhibit KR3 to the affidavit of Mr Roache

[19] Exhibit KR12 to the affidavit of Mr Roache

[25] Collier and Lindsay Powers of Attorney in Australia and New Zealand (1992) p. 7 - p. 8

[26] Section 107 of the Instruments Act gives effect to a general Power of Attorney provided it is "in or to the effect of the form set out in Schedule 12". Division 2 of Part XIA gives effect to the making of an enduring Power of Attorney subject to compliance with its provisions.

[28] In the Will of Joseph Vickerman [1895] VicLawRp 43; (1895) 21 VLR 236; In re Balderson [1918] VicLawRp 40; [1918] VLR 257

[29] Nygh & Davies Conflict of Laws 7th ed (2002) 325-327

[41] Exhibit KR3 to the affidavit of Mr Roache

[48] Exhibit JN1 to the affidavit of Mr Nott

[49] Affidavit of Mr Nott p. 2 [5] - [8]

[57] [1954] HCA 17; (1953-1954) 91 CLR 423 at 444 - 445

[59] [1988] 1 Ch 310

[60] (1988) NSW ConvR 55-385

[61] [2004] VSCA 235 [3]

[62] [1942] HCA 13; (1942) 66 CLR 295, 343

[63] Kantor v Vosahlo [2004] VSCA 235, [49].

[64] [1999] QSC 182, [13] and [14]

[65] [1954] HCA 17; (1953-4) 91 CLR 423, 438

[66] [1988] 1 Ch 310

[67] Re K, Re F [1988] 1 Ch 310, 315

[68] Re K, Re F [1988] 1 Ch 310, 315

[69] [1988] NSW Conv R 55 - 385, 57, 548

[70] [1998] NSW Conv R 55 - 385, 57, 548

[71] [1954] P 112, 136

[72] Collier, Coyne and Sullivan, Australian Legal Monographs, Federation Press, p.44

[74] Compare the evidence from treating doctors and geriatric specialists available to Smith J in Brokenshire (deceased) [1998] VSC 183; (1998) 8 VR 659

[78] [1959] HCA 8; (1959) 101 CLR 298

[79] Transport Industries v Langmuir (1997) 1 VR 125, 143

[80] [1774] EngR 2; (1774) 1 Cowp 63, 65

[81] [2005] HCA 4; (2005) 220 CLR 517 [17]

[82] [2003] HCA 53; (2003) 215 CLR 643 [10] and [11]

[83] [2003] HCA 53; (2003) 215 CLR 643 [10] and [11]

[84] [1974] VicRp 86; [1974] VR 722, 733, cited with approval in Kidman v Costorplan [1999] VSCA 28 [26]. See also [27] - [28]

[85] [1956] HCA 6; (1956), 94 CLR 384, 403

[90] [1999] NSWSC 456 [17]

[91] [1959] HCA 8; (1959) 101 CLR 298

[92] (1955) 1 QB 515, 539; see also Collier and Lindsay "Powers of Attorney in Australia and New Zealand" (1992); p 67 and 68

[95] Exhibit KR11 to the affidavit of Mr Roache

[96] Exhibit KR12 to the affidavit of Mr Roache

[97] Collier and Lindsay Powers of Attorney in Australia and New Zealand (1992) p. 220