Elder wealth transfers and the Court’s watchful eye: transactions undone in La Selva v La Selva [2025] NSWSC 78

In the recent case of La Selva v La Selva [2025] NSWSC 78, the Supreme Court of New South Wales delivered a sobering and thorough judgment exploring the limits of familial loyalty, the reach of equitable relief, and the consequences of breaching fiduciary obligations. Pike J’s decision is an instructive application of equitable and statutory doctrines to transactions within families where one party holds significant power and influence and is a cautionary tale about the way in which inter vivos gifts made in circumstances of vulnerability can be scrutinised and undone. 

At its heart, La Selva is a case about a vulnerable elderly woman who, in the last year of her life, transferred over $1.3 million to her son. Although she still had capacity to manage her own affairs, the Court found that her deteriorating health, grief, dependency and isolation created a “special disadvantage” of the kind equity protects.

Background: a son returns, a mother declines

Silvana La Selva, aged 82, died on 24 December 2022. She was predeceased by her husband of 62 years, Luciano, in 2021. The plaintiffs were her daughters, Milvia and Melissa; the defendant was her son, Angelo.

Following Luciano’s death, Angelo moved from Queensland back into the family home in NSW in mid-2021. Silvana’s health declined rapidly thereafter: her breast cancer recurred, she became increasingly frail, and she was admitted to residential care by early 2022.

In the lead-up to Silvana’s death, over $1.3 million was withdrawn from her bank accounts, largely benefiting Angelo, his wife Yuka, and their daughter. The plaintiffs sought orders for the return of $1,293,000 on the basis of unconscionable conduct, breach of fiduciary duty, and unjust contract under the Contracts Review Act 1980 (NSW).

Notably, the claims were not predicated on a lack of legal incapacity. Rather, the main question was whether Angelo had acted unconscionably in circumstances where Silvana was under a special disadvantage.

Key transactions in question

Justice Pike scrutinised a series of payments made from Silvana’s bank accounts between May and December 2022. These included:

• 10 May 2022: $200,000 “gift” to Angelo

• 10 May 2022: $975,000 paid to Angelo for Silvana’s Refundable Accommodation Deposit (RAD) so that the RAD would be refunded to Angelo on Silvana’s passing

• 29 July 2022: $5,000 paid to a joint bank account of Yuka (Angelo’s wife) and Angelo

• 28 September 2022: $20,000 paid to Angelo

• 28 September 2022: $10,000 paid to a joint bank account of Yuka and Angelo

• 4 November 2022: $73,000 to Angelo for the purchase of a new car (registered in Angelo’s name)

• 9 December 2022: $10,000 paid to a joint bank account of Yuka and Angelo

The transfer of $975,000 to Angelo was subsequently documented in a formal loan agreement dated 16 June 2022 – loaned back to Silvana – ostensibly for the payment of the RAD, with the amount to be refunded to Angelo via Silvana’s estate upon her death.

Key legal issues

Justice Pike was tasked with resolving three principal issues:

1. Whether the impugned transactions were procured by unconscionable conduct.
2. Whether the loan agreement for the $975,000 RAD payment was unjust under the Contracts Review Act.
3. Whether Angelo had breached fiduciary duties owed as Silvana’s appointed attorney.

The court ultimately found that each of the impugned transactions was the product of unconscionable conduct by Angelo and that each should be repaid by him to Silvana’s estate. Consequently, it was not necessary for the court to determine issues (2) and (3); but the court made some observations on those issues anyway.

The court’s approach to witness credibility and factual findings

Justice Pike’s approach was methodical and forensic. He gave limited weight to peripheral witnesses but placed reliance on objective documentary evidence and the evidence of solicitor Mr Previte, “an honest witness doing his best to assist the Court” (at [13]), who advised Silvana throughout the relevant period.

Milvia and Melissa were generally found to be credible, though Pike J noted Milvia’s “great dislike” (at [11]) for Angelo may have coloured some of her evidence. Angelo, by contrast, was approached with caution:

“I approach Angelo’s evidence with considerable caution... In some areas, Angelo’s evidence was unreliable... I formed the view that Angelo’s reluctance to make concessions was out of a fear of giving evidence detrimental to his case” ([12])

The factual narrative revealed a shift in familial control and influence after Angelo moved back into the family home and became Silvana’s primary carer, culminating in him becoming a signatory to her new bank account – established shortly before the sale of the family home for $4.3 million.

Unconscionable conduct – the equity analysis

Justice Pike’s reasoning is grounded in the High Court's formulation of unconscionable conduct in Commercial Bank of Australia v Amadio (1983) 151 CLR 447 and later authorities including Thorne v Kennedy (2017) 263 CLR 85. Justice Pike noted that “four criteria are generally required to be satisfied” in order to establish unconscionable conduct:

1. The weaker party must, at the time of the relevant transaction, suffer from a special disadvantage, condition or circumstance which seriously compromises the weaker party’s capacity or opportunity to judge or protect his, her or its own interests in relation to the transaction.

2. The stronger party must know of the special disadvantage, or know of facts raising that possibility in the mind of any reasonable person.

3. The stronger party must take advantage of the opportunity presented by the special disadvantage.

4. The taking of advantage must have been unconscientious in the circumstances.

The Court found that Silvana suffered from a “special disadvantage,” including physical frailty, mild cognitive impairment, emotional vulnerability following her husband’s death, and increasing social isolation – conditions of which Angelo was aware:

“…of advanced years, suffering mild cognitive decline, grieving the loss of her husband of 62 years, with a body ravaged by cancer and stressed and anxious by reason of the family conflict, all of which was well known to Angelo, Silvana changed her bank account and made Angelo a signatory to it, all without the knowledge of Milvia and Melissa. The opening of the new account came at a time when Silvana was about to receive in excess of $3.8 million from the sale of the Five Dock House and coincided with Silvana’s statement to Mr Previte of her intending to give money to Angelo. Silvana then started to give large sums of money away to Angelo and those close to him. All of this conduct appears to have been quite out of character for Silvana and contrary to her consistent testamentary intentions of all three children taking equally on her death. It was also all done without telling Milvia and Melissa” ([147]).

The judge found that each of the impugned transactions was “improvident” and “out of character for Silvana”, was procured by Angelo taking advantage of the special disadvantage which Silvana was acting under during the relevant period, was the product of unconscionable conduct, and should be repaid to Silvana’s estate.

The loan agreement: a product of unconscionable conduct and an unjust contract

A particularly novel aspect of the case was the transfer of the $975,000 to Angelo and the subsequent loan of those funds by Angelo back to Silvana under an executed loan agreement to ensure the funds would be returned to him via Silvana’s estate after the RAD was refunded. In addition to arguing that the transfer and loan was a product of unconscionable conduct, the plaintiffs argued that the agreement was unjust under the Contracts Review Act 1980 (NSW). 

The Court agreed:

“…the Loan Agreement to pay for the RAD makes no sense – Silvana clearly had sufficient monies to pay the RAD out of her own funds” [177]

In respect to the solicitor’s involvement in advising Silvana about the loan agreement, the court noted (at [187])”

“Mr Previte is not to be criticised for failing to advise Silvana as to the improvidence of the Loan Agreement. As far as Mr Previte was aware, based on what he was told by Silvana, Angelo had the money. It was Angelo’s money otherwise being lent interest free to Silvana. The fact is that Silvana was not advised as to the prudence of gifting the money to Angelo and then loaning it back from him. This lack of advice is of significance in the overall assessment.”

The court found that the loan agreement was not only a product of unconscionable conduct; but, also that (if the Contracts Review Act 1980 (NSW) applied) it would have been an unjust contract.

Breach of fiduciary duty

From September 2022, Angelo held an enduring power of attorney granted by Silvana. As such, he owed her fiduciary duties, including an obligation “not to obtain any unauthorised benefit from the fiduciary relationship” ([207]).

The $73,000 car transaction in particular was emblematic. Purchased in November 2022 and registered in Angelo’s name despite being “for Silvana”, who was by then receiving end of life care, was bed bound and on oxygen.  The Court noted: “She had no need for a car at all, let alone a new sporty one…” ([147]).

Pike J found that it was not strictly necessary to determine the breach of fiduciary duty claim in light of the finding of unconscionable conduct; but noted that Angelo had breached the fiduciary duties he had owed in conferring benefits on himself.

Practical implications and takeaways

The decision is a timely reminder of the growing legal and ethical challenges posed by Australia’s ageing population and the phenomenon often described as ‘inheritance impatience’. As more elderly individuals enter periods of physical frailty, cognitive decline, or social isolation, particularly in the aftermath of losing a spouse, they can become increasingly vulnerable to financial exploitation.

The decision underscores the need for rigorous due diligence when advising on transactions involving ageing clients, especially those that involve large inter vivos transfers to children or are radically inconsistent with longstanding testamentary wishes.

As wealth continues to be transferred intergenerationally, often in circumstances of declining health and heightened vulnerability, this case offers the following key takeaways:

• Vulnerability extends beyond incapacity: The court can grant relief in respect of a transaction it is the product of unconscionable conduct. Grief, frailty, mild cognitive decline, and social isolation may give rise to a ‘special disadvantage’, even if the person retains legal capacity. 

• Inheritance impatience is a real risk: Financial transfers to children or caregivers, particularly when made shortly before death, without independent legal advice and without full transparency, are likely to attract scrutiny, especially where they depart from long-standing testamentary intentions.

• Unjust contracts: Legal agreements such as loan agreements will not protect a transaction if the underlying conduct is found to be unconscionable or ‘unjust’ under the Contracts Review Act 1980 (NSW). Legal documents may be questioned if they reflect the post hoc rationalisations of a dominant party.

• Attorneys are subject to strict fiduciary duties: An attorney under an enduring power of attorney must not (subject to the terms of the appointment) use their position to gain a personal benefit and must avoid conflicts of interest.

• Professional advisers must be vigilant: Lawyers advising elderly clients should be attuned to red flags, family dynamics, potential coercion and influence, and the client’s emotional and cognitive state. Independent legal advice may not cure the injustice of a transaction if given on incomplete or incorrect facts.

• Meticulous documentation: Where significant inter vivos gifts or transactions are intended, contemporaneous documentation, clear rationale, and independent advice are essential to minimise the risk of later challenge.

Conclusion

As the demographic trend of wealth transfer from ageing parents to adult children accelerates, this case serves as a poignant example of how elder financial abuse can take the form of incremental “early inheritance through the back door”, effected under the guise of care and familial closeness.

Transactions arising from subtle, yet repeated, exploitation of relational power and emotional vulnerability may attract scrutiny and ultimately may be undone if found to be a product of unconscionable conduct.

Author: Raffael Maestri