New South Wales Supreme Court CITATION : Trevenar v Ussfeller & Ors [2005] NSWSC 582 HEARING DATE(S) : 09/06/05, 10/06/05 JUDGMENT DATE : 23 June 2005 JUDGMENT OF : Gzell J DECISION : Alleged gifts set aside CATCHWORDS : EQUITY - Undue Influence and Duress - Plaintiff an 83 year old dependent personality emotionally dependent upon female defendant - Presumption of undue influence accepted - Female defendant wrote cheques in excess of $500,000 on plaintiff's bank account - Whether presumption rebutted - No new principles - Forensic evidence from indentations on cheques disproving defendants' contentions - Whether fraud established - Unnecessary to decide Johnson v Buttress (1936) 56 CLR 113 Union Fidelity Trustee Co of Australia v Gibson [1971] VR 573 Allcard v Skinner (1887) 36 Ch D 145 CASES CITED : Stivactas v Michaletos (No 2), NSWCA, unreported, 31 August 1993 Spong v Spong (1914) 18 CLR 544 Briginshaw v Briginshaw (1938) 60 CLR 336 Melba Josephine Trevenar - Plainitff Margaret Mary Ussfeller - 1st Defendant PARTIES : Wolf Rainer Alfred Ussfeller - 2nd Defendant Christie Steve McGuiness - 3rd Defendant FILE NUMBER(S) : SC 2842/04 Mr M Ashhurst - Plaintiff COUNSEL : Mr Christian Vindin - Defendants Kemp Strang Solicitors SOLICITORS : Acclaim Legal LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J THURSDAY 23 JUNE 2005 2842/04 MELBA JOSEPHINE TREVENAR v MARGARET MARY USSFELLER & ORS JUDGMENT 1 Margaret Mary Ussfeller, the first defendant, wrote cheques totalling $584,200.00 on the bank account of Melba Josephine Trevenar, the plaintiff, who brings her action by her tutor Peter Carusi. Mrs Trevenar signed each of the cheques. They were written in favour of, or for the benefit of, Mrs Ussfeller, her husband Wolf Rainer Alfred Ussfeller, the second defendant, and her father, Christie Steve McGuinness, the third defendant. The cheques were paid on presentation to Mrs Trevenar's bank. $7,000.00 was subsequently repaid. Mrs Trevenar sought an order against Mrs Ussfeller in the amount of $577,200.00 and orders against Mr Ussfeller and Mr McGuinness in lesser amounts. She made these claims on the alternative grounds of fraud and undue influence. Background 2 Mr and Mrs Ussfeller and Mr McGuinness lived in a house at Ashfield, New South Wales, until 4 October 2003. 3 Mrs Ussfeller became a close friend and confidante of Mrs Trevenar who lived across the road from Mrs Ussfeller. Mrs Trevenar was born on 1 April 1920. 4 On 24 April 2003, Mrs Trevenar appointed Mrs Ussfeller her enduring guardian, granted a power of attorney to Mrs Ussfeller and Thomas Edward Dawson, an accountant, and executed a will appointing Mrs Ussfeller her executrix and giving the whole of her estate to her. In the event that Mrs Ussfeller predeceased Mrs Trevenar, she appointed Mr Ussfeller her executor and gave him the whole of her estate. 5 Mr Trevenar was ill with heart disease and could not drive. Mrs Ussfeller became the means of transport for both of them. Mrs Ussfeller read Mrs Trevenar's mail to her and wrote out cheques on Mrs Trevenar's bank account for her signature. 6 On 3 June 2003, Mrs Ussfeller wrote out a cheque for $4,000.00 that Mrs Trevenar signed. The cheque was debited to Mrs Trevenar's bank account on 5 June 2003. Mrs Ussfeller said that Mr Trevenar had become aggressive and Mrs Trevenar wanted to leave him. She had packed her bags and needed cash. That was why Mrs Ussfeller wrote the cheque. She said she took Mrs Trevenar to her cardiologist, Dr Hermann, to have him explain that the aggressiveness was associated with Mr Trevenar's medical condition. Mrs Ussfeller said she put the money in an envelope and used it to defray Mrs Trevenar's expenses and when she settled down and was no longer going to leave, Mrs Ussfeller said she gave Mrs Trevenar the money remaining in the envelope. 7 Mrs Trevenar denied these events. She said she signed blank cheques that Mrs Ussfeller subsequently filled out. 8 The cheque was made payable to Mrs Ussfeller. She did not explain why, if the purpose was to obtain cash for Mrs Trevenar, the cheque was not made out to cash and cashed at Mrs Trevenar's bank. 9 On 1 July 2003, Mrs Ussfeller wrote out a cheque on Mrs Trevenar's bank account to cash for $7,000.00. The cheque was signed by Mrs Trevenar and debited to her bank account on 11 July 2003. Mrs Ussfeller said the money was to pay for the funeral expenses of Mrs Trevenar. After the commencement of these proceedings, $7,000.00 was repaid. 10 On 25 July 2003, Mr Trevenar died. Mrs Ussfeller said that before he died, Mr Trevenar asked her to promise him that she would look after Mrs Trevenar. Mrs Trevenar, who had not lived alone previously, became more dependent upon Mrs Ussfeller. She had no children and no surviving siblings. Mrs Ussfeller used to visit Mrs Trevenar three to four times a day. 11 On 1 August 2003, Mrs Ussfeller wrote a cheque payable to herself on Mrs Trevenar's bank account for $6,500.00. The cheque was signed by Mrs Trevenar. It was charged to Mrs Trevenar's bank account on 5 August 2003. Mrs Ussfeller said it was a gift. Mrs Ussfeller said that she was informed of Mr Trevenar's death at 4 am on 25 July 2003. She went to Mrs Trevenar's home and stayed with her until 8 am. Mrs Ussfeller said she had a nursing examination that morning but she failed. Mrs Ussfeller said that on 1 August 2003 Mrs Trevenar asked her to write out the cheque as she was sorry that Mrs Ussfeller had failed her nursing examination. Mrs Trevenar denied that she made a gift of $6,500.00 to Mrs Ussfeller. 12 Mrs Ussfeller said that Mrs Trevenar said she wanted Mr and Mrs Ussfeller and Mr McGuinness to move in with her. Mrs Ussfeller said they could not as Mr Trevenar had left the house to his family with a right of occupancy to Mrs Trevenar alone. Mrs Trevenar denied that she had invited the Ussfellers to move in with her. 13 In mid August 2003, Mr and Mrs Ussfeller and Mrs Trevenar went to Singleton to inspect a house. Mrs Ussfeller said they stopped at Cessnock on the way back to Sydney for lunch. Mrs Ussfeller said that Mrs Trevenar told them that they were getting her estate in her will because nobody else had looked after her and that they should buy the house and she would give them the money for it. She said: "You're going to get it when I die anyway, so you might as well have it now, and we can all live together in the house". Mrs Trevenar agreed that she had gone to Singleton to look at the house. She did not remember the trip back. She denied saying she would buy the house and pay for it. 14 Mr and Mrs Ussfeller made several offers on the house until an offer of $462,000.00 was accepted. Mrs Ussfeller said that Mrs Trevenar asked how much the deposit was and instructed her to write a cheque for $46,200.00 to the real estate agent. This she did on 27 August 2003. The cheque was signed by Mrs Trevenar. She denied agreeing to pay the deposit. 15 On 27 August 2003, Mrs Ussfeller signed the closure of two term deposits held by Mrs Trevenar with the Commonwealth Bank of Australia and the transfer of those funds to Mrs Trevenar's cheque account. The term deposits totalled $500,540.00. A further $81,665.45 was credited to Mrs Trevenar's account on 22 August 2003. Prior to those deposits, the balance in Mrs Trevenar's bank account stood at $110.98, an amount insufficient to cover the cheque for $46,200.00 that was debited to her account on 29 August 2003. 16 On 26 February 2004, Mrs Trevenar's solicitor, John Hannaford prepared a list of her cash investments totalling $771,669.00. Assuming little increase in value between 27 August 2003 and 26 February 2004, Mrs Trevenar had interest earning assets of approximately $1,270,000.00 when the term deposits were closed. Those term deposits represented approximately 39% of her interest earning assets. 17 On 8 March 2004, William John Andrews, an accountant, calculated Mrs Trevenar's income from her investments for the year ended 30 June 2003 at $53,398.37. This included $23,113.00 from the term deposits that were closed on 27 August 2003. That interest represented 43% of Mrs Trevenar's income. 18 Mrs Ussfeller did not consider what effect on Mrs Trevenar's income the closure of the fixed deposits might have. She did not give it any thought. Mrs Ussfeller agreed that Mrs Trevenar might be emotionally dependent upon her but she had not thought about the effect on Mrs Trevenar of the closure of the fixed deposits. 19 On 11 September 2003, Mrs Ussfeller made out a cheque for $520,500.00 on Mrs Trevenar's cheque account that resulted in a bank cheque being obtained in favour of Mr McGuinness in that amount. The cheque was charged to Mrs Trevenar's bank account on that day. Mrs Trevenar denied making a gift or writing a cheque in that amount. She said she might have signed the cheque with $500.00 on it. Mrs Ussfeller said it was for the balance of the purchase price for the Singleton property and that Mrs Trevenar took $500.00 of it in cash. That was not possible. The bank cheque was for the full amount of the cheque signed by Mrs Trevenar. 20 Mr and Mrs Ussfeller had made application to the Department of Veteran's Affairs for a pension. The Department was not advised of the alleged gift. Mr Ussfeller said this was because the money had been banked to the account of Mr McGuinness. Yet loans made to third parties with the moneys were claimed by Mr and Mrs Ussfeller as their joint assets. They said they were mistaken when they made this claim. 21 The balance of the purchase price for the Singleton house was $415,800. 00 There was no explanation for the difference between this figure and $520,000.00. 22 Mrs Ussfeller did not consider what effect the gifts of $566,700 would have on Mrs Trevenar's income. She said she did not give it any thought. Mrs Ussfeller had taken Mrs Trevenar to Dr Hermann for advice, but it did not occur to her that she should take Mrs Trevenar to a solicitor or an accountant for advice in relation to the alleged gifts. 23 In cross-examination, Mrs Ussfeller said that Mrs Trevenar said she did not want to see a solicitor because it cost money. This assertion was not contained in any of her affidavits. When this was pointed out to Mrs Ussfeller, she said she never suggested that Mrs Trevenar should get professional advice but she did tell her that she should tell Mr Hannaford when Mrs Trevenar said she did not want anybody to be told. That assertion was also not set forth in any of Mrs Ussfeller's affidavits. Later in her cross-examination, Mrs Ussfeller said that it had never occurred to her that Mrs Trevenar should get professional advice. 24 Mrs Ussfeller was aware that Mrs Trevenar had not discussed the matter with anybody. Mrs Ussfeller conceded that the gift was very generous but she would not accept that it was far too generous for her to accept. Mrs Usfeller's evidence was that the offer of the gift had been made in Cessnock on the way back from viewing the house in Singleton. Mrs Ussfeller would not agree that it was a spur of the moment offer, nor that Mrs Trevenar was extremely concerned that Mr and Mrs Ussfeller might move to Singleton. Mrs Ussfeller was not concerned that Mrs Trevenar had not thought through the implications of her offer. Mrs Ussfeller's cross-examination ended thus: "Q: Why didn't you take her to see an accountant or her solicitor, to get the accountant and/or the solicitor to explain to her the consequences of giving you over half a million dollars? A: It did not occur to me. Q: It did not occur to you because you were concerned that if she got that explanation she might not make the gift? A: It did not occur to me in that way at all." 25 Mr Ussfeller was aware that Mrs Trevenar turned to Mrs Ussfeller when she had emotional needs. Mrs Trevenar would have been very upset had Mr and Mrs Ussfeller moved to Singleton. Mrs Trevenar had no one else to turn to but Mrs Ussfeller. Mr Ussfeller would not accept that Mrs Trevenar was in a vulnerable state when she made her alleged offer. He was not concerned that Mrs Trevenar had no professional advice. Mr Ussfeller said: "No. She offered us the money". When asked whether he thought that the gift was out of all proportion to what had been done for Mrs Trevenar, Mr Ussfeller said: "I thought it was rather large, yes". 26 On 15 September 2003 and 22 September 2003, Mrs Ussfeller took Mrs Trevenar to meetings with her solicitor, Mr Hannaford. On neither occasion was the gift mentioned. On each occasion the suggestion was that Mr and Mrs Ussfeller were moving to Singleton and Mrs Trevenar was going with them for a short holiday. 27 On 4 October 2003, Mr and Mrs Ussfeller, Mr McGuinness and Mrs Trevenar moved to the Singleton property. 28 Ethel Audrey Crossland met Mrs Trevenar in early October 2003. She was a next door neighbour. She had many conversations with Mrs Trevenar who expressed her appreciation of what Mrs Ussfeller was doing for her. In none of the conversations between October 2003 and March 2004 did Mrs Trevenar ever say she had paid for the house. 29 Mrs Trevenar left the Singleton property and went to live with her niece, Shirley Carusi, in April 2004. 30 Mr Ussfeller said he always intended to repay $500,000.00 from the proceeds of sale of their Ashfield property. On 24 December 2003, he wrote a cheque for $500,000.00 in favour of Mrs Trevenar. The deposit slip was incorrectly entered by Mrs Ussfeller with the number of Mr Ussfeller's bank account so that there was a debit and a credit to Mr Ussfeller's account in the amount $500,000.00 on the same day. Mr Ussfeller wrote a second cheque for $500,000.00 in favour of Mrs Trevenar on 29 December 2003. That cheque was dishonoured on 31 December 2003. On 6 January 2004, Mr Ussfeller re-deposited the second cheque to Mrs Trevenar's account and the funds were cleared on that day. 31 Mrs Ussfeller said that on 29 December 2003 she told Mrs Trevenar that Mr Ussfeller had put $500,000.00 into her account from the money from the sale of the Ashfield property. She said that Mrs Trevenar was not happy and said Mr Ussfeller was to keep the money because Mr and Mrs Ussfeller were the only family she had and she did not want anyone else having it. 32 Mrs Ussfeller said that the next day or the day after, Mrs Trevenar came to the kitchen with a cheque including the stub taken from her cheque book. According to Mrs Ussfeller, Mrs Trevenar said she wanted Mr and Mrs Ussfeller to have the money back. She told Mrs Ussfeller to make out the cheque in the same amount deposited to her account in favour of Mr McGuinness. Mrs Ussfeller said she wrote the cheque and Mrs Trevenar signed it. The cheque was debited to Mrs Trevenar's bank account on 12 January 2004. It was dated "9 Jan 2004". 33 Mrs Trevenar denied any conversation in which she was informed that $500,000.00 had been deposited to her account. She said she was unaware that moneys had been taken from her account and repaid. She denied any conversation about repaying $500,000.00. She said she did not tear a cheque and stub from her cheque book nor did she sign a cheque filled out for $500,000.00. 34 Mr Ussfeller said it was on 9 January 2004 that Mrs Trevenar came to the kitchen with a cheque and stub and said she was giving back the $500,000.00 which Mrs Ussfeller "might need for her dad". Mr Ussfeller said he observed Mrs Ussfeller write out the cheque and hand it to Mrs Trevenar to be signed. He said while Mrs Trevenar was signing the cheque, Mrs Ussfeller filled out the stub. 35 The cheque was numbered 66. The stub is missing from the cheque book. Cheque 67 is dated 23 December 2003 and was debited to Mrs Trevenar's bank account on 24 December 2003. Cheque 68 was dated 31 December 2003 and was charged to Mrs Trevenar's bank account on 31 December 2003. Neither Mr nor Mrs Ussfeller could explain why later cheques in Mrs Trevenar's cheque book were dated prior to cheque 66 and charged to Mrs Trevenar's bank account before cheque 66. Each denied that the cheque had been signed by Mrs Trevenar on or before 23 December 2003, the date of cheque 67, and held back until Mr and Mrs Ussfeller were satisfied that their deposit of $500,000.00 had been made to the cheque account against which cheque 66 could be debited. 36 Chris Anderson, a forensic examiner, analysed the cheque book of Mrs Trevenar and the cheques signed by her. Cheque 65, made out to cash for $500 dated "4th Dec", left indentations on cheque 66 and also on cheque 67. Mr Anderson concluded that cheque 66 was in the cheque book when cheque 65 was written. Mr Anderson found no indentations from cheque 66 on cheque 67. He concluded that cheque 66 had been removed from the cheque book before cheque 67 was written. It was for $145.50 in favour of Mr McGuinness and dated "23.12.2003". Mr Anderson also concluded that the lack of indentations on cheque 67 indicated that cheque 66 was blank when removed from the cheque book. 37 Mr Anderson analysed the inks used on cheque 66 and concluded that the substantive entries in the body of the cheque were made with a blue ballpoint pen, whereas Mrs Trevenar's signature was made with a blue nylon/felt tipped pen and the date was written with a different blue ballpoint pen. 38 Mr Ussfeller's explanation for Mrs Ussfeller not handing her pen to Mrs Trevenar to sign the cheque after she had entered the details on it, was that there was a container of pens on the kitchen table and Mrs Ussfeller retained hers to write out the stub while Mrs Trevenar signed. Mr Anderson's evidence disputed that assertion. He said that there were indentations on the butt of cheque 67 that were not produced by any of the entries on the butts of cheque 65 or cheque 64. Mr Anderson concluded that these impressions were created from writing on the butt of cheque 66 prior to it being torn out or removed from the cheque book. 39 Mrs Ussfeller said she did not necessarily hand over to Mrs Trevenar the pen with which she had filled out a cheque, because of the container of pens on the kitchen table. 40 Mr Andrews was retained to prepare Mrs Trevenar's income tax return for the year ended 30 June 2003. He recorded details of Mrs Trevenar's income and the assets from which it was produced. Mr Andrews was informed that the two Commonwealth Bank fixed deposits had been given to Mrs Ussfeller. Nonetheless, he indicated that even with those bank deposits closed, it would still, almost certainly, be the case that Mrs Trevenar had to lodge an income tax return for the year ended 30 June 2004. 41 In cross examination, Mr Andrews said that Mrs Ussfeller had all the records necessary for the tax return. It was she who answered questions and handed over the appropriate record. It was Mrs Ussfeller who informed him that the Commonwealth Bank deposits had been closed and Mrs Trevenar had given the money to her to buy the house. Mr Andrews said he wanted to be clear it was a gift and not a loan likely to attract interest, so he said to Mrs Trevenar: "You gave Margaret the money for the house?" and Mrs Trevenar said: "Oh, yes." 42 Dr John Robert Strum, a consultant psychiatrist, examined Mrs Trevenar in September 2004. He said it was not possible to get a proper and meaningful history from Mrs Trevenar because her memory was poor and she was mixing up facts. He concluded that she was a highly dependent woman who was not able to look after her personal affairs. When her husband died, she suffered severe depression. Dr Strum said that when a person is severely depressed, memory and concentration deteriorate even more and the person becomes more dependent. 43 A psychometric examination was conducted by Sam Borenstein, a clinical psychologist. Commenting on those results, Dr Strum said there was some evidence of deficit in brain function and this superimposed on personality difficulties, made it highly unlikely, in Dr Strum's opinion, that Mrs Trevenar would have been able to comprehend what she was signing, there was a tendency towards extreme dependency on Mrs Ussfeller and Mrs Trevenar would most probably have gone along with anything that was suggested to her. 44 In cross-examination, Dr Strum conceded that it was possible that Mrs Trevenar had suffered a recent deterioration in memory when he saw her and it was also possible that her symptoms could fluctuate. But Dr Strum maintained his opinion that Mrs Trevenar had a dependent personality and was very vulnerable to going along with a suggestion. Dr Strum was of the view that Mrs Trevenar as a dependent person would give the answer she thought the other person wished to hear. In re-examination, Dr Strum said that the question asked of Mrs Trevenar by Mr Andrews was insufficient to determine whether Mrs Trevenar understood the nature of the question. 45 Dr Strum's observation that it was not possible to get a proper and meaningful history from Mrs Trevenar because her memory was poor and she mixed up facts was made out by her testimony in the witness box. She said at one stage that no board was asked for and it was not paid. Yet she said later in her cross-examination that she paid board of $100 per week when living with Mr and Mrs Ussfeller in Singleton. In her affidavit, she said she kept her cheque book in her room. In cross-examination, she said that was wrong and the cheque book was left in the kitchen. Mrs Trevenar denied signing any will that her grandnephew, Brian Cavanagh, encouraged her to sign when she stayed with him in February 2004. Yet on her return to Singleton, she told Mrs Ussfeller that she had signed a will and Mrs Ussfeller took her to her solicitor, Mr Hannaford. Mrs Trevenar denied she wanted to make a new will leaving everything to Mrs Ussfeller. Mrs Trevenar said she was not going to leave anything to Mrs Ussfeller but she was going to leave her estate to her sister's daughter. 46 Mr Hannaford's dairy notes were in evidence. They indicated that in February 2004, Mrs Trevenar and Mrs Ussfeller met with him. Mr Hannaford took instructions that Mrs Trevenar had executed a will at Mr Cavanagh's suggestion and she wished to make a new will leaving everything to Mrs Ussfeller as she had done previously. She produced the will she had executed on 24 April 2003. Mrs Trevenar instructed Mr Hannaford that she wished to give everything to Mrs Ussfeller except for a legacy of $10,000 to Mr Cavanagh. Undue influence 47 In their pleading, the defendants admitted that Mrs Trevenar was in a special relationship of confidence with Mrs Ussfeller. In their written outline of submissions delivered before the hearing, the defendants admitted Mrs Ussfeller's relationship with Mrs Trevenar was such as to give rise to a presumption of undue influence and the position of both Mr Ussfeller and Mr McGuinness as volunteers left them also affected by the presumption. 48 In my view those concessions were properly made. In Johnson v Buttress (1936) 56 CLR 113 at 134, Dixon J described the presumption in a passage that has been quoted on many occasions: "But the parties may antecedently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee." 49 The defendants' case was that, in all circumstances, the presumption was rebutted. It was submitted that the evidence demonstrated that Mrs Trevenar entered into the transactions by exercising free will on a purely voluntary basis, the consequences of which she well understood, both at the time they occurred and subsequently. It was submitted that Mrs Trevenar still had substantial assets after the gifts were made and improvidence or folly were not grounds for setting aside the gifts. 50 Reference was made to Union Fidelity Trustee Co of Australia v Gibson [1971] VR 573. In that case, the deceased had lent moneys to the defendants secured by mortgage. She subsequently signed a discharge of the mortgage. No repayment of the loan had been made. The defendants contended that she had made them a gift of the outstanding moneys in gratitude for their past services. Her executors sought to have the discharge of mortgage set aside. It was held that the nature of the defendants' relationship with the deceased raised a presumption of undue influence and the defendants had failed to establish that the intention to sign the discharge was produced without any undue influence or that it was formed independently of the relationship that existed. At 575-579, Gillard J derived a series of propositions from the authorities. One such proposition drawn from what Lindley LJ had said in Allcard v Skinner (1887) 36 Ch D 145 at 183 is that Courts of Equity will set aside gifts made to persons in a position to exercise undue influence over the donor, although there has been no proof of actual exercise of such influence. The Courts have done this on the avowed ground to protect persons from the exercise of such influence under circumstances that render proof of it impossible. The courts have required proof of its non-exercise and, failing that proof, have set aside gifts otherwise unimpeachable. 51 It matters not that the moving party, on the defendants' case, was Mrs Trevenar. In Stivactas v Michaletos (No 2), NSWCA, unreported, 31 August 1993, a nephew failed to rebut the presumption of undue influence with respect to his aunt's transfer of property to him at her insistence. The nephew took his aunt to a solicitor but the advice given was insufficient to establish that the aunt understood precisely what she was doing. 52 Neither Mrs Ussfeller, nor Mr Ussfeller, nor Mr McGuinness, acted in the interests of Mrs Trevenar. No consideration was given to having her independently advised by a solicitor or accountant. Indeed, on the occasions after the initial gift of $520,500.00 was made that Mrs Ussfeller took Mrs Trevenar to see Mr Hannaford, no mention was made of any gift. 53 No consideration was given to the effect on Mrs Trevenar's assets or income of the making of the gifts. This is not a case of a gift commensurate with services provided that can be explained as an act of gratitude for the support provided by a neighbour. If it were only a matter of a gift of $6,500.00 said to have been compensation for Mrs Ussfeller's failure in her nursing examination the morning after the death of Mr Trevenar, that gift might have stood. But in this case, the gifts totalled $577,200.00. They were large gifts. As Griffith CJ said in Spong v Spong (1914) 18 CLR 544 at 549 large gifts made by a person incapable of managing his own business without independent advice cannot stand unless it is made abundantly plain that the donor fully understood what he or she was doing. 54 Mrs Trevenar was emotionally dependent upon Mrs Ussfeller. Mrs Usfeller has failed to establish that Mrs Trevenar made the alleged gifts in exercise of independent judgment, fully aware of the consequences of her actions. Dr Strum's examination of her, led him to the view that she was a dependent personality who did not understand the nature of the cheques she was asked by Mrs Ussfeller to sign. That opinion was borne out by Mrs Trevenar's evidence in the witness box. In cross examination she was, on many occasions, unable to understand the question being put to her and she could not give a rational explanation of many of her actions. 55 In my judgment the alleged gifts must be set aside. Fraud 56 In view of my finding of undue influence, it is unnecessary for me to determine this issue. 57 Fraud is a serious allegation and a Court must feel an actual persuasion of its occurrence or existence before it can be found (Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362). 58 The forensic evidence of Mr Anderson raises serious doubts as to the claims of Mr and Mrs Ussfeller. On the other hand, Mrs Trevenar's denial of established fact makes it difficult to accept her evidence and Mr Andrews' evidence of Mrs Trevenar answering the question: "Did you give the money to Margaret for the house" in the affirmative, supports the evidence of Mr and Mrs Ussfeller. 59 Nonetheless, were it necessary for me to do so, I would have dismissed the claims of Mr and Mrs Ussfeller and found that they had fraudulently removed the moneys from Mrs Trevenar's bank account. Once the claims of Mr and Mrs Ussfeller are rejected that must be the consequence. 60 I would have rejected the claims of Mr and Mrs Ussfeller as to the gifts of the moneys because their evidence cannot stand against the forensic analysis. And I think that Mr Andrews' evidence is explained by Dr Strum. It was Mrs Ussfeller who did the talking in the meeting with Mr Andrews and the question he asked Mrs Trevenar was likely to be answered by her in the affirmative because of her dependent personality. I accept that opinion by Dr Strum. It was borne out by the evidence of Mrs Ussfeller herself. She said that when Mrs Trevenar returned from a short visit to Mr Cavanagh, his wife, Margaret, told Mrs Ussfeller that Mrs Trevenar had decided that she wanted to live with them in Sydney. Notwithstanding that Mrs Trevenar did not want to do so, she nodded her had. Conclusion 61 The alleged gifts totalling $577,200.00 must be set aside. I will hear the parties on the terms of appropriate orders. I will also hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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