The complaints on appeal and their disposition
31Central and fundamental to the appeal was the submission that the primary judge erred in making the findings that there was a special disadvantage, that the appellants were aware of any such disadvantage and that they unconscientiously took advantage of it.
32For the first finding challenged (that there was a special disadvantage) to be successful, it would be necessary for this Court to conclude that the primary judge's view that the irrational obsession that the Labor Party would take his pension or his house was not operative as a motivating factor because of the influence of other factors such as love, affection and gratitude.
33The finding by the primary judge involved weighing and assessing the evidence of Mr Ryan, including by reference to his character and behaviour. Inevitably this involved a degree of impression. Further, although the primary judge considered Mrs Aboody a "good witness" ([19] of the reasons), he did not accept limited, but important, parts of her evidence in relation to her perception of aspects of her father's opinions and behaviour. These considerations led to the findings at [31]-[33] and [38]-[41]. The findings at [31]-[33] were clearly founded on paragraphs 13 to 15 of Mr Ryan's affidavit of 11 March, which were denied by Mrs Aboody. These considerations also led to the express rejection of Mrs Aboody's (and Mr Aboody's) evidence that she (and he) did not appreciate the influence of the irrational obsession.
34Review of these critical findings is to be undertaken in accordance with the well-known principles in Fox v Percy [2003] HCA 22; 214 CLR 118, as to which see Gett v Tabet [2009] NSWCA 76 at [10]-[23] and Seiwa Australia Pty Ltd v Beard [2009] NSWCA 240 at [2] and [140]-[154]. The appellants pointed to a number of considerations that were said to be inconsistent with the findings and to be sufficient to undermine them. First, there was the evidence of Mrs Aboody that during 2005 and 2006, before any manifestation of the irrational fear about a future Labor government, Mr Ryan had spoken of giving the house to her out of love and gratitude and to deny the house to John. The primary judge, however, took these conversations into account (see [39] and [45] of his reasons). Further, Mr Ryan's evidence was that for some months prior to January 2007 he had been discussing with Mrs Aboody his fears of the Labor Party (paragraph 9 of his affidavit). Also, he said he had been discussing his poor health with her (paragraphs 10-12 of his affidavit). It was in that context of an old, sick man talking of his frailties, his impending death and of his fears of the Labor Party that the discussions in [31]-[33] of the reasons are found.
35Secondly, emphasis was placed on Mrs Aboody's evidence at paragraphs 6 and 9 of her affidavit of 14 April 2011 where she described the conversation between her and her husband and Mr Ryan about what Centrelink officers had told Mr Aboody - that he had been assured that no one would take Mr Ryan's pension. In his own evidence, in reply to this, Mr Ryan himself referred to this conversation. He said it did not quell his fears, but he said that he did not say anything to her. Thus, it was submitted that Mrs Aboody and Mr Aboody would consider that fear at an end.
36The difficulty with this part of the argument is that the judge accepted that the conversations took place ([38] of the reasons) but drew from his assessment of the witnesses that Mrs Aboody knew of her father's continuing fear. That conclusion was one based on the primary judge's assessment of Mrs Aboody and of her knowledge of Mr Ryan's stubborn and irascible character. He had expressed this fear, which Mrs Aboody accepted was irrational. It was rooted in his long-standing hatred of the Labor Party. He was a stubborn man, not easily persuaded out of views, and he was ill and fearing death. The fact that he said nothing after the Centrelink assurances was not sufficient for the primary judge to conclude that he had been disabused of his fear. That conclusion was plainly open to his Honour, as was the conclusion that Mrs Aboody must have known that.
37There may be grounds to think that the Centrelink conversation took place after the conversation referred to in [32] of the reasons and before the parties visited Mr Dakin. This is assisted by the recognition that the first visit to Mr Dakin was in December 2006, not January 2007 as Mr Ryan said in his evidence. It was put that it was inherently unlikely that the conversation about the irrational fear occurred after the Centrelink discussion. So much can be accepted. The sequence recounted by the primary judge at [32]-[33] of the reasons can be reconciled with the Centrelink conversation between the conversation in [32] and seeing Mr Dakin. The primary judge effectively did so at [39] of the reasons. Mrs Aboody's awareness of the operative effect of Mr Ryan's obsession was able to be drawn from what he had said, his failure to say anything reassuring after the Centrelink discussion, her knowledge of his character and the assessment of Mr Ryan's and Mrs Aboody's evidence.
38I am unpersuaded that the findings in [39] and [40] of the reasons were incorrect. In particular, I am unpersuaded that it is inconceivable that the Aboodys would have proceeded had the conversations recounted at [30]-[31] occurred or been seen to remain operative, given their reluctance to enter the transaction. Yet, as was said in argument, there is a degree of speculation in that, in particular if they were to take the transfer to put his mind at ease, intending to give it back to him if he asked for it (a sentiment later expressed by Mrs Aboody).
39Other factual matters were referred to in submissions as considerations that militated against any conclusion that Labor Party concerns were motivating Mr Ryan.
40It was submitted that the primary judge paid insufficient regard to a statutory declaration dated 22 January 2006 (sic: 2007) prepared by Mr Dakin and signed by Mr Ryan before Mr Dakin. It contained twelve paragraphs in which Mr Ryan explained the circumstances of the gift of the house to the Aboodys. It explained first why he was not providing for Lorraine and John; it explained the estrangement with these adult children and their independence. It concluded in paragraphs 11 and 12 as follows:
"I have decided to gift my house at 14 Hickey Street, Iluka to my daughter Jenny and her husband Tony. They have been great companions and friends to me over many years. Jenny was constantly by my wife's side after my wife was admitted to the Caroona Nursing Home when she was diagnosed with rapid onset dementia. They visit me regularly. They mow the lawn at my home. They paint and maintain my home and do most things for me. I know that they do these things for me because they love me and not because they want anything in return.
No pressure or influence has been brought to bear on me to make this decision. I do so of my own free will. I will continue to live in the house at Iluka after I have transferred the title to my daughter and son in law for as long as I am able."
41The respondent submitted that this was a document requested by Mrs Aboody to protect herself and should be given little weight. I do not agree. It appears to reflect the background factual context that Mr Dakin received. One would not conclude that he would leave out any relevant explanation, such as, for instance, any expression of the irrational fear of the Labor Party. Thus one can conclude that the matters covered in the declaration reflected the scope of relevant explanation of the gift by Mr Ryan. The evidence revealed that the Aboodys did not see this document until the litigation.
42Giving proper weight to the declaration does not, however, undermine the conclusions of the primary judge at [31]-[33] and [38]-[41] of the reasons. The favour enjoyed by the Aboodys in Mr Ryan's trust and affection at this time is evident from this and other evidence. That Mr Ryan did not speak to a stranger of his fears of the Labor Party does not detract from a conclusion that he maintained it, as appreciated by those who knew him well.
43It was also submitted that inadequate regard was paid by the primary judge to aspects of Mr Ryan's own evidence. In his evidence in cross-examination, Mr Ryan said that he was concerned that Lorraine and John not receive anything from him in his will or receive any part of his property. He accepted that Mr and Mrs Aboody did not encourage him to make the gift. He then said (black appeal book, vol 2, pp 77-78):
"Q. And the situation is that it was only when you reconciled with John, and it was only after you saw John's reaction to the news that you had given the house to Jenny and Tony, that you had a change of mind about the gift of the house to them, isn't it?
A. True.
Q. Do you agree with that?A. Yep."
44I would not conclude that the primary judge was not aware of this evidence. It is plain that Mr Ryan changed his mind after a turn in his affections. Two aspects of his character found by the primary judge (and well-known to the members of his family) were his fixed views and somewhat difficult personality. That he had views, and that they were rigid, does not undermine the factual conclusion of the influence of the irrational obsession.
45It was submitted that greater weight should have been given to the poor recollection of Mr Ryan. The primary judge did not accept all of Mr Ryan's evidence and he weighed and assessed it against the family background. I do not consider that any error is displayed in how his Honour approached Mr Ryan's evidence.
46It was submitted that the letter sent by solicitors for Mr Ryan in November 2010 demanding retransfer of the property made no mention of the Labor Party obsession. The letter was not comprehensive and little can be taken from what was not said in it. It is certainly inadequate to undermine the crucial factual conclusion at [31]-[33] and [38]-[41] of the reasons.
47It was submitted that the findings should be viewed (and reviewed) in the light of the failure of counsel at the trial to cross-examine the Aboodys about their appreciation of the operative effect of the Labor Party obsession. The trial was conducted on affidavits, which from their content displayed the contest about the Labor Party obsession. Further, before the Aboodys gave evidence the primary judge said as counsel for Mr Ryan was to put some "Browne v Dunn type matters" to Mr Dakin (black appeal book, vol 2, p 131):
"The view I take of Browne v Dunn - firstly, you have put, it seems to me, what you were going to put in your final submissions, you put material arising out of these particulars. I don't require anyone to put Browne v Dunn points arising out of the affidavits. The proper interpretation of the rule, parties are at issue on the affidavits, and that applies both ways. Mr Altan doesn't have to put things to your client or you to the defendants' witnesses, simply because it's in the affidavits. It seems to me to be a complete waste of time."
Having examined the affidavits and trial record I find no unfairness towards the Aboodys in the approach of the primary judge.
48It was also submitted that the primary judge was wrong to call the fears of Mr Ryan about the Labor Party an "obsession". It was submitted that the medical records available did not support that conclusion. I do not read the primary judge as having drawn a medical conclusion; rather, he was expressing in legitimate encapsulated terms the conclusion about the conduct of Mr Ryan that was fixed and irrational. The evidence of Mr Ryan and of his character and health supported that conclusion and that language.
49Without the findings in [31]-[33] and [38]-[41] being overturned, it is not possible to say that the only motivating or substantially operative reason for the gift was love and affection for Mrs Aboody. It is certainly the case that love and affection existed, and that Mrs Aboody's loving conduct towards her father in the prior years gave ample foundation for such paternal emotion. To the extent, however, that she recognised that "her father was still driven by these concerns [about the Labor Party]" ([40] of the reasons) the conclusion that she took the transfer with knowledge of that aspect of his disability stands.
50One must then assess the attendance upon Mr Dakin in that light. If Mrs and Mr Aboody knew of the operation of this fear on Mr Ryan they could have no confidence that even an independent solicitor would be sufficient to eliminate the influence working on him. This is especially so if the concerns about the Labor Party and his pension and house were not made known to Mr Dakin.
51I will come to Mr Dakin and the place of his advice in due course. At this point it is necessary to deal with the challenge to the primary judge's finding that this was an improvident transaction.
52There were two bases for the attack on the finding: that it was not pleaded or the subject of particulars; and that it was factually wrong.
53The pleading did not expressly enunciate the notion of improvidence. It did, however, expressly identify the lack of financial advice. Further, in the evidence filed before the trial, Mr Ryan had stated the following in paragraphs 47 and 48 of his affidavit of 11 March 2011:
"My only assets are the Property, my car, my household furniture and what I have in the bank. I wish to continue to own my own home outright in my own name and when I die to distribute it in my Will as I see fit. If members of my family want to argue about who should receive the Property then they can do so after I die. At the moment I feel like Jenny and Tony have taken the Property and I cannot deal with it as I want to upon my death. I have made a new Will but in real terms without the Property I have very few assets to distribute on my death.
Even though I am currently 94 years of age, I could live for another 5 or 10 years longer and I may need to go into some sort of hospital or old aged care. As things are at the moment I cannot sell the Property to fund this. I wish to retain the right to do this if I need to."
54This evidence was not objected to. There was no suggestion in the evidence that Mr Ryan had any real wealth beyond his house and pension. Further, it was part of the Aboodys' case that during the Centrelink discussion Mr Ryan had indicated that he was well within the means testing level to retain his pension.
55In written submissions exchanged at the beginning of the trial, counsel for Mr Ryan put the following at paragraph 40:
"The plaintiff did not receive any independent financial advice. The Transfer was a transaction on which he should have received financial advice. The transaction was a grossly improvident transaction for the plaintiff to make. He was giving away his only significant asset while he [was] still alive. By giving the Property to the defendants, the plaintiff was paying no regard to his future financial needs such as for hospitalisation or aged care, nor was he properly considering the possibility of changing his mind about the conduct of his estate. He had misconceptions as to the financial needs to conduct the transaction. An independent financial advisor could have fully and properly discussed all of these matters with the plaintiff." (emphasis added)
There was no assertion by counsel for the Aboodys that this went beyond the scope of the legitimate contest in the litigation. This was in circumstances where issue was taken with the scope of the submissions as being beyond the pleadings in another respect - the adequacy of Mr Dakin's advice.
56In all these circumstances, it is tolerably plain that the question of the improvidence of the transaction was an issue in the litigation. The issue of improvidence raised by a sick old man putting his only asset out of his hands as a source of future capital was obvious. He could remain in the house for life. But what if he needed aged care or hospitalisation? The house could only be used for such at the discretion and with the consent of the Aboodys. He was submitting himself to their charity in the event of such contingencies. This was obvious.
57Thus the procedural attack on the finding fails.
58It was submitted that the transaction was not improvident, but fair and reasonable in the circumstances. This reasonableness was to be considered, it was submitted, in the real context of the parties: the close and loving relationship between Mrs Aboody and Mr Ryan and the deteriorated and estranged relationships between Mr Ryan and Lorraine and John. The reasonableness was said to stem from the source of the reason for the gift - gratitude and affection. The reasonableness was said to be also supported by Mr Ryan's wish to avoid his property going to his other children. Further, he was relieved of the obligation to pay rates and to maintain the property.
59Reliance was placed on Archer v Archer [2000] NSWCA 314. In that case a mother and father gave one of their three sons their country property. After some reluctance of the mother the gift was made. Later the parents sought the return of the property claiming undue influence and unconscionable bargain. The case is of little assistance. The primary judge found no disability - certainly none of the kind suffered by Mr Ryan (age, ill health and irrational fear), indeed at [51] of his reasons Handley JA described Mrs Archer as "no shrinking violet". At [68] of his reasons, Handley JA said there was no evidence that she had no other assets. Further, at [69] he said that Mrs Archer did not even attempt to establish the precise effect of the gift on her disposable property and that her case was not that the gift was improvident but that she did not want to part with the property (and had been overborne). The case is of no assistance in any expression of principle relevant to the disposition of this appeal.
60The gift here had all the hallmarks of apparent unwisdom and improvidence, even if, contrary to the primary judge's findings, the only apparent reasons for it were love and gratitude to one daughter, and irascible estrangement of the father from the daughter's two siblings. The gift was being made by a man whose health was poor, whose temper was irascible and uncompromising and whose reasons included estrangement of family. The clear consequences were to put out of his hands the only capital asset that he had to ensure any degree of financial security that he had, and thus to consign him to the charity of family and the support of the social service system.
61The primary judge was correct to characterise the transaction as improvident.
62Before turning to the role of Mr Dakin it is appropriate to say something of the proper legal framework for its analysis. The governing general principles in respect of relief against unconscionable dealings are to be found in Blomley v Ryan [1956] HCA 81; 99 CLR 362, especially at 405 (per Fullagar J) and 415 and 428-429 (per Kitto J); Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447, especially at 461-62 (per Mason J) and 474-75 (per Deane J); Louth v Diprose [1992] HCA 61; 175 CLR 621 at 626-627 (per Brennan J), at 637 (per Deane J) and at 650 (per Toohey J); and Bridgewater v Leahy [1998] HCA 66; 194 CLR 457 at 485-486 (per Gaudron, Gummow and Kirby JJ), in which passage Deane J in Amadio is cited.
63A number of considerations are important to recognise. First, as Fullagar J in Blomley v Ryan at 405 and Mason J in Amadio at 461-462 said, there is an underlying general principle, the applications or exemplifications of which are impossible to describe fully. Thus, one should always be careful not to dwell over-technically or textually on individual expressions of general principle of normative values rooted in the remedying of injustice. It is general principle, not a precisely expressed rule, that operates. The principle is wide, and the danger in further textual definition (as opposed to exemplification or illumination) is that inaccuracy or undue restriction may be brought about: I C F Spry, Equitable Remedies, 8th ed (Law Book Co, 2010) at 188. Equity's norms and values can be expressed as by Mason J in Amadio at 461-462, or by Deane J in Amadio at 474-475, or by Dawson J in Amadio at 489, or by Lord Selborne in Earl of Aylesford v Morris (1873) LR 8 Ch App 484 at 490-491.
64The exemplifications given by Fullagar J in Blomley v Ryan of the circumstances adversely affecting a party included need of any kind, sickness, age, infirmity of body or mind, and lack of assistance or explanation where such is necessary.
65It can be seen from the expression of the general principle by Deane J in Amadio and by Lord Selborne in Earl of Aylesford that once the disability or weakness is sufficiently evident such that it is prima facie unfair to procure, accept or retain the benefit from the weaker party's assent to the transaction in the circumstances in which it was procured, accepted or retained, the onus is upon the stronger party to show the transaction to be fair, just and reasonable. The focus is upon the conduct of the stronger party in the assessment of unconscionability in the procurement, acceptance or retention of the benefit. Equity's fixing upon the conscience of the stronger party is not strictly limited by the need to find moral obloquy or reprehensible conduct, either generally, or at any particular point of time, although it is often present. At the heart of the doctrine is the taking or retaining of the benefit in a transaction in which advantage was taken of weakness or disability in a manner that in all the circumstances is unjust or unfair: Johnson v Smith [2010] NSWCA 306 at [5].
66The obtaining by the weaker party of the advice of a solicitor may be relevant to the application of the general principle from at least two perspectives. The appreciation of its occurrence, and perhaps (as here) the place in its arrangement, by the stronger party might be seen as part of the circumstances in which he or she procures or accepts the benefit. It is an element of the stronger party's conduct to be assessed. From that perspective, the precise quality of what was done by the legal adviser may be seen not to be as relevant as what an honest and reasonable person in the position of the stronger party would have understood its effect to be on the justice and fairness of the transaction.
67The second perspective is that if the circumstances, including the known special disadvantage, the nature of the transaction and the existence of advice, remain sufficient to make it prima facie unfair or unconscionable to procure, accept or retain the benefit, the independence and adequacy of the advice will be relevant, but as part of the discharge by the stronger party of his or her onus of proving the transaction to be fair, just and reasonable.
68Looking at the circumstances here, the Aboodys knew, on the findings, not only of Mr Ryan's age, ill health, financial position, and dependence on Mrs Aboody, but also of the irrational obsession which was operating upon him to make a gift which would leave him financially exposed to their charity or the support of the state. By taking the property in those circumstances, they were sufficiently aware of the operation of the special disability and to take the improvident gift was to take advantage of the known weakness. The obtaining of a solicitor to advise him, at least without that adviser knowing of the irrational fear, would not remove the appreciation of the likely continued operation of the irrational fear. Thus, it was for them to demonstrate that the transaction was fair, just and reasonable. Proof of independent and adequate legal advice was part of their onus.
69From this perspective, the effect of Mr Dakin's advice can be assessed without too much complication. Mr Dakin obtained what he understood to be the reasons for the transaction. No mention was made by Mr Ryan of the fear of the Labor government. No enquiry was made about Mr Ryan's financial position and the risk that the disposal of his capital asset posed to him. Mr Dakin satisfied himself that Mr Ryan knew what he was doing and wanted to go ahead. There was no discussion or advice about mechanisms that might bind Mr and Mrs Aboody to deal with the capital asset for his benefit or to retransfer it. If such steps had been taken, the fairness and reasonableness of the transaction and its attendant transaction costs could have been evident and advised upon. The advice of Mr Dakin did not transform the transaction into one that was fair, just and reasonable.
70The above is sufficient for the resolution of the appeal, which should be dismissed.
71If one removes from the factual circumstances the found knowledge of Mr and Mrs Aboody of the operative irrational obsession, they were still aware of an unwell, irascible father's wishes to benefit one daughter (whom he loved and upon whom he depended) and to ensure the two other children's non-participation in his estate, by making a clearly improvident gift. To do this he was, plainly to their appreciation, placing himself at financial risk, and dependent upon their charity. They knew it was improvident, that was obvious; they, to a degree, resisted it; but subject to legal advice, they were prepared to take the gift. It cannot be said that their conduct involved actively promoting the weakness, but they were prepared to accept the gift and thereafter retain it.
72How one assesses the place and effect of Mr Dakin's role and advice in this context is more subtle. The special disadvantage is a combination of factors that, on this hypothesis, were age, poor health and dependence on Mrs Aboody (see [88] of the reasons). In that context, Mr Ryan wanted to make a gift that could be explained by love, as well as by the factors constituting the special disadvantage, but which was plainly improvident in the way I have described.
73The appellants submitted that it is sufficient for them to assume that the solicitor would do his job; and that in those circumstances they could reasonably assume that Mr Dakin had attended to his task by addressing all aspects of the reasons for, and disadvantages of, the transaction. Thus, if there was any aspect of Mr Dakin's retainer that compromised his independence or that revealed inadequacy of advice, that could not be sheeted home to them. The focus was on their conduct. As honest lay people, they could not have been expected to do more than arrange someone who was independent to advise Mr Ryan.
74There is a well-established body of cases to the effect that in certain circumstances (whether in undue influence or unconscionable transaction cases) a party to the transaction (such as a bank) may rely upon the apparent existence or availability of independent advice as part of the circumstances that reveal either no special disadvantage or no taking advantage of any special disability: Bank of Baroda v Shah [1988] 3 All ER 24 at 28-29; Massey v Midland Bank plc [1995] 1 All ER 929 at 933-934; Banco Exterior Internacional v Mann [1995] 1 All ER 936 at 940-941 and 949; Royal Bank of Scotland v Etridge (No 2) [2002] 2 AC 773; Citibank Savings Ltd v Nicholson (1997) 70 SASR 206 at 228-229 (Perry J); Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; 75 SASR 1 at 43-44 [228]-[236] (Olssen J) and 130 [655] (Debelle J and Wicks J); Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10; 41 WAR 353 at 420-21 [344] (Murphy J); Burrawong Investments Pty Ltd v Lindsay [2002] QSC 82 at [93] (Muir J).
75Here, however, the Aboodys knew of Mr Ryan's age, health, dependence (in the sense of emotional dependence) on and love for Mrs Aboody and of the improvidence of the gift. Thus, the stronger party knew of the aspects of character of the weaker party and the character of the transaction that revealed improvidence and real disadvantage that affected Mr Ryan's judgment. At this point, in the circumstances here, the onus shifted to the Aboodys to show the legal advice and any other relevant factor made the transaction fair, just and reasonable. The solicitor's advice here should be viewed as part of that process: Smith v Smith [2004] NSWSC 663 at [60] (Barrett J); Turner v Windever [2003] NSWSC 1147 at [105] (Austin J); and R P Meagher, J D Heydon and M J Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 4th ed (Butterworths LexisNexis, 2002) at 530 [16-035]; and see Micarone at 41 [215]. The place of asserted independent advice and its assessment will depend upon all the circumstances, including in particular what else is known by the party taking the benefit.
76It is unnecessary, however, to resolve this alternative hypothesis in the disposition of this appeal. Nevertheless, some further considerations may be seen as relevant.
77First, it is to be recognised that there is within the general principle an element of Equity's public normative role in the protection of the weak from the strong in appropriate circumstances. See J Story, Commentaries on Equity Jurisprudence (Boston, 1836) at 261.
78Secondly, one aspect of the unconscionable advantage dealt with by the general principle is the retention of the benefit of the transaction: Deane J in Amadio at 474 and Rich J in Wilton v Farnsworth [1948] HCA 20; 76 CLR 646 at 655. In the circumstances here, the solicitor did not in fact address the question of improvidence, and acted in part for the Aboodys. From a perusal of the bill of Mr Dakin dated 2 March 2007, it was apparent that he had "ensure[d] Mr Ryan [was] aware of the effects of the transaction". He also reported to the Aboodys "at the outcome of the proceedings". The primary judge's conclusion about lack of independence was correct. The signature as transferee's solicitor is not to be put to one side as mere convenience. He did act for Mr and Mrs Aboody. He took instructions from them about the transaction and he reported to them. Further, Mr Dakin did not attempt to make any assessment of the financial consequences of the transaction for Mr Ryan or to see that Mr Ryan obtain advice about that. The fundamental inadequacy was the failure to address with Mr Ryan the financial and practical consequences of what he was doing. Of course, Mr Dakin was a lawyer, not a financial adviser. But he was dealing with an old man who was giving away the capital in his home. The potential consequences and risks of that were clear, unless he had other assets. This was not complex finance. It was the interaction of law and life. It was part of Mr Dakin's duty to see that Mr Ryan understood fully the legal and practical consequences of what he was doing. In drawing these conclusions, I should not be taken to make any personal criticism of Mr Dakin.
79Thirdly, Equity does not fix upon the instant of a transaction and ignore what later arises in the assessment of the conscionability of behaviour that includes the retention of benefit obtained from a weaker party. That is why Deane J referred to "retain" in Amadio at 474. An illustration of such an approach of Equity in another context is the origin of the equitable rule for rescission for innocent misrepresentation. As Sir George Jessel MR said in Redgrave v Hurd (1881) 20 Ch D 1 at 12-13:
"One way of putting the case was, 'A man is not to be allowed to get a benefit from a statement which he now admits to be false. He is not to be allowed to say, for the purpose of civil jurisdiction, that when he made it he did not know it to be false; he ought to have found that out before he made it.' The other way of putting it was this: 'Even assuming that moral fraud must be shewn in order to set aside a contract, you have it where a man, having obtained a beneficial contract by a statement which he now knows to be false, insists upon keeping that contract. To do so is a moral delinquency: no man ought to seek to take advantage of his own false statements.' The rule in equity was settled, and it does not matter on which of the two grounds it was rested."
80Another illustration is the learning by an innocent donee of the wrongful source of moneys given to him or her. The donee who seeks to retain funds in those circumstances becomes tainted by the underlying wrong: Black v S Freedman & Co [1910] HCA 58; 12 CLR 105 at 109; Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 at 260-268 [130]-[164]. Even if one cannot draw a conclusion about unconscionability at the date of the transaction, once the limits of Mr Dakin's advice to Mr Ryan were evident and it was clear that Mr Ryan was not adequately advised, absent other countervailing factors, in circumstances where the Aboodys were otherwise aware of Mr Ryan's disadvantage and the improvidence of the gift, it might be seen to be unconscionable to seek to retain the benefit of the transaction. Further exploration of this possibility and of the limits of such unconscionability later arising, is and are, however, unnecessary.
81I would dismiss the appeal with costs.
82CAMPBELL JA: I agree with Allsop P.