New South Wales Supreme Court CITATION : Luscombe v Hammond [2007] NSWSC 479 HEARING DATE(S) : 8 May 2007 JUDGMENT DATE : 8 May 2007 JURISDICTION : Equity Division JUDGMENT OF : Windeyer J at 1 DECISION : Held that transactions between defendant and plaintiff were unconscionable. Order that defendant holds car on trust for plaintiff and that the defendant pay the plaintiff $9,000. CATCHWORDS : EQUITY – Equitable fraud – Unconscionable dealing – Plaintiff 101 years old and living in nursing home – Defendant 58 year old woman who visited him at the nursing home – Series of transactions between plaintiff and defendant – Defendant claims transactions were for the benefit of the plaintiff – Plaintiff traumatised and in a position of vulnerability and disadvantage when transactions took place – Whether or not plaintiff intended to she did take advantage of the age and medical condition of the plaintiff – Transactions were unconscionable PARTIES : Athelstan Walter Luscombe (Plaintiff) Carolyn Judith Hammond (Defendant) FILE NUMBER(S) : SC 1129 of 2007 COUNSEL : Mr G McGrath (Plaintiff) In person (Defendant) SOLICITORS : Lobban McNally Lawyers (Plaintiff) In person (Defendant) - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J TUESDAY 8 MAY 2007 1129/07 ATHELSTAN WALTER LUSCOMBE v CAROLYN JUDITH HAMMOND JUDGMENT 1 HIS HONOUR: This is an unfortunate matter which, in my view, has not been terribly well handled by anybody and should never have ended up here. As a start, it appears to be a claim by the plaintiff against the defendant based on unconscionable conduct which ought to have been pleaded and certainly should never have been brought by summons in the way it has been. That may have been partly my fault. When the matter came for an expedited hearing I did not direct the matter proceed on pleadings, but lawyers acting in these matters ought to know that it is quite undesirable to proceed on a matter such as this without the issues having been properly articulated in some pleaded manner. 2 The plaintiff is 101 years of age. The defendant, as I understand it, is 58 years of age. The plaintiff was living in a hostel run by the Harbison organisation at Bowral. He was subsequently, I think on 21 November last year, moved into the Harbison nursing home. The defendant came to know him in March 2006. She found him to be a nice old man who needed some companionship. She proceeded to visit him and her visits became more regular. 3 It appears that the plaintiff is a man of some substance, although there is no evidence whatsoever before the court on which it could find that he has an estate worth the amount put to the defendant in cross-examination. The plaintiff and his brother, who is 99, are the owners as joint tenants of property 26 Kings Road, Moss Vale. The area of that property is almost impossible to tell from the evidence, as I still cannot tell how the two properties are contiguous, but if they are, they would appear to have a total area of about five and a half acres. There is a home erected on the land in question which, according to the defendant, is very dilapidated. 4 The plaintiff apparently was not happy being moved from hostel accommodation to nursing home accommodation. According to the defendant the move was quite traumatic for him. According to his nephew, who held a power of attorney from his uncle, that was the position, and he (the nephew) was also concerned about the move. He says that the hostel authorities insisted on it happening. 5 The defendant, who considers that she is well versed in health matters and who is a proponent of the use of minerals, part of the purpose of which is to stop the onset of prostate cancer, considered that she was helping the plaintiff by obtaining minerals for him and attending to some of his needs. Whether that was or was not the position I am quite unable to tell. 6 In any event, what happened was that on the day of the move, at a time when this 101 year old man was in what the defendant described as a traumatised state, he signed on his account at least four cheques in favour of the defendant. There is nothing particularly untoward about most of those in that two were for $20 each, one was for $200 and the other was for $500. It is not entirely clear what was done with those cheques, but I am prepared to accept that the defendant applied the moneys which she obtained for the benefit of the plaintiff. 7 There were other cheques which appear to have been signed by the plaintiff on his own account in the next three or four days. Three of those cheques were in favour of Harvey Norman, one for $4,416.90, one for $2,237.02 and one for $1,439.85. There is no doubt, on the evidence, that those cheques were primarily for the purchase of two television sets for the plaintiff. One of those sets was inappropriate in it being too big for the plaintiff's room at the nursing home, and the defendant apparently has that set at her home. As I understand the evidence, the other is probably in the nursing home. The other cheque for $4,416 appears to have been applied first towards a washing machine, and second towards other items which the defendant says she purchased for the benefit of the plaintiff, including a juicer and two Walkmans. The washing machine was to be used, so she says, when they went together to live at the Kings Road, Moss Vale property. She says that the plaintiff said that he would be happy if he and she could live there and she cared for him. 8 On 21 November 2006 the plaintiff signed a letter under which he said that he would like the defendant to have his home for a health centre - [a]s I am no longer able to live there. She has my full consent to have the property Long Cause 26 Kings Road Moss Vale and develop as she sees fit. 9 The defendant says that she asked the plaintiff for something which would indicate that she was allowed to enter the property and to try to bring it back into a condition fit for residence. I have to say I do not accept that evidence. This document was typed out by her on the date of the move, said to be signed by the plaintiff on that date, yet it says that it was for the defendant to have the home for a health centre on the basis that the plaintiff was no longer able to live there. As that document was prepared by the defendant, it certainly does not fit with the story which she gives about going to live in that home with the plaintiff to look after him. 10 A cheque signed on 24 November, when the plaintiff was still, according to the defendant, in a disturbed state, was made out to the Moss Vale Motor Group. That cheque has been applied to purchase a Holden Astra twin top two-door auto convertible in the name of the defendant. Mrs Hammond says that the plaintiff went with her, at least on the first occasion, to buy the car. It seems that he did not go into the motor vehicle dealer's place, but in any event she says this was the car that he wanted. She said that the purpose of getting it was to enable her to take the plaintiff on drives and to take him on outings outside the nursing home situation. If that was the position, and I accept for the moment that it could have been, then there is no reason why the car could not have been bought in the name of the plaintiff, registered in his name, with him allowing her to keep it at her home so that she could pick him up and take him on outings. 11 There is another cheque for $9,000 which was made out to "cash, C J Hammond". The defendant says that she applied this to purchase certain furnishings for the Kings Road property, which I understand to be things such as blinds, curtains and the like. Those items, on the defendant's evidence, are not in the home but are in a shed on the property. 12 The sad position with this case is that the plaintiff's nephew, who appears to have had the running of this case, and the defendant apparently had not met until today. Nobody seems to have endeavoured to bring about communication between them. All that seems to have been done is that there was a rush to court to bring this action. That is explicable, I suppose, in view of the cheques which had been signed and the haste in which Mr John Luscombe as attorney had felt he was required to act to stop any further operations on the bank account. 13 The defendant, in my view, genuinely thinks that she has been helping the plaintiff. The simple fact is that on the evidence the plaintiff has no memory of her and he has no memory of signing any of the cheques. It is perfectly clear that his short-term memory is not good. As he is in a nursing home obviously nobody wished to disturb him by taking any oral evidence from him, and that has caused some problems with this matter. Nevertheless, his affidavit stands as evidence that he does not remember signing any of the cheques. 14 The evidence is also clear that he was in a disturbed state for some days when he left the hostel accommodation and was moved to the nursing home which, according to the defendant at least, has a large number of dementia patients in it. 15 The plaintiff's claim, I was told, was brought on the basis of unconscionable conduct. I consider that claim has been made out. This plaintiff was obviously a man who was not really in a position to look after himself. He was a man, on any basis, able to be influenced even if he knew what was happening. He was old, and in a position of vulnerability and disadvantage. Whether she intended to do so or not, it is clear that the defendant took advantage of the age and the medical condition of the plaintiff. There is no basis whatsoever on which she should be entitled to retain any benefit of so acting. 16 She has said in evidence that she does not claim to have any interest in the Kings Road Moss Vale property. I do not think that the letter could possibly have given her an interest in it as there is no consideration given for it. Nevertheless, it is, I think, appropriate to make a declaration that the defendant has no interest in that property and I will do so. 17 I should add that the defendant has no difficulty with such a declaration, as she is not alleging at the present time that she has any interest in that property. Had the arrangement, under which she thought it was possible to take the plaintiff to live at the King's Road property, come about, the position might have been different. I should add that one of the clear things about this action is that although the defendant might have had some belief that she and the plaintiff would have been able to go and live at Kings Road with her looking after him, the evidence shows that that would not have been possible. 18 So far as the motorcar is concerned, the plaintiff seeks a declaration that it is held on trust for him: that is a declaration which ought to be made. It was purchased with his money and it is not stated to have been the subject of a gift. I would propose to make that declaration together with an order that the defendant do whatever is necessary to cause that property to be transferred to the plaintiff. 19 So far as the cheques are concerned which appear to total $70,000, one of those is the cheque for $52,000 for the motorcar. As I am making an order that the car goes back to the plaintiff, that figure can be disregarded. So far as the television sets are concerned, those television sets belong to the plaintiff. If somebody can fashion an order for that I will make it. So far as the balance of the cheques is concerned the only one in connection with which I would be prepared to make any order is the cheque for $9,000. 20 The appropriate order is that as the cheque was the money of the plaintiff and has been used, if used at all, by the defendant for purchases which on no basis could sensibly have been thought to have been for the benefit of the plaintiff, an order should be made that the sum of $9,000 be paid by the defendant to the plaintiff. Otherwise there should be no orders. 21 I make the declaration in paragraph 1 of the summons. I order the defendant to do all things necessary to transfer the said motor vehicle to the plaintiff. 22 I note that the plaintiff makes no claim for the television sets and I make no order accordingly. 23 I order the defendant pay to the plaintiff the sum of $9,000. 24 I order the defendant to pay 50% of the plaintiff's costs. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.