Macura v Sarasevic

1. [1]

   HER HONOUR: This matter involves an application by the defendants, the executors of the Will of the late Mr Milorad Adzic (the deceased), namely, Fr Dragan Sarasevic and Ms Milena Mijatovich, brought by notice of motion filed 16 May 2018 and amended 23 April 2019, seeking a declaration pursuant to s 73 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) as to a settlement agreement reached at a court-annexed mediation held on 20 March 2018 in relation to these proceedings in the Family Provision List (2017/00336881). The plaintiff in these proceedings is Mr Branco Macura. Mr Macura now contends that he did not have capacity to enter into the said settlement agreement. (There are notable inconsistencies with the spelling of the names of parties in this matter. For example, sometimes in the court documents Mr Branco Macura’s name is spelt Branko, Fr Sarasevic’s name is spelt Saracevic and Ms Mijatovich’s name is spelt Mijatovic; however, nothing turns on this.)

2. [2]

   The hearing of the present application was beset by delay in the service by Mr Macura of medical evidence relating to his claimed incapacity as at the date of the said mediation and by last minute adjournment (and other) applications brought on his behalf. Having acceded to various such applications, including for the appointment of a tutor to act on behalf of Mr Macura (in the circumstances to which I will refer shortly), I ultimately refused the last application for an adjournment to adduce further psychiatric evidence as to Mr Macura’s cognitive ability at the time of the mediation. That application was made at the close of the hearing of the evidence on the executors’ application. I proceeded to hear the parties’ closing submissions based on the evidence that had by then been adduced, before reserving my judgment on the substantive application. For the reasons that follow, I consider that the executors’ application for declaratory relief and consequential orders has been made good. I will make orders accordingly.

Background

1. [3]

   The dispute which was the subject of the mediation leading up to the disputed settlement agreement involved a claim by Mr Macura against the estate of the deceased (in proceedings commenced by him on 7 November 2017) to the effect that the deceased had made him a testamentary gift (donatio mortis causa) of property owned by the deceased in Liverpool (the Liverpool property) or in the alternative that the executors are estopped by their conduct from denying the gift; and, if those claims failed, a claim by Mr Macura under s 59 of the Succession Act 2006 (NSW) (Succession Act) for provision out of the estate or notional estate of the deceased (that claim being based on an alleged same sex de facto relationship between Mr Macura and the deceased).

2. [4]

   In a related proceeding (2017/00270488), also mediated as part of the 20 March 2018 mediation, another person (Ms Slavica Ristic) brought a separate claim under s 59 of the Succession Act for provision out of the estate or notional estate of the deceased. Both Mr Macura (who was described by Ms Ristic in the course of her evidence as the deceased’s driver) and Ms Ristic (who was for some time before the deceased’s death in receipt of a carer’s allowance in respect of the deceased and for part of the time also in receipt of a carer’s allowance as, and still claiming to be, Mr Macura’s carer) claimed to have been in a sexual relationship with the deceased prior to the deceased’s death (the respective alleged de facto relationships forming the basis for the respective, and in at least one sense competing, family provision claims).

3. [5]

   I was informed by the executors’ Counsel (Mr Bartos) that, according to Mr Macura, the deceased’s estate was valued at about $11 million (see T 3.18; 10/05/19) on the basis that the Liverpool property could be sold as part of a consolidated development parcel with a neighbouring property, but that there had been some enquiries made and that there was no interest in such a development, so that the Liverpool property was worth about $3.2 million and the executors had estimated the value of the estate overall at about $5.7 million. (In the submissions for Mr Macura on the present application it appears that he still contends that the estate is worth some $10 million.)

4. [6]

   The deceased was not married and had no surviving issue. He was in his 90’s at the date of his death in 2016. Under the deceased’s Will, his estate is left to various nieces and nephews and their respective children. There has been no distribution to any of the beneficiaries.

5. [7]

   The Liverpool property is a block of units on a single title. The deceased lived in one of the units (the location of which is said to have varied from time to time over the years). Mr Macura resided in another of those units (though from time to time, according to Ms Ristic, he slept in a bedroom in the deceased’s unit).

6. [8]

   Mr Macura’s case is that he first commenced living at the Liverpool property as a tenant but that he then formed a sexual relationship with the deceased; and that the deceased promised him the Liverpool property or promised that he could live at the Liverpool property for the rest of his life rent-free.

7. [9]

   Ms Ristic’s evidence in her family provision claim (arguably inconsistent with Mr Macura’s case) was that from 2010 until the date of his death she and the deceased were in a de facto sexual relationship (and that they intended to travel to Serbia and to purchase a house together). In cross-examination on the present application, Ms Ristic’s evidence of a sexual relationship with the deceased ultimately consisted of no more than that she and the deceased had “very close hugs” without wearing parts of their clothes (and even then there is some doubt as to whether any such relationship persisted to the date of the deceased’s death – her oral evidence being that the “very close hugs” did not continue for more than a period of about two years – see T 131-132).

8. [10]

   As adverted to above, the mediation of both matters took place concurrently on 20 March 2018. The late Mr Grahame Berecry was the mediator. Each of Mr Macura and Ms Ristic (as also was the estate) was separately represented by independent legal representatives: Mr Macura by Mr Steven Cominos of Counsel and Mr Costa Vertzayias, a solicitor working as a consultant for the solicitor then on the record for Mr Macura (Mr Dion Vertzayias, who is Mr Costa Vertzayias’ son); Ms Ristic by Mr Kim Morrissey of Counsel and a solicitor; the executors by Mr Grant Carolan of Counsel and Mr Antony Sutton, solicitor.

9. [11]

   At the mediation (leaving aside for the moment the issue now raised as to Mr Macura’s claimed incapacity and the effect of any incapacity that may be established on the efficacy of the settlement) agreement was reached for the settlement of the respective proceedings on the basis that each of Ms Ristic and Mr Macura was to receive a lump sum legacy of $100,000 from the estate. In Ms Ristic’s case, I understand that this has since occurred. Orders were made giving effect to Ms Ristic’s settlement on 29 March 2018.

10. [12]

    Short minutes of order were prepared to record the respective parties’ agreements in the separate proceedings and were signed by the parties’ legal representatives on behalf of their respective clients following the mediation. In the case of Mr Macura’s proceeding, the signed short minutes of order included an order that Mr Macura vacate the unit occupied by him at the Liverpool property. Unhelpfully (at least in the sense that it led to considerable confusion and dispute – though any issue as to authenticity was ultimately abandoned by Mr Macura), it appears that only one set of short minutes was prepared at the mediation (notwithstanding that there were two sets of proceedings) and that a photocopy of those short minutes of order was executed with amendments to reflect the different sets of proceedings. Certainly, the short minutes of order as filed in the Macura proceeding were contained in a photocopy document that had been signed by Mr Macura.

11. [13]

    In the short minutes of order signed in relation to Mr Macura’s proceeding, it was noted that the parties had agreed that there be no order as to Mr Macura’s costs “to the extent [sic; presumably meaning to the intent] he pay his own costs”; and that Mr Macura consented to the orders made in favour of Ms Ristic in her separate family provision proceeding. The settlement was thus inclusive of costs.

12. [14]

    The short minutes of order in the Macura proceeding were signed by Mr Costa Vertzayias (bearing Mr Macura’s signature in various places) on 23 March 2018. However, no orders in terms of the short minutes of order were in fact entered in the Macura proceeding because, not long after the conclusion of the mediation, Mr Macura disputed the existence of a binding settlement agreement and asserted, in effect, that he did not have capacity to enter into the terms of settlement agreed on 20 March 2018. That was first communicated to the Family Provision List Judge, Hallen J, on 27 March 2018 (the matter having been listed for approval of the short minutes on 29 March 2018).

13. [15]

    At about the same time as raising this issue, Mr Macura appointed a new solicitor to act for him (Mr Anthony Stewart of Stewart & Associates), a notice of change of solicitor being filed in the proceedings on 26 March 2018. There is presently a dispute between Mr Macura and his former solicitors, VC Lawyers, in relation to their fees; his former solicitors claiming an equitable “fruits of litigation” lien over the settlement sum – it being alleged that the agreement reached by them with Mr Macura at the mediation was that, of the $100,000 settlement sum, a sum of $70,000 would go towards Mr Macura’s legal fees. (For present purposes, this is a different issue to that raised by the executors’ notice of motion, although it might perhaps explain to some extent Mr Macura’s desire to set aside any agreement entered into at the mediation; in any event, it is relied upon in some of the submissions for Mr Macura on the present application as going to the perceived “unfairness” of the settlement reached at the mediation from Mr Macura’s perspective.)

14. [16]

    On 29 March 2018, Hallen J directed Mr Macura to serve any evidence setting out the facts and circumstances going to the reasons why he contended he should not be bound by the signed short minutes of order by 4pm on 20 April 2018. Mr Macura does not appear to have complied with that direction.

15. [17]

    By notice of motion filed 16 May 2018, the executors sought declaratory and other relief in effect to enforce the settlement agreement reached at the mediation. In support of that motion, the executors have served a number of affidavits: relevantly, an affidavit affirmed 15 May 2018 by Mr Antony Sutton, the solicitor who attended the mediation (with Counsel) for the executors; an affidavit sworn 6 June 2018 by the late Mr Grahame Berecry, who conducted the mediation; an affidavit sworn 25 June 2018 by Mr Costa Vertzayias, the consultant at VC Lawyers who attended the mediation while his son, the solicitor on the record for Mr Macura, Mr Dion Vertzayias, was overseas; an affidavit affirmed 2 July 2018 by Ms Milena Mijatovich, the solicitor for, and an executor of, the estate; an affidavit affirmed 17 October 2018 by Fr Dragan Sarasevic, the other executor; and an affidavit affirmed 30 November 2018 by Mr Grant Carolan, Counsel representing the executors at the mediation. Each of those persons had attended at the mediation (and each, other than Mr Carolan, was required for cross-examination on the present application).

16. [18]

    Also served in the proceedings was an affidavit affirmed 9 April 2019 by Ms Michelle Leahy (a real estate agent) in which Ms Leahy deposed to certain matters in relation to the Liverpool property, namely as to receipt by Mr Macura of rents from other tenants occupying units in the property and steps taken by him in relation to the property – which evidence need not here be considered as it is not relevant to the issue presently for determination; namely, as to the existence and enforceability of a binding settlement agreement.

17. [19]

    For the hearing of the present application, Mr Macura served affidavits affirmed by him on 23 May 2018 and 7 September 2018, as well as affidavits affirmed 10 May 2018 and 7 September 2018 by Ms Ristic and an affidavit affirmed 10 September 2018 by Dr Magdy Attia, Mr Macura’s general practitioner. Mr Macura subsequently sought leave to file, and rely upon, a number of further affidavits and to adduce other evidence, as I explain below.

18. [20]

    The executors’ motion for relief pursuant to s 73 of the Civil Procedure Act was initially listed (by Hallen J on 14 December 2018) for hearing for two days commencing on 13 February 2019. I am informed by Mr Bartos that, although Mr Macura’s solicitor was not present on that occasion, there had been communication between the parties’ legal representatives at the time as to the setting down of the matter for hearing and it is noted that the Court was not informed at that time (nor immediately thereafter) of any incapacity on the part of Mr Macura to attend a hearing in February 2019 notwithstanding that it now appears that, as at that time, Mr Macura’s general practitioner, Dr Attia, had already signed a medical certificate dated 3 December 2018 to the effect that Mr Macura would not be able to attend court for the next four months. (I refer to this certificate in more detail later in these reasons.)

19. [21]

    On 31 January 2019, the matter first came before me, ex parte, in the duty list. Mr Macura had filed a notice of motion electronically on 30 January 2019 seeking an order that the hearing of the executors’ motion on 13/14 February 2019 be vacated. In support of that application, an affidavit sworn 31 January 2019 by Mr Macura was filed and reliance was placed on the affidavit affirmed 10 September 2018 by Dr Attia. I listed the matter for directions the following day and directed that the executors (who had not at that stage been served with the notice of motion) be notified of the application.

20. [22]

    The basis on which the application for an adjournment was put at that stage was Mr Macura’s medical condition. Mr Macura deposed to having prostate and bone cancer; to having been diagnosed with post-traumatic stress disorder said to have been acquired as the result of his service with the Australian Army in Vietnam; to being on various medications; and to suffering from grief-related symptoms from the passing of the deceased (who he claimed was his de facto partner); as a result of which Mr Macura claimed to be too unwell to attend the hearing.

21. [23]

    Pausing here, the executors pointed out (when the adjournment application was before me on 1 February 2019) that on 19 December 2018 (some two weeks after Dr Attia’s 3 December 2018 certificate), Mr Macura had been “well enough” to attend proceedings initiated by him in the NSW Civil and Administrative Tribunal (the Tribunal proceedings, to which I refer below) relating to issues relevant to the present proceeding.

22. [24]

    I heard argument on the adjournment application in the duty list on 1 February 2019. The executors opposed the application, relying on a number of affidavits (an affidavit affirmed 31 January 2019 of Mr Paul Grech (a private investigator who had conducted surveillance of Mr Macura on 30 January 2019 and deposed to the various activities in which Mr Macura had engaged on that day); an affidavit affirmed 17 January 2019 of Mr Louis Schuster (a tenant at the Liverpool property); and an undated affidavit filed 1 February 2019 by Mr Allen Zarib (a managing agent for the Liverpool property); and tendering (not as evidence of the truth of their contents but for the fact that Mr Macura had deposed therein to particular matters) portions of affidavits affirmed or sworn by Mr Macura in the proceedings to that time ([12] and [13] of an affidavit sworn by him on 6 November 2017; [2] of his affidavit affirmed 23 May 2018; and [2] of his affidavit affirmed 7 September 2018).

23. [25]

    Also tendered on that application were copies of documents produced under subpoena by the Commonwealth DPP relating to Mr Macura’s criminal record, correspondence subpoenaed from the Department of Housing, copies of Army records relating to Mr Macura and medical records from the Chris O’Brien Lifehouse where Mr Macura was being treated for cancer (Exhibits 4, 6-8), correspondence between the respective lawyers (a letter dated 19 October 2018 from Jordans Law Practice to Stewart & Associates – Exhibit 5), and clinical notes from Chris O’Brien Lifehouse and a letter dated 28 February 2018 from Chris O’Brien Lifehouse to Dr Attia (Exhibit 9).

24. [26]

    In particular, reference was made by the executors to what was recorded in various clinical notes produced on subpoena in relation to Mr Macura’s treatment at the Chris O’Brien Lifehouse, including: a note dated 28 February 2018 in which, relevantly, it is stated that:

25. [27]

    A certificate signed by Mr Macura’s oncologist at the Chris O’Brien Lifehouse, Professor Lisa Horvath, was also in evidence; that certificate stating that Mr Macura would have limited capacity to attend court (the executors noting that it was unclear, however, whether that was said to be because of his (in)capacity to give evidence or because of timing issues relating to his treatment; nor was it clear as to how long that situation would continue).

26. [28]

    On that occasion, as adverted to above, I was advised of the recent commencement by Mr Macura of the Tribunal proceedings and was informed that in those proceedings he was claiming an entitlement to a lifelong tenancy in the Liverpool property, entitling him to occupy the whole of the building rent-free and to collect rent from other tenants (see T 11.45). I was informed that the Tribunal proceedings, which the executors had sought to have struck out as an abuse of process and on Anshun estoppel principles, had been stayed pending a determination of the proceedings in this Court (see T 12.16). (They have now been transferred to this Court.)

27. [29]

    As also adverted to above, in evidence on the adjournment application was a medical certificate dated 3 December 2018 from Mr Macura’s general practitioner, Dr Attia. In that medical certificate, Dr Attia estimated that Mr Macura would be unable to give “proper evidence” for the next four months. Mr Macura, in his affidavit, deposed that he was undertaking a new course of treatment that was expected to last at least six months. Ultimately, the position of Mr Macura, as put forward by his current solicitor, Mr Tees, on the adjournment application, was that a four month adjournment was required while Mr Macura underwent the new course of (chemotherapy) treatment.

28. [30]

    Issues were also raised for Mr Macura at that time as to the authenticity of the short minutes of order filed with the Court following the mediation (although, as noted, such issues were not ultimately pressed), apparently on the basis that what had been filed was a photocopy document.

29. [31]

    By that stage (i.e., 1 February 2019), according to the court file, there had already been orders made by Hallen J, noting that Mr Macura had informed the Court on a number of occasions that medical evidence was to be served but not having served such evidence, to the effect that in the event that the medical evidence was not served by 4pm on 10 December 2018 Mr Macura would require the leave of the Court to rely on any medical evidence. (The only medical evidence ultimately served by Mr Macura by that time was the affidavit of Dr Attia.) Thus, by the time the matter first came before me, there was a history of default by Mr Macura in service of his medical evidence and he was under a “guillotine” order in that regard.

30. [32]

    At [5] of his affidavit affirmed 31 January 2019, Mr Macura deposed to his attempts to obtain medical evidence from his treating doctor, Professor Horvath, who had not agreed to give evidence in the proceedings but had provided a medical certificate which confirmed that Mr Macura was being treated for cancer (as noted above).

31. [33]

    During the course of oral argument on 1 February 2019, Mr Tees informed me from the Bar table that there had been “some significant problems obtaining proper instructions” (see T 17.33) but said that Mr Macura had been able to give him “sufficient instructions” for the production of the affidavit that had been filed on that occasion, though he (Mr Tees) was sceptical “as to whether we could go any further” (T 18.2). (Mr Tees there appeared to me clearly to acknowledge that he had not, thus far, seen it necessary to seek the appointment of a tutor on the basis of any perceived incapacity on the part of Mr Macura to provide instructions for the conduct of the proceeding.)

32. [34]

    The executors’ position at that stage (which remains their position) was that Mr Macura’s evidence was unreliable (pointing to Mr Grech’s surveillance evidence which it was said indicated that Mr Macura was physically capable of driving a vehicle long distances, and walking and lifting items; and to evidence of Mr Macura’s criminal record and history of making false statements as to his army record and Vietnam war service – evidence admitted subject to relevance on the adjournment application). Complaint was also made as to Mr Macura’s interference with attempts by the managing agents to let the Liverpool property; and the unsatisfactory nature of the medical evidence relied upon for the purposes of the adjournment application was noted.

33. [35]

    At the conclusion of the hearing of that adjournment application, I indicated that I did not propose, on the medical evidence that I had seen, to adjourn the hearing then listed for 13/14 February 2019 (not being persuaded that I had sufficient information as to the details of the chemotherapy treatment Mr Macura was then undertaking or as to the timeframe within which Mr Macura would be capable of attending and giving evidence if the then hearing dates were to be vacated) but that it would be open to Mr Macura, if so advised, to make a further application for an adjournment to the trial judge at the commencement of the hearing.

34. [36]

    However, I also indicated that I might be prepared to vacate the hearing if that could be done on a basis that would remedy any prejudice to the estate by reason of the delay; and, in that regard, that I might be prepared to vacate the then hearing dates if, as a condition of the adjournment of the hearing, Mr Macura was required to pay an occupation fee to the estate in relation to the premises (which fee would be refunded to him if he were ultimately successful in the proceedings); and, if it were possible, for the matter to be listed in late April 2019. Mr Tees considered that course of action to be a reasonable outcome in his client’s interests and the upshot was that, after standing the motion over to 4 February 2019 for the executors’ instructions to be obtained, that was indeed what occurred: the hearing dates of 13 and 14 February 2019 were vacated and the hearing was re-listed to take place on 23 and 24 April 2019; with the making of orders for the payment by Mr Macura of an occupation fee in the interim (and the filing of an affidavit by Mr Macura as to rent collected in respect of the properties); orders with which, as it transpires, Mr Macura did not comply.

35. [37]

    The matter next came back before me on 17 April 2019 on an application by Counsel appearing for Professor Horvath to set aside a subpoena to give evidence that had been served on her on 10 April 2019 by Mr Macura’s solicitor. The subpoena as issued was returnable on 23 April 2019 (at which time Professor Horvath had a long standing personal arrangement to be outside the jurisdiction and was not likely to be contactable by telephone). I indicated on that occasion that arrangements would be made to accommodate the inability of Professor Horvath to give evidence when the matter was listed for hearing on 23/24 April 2019 (by listing the matter at a later time, convenient to Professor Horvath and the Court, after her return to Sydney).

36. [38]

    It was only at that stage (and in the absence of any representation by the executors on that occasion) that Mr Tees informed me that, on the evening of Monday 15 April 2019, “certain matters” had come to his attention and to the attention of Counsel in the matter as to the “mental health and capacity” of Mr Macura and that an appointment had been arranged with a psychiatrist on the morning of 17 April 2019, the outcome of which, Mr Tees said, would determine whether or not Mr Macura had capacity “from here on in to provide [us] with adequate instructions” (T 6.2) (my emphasis). It should be noted that it was still not then suggested that there was any doubt as to Mr Macura’s ability up to that point to provide instructions. Also raised at that stage, for the first time, was the possibility that Mr Macura’s legal representatives might not be able to continue to represent Mr Macura; Mr Tees informing me (T 6.5):

37. [39]

    That was a reference, as I understood it, to issues as to the alleged falsification of Mr Macura’s Army records or war service (a matter that had been raised when Mr Tees appeared before me back in February 2019 but in relation to which he said he had not been able to make adequate enquiries before the then recent conference with Counsel who I was informed by Mr Tees was a “reserve Army officer and a legal officer in the Army”) (see T 6.24).

38. [40]

    The executors’ legal representatives had, regrettably, not been notified of the application then before the Court on 17 April 2019 so were not privy to the disclosure of these purportedly fresh concerns on the part of Mr Macura’s legal representatives as to his capacity. That led to the matter coming back before me on 18 April 2019 (this time with notice being given in advance upon my direction, to the executors’ Counsel of that listing).

39. [41]

    On 18 April 2019, Mr Tees filed an application for the appointment of a tutor to represent Mr Macura in the proceedings. In support of that application, an affidavit that Mr Tees had affirmed on 18 April 2019 was filed. To this affidavit, Mr Tees annexed an email to Dr Napper, a psychiatrist, sent on 15 April 2019, in which Mr Tees said, among other things:

40. [42]

    Mr Tees annexed a report dated 17 April 2019 from Dr Napper in which Dr Napper opined that Mr Macura “is not fit to provide his solicitor with instructions for Supreme Court proceedings”.

41. [43]

    Pausing here, Dr Napper had seen Mr Macura in November 2018 and had at that time diagnosed a panic disorder based on what Mr Macura had told him of his experience in Vietnam (including that he had served in Vietnam, that he was captured by the Viet Cong, that he was tortured for ten days by being put in a water cage – none of which, it is now conceded, is true). It does not appear that Mr Tees had seen fit at that stage to draw to Dr Napper’s attention the discrepancies or inconsistencies that had by then already been raised as to Mr Macura’s account of events – see below.)

42. [44]

    I admitted the evidence as to Mr Macura’s capacity (Dr Napper’s report) for the limited purpose of dealing with the application for the appointment of a tutor and made clear to Mr Tees that if reliance was sought to be placed on that medical evidence in the substantive proceedings then he would need to make Dr Napper available for cross-examination by the executors.

43. [45]

    Ultimately, there was no opposition by the executors to the appointment of a tutor provided that this did not lead to an adjournment of the substantive hearing dates fixed for 23/24 April 2019. I concluded at that time that the proposed tutor (a “semi-retired” solicitor, Mr Lawrence Myers) should be appointed as Mr Macura’s tutor on the basis of the evidence that Mr Macura had a persistent delusion as to his Vietnam war service that made him incapable of providing proper instructions in relation to the conduct of the proceedings going forward (and, significantly, that his solicitors would otherwise have been unable to continue to act if Mr Macura persisted in maintaining certain matters in his affidavit that they had discovered to be false). That conclusion involved no finding as to Mr Macura’s capacity to give instructions in relation to the proceedings at any earlier time.

44. [46]

    It was against that background that the hearing of the executors’ application commenced on 23 April 2019. On that occasion, an amended notice of motion was filed by the executors, the only substantive change to which being in relation to the costs of the notice of motion now sought to be withheld out of the settlement sum the subject of the agreement reached at the mediation.

45. [47]

    I was informed (and there is no dispute as to this) that Mr Macura had not complied with the orders made in February 2019 in relation to the payment of an occupation fee (T 3.30). There was some dispute as to his compliance with the order for provision of an affidavit as to his collection of rent for the property.

46. [48]

    On that occasion, Counsel appearing for Mr Macura (Mr Levet) informed me that there was now no contest as to the whereabouts of the original short minutes of order signed at the mediation (see T 8.30; T 9.11); that there were assertions in Mr Macura’s affidavits as to his military service that were not read as to the truth of those assertions (though it was said that they would be relevant in respect of any submission made as to his capacity) (T 10.47); and it was conceded that: the assertions made by Mr Macura as to having served as a member of the Australian Army were false; his assertions as to having served in the Vietnam War were false; his assertions as to having been conscripted were false; the discharge document that Mr Macura had tendered in his affidavit was false, and was a forged discharge document; and that Mr Macura was not entitled to any of the medals or awards that such a discharge document claimed on his behalf. Concessions were also made as to the criminal record of Mr Macura that the executors sought to tender (see T 37). (That criminal record includes offences involving dishonesty on Mr Macura’s part not limited to his war service record. For completeness, I note that in his oral evidence on the present application Mr Macura proffered explanations to some extent of that criminal record.)

47. [49]

    The various lawyers at the mediation who gave affidavit evidence of what had occurred on that occasion were: Mr Costa Vertzayias, Mr Carolan, Mr Sutton and Ms Mijatovich, each of whom was cross-examined. (There was no evidence from Mr Cominos, Mr Macura’s Counsel.) Mr Berecry, the mediator, had sworn an affidavit deposing to events at the mediation but due to his subsequent death was obviously unable to be cross-examined on that affidavit. Each of Mr Macura, Ms Ristic and Fr Sarasevic also gave evidence, and was cross-examined, as to his or her recollection of events on 20 March 2018.

48. [50]

    In summary, the evidence as to what occurred at the mediation was as follows.

49. [51]

    In his affidavit sworn 6 June 2018, Mr Berecry deposes that at the commencement of the mediation he: informed the parties that it was a voluntary process and they could “terminate the mediation at any time for whatever reason”; recommended that the parties should “consult with their legal team about any issue which causes them concern which could include any health issue that is causing them stress or other manifestations of illness”; and asked the parties if they had any questions.

50. [52]

    Mr Berecry deposes that he does “not remember any conduct or mannerisms by Mr Macura which would indicated [sic] that he was under great stress and that he was not following what I was saying” and that Mr Macura was “quiet right throughout the mediation” which is “not unusual, particularly in family provision mediations”.

51. [53]

    Mr Berecry states that he has no recollection of Mr Macura vomiting (as Mr Macura deposes he did) either in the mediation room or elsewhere during the mediation, explaining that “[t]hat would have been quite a dramatic event that I would most likely remember if it happened”.

52. [54]

    According to Mr Berecry, there was “nothing remarkable” about Mr Macura’s conduct at the mediation and Mr Macura appeared “to be a quiet person who was under some stress”, (which he considered to be a “bedfellow of mediation”).

53. [55]

    In his affidavit sworn 25 June 2018, Mr Costa Vertzayias deposes that, in his introductory remarks at the mediation, Mr Cominos said words to the effect:

54. [56]

    Mr Vertzayias deposes that he sat next to Mr Macura during the opening remarks from all the parties at the mediation and that he was able to observe Mr Macura’s reactions during this time, and that:

55. [57]

    Mr Vertzayias continues in his affidavit to depose that:

56. [58]

    In relation to Mr Macura’s behaviour, movements and physical condition throughout the day, Mr Vertzayias deposes that Mr Macura: appeared in good spirits and good physical health; was not sweating, shaking, dizzy or vomiting; did not report any ill effects; and ate “heartily” his lunch in the mediation room. According to Mr Vertzayias, Mr Macura left the building once for approximately 45 minutes to get “fresh air”, on the advice of Mr Vertzayias and his Counsel. Mr Vertzayias deposes that Mr Macura also went to the bathroom “once or twice for a very short time” (i.e., only a few minutes) and appeared in good health and physical condition on each occasion.

57. [59]

    Further, Mr Vertzayias deposes that: he did not observe Mr Macura talk to Ms Ristic during the mediation; Mr Macura engaged in discussions with Counsel and Mr Vertzayias throughout the day as well as “lucid and lively” discussions with the mediator and made “lucid and reasoned arguments in support of his claim for provision from the deceased’s estate”. (No indication as to the content of those discussions, from which Mr Vertzayias’ conclusions as to lucidity could be tested, was provided.)

58. [60]

    Mr Vertzayias deposes that Mr Macura “apparently accepted” an offer of $100,000 (inclusive of costs) at settlement by saying “that’s ok” and was shown an A4 sized page containing handwritten consent orders written by the Counsel for the executors which he read through. According to Mr Vertzayias, Counsel for Mr Macura (Mr Cominos) then:

59. [61]

    During this period, Mr Vertzayias states that Mr Macura appeared “lucid, alert and was not in any physical or emotional distress. He appeared to understand exactly what was happening and the effect of the document he was signing”.

60. [62]

    Mr Vertzayias says that Mr Macura told him he had driven to the mediation (which is consistent with the evidence of both Mr Macura and Ms Ristic) and that he would drive himself home at the end of the mediation (although according to Ms Ristic that did not happen).

61. [63]

    In cross-examination, Mr Vertzayias’ evidence was that the gravity of Mr Macura’s situation was brought to his attention that day when he heard Mr Cominos say that Mr Macura had “terminal cancer” (T 16.18) but that, until then, he was unaware of the gravity of Mr Macura’s health (see T 17.29) and was unaware that Mr Macura was about to die (T 18.3).

62. [64]

    Mr Vertzayias was cross-examined about various matters going to the preparation of the matter for mediation and as to what a reasonably prudent solicitor would have done in preparation for or at the mediation. The relevance of that cross-examination was said to go to a contention that Mr Macura was inadequately legally represented (see T 20.39). That contention is not to the point. This is not a claim against Mr Macura’s legal representatives for negligence in relation to the preparation of the matter for hearing or for mediation (or as to the adequacy of advice given at or relating to the mediation). Rather, the case, as put for Mr Macura, is that he did not have capacity to enter into the terms of settlement on the day of mediation and that the “plaintiffs” (as stated in oral submissions, although in context it is clear that this must be a reference to the executors) were “at least on notice that he was physically unwell”; and that in all the circumstances the terms of settlement were unjust and attracted a residual discretion on the part of the Court to set those terms of settlement aside (even if not satisfied as to the fact of incapacity or as to the knowledge by the other side, the executors of any such incapacity) ( see T 9.40-10.13). That cross-examination was also put as going to the credit of the witness (Mr Vertzayias) (T 21.36ff) in circumstances where it was said for Mr Macura that the solicitor’s evidence (as an officer of the Court) was put to establish that Mr Macura would have known the nature of the settlement and appeared to understand the settlement (and it was suggested that there was an attempt to bolster his credibility by the wearing of a particular lapel pin).

63. [65]

    I address the submissions as to credit in due course. Suffice it here to note that I permitted some latitude in the cross-examination of Mr Vertzayias on this topic but, ultimately, how well-prepared or otherwise Mr Vertzayias was at the mediation is not relevant to the issue of capacity; nor is it relevant to the issue (critical in the present case) as to whether the executors had the requisite knowledge of any such incapacity.

64. [66]

    Mr Sutton was cross-examined as to the mediation. He also affirmed an affidavit on 15 May 2018; however, the affidavit did not outline the events that took place at the mediation. Under cross-examination, he recalled that: there were brief introductory speeches at the mediation; Mr Cominos mentioned that Mr Macura had a condition (but could not remember the detail Mr Cominos went into in that regard); and said he believed the condition was cancer. Asked whether he heard Mr Cominos say that the cancer had returned and that Mr Macura was on medication and unwell that day, Mr Sutton said “[y]es, and I remember Mr Berecry accommodating that” (T 35.47). He agreed that he was aware that Mr Macura was unwell and on medication and that Mr Macura might have to leave from time to time (and said that Mr Berecry made it very clear that Mr Macura could leave at any time he wanted). He could not say whether Mr Cominos had indicated that it was terminal cancer but said he understood it was cancer and that it was serious.

65. [67]

    In his affidavit affirmed 30 November 2018, Mr Carolan (who, as already noted, was not required for cross-examination) deposes that Mr Macura’s counsel said that Mr Macura was being treated for prostate cancer and was on medication and may need to take a break during the day. However, he also deposes that Mr Macura did not show any signs of discomfort or ill health during the initial (joint) session in the conference room.

66. [68]

    In her affidavit affirmed 2 July 2018, Ms Mijatovich, a defendant in the proceedings and the solicitor for the estate of the deceased, deposes: that she sat opposite and diagonally across from Mr Macura at the commencement of the mediation; that Mr Macura did not look ill; that his face was not flushed and sweaty, but pale; that he was neatly dressed; and that he was listening to Mr Berecry “intently”. According to Ms Mijatovich, Counsel for Mr Macura (Mr Cominos) stated in the initial session that Mr Macura was not feeling too well as his cancer had returned and he was on medication but would still participate in the mediation.

67. [69]

    Cross-examined as to her recollection of the mediation, Ms Mijatovich affirmed her evidence that Mr Macura on the day of the mediation looked pale (but rejected the assertion put to her that he looked “abnormally so”) (T 28.37); she recalled that Mr Cominos had said that the cancer had returned and that Mr Macura was on medication (T 29.14); she also accepted (when put to her in these words) that something was said to the effect that Mr Macura “might leave the room when any argy bargy commenced”. (Pausing here, it is not insignificant to note that there might have been any number of reasons as to why Counsel for Mr Macura might have considered it in his client’s interests for Mr Macura not to be present during all of the mediation sessions with other parties – not least if it were considered that Mr Macura (or others) might become emotional or that there might be “argy bargy”. A statement of the kind attributed to Mr Cominos by each of the legal representatives, made at the outset of the mediation, to the effect that Mr Macura had cancer (or, indeed, terminal cancer) and was ill or unwell; or that he might leave the room, is not sufficient in my opinion to put anyone on notice of any mental incapacity on Mr Macura’s part.)

68. [70]

    In his affidavit affirmed 17 October 2018, Fr Sarasevic, a defendant in the proceedings and executor of the deceased’s estate, deposes that he did not observe anything remarkable about Mr Macura, who did not display any signs of illness or distresses in the initial session in the conference room or later in the common area when the parties had gone into the separate rooms.

69. [71]

    That evidence, in my opinion, is of limited use since in cross-examination Fr Sarasevic was unable to give any useful evidence as to the events in question. He variously did not remember or did not recall what was said; or did not understand the questions put to him. I do not place any weight on his affidavit evidence as to the events that took place on 20 March 2018.

70. [72]

    In his affidavit affirmed 23 May 2018, Mr Macura deposes that when he first arrived at the mediation room he started to have one of his “common ‘panic attacks’”. He deposes that:

71. [73]

    As to the settlement document, Mr Macura deposes that he could not read the handwritten piece of paper (presumably the short minutes) that he was told by his Counsel to sign without any explanation of the document provided by Counsel. Mr Macura deposes that, after signing the handwritten document, Counsel walked out of the room with it and appeared to return with a “different” document which had the added “very dark print (paragraph 4)”. He deposes that:

72. [74]

    In his affidavit affirmed 7 September 2018, in response to parts of the affidavit evidence filed on behalf of the executors regarding the mediation, Mr Macura deposes as follows.

73. [75]

    In response to the affidavit of Mr Berecry, Mr Macura says he vomited twice in the toilet and not in the presence of others. (Pausing here, this means that this evidence is not corroborated and depends solely on acceptance of Mr Macura’s assertion.)

74. [76]

    In response to the affidavit of Mr Vertzayias, Mr Macura disagrees with Mr Vertzayias’ description of what occurred at the mediation. Mr Macura says he told Mr Vertzayias he was feeling unwell throughout the day and that Mr Vertzayias said nothing. In relation to discussing the written advice of his Counsel, Mr Macura says he has no recollection of that occurring or it being read to him slowly but, in any event, was “too ill properly [to] understand such advice and discussion at that time”. (That evidence, in effect, is Mr Macura’s submission as to incapacity.) Mr Macura says he did not drive his car to or from the mediation that day. (Ms Ristic’s evidence supports the latter part of this but is inconsistent with the former.)

75. [77]

    In response to Ms Mijatovich’s affidavit, Mr Macura responds that he could not listen intently or concentrate on what was said at the mediation because he was feeling unwell. That evidence is no more than an assertion on Mr Macura’s part.

76. [78]

    In cross-examination, Mr Macura maintained that he had told his Counsel (Mr Cominos, who gave no evidence at this hearing) at the mediation that he was not well; and that he felt like vomiting all the time. There was the following exchange:

77. [79]

    Pausing here, no issue was taken by either side as to any adverse inference arising from the fact that Mr Cominos did not give evidence.

78. [80]

    As to the course of the mediation, there was the following evidence by Mr Macura in cross-examination by Mr Bartos:

79. [81]

    As to the settlement reached at the mediation, the cross-examination included the following:

80. [82]

    In her affidavit affirmed 10 May 2018, Ms Ristic deposes that Mr Macura had a “panic attack” when everyone was in the mediation room at the commencement of the mediation. (I pause here to note that that evidence is not corroborated by any independent witness – particularly, the mediator. It is not plausible that someone in Mr Berecry’s position would not have noticed and commented on a panic attack of the kind that Mr Macura and Ms Ristic describe – i.e., with symptoms including hot flushes, profuse sweating, dizziness, unsteadiness or inability to stand, scratching his face or the like.)

81. [83]

    Ms Ristic describes Mr Macura at the mediation as: sweating profusely; red in the face; vomiting; dizzy; unsteady on his feet; confused; and unable to talk properly. She deposes that Mr Macura told her he felt unwell, had a terrible headache, and felt numbness in his face. Further, she states that Mr Macura: told her he was unable to read the document he signed; was told by his Counsel it was “his bills for working”; and was pressured by his Counsel to sign it.

82. [84]

    In her affidavit affirmed 7 September 2018, in response to the affidavit of Mr Vertzayias, Ms Ristic deposes that she met Mr Macura outside the building at the end of the mediation and that she had arranged for her nephew to pick them up in his car.

83. [85]

    As to Ms Ristic’s observations of the mediation, she was questioned as follows:

84. [86]

    The account of Mr Macura as to a panic attack at the commencement of the mediation is therefore supported only by Ms Ristic; and Ms Ristic’s account of Mr Macura scratching on the door of the separate room where Ms Ristic was after the opening session of the mediation is not supported by anyone else present at the mediation. Further, Ms Ristic’s account of some events (such as Mr Macura vomiting during the mediation) is based wholly on Mr Macura’s account, not on any personal observation by her.

85. [87]

    A day or so after the mediation, Mr Macura went to see Dr Attia. Ms Ristic’s account is that this occurred on the day after the mediation (but the evidence of Dr Attia suggests it was on 22 March 2018 that Mr Macura first consulted with him after the mediation).

86. [88]

    In cross-examination of Ms Ristic there was the following exchange:

87. [89]

    However, Dr Attia’s evidence (by reference to his file notes) is that he saw Mr Macura on 22 March 2018. Dr Attia thought that that consultation was “just” for the purpose of Mr Macura obtaining a letter from him (T 65.22). On Dr Attia’s file was a letter dated 21 March 2018. Dr Attia accepted in cross-examination that the version of the 21 March 2018 letter on file read:

88. [90]

    Cross-examined as to this, there was the following exchange:

89. [91]

    Pausing here, it is clear from Dr Attia’s evidence that he was disavowing having formed or held a view, independently of Mr Macura, that Mr Macura “did not” have capacity to give instructions on 20 March 2018; rather, he was expressing the opinion that Mr Macura “may not” have had such capacity and he was doing so based on no more than what Mr Macura had told him:

90. [92]

    Dr Attia’s position as to the history that Mr Macura gave him on that occasion was that he just needed to believe what the patient told him and that, as a doctor, he does not probe into his patient’s history (T 68.7):

91. [93]

    Pausing here, this evidence makes it impossible to place any real weight on Dr Attia’s professed views as to Mr Macura’s incapacity - in effect, he seems to have seen his role as no more than Mr Macura’s “mouth piece” and he certainly did not seem prepared objectively to assess the veracity of what he was being told by Mr Macura nor did he see it as any part of his role or function, as Mr Macura’s general practitioner, to do so.

92. [94]

    Relevantly, Dr Attia had seen Mr Macura on 19 March 2018 (the day before the mediation). On that occasion, Dr Attia recorded that Mr Macura had a normal blood pressure and that his pulse was normal; and that he had given Mr Macura some prescriptions; the main one being hormone replacement or suppression in relation to his prostatic cancer. (Dr Attia’s evidence (contrary to that of the oncologist, Professor Horvath, on whose evidence I would place more weight in this regard, given that she impressed me as an objective and careful witness) was that any medicine used to combat cancer could be called chemotherapy – see T 64.2; T 64.42.)

93. [95]

    The relevance of this for present purposes is that Mr Macura adduced in evidence the letter dated 19 March 2018 from Dr Attia. However, on his review of the file (in the course of cross-examination over telephone link), Dr Attia said that there was no copy of a letter dated 19 March 2018 on the file. Dr Attia also did not have a recollection of 19 March 2018. In re-examination, Dr Attia was quite clear that he had no copies on the file of a letter dated 19 March 2018.

94. [96]

    Dr Attia accepted in cross-examination that he had received some clinical notes and that on 28 February 2018 he had received a letter from Chris O'Brien Lifehouse that said (see Exhibit 9):

95. [97]

    Dr Attia accepted that this indicated that, at that stage, Mr Macura did not have (or, perhaps more accurately, this evidence should be understood as Mr Macura not complaining about) any side effects associated with that drug.

96. [98]

    Dr Attia agreed that when Mr Macura saw him on 19 March 2018 he did not complain about any side effects of that drug (there being nothing mentioned in his notes) and that, if Mr Macura had complained, he would have noted it in his notes.

97. [99]

    I have referred above to the evidence given by Dr Attia (via telephone link) of his consultations with Mr Macura on 19 and 22 March 2018. Mr Macura’s Counsel ultimately did not rely on any of the documents purportedly annexed to Dr Attia’s affidavit (see T 41.38). (Dr Attia’s evidence was that there were no annexures to the affidavit when he signed it.)

98. [100]

    As to the evidence of Dr Attia, in his 10 September 2018 affidavit, that Mr Macura suffers from post-traumatic stress syndrome and that:

99. [101]

    As already noted, it is clear from the cross-examination that Dr Attia’s opinion is not that Mr Macura did not have capacity on 20 March 2018 – rather, at the highest, that he may not have had capacity at that time (based on Mr Macura’s account of events alone). It is difficult to accept that any competent doctor would not be able to appreciate the difference between “may not have had capacity” and “did not have capacity”. It would be the same as the difference between “you may have cancer” and “you do have cancer”. It is not purely a question of semantics as Dr Attia seems to suggest (offhandedly) in cross-examination.

100. [102]

     Dr Attia did not have on his file a clinical note from Chris O’Brien Lifehouse dated 28 March 2018 (the content of which was read to him in the course of cross-examination) to the effect:

101. [103]

     As at the conclusion of the oral evidence on 23 and 24 April 2019, the position was that a time had already been scheduled for Professor Horvath to give oral evidence (on subpoena) (namely, on 30 April 2019) and Dr Napper’s report was only in evidence for a limited purpose. On 24 April 2019, Counsel for Mr Macura had sought to rely upon Dr Napper’s report for a more extensive purpose than that for which it had originally been admitted (see T 122.44). Dr Napper’s report (annexed to the affidavit of Mr Tees affirmed 18 April 2019) was to the effect that “Mr Macura would benefit from psychiatric treatment but is currently too preoccupied with the outcome in the legal proceedings to fully engage”; that “[h]is psychiatric treatment is not life-threatening and has been present for some time”. Dr Napper’s conclusion as at the date of the report tendered for the purposes of the application to appoint a tutor was that “[h]e is not fit to provide his solicitor with instructions for the Supreme Court proceedings”.

102. [104]

     That led to what was, in effect, an application for leave to adduce evidence from Dr Napper. It was put on the basis that:

103. [105]

     The position of Mr Macura’s Counsel was that he sought to utilise Dr Napper for the purpose of establishing whether, in his opinion, having regard to Mr Macura’s medical condition, Mr Macura was able to give proper instructions as at the time of the mediation. Relevantly, the relief then sought included orders: that the further hearing of this matter be adjourned to enable a cognitive and neuro-psychiatric assessment of Mr Macura to be undertaken, together with an updated psychiatric assessment from Dr Napper and that Mr Macura have leave to file any expert reports relating to a cognitive assessment, a neuro-psychiatric assessment or a psychiatric assessment by such time as the Court thinks fit.

104. [106]

     Pausing here, the basis on which I had considered on 18 April 2019, the application to have a tutor appointed, and my decision ultimately to appoint a tutor (as noted earlier), was in circumstances where Mr Tees had informed me that if Mr Macura maintained his position in relation to the alleged Vietnam war service then Mr Tees (and Mr Macura’s Counsel) would not be able to continue to act in the matter. However, a fixed idea (even if persisting for some time) that Mr Macura had been tortured in Vietnam or exposed to Agent Orange or was suffering post-traumatic stress syndrome (from those non-existent events) was a matter of which Mr Tees had been aware for some time; and even if Mr Macura had suffered from those delusions back at the time of the mediation (as opposed to those being matters about which he was being deliberately deceitful) it did not follow that he was incapable of giving proper instructions to his solicitors or barristers at the mediation.

105. [107]

     I did not consider that the defendants should be forced to deal “on the run” with evidence that could have been adduced from Dr Napper some time ago. The response from Counsel for Mr Macura, when I indicated this, was that (T 125.34):

106. [108]

     The position for the executors in this regard was that Mr Macura’s evidence was a deliberate deceit but that, if a psychiatrist concluded that Mr Macura did not have a proper mental capacity because of these delusions (and that had existed for a very long time), then it was difficult to place reliance on anything Mr Macura had said in these proceedings (and hence that even if the settlement were to be set aside there would be an issue as to what would then happen – a difficulty to which I will revert in due course).

107. [109]

     I considered that there had been numerous indulgences given for Mr Macura over the period since March 2018 to obtain medical reports as to his medical condition; that the issue about Mr Macura’s Vietnam war service had been squarely raised with his lawyers in August 2018 and then again in October 2018 (in correspondence noting the inconsistencies with (what is the now admitted falsity of) his claim that he served in Vietnam); and that it was too late in the proceedings (the evidence by then being almost complete) for there to be a further adjournment for medical evidence to be obtained. I indicated, however, that I would permit Mr Macura to rely upon the report of Dr Napper of 17 April 2019 beyond the limited purpose for which I had initially admitted it and would permit cross-examination of Dr Napper (but that I would not give leave for Mr Macura at that stage to supplement the medical evidence). The executors at that stage reserved the position as to whether they wished to cross-examine Dr Napper and the matter was stood over to 30 April 2019.

108. [110]

     The upshot was that Dr Napper’s report went into evidence without the qualification that it only be for the limited purpose initially permitted. As it transpired, the executors ultimately did not require Dr Napper for cross-examination; and therefore Dr Napper’s report (so far as it goes) was not directly challenged.

109. [111]

     Professor Horvath gave evidence on 30 April 2019 by telephone link at 4pm. As already noted, Professor Horvath is a medical oncologist. Professor Horvath practised at the Chris O'Brien Lifehouse in Camperdown. She has a PhD in cancer biology.

110. [112]

     From February 2016, she has been Mr Macura’s treating doctor. Professor Horvath confirmed that at that stage Mr Macura was suffering from prostatic cancer and that the cancer had metastasised. According to Professor Horvath’s records, Mr Macura was diagnosed with prostatic cancer in 2011. Professor Horvath confirmed that it was a terminal condition and said that his prognosis in terms of life expectancy was 12 to 18 months.

111. [113]

     Professor Horvath confirmed the treatment that Mr Macura had been undergoing since 2013 (commencing with Androgen deprivation therapy in the form of Zoladex and injection) and gave evidence as to the common or possible side effects of the Androgen deprivation therapy as follows:

112. [114]

     As to the position at 20 March 2018, Professor Horvath confirmed that Mr Macura was still on Zoladex and had commenced Enzalutamide, an anti‑Androgen therapy. There was then the following evidence:

113. [115]

     Professor Horvath’s evidence was that she had seen Mr Macura on 28 February 2018 and also on 28 March 2018. Her evidence was that:

114. [116]

     Professor Horvath’s evidence was that, during the time that Mr Macura was her patient, she had not had any reason to refer him for a mental state examination nor any cause to refer him for a cognitive assessment or neuropsychiatric assessment. Professor Horvath considered that “in the 15 minutes that I saw him each month [Mr Macura] appeared unchanged on a gross basis of cognitive function”. There was then the following evidence:

115. [117]

     Professor Horvath later confirmed that evidence as follows:

116. [118]

     Professor Horvath also made clear that she would not classify the drugs Enzalutamide and Zoladex as “chemotherapy”; and that her evidence as to whether Mr Macura had reported any side effects was by reference to notes on the file dated 28 February 2018; a letter dated that date from Dr Blossom Mak, Professor Horvath’s advanced trainee to Dr Attia, and notes dated 28 March 2018. Professor Horvath confirmed that statements contained in medical clinic notes under the heading “History” (such as “mild fatigue but otherwise well” in the March notes or “good energy levels walking and running” on the February note) were based on something that Mr Macura was telling her at the clinical examination.

Further adjournment application

1. [119]

   At the conclusion of the hearing of Professor Horvath’s evidence on 30 April 2019, Mr Levet informed me that the previous evening a notice of motion had been filed, supported by an affidavit of Mr Tees, seeking an adjournment of the proceedings to seek psychiatric evidence.

2. [120]

   I was informed on that occasion that in his evidence Mr Tees was deposing that he had attempted to have conferences before, which had not occurred because of Mr Macura not keeping appointments; that on a particular date he put to Mr Macura, certain things and formed a view that Mr Macura had made claims in relation to his military service which could not be true; and that, in the face of irrefutable evidence as at 15 April 2019, Mr Macura continued to insist that they were true. Mr Tees sought to place before the Court, on the instructions of the tutor, a cognitive assessment and neuropsychiatric assessment going to Mr Macura’s ability to understand and properly to participate in “proper legal process” as at 20 March 2018.

3. [121]

   I was informed by Counsel for Mr Macura that:

4. [122]

   Mr Tees was required for cross-examination on his affidavit and the matter was adjourned to 3 May 2019 to permit that cross-examination to occur. Relevantly, as at the time the application was filed, no attempt had been made by Mr Tees to make any enquiries as to availability of an expert psychiatrist to examine and make an assessment of Mr Macura (and hence there was no attempt to ascertain the extent of the delay that would thereby, inevitably, be involved).

5. [123]

   Mr Bartos’ submission in opposition to the adjournment application was that:

6. [124]

   The cross-examination of Mr Tees revealed, regrettably, that Mr Tees’ account of events in his affidavit affirmed 30 April 2019 was nowhere near reliable. In essence, Mr Tees’ affidavit account was that he had only had one conference with Mr Macura after August 2018 and before 15 April 2019 (see [2]) (and hence, seemingly had had no opportunity to obtain instructions in relation to the issue as to capacity). (He amended that evidence in examination in chief but only to the effect that he had had one conference with another barrister with a view to that other barrister taking over the matter but that nothing had come of that.) It is clear from the concessions made by Mr Tees in cross-examination (reluctant as some of those concessions seemed to be) that this was far from the truth and that, in fact, there had been numerous occasions on which Mr Tees had taken instructions from Mr Macura or attended Mr Macura (personally or over the telephone) between August 2018 and 15 April 2019. To demonstrate why I say that, it is necessary to consider the course of events since Mr Tees took over conduct of the proceedings on behalf of Mr Macura.

7. [125]

   Mr Tees had previously been employed by Stewart & Associates. His evidence was that during that time he was involved in the conduct of Mr Macura’s proceedings but that he had left the firm by 6 August 2018 (having been overseas in June/July 2018) and that sometime in August 2018 Mr Macura asked him to take over the conduct of the matter. On 26 September 2018, Mr Tees filed a notice of change of solicitor.

8. [126]

   The significance for present purposes of the timing of Mr Tees’ departure from Stewart & Associates is that it was by letter dated 6 August 2018 that the issue of the veracity of Mr Macura’s claims in relation to his war service was raised with Stewart & Associates (and Mr Tees’ evidence is that he was not at the firm at that time). When Mr Tees took over the matter after he left Stewart & Associates he did not receive any files from Mr Stewart. Mr Tees’ evidence was that the first time he saw the letter of 6 August 2018 written to Stewart & Associates was after he received a letter dated 19 October 2018 by email. He said that he emailed a copy of the letter to Mr Macura and that he probably forwarded a copy of the email to the barrister with whom he had a conference (Ms Irene Ryan):

9. [127]

   There was then the following cross-examination as to the opportunities that Mr Tees had in fact had over the period from 19 October 2018 (when he was squarely put on notice of the inconsistencies in Mr Macura’s account of events) to 15 April 2019 (when he had the conference with Counsel that led to the 17 April 2019 adjournment application). I set this out in some detail because it illustrates the unsatisfactory nature of Mr Tees’ affidavit account of events.

10. [128]

    Extraordinarily, Mr Tees seemed to explain the obvious difficulty with his affidavit evidence in this regard by drawing a distinction between “meeting” with a client and “conferences”. Asked about the occasion leading up to the 31 January 2019 adjournment application, when Mr Tees accepted he had seen Mr Macura and had gone through his affidavit with him, there was the following exchange:

11. [129]

    There was also (on a different topic but nevertheless still concerning in my opinion) evidence to the effect that Mr Tees, under his costs agreement with Mr Macura, had secured his fees by taking security over Mr Macura’s property or properties and that Mr Tees was aware that Mr Macura has two properties in Tasmania and one in New South Wales and had taken a caveat over those two properties; and thus must have realised that the 6 November 2017 affidavit tendered during the course of the proceedings (though not prepared by Mr Tees) was incorrect in that Mr Macura there claimed he only had one property and that was the New South Wales property.

12. [130]

    The fact that Mr Tees seems not to have appreciated the difficulty for a solicitor, as an officer of the Court, in permitting his or her client to put forward evidence to the Court that the solicitor knows to be incorrect, says nothing to his credit in relation to his conduct in the proceedings, but it is not necessary here to take that any further. What is, however, relevant for the purposes of the adjournment application, is that Mr Tees had had ample opportunity to explore with Mr Macura the inconsistencies in his account of events, and to obtain any further medical evidence by reference to those inconsistencies well before April 2019. His suggestion to the contrary is untenable.

13. [131]

    In support of the application for an adjournment, Counsel for Mr Macura invoked the principle affirmed in Sali v SPC Limited (1993) 116 ALR 625 (Sali) by the High Court that “an adjournment, which, if refused, would result in a serious injustice to the applicant should only be refused if that is the only way that justice can be done to another party in the action”, though accepting that this was subject to a court being entitled to consider any adverse consequences of an adjournment on the resources of the court or on the interests of other litigants before the court. It was noted that Sali was followed in Queensland v JL Holdings Pty Ltd (1996) 189 CLR 146; [1997] HCA 1 (JL Holdings) where the plurality of the High Court said that:

14. [132]

    Counsel for Mr Macura’s position was that he accepted that the decision in JL Holdings was “circumscribed” by the decision of the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon) in which the court said that there is no entitlement to raise an arguable claim subject to payment of costs by way of compensation but noted that the court went on to say that all matters relevant to the exercise of the power to permit amendment should be weighed. Reference was also made to the consideration of the relevant principles in Hamod v State of New South Wales [2011] NSWCA 375.

15. [133]

    It was submitted for Mr Macura that significant injustice would be occasioned to him in the event that the application for adjournment were not to be granted, namely: that there are questions as to the fairness of the mediation process and settlement (having regard to the settlement sum, the size of the estate and the agreement between the parties as recorded in the short minutes of order that Mr Macura was an eligible person to make a family provision claim; and on the basis that there should be real concerns as to the efficacy of Mr Macura’s legal representation at the mediation). It was said that there is a question as to Mr Macura’s capacity at the time of the mediation and subsequently (having regard to Professor Horvath’s evidence and the report of Dr Napper); and there is some evidence of an awareness by the executors that Mr Macura was unwell as at the date of the mediation (by reference to the statement made by Mr Cominos at the start of the mediation).

16. [134]

    Counsel for Mr Macura submitted that the injustice so identified to the conduct of the litigation could be cured by an adjournment; and that this was not a circumstance where an adjournment has no efficacy. It was accepted that the preparation of this matter on behalf of Mr Macura “has fallen short of best practice” (an understatement of mammoth proportions in my opinion) though even then, I note, Mr Tees appears to attribute some of the blame for this to Mr Macura’s cancellation of scheduled “conferences” and to Mr Macura’s instructions not to obtain psychiatric evidence rather than assuming full responsibility for his actions as Mr Macura’s solicitor. It was submitted that it was (only) after the appointment of a tutor that Mr Tees was no longer bound by the constraints of Mr Macura’s instructions.

17. [135]

    For Mr Macura, it was accepted that there would be injustice to the executors in any significant delay in the proceedings in that it would delay a distribution of the estate to the various beneficiaries; and that there would also be prejudice to them by way of the incurring of extra legal costs (although it was submitted that this can be cured by an order for costs – as to the latter, this is highly problematic in light of Mr Macura’s evidence as to his asset position).

18. [136]

    Counsel for Mr Macura accepted that the effect on court resources (and other litigants) is a relevant consideration on such an adjournment application but noted that considerations as to the allocation of resources were not and could not be known to the parties to this litigation.

19. [137]

    It was submitted that a balancing of the discretionary factors to be taken into account in deciding whether or not to grant the adjournment he has sought weighed in favour of the grant of the adjournment and the granting of leave to adduce the expert evidence that is now sought.

20. [138]

    As noted, the executors opposed the adjournment and the evidence sought to be introduced (contending that this was in effect an application by the tutor on behalf of the plaintiff to re-open his case and make an application that had already been rejected).

21. [139]

    The executors emphasised that, following the mediation that took place on 20 March 2018 and up to the hearing of the notice of motion, there had been at least nine directions hearings with Mr Macura’s solicitors “consistently” “seeking more time to obtain and file medical evidence”; and that Mr Macura had “time and time again” been given an opportunity to obtain medical evidence.

22. [140]

    The executors took issue with the proposition that Mr Macura is presently cognitively impaired (or, as his own Counsel colloquially said, “three sandwiches short for a picnic”) and submitted that it was more likely that, having been caught lying about the Vietnam service, Mr Macura “is panicking of being guilty of perjury and dissembling” and seeking now to turn his lies to his advantage.

23. [141]

    The executors contended that there was nothing preventing Mr Macura’s legal advisers from seeking (at a much earlier time) to obtain medical evidence as to Mr Macura’s medical condition as at 20 March 2018 and its impact, if any, on his mental capacity. It was noted that Dr Napper had seen Mr Macura on 19 November 2018, at which time Mr Macura’s solicitor already had in his possession material and access to subpoenaed documents which the executors say, on any objective assessment, indicated that Mr Macura was lying about his Vietnam service; and that this information was not provided to Dr Napper. The executors also took issue with the suggestion that it had only lately been discovered that Mr Macura had the alleged present disability, having regard to the information to which Mr Tees accepted in cross-examination he was privy to in this period from October 2019.

24. [142]

    The executors (with ample justification in my opinion) challenged the proposition that Mr Tees only had an opportunity to raise this issue in conference with Mr Macura on 15 April 2019.

25. [143]

    The executors submitted that the proposed further medical evidence would “have to speculate” as to what was Mr Macura’s mental capacity on 20 March 2018. They pointed to the fact that there was already medical evidence led by Mr Macura (that being the evidence of Dr Attia and Professor Horvath), which it was said made clear that Mr Macura suffered from no side effects from the medication and that there were no concerns concerning his cognitive functions at the relevant time. It was submitted that there was a strong inference that Mr Macura had forged the letter dated 19 March 2018 from Dr Attia (shortly after that date) and the executors argued that this (as does his request for such a letter on 21/22 April 2018) indicates a “rather high level of cognitive capacity”.

26. [144]

    As to the submissions made for Mr Macura concerning the size of the estate and the amount of the settlement, it was submitted that these are irrelevant and misconceived; that the suggestion that the settlement was unfair to Mr Macura given his needs (and that, as an eligible person, Mr Macura would be entitled to greater provision if the case proceeded to trial) ignored the fact that the negotiations for settlement would also invariably have considered the prospects of Mr Macura establishing that he is an eligible person and the veracity of his evidence; and it was argued that it is not for the executors to ensure that the settlement is “fair” to Mr Macura (rather, if Mr Macura’s legal advisers were negligent in their advice then that might be a matter for other recourse).

27. [145]

    It was further submitted that the submissions by Mr Macura ignored the utility of the settlement now being set aside, given the obvious credit issues relating to Mr Macura.

28. [146]

    In terms of legal principle, the executors maintained (as they do on the substantive application) that to set aside the settlement on the basis of lack of capacity, it must be established that the executors were aware of the lack of mental capacity (assuming it be established). The executors submitted that the fact that Mr Cominos said at the commencement of the mediation words to the effect that Mr Macura’s cancer had returned and that he was unwell would not indicate that Mr Macura did not have mental capacity.

29. [147]

    Finally, the executors contended that any lack of medical evidence is “entirely at the feet of [Mr Macura] and his current solicitor”. They argued that Mr Macura was in contempt of the Court in not paying the occupation fee, noting that Mr Macura claimed that he could not afford that amount. It was argued that, in circumstances where the executors’ costs now exceeded the amount of settlement, an order for costs (unless paid by the tutor), would be likely to be futile; and it was thus submitted that the notice of motion should be dismissed with costs payable by the tutor, it being his motion.

30. [148]

    On 3 May 2019, I dismissed the application for an adjournment and indicated that I would provide reasons for so dismissing the application in my final judgment. These are those reasons.

31. [149]

    I had regard to the principles outlined in Aon, particularly at [98]-[103] where the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ), in the context of an amendment application said that:

32. [150]

    Thus, what was required was a balancing of the extent of delay, costs and prejudice to the estate that may reasonably be assumed to follow from acceding to the adjournment request made on behalf of Mr Macura against the prejudice to Mr Macura of not permitting such an adjournment. In balancing those factors, I took a number of matters into account.

33. [151]

    There can be no doubt that Mr Macura has been afforded considerable latitude in relation to adducing evidence in these proceedings. The mediation took place on 20 March 2018. Mr Macura almost immediately challenged the outcome of the mediation. Since then, he has had the benefit of two different sets of solicitors (Stewart & Associates and Mr Tees’ firm); he failed to serve evidence in a timely fashion – only serving any such evidence in the first place on the last day before the guillotine order came into operation; and, despite the consultation with Dr Napper in November 2018 and despite obtaining the medical certificate from Dr Attia in December 2018, no issue was raised as to the vacation of the February 2019 hearing dates until two weeks before that hearing was due to commence. Having then obtained a four month adjournment (on conditions honoured by the conspicuous breach thereof), it appears that no meaningful steps were taken by Mr Macura, or on his behalf, to obtain any medical evidence until the week before that adjourned hearing date.

34. [152]

    The explanation given for that delay by Mr Tees is, frankly, not credible and cannot be accepted. Intentionally or otherwise, it is quite misleading for Mr Tees in his 18 April 2019 affidavit to suggest that before 15 April 2019 he had no opportunity to have a conference with Mr Macura – in actuality he had attended various conferences (or “meetings”) with Mr Macura in the relevant period (whether they be short or long, over the telephone or in person, with or without Counsel, “full-blown” or not, is not to the point). Mr Tees’ account of events is extraordinary and his self-serving definition of “conference” is risible. The preparation of the matter for hearing does not just fall “short of best practice”, it is unacceptable and not in accordance with the professional obligation of officers of this Court having regard to the overriding mandate for which provision is made in ss 56-60 of the Civil Procedure Act.

35. [153]

    That explanation for the delay was simply unsatisfactory. The only other explanation was Mr Macura’s professed concern not to jeopardise his relationship with his oncologist. However, that says nothing about his ability (or Mr Tees’ ability on his behalf) to arrange for Mr Macura’s mental state to be assessed by someone other than Professor Horvath. Mr Tees was perfectly capable, for example, of arranging for Mr Macura to have a consultation with Dr Napper in November 2018.

36. [154]

    The prejudice suffered by the estate as a result of the requested adjournment is, clearly enough, the cost (and delay) of yet another adjournment. Even accepting that a costs order is not the panacea for all ills (as was made clear in Aon), in the present case that prejudice is exacerbated by the difficulty that a cost order is unlikely to be able to be met by Mr Macura – who made no secret of the fact that he could not even afford the relatively modest occupation fee set in February 2019 as a condition of that earlier adjournment.

37. [155]

    The prejudice to Mr Macura, if the adjournment was not granted, is of course the difficulty (if any) posed to his case on the present application if further medical evidence were to be available (and the potential loss of an opportunity to have the settlement agreement set aside).

38. [156]

    Of course, if the settlement were to be set aside on the grounds of any such incapacity, questions would arise as to the likelihood that Mr Macura could establish an entitlement to the relief he had claimed having regard to the fact that his claims seem to be dependent on acceptance of oral evidence yet to be given by him as to the testamentary gift (a claim that Mr Levet frankly conceded is not likely to be maintainable – see T 7.32; 10/05/19) or a claim for family provision based on his alleged relationship with the deceased. The fact that there are real difficulties in that regard lessens the likely prejudice that would otherwise be suffered.

39. [157]

    As to the allocation of Court resources and prejudice to other litigants, it is obvious that the more occasions on which court time is occupied in hearing matters that should have been completed expeditiously at a much earlier time, the more impact there is on time available to hear matters for other litigants.

40. [158]

    There is an overriding statutory obligation to conduct litigation with a view to the just, quick and cheap resolution of the real issues in dispute. When I ruled on the adjournment application I was firmly of the view (which I still hold) that that mandate would not be achieved by yet a further adjournment, particularly in circumstances where, having by then heard the whole of the evidence that was at that stage before the Court, I was of the view that, even if it were to be established that Mr Macura had been under a relevant incapacity as at 20 March 2018, there was no evidence that the executors were, and there had been nothing to put the executors, on notice at the mediation of that incapacity. As discussed below from [225]ff, it is well established that a person who seeks to avoid a contract on the basis of incapacity, must prove not merely the incapacity, but also that the other party had knowledge of the incapacity.

41. [159]

    Ultimately, my decision to refuse the adjournment application was based on a balancing of the cost and delay a further adjournment would inevitably occasion, the belated timing of the application, the opportunity that had already been made available to Mr Macura, and my view that the matter could ultimately be approached without the need for such evidence – i.e., that the application could ultimately be determined based on an assumption that Mr Macura did in fact suffer from the mental incapacity which it is now said he does without it being necessary for that to be conclusively established by psychiatric evidence.

Executors’ motion seeking declaratory relief as to settlement agreement

1. [160]

   Turning then to the substantive relief here sought, oral submissions were heard on 10 May 2019. The submissions made by the respective parties may be summarised as follows.

2. [161]

   The executors submit that Mr Macura is not a credible witness, pointing to his criminal record, which includes a number of criminal convictions including offences relating to dishonesty (including the conviction in June 2013 in relation to falsifying his army record to obtain disability and service pension on the basis of alleged war service in Vietnam); and to his non-compliance with the Court orders made in February 2019. The executors also submit that Ms Ristic is not a witness whose testimony should be accepted.

3. [162]

   The executors contend for a finding, based on the medical evidence, that Mr Macura suffered no cognitive impairment on 20 March 2018, pointing to the evidence that: Professor Horvath saw Mr Macura on 28 February 2018 on which occasion he did not report any side effects of concern; reported that he maintained good energy levels and was active with walking and running; and denied any pain; and Professor Horvath did not note any cognitive impairment; Dr Attia saw the plaintiff on 19 March 2018, and recorded that Mr Macura had normal blood pressure and pulse and did not complain of any side effects or problems; Dr Attia saw Mr Macura on 22 March 2018 and, although Dr Attia provided Mr Macura with a letter to say that Mr Macura did not have mental capacity on 20 March 2018, this was because that is what Mr Macura told him (and Dr Attia conceded that he had no way of ascertaining whether that was true). The executors maintain that Dr Attia did not give Mr Macura the letter dated 19 March 2018 (annexure B to Mr Macura’s affidavit of 7 September 2018) (and contend that it may be inferred that it was forged by Mr Macura and that, if so, this suggests a high level of mental capacity on the part of Mr Macura – see T 9.50).

4. [163]

   Even leaving aside the allegation of forgery of the 19 March 2018 letter, the executors argue that the fact that Mr Macura requested a letter from Dr Attia on 22 March 2018 suggests that he was not cognitively impaired at that time as he was able to appreciate his position in seeking such a letter. It is noted that Professor Horvath saw Mr Macura again on 28 March 2018, on which occasion he did not report any side effects apart from mild fatigue and Professor Horvath did not note any cognitive impairment. Thus, the executors express scepticism as to the contention that Mr Macura is presently cognitively impaired and say that it is more likely that, having been caught lying about the Vietnam service, he is panicking about being found to be guilty of perjury and dissembling.

5. [164]

   The executors submit that the evidence adduced by them as to what transpired at the course of the mediation, and their observations of Mr Macura that day should be accepted. It is submitted that the executors and their witnesses were not cross-examined as to the truthfulness of their evidence nor was their credit impugned; whereas they submit that (even apart from the concession made in relation to the Vietnam war service) Mr Macura proved to be an unreliable witness whose evidence ought not to be accepted and that Ms Ristic was also not a reliable witness.

6. [165]

   Even if Mr Macura’s testimony were to be accepted, the executors say that there is no evidence that they were aware of his mental incapacity; and that the highest that Mr Macura can take it is that, at the commencement of the joint mediation session, Mr Cominos announced that Mr Macura’s cancer had returned and that he was not feeling well. It is submitted that there is a marked difference between having cancer and not feeling well, on the one hand, and on the other hand not having a mental capacity. (I agree with this submission.)

7. [166]

   As to the issue of Mr Macura’s mental capacity as at the date of the mediation, Mr Macura points to the following evidence.

8. [167]

   First, that on 18 April 2019 Mr Myers was appointed as Mr Macura’s tutor on the basis that Mr Macura lacked the capacity to provide meaningful instructions and that, despite objective evidence, he was not prepared or able to concede the truth about his claims concerning his alleged Vietnam service.

9. [168]

   Second, the evidence of Dr Napper (in his report dated 17 April 2019) that:

10. [169]

    Third, the evidence of Mr Vertzayias in his affidavit sworn 25 June 2018 as to the comment of Mr Cominos at the commencement of the mediation to the effect that:

11. [170]

    Fourth, the evidence of Professor Horvath that: Mr Macura was diagnosed with prostatic cancer in 2011; Mr Macura’s condition is terminal and his prognosis is 12 to 18 months; possible side effects of the medication he was on as at the date of the mediation included hot flushes, fatigue and short term memory loss; and, had she been aware of the claims that he made in respect of his military service, and had she been aware that they were false, she would have referred him for a mental state examination either by way of cognitive assessment or neuro-psychiatric assessment.

12. [171]

    Fifth, the evidence of Mr Macura in his affidavit affirmed 7 September 2018 as to feeling unwell on the date of the mediation (although it is conceded that significant credit issues have arisen in respect of Mr Macura).

13. [172]

    It is submitted that, given Dr Napper’s evidence as to the unfitness of Mr Macura as at 17 April 2019 (i.e., that Mr Macura was not fit to provide instructions for Supreme Court proceedings and that Dr Napper says that his condition has been present for some time), it is a reasonable inference that such unfitness extended to the point of the earlier mediation; and that this is supported by Professor Horvath’s evidence that possible side effects of the mediation he was on as at the date of mediation included hot flushes, fatigue and short term memory loss; and also supported by Professor Horvath’s statement that, had she been aware that he had been making false claims in respect of his military service, she would have referred him to a mental state examination. It is noted that such false claims preceded the date of mediation.

14. [173]

    For Mr Macura, reference is made to the test of capacity that was set out by Dixon CJ, Kitto and Taylor JJ in Gibbons v Wright (1954) 91 CLR 423; [1954] HCA 17 (Gibbons v Wright); namely, that:

15. [174]

    In applying this test in general terms, it is submitted that what must be considered is: whether Mr Macura had an understanding of the value of his entitlements in respect of any family provision application he was making; the risks, benefits and consequences of settling the proceedings in terms of his needs including his needs for accommodation, and the need to find alternative accommodation; whether Mr Macura had an understanding or could comprehend advice regarding the financial implications of settling the matter, including in terms of his future needs; and whether he had the capacity to understand the documents he was being asked to sign.

16. [175]

    It is submitted that there is sufficient material before the Court to form an inference that, on the balance of probabilities, Mr Macura, as at the date of the mediation, was not in a position properly to participate in the legal process. Whilst it is conceded that there is evidence that the executors may not have been aware of the extent of his incapacity, it is submitted that this should not deprive Mr Macura of equitable relief “in circumstances where he has given away a claim to a share of an estate worth in excess of $10,000,000 for an amount of $100,000, being an amount only slightly in excess of the legal costs he had at that stage incurred”.

17. [176]

    Reliance is placed on authority for the proposition that, in certain circumstances, equitable relief will be granted to one party to a transaction where that person, because of some special disadvantage, was unable to act in his or her own best interests, notwithstanding a lack of awareness of such incapacity by the other party or parties to the transaction. In particular, emphasis is placed in this regard on the observation in Wilton v Farnworth (1948) 76 CLR 646; [1948] HCA 20 (Wilton v Farnworth), where Latham CJ said:

18. [177]

    It is convenient at the outset to address the question of the credibility of the respective witnesses, particularly in light of the issue raised by the executors as to what would be the practical outcome of setting aside the settlement agreement on the grounds of incapacity in any event.

19. [178]

    First, as to those who attended the mediation in a professional capacity (and who gave evidence on affidavit in these proceedings), namely: the late Mr Berecry, Mr Carolan, Mr Sutton and Mr Costa Vertzayias. (Ms Mijatovich, although the solicitor for the estate, I deal with in a separate category as she is of course also a defendant in the proceedings.) There was no evidence from Mr Cominos (Counsel appearing at the mediation for Mr Macura) and no submission was made that any adverse inference should be drawn from his absence.

20. [179]

    For obvious reasons, the affidavit evidence of the late Mr Berecry could not be tested in cross-examination and must be weighed with care accordingly. It was not, however, suggested for Mr Macura that there was any basis on which to doubt the veracity of that evidence or the recollection of Mr Berecry as to what occurred at the mediation. I have summarised his evidence earlier. It would, quite frankly, be extremely surprising if an experienced mediator in Mr Berecry’s position did not remark on events of the kind to which Mr Macura has deposed had they in fact occurred in a session at the mediation in which the mediator was present. Mr Berecry’s observations of Mr Macura at the mediation are, tellingly, inconsistent with Mr Macura and Ms Ristic’s account of a panic attack at the commencement of the mediation (at least insofar as Mr Macura and Ms Ristic suggest this occurred in the opening session itself); and it is to be noted that Mr Macura clarified his evidence as to vomiting at the mediation after he received Mr Berecry’s affidavit (making it clear that there is no independent witness to that ever having occurred). It is also worth noting that, as outlined above, Ms Ristic, on cross-examination, changed her evidence in relation to when the panic attack occurred. I accept Mr Berecry’s account of events.

21. [180]

    Similarly, Mr Carolan’s account of the mediation was not challenged in cross-examination and I accept that account; relevantly, Mr Carolan confirming that what Mr Cominos said at the opening session was to the effect that Mr Macura was being treated for prostatic cancer and was on medication; and that he might need to take a break during the day; but that his observation was that Mr Macura did not show any signs of discomfort or ill health during the initial session. That account is inconsistent with the evidence of Mr Macura and Ms Ristic as to Mr Macura’s demeanour and behaviour at the mediation. I accept Mr Carolan’s account of events.

22. [181]

    As to Mr Sutton, whose evidence as to what occurred at the opening session at the mediation was confined to that which emerged in cross-examination, he accepted that Mr Cominos had said that the cancer had returned and that Mr Macura was on medication and unwell and that Mr Macura might have to leave from time to time. Nothing turns on the fact that he could not confirm that Mr Cominos had indicated that Mr Macura had terminal cancer. Mr Sutton’s evidence certainly does not support Mr Macura’s account of exhibiting signs of illness at the opening session of the mediation.

23. [182]

    As to Mr Costa Vertzayias, as I have already noted, he was cross-examined as to matters going to his preparedness for the mediation (and it was ultimately submitted for Mr Macura that there was a real question as to the adequacy of his legal representation at the mediation); and, as I had noted above, issue seemed to be taken with the manner in which Mr Vertzayias was attired (as an attempt to bolster his credibility). As to that last aspect of the submissions, I do not accept that the fact that Mr Vertzayias is an officer of the court is relevant to the assessment of his credit in the witness box (regrettably, there are legal practitioners, just as there are people in all manner of professions, whose testimony is shown not to be credible); nor do I place any weight on the fact that Mr Vertzayias may have been conferred with an award of some kind (and there is nothing to suggest that this was some kind of deliberate attempt to bolster his credibility as opposed to his ordinary professional attire).

24. [183]

    In cross-examination, Mr Vertzayias appeared somewhat defensive of his position and quick to ascribe fault on the part of Mr Macura; and it is clear from the evidence before me that there is a dispute between Mr Vertzayias’ son’s firm and Mr Macura as to the legal fees incurred in the proceedings, so I accept that Mr Vertzayias’ evidence is not that of a wholly impartial observer. That said, in broad terms Mr Vertzayias’ evidence as to Mr Macura’s physical state at the opening session of the mediation is consistent with that of Mr Berecry and Mr Carolan (and, whatever may have been Mr Macura’s condition as it appeared to Mr Vertzayias in the private mediation room after the opening session, it is the appearance of Mr Macura at the opening session that is most relevant to the present application – since it is not suggested that the executors or their representatives conferred with Mr Macura later in the day).

25. [184]

    There is no basis on which to make any adverse credit findings in relation to Mr Vertzayias. That said, various of the assertions made by him in his affidavit (such as Mr Macura’s engagement in discussions during the day as being “lucid and lively” or as to the making by Mr Macura of “lucid and reasoned arguments”) cannot possibly be tested in the absence of evidence as to what was said in those discussions; and hence I can place no weight on Mr Vertzayias’ lay opinion in that regard.

26. [185]

    Second, as to the evidence of the executors, Ms Mijatovich and Fr Sarasevic, I have already noted that I cannot place any weight on the affidavit evidence of Fr Sarasevic as to his observations at the mediation having regard to his limited recollection of events when cross-examined. As to Ms Mijatovich, her evidence as to Mr Macura’s appearance at the mediation was not shaken in cross-examination. She made appropriate concessions; in particular, she accepted that she was aware that Mr Macura’s cancer had returned and that Mr Macura was on medication; and that Mr Macura might have to leave the mediation room. Her evidence was consistent with that of Mr Berecry and Mr Carolan (each of whose evidence I have accepted).

27. [186]

    Third, and critically, as to the evidence of Mr Macura and Ms Ristic, there were in my opinion significant credit issues in relation to each (this being readily conceded, at least as far as Mr Macura is concerned, by his Counsel).

28. [187]

    Relevantly, Mr Macura’s account of hot flushes, sweating, dizziness and the like (which is inconsistent with the evidence of all the others except Ms Ristic at the mediation opening session) was supported by Ms Ristic – and Ms Ristic was apparently prepared to depose to events not actually observed by her (such as Mr Macura vomiting at the mediation) based on no more than what Mr Macura had told her (but without making it clear in her affidavit the source of her asserted knowledge of those events).

29. [188]

    To explain the doubts that arise as to the credibility of each of Mr Macura and Ms Ristic, it is instructive to note other aspects of the evidence that emerged during the course of cross-examination.

30. [189]

    As to other aspects of Mr Macura’s evidence in cross-examination, he accepted in cross-examination that he had not paid the occupation fee ordered in February this year (as a condition of the adjournment granted in respect of the February hearing dates) (see T 60.15) which he said he could not afford, and it is apparent from the court record that he has not filed the affidavit ordered to be filed in relation to money collected from other occupants of the building (though he asserted, contrary to the evidence to which he was taken, that after the Court order had been made he had not collected any rent (see T 60; T 71-72)). Although Mr Macura insisted that he had put the rent into a trust account, there was no evidence to support that assertion (see T 72).

31. [190]

    Mr Macura did not accept that he struggled with telling the truth (T 75.22), though he conceded that he “might be mistaken in [his] lifetime”; and he did not accept that he had used a number of aliases in the past (T 76.1), (inconsistently with his criminal record). He maintained that he could not remember matters relating to his criminal record, though he then gave a lengthy explanation as to the circumstances in which he had spent some time in gaol (see at T 77.35; and T 81-82). Mr Macura made impassioned speeches as to his patriotism (see T 78.46; T 82.19; T 83.24).

32. [191]

    Cross-examined as to certain Facebook entries (such as a reference to a PhD from Harvard and a degree in masters of politics and public policy from Macquarie University), Mr Macura seemed to accept that those entries had overstated the position (his evidence is that he commenced the Harvard degree but did not finish the degree and that he commenced the Macquarie degree but again did not complete it) but he insisted that he had graduated with a masters of international law degree from the Sydney University School and a masters of arts in international relations degree from the University of New South Wales (the following day tendering framed copies of those degrees). He seems to blame other (unidentified persons) for posting Facebook entries or taking other steps (such as advertising on Gumtree for the rooms to rent at the Liverpool property).

33. [192]

    What emerged from his cross-examination was that Mr Macura had a tendency to make speeches as to his position (see, for example, his evidence as to his conviction for making false and misleading statements in relation to his alleged Vietnam record – T 83). By way of further example, see the following exchange (at T 83.48ff):

34. [193]

    Intentionally or otherwise, Mr Macura’s affidavit evidence presented an unreliable picture of various matters (even apart from the Vietnam war service, there were parts of his affidavit which his Counsel did not read for the truth of their contents). So, for example, at [61] of his affidavit sworn 6 November 2017, Mr Macura had deposed that the only real property he owned was a property in Toogong that he had bought some four or five years ago for about $50,000. In fact, when taken to this evidence Mr Macura ultimately conceded that he also owned a piece of land in Tasmania (insured by him in his name and the name of a Mankitsze Macura who Mr Macura initially denied knowing but then said was “probably a friend” but definitely not a wife or girlfriend, and then later said that she was “supposed to be my carer” and was named Karen); as well as an interest in another property in Tasmania. Unfortunately, much of Mr Macura’s evidence had the flavour of being made up on the run (see his ultimate acknowledgement at T 101.36 that he had not disclosed property in “Liverpool, New Zealand or the Tasmania or elsewhere, only New South Wales”).

35. [194]

    As to his relationship with the deceased, at [5] of his affidavit affirmed 23 May 2018, Mr Macura had deposed that:

36. [195]

    Cross-examined about this evidence, and faced with the evidence by Ms Ristic that she was the deceased’s de facto partner, there was the following evidence:

37. [196]

    Mr Macura would not comment on Ms Ristic’s claim (at least to some extent inconsistent with his own claim, since it was not suggested that the three were in a tripartite de facto relationship at any time) that she was the deceased’s de facto wife since 2010 to the date that he died; nor was he able to comment on Ms Ristic’s evidence that she had sexual relations with the deceased in 2010 and following and that they were living as man and wife from 2010 until the day that he died. He gave the following evidence:

38. [197]

    Cross-examined as to the 19 March 2018 letter from Dr Attia (of which there was no copy on Dr Attia’s file), Mr Macura denied that he had written that letter (T 107.2). However, if genuine, there is no obvious explanation as to why it was not deployed earlier; and it would not then have been necessary to seek another such letter on 22 March 2018.

39. [198]

    Ms Ristic was cross-examined as to her evidence through an interpreter (although her sworn affidavit was in English and did not disclose that the services of an interpreter had been used in that regard) (see her evidence at T 129/130). As to her claimed relationship with the deceased (which was the foundation for her family provision claim) she was cross examined as follows:

40. [199]

    Ms Ristic was also cross-examined as to her affidavit evidence that she had been registered as a carer for Mr Macura since 2015 (and collecting since that time social security payments of $1,900 a month) and was aware that, as a carer, she had to perform at least 20 hours a week of personal service.

41. [200]

    Her evidence was that in 2015, Mr Macura was looking after the deceased and helping him out with his daily tasks, but she was also caring for Mr Macura:

42. [201]

    In the provision of personal services, Ms Ristic appeared to include tasks such as shopping for food, spending a lot of time with Mr Macura, reading to him “and I actually had a lot of social engagement around him”; services that it was put to her (but she did not seem to accept) would not qualify as personal services for the purpose of qualifying as part of the required number of hours for a carer.

43. [202]

    I found neither Mr Macura nor Ms Ristic to be a reliable or credible witness.

44. [203]

    Mr Macura’s credit suffered from the obvious difficulties as to his preparedness to depose to demonstrably false assertions (as properly conceded by his Counsel – see T 4.44; 10/05/19). However, more pertinently (since that aspect of his evidence is relied upon as demonstrating mental incapacity), even leaving aside the Vietnam war evidence, Mr Macura’s evidence revealed a tendency to exaggeration, overstatement and imprecision. He was prone to self-justification (such as, for example, in his evidence as to his admitted criminal record for offences involving dishonesty). I have real doubts as to the authenticity of the 19 March 2018 letter purportedly from Dr Attia (not least because there is no copy of such a document on Dr Attia’s file; that Dr Attia has no recollection of it; that, to a lay observer, the signature on it appears different from that on the 22 March 2018 letter; and that there is no plausible reason why a letter of that kind would be sought the day before the mediation but not put before the parties and mediator at the mediation). While I make no finding as to it having been forged by Mr Macura, it is difficult to see who else would have an interest in falsifying the medical evidence in this regard. Suffice it to note that I cannot accept that the 19 March 2018 letter is genuine; and I would not accept any of Mr Macura’s evidence of disputed conversations or events without independent corroboration.

45. [204]

    As to Ms Ristic, a similar conclusion must be drawn. Even allowing for difficulties in translation, the fact that Ms Ristic was willing to depose to matters of which she accepted she had no personal knowledge (such as Mr Macura vomiting at the mediation) and which were solely based on Mr Macura’s say-so (without indicating this before she was cross-examined on those matters) is not to her credit. Ms Ristic was also in my opinion prone to overstatement and self-serving evidence – her evidence as to her relationship with the deceased makes that abundantly clear. Ms Ristic deposed to (and based her claim for family provision) on a close and loving sexual relationship of a de facto nature from 2010 to the date of the deceased’s death in 2016. She departed considerably from that evidence in cross-examination (perhaps conscious of the inconsistency between her evidence of a relationship with the deceased and that of Mr Macura). Her evidence as to the basis on which she seems to have claimed a carer’s allowance both for the deceased and for Mr Macura (and what that entailed) was unsatisfactory, to say the least. I regarded her as an unreliable witness.

46. [205]

    Even leaving aside the inherently contradictory nature of the accounts given by Mr Macura and Ms Ristic as to their relationships with the deceased, their evidence as to Mr Macura’s state and physical condition at the mediation differs wildly from that of the independent witnesses whose evidence I have no reason not to accept (and do positively accept). That of itself casts considerable doubt on the credibility of each of Mr Macura and Ms Ristic. Without corroboration, I cannot accept Ms Ristic’s evidence and I therefore cannot accept her account (dramatically given as it was) of Mr Macura scratching at the door of her private mediation room during the course of the day (but even if I were to have accepted that account, as already adverted to, it still says nothing as to what was or should have been known by the executors of Mr Macura’s mental state on that day).

47. [206]

    Turning then to the first of the critical issues on the present application, namely Mr Macura’s capacity as at 20 March 2018 to enter into the settlement agreement (and, in that context, to provide instructions to his legal representatives for the settlement of the proceedings), I note that s 3 of the Civil Procedure Act defines “person under a legal incapacity”, relevantly, as including:

48. [207]

    The test for capacity is “issue specific” (see Masterman-Lister v Brutton & Co [2003] 3 All ER 162; [2003] 1 WLR 1511 (Masterman-Lister) and Dalle-Molle (by his next friend Public Trustee) v Manos [2004] SASC 102 (Dalle-Molle)). Capacity is therefore to be tested by reference to the particular transaction or conduct in which the person proposes to engage. (I have set out earlier the passage in Gibbons v Wright in which this principle was expressed.)

49. [208]

    Here, the “transaction” in question is the settlement of the legal proceedings by entering into or signing the short minutes. Where the question of capacity relates to the conduct of litigation (the capacity to instruct lawyers to represent a party in contested litigation), in Dalle-Molle, Debelle J noted that the question whether a person has the capacity to give sufficient instructions in a litigious matter does not turn on whether or not the person has the requisite mental capacity to make some other legally effective decision. Rather in Dalle-Molle, Debelle J noted, with reference to the required capacity of a party to litigation, that the question was whether the person was able to give sufficient instructions to take, defend or compromise legal proceedings. The capacity to give sufficient instructions extended not merely to the prosecution or defence of the action but also to the compromise of the proceedings. As to what was meant by the qualification “sufficient”, in this context, his Honour considered it meant instructions of a quantity, extent or scope adequate for the purpose or object of those instructions. His Honour said (at [22]):

50. [209]

    His Honour did not agree in absolute terms with the comments of Chadwick LJ in Masterman-Lister to the effect that:

51. [210]

    Rather, Debelle J considered that evidence of the capacity to make other decisions which have legal consequences and to conduct ordinary day to day affairs would be relevant but that such evidence must be weighed with other evidence as adduced. His Honour considered that even if the condition suffered by the person was one which rendered him or her vulnerable to exploitation or at risk of making rash or irresponsible decisions, it did not necessarily follow that he or she was unable to give sufficient instructions and must be considered in light of other relevant evidence.

52. [211]

    Debelle J noted that the question whether a person has the capacity to give sufficient instructions must be examined against the facts and subject matter of the particular litigation and the issues involved in that litigation. Thus, in a complex matter it may be necessary for careful advice and explanation to be given and for there to be time for consideration by the litigant. His Honour said:

53. [212]

    According to his Honour, the level of understanding of legal proceedings involves an ability “to understand the nature of the litigation, its purpose, its possible outcomes, and the risks in costs which is of course but one of the possible outcomes.”

54. [213]

    Further it is of relevance to note that in Murphy v Doman [2003] NSWCA 249, where Handley JA referred to the comments of Dixon CJ, Kitto and Taylor JJ in Gibbons v Wright, his Honour considered that the test of capacity for a litigant in person would be higher than that for a litigant retaining a solicitor.

55. [214]

    In the present case, whether Mr Macura was capable of giving sufficient instructions in relation to the conduct or compromise of the legal proceedings brought by him against the estate therefore depends on whether he was able to understand, if it were carefully explained to him by a lawyer or other competent person, the nature of the proceedings, their subject matter, any advice as to his prospects and the risks of litigation, including costs; and to form and express a sufficient view for the purpose of giving instruction in those proceedings. The fact that he might then make a rash decision or one affected by a delusion as to, say, Vietnam war service, would not be determinative against capacity.

56. [215]

    The rationality of decisions which Mr Macura might make in relation to the settlement of those proceedings would be something which could be taken into account in determining capacity but which, on the authorities referred to above, would not be conclusive in determining this question. Similarly, the fact that Mr Macura might not be able to carry out certain functions in relation to everyday affairs (for example, if, while undertaking chemotherapy, he suffered from hot flushes or dizziness or the like, such that he might not be able to drive or might have difficulty standing) would be relevant only to the extent that any such disability affected whether or not he would be capable of understanding the nature of acts he would be required to authorise in retaining and instructing a solicitor in relation to the proceedings.

57. [216]

    In these circumstances, the fact that 5% of people in his present condition may suffer from short term memory impairment would not be determinative of a lack of capacity, even assuming that Mr Macura fell within that 5% (which is by no means here established). The fact that, having listened to a careful explanation of matters and having given particular instructions, Mr Macura might not later remember in detail the basis on which he had given those instructions (at least without reference to a record of those instructions) would also not make Mr Macura incapable of giving instructions in relation to the settlement of the litigation.

58. [217]

    Bearing in mind the duty of a solicitor to his or her client (and to the Court) in the conduct of proceedings, mild cognitive impairment (assuming, for present purposes, Mr Macura suffered from this as a side effect of his cancer treatment) would thus not necessarily preclude him from understanding a careful explanation of matters as put to him during the course of the mediation and forming a view and expressing a view on those matters from time to time.

59. [218]

    In that regard, Mr Macura’s performance in the witness box was instructive. Mr Macura was clearly not incapable of answering questions albeit that he had a tendency in so doing to argue his own case and to indulge in lengthy and not always responsive explanations.

60. [219]

    Tellingly, Mr Tees apparently did not consider Mr Macura incapable of providing proper instructions at any point earlier than 15 April 2019 (and indeed his evidence was that up to the point where the February adjournment application was made he did have “sufficient” instructions – see [33] above).

61. [220]

    Emphasis was placed for Mr Macura on Dr Napper’s report of 17 April 2019 (not challenged in cross-examination) to the effect that Mr Macura was not capable of providing instructions for Supreme Court proceedings and that his psychiatric condition “is not life‑threatening and has been present for some time”. It is submitted that this amounts to undisputed medical evidence that Mr Macura was unfit to provide instructions at that time and it is submitted that if he was unfit to provide instructions then a fortiori he would be unfit to be in a mediation process “if, indeed, his unfitness preceded 17 April to encompass the period of the mediation” (see the submission at T 4.5-13; 10/05/19).

62. [221]

    As to Dr Napper’s opinion, unchallenged as it was in cross-examination, it is relevant to note not only the vagueness of the opinion that the condition had been “present for some time” but also the lack of any indication as to how it was concluded by Dr Napper (and to what extent) that Mr Macura’s thought processes made him unfit to provide relevant instructions. The generality of the opinion makes it unsafe to draw inferences from it as to Mr Macura’s capacity as at the time of the mediation to understand and respond to issues calling for instructions in relation to the settlement of the dispute generally (whatever may have been his refusal to accept a version of events that did not include his asserted Vietnam war service).

63. [222]

    Insofar as Mr Macura here seeks to call in aid the fact that on 18 April 2019 I appointed a tutor to act for him in the proceedings (see T 4.8 to which I have referred above), the context in which I made that order has already been explained. The issue at that stage was not an incapacity to provide instructions per se. Rather, it was Mr Macura’s apparent refusal to accept that his account as to Vietnam war service was inconsistent with objective facts as to his army record (in circumstances where his persistence in adherence to that evidence would inevitably lead to him becoming unrepresented in the proceedings; and the likely further delay if that were to transpire). I do not accept that this means that Mr Macura was at that time incapable of understanding and giving instructions as to the settlement of the proceedings in general – assuming that the legal advice was appropriately and carefully explained to him.

64. [223]

    Had it been necessary to determine for the purposes of the present application, I would have held that it had not been established on the balance of probabilities (whatever be the position now) that Mr Macura lacked capacity on 20 March 2018 to give instructions in relation to, and to enter into, a compromise of his claims in the substantive proceedings.

65. [224]

    I also have grave suspicions, as noted above, that the 19 March 2018 letter purporting to be from Dr Attia is not authentic; and the fact that Mr Macura relied upon such a letter (and on his account obtained such a letter the day before the mediation) speaks to a level of cognitive ability inconsistent with the incapacity case he is now seeking to run.

66. [225]

    That said, it is not necessary to make any final determination on that issue because, in my opinion, even if there was such an incapacity, it has not been established that the executors knew (or, if that be the relevant test, ought to have known) of that incapacity.

67. [226]

    As submitted for the executors, knowledge of the incapacity on the part of the other party to the agreement (here the executors) is required to set aside an agreement entered into under a relevant incapacity. It has been debated whether actual or constructive knowledge of the incapacity is required; however, the weight of authority favours the conclusion that actual knowledge is required (see Public Trustee (WA) v Brumar Nominees Pty Ltd [2012] WASC 161 (Public Trustee v Brumar); and Cheshire & Fifoot, Law of Contract (11th Australian ed, 2017, LexisNexis) (Cheshire & Fifoot, Law of Contract) at [17.53]).

68. [227]

    In Gibbons v Wright, the Court stated (citing Lopes LJ in Imperial Loan Co v Stone (1892) 1 QB 599 (Imperial Loan Co v Stone) (at 441)) that:

69. [228]

    In Giles v Rooney (1996) 23 MVR 510 (Giles v Rooney), the applicant sought to set aside a judgment entered by consent on the basis that new medical evidence showed he suffered diminished mental capacity at the time of settlement. Malcolm CJ (Kennedy & Rowland JJ agreeing) rejected the applicant’s submission that the principle in Imperial Loan Co v Stone, as approved in Gibbons v Wright, extended to constructive knowledge. His Honour saying (at 513) that in his opinion that stated the principle more widely than it was stated and accepted by the High Court in Gibbons v Wright. His Honour went on to say:

70. [229]

    In Public Trustee v Brumar, the Public Trustee, as the named executor of the deceased person’s estate, refused to perform a contract for the sale of land which the deceased had entered shortly before his death. Issues as to the deceased’s capacity and the validity of the contract were contested before Pritchard J.

71. [230]

    Her Honour summarised the position in the case law (from [91]):

72. [231]

    Ultimately, the issue as to whether actual or constructive knowledge is what is required was not determinative in that case, as her Honour found on the balance of probabilities that the plaintiff had sufficient mental capacity to enter into the transaction in question (a contract for sale of real property) but that, even if he did not, the first and second defendants had no actual or constructive knowledge that he might not have had the requisite mental capacity to enter into the contract (see the conclusion at [110]).

73. [232]

    The reasoning of Pritchard J was recently referred to by the Court of Appeal in Hanna v Raoul [2018] NSWCA 201. There, an elderly widower had entered into a deed and transfer in respect of real property to his nephew (the transfer being subject to a life estate in the widower’s favour). The primary judge had found that the deed and transfer were not binding on the parties, holding (inter alia) that the transferor lacked capacity to enter into the transaction. On appeal, Beazley P, as Her Excellency then was, (Macfarlan and White JJA agreeing) found that the primary judge had erred in finding that the transferor lacked capacity to enter into the deed and transfer, as he understood the broad operation or general purport of the transaction (see at [47]-[63]). As to the circumstances in which a transaction entered into by a person without the requisite capacity is voidable, her Honour there observed (at [51]) that:

74. [233]

    The authors of Cheshire & Fifoot, Law of Contract express the proposition as follows: “[an] incapacitated party will be able to avoid the contract if that person can show that he or she was suffering from such a degree of mental disability at the time of making the contract that he or she was incapable of understanding it and that the other party was aware, or ought to have been aware, of this” (my emphasis) (see at [17.53] and the authorities cited at fn 204). As to the second element, the authors note that it is not clear whether constructive knowledge is sufficient, but suggest that, an approach of actual knowledge only may “not be consistent with the approach to this issue in unconscionability cases where a constructive knowledge test is adopted”.

75. [234]

    In the present case, I am not persuaded that the executors had actual or constructive knowledge of incapacity on the part of Mr Macura to provide proper instructions or to agree to a settlement of his proceeding. The highest to which the evidence points is that the executors knew that Mr Macura was suffering from a serious illness, that would sooner or later prove to be terminal; and that Mr Macura might not remain in (or might have to leave) the main mediation room at times during the mediation (or for the joint mediation session). A statement that Mr Macura was “unwell”, assuming for present purposes that this was what was said (some versions putting it simply as that his cancer had returned and he was on medication), tells one nothing about his mental health or capacity to give instructions. (Even if it had been the case that Mr Macura had needed to leave the mediation room to vomit in the bathroom once or twice, this still would not tell one anything about his state of mental health.)

76. [235]

    I do not accept that the evidence establishes that Mr Macura was exhibiting at the mediation the signs that he says (i.e., hot flushes, sweating or dizziness) but even if he had that would not in my opinion put the executors on notice of a mental incapacity. Someone can be physically ill (for a variety of reasons) but still capable of providing instructions.

77. [236]

    As to the fairness or otherwise to Mr Macura of the ultimate settlement and his complaints, in effect, that it was foist upon him by his Counsel, the former depends on an assessment of the merits of his claim in the principal proceedings; the latter is unsubstantiated by any independent evidence (and inconsistent with the professional obligations of his Counsel and the fact that the experienced mediator appears not to have had any such concerns).

78. [237]

    As to the former, Mr Macura’s Counsel virtually conceded that the only claim Mr Macura might now be able to make good would be the family provision claim. The likelihood of that cannot here be assessed. It is, however, not irrelevant to note the inconsistencies between Mr Macura’s evidence and that of Ms Ristic; and the likelihood that this would cause difficulties in establishing his claim (indeed one might perhaps infer, from the fact that experienced family provision counsel were involved in the matter at the time of mediation, that the settlement reflected at least to some extent their independent assessment of the prospects of the family provision claim).

79. [238]

    As to the latter, complaints by Mr Macura as to his lawyers’ conduct of the mediation or in preparation for the mediation are not matters for which the executors are responsible; and would need to be pursued in a very different context.

80. [239]

    Finally, insofar as Mr Macura’s Counsel emphasised the observation of Latham CJ in Wilton v Farnsworth (as being the “only quote” that might possibly support his position – T 7.19; 10/05/19), those observations were made in a very different context – where the donee of a gift was the “moving spirit” in the transaction of gift. Here, it is inapt to characterise the executors as the “moving spirit” in the settlement negotiations – the parties were participating in a private mediation. No doubt the mediation agreement required them to act in good faith but there is nothing to suggest that the executors did not do so.

81. [240]

    This is not a claim of unconscientious conduct; nor must the executors establish that Mr Macura understood the substance of what he was doing before moving to enforce a settlement agreement reached in the course of a mediation where he had the benefit of independent legal representation.

Conclusion

1. [241]

   For the above reasons, the settlement agreement reached at the mediation should not be set aside and, in substance, the relief sought by the executors pursuant to s 73 of the Civil Procedure Act 2005 (NSW) should be granted (and hence the orders in substance as sought by them in their notice of motion should now be made). There is, however, an application by notice of motion filed by Mr Macura’s former lawyers in relation to the lien claimed by them for their legal fees which will require determination prior to the payment out of any of the settlement sum to Mr Macura. Moreover, the executors have sought to set-off as against the settlement sum the moneys payable by Mr Macura pursuant to the occupation fee ordered in respect of the Liverpool property and any costs orders made in their favour in respect of these proceedings. I will make directions for those matters to be heard when these reasons are published. As it is, I will simply make provision for there to be a set-off as against the settlement sum of the moneys that, on the evidence, Mr Macura collected by way of rent or occupation fees by other tenants during the period in which the executors were entitled to receive any such moneys (quantified by Ms Leahy at $1,580).

2. [242]

   As to costs, the position of costs of the proceedings up to the date of the mediation is to be dealt with in accordance with the settlement agreement reached at the mediation. However, the costs of the present application should follow the event, as is the general rule; and therefore there should be an order that Mr Macura pay the costs of the proceedings from 23 March 2018 (that being the date on which the short minutes of order that he subsequently disputed were signed). Furthermore, in circumstances where Mr Macura’s financial position (according to his evidence) is unlikely to enable the executors to recoup their costs from him, and hence there would be a further drain on the estate by reference to these proceedings; and where the tutor appointed to act for Mr Macura consented to do so knowing that he might be personally liable for costs (and presumably gave the instructions that led to the hearing being prolonged beyond that date), I consider that the tutor should indemnify the executors for any costs payable by Mr Macura (and unpaid by him) in respect of the proceedings from 19 April 2019.

3. [243]

   Accordingly, I make the following orders:

   1. (1)

      Declare that the parties have reached a settlement agreement as set out in the Short Minutes of Orders signed by the parties on 20 March 2018 (annexure A to the Notice of Motion filed by the defendants on 16 May 2018), and formalised in the Short Minutes of Orders signed by the parties’ solicitors on 23 March 2018 (annexure B to the Notice of Motion filed by the defendants on 16 May 2018)

   2. (2)

      Order that:

   3. (3)

      Order that the plaintiff pay the costs of the defendants of the proceedings from and including 23 March 2018 on the ordinary basis.

   4. (4)

      Order that the plaintiff’s tutor, Lawrence Myers, indemnify the defendants for any costs payable by the plaintiff pursuant to these orders (and unpaid by the plaintiff) in respect of the defendants’ costs of the proceedings from 19 April 2019 to date.

   5. (5)

      Order that the amount of $1,580 collected by the plaintiff from the occupiers of other units at the Liverpool property (as set out in the affidavit of Michelle Leahy affirmed 9 April 2019) be deducted from the settlement sum payable pursuant to Order 2(a).