Estate of Nitopi (No 2)

1. [1]

   These proceedings arise out of a family dispute concerning the administration of the estate of the late Egidio (“Tony”) Nitopi who died in May 2014 at the age of 73. The plaintiff in the proceedings is Giuseppe (also known as “Pepe”) Nitopi, the deceased’s only son. The remaining active defendant is Cristina Antonina Lucia Nitopi, the deceased’s younger daughter. For convenience and without disrespect, I will refer to the members of the deceased’s family by their given names.

2. [2]

   The deceased’s estate was worth more than $21 million. Giuseppe, who is one of the beneficiaries, seeks on behalf of the estate to recover a series of payments which were made by, or on behalf of, the deceased in favour of Cristina prior to his death.

3. [3]

   The deceased was born in Sicily in September 1940. He came to Australia in the 1960s. He later became a successful businessman whose businesses included hardware wholesaling and property development.

4. [4]

   The deceased’s wife was Cristina Francesca Nitopi (nee Pirello) (“Tina”). She was also born in Sicily and migrated to Australia in her twenties. She and the deceased married in 1968.

5. [5]

   Together the deceased and Tina had three children:

   1. (1)

      Giuseppe, born in October 1969;

   2. (2)

      Rosaria (also known as “Rose”) Theoharopoulos (nee Nitopi), born in September 1971;

   3. (3)

      Cristina, born in March 1982.

6. [6]

   The deceased and Tina separated in the 1990s. There were family law proceedings between them which resulted in the deceased making a property settlement in her favour, but they never divorced.

Claims and defences for determination

1. [7]

   The deceased made what proved to be his last will in September 1997. He left his estate to his children in equal shares. As executors, he appointed his wife Tina and Mr Mervyn Cathers. Mr Cathers was a solicitor practising in Western Sydney. He declined to take up appointment as the deceased’s executor. Probate was granted to Tina in March 2015.

2. [8]

   The procedural history of this case up to May 2018 is set out in an interlocutory judgment of Lindsay J: Re Estate Nitopi [2018] NSWSC 1560 at [11]-[34]. A summary of relevant events for the purpose of these proceedings is set out below.

3. [9]

   The proceedings were commenced by Giuseppe as plaintiff against Tina as defendant in February 2016. Giuseppe launched the proceedings because he alleged that Tina was taking too long to administer and distribute the estate. A timetable for distribution was agreed between the parties and each of the deceased’s children received interim distributions totalling $6.3 million.

4. [10]

   Then, after most of the estate had been distributed, Giuseppe identified that some large payments had been made out of a bank account of the deceased in favour of Rosaria and Cristina (and one payment in favour of Tina). The payments were made between 2008 and 2010. They totalled about $5 million.

5. [11]

   Giuseppe claimed that these payments should be repaid to the estate; he alleged that at the time the deceased was suffering from dementia and other illnesses which made him unable to manage his affairs properly. Rosaria and Cristina were joined as the second and third defendants.

6. [12]

   Applications were made to dismiss or strike out the claims against the defendants. Those applications were the subject of Lindsay J’s judgment to which I have referred. His Honour declined the applications. He made orders granting leave to Giuseppe to represent the estate for the purpose of pursuing the claims for repayment.

7. [13]

   The hearing was fixed to begin before me on Monday 22 March. A few days beforehand, Giuseppe settled the claim against Rosaria. On the first day of the hearing he settled the claim against his mother, Tina. The case continued as against Cristina.

8. [14]

   The claim is based on a total of twelve payments to Cristina totalling $3.2 million. The payments were made between February 2008 and June 2010.

9. [15]

   If the deceased had been so severely disabled at the time he made the payments that he did not understand what he was doing, the transactions would have been void at law (non est factum). The payments would have been recoverable by way of judgment for restitution, subject to any restitutionary defences such as change of position. But Giuseppe has not made any such claim. Instead he accepts the payments were valid gifts at law but seeks to have them rescinded in equity.

10. [16]

    Giuseppe sought to advance two equitable bases for rescinding the payments made to Cristina. As set out in a proposed further amended statement of claim, and explained by counsel, they were as follows.

11. [17]

    First, he alleged that the payments were procured by undue influence on the part of Cristina over the deceased. Second, he alleged that in receiving the payments Cristina took unconscientious advantage of the deceased (this equitable doctrine is described in J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) as a “catching bargain”. Despite the label, the doctrine is not confined to bargains but extends to gifts such as were made in the present case: see Louth v Diprose (1992) 175 CLR 621 at 630-631.

12. [18]

    The undue influence claim was clearly pleaded in Giuseppe’s existing statement of claim, which had been filed following Lindsay J’s 2018 decision. The unconscientious advantage claim was not. Counsel for Cristina opposed the amendment.

13. [19]

    Counsel for Cristina only came into the case a few weeks before the trial was due to begin. He is acting on a direct access basis. I offered him the opportunity to apply for an adjournment to put on evidence of prejudice, but he declined.

14. [20]

    It was open to Cristina to defend the undue influence claim against her simply by denying that there was any relationship of influence. But if she failed on that point, the onus would shift to her to justify the transactions. Counsel conceded that her evidence had been prepared to address that contingency.

15. [21]

    It seemed to me that evidence rebutting the presumption would have covered the same general ground as evidence denying unconscientious advantage. Counsel submitted that the unconscientious advantage claim had not been directly addressed. But I was prepared to give Cristina an opportunity to put on further supplementary evidence to do so. In these circumstances, I thought that I could, and should, permit the amendment to allow Giuseppe to present his full case without disadvantage to Cristina.

16. [22]

    I was also influenced by a further discretionary consideration. The proposed further amended statement of claim was provided to counsel for Cristina on the evening of Monday 15 March, six days before the hearing was due to begin. There was no response from counsel, and he did not refer to the issue in the opening submissions he filed in advance of the hearing. The first notification of the objection came when counsel announced it at the hearing. Although the amendment should have come much earlier, and counsel no doubt had much to do in order to prepare, opposition to the amendment was significant enough that it should have been notified immediately, or at the latest in the submissions.

17. [23]

    For these reasons I allowed the amendment and permitted Giuseppe to pursue both of his claims. On the last day of the hearing, counsel for Giuseppe abandoned the undue influence claim. As a result, I do not need to say anything further about it for the purposes of this judgment.

18. [24]

    The only remaining claim is for unconscionable conduct. Cristina denies Giuseppe’s claim on the merits. She also contends that the claim against her is statute barred. By way of reply, the deceased is said to have been incapable, thus extending any applicable limitation period.

19. [25]

    In her defence, Cristina relied on various sections of the Limitation Act 1969 (NSW). But at the hearing counsel for Cristina abandoned the statutory defences. He accepted that the sections relied upon did not apply to the plaintiff’s equitable claims. Instead, counsel sought to rely on the equitable defence of laches. Leave was sought to amend the pleading to add this defence and for an adjournment to file an affidavit outlining the prejudice suffered by Cristina.

20. [26]

    It had been clear from 2018 onwards that the plaintiff’s claim was a claim in equity, not a claim at law, and therefore that laches was the relevant defence. There was no explanation for the failure to plead the defence and adduce evidence going to the alleged detriment resulting from the plaintiff’s delay. Adjourning the proceedings would have meant vacating the hearing date.

21. [27]

    I therefore refused the amendment application. As a result, the limitation issue fell away and it is not necessary to say anything further about it for the purposes of this judgment.

Chronology of key events

1. [28]

   During their married life, the deceased and Tina lived together in Sydney. In about 1998, some years after separating from Tina, the deceased moved to the Gold Coast in Queensland. He lived in an apartment at Main Beach, near Southport.

2. [29]

   Of the deceased’s children, Rosaria appears to have had most contact with him after his move to Queensland. Contact between Cristina and the deceased ceased for a period, starting in about 1999 according to Cristina’s evidence. Giuseppe and the deceased fell out in 2000, apparently because the deceased did not approve of the way Giuseppe was living his life. According to Cristina, she resumed contact with the deceased in 2001. But he remained estranged from Giuseppe. There was an evidentiary dispute about the extent, if any, of the deceased’s ongoing relationship with his wife, Tina, but as a result of the settlement of the claim against her I do not need to say any more about that in this judgment.

3. [30]

   The deceased’s medical condition from the mid-2000s onwards is the subject of documentary evidence in the form of medical records which I discuss below. The deceased suffered from diabetes, vascular disease and chronic back pain, among other things. He also drank to excess.

4. [31]

   From January 2006 the deceased’s general practitioner (“GP”) was Dr Paul Fisher. Dr Fisher gave evidence before me, which I discuss in detail below.

5. [32]

   The first payment which is the subject of the claim against Cristina was made in February 2008, in the amount of $100,000. The payments are set out in a table at [46] below.

6. [33]

   In late October 2008 the deceased had a fall and was admitted to the Gold Coast Hospital. The hospital staff raised concerns about his cognition. On 29 October he was transferred to a psychiatric clinic called Currumbin Clinic. Two days before that, on 27 October, he executed an enduring power of attorney appointing Rosaria as attorney for his personal and health matters. On 31 October, whilst at the clinic, he executed a further enduring power of attorney appointing her as attorney for his financial affairs. He was discharged from the clinic after about a week.

7. [34]

   In May 2009 there was a further episode which resulted in the deceased being hospitalised. Arrangements were made by Rosaria for him to be admitted to a nursing home in Sydney called Redleaf Manor Aged Care. He did not like it there. In July he was brought back to Queensland.

8. [35]

   In the second half of 2009 a dispute appears to have arisen between Giuseppe and Cristina on the one hand, and Rosaria on the other, concerning the deceased’s care arrangements. According to Giuseppe, he had organised for the deceased to be admitted into a specialist area of Pindarra Private Hospital. While Cristina was supportive of this, Rosaria objected.

9. [36]

   On 29 September 2009 the deceased executed an instrument which revoked Rosaria’s power of attorney. By this stage he had reconciled with Giuseppe and appears to have fallen out with Rosaria. On 14 December he executed a power of attorney in favour of Giuseppe.

10. [37]

    The deceased’s execution of the power of attorney was witnessed by a solicitor, Mr Renaldo Polo, who presumably prepared it (and the earlier revocation of Rosaria’s power of attorney). Mr Polo had apparently known the deceased for some 15 years. I infer that he was retained by the deceased (or Giuseppe) on an ad hoc basis.

11. [38]

    The validity of the instruments executed by the deceased was disputed by Rosaria. The dispute gave rise to proceedings in the Queensland Civil and Administrative Tribunal (“QCAT”). The Tribunal conducted a hearing and delivered its decision on 25 March 2010.

12. [39]

    A note of Dr Fisher’s (see [85] below) contains a passing reference to Cristina “agreeing” to the revocation of Rosaria’s power of attorney. But there is no clear evidence that Cristina had taken sides between Giuseppe and Rosaria at the time the disputed instruments were prepared. By the time the hearing took place, however, Cristina had clearly aligned herself with Giuseppe. The Tribunal noted in its reasons for decision that both Giuseppe and Cristina had “expressed concern” as to some withdrawals from the deceased’s bank account made by Rosaria in mid-2009.

13. [40]

    The Tribunal found that the purported revocation of Rosaria’s power of attorney and the later appointment of Giuseppe as the deceased’s attorney were ineffective because the deceased lacked sufficient capacity. The Tribunal appointed an independent attorney to look after the deceased’s accommodation, health care and provision of services, but left Rosaria’s power of attorney so far as it concerned the deceased’s financial affairs untouched.

14. [41]

    Giuseppe and Cristina later applied for leave to appeal from the decision. The application was dismissed on the basis that there was nothing in QCAT’s reasons that demonstrated any error of law or fact.

15. [42]

    Meanwhile, on 1 June 2010 the deceased was admitted to hospital again. The last payment which is the subject of these proceedings was made to Cristina three days later, on 4 June. It was for $202,000. The deceased was eventually discharged to a care facility at Robina in August.

16. [43]

    The deceased never returned to his home at Main Beach. In October 2013 he was relocated to a care facility in Sydney. He died on 16 May 2014.

Summary and analysis of evidence

1. [44]

   In this section of the judgment I deal with the factual aspects of the evidence which require detailed analysis. I first summarise the documentary evidence, including the deceased’s financial records, treating medical records, and the evidence relating to the QCAT proceedings. Next I deal with the lay evidence (including, for this purpose, the evidence of Dr Fisher). Then I deal with the opinion evidence from the psychiatric experts who gave evidence in these proceedings.

2. [45]

   There was no evidence from the deceased himself that would allow me to make a direct assessment of his character and habits. He appears to have been self-reliant and used to making his own decisions. In particular he seems not to have been particularly compliant in medical matters. There were some medical practitioners who no doubt found him difficult. But Dr Fisher appears to have found him refreshing and to have enjoyed his company.

3. [46]

   Financial records: The only financial statements in evidence were those from a bank account held by the deceased with the Commonwealth Bank of Australia (“CBA”) at its branch in Southport. The major transactions for the relevant period are set out in the following table (the payments to Cristina which are the subject of the claim against her are shown in bold):

4. [47]

   There was no evidence before me that indicated where the credits into the CBA account came from, but it is clear that they must have come from other accounts he controlled. There was reference in the evidence to the deceased dealing with a banker in Hong Kong, and also to monies being raised from the sale of business assets, but these references contained no further detail.

5. [48]

   Between February 2008 and June 2010, a total of $3.2 million was withdrawn from the CBA account and paid to Cristina. Counsel for Cristina did not dispute that she had received these payments. Most of these transactions were effected pursuant to a CBA form titled “International Money Transfer Application” (which was used despite the fact that all the transfers were domestic). Copies of these forms were in evidence, but the copy quality was so poor that I could not discern whose signature appeared on them.

6. [49]

   There were no International Money Transfer Application forms in evidence for the payments dated 23 October 2008, 30 April 2009, 2 September 2009 and 4 June 2010. There was an undated handwritten note recording Cristina’s bank account details and the amount of “$150,000”, but no further details were recorded. There was also a withdrawal voucher issued by CBA on 4 June 2010 in the amount of $202,000, but again it is unclear whose signature appeared on the document.

7. [50]

   It will be recalled that Rosaria held a power of attorney for the deceased’s financial affairs from 27 October 2008. Clearly she used this power to make some of the withdrawals from his account after this date (for example the Careflight Queensland payment made on 1 June 2009). But the grant of the power in her favour did not prevent the deceased from making withdrawals from the CBA account himself.

8. [51]

   There is correspondence in evidence between the CBA and solicitors acting for Rosaria in which the solicitors were questioning the withdrawal in favour of Cristina on 4 June 2010. It seems clear enough that Rosaria had nothing to do with that transfer. The documentary evidence itself says nothing more about who was actually responsible for effecting the payments which are the subject of the claim against Cristina.

9. [52]

   Treating medical records and QCAT proceedings: The treating medical evidence begins with Dr Fisher’s clinical notes. Between January 2006 and October 2008 the deceased frequently consulted Dr Fisher about a range of ailments including dermatitis, stomach pains, back pain, gastro-oesophageal reflux disease (“GORD”), gout, nausea, anaemia and diabetes. He was prescribed a range of medication to treat his stomach problems and pain. It was also clear that during this period he had a serious alcohol problem. Despite having been advised to give up drinking altogether, the notes indicate that he would often consume several bottles of alcohol per day.

10. [53]

    There was also evidence of psychological issues, including depression and anxiety, from at least May 2006. Dr Fisher’s wife, Maree Fisher, who was consulting with the deceased for dietary and diabetic issues, recorded that his stress levels were high and he was suffering from episodes of anxiety. This was apparently affecting his ability to manage his diabetes properly. By November 2007 it appears that his anxiety and depression had become severe.

11. [54]

    In January 2008 the deceased consulted with Dr Fisher for hypercholesterolemia. He returned on 4 February, at which time Dr Fisher noted that he was “well at present”. On 11 February he presented to Dr Fisher complaining of insomnia and depression.

12. [55]

    On 19 February Dr Fisher drafted a letter to Mr Pierre Bonnet for “gp mental health”, which was presumably a reference to a GP Mental Health Plan. It was later recorded that the deceased resisted any suggestion for a care plan.

13. [56]

    In March 2008 the deceased consulted with Dr Fisher complaining of GORD and depression. He returned to Dr Fisher multiple times throughout the course of the month for nausea, pain, dermatitis and anaemia.

14. [57]

    On 29 April Dr Fisher noted that the deceased was “well”, albeit with a skin infection on his face. In May he continued to consult with Dr Fisher for dermatitis, hypercholesterolemia and diabetes. On 14 May it was noted that he was suffering from background retinopathy and a mild left cataract, for which he had seen an ophthalmologist.

15. [58]

    On 26 May Dr Fisher noted that the deceased had “many problems” including diabetes, depression, insomnia, peripheral pulses and background retinopathy. It was also recorded that he consumed “four bottles of alcohol per night” and his feet were painful as a result.

16. [59]

    On 16 June the deceased consulted with Dr Fisher complaining of GORD. He also consulted with Mrs Fisher who conducted a review of his diabetes management. He was advised to reduce his alcohol intake to two drinks per night. It was noted that his leg pains were likely a result of alcohol nerve damage and elevated blood glucose levels. Mrs Fisher recorded he was a “lonely man who worries a lot”. On 23 June he returned to Dr Fisher complaining of pain in the right hip, femur and knee. He underwent an x-ray on 1 July which revealed no abnormalities.

17. [60]

    On 3 July he consulted with Dr Fisher for GORD and depression. On 21 July he consulted with Dr David Seton for a cholesterol test. On 31 July he returned to Dr Fisher for hypercholesterolemia, pain, arthritis, indigestion and dermatitis.

18. [61]

    In August 2008 he continued to consult with Dr Fisher for hypercholesterolemia and nausea. On 28 August it was noted that he had been referred to a specialist at the Gold Coast Hospital, but refused to go. He also refused to take Maxolon tablets, which were presumably prescribed to treat his stomach problems.

19. [62]

    On 23 September the deceased consulted with Dr Fisher for bronchitis. On 26 September Dr Fisher noted that he “can’t eat and can’t sleep” and “does not want more tablets”. It was also recorded that he refused to see a psychologist. On 17 October he consulted with Dr Fisher complaining of osteoarthritis and general pains.

20. [63]

    At some point between 17 October and 28 October the deceased suffered a fall. The evidence before me was not clear as to precisely when this occurred. According to Dr King’s discharge report (see [66] below) he was admitted to the Gold Coast Hospital after being “unable to cope” at home (presumably as a result of the fall). It was concluded that he had suffered a crush fracture of the spine at L3.

21. [64]

    Staff at the Hospital also apparently raised concerns about his cognition. On 28 October, whilst at the Hospital, he was administered a standard test known as a mini-mental state examination (“MMSE”), which is used to screen a person’s basic cognition. He was unable to indicate the date or complete an exercise in which he was asked to subtract 7 from 100 and keep subtracting 7 until he was told to stop. He was also unable to write a complete sentence. His overall MMSE score was 18/30.

22. [65]

    As already noted, on 29 October the deceased was transferred from the Gold Coast Hospital to the Currumbin Clinic. Dr Fisher appears to have supported, or at least gone along with, this.

23. [66]

    At the Clinic the deceased came under the care of Dr Penny King, a psychiatrist and psychogeriatrician. In the discharge summary dated 6 November, Dr King noted that upon admission the deceased had “significant short term memory deficits” and symptoms of alcohol withdrawal. Dr King continued:

24. [67]

    Dr King noted that the deceased’s family had been informed that it was believed he had an “alcohol related dementia syndrome with not only cortical but cerebro vascular changes on his MRI scan”. She did not specify which members of the deceased’s family had been provided such information.

25. [68]

    Dr King considered he was best maintained on Oxycodone, but he was also started on a regular dose of Risperidone (a tranquiliser) to assist with his agitation and delirium. He was discharged on 6 November. Dr King made referrals to a neurosurgical registrar for his aneurysms and the Aged Care Assessment Team (“ACAT”) for increased levels of home care. Dr King also noted that his daughter (presumably Rosaria) was to organise Webster Packs to manage his medication.

26. [69]

    On 7 November, the day after his discharge from the Currumbin Clinic, the deceased consulted with Dr Fisher in the company of Rosaria. He was still experiencing back pain and was awaiting an appointment with a neurosurgeon at the Gold Coast Hospital.

27. [70]

    On 9 November Dr Fisher recorded that the deceased had an “unconscious episode” the day before and was taken to the Gold Coast Hospital. He was prescribed Morphine 100mg. On 14 and 28 November Dr Fisher conducted counselling sessions with the deceased focusing on his alcohol intake. It was also noted that he had now come under the care of a nurse named Cathy.

28. [71]

    From late 2008 to early 2009 the deceased continued to suffer from pain in his back, in addition to depression and anxiety. In a clinical note dated 24 December 2008, Dr Siv Karthigasu recorded that he may have required a further dose of Risperidone due to his “behaviour”. Dr Karthigasu did not specify what aspects of the deceased’s behaviour were of particular concern. On 27 January 2009 Dr Fisher noted that the deceased had “severe pain”. He was prescribed Lyrica 75mg.

29. [72]

    On 3 April Dr Fisher had a prolonged consultation with the deceased at his home. His nurse, Cathy, was present. It was recorded that he was weak and lethargic and his blood glucose levels were high. Despite this, Dr Fisher noted that he was “better today”, but did not specify what aspects of the deceased’s health had improved. Dr Fisher further noted that he “does not need hospitalisation and does not want”.

30. [73]

    On 20 May Dr Fisher had another long consultation with the deceased at his home. It was noted that there were “many problems” and he appeared confused and uncooperative. His unit was disorderly and in a mess. At this point Dr Fisher considered he required hospitalisation.

31. [74]

    The following day, 21 May, Dr Fisher wrote the following letter to Dr King (emphasis in the original):

32. [75]

    On 22 May he was admitted to the Gold Coast Hospital. He underwent a further MMSE on 25 May. He scored 0/5 for concentration and 0/3 for memory. He was unable to indicate the day of the week, month or year. He knew he was in Queensland, but could not indicate what city or town he was in. He was also unable to recall the names of three objects that he had been asked to remember, or complete the subtracting seven exercise described at [64] above. His overall MMSE score was 7/30.

33. [76]

    On 27 May the deceased was assessed by ACAT. The assessment team consisted of a geriatrician, a psychiatrist and other medical practitioners. In the ACAT form dated 27 May, the delegate noted that in terms of his cognitive behaviour, the deceased:

    1. (1)

       “Always” exhibited short and long term memory problems, confusion, and disorientation (about time, place and other people);

    2. (2)

       “Regularly” exhibited at risk behaviour, hallucinations/delusions, wandering, and disturbed sleep/insomnia; and

    3. (3)

       “Occasionally” exhibited aggressive behaviour (both verbal and physical).

34. [77]

    The ACAT delegate recorded that they were “unable to determine” whether the deceased exhibited depressive symptoms. It was also noted that he had undergone another MMSE on 4 May in which he scored 11/30, but that test was not in evidence before me.

35. [78]

    The ACAT delegate noted that the deceased had difficulties writing and using a telephone. It was noted that he “usually lives in his own unit with [a] paid carer visiting” and that he was “unable to care for himself”. His primary diagnosis was recorded as alcoholic dementia. ACAT assessed him as being eligible for “high care – respite residential” and “high care – permanent residential” in a secure environment. Rosaria signed the ACAT form (the reason provided was because the deceased was “dementing”).

36. [79]

    On the same day, 27 May, Dr Veevek Thankey (Medical Resident for Dr Vincent Chai, general medical consultant at Robina Hospital) reported:

37. [80]

    On 1 June, following discharge from the Gold Coast Hospital, Rosaria arranged for the deceased to be flown from Queensland to Sydney, where he was then admitted to an aged care facility called Redleaf Manor. According to Cristina, the deceased was unhappy with Rosaria’s decision and as a result, he was returned to Queensland on 1 July.

38. [81]

    On the same day, 1 July, Dr Fisher prescribed the deceased with a morphine based painkiller called MS Contin SR. He consulted with Dr Fisher again on 7 July, in the company of a friend named Neville, complaining of anxiety and depression.

39. [82]

    The deceased returned to Dr Fisher on 4 August following a flare-up of his GORD. On 6 August Dr Fisher noted that he was doing “much, much better”. He said that his improvement was “definitely related to [his] friend Neville”. Dr Fisher did not specify exactly what aspect of the deceased’s health had improved, just that he was doing “much, much better”.

40. [83]

    On 20 August the deceased consulted with Dr Fisher for his pain and diabetes. Dr Fisher noted that his friend Neville was helping, but he had severe pains and needed a referral to a podiatrist. On 25 August he returned to Dr Fisher complaining of depression and an infection.

41. [84]

    On 15 September the deceased consulted with Dr Fisher for GORD and arthritis. Dr Fisher noted that he was “very well” and that his blood glucose tests were “good”. He was prescribed Tagamet 400mg to treat his reflux, and Voltaren 50mg to assist with muscle and joint pain.

42. [85]

    On 29 September, the day the deceased executed the instrument purporting to revoke Rosaria’s power of attorney, Dr Fisher’s notes record a discussion with the deceased concerning his power of attorney and that “both daughter and son agree”. The clinical note did not contain any further details about the conversation, but given the context, Dr Fisher can only have been referring to Cristina and Giuseppe.

43. [86]

    A month later, on 30 November, the deceased was again admitted to the Gold Coast Hospital after being found on the floor by a friend (unspecified in the evidence) when he did not answer the door for two days. It was during this admission that he was diagnosed with chronic myeloid leukaemia.

44. [87]

    The deceased underwent a further MMSE on 7 December. He scored 0/5 for concentration and 0/3 for short term memory. He was unable to recall the date and the name of the city, town or hospital he was in. He could not complete the subtracting seven exercise described at [64] above and was unable to recall the names of three objects he had been asked to remember. He was also unable to write a complete sentence. His overall MMSE score was 12/30.

45. [88]

    As already noted, on 14 December the deceased executed an enduring power of attorney in favour of Giuseppe prepared by a solicitor, Mr Polo. In evidence is a letter from Mr Polo to QCAT dated 23 March 2010. The letter describes the background to the preparation of the power of attorney and the earlier revocation of Rosaria’s power of attorney. Presumably it was based on instructions from the deceased or Giuseppe.

46. [89]

    According to the letter, in July or August 2009 the deceased attended the CBA (presumably the Southport branch) and was told that Rosaria had control of his accounts. The deceased then sought copies of his financial statements from CBA and found that large sums of money had been withdrawn from his accounts. The deceased told Mr Polo that at no time had he executed a power of attorney nominating Rosaria as his sole attorney. He was also unaware why such large amounts were withdrawn and how the funds had been used.

47. [90]

    The letter went on to refer to the execution of the power of attorney in favour of Giuseppe which was in issue in the QCAT proceedings:

48. [91]

    Seemingly as a result of the dispute between Giuseppe and Rosaria, on 15 December Ms Lois Lawlor, a social worker at the Gold Coast Hospital, lodged an application with QCAT concerning the deceased’s affairs. The application sought the appointment of the Adult Guardian as guardian and the Public Trustee of Queensland as administrator for the deceased.

49. [92]

    On the same date Dr Norman Barling, psychologist, completed a report after consultation with the deceased at the Hospital. Dr Barling recorded that he was asked by the deceased’s family to assess his capacity to make informed decisions about the future of his health care (presumably for the purposes of the QCAT proceedings).

50. [93]

    Dr Barling recorded that he had administered a further MMSE in which the deceased scored 11/30. Dr Barling diagnosed him as suffering from moderate dementia, although noted that he still had a “strong personality, is able to express an opinion, and can forcibly communicate his wishes”. Dr Barling considered he was able to return home, provided he received 24 hour care.

51. [94]

    Also on the same day, Dr Michael O’Reilly, a Resident Medical Officer at the Gold Coast Hospital, completed a QCAT Guardianship report under the Guardianship and Administration Act 2000 (Qld). Dr O’Reilly noted that the deceased had heavy alcohol dependence and was suffering from alcohol related dementia. Dr O’Reilly did not believe the deceased was capable of managing his financial affairs. He believed that although the deceased was capable of making decisions freely and voluntarily, his decisions appeared to have been “influenced by whoever was in his presence”. Dr O’Reilly concluded that he did not believe the deceased was able to understand and make his own decisions about personal health care, lifestyle and accommodation and his financial affairs.

52. [95]

    On 18 December Ms Lori Conley, an occupational therapist at the Gold Coast Hospital, provided a report to QCAT concerning the deceased. Ms Conley summarised the deceased’s previous MMSE results and concluded that his basic cognition had declined in the preceding 14 months. Ms Conley provided the following general observations:

53. [96]

    In relation to his financial affairs, Ms Conley noted the following:

54. [97]

    Ms Conley believed that the deceased required 24 hour supervision, 7 days per week. She said he displayed “poor attention, problem-solving and insight into his current care needs” and would benefit from “full assistance with managing his finances”.

55. [98]

    According to counsel’s submission, on 22 December the deceased was admitted to a rehabilitation facility at Carrara on the Gold Coast called the Carrara Centre. There were no documents in evidence from this facility.

56. [99]

    On 15 March 2010 Dr Fisher provided a report in response to a request from the solicitors acting for Rosaria in the QCAT proceedings. Dr Fisher explained that his consultation notes from 17 October 2008, 28 October 2008, 15 September 2009 and 29 September 2009, confirmed that on each occasion the deceased was “of sound mind” and that “his mental state was perfectly normal”. Dr Fisher believed that during these consultations, the deceased understood the nature and effect of decisions about his life circumstances and was capable of communicating his decisions.

57. [100]

    As already noted, on 1 June the deceased was again admitted to the Gold Coast Hospital. This was after he had again been found on the floor of his unit in a disoriented and confused state. Dr Fisher visited him in hospital. On 15 June Dr Fisher noted the deceased might be “going home” and that he would be required to conduct home visits. However, the deceased was not discharged until 14 July, at which time he was moved permanently to an aged care facility in Robina called Villa Serena Aged Care. It was around this time that Dr Fisher ceased to be the deceased’s treating GP.

58. [101]

    On 26 July Dr King provided a report to the solicitors acting for Giuseppe and Cristina in the QCAT appeal proceedings. Dr King noted that the deceased’s most recent Frontal Battery Score was 3/18 (where 12/18 was indicative of frontal lobe impairments) and his MMSE score was 24/30. The deceased apparently told her that he felt there was nothing wrong with his memory at the time. Dr King noted:

59. [102]

    Dr King provided her overall opinion as follows:

60. [103]

    On 2 February 2011 Dr King completed a QCAT Guardianship report. It was noted that the deceased believed he could manage everything himself, but had been “frustrated with his family at times” as they could not “get along and make decisions together”. Dr King believed his medication was likely affecting his decision making ability. In relation to his financial affairs, Dr King noted:

61. [104]

    In Dr King’s opinion, the deceased was not capable of making decisions freely and voluntarily. Dr King did not believe he had the capacity to understand and make his own decisions about personal health care, lifestyle and accommodation choices and financial affairs.

62. [105]

    In a letter to solicitors acting in the appeal proceedings dated 9 February 2011, Dr King noted:

63. [106]

    There was further documentary evidence concerning the deceased’s medical condition from 2011 until his death in 2014. Given the last payment to Cristina was made in June 2010, it is unnecessary to discuss such material for the purposes of this judgment.

64. [107]

    Two lay witnesses were called by the plaintiff. These were Terence Raftery (a friend of the deceased) and Giuseppe. Mr Raftery was not required for cross-examination. Cristina and Dr Fisher gave evidence in the defence case and were cross-examined.

65. [108]

    Terence Raftery: Mr Raftery is a retired furniture maker. Before his retirement he operated a furniture making business at Ashmore, Queensland. He met the deceased in 2002. Over the years Mr Raftery and his wife, Trish Nixon, became good friends with the deceased.

66. [109]

    Mr Raftery deposed that after a close friend of the deceased died he “gradually went downhill”. Mr Raftery recalled that he became sad and lonely, and began to drink heavily. On one occasion, Mr Raftery expressed concern for the deceased and told him he was drinking too much.

67. [110]

    Mr Raftery recalled being introduced by the deceased to Cristina and Rosaria in or around 2002 (that is, not long after Mr Raftery and the deceased met). Mr Raftery said that he did not see Cristina often over the course of his friendship with the deceased. He said he would frequently see Rosaria when she came to visit the deceased. He said they got on well together and appeared comfortable in each other’s company.

68. [111]

    Mr Raftery said that the deceased did not discuss his financial affairs in great detail. On two occasions he drove with the deceased to CBA’s Southport branch, where the deceased went into the bank while Mr Raftery waited in the car. Mr Raftery did not specify when these visits to CBA occurred.

69. [112]

    Mr Raftery also recalled a number of conversations with the deceased in which he discussed giving money to Cristina:

70. [113]

    Mr Raftery said that the deceased’s health declined in the later stages of his life. On more than one occasion Mr Raftery would receive a call from the deceased’s building manager who explained that he was not answering his door. When he arrived at the deceased’s home, Mr Raftery would find him on the floor. On each occasion he called Rosaria for assistance.

71. [114]

    Mr Raftery was not cross-examined. I therefore accept his evidence, but it was not specific as to the dates on which any of the abovementioned events or conversations took place. As a result, it is difficult to place it in the context of the case as a whole.

72. [115]

    But Mr Raftery’s evidence does establish two things. First, on Mr Raftery’s account, at least some of the payments made by the deceased to Cristina were made by way of response to her saying that she needed money. Secondly, on at least one of those occasions the money was said to be needed to fund Cristina’s fashion business.

73. [116]

    Giuseppe Nitopi: Giuseppe had been estranged from the deceased for a number of years prior to his death. He said they had ceased communicating in or around 2000, but he was unable to recall exactly what caused the breakdown in their relationship.

74. [117]

    Giuseppe said that he had reconciled with the deceased in or around Easter 2007, however this was the subject of dispute between the parties. Counsel for Cristina cross-examined Giuseppe about a letter he provided to QCAT in February 2010 in which he noted that he had resumed contact with the deceased in 2009. Giuseppe said that the references to 2009 in the letter were “typographical errors” and maintained that he reconciled with the deceased in or around Easter 2007. He said that over the next 18 months, he was in regular contact with the deceased and had a number of conversations with him about the management of his finances by Rosaria.

75. [118]

    In particular, Giuseppe described a conversation with his father which he said took place in or around 2009. The deceased told him that he was concerned about what Rosaria and Cristina were doing with his money and that they were “taking money out of my bank accounts”. The deceased wanted to give him a power of attorney.

76. [119]

    Giuseppe said he was initially reluctant to accept the power of attorney due to the fact that they lived in different states. He also said that he was “not comfortable” with being appointed. At the hearing he explained that this was because he thought there would be a conflict of interest and that it would be easier if an independent party was appointed.

77. [120]

    In cross-examination, counsel for Cristina suggested to Giuseppe that, in fact, he never discussed with deceased the management of the deceased’s finances by Rosaria in the 18 months following Easter 2007. This was because Giuseppe did not resume contact with the deceased until 2009. Giuseppe disagreed.

78. [121]

    In the end, I do not think it matters a great deal whether Giuseppe reconciled with the deceased in 2007 or 2009. Nevertheless, I am not satisfied that they resumed contact as early as Easter 2007. The reconciliation date appears as 2009, twice, in Giuseppe’s February 2010 letter to QCAT. I do not accept that these dates were merely “typographical errors”, as Giuseppe contended.

79. [122]

    Cristina’s evidence on the issue was also inconsistent and unreliable. In her affidavit she said that Giuseppe resumed contact with the deceased at his 70th birthday party in 2010. But then at the hearing she said they reconciled in 2009. Given the inconsistency, I have given no weight to her evidence.

80. [123]

    I think that the 2009 date for the reconciliation referred to in the letter to QCAT is likely to have been correct. This is consistent with the dispute about the management of the deceased’s affairs having arisen between Rosaria on the one hand and Giuseppe and Cristina on the other in the second half of that year.

81. [124]

    Counsel then questioned why Giuseppe had made no mention in his affidavits of what Cristina was supposedly doing with the deceased’s money. Giuseppe said that the deceased was a very private person and that “if he wanted to share that with me I’m sure he would have”.

82. [125]

    Giuseppe was also asked about the relationship between the deceased and Cristina. Giuseppe believed that Cristina had taken advantage of the deceased at certain times, which caused him to become more upset and drink a lot more. He said that during the QCAT proceedings, Rosaria divulged that there were occasions when Cristina had taken the deceased to the bank. Counsel for Cristina suggested that Giuseppe was simply jealous about the value of the gifts that his sisters had received from his father. Giuseppe denied this.

83. [126]

    Giuseppe said that the first time he learned that significant amounts of money had been withdrawn from his father’s account was in July 2014 after a conversation with Mr Cathers. According to Giuseppe, Mr Cathers told him that in preparing a reconciliation of the deceased’s accounts, Cristina had received transfers from her father’s account exceeding $5 million.

84. [127]

    Counsel for Cristina questioned why, if he had been aware of such issues as early as July 2014, he did not raise them in his original statement of claim filed in February 2016. Despite the conversation with Mr Cathers in July 2014, Giuseppe said that at the time he commenced proceedings he was “not aware of the extent of the moneys that had been withdrawn”. He said that it was not until April 2017, when he received subpoenaed material from CBA, that he became aware of the extent of the withdrawals. It was around this time that he amended his statement of claim to join Rosaria and Cristina as defendants.

85. [128]

    Giuseppe also gave evidence generally about his father’s health and capacity. He said that when the deceased executed the new enduring power of attorney in December 2009, he considered he was “aware of what was going on”. Giuseppe accepted, however, that he was not fully aware of the extent of the deceased’s medical issues at that point.

86. [129]

    Giuseppe said that in or around mid-2010 he noticed his father’s health deteriorating. He said that by this time, he was spending most of his time at either a nursing home or in hospital. He said he was becoming more frail and bedridden and was unable to move around without special equipment. On occasion, he needed oxygen to be administered. Giuseppe said this always occurred at a medical facility and never at the deceased’s home. He also gave evidence that around this time, the deceased was becoming increasingly distant and was unable to recognise him; although he conceded in cross-examination that this would only happen on some occasions.

87. [130]

    Overall, I thought Giuseppe’s evidence was of little value in resolving the issues which arise in these proceedings. On my findings, they had no contact with each other until they reconciled in 2009. Accepting that this would have been before the purported revocation of Rosaria’s power of attorney in September, it may only have been slightly before that. Although one might suspect that the dispute with Rosaria arose because of a concern about the deceased’s abilities to manage his own affairs, that was not the way Giuseppe put his evidence. On his account, he only noticed a decline in the deceased’s condition in mid-2010. By that point, all of the payments to Cristina (save for maybe the 4 June payment) had already been made.

88. [131]

    Cristina Nitopi: Cristina is the youngest daughter of the deceased. She currently lives in Surfers Paradise, Queensland, but also owns a property in Croydon, New South Wales. She lost contact with her father in 1997 at the age of 15 after her mother obtained a restraining order against him. She resumed contact with him in 2001 after she reached the age of 18.

89. [132]

    In 2003 Cristina told her father that she wished to create her own fashion label. She said that the deceased, having been a successful businessman, was supportive of her decision. In 2007 she created the “Cristina Nitopi” fashion label. It launched in New York in the same year and later presented on runways in America, Hong Kong and Greece.

90. [133]

    In her affidavit dated 29 January 2018, Cristina said that her father was a great source of emotional and financial support and encouraged her to expand the fashion label. She said that he “willingly financed the Cristina Nitopi fashion label by way of gift”. She further deposed:

91. [134]

    Cristina was cross-examined extensively about the payments she received from her father in the period between 2008 and 2010. At the hearing, she explained that most of the funds were used to purchase real estate. She said that during this period she bought a total of five properties (two residential and three commercial) but that most of these had since been sold.

92. [135]

    Cristina said that the payments came about following conversations with her father in which she told him she had placed a deposit on a property and he volunteered to assist her. Counsel asked whether she would ring and tell him she needed a particular amount of money. She responded:

93. [136]

    Cristina also said there were some occasions when she had no idea that her father was going to transfer money to her. She said that she only checked her bank account every couple of weeks and sometimes discovered that hundreds of thousands of dollars had been transferred to her by the deceased. In response to counsel’s question on this point, Cristina said:

94. [137]

    Counsel addressed each transaction individually and asked whether, prior to the payments being made, she knew that she was going to receive funds from her father. Her responses are summarised in the table below:

95. [138]

    Counsel suggested that if in fact the funds were used for real estate, the deceased was completely unaware of this and had incorrectly believed they were used to finance the fashion business. Cristina emphatically denied this and reiterated that she had spoken to her father about property purchases:

96. [139]

    The remainder of the cross-examination focused on the deceased’s physical and mental health issues. Cristina said that although she had a close relationship with her father, they rarely, if ever, spoke about his health. She said she would ask him generally how he was, and he would occasionally tell her that he had been to the doctors, but never went into any great detail. She said that she was aware that he had diabetes and was a social drinker, but never noticed anything unusual and did not know that he consumed high amounts of alcohol.

97. [140]

    Counsel asked whether she knew about the times he had been admitted to the Gold Coast Hospital or a clinic between 2008 and 2010. She responded:

98. [141]

    Cristina said that her relationship with Rosaria broke down in 1999 and they had been estranged for some 21 years. As a result, she was unaware that an enduring power of attorney had been granted to her sister in October 2008. She said that she only became aware of this in mid-2009 when Rosaria moved the deceased from Queensland to Redleaf Manor in Sydney. She said that her father was unhappy about this decision and complained to her about Rosaria’s behaviour:

99. [142]

    In her affidavit dated 29 January 2018, Cristina recalled a conversation she had with her father when she visited him at Redleaf Manor, in which he said words to the following effect:

100. [143]

     Cristina said that she became distressed and upset with Rosaria because she believed that at the time, he did not suffer from dementia. She said that the deceased had asked her to make an application to QCAT to “cancel” Rosaria’s power of attorney and have a guardian step in. Counsel questioned why a guardian would need to be appointed if the deceased was capable of looking after himself. Cristina said that she thought a guardian was only being appointed for decisions concerning the deceased’s accommodation.

101. [144]

     Counsel suggested that Cristina’s understanding was incorrect and that a guardian was in fact appointed for accommodation, health care and the provision of services. Cristina maintained that she could “only recall the accommodation”. Counsel continued:

102. [145]

     Counsel asked whether she had in fact read QCAT’s decision. She said that she had, but maintained that a guardian was only appointed for accommodation. She also said she was unaware that Giuseppe had tried to revoke Rosaria’s power of attorney:

103. [146]

     Despite this, it was clear that Cristina was aware that QCAT’s decision concerned the deceased’s capacity to revoke Rosaria’s power of attorney:

104. [147]

     Counsel asked whether Cristina knew that the deceased had, for many years, suffered from depression. She said she was not aware of this and that the first time she noticed any symptoms was when she saw him at Redleaf Manor in mid-2009. Counsel then asked Cristina about her observations on the deceased’s condition whilst he was at Redleaf:

105. [148]

     Counsel suggested that by mid-2009 the deceased was a “physical and mental wreck”. Cristina denied saying he was a “mental wreck”, only that she saw he was depressed. Counsel continued:

106. [149]

     Counsel suggested that by 2009 and 2010, Cristina knew that her father had significant health problems. She denied this and said that she was only aware of his diabetes. She accepted that she saw he had depression at Redleaf Manor, but she did not think this was a daily issue.

107. [150]

     Counsel then asked specifically about the deceased’s dementia:

108. [151]

     Cristina said that she may have spoken to Dr King “one or two times on the phone”, although it was unclear as to when these conversations occurred. In response to counsel’s question, she explained:

109. [152]

     Counsel continued:

110. [153]

     Counsel then referred to Dr King’s discharge summary from November 2008 in which it was noted that “information was given to his family” that he had an alcohol related dementia syndrome. Cristina interjected and emphatically denied that she ever received any reports from Dr King. She said that Rosaria received it and did not communicate anything to her. Counsel continued:

111. [154]

     Counsel then asked Cristina about the payment made to her on 4 June 2010 in the amount of $202,000. Counsel suggested that even after QCAT had determined that her father was unable to execute legal documents, she appeared happy to receive money from him. Cristina responded by saying that she did not know he had transferred the money to her and that she only became aware of this after he told her he had done so.

112. [155]

     This was inconsistent with her affidavit dated 28 March 2018 in which she deposed that she first became aware of the payment when she logged into her NAB account that month. She denied having attended CBA with him on that day and said she was in Sydney preparing for a fashion show which was to occur in Hong Kong in July.

113. [156]

     Counsel questioned whether, after receiving the $202,000 in June 2010, she asked her father if he knew what he was doing. She responded:

114. [157]

     Counsel concluded by putting a series of propositions to Cristina:

115. [158]

     I found Cristina an unimpressive witness. There were four reasons for this.

116. [159]

     First, I found Cristina to be generally uncooperative at the hearing. Her evidence was often unresponsive to the questions asked and sometimes incoherent. On more than one occasion I explained to her that the Court would be required to make an assessment of her credibility and would need to take into account whether she was making a genuine attempt to answer the questions being asked of her. There was no apparent improvement. I got the impression that for most of her cross-examination, she was not listening to the questions that were being asked of her and simply wanted to address the Court on matters she thought were important.

117. [160]

     Second, her evidence was vague and lacking in detail on critical issues. This can be seen in particular in her responses to questions about the individual payments she received (see [137] above), and about the dispute with Rosaria concerning the management of her father’s affairs. I was left with the impression that she was either actively avoiding providing any details about the period in question, or simply had very little recollection of the events that occurred. Either way, her evidence on key issues was unreliable.

118. [161]

     Third, there were inconsistencies between her oral testimony and her affidavit evidence. The most prominent example of this was her oral evidence about needing the money for property purchases rather than for her fashion label. This evidence was quite different from what she said in her affidavit (and what Mr Raftery said, which was not challenged).

119. [162]

     In the end I do not think much turns on what Cristina actually did with the money once she received it. Nevertheless, it was not immediately clear to me why she was, at the hearing, so emphatic in her denial that it was used to finance the fashion label. Perhaps it was because she was sensitive about the business. In any event, there was no independent evidence to support the assertion that the payments were used to buy real estate. In fact, Mr Raftery recalled a conversation he had with the deceased in which he said that Cristina, at least on one occasion, needed money for her fashion label. I do not think it is necessary to make a finding one way or another, but the fact that Cristina’s evidence was inconsistent on the issue says little for her credibility.

120. [163]

     Fourth, Cristina was unwavering in her assertion that the deceased’s cognitive functioning had been unproblematic over the entire two and a half period. This was despite the fact that by mid-2010 he had been admitted to several hospitals and there were a chorus of medical practitioners who had diagnosed him as suffering from dementia. Had she accepted that there was a time where she did begin to suspect that there were problems with his cognition, her evidence would have been more believable. But it is simply not plausible to suggest that over the entire period, she remained completely unaware that there were growing concerns about his mental state.

121. [164]

     Dr Fisher: On 5 July 2012 Dr Fisher wrote a report addressed to Cristina. In his opinion, the deceased did not suffer from dementia during the consultations between June and August 2010. He added that the deceased was “always very lucid and his mental state was normal”.

122. [165]

     Dr Fisher provided two further reports in May and August 2017. He noted that over the course of the time the deceased consulted with him, he “always had mental capacity“ and “was of sound mind“. Dr Fisher further noted in his August 2017 report (emphasis in the original):

123. [166]

     Similarly, in his affidavit dated 29 May 2019, Dr Fisher deposed:

124. [167]

     Dr Fisher was cross-examined on the deceased’s mental capacity and cognitive functioning. He accepted that the deceased had a drinking problem during 2008 and 2009. He said that when he was suffering from periods of excessive alcohol consumption, he would become agitated, anxious and often rude and abrasive. Dr Fisher said that during these times, although he did not present as a completely different person, the alcohol did have a “deleterious effect on him”.

125. [168]

     Dr Fisher said that in or around June 2008 he came to the conclusion that the deceased suffered from alcohol nerve damage. Despite this, he maintained that during 2008 he had no issues with his mental capacity.

126. [169]

     Counsel asked Dr Fisher whether the deceased’s consumption of alcohol could produce symptoms of alcoholic dementia. Dr Fisher agreed that this could be the case. Counsel continued:

127. [170]

     Dr Fisher accepted that during 2008 and 2009, the deceased could have been suffering from a degree of alcohol induced dementia, but qualified this. He said that the deceased’s consumption of alcohol was sporadic, meaning there were many times when he did not drink at all or only small amounts. He said that he was not aware of any evidence that such behaviour would lead progressively to alcoholic dementia. Counsel continued:

128. [171]

     Dr Fisher accepted that there were times when he clearly considered the deceased had a psychological or depressive component to his presentation, but maintained that he did not notice any signs of cognitive impairment. At one stage in the cross-examination there was an apparent concession by Dr Fisher on this point, however his answer was generally inconsistent with the rest of his evidence:

129. [172]

     Counsel then cross-examined Dr Fisher about the paragraph of his affidavit referred to at [166] above:

130. [173]

     Dr Fisher said that there was one exception to this, in May 2009, when the deceased was “very unwell and I had to send him into … the psychiatric hospital”.

131. [174]

     Counsel later referred Dr Fisher to the report of Dr Thankey dated 27 May 2009 in which it was noted that the deceased did not have the capacity to make decisions regarding personal, financial and legal matters (see [79] above). Dr Fisher said he was completely unaware of this report and had never received it. Counsel continued:

132. [175]

     There was no dispute that Dr Fisher’s clinical notes were accurate, so far as they went. But the later opinions offered by Dr Fisher to the effect that the deceased never had any cognitive problems are more problematic.

133. [176]

     It is true that Dr Fisher’s running notes never mentioned any cognitive difficulties over the period from early 2008 to mid-2010. But other evidence (including Dr Fisher’s own letter to Dr King from May 2009) establishes beyond any doubt that there were at least occasions during that period when he was suffering from cognitive impairment, and in fact he came under psychiatric care as early as 29 October 2008.

134. [177]

     It certainly seems strange that Dr Fisher’s notes do not mention this. Perhaps, not being able to offer any treatment, Dr Fisher simply never had any occasion to do so. Perhaps he did not consider it was within his field of expertise. But whatever the explanation may be, given the other evidence, the absence of mention of problems in Dr Fisher’s notes is of little or no weight in assessing what the deceased’s cognitive function actually was at relevant times.

135. [178]

     Dr Fisher had diagnosed the deceased as suffering from alcohol nerve damage in June 2008 and acknowledged in cross-examination that it was possible he could have been suffering from alcohol induced dementia which was not observed during their consultations. Dr Fisher’s only qualification was to say that he did not think sporadic drinking could progressively lead to alcoholic dementia. I do not accept that for two reasons. First, the evidence indicated that the deceased drank much more than sporadically. Second, both experts, whose evidence I discuss in further detail below, agreed that excessive alcohol consumption was the likely cause of his cognitive impairment (albeit disagreed on the degree of that impairment).

136. [179]

     Furthermore, Dr Fisher accepted that it was possible the deceased could have presented unexceptionally in their consultations, but otherwise have been incapable of appreciating the significance of financial transactions.

137. [180]

     It is clear from his own correspondence with Dr King that Dr Fisher was overstating matters when he said that the deceased never suffered from any cognitive difficulties. I think that this, and Dr Fisher’s other retrospective opinions, may be based on the absence of mention of cognitive difficulties in his notes rather than on any actual contemporaneous assessment. I do not accept those opinions as reliable.

138. [181]

     Report of Dr Rosenfeld: The first medico-legal report in evidence was prepared for the plaintiff by Dr Tuly Rosenfeld, a consultant geriatrician and physician, dated 30 January 2020. Dr Rosenfeld did not examine the deceased during his lifetime and completed his report on the papers only.

139. [182]

     Dr Rosenfeld was asked to provide his opinion on whether the deceased had the requisite mental capacity to understand the general nature of what he was doing in making the payments to Cristina. After reviewing the medical evidence, Dr Rosenfeld opined that the deceased was, for some years prior to 2008 and 2009, suffering from a number of medical problems that would have “significantly affected his brain function”. He said the most prominent of those issues were diabetes, diabetic vascular disease and prolonged alcohol abuse.

140. [183]

     Dr Rosenfeld discussed, in general terms, the effect of alcohol on the brain:

141. [184]

     Dr Rosenfeld noted that Wernicke-Korsakoff Syndrome (“WKS”) is generally associated with damage and haemorrhagic injury to deep brain structures that affect memory. He explained that individuals who suffer from such damage to the brain invariably suffer from, among other things, a reduced ability to understand, difficulty with judgment and difficulty in weighing and resolving competing considerations. Dr Rosenfeld continued:

142. [185]

     Dr Rosenfeld believed the deceased was likely suffering from WKS throughout 2008 and 2009, which was related to excessive alcohol consumption. He noted that during this time, the deceased had gait and balance problems leading to falls and memory impairment.

143. [186]

     Dr Rosenfeld also noted that the deceased had been treated with major anti-psychotic medication in the form of Risperidone 0.5mg. He said that Risperiodone at this dosage has an impact on a range of brain functions. He opined that the effect of sedative anti-psychotic medication would “invariably have affected Mr Nitopi’s cognitive function while he was taking them”.

144. [187]

     Dr Rosenfeld stated his overall opinion as follows:

145. [188]

     Dr Rosenfeld also noted in passing that based on the material, it was likely that the deceased was suffering from significant cognitive impairment prior to 2008. He explained that dementing illness and brain disease “invariably begin years before symptoms are evident and a diagnosis is made”.

146. [189]

     Report of Dr Obeid: The second medico-legal report in evidence was prepared for the defendant by Dr John Obeid, a consultant physician specialising in geriatric medicine, dated 24 April 2020. Like Dr Rosenfeld, Dr Obeid did not examine the deceased during his lifetime and completed his report on the papers only.

147. [190]

     First, Dr Obeid was asked generally what tests doctors use to diagnose dementia or cognitive impairment. Dr Obeid explained that dementia is a neurodegenerative brain disorder that is characterised by, among other things, a decline in cognition from a previous baseline and impairments in cognitive function across at least two cognitive “domains” (including memory, orientation, executive functions, language, praxis and visuo-spatial function).

148. [191]

     Dr Obeid said that in cases of dementia, such impairments do not occur exclusively in the context of delirium and are not attributable to some other disorder (e.g. depression or schizophrenia). He said that in order to meet the criteria for dementia, the deficits must be severe enough to impair social, occupational or daily living functions.

149. [192]

     Dr Obeid drew a distinction between dementia on the one hand, and mild cognitive impairment (“MCI”) on the other. Although the two neurocognitive disorders are different, they appear to be closely related. As Dr Obeid explained:

150. [193]

     Dr Obeid noted that dementia is not primarily (or even substantially) diagnosed on the basis of tests or assessments. Instead, he explained that a diagnosis is made through a combination of the following:

     1. (1)

        A careful history obtained from a carer or relative, which reveals a chronic, progressive decline in cognitive function, with a clear deterioration from a baseline;

     2. (2)

        Cognitive (mental state) testing;

     3. (3)

        Physical examination (to assess for neurological signs of dementia); and

     4. (4)

        Image studies (usually a cerebral CT scan or MRI scan).

151. [194]

     On mental state testing, Dr Obeid further explained (emphasis in the original):

152. [195]

     Dr Obeid opined that mental state tests, including the MMSE, are useful as screening tools to identify people who might have dementia or cognitive impairment. He said that an MMSE score of 24 or below is generally used to indicate that cognitive impairment is likely to be present. However, he considered that it would be incorrect to draw a conclusion that dementia is present simply by undertaking an MMSE, regardless of how poorly the person performs. He also said that the MMSE should not be used in people from non-English speaking backgrounds. Instead, he considered the Rowland Universal Dementia Assessment Scale (“RUDAS”) was a more effective tool in circumstances where cultural or linguistic barriers are present.

153. [196]

     Dr Obeid was then asked whether a diagnosis of dementia or MCI means that a person has lost all capacity. Dr Obeid did not think this was the case and explained that from a medical point of view, there is “no logical or scientific basis to support the notion that a diagnosis of dementia or MCI necessarily equates with a loss of capacity”. He provided three main reasons, which are summarised as follows:

     1. (1)

        Dementia/cognitive impairment is a syndrome which encompasses a wide range of severity that progresses over time. Symptoms may have been present for one or two years, but throughout this time, the person might have been functioning quite well and managing their self-care, shopping, financial and transport needs;

     2. (2)

        Capacity is “domain specific”, meaning that a person with dementia might lack capacity in one domain (or task), but not in another; and

     3. (3)

        Capacity is “situation specific”, meaning that a person with dementia might lack capacity at one particular point in time, but have capacity at another point in time.

154. [197]

     Dr Obeid was then asked specifically about the deceased and whether, on the balance of probabilities, he would have understood the nature and effect of the payments made during the period between 2008 and 2010.

155. [198]

     After reviewing the treating medical material, Dr Obeid opined that whilst the deceased may have had MCI, he did not have dementia until at least 2011. He did not believe the deceased met the criteria for such a diagnosis. He provided a number of reasons for this, which are summarised as follows:

     1. (1)

        The deceased did not have clear evidence of progressive worsening in cognitive function. Dr Obeid noted that his MMSE scores actually improved with time in the period from May 2009 to July 2010;

     2. (2)

        There was no evidence in the records that a proper history was obtained by any clinician that clearly shows a progressive decline in cognition and function;

     3. (3)

        The deceased’s deficits/cognitive problems recorded in the material appeared to occur mainly in the context of delirium. Dr Obeid noted that a diagnosis of dementia or cognitive impairment provided by the various doctors (Dr King, Dr Thankey, Dr O’Reilly and Dr Barling) were all undertaken during or around the times he was suffering from delirium and were often in periods when he was on multiple psychotropic medications;

     4. (4)

        There appeared to be occasions where the deceased’s cognition was functioning reasonably normally;

     5. (5)

        The appropriate mental state tests were not administered and an interpreter was not used. Dr Obeid reiterated that the more appropriate test was the RUDAS; and

     6. (6)

        Dr Fisher stated there was little evidence of a significant, fixed or progressive cognitive impairment.

156. [199]

     Dr Obeid stated his overall opinion as follows:

157. [200]

     Dr Obeid then reviewed the treating medical material and analysed the deceased’s condition at the time each payment was made during the period between 2008 and 2010. Dr Obeid drew the following conclusions:

158. [201]

     However, Dr Obeid did accept that the deceased suffered from episodes of delirium on a number of occasions, which were associated with alcohol intoxication, medication and his various physical ailments. He noted that on 28 August 2008, Dr Fisher recorded that the deceased had been nauseated, his blood sugar level was elevated and he had severe lethargy. Although Dr Fisher made no comments as to the deceased’s cognition, Dr Obeid considered it reasonable to speculate that he was unwell to such an extent that his capacity to understand the payment made to Cristina five days later, on 2 September, would have been affected.

159. [202]

     Finally, Dr Obeid noted that he disagreed with Dr Rosenfeld’s conclusion that the deceased was in the “final climactic stage” of dementia in 2008 or 2009. Dr Obeid concluded as follows:

160. [203]

     Joint report of Dr Rosenfeld and Dr Obeid: In accordance with orders made by Hallen J on 1 June 2020, Dr Rosenfeld and Dr Obeid prepared a joint expert report for the purposes of these proceedings dated 10 July 2020.

161. [204]

     The experts were first asked about the extent to which a person’s MMSE score correlates with their mental capacity. The experts responded:

162. [205]

     The experts were then asked about the accuracy and reliability of the opinions of hospital medical staff concerning a person’s mental capacity. They agreed that the assessment of cognitive function in a hospital environment is confounded by other factors such as a person’s acute illness, which will adversely affect cognitive function. They also agreed that hospital doctors may be untrained in the ability to determine capacity.

163. [206]

     The experts agreed that the deceased suffered from cognitive impairment, but disagreed as to its extent and severity. Dr Obeid was of the view that, at worst, he suffered from MCI, characterised by some memory impairment rather than dementia. He noted that the deceased was previously observed to have an “odd” personality/behaviour and his cognitive test scores had actually improved over time. Dr Obeid considered the deceased’s MCI would not have impaired his abilities to function and remain independent.

164. [207]

     On the other hand, Dr Rosenfeld said that the occurrence of delirium when the deceased was unwell indicated the likely presence of underlying dementia. He noted that prolonged alcohol use would invariably lead to brain disease and dementia. Dr Rosenfeld considered that the deceased had at least moderately severe dementia which would have impaired his ability to manage and make decisions about his finances.

165. [208]

     Cross-examination of experts: Both Dr Rosenfeld and Dr Obeid were cross-examined. Counsel for Cristina first asked Dr Rosenfeld about the deceased’s various MMSEs and whether a score under 25/30 was indicative of a person suffering from dementia. Dr Rosenfeld said that it was not. He provided the following explanation:

166. [209]

     Dr Rosenfeld explained that when a person is suffering from dementia, their overall MMSE scores generally decline, but there can also be fluctuations in the results. He accepted that MMSEs are an unreliable indicator of dementia if they were taken on occasions in which the person was in a state of delirium. He also accepted that MMSEs are not appropriate tools for people with non-English speaking backgrounds.

167. [210]

     Counsel then asked Dr Rosenfeld how he formed the opinion that the deceased was suffering from significant cognitive impairment prior to 2008 if he was not provided with any clinical notes from the relevant period. Dr Rosenfeld responded as follows:

168. [211]

     Counsel also questioned Dr Rosenfeld on the deceased’s MMSE from July 2010, in which he scored 24/30:

169. [212]

     In re-examination, counsel for Giuseppe also asked Dr Rosenfeld about the extent to which the deceased’s impairment had commenced before 2008:

170. [213]

     Counsel for Giuseppe then asked Dr Rosenfeld how the presence of cognitive impairment (both MCI and dementia) affects an individual’s understanding of financial transactions. Dr Rosenfeld provided the following explanation:

171. [214]

     Counsel for Cristina first cross-examined Dr Obeid about his reliance on Dr Fisher’s clinical notes. Dr Obeid accepted that his assessment of the deceased was somewhat limited by the fact that he did not examine him in person. Apart from one instance in May 2009, there were was nothing in Dr Fisher’s clinical notes that indicated the deceased presented with any symptoms of cognitive impairment. Counsel asked Dr Obeid whether it was possible the deceased could have presented unexceptionally for a consultation with Dr Fisher, while nevertheless being “incapable of appreciating the wherewithal of a significant financial transaction”. Dr Obeid responded:

172. [215]

     Dr Obeid maintained that during the relevant period, the deceased likely had, at worst, MCI rather than dementia. Counsel asked Dr Obeid about the difference between MCI and dementia. Dr Obeid explained that MCI is a syndrome of forgetfulness or other cognitive problems that do not impact a person’s functional state or ability to manage their social and financial affairs, work environment or their self-care abilities. He said that when MCI is sufficiently severe to impact the person’s functional state, that is when a diagnosis of dementia is made.

173. [216]

     Dr Obeid accepted counsel’s proposition that there is somewhat of a “grey line” between MCI and dementia, but reiterated that the two types of impairment are distinct from one another. Dr Obeid explained why he did not agree with a diagnosis of dementia:

174. [217]

     Counsel also asked Dr Obeid about the MMSE taken in July 2010, in which the deceased scored 24/30:

175. [218]

     Overall, Dr Obeid considered there was “really no evidence of a progressive decline in cognitive function which is the hallmark of dementia”. He also said there were problems with the ways in which the cognitive tests were performed, including the fact that they did not take into account the deceased’s cultural and linguistic background.

176. [219]

     Counsel suggested that the deceased’s occasional refusal of treatment was consistent with a lack of insight into his own circumstances. Dr Obeid accepted that this was one possible explanation, but said there could be others, including the fact that the deceased was a very private person.

177. [220]

     Counsel asked Dr Obeid whether he came to any conclusions as to the cause of the deceased’s cognitive impairment. Dr Obeid explained that the causes of MCI and dementia are generally the same. He said that in this case, it would be reasonable to assume that excessive alcohol consumption might have been the cause of the deceased’s MCI. He accepted that any damage caused by the alcohol would be permanent and that as a result, his MCI would also be permanent.

178. [221]

     Dr Obeid was then asked specifically about the discharge summary from Currumbin Clinic in November 2008. By this point an MRI had been conducted revealing cortical atrophy and cerebrovascular disease. Dr Obeid accepted that this could not simply happen overnight and that such issues “could have been present for 15 years or slowly developing for 15 or more years”.

179. [222]

     Counsel then asked about the deceased’s episode of delirium upon admission to the Currumbin Clinic. Dr Obeid explained:

180. [223]

     In re-examination, Dr Obeid further explained:

181. [224]

     In response to my question, Dr Obeid explained what he understood by the term “delirium”:

182. [225]

     Conclusions on expert evidence: Overall, I found Dr Rosenfeld and Dr Obeid’s evidence about the criteria for a diagnosis of dementia and cognitive impairment, and the information about the ways in which alcohol affects the brain, generally useful. However, their opinions on whether the deceased actually had the capacity to understand specific financial transactions that occurred between 2008 and 2010 should, in my view, be treated with caution. Neither expert actually examined the deceased during his lifetime and both prepared their reports on the papers only. The material available to them was, in large part, the same as the material that was in evidence before the Court.

183. [226]

     Whilst I have taken Dr Rosenfeld and Dr Obeid’s conclusions into consideration, I have given comparatively more weight to the opinions and diagnoses of the medical practitioners who treated the deceased during the relevant period and whose various reports were tendered without objection. This includes the opinion of Dr King who was his treating psychiatrist.

184. [227]

     Furthermore, much of the expert evidence was directed towards the question of the deceased’s capacity. The issue before the Court is whether Cristina took unconscientious advantage of any special disadvantage the deceased might have had, not whether he had the capacity to make each of the payments. Although capacity is undoubtedly an important factor, it is not determinative of whether he was in fact suffering from a special disadvantage. There are a number of other considerations the Court must take into account in answering that question.

185. [228]

     I have also only attributed limited weight to the various MMSEs that were administered over the relevant period. I accept what the experts said that these tests are only useful as screening tools and are not authoritative on whether a person is actually suffering from dementia. In reaching my conclusions, I was less concerned with the overall scores and whether they increased or decreased over time, and focused more on the substantive exercises the deceased was asked to complete and what his responses suggested about his cognitive abilities at the time.

186. [229]

     There was some concern about the utility of those responses, given the fact that English was not the deceased’s first language. I am not convinced that the concern is justified. He had lived in Australia for decades and had run successful businesses here. He appears to have had no difficulty in dealing with banks and other service providers (including Dr Fisher). There was also no suggestion in the lay evidence, particularly from the witnesses who were closest to him, that he had any language difficulties.

187. [230]

     Although Dr King noted in her letter of February 2011 (see [105] above) that an Italian interpreter would have been helpful, she did not consider it was essential. Even if there were language difficulties, I am not satisfied that that would have made any difference to the answers he provided in the MMSEs. One does not need a comprehensive command of English to express the date, count backwards, recall their location, or write a sentence.

188. [231]

     As for the MMSE that was taken in July 2010, in which the deceased scored 24/30, Dr Obeid considered that such an improvement in MMSE scores was virtually unheard of in cases of dementia. I accept that dementia is a progressive disease that does not get better over time. It follows that the increase in the deceased’s MMSE scores does not actually reflect any improvement in his baseline level of cognitive function at all. The lower scores in his previous MMSEs may be explained by the fact that there were other stressors, including pain, the effects of medication, and episodes of delirium, that affected his ability to respond to questions at the time. Given the contemporaneous reports, I am not satisfied that his baseline in the years before would have been any better than it was in July 2010. In fact, there was evidence that episodically his mental state was much worse.

189. [232]

     In any event, both experts agreed that the July 2010 score did not exclude a significant loss of cognitive function. Dr Obeid acknowledged that a score of 24 could be consistent with dementia. Dr Rosenfeld similarly opined that there is a higher likelihood of dementia at scores under 25, but said that he had seen people who were suffering from significant dementia who scored as high as 30/30.

Unconscionable dealing

1. [233]

   Before setting out my conclusions on the plaintiff’s claim, I should note that on the whole, the documentary evidence before the Court in this case was somewhat incomplete. First, there were only limited financial records. The material in evidence was confined to statements from the CBA Southport account and transfer documents relating to only some of the payments to Cristina. This made it difficult to understand the context and circumstances in which each of the twelve payments were made.

2. [234]

   The CBA Southport account was presumably only one of a number of bank accounts the deceased held, possibly with multiple different banks. It appeared to be an intermediary account in which money was received and transferred out again soon after. However, without further material, it was unclear as to how the money was credited into his account in the first place and where those funds actually came from.

3. [235]

   It was also unclear as to who signed the relevant transfers in favour of Cristina. In closing submissions, counsel for Giuseppe accepted that this was a matter for speculation. In the end, there was no dispute that Cristina received the twelve payments in question, totalling around $3.2 million. There was also no suggestion that she had access to his accounts and had effected the transfers herself.

4. [236]

   It would also make little sense for Rosaria to have made the payments. Although she held a financial power of attorney from October 2008, it was clear from the evidence that she did not have an amicable relationship with Cristina. As a result, I am left with no choice but to assume that the transfer documents giving effect to the payments to Cristina were signed by the deceased himself and this was done at the Southport branch (or elsewhere and delivered to the branch by the deceased or someone acting on his instructions).

5. [237]

   Second, there were also gaps in the treating medical evidence. The only clinical notes in evidence were from Dr Fisher. This is despite the fact that between 2008 and 2010, the deceased had attended a number of different medical facilities, clinics and hospitals. In particular, there were no records from the Currumbin Clinic, Redleaf Manor or the Carrara Centre, and only limited documentation from the Gold Coast Hospital.

6. [238]

   Further, the only evidence from Dr King took the form of a handful of reports. The fact that Dr King was not called to give evidence was somewhat surprising, given she was the deceased’s treating psychiatrist during the relevant period and had diagnosed him as suffering from alcoholic dementia syndrome as early as November 2008. But, whatever the explanation, the result is that I was left with an incomplete picture of the deceased’s medical history for the period in which the payments were made.

7. [239]

   The legal principles dealing with unconscionable conduct, or what the learned authors of Meagher, Gummow and Lehane call “catching bargains”, are well established and uncontroversial. Ward CJ in Eq provided the following summary in her recent decision of Turner v O’Bryan-Turner [2021] NSWSC 5 at [399], which I respectfully adopt:

8. [240]

   Once it is established that the weaker party has a special disadvantage, and the stronger party either knew or ought to have known of this, the onus shifts to the stronger party to demonstrate that the transaction was fair, just and reasonable. As the Chief Judge noted at [399] (citing Austin J in Turner v Windever [2003] NSWSC 1147 at [106] with approval):

9. [241]

   As to the nature of the special disadvantage, her Honour noted (at [400], citations omitted):

10. [242]

    The first question in assessing the deceased’s ability to conserve his own interests is to identify, to the extent possible, the nature of the transactions and their context. Despite the lack of evidence to which I have referred, some conclusions are possible.

11. [243]

    Cristina’s case, at least in her affidavit, was that each of the twelve payments were made by the deceased on a wholly spontaneous, and unrequested, basis. Indeed in her oral evidence she maintained that she was unaware in advance that some of the payments were going to be made, and only became aware of them when she noticed them in her bank account.

12. [244]

    Putting aside the $15,000 payment in September 2008, which is too small to matter, I do not accept Cristina’s version of events, such as it is. This is for two reasons.

13. [245]

    In the first place, for reasons I have given, I found Cristina to be an unreliable witness. In particular I found her evidence on the circumstances of the payments unimpressively vague. I am not prepared just to accept her conclusory assertions without any corroboration.

14. [246]

    Secondly, there is the independent and uncontested evidence from Mr Raftery, in which he recalled being told by the deceased that Cristina “needed money” and “wants more money”. It is true that Mr Raftery was not precise as to when those conversations took place, and it may be that he was referring to transfers that occurred at an earlier point in time. But even if that was the case, there seems no reason to think that the situation would have changed in relation to later payments. Certainly Cristina did not suggest so in any of her evidence.

15. [247]

    It may be that Cristina did not expressly ask her father for all of the payments in so many words. But I am satisfied on the probabilities that before each of the payments Cristina had at least implicitly made it known to her father that she needed money for one purpose or another, and thereby imposed a degree of moral pressure on him to give her what she wanted. The question is whether, at the relevant times, the deceased was in a position to conserve his own interests in the face of this pressure.

16. [248]

    Counsel for Giuseppe submitted that the Court should accept Dr Rosenfeld’s opinion that at all times during 2008, 2009 and 2010, the deceased was suffering from dementia and had permanent incapacity of the brain. On the other hand, counsel for Cristina submitted that Dr Obeid’s evidence should be favoured on the basis that he undertook a much more forensic examination of the contemporaneous material and the events that were happening around each transfer. For all but one payment, Dr Obeid did not consider there was any evidence to suggest the deceased would have been unable to understand the nature of what he was doing.

17. [249]

    I accept that Dr Obeid conducted a thorough examination of the material. However, his conclusions on the circumstances surrounding each payment relied heavily on the clinical notes of Dr Fisher. As I have already stated, I am not satisfied that just because Dr Fisher’s notes were silent on the issue of cognition, that necessarily meant the deceased was mentally well at the time of their consultations. In fact, Dr Fisher accepted at the hearing that he may not have been. In any event, I am not convinced that there is much utility in Dr Obeid’s transaction-by-transaction analysis given he did not actually examine the deceased at or around the time any of the payments were made.

18. [250]

    Counsel for Giuseppe submitted that in the end, there was not a great deal of disagreement between Dr Obeid and Dr Rosenfeld. He submitted that the only real dispute between them was a matter of terminology; while Dr Obeid thought he had MCI, Dr Rosenfeld considered it was dementia. I do not accept that submission. There is clearly a difference between MCI and dementia. As I understood Dr Obeid’s evidence, although they are both forms of cognitive impairment, MCI is less severe and does not, necessarily, affect a person’s functional state or capacity to manage their social or financial affairs.

19. [251]

    In evaluating the experts’ conclusions, it must again be borne in mind that this is not just a case about lack of legal capacity. The parties appeared to be under the impression that if, on the one hand, the Court accepted Dr Rosenfeld’s opinion and found that the deceased was suffering from dementia during the relevant period, that would necessarily establish that he was at the relevant time in a position of special disadvantage. Conversely, if the Court accepted Dr Obeid’s opinion and found that the deceased was only suffering from MCI, Giuseppe’s case would fail. In my view, it is not as simple as that.

20. [252]

    In Bridgewater v Leahy (1998) 194 CLR 457, Gaudron, Gummow and Kirby JJ held that in cases concerning unconscionable dealing, capacity to make free decisions is not determinative of whether the weaker party (in that case, Bill York) has been exploited. Their Honours noted at 491 [117]-[118]:

21. [253]

    Their Honours then cited with approval the well-known passage from Lord Eldon LC in Huguenin v Baseley (1807) 14 Ves Jun 273 at 299-300:

22. [254]

    Accordingly, it is not enough to say that because the deceased was able to effect the payments himself, that necessarily meant he was not relevantly disadvantaged at the time they were made. For the same reason, acceptance of Dr Rosenfeld’s diagnosis of dementia, or Dr Obeid’s diagnosis of a condition of lesser severity, MCI, is relevant but not dispositive. The Court must look to the broader context in which the transfers were made and, as Lord Eldon LC noted, that includes how the intention to make those payments was produced.

23. [255]

    Having said this, I propose to make some observations on the diagnosis issue before proceeding to consider other relevant factors.

24. [256]

    Counsel for Giuseppe submitted that on the medical evidence, the Court would readily conclude that the deceased was suffering from dementia. Counsel relied, in particular, on the MRI taken in October 2008, which revealed cortical atrophy and small vessel cerebrovascular disease, and the discharge summary of Dr King dated 6 November 2008, in which the deceased was diagnosed as suffering from alcoholic dementia syndrome.

25. [257]

    Counsel for Cristina challenged Dr King’s diagnosis of dementia. He submitted that it was made at a time when the deceased was in a state of delirium, having just suffered a fall, and was therefore not directly related to his cognition.

26. [258]

    It is true that at the time of his admission to the Currumbin Clinic, the deceased’s condition may have been affected by other factors. But counsel’s submission cannot be pressed too far. Dr King was the treating specialist and her expertise was not questioned. She was clearly aware of the deceased’s injury and the possibility of delirium. The natural inference is that she would have taken these into account in reaching her diagnosis. That diagnosis was consistent with the later diagnosis of Dr Barling ([92]-[93] above). There is no evidence of any contrary contemporaneous diagnosis.

27. [259]

    The discharge summary, and other documentary evidence recording Dr King’s diagnosis, were tendered without objection. Dr King might have been called as a witness in the plaintiff’s case, but she might just as well have been called in the defence case. I do not see why I should discount her diagnosis simply because there were other factors which might have been relevant and which she did not expressly address. To do so would, it seems to me, be an exercise in unwarranted speculation.

28. [260]

    In my view, the deceased’s admission to Currumbin Clinic on 29 October 2008 marks an important turning point in the evidence. Upon his discharge, Dr King not only diagnosed him with alcoholic dementia syndrome, but also considered it was necessary to refer him to ACAT for increased levels of home care. Only three days after his discharge, on 9 November, he had an unconscious episode and was taken back to hospital, and by mid-November he had come under the care of a paid nurse.

29. [261]

    It is clear that, although the deceased continued to live at home, he had lost the ability to care for himself independently. The evidence from May 2009 confirms the marked deterioration in the deceased’s ability to cope when compared with his independent state before October 2008. On 20 May Dr Fisher himself noted as a result of a home visit that the deceased’s unit was in a mess and requested his admission to hospital immediately, on the basis that he was confused, disoriented and unable to care for himself (see [73]-[74] above). This assessment was confirmed by ACAT (see [76]-[78] above).

30. [262]

    The deceased eventually returned to his unit but continued to require assistance from a visiting carer. Clearly this was only partially successful: an episode of the deceased being found on the floor of his unit resulted in his re-admission to hospital in November 2009 (see [86] above).

31. [263]

    There is also direct evidence of observed cognitive difficulties from May 2009. The ACAT delegate noted (see [76] above) that he was suffering from ongoing short and long term memory problems, confusion, disorientation, hallucinations, delusions, wandering and disturbed sleep. These problems were not merely intermittent in nature; the delegate recorded that they were occurring more frequently than that. The hospital treating team’s opinion (see [79] above) was that the deceased no longer had the capacity to make decisions regarding personal, financial and legal matters.

32. [264]

    In these circumstances I do not give much weight to the conclusion statements in Mr Polo’s letter to QCAT to the effect that the deceased had capacity when he executed the power of attorney in favour of Giuseppe in December 2009 (see [90] above). But the letter is still significant. The deceased was apparently telling Mr Polo that Rosaria was not authorised to operate his bank account, and querying the propriety of the large payments made from his account up to October 2009 (see [89] above). He had apparently forgotten granting the power of attorney in favour of Rosaria the previous year. And the payments the deceased was complaining about included, or at least were accompanied by, very substantial payments in favour of Cristina. The letter strongly suggests that by the time Mr Polo became involved the deceased had already lost his mental grip on his finances.

33. [265]

    This conclusion is reinforced by the evidence about the deceased’s cognitive function after his re-admission to hospital in November 2009. Ms Conley (see [95] above) observed that the deceased was easily distracted, was wandering around hospital corridors at night, and was confused and agitated. Critically, by this point he displayed a lack of awareness and insight into his own condition. He believed that he was managing well and did not require any assistance. In fact, by this point he was suffering from severe memory problems; he was not even able to recall the names of the staff members he had seen only a few hours before and was re-introducing himself to individuals several times within an hour.

34. [266]

    Dr O’Reilly (see [94] above) also concluded that the deceased was not capable of managing his financial affairs. Critically, he thought that the deceased was easily swayed by those in his presence.

35. [267]

    Of course, it would have been natural for the deceased to have wished to benefit Cristina. But even a man as wealthy as the deceased, when faced with a request for money, needs a sufficient level of memory to recall prior requests and a sufficient degree of independence to decide for himself whether to accede to the latest one.

36. [268]

    In my view, the evidence I have summarised shows that these requirements were lacking in the deceased. Of particular significance is the evidence that the deceased was easily swayed and lacked the insight to appreciate that his memory had failed. He had no real ability to evaluate Cristina’s requests for money and bring a proper judgment to bear on them. It is also relevant that, in addition to his cognitive difficulties, the deceased was lonely and plagued with serious ailments, including severe pain. He was in a very vulnerable state.

37. [269]

    Admittedly the evidence which goes directly to the deceased’s ability to manage his financial affairs only begins in May 2009. But there is nothing to suggest that there was any relevant change at that time. I think that the fact that the deceased was diagnosed with dementia, and lost the ability to live independently, after his hospital admission at the end of October 2008 allows me to conclude that he would have been in a position of special disadvantage from then onwards.

38. [270]

    The period before late October 2008 is, however, another matter. Clearly the brain pathology detected at that time would not have appeared overnight. I also accept that dementia usually progresses relatively slowly. There must be a strong suspicion that the factors giving rise to the deceased’s vulnerability existed well before his fall and consequent admission to hospital at the end of October 2008. But there is no evidence before then of the deceased actually experiencing difficulties with his cognitive function in general, or the management of his financial affairs in particular. In the end I do not think that I can be satisfied that the deceased was in a position of special disadvantage at that point.

39. [271]

    I have not overlooked the fact that one of the payments in issue in these proceedings was a payment of $500,000 to Cristina on 23 October 2008, only six days before the deceased was admitted to the Currumbin Clinic. But the deficiencies in the evidence mean that I cannot be sure that this payment post-dated the fall which ultimately resulted in the deceased’s hospitalisation on 28 October. Certainly there is nothing in Dr Fisher’s note of 17 October (see [62] above), which suggests there was any new issue at that stage. Even for this payment, suspicion based on subsequent events is not, in my view, enough.

40. [272]

    I think it is clear that by the time the last payment was made on 4 June 2010 Cristina was well aware of the deceased’s condition. She ultimately conceded at the hearing that she had read QCAT’s March 2010 decision and understood that it concerned the deceased’s capacity (see [146] above). In closing submissions counsel for Cristina accepted that she was aware of his lack of capacity from that point. The question is whether she was on notice at earlier times.

41. [273]

    In closing submissions counsel for Giuseppe relied on the paragraph of QCAT’s March 2010 decision in which the Tribunal noted that Cristina had expressed concerns about withdrawals by Rosaria in mid-2009 (referred to at [39] above). Counsel submitted that as a result, it would be impossible for Cristina to contend that she had no knowledge that the deceased was vulnerable to exploitation at all relevant times.

42. [274]

    I do not accept that submission for two reasons. First, the relevant paragraph of QCAT’s reasons for decision is not admissible to prove the existence of the facts contained therein: Evidence Act 1995 (NSW), s 91(1). Secondly, even if admissible, it does not actually demonstrate that Cristina was aware of the deceased’s vulnerability at the relevant times.

43. [275]

    All the paragraph indicates is that Cristina had some concerns about Rosaria’s conduct. It does not state that Cristina was concerned about the deceased’s condition. Nor does the paragraph state that Cristina held her concerns in mid-2009 when the withdrawals purportedly occurred (and still less at the time of the payments which pre-dated mid-2009). She might not have become aware of the withdrawals by Rosaria until closer to the QCAT hearing in March 2010.

44. [276]

    But there is other much more compelling evidence on the question which dates from mid-2009. It is Cristina’s own testimony about seeing her father at Redleaf Manor in June 2009 (see [141], [147]-[149] above). She revealed in cross-examination that when she saw him, he was in a very vulnerable state. She saw him curled up in bed “like a baby” and said he had “no idea what was going on and he didn’t know where he was”. She agreed that it was obvious to her that he was bedridden, depressed and confused, and that she had not seen him like that before.

45. [277]

    Cristina later tried to clarify her evidence. She said that the deceased was confused at Redleaf Manor not because of his mental state, but because Rosaria had simply transported him to Sydney without telling him where he was going. Cristina maintained that his confusion had nothing to do with his mental capacity. I do not accept this. Apart from the general difficulties with her reliability, there is simply too much independent evidence to the contrary to make it credible.

46. [278]

    Cristina also recalled a conversation that occurred at Redleaf Manor in which the deceased told her that he did not think he had dementia (see [142] above). The fact that he explicitly denied having the disease indicates that he had, at some point, been told that he did have it. Cristina was clearly on notice that there were concerns about his mental state.

47. [279]

    Even if in June 2009 Cristina lacked actual knowledge of the full extent of the deceased’s disabilities, in my view she could not have failed to see the signs of his vulnerability. I am satisfied that Cristina was on notice of his special disadvantage from that point.

48. [280]

    There is a suspicion that Cristina would have been aware of the deceased’s condition earlier. But again there is a lack of hard evidence. Cristina did not live with him in Queensland and although she was in regular contact with him over the phone, it was common ground that he was generally a private person. He was also frequently non-compliant with his treatment regime and later denied suffering from health problems that clearly existed.

49. [281]

    It is true that Dr King reported in November 2008 that she had provided information to the deceased’s family members that he was suffering from dementia. Cristina also accepted that she had spoken to Dr King on the phone about her father. She denied that Dr King told her about the deceased’s cognitive issues, but I do not accept that. Dr King was the deceased’s treating psychiatrist and it was implausible to suggest that when they did speak Dr King did not tell her about the diagnosis.

50. [282]

    But there remains a doubt whether Cristina was informed of the diagnosis by Dr King as early as November 2008. Dr King’s report was not specific as to which family members she was referring to. Nor was Cristina specific as to when the telephone conversations with Dr King took place. She said that they occurred “when [the deceased] was admitted to Carrara”, but it appears that he was admitted to the Carrara Centre multiple times between 2008 and 2010.

51. [283]

    It was never put to Cristina directly in cross-examination that her telephone conversation with Dr King occurred in November 2008. In these circumstances I am unwilling to reach that conclusion by inference. I am not satisfied that Cristina was on notice of the deceased’s special disadvantage before June 2009.

52. [284]

    As I am satisfied that Cristina had notice of the deceased’s special disadvantage from June 2009 onwards, there is an equitable presumption that thereafter she unconscientiously took advantage of the opportunities presented by that disadvantage. The onus was on her to establish that the six transfers made to her after that date were fair, just and reasonable. I am not satisfied that she has done so.

53. [285]

    I have rejected Cristina’s case that the payments were spontaneously made to her by the deceased. One of the reasons I have done so is that Cristina presented no clear context for the payments. There is simply no reliable evidence which would establish that, had the deceased been able to give proper consideration to Cristina’s requests, he would have acceded to them. At best that is a matter of speculation. The presumption has not been rebutted.

Conclusions and orders

1. [286]

   I have concluded that:

   1. (1)

      the deceased was subject to a special disadvantage in his dealings with Cristina from November 2008 onwards;

   2. (2)

      Cristina ought to have known this from June 2009 onwards; and

   3. (3)

      the payments made to her after June 2009 were consequently the result of her unconscientiously taking advantage of him.

2. [287]

   It follows that the plaintiff’s claim in respect of the six payments made to Cristina before June 2009 fails, but the claim in respect of the six payments made to her between June 2009 and June 2010 succeeds.

3. [288]

   In the result Cristina will be obliged to make repayment of receipts totalling about $1.2 million. The plaintiff is entitled to have those funds repaid to the estate, after which they will be distributed in accordance with the terms of the deceased’s will.

4. [289]

   It will be necessary to draw up orders to give effect to my conclusions. I will stand the proceedings over to allow that to happen. Any debate about interest and costs should take place at the same time.

5. [290]

   The orders of the Court are:

   1. (1)

      Adjourn the proceedings to 9.30 am on 12 July 2021 or such other time as may be arranged with my Associate.

   2. (2)

      Direct that the parties confer on the form of orders to be made to give effect to this judgment and to deal with costs, and, no later than 24 hours before the adjourned hearing, submit proposed orders for this purpose.