Anthony v Vaclav [2009] VSC 357

1 Mrs Vaclav, who is the defendant, is an elderly widow. She owns a house in North Dandenong. She sold it to her handyman Mr Anthony, who is the plaintiff. Mrs Vaclav then had second thoughts because she believed that the price she sold for was too low. She attempted to put an end to the contract. Mr Anthony in this proceeding seeks to enforce the contract. However, Mrs Vaclav says that she is entitled not to proceed because the transaction was not fair, just or reasonable, she was unduly influenced by Mr Anthony to sign the contract and she was not of sound mind when she did.

2 Mrs Vaclav was one of the registered proprietors of the land and improvements situated at and known as 11 Scenic Court, Dandenong North in the State of Victoria, being the land more particularly described in Certificate of Title Volume 8976 Folio 724 ("the property"). The other registered proprietor of the land was Mrs Vaclav's late husband, Mr Bohuslav Vaclav, who died on 17 March 2007. Mrs Vaclav is entitled to be registered as the sole proprietor of the property by virtue of an application by surviving proprietor dated 25 March 2008.

3 By an agreement in writing made on 26 March 2008 ("the Contract of Sale") Mrs Vaclav agreed to sell the property to the plaintiff, Mr Anthony. The Contract of Sale was in the standard form published by Law Institute of Victoria and the Real Estate Institute of Victoria Ltd. It was signed by both Mrs Vaclav as the vendor and Mr Anthony as the purchaser.

4 The terms and conditions of the Contract of Sale included written terms that:

(b) Mr Anthony would pay a deposit to Mrs Vaclav in the sum of $28,000.00;

(c) Mr Anthony would pay the residue of the purchase price of $252,000.00 on 30 April 2008; and

(d) Mrs Vaclav would execute and deliver to Mr Anthony on or before the settlement date being 30 April 2008, a transfer of land of the property to Mr Anthony in registrable form.

5 Pursuant to the Contract of Sale Mr Anthony paid to Mrs Vaclav the deposit of $28,000.00 at or about the time of signing the contract. This was paid by a first payment of $500 followed by a second payment of $27,500. Both payments were made to Mrs Vaclav's solicitor who deposited the funds in his trust account.

6 However, by letter dated 21 April 2008 sent on Mrs Vaclav's instructions by her solicitor, she sought to avoid the Contract of Sale. Mrs Vaclav has since refused or failed to accept payment from Mr Anthony of the balance of the purchase price and has refused or failed to execute and deliver to Mr Anthony on or about 30 April 2008, or at any other time, a transfer of land of the property to the plaintiff in registrable form.

7 In response to this step taken by Mrs Vaclav, Mr Anthony issued a writ in this Court on 8 May 2008. He claims: specific performance of the Contract of Sale; an order that Mrs Vaclav deliver to him a transfer of land in registrable form of the property situated at 11 Scenic Court, Dandenong North in the State of Victoria, more particularly described in Certificate of Title 8976 Folio 724; and damages for breach of the Contract of Sale in lieu of, or in addition to, specific performance of the Contract of Sale dated 28 March 2008.

8 Mrs Vaclav, by her amended defence and counterclaim dated 3 April 2009 (the "Amended Defence and Counterclaim"), seeks an order that the Contract of Sale be set aside, delivered up and cancelled on the grounds that it is an unconscionable bargain and/or was procured by undue influence and/or was entered into by her at a time when she was of unsound mind, and a declaration that she has avoided or is entitled to avoid the Contract of Sale.

9 As to Mrs Vaclav's allegation of unconscionable dealing, she states that her signature to the Contract of Sale was obtained in circumstances where she was unable to protect her own interests by reason of a special disability. In this respect she says that she suffers from a mild cognitive impairment and that she signs documents impulsively and without full consideration. Until the defendant's husband died on 17 March 2007, she says that she had relied on her husband in all business affairs. She says further that Mr Anthony knew or ought to have known of her special disability as it would have become apparent to Mr Anthony during his frequent, solitary and unannounced visits to the defendant's house after her husband died. Mrs Vaclav states that Mr Anthony unconscionably took advantage of the opportunity presented by her special disability in having her sign the Contract of Sale, which she says was an unjust and unfair bargain, because she sold her house at a considerable undervalue.

10 Further or alternatively, she says that her signature on the Contract of Sale was obtained by Mr Anthony's exercise of undue influence over her. In this respect, she says that the undue influence is to be presumed in the relationship which developed between her and Mr Anthony after her husband died, pursuant to which Mr Anthony provided services to her in her home as a tradesman and confidential adviser.

11 Further or alternatively, Mrs Vaclav says that she was a person of unsound mind at the time that she signed the Contract of Sale, and the Court should set aside the contract as unfair. She says that she suffered from primary degenerative dementia with cognitive deficits and/or a clinical depressive illness, and that Mr Anthony exploited her mental condition in order to acquire her house at a considerable undervalue.

12 Mrs Vaclav was an elderly lady aged 83 years at the time of the sale of the property to Mr Anthony in March 2008. She was a retired school teacher. She had no children.

13 Mrs Vaclav's husband died on 17 March 2007, leaving her a widow.

14 Following the death of her husband, she lived alone at the property. She missed her husband and was prone to loneliness and depression.

15 She was accustomed to leaving domestic business decisions to her husband.

16 Mrs Vaclav had a brother, Cyril Hendricks. She also had a close friend, Mr Sante Iacovelli, who lived nearby in Scenic Court, Dandenong North. Mr Iacovelli assisted Mrs Vaclav from time to time with her domestic and business affairs. Mrs Vaclav also had an accountant and a solicitor to assist and advise her as she required from time to time.

17 Mr Anthony described himself as a "domestic and industrial maintenance person". He is married with two children and presently lives in Cranbourne North in the State of Victoria. He started his own business in maintenance about six years ago, is self-employed, and has no employees working in the business.

18 In about June or July of 2007, Mrs Vaclav contacted Mr Anthony for the purpose of engaging him to carry out some renovation work on her house on the property at 11 Scenic Court, Dandenong North. She explained to Mr Anthony that she had water coming into her house and required some repairs and other work to be done.

19 Following some further telephone calls from Mrs Vaclav, Mr Anthony made an arrangement to visit her property later in 2007 to inspect the property.

20 When Mr Anthony visited her on his inspection, Mrs Vaclav said that she wanted to make the house water tight. Mrs Vaclav's husband, prior to his death, had undertaken some renovations on the property, but these had not been completed, exposing parts of the house to water leakage. Mr Anthony explained in relation to the partly renovated works, that it was necessary to install glass into the windows and doors and panel or clad the walls with cement sheet and render it appropriately.

21 Mrs Vaclav asked Mr Anthony for a price to undertake the works. He told her that it would cost about $16,000 to complete the work he described. Mrs Vaclav told him that this was a lot of money, and told him that she would talk to her family and get back to him.

22 A few weeks later, Mrs Vaclav spoke on the telephone to Mr Anthony's wife and said that she was very worried about her house getting damaged by water leakage, and that she was worried about deterioration of her property. About a week after this conversation, Mr Anthony made an arrangement with Mrs Vaclav to attend at her property. He provided temporary protection for the exposed parts of her house with black plastic sheeting which he nailed to the house to inhibit the ingress of water. Mrs Vaclav appeared to Mr Anthony to be happy with the temporary work and offered him a cup of tea. Mr Anthony did not charge her for the materials or the work. For his trouble however, Mrs Vaclav gave Mr Anthony some cable which she had at hand.

23 Subsequently, Mrs Vaclav telephoned Mr Anthony regularly and requested him to carry out other jobs at her house. She said in her evidence that she would telephone Mr Anthony to carry out these jobs about twice in the month on average. For example, Mr Anthony attended to further water leaks stemming from the roof; dripping taps in the kitchen; a faulty light in the front of the house; the removal of rubbish; a malfunctioning garage door; a defective swimming pool pump; and the commissioning of a new washing machine purchased by Mrs Vaclav. Mr Anthony regarded these as small jobs and, apart from receiving from her $30 for a rubbish tip fee, he did not charge her for the work. There were occasions when Mr Anthony, because of other work commitments, was reluctant to attend, but he usually responded to her requests when she insisted that he come. Mr Anthony's parents lived close to Mrs Vaclav's house, which made it convenient for him to attend at her house when visiting his parents.

24 On the occasions when Mr Anthony did attend to do some work at Mrs Vaclav's property, she would usually offer him a cup of tea and biscuits, or the like.

25 The property consisted of a block of land situated in Dandenong North, a suburb of Melbourne. Situated on the property was a two storied dwelling house, a garden area and a swimming pool.

26 Prior to his death on 17 March 2007, Mrs Vaclav's husband had personally undertaken renovations on the house. These works were incomplete at the time of his death. By the time of the sale to Mr Anthony in March 2008, a good deal remained to be completed.

27 Mr Anthony's wife, Mrs Karen Anthony, described the condition of the house as she observed it when she first saw the property on 22 March 2008:

... a lot of work had to be put into that place to make it liveable for us and it was just very cold, very cold.

28 Mrs Vaclav recorded in her diary notebook that the following items needed attention: making the house watertight by cladding where necessary upstairs and downstairs; glass installation upstairs and downstairs; a door downstairs to be attended to; the roof extension to be attended to; removing roof tiles and installing sisalation [insulation]; and rendering and plastering.

29 The quotation provided by Mr Anthony dated 12 January 2008 for works to be undertaken on the house was more extensive. It totalled $80,946. The works included the following:

Double-glaze all windows and doors top floor and ground floor;

Clad complete top and bottom floor walls and cover with weather board;

Install vanity, toilet, shower, tapware and wall and floor tiles to top floor bathroom;

Plumbing and electrical;

Insulate and plaster walls and ce[i]ling to top ground floor;

Reinforce sitout and replace water-damaged sections;

Tile ground floor and install stairs;

Fit spar;

Remove and replace gutter and down pipes around house;

Remove and replace plaster to bedroom 3;

Renovate bathroom;

Paint complete inside and outside.

30 Although some of the works included in Mr Anthony's list may have been in the category of discretionary expenditure, I am satisfied that a considerable amount of work needed to be done on the house to complete the renovations commenced by Mr Vaclav and to make it habitable by commonly accepted standards.

31 During the latter part of 2007, Mrs Vaclav expressed interest in selling her property. In mid August 2007 she sought and obtained an appraisal of a real estate agent, Ray White Mulgrave. The appraisal was dated 14 August 2007 and was prepared and signed by a sales consultant, Mr Chris Gillen. The appraisal concluded:

I believe the property's value in its current condition would be between $250,000 and $270,000. However, as a result of building works, should these works be completed, your property's value would be between $330,000 and $350,000.

Mrs Vaclav acknowledged in her cross-examination knowing of this appraisal and the assessment of Mr Gillen that her property, in his opinion, was worth between $250,000 and $270,000 in its current condition.

32 However, it was not until mid March 2008 that she took the step of engaging a real estate agent to sell her property. On 14 March 2008, Mrs Vaclav engaged McDonald Real Estate Mulgrave Pty Ltd ("MacDonald Real Estate") of shop 21 Waverley Gardens Shopping Centre Mulgrave, to act on the sale. On that date she signed an Exclusive Sale Authority in favour of MacDonald Real Estate to sell her property. The sale authority was in the standard form of the Real Estate Institute of Victoria Ltd. Mrs Vaclav's asking price was noted in the sale authority as being $349,000, the commission was recorded as 2.5% and the advertising expenses were noted as $858.

33 The range of selling prices for the property estimated by McDonald Real Estate in the Exclusive Sale Authority pursuant to s.47A Estate Agents Act 1980 was between $300,000 and $330,000. The section provided:

47A. Seller must be given estimated selling price

(1) Before obtaining a person's signature to an engagement or appointment to sell any real estate on behalf of the person, an estate agent (or an agent's representative employed by the agent) must ensure that the engagement or appointment states the agent's (or representative's) estimate of the selling price of the real estate, and that the estimate complies with this section.

Penalty: 100 penalty units.

(2) The estimate-

(a) may be a single amount or a price range; and

(b) must be the amount the agent or representative believes, on the basis of his or her experience, skills and knowledge, that a willing but not anxious buyer would pay for the real estate, or in the case of a price range, the range within which that amount is likely to fall; and

(c) must be set out in a manner approved by the Director.

(3) If an estimate is expressed as a price range, the difference between the upper and lower limits of the range must not exceed 10% of the amount of the lower limit of the range.

(4) Nothing in this section requires the estimated selling price and the seller's reserve price to be the same amount.

Discussions Between Mrs Vaclav and Mr Anthony About the Property Purchase

34 On one occasion, in the latter half of 2007 when Mr Anthony was fixing a tap in Mrs Vaclav's house, she mentioned to him that she was selling her house. Mr Anthony said that if she sold her property, he would be interested in it.

35 Then in March of 2008, Mrs Vaclav telephoned Mr Anthony and told him that she had given the property to an agent, although at that stage she said that she had not signed any paperwork. She mentioned an approximate sale price range to Mr Anthony of $290,000 to $350,000. Mr Anthony said that he was interested in the property and that after he had visited his parent's house that evening, he would stop by and discuss the matter further. During the evening, Mr Anthony visited Mrs Vaclav. Mrs Vaclav told Mr Anthony that she was contemplating moving to a retirement village called Lexington Gardens. She asked him if he was interested in buying her property. Mr Anthony said he was, however he couldn't buy it if she had already signed up with an agent. Mrs Vaclav showed Mr Anthony some papers which he examined. He discovered a sale authority in favour of McDonald Real Estate which Mrs Vaclav had signed. Mr Anthony told Mrs Vaclav that, in the light of the signed sale authority, he could not proceed with any prospective purchase of the property.

36 However, I accept the evidence of Mr Anthony that in January 2008 he made an oral offer to purchase the property for the sum of $260,000 and that Mrs Vaclav refused to accept this offer. Although Mrs Vaclav denied that he made this offer, she was somewhat confused in her response to the questions put in cross-examination on the matter, and I prefer the evidence of Mr Anthony on this point.

37 Subsequently, a further conversation took place between Mrs Vaclav and Mr Anthony during which Mr Anthony asked Mrs Vaclav what she wanted for the property. She told him between $390,000 and $450,000, which Mr Anthony said he couldn't afford. Mrs Vaclav then asked him how much he was willing to offer. Mr Anthony then offered to purchase the property for $280,000. He said that he could not offer any more because he didn't have the money. However, Mr Anthony calculated that he would have a surplus of $3000 from his borrowed funds after he settled the purchase with Mrs Vaclav. When Mrs Vaclav pressed him for more money for the sale, he offered her the additional $3000, which he requested was not to be shown in the Contract of Sale. Mrs Vaclav recorded this component of the agreement in her diary notebook. In this way Mr Anthony agreed to pay Mrs Vaclav the sum of $3,000 in addition to the purchase price specified in the Contract of Sale. Although this was denied by Mr Anthony, I accept the evidence of Mrs Vaclav that this was part of the agreement made between them.

38 In the course of this discussion, Mrs Vaclav also told Mr Anthony that she was proposing to move into new premises which she proposed to purchase, being a unit in a property called "Lexington Gardens." Mr Anthony then made a further offer to move Mrs Vaclav into her new dwelling and would help her to dispose of her unwanted possessions. At Mrs Vaclav's request, Mr Anthony wrote down his offer on a piece of paper so that she could show it to her brother. Mrs Vaclav also recorded this component of the agreement in her diary notebook.

39 About one and a half weeks later, Mr Anthony received a telephone call from Mrs Vaclav's brother, Cyril Hendricks. He said that his sister Mrs Vaclav had decided to sell her house to Mr Anthony. During this discussion Mrs Vaclav also spoke to Mr Anthony and confirmed her acceptance of his offer. Mr Hendricks then resumed his discussion with Mr Anthony and said that Mr Anthony would have to pay a deposit on the purchase.

40 About four to five days later, Mrs Vaclav telephoned Mr Anthony and told him that she had made an appointment with her solicitor, Mr Felix Vitiello, on 24 March 2008. She asked whether Mr Anthony could drive her to the appointment because her brother, Cyril Hendricks, had another engagement at that time.

41 On 24 March 2008, Mr Anthony drove to Mrs Vaclav's property to pick her up. Mrs Vaclav gave a small piece of paper to Mr Anthony with Mr Vitiello's address written on it. She also asked Mr Anthony to first take her to the office of her real estate agent, McDonald Real Estate, situated at shop 21 Waverley Gardens, Mulgrave, to collect documents which she had left with the agent relating to the property. Mr Anthony obliged, and drove Mrs Vaclav to the office of McDonald Real Estate, where she was given the paperwork she had requested. This was handed over in the presence of Mr Anthony. Mr Anthony then drove Mrs Vaclav to her solicitor's office at 99 Springvale Road, Springvale.

42 On 22 March 2008, Mr Anthony brought his wife and two boys to visit Mrs Vaclav and have a look at the house. Mrs Vaclav welcomed them in, made them a cup of tea and brought out some biscuits and pistachio nuts. She then took them around the house. Mrs Vaclav was very friendly and somewhat excited. She indicated that she wished to sell the property to Mr Anthony and his family. She said that she wanted to see the house completed and not demolished, which could happen if someone else bought it. Mr Anthony and his family stayed at the property with Mrs Vaclav for between one and one and a half hours.

43 On 26 March 2008, both Mr Anthony and Mrs Vaclav signed the Contract of Sale. That evening, soon after Mr Anthony had signed the contract, by arrangement with Mrs Vaclav, Mr Anthony's parents visited the property. Mrs Vaclav showed them around the house. She was welcoming towards them. Mrs Josephine Anthony, Mr Anthony's mother, gave evidence that Mrs Vaclav said that she was happy with the sale because her late husband had started the construction and she was happy that Mr Anthony would complete the work. She talked about her plans to move into a retirement home. She said nothing about being pressured into the sale by Mr Anthony. I accept the evidence of Mrs Anthony.

Involvement of Mr Felix Vitiello, Mrs Vaclav's Solicitor

44 Mr Vitiello had previously acted in a professional capacity as a solicitor for Mrs Vaclav and her late husband. In about March 2007, on Mrs Vaclav's instructions, he had prepared a will for him at a time when he was very ill.

45 In March 2008, Mrs Vaclav telephoned Mr Vitiello and gave him instructions to prepare a vendor's statement for the sale of her property. This was a statement required to be provided by a vendor to a purchaser pursuant to s.32 Sale of Land Act 1962. Mr Vitiello wrote down the relevant details in respect of the property related to him by Mrs Vaclav. Mr Vitiello stated in his evidence that he had no difficulty obtaining those instructions over the telephone from Mrs Vaclav, and that he received all of the information which he required.

46 Mr Vitiello also inquired as to whether Mrs Vaclav had signed an authority to a real estate agent to sell her property. On being told by Mrs Vaclav that she had signed an authority, Mr Vitiello prepared a note for her to take to her real estate agent. The note was dated 25 March 2008 and read as follows:

Dear Phyllis, Please go to the agent and get a written confirmation that the authority dated 14/3/2008 is cancelled by mutual agreement and that you are not liable to pay commission under any circumstances if you sell the property at any future time Felix Vitiello 25/3/08.

47 Mrs Vaclav followed the advice of her solicitor. She obtained a letter dated 25 March 2008 signed by the sales manager of McDonald Real Estate which relevantly stated:

As mutually agreed, the Exclusive Sale Authority that you signed dated 14 March, 2008 is hereby cancelled and you will not be liable to pay any commission to McDonald Real Estate under any circumstances should you sell the property in the future.

48 On 25 March 2008 Mr Anthony paid $500 into Mr Vitiello's trust account as part payment of the deposit.

49 On 26 March 2008, Mr Vitiello prepared the Contract of Sale. In his evidence, Mr Vitiello confirmed the contents of a file note dated 26 March 2008 which he took at about 11 am on that day. The file note records that Mrs Vaclav returned Mr Vitiello's telephone call to her. Mr Vitiello noted Mrs Vaclav as saying the following relevant things:

She discussed the matter with her sister and brother and although the price seems low she want to go ahead. FAV [Mr Vitiello] suggested that she get other valuations. She says that she has been doing that. Also she says that the house is unfinished. She definitely wants to sell to Shelton. She wants peace of mind. She will come at 1.00 pm today so that documents can go to Shelton's lawyer.

I accept that this conversation took place, as recorded in Mr Vitiello's file note, at about 11 am on 26 March 2008.

50 Both Mrs Vaclav and Mr Anthony signed the Contract of Sale prepared by Mr Vitiello on 26 March 2008.

51 On 27 March 2008, Mr Anthony paid a further $27,500 into Mr Vitiello's trust account being the balance of the deposit.

52 Prior to her signing the Contract of Sale, Mr Vitiello did express concern to his client, Mrs Vaclav, that the price she was proposing to sell the property to Mr Anthony for was too low. He stated in his evidence that he asked Mrs Vaclav about the price. She told Mr Vitiello that she had some estimates from agents to say that a higher price could be achieved. Mr Vitiello continued in his evidence:

So, it occurred to me that she was underselling the property so I wanted to get it off my chest that I thought that the price was too low and so I asked her a number of questions about that. Was she sure that she wanted to sell at that price, as even though she might pay a commission if she sold through an agent which might cost her $10,000, the prospect was there, based on the estimates of the agents, that she might pick up another 20, 30 or so thousands of dollars on top of the 280 that was being offered by this purchaser. So, that was a major concern to me throughout the whole matter.

53 In his cross-examination Mr Vitiello expressed the view that Mrs Vaclav was a particularly vulnerable person. He said:

She was recently widowed and I've been in that position myself and I can recall how one reacts in those situations. So, I felt that she was particularly vulnerable. The fact that it was a private sale without an agent involved so it wasn't sold on the open market to someone referred to as a friend. All those things rang alarm bells in my head and I was very concerned about the fact that she was going ahead at that price.

.... Well I pretty well knew her history, I mean I'd watched her husband, you know pretty much on his death bed. Then she consults me about this sale, so I drew my own conclusions, she's moving on in life as best she can, she's going to sell her house. She's going to move into this retirement village which a lot of my clients do. So it was a classic picture of a woman who I felt deeply was in a vulnerable position.

Mr Vitiello also said in his cross-examination that he thought that the sale price was clearly below market value. He based this upon the range of prices expressed in the price estimate of between $300,000 and $330,000 provided by McDonald Real Estate in the Exclusive Sale Authority.

54 Mr Vitiello raised his concerns directly with Mrs Vaclav, and he received her answers. As to this, Mr Vitiello said in his evidence:

I wasn't happy with the answers but I certainly got answers and the answers were that the matter had been considered. There had been discussions between Mrs Vaclav and her, I think, brother and sister and she wanted to proceed.

And you satisfied yourself that that was her decision?---Yep, reluctantly but I had to.

55 It is to be noted that Mr Vitiello had never seen the property, and apart from being aware that it needed some fixing up, he wasn't aware of anything else about the property, including its condition or the extent or nature of the repairs required.

56 Mr Vitiello said in his cross-examination, based on what he observed and what heard from Mrs Vaclav, that:

At the time that I spoke to her I formed the view that she knew what I was asking, she me gave answers, those answers were clear. The process was repeated a number of times. I came away convinced that although I didn't like the price, she did and she chose to sign the documents.

57 There were three components of the agreement between Mrs Vaclav and Mr Anthony which, although agreed to between them in the course of their oral negotiations, were not recorded in the Contract of Sale. The additional terms of the agreement between them were:

(a) Mr Anthony agreed to move Mrs Vaclav to her new unit in Lexington Gardens, and dispose of her unwanted possessions without any charge to her;

(b) Mr Anthony was to pay Mrs Vaclav the sum of $3,000 in addition to the purchase price specified in the Contract of Sale; and

(c) Mr Anthony agreed to permit Mrs Vaclav to remain in the property after settlement, which was due on 30 April 2008 or earlier by agreement, until 30 June 2008, and her continued occupation was to be rent free.

58 Each of these terms was recorded by Mrs Vaclav in her diary notebook.

59 On 18 April 2008, approximately two weeks prior to settlement of the Contract of Sale, Mrs Vaclav telephoned Mr Vitiello. He recorded the telephone conversation in a file note, which he confirmed in his evidence. The file note relevantly stated:

Spoke to Phyllis. She wants more money. She sold too cheaply. NB. FAV [Mr Vitiello] warned her about this!! She is now coming to her senses. FAV told her to come back with the amount she wants.

I accept that this conversation took place as recorded in Mr Vitiello's note.

60 On 21 April 2008 Mr Vitiello telephoned Mr Anthony's solicitor, at the firm of Salinger Brown. Mr Vitiello advised, on a without prejudice basis, that his instructions were that the vendor was not in a fit state of mind when she signed the contract. He also advised that she would not proceed unless she got more money.

61 On or shortly after 21 April 2008, Mr Vitiello received a typewritten letter signed by Mrs Vaclav. The letter was sent by facsimile. The letter relevantly stated:

I refer to today's telephone conversation with you.

If possible, I wish to withdraw from the above sale. I feel that I have been unnecessarily pressured by the Purchaser to sell. As you are aware I am a widow, having recently lost my husband. I have no family I can rely upon to assist me in the decisions I make.

I believe my property would be substantially undervalued if I sold it at $280,000. You did warn me, but I have been in a constant state of confusion and uncertainty about the sale.

I authorise you to refund the deposit to the Purchaser and request you forward to me an invoice for your services.

If there are any difficulties with withdrawal from the sale then I authorise you to confer with my friend and confidant Mr Sante Iacovelli of 6 Scenic Court Dandenong North Phone 9795 4685 who is sending this fax on my behalf. I believe he can assist me at this time in the decisions I make.

Thanking you for your help with the transaction to date.

62 The statement made by Mrs Vaclav in her letter of 21 April 2009 to Mr Vitiello, that "I have no family I can rely upon to assist me in the decisions I make", contradicted the earlier instructions which she had given to him.

63 On 23 April 2008 Mr Vitiello wrote a letter to Mrs Vaclav. The letter relevantly stated:

I have informed the solicitors for the purchaser that you do not wish to proceed.

The reply is that they will apply to the Supreme Court for a writ of Specific Performance (to compel you to complete the contract).

I note that you confirm that I did warn you that the sale price was below the market estimates which the agents had given you.

It will not be possible to simply return the deposit and "call the sale off".

The opposing party, if it takes the threatened legal action, can cause you to incur considerable legal costs and can expose you to the payment of damages.

I shall be pleased to give you extensive advice in conference.

Your friend Mr Sante Iacovelli is welcome to attend the conference.

64 Mr Vitiello is a solicitor of some thirty five years experience. Conveyancing work comprises a significant component of his practice. Mr Vitiello was a diligent and conscientious legal practitioner. He took particular care in his dealings with Mrs Vaclav in the sale of her property. He appreciated that she was in a vulnerable position at the time and sought to protect her interests by giving sound advice. Mr Vitiello took file notes of important telephone conversations which he had with Mrs Vaclav. I found his evidence to be truthful and accurate.

65 Mr Sante Iacovelli lives at 6 Scenic Court, Dandenong North. He is a computer consultant by occupation, and a neighbour of Mrs Vaclav. He has known Mrs Vaclav and her late husband since the early 1970's when they moved into Scenic Court. He came to be close to Mr and Mrs Vaclav, and witnessed Mr Vaclav's death in a convalescent home.

66 Mr Anthony issued his writ in the proceeding on 8 May 2008. Mr Iacovelli was appointed litigation guardian of Mrs Vaclav in these proceedings by order of the Court made 15 August 2008.

67 Mr Anthony first met Mr Iacovelli in early January 2008. Mr Iacovelli telephoned Mr Anthony and enquired as to when he was going to provide a quotation for Mrs Vaclav. Mr Anthony explained that he needed to know precisely what Mrs Vaclav wanted to do before he could provide a quotation. Subsequently, Mr Anthony met with Mrs Vaclav and Mr Iacovelli at Mrs Vaclav's house to discuss the work that needed to be done. Mr Iacovelli spoke on Mrs Vaclav's behalf and there was considerable discussion about the prospective work. At Mr Iacovelli's request, Mr Anthony agreed to provide a quotation for the work which, in his opinion, was required on Mrs Vaclav's house. The matter was left on the basis that Mrs Vaclav could select out of the works specified in the quotation those items which she wished to proceed with. Mr Anthony said that the provision of the written quotation would be undertaken without any charge. However, on being pressed by Mr Iacovelli as to the cost of fitting glass to all the windows and doors which needed it, Mr Anthony verbally estimated about $16,000.

68 Mr Anthony subsequently provided his written quotation for the works which he assessed were needed to be undertaken on Mrs Vaclav's house. The quotation was dated 12 January 2008 and totalled $80,946. It included 10 categories of works, including the double glazing of all windows and doors (top floor and ground floor) for the sum of $16,540. He gave the quotation to Mrs Vaclav.

69 Mr Iacovelli had a further conversation with Mr Anthony about the quotation. He asked Mr Anthony if he could reduce his quotation if the work was done for a cash payment. Mr Anthony refused this suggestion. Mr Anthony heard nothing further about the quotation, either from Mrs Vaclav or anybody else.

70 On 21 April 2008, Mr Anthony visited Mrs Vaclav at her home at about 2:30 in the afternoon. He brought some take-away food with him which he shared with Mrs Vaclav. There was a knock at the door, and Mrs Vaclav told Mr Anthony that Mr Iacovelli wanted to have a word with them. Mr Iacovelli spoke to Mr Anthony. He said to Mr Anthony words to the effect "How can you take advantage of an old lady like this?" Mr Anthony was dismayed by the allegation. He replied with words to the effect "What's wrong, tell me what's wrong?" Mr Iacovelli said words to the effect "If I was a criminal you wouldn't be standing here right now". Mr Iacovelli made a complaint about the sale transaction to Mr Anthony. This was the first intimation Mr Anthony had that Mrs Vaclav wanted to avoid the Contract of Sale. Mr Anthony responded by saying words to the effect:

What do you mean? I offered Mrs Vaclav the money, she accepted it, she spoke to her brother and family and she got back to me and she offered to sell it to me.

They then walked to Mr Iacovelli's house where he turned his computer on and showed Mr Anthony some houses for sale with sale prices. This was far from an accurate exercise in assessing comparable sales. Mr Iacovelli told Mr Anthony that he had to give her more for the house. By this time Mr Iacovelli had become quite aggressive. An argument ensued.

71 The essence of the equitable doctrine of unconscionable dealing is that relief may be granted where the will of the innocent party, whether or not independent and voluntary, is the result of the disadvantageous position in which he or she is placed; and unconscionable advantage is taken of that position by the stronger party.[1] Unconscionable dealing therefore looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability, in circumstances where it is not consistent with equity or good conscience that he should do so.[2]

72 Unconscionable dealing rendering a contract liable to be set aside may arise when the following elements are satisfied:[3]

(a) a stronger party deals with another who is under a special disability; and

(b) the special disability is sufficiently evident to the other party to make it unfair that stronger party should benefit from the transaction.

If these matters are established, the onus is cast upon the stronger party to show that the transaction was fair, just and reasonable. If the stronger party is unable to satisfy the court that it was, the transaction may be set aside.

73 In Commercial Bank of Australia v Amadio Deane J[4] quoted Kay J in Fry v Lane[5] for the proposition that once it was established that the weaker party had a relevant special disability, and the inequality thus arising is evident to the other stronger party, in those circumstances it is "prima facie unfair and 'unconscientious' " of the stronger party to proceed to procure the signature of the weaker party on the transaction documents under challenge. As Deane J said further:

With that conclusion, the onus is cast upon the bank [the stronger party] to show that the transaction was "in point of fact fair, just and reasonable".

74 In Fry v Lane, Kay J was of the opinion, after making reference to cases arising from the "circumstances or conditions of the parties contracting - weakness on one side ... or advantage taken of that weakness", where there has been "an unconscientious use of the power arising from these circumstances and conditions, and when the relative position of the parties is such as prima facie to raise this presumption", that "the transaction cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been in point of fact fair, just and reasonable".[6] Kay J said further, in relation to the circumstances of the case before him:[7]

The circumstances of poverty and ignorance of the vendor, and the absence of independent advice, throw upon the purchaser, when the transaction is impeached, the onus of proving ... that the purchase was "fair, just and reasonable".

75 It was submitted by the defendant in this case that if the first two elements of the doctrine of unconscionable dealing are satisfied, no presumption of unconscionable dealing arises, in the sense of the legal burden shifting to the respondent party to negate the presumption. It was submitted that in such a case the court may draw an inference that the stronger party has exploited the disability. To avoid the consequences of a finding of unconscionable dealing, the stronger party then has the evidentiary burden of proving that the transaction was fair, just and reasonable.

76 Whether the position is that a legal presumption arises resulting in a shifting of the legal onus of proof from the weaker party to the stronger, or whether the circumstances give rise to a strong inference of unconscionable dealing, calling for the stronger party to assume an evidentiary burden to displace the inference, if the transaction is to be maintained, is likely to be of little practical significance in the conduct of most trials of the issue.

77 Nevertheless, I will proceed to analyse the facts of this case by considering both approaches.

78 A special disability for the purpose of the equitable principle may exist in a wide variety of circumstances. However, the common thread is that, to amount to a relevant special disability, the circumstances have the effect of placing one party at a serious disadvantage vis-a-vis the other, such that the weaker party is unable to properly judge the transaction for himself and make an informed judgment as to his or her interests.

79 In Blomley v Ryan[8], McTiernan J[9] described the weaker party's special disability in the following terms:

The respondent was clearly the weaker side. His weakness was of the kind spoken of by Lord Hardwicke in defining the fraud characterised as taking surreptitious advantage of the weakness, ignorance or necessity of another. The essence of such weakness is that the party is unable to judge for himself. The condition and circumstances of the respondent have been mentioned. His mental and physical powers were impaired by the cumulative effects of old age, intemperance and his manner of life, the burden of holding this property was increasing with the years and the deterioration of his powers, and at the time this bargain was concluded he was in worse than his normal poor state of mental and bodily health by reason of drinking excesses and irregular living of the past few days. The respondent, being in possession of this valuable grazing property, was by reason of his circumstances and condition, exposed to imposition and overreaching; and E. F. Blomley and Stemm had, relatively to him, great bargaining strength and could dominate his will and they were anxious to effect a sale of the property upon terms advantageous to the Blomleys. There is a strong presumption upon these facts that they took advantage of their relatively superior strength and made undue use of it, and by such unconscientious behaviour procured the purchase of the property at a great undervalue.

80 In Blomley v Ryan, Fullagar J said:[10]

The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy, or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other.

81 In Commercial Bank of Australia v Amadio, Deane J observed:[11]

The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued. In Blomley v Ryan (1956) 99 CLR at p405, Fullagar J listed some examples of such disability: "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary". As Fullagar J remarked, the common characteristic of such adverse circumstances "seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other".

Further, in relation to the particular facts of Amadio, Deane J said:[12]

It is apparent that Mr and Mrs Amadio, viewed together, were the weaker party to the transaction between themselves and the bank. Their weakness may be likened to that of the defendant in Blomley v Ryan of whom McTiernan J. said (1956) 99 CLR, at p392:

"His weakness was of the kind spoken of by Lord Hardwicke" (in Earl of Chesterfield v Janssen [1750] EngR 25; (1751) 2 Ves Sen, 125 at pp155-156 [1750] EngR 25; (28 ER 82 at p100)) "in defining the fraud characterised as taking surreptitious advantage of the weakness, ignorance or necessity of another. The essence of such weakness is that the party is unable to judge for himself".

That weakness constituted a special disability of Mr and Mrs Amadio in their dealing with the bank of the type necessary to enliven the equitable principles relating to relief against unconscionable dealing. Put more precisely, the result of the combination of their age, their limited grasp of written English, the circumstances in which the bank presented the document to them for their signature and, most importantly, their lack of knowledge and understanding of the contents of the document was that, to adapt the words of Fullagar J quoted above, they lacked assistance and advice where assistance and advice were plainly necessary if there were to be any reasonable degree of equality between themselves and the bank.

82 In Bridgewater v Leahy,[13] the owner of grazing land, Bill York, entered into a contract to sell it to his nephew, Neil York and his nephew's wife for the sum of $696,811. Simultaneously, he executed transfers of the land and a deed of forgiveness for $546,811 of the price, leaving a balance due of $150,000 for the nephew and his wife to acquire the land. Gleeson CJ and Callinan J, after citing the passage of Fullagar in Blomley v Ryan,[14] said:

The nature of the relevant disadvantage concerns the ability of the weaker, or victimised, party, to make an informed judgment as to his or her interests. This is made clear in Commercial Bank of Australia Ltd v Amadio. Mason J, after referring to Fullagar J in Blomley v Ryan said:

It is made plain enough ... that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.

83 In Bridgwater, Gaudron, Gummow and Kirby JJ[15] accepted the evidence before the trial judge that the person alleged to be under a relevant disability, Bill York, had:[16]

... no signs of senile dementia and his physical condition [was found to be] appropriate for his age, [the primary judge] saying, "[h]e was a fragile elderly man". [The] contemporaneous [medical] report that Bill was of sound mind and capable of making decisions about his personal affairs.

The primary judge's conclusion that Bill York had "the capacity then to know what he was doing and to make informed decisions about the disposition of his property" was also accepted. The High Court noted:

[t]he closeness of the relationship between Neil York [the stronger party] and Bill York [the weaker party], and the tendency of the older man to fall in with the wishes of the younger[17],

Bill's goal to preserve his rural interests intact and his perception that Neil was the candidate to provide reliable and experienced management thereof were significant elements in his emotional attachment to and dependency upon Neil.

The High Court also observed that active pursuit of a benefit by the stronger party is not a pre-requisite to the application of the equitable principles. In this respect, Gaudron, Gummow and Kirby JJ said:[19]

The equity to set aside the Deed may be enlivened not only by the active pursuit of the benefit it conferred but by the passive acceptance of that benefit.

Neil took advantage of this position to obtain a benefit through a grossly improvident transaction on the part of his uncle. ... It is unconscionable for Neil and his wife to retain the benefit of the improvident transaction ...

84 A relevant factor in determining whether or not a special disability arises is whether or not the alleged weaker party sought and obtained independent legal advice. In Bridgwater, Gleeson CJ and Callinan J said as to this element:[21]

Absence of independent legal advice, like age, or infirmity, or some other condition or circumstance of the kind referred to may, in a given case, be of factual importance in determining whether special disability or weakness, of the relevant kind, exists, ...

85 However, the presence or absence of independent legal advice is not determinative. What is of significance is the nature and quality of the advice. Street J in Bester v Perpetual Trustee Co Ltd[22] made the following observations as to the effect of the limited nature of the advice given in that case by a solicitor, Mr Emanuel to his client in relation to the impugned transaction:

Another of the indicia to which reference may legitimately be made in determining the critical issue of whether the plaintiff thoroughly comprehended the transaction, and entered into it deliberately and of her own free will, is the presence or absence of independent legal advice having been tendered to her. Mr Emanuel was brought into the present transaction with the intention no doubt of meeting this requirement. I am of the view, however, that such part as he played in connexion with this settlement could not fairly be described as meeting that degree of independent advice that the plaintiff, as a person subject to the relationship of influence, was entitled to receive. Mr Emanuel was, I accept, most careful to read the document through, and to invite questions of the plaintiff. But it was not textual advice upon the engrossment which was of prime importance in this regard: rather, it was advice upon the more general topic of whether a settlement should be entered into at all. And if so, the general nature of the settlement.

Although Bester was a case of undue influence, like considerations would apply, in my view, in determining whether the presence of independent legal advice had the effect of emancipating the transaction from being set aside on the ground of unconscionable dealing.

86 Nevertheless, if the legal adviser takes the view that the transaction is not in the best interests of his client, who is otherwise operating under a special disability, and gives reasoned advice to this effect, which is understood by the client, save in exceptional circumstances, the lawyer is not precluded from continuing to act further and from seeing the transaction through to its conclusion, if those are the instructions of the client. Lord Nicholls in Royal Bank of Scotland v Etridge (No 2)[23] described the position in the following terms:

Thus, in the present type of case it is not for the solicitor to veto the transaction by declining to confirm to the bank that he has explained the documents to the wife and the risks she is taking upon herself. If the solicitor considers the transaction is not in the wife's best interests, he will give reasoned advice to the wife to that effect. But at the end of the day the decision on whether to proceed is the decision of the client, not the solicitor. A wife is not to be precluded from entering into a financially unwise transaction if, for here own reasons, she wishes to do so.

That is the general rule. There may, of course, be exceptional circumstances where it is glaringly obvious that the wife is being grievously wronged. In such case the solicitor should decline to act further. In Wright v Carter [1903] I Ch 27, 57-58, Stirling LJ approved Farwell J's observations in Powell v Powell [1900] I Ch 243, 247. But he did so by reference to the extreme example of a poor man divesting himself of all his property in favour of his solicitor.

87 The special disability pleaded by Mrs Vaclav in her Amended Defence and Counterclaim was that:

The defendant suffers from a mild cognitive impairment. She signs documents impulsively and without full consideration. Until the defendant's husband died on 17 March 2007, the defendant had relied implicitly on her husband in all business affairs.

It was also pleaded that Mrs Vaclav was a person of unsound mind. It was said that:

The defendant suffered from Primary Degenerative Dementia with cognitive deficits and/or a Clinical Depressive Illness.

88 In opening and closing address, counsel for Mrs Vaclav expanded the elements of special disability alleged to include the defendant's age, being 83 years, and the fact that she was lonely after the death of her husband. No objection was taken to the expansion of the defendant's case in these respects, and in considering the question of special disability I will take into account the additional components addressed by the defendant's counsel in opening and closing.

89 Prior to entering into the Contract of Sale, there is no evidence that Mrs Vaclav had been diagnosed with any mental disorder or was being treated for any mental disorder.

90 The defendant, Mrs Vaclav, called Dr Sutcliffe, a psychogeriatrician, to give evidence. The qualifications of the witness were not challenged. Dr Sutcliffe had been previously engaged by the plaintiff, Mr Anthony, to prepare a report on Mrs Vaclav's medical condition. The report had been previously provided to Mrs Vaclav's lawyers in confidence and on a without prejudice basis. A legal professional privilege was claimed by Mr Anthony in respect of its contents. Mrs Vaclav claimed that the privilege, if it existed, had been waived by its communication to her lawyers. Having heard evidence in voir dire, I ruled that Dr Sutcliffe's report remained the subject of a litigation privilege, which had not been waived.

91 In the course of his evidence, Dr Sutcliffe expressed the opinion that at the time of the sale Mrs Vaclav "was impaired and unable to make a reasoned judgment". He explained her "impairment" in the following terms:

I felt she had a cognitive disability that was in the mild to moderate category probably reflecting a dementia, and in addition I felt there were either features of a depression or a prolonged grieving reaction making it worse.

Dr Sutcliffe responded that in his view, Mrs Vaclav would have difficulty understanding transactions even when they were explained to her. In this regard, he said:

I think she would have difficulty understanding them [transactions undertaken at the relevant time even when they were explained to her] and remembering them at a later date and judging their import. I felt her judgment was impaired - likely to be impaired.

92 However, Dr Sutcliffe was not Mrs Vaclav's treating doctor. He expressed his opinions after examining her at a later date in January 2009, about nine months after she entered into the Contract of Sale. In cross-examination Dr Sutcliffe conceded that he had not been given much relevant material in the course of arriving at his opinion. This included Mrs Vaclav's consultations with her solicitor; the fact that she embarked upon, negotiated and in fact signed an agreement to purchase an apartment in the retirement village, Lexington Gardens; the fact that she organised the cancellation of her estate agent's authority to avoid payment of the agent's commission; and that she was aware that a deposit had been paid.

93 Further, and importantly, Dr Sutcliffe was not given access to Mrs Vaclav's diary notebook. The diary notebook was entitled "Sale of the Property at 11 Scenic Court Dandenong North". It was not discovered by Mrs Vaclav, but produced by Mrs Vaclav in the course of her cross-examination. It consisted of an exercise book written up in Mrs Vaclav's hand, containing, amongst other things, a record of significant matters surrounding her entry into the Contract of Sale, which she wrote down as an aide-memoire as the events occurred. This was an important repository of Mrs Vaclav's thought processes at the time when she negotiated and entered into the Contract of Sale.

94 Mrs Vaclav's diary notebook demonstrates a clear understanding of what was involved in the transaction and an astute business sense. It contains a number of entries which evidence the clarity of her thinking, both before, during and after entry into the Contract of Sale, both in relation to the sale and in relation to other matters of a domestic and financial nature. The following extracts serve to illustrate these findings:

(a) On 8 October 2007, Mrs Vaclav wrote to her accountant about an investment transaction. A copy of her letter is drafted in her handwriting in the diary notebook. It relevantly reads:

This letter is to inform you that I sold 989 units @ 1.35 which I had in JL Meridian Trust now known as Mirvac Real Estate Investment Trust, on 14 August 2007.

Mrs Vaclav then recorded the net proceeds, after taking into account the sale price per unit ($1.37), the brokerage (6.64%) and GST, which yielded a net sum of $1,255.93.

(b) Mrs Vaclav also attended to managing some outstanding matters in relation to her husband's business, Domestic & Industrial Services Pty Ltd. A copy of her letter to an unknown addressee is drafted in her handwriting in the diary notebook. It relevantly reads:

Regarding your letter dated 17th September 2007 I have already advised you on the 2nd July 2007 (copy attached informing you of my husband's passing. Also attached is a form for the deregistration of the company my husband was operating. I hope this satisfies your requirements.

(c) Mrs Vaclav also recorded in her diary notebook that:

I sold my husband's business Mobile Mower & Tractor Centre (Division of Domestic & Industrial Engineering Services P/L for $3000 on 5 February 2007.

(d) Mrs Vaclav also attended to her personal affairs. She wrote a letter to the Nepean Country Club seeking to avoid payment of a penalty imposed on a late payment of a maintenance fee. The letter encloses a cheque for the fee in the sum of $286, and makes an eloquent plea to be forgiven the penalty imposed. She also noted that she had signed documents in respect of her proposed occupation of Lexington Gardens on 19 March 2008. She recorded other details of the Lexington Gardens transaction including the signing of the licence agreement on 9 April 2008 in respect of apartment No.63, and that the joining date was 25 June 2008. Mrs Vaclav subsequently noted that:

Due to unforeseen circumstances the Licence Agreement has been cancelled. When ready phone Liz Hill to renew the Licence Agreement. Appointment with Liz Hill on 7th May 2008 at 2 o'clock. Licence Agreement cancelled and 1000$ deposit returned by cheque.

(e) A number of entries are made relating to her property and its sale to Mr Anthony. For example, she wrote:

1. Section 32 agent will give me to sign once the purchaser is prepared to buy at our price
2. Then the contracts prepared by the two lawyers will be exchanged
3. Fees of solicitor
4. Deposit 10%
5. Cost of transaction

Mrs Vaclav also wrote:

Repairs to 11 Scenic Court

Making it water tight

- cladding where necessary upstairs and downstairs

- glass upstairs and downstairs

- door downstairs

- roof to extension, taking off tiles and putting sisalation

- rendering and plastering.

(f) Mrs Vaclav also recorded the substance of the sale agreement with Mr Anthony in the following terms:

Shelton Anthony

Sale of Property - Shelton to pay $280,000 Later $3000

- transfer as soon as possible

- can stay here till June 30th without paying rent

- shall help to dispose what don't want and take to your new home

- shall help to move you to your new place.

(g) Mrs Vaclav also recorded elements of the Agents' Sale Authority with McDonald Real Estate. In this regard she noted:

Selling price 300,000 - 330,000 commission

Advertising $858.

(h) Mrs Vaclav also noted the terms and conditions of a sale authority with an alternative estate agent who she had consulted about the sale of her property, Mr Neil Butler, a director of Stockdale & Leggo. She included Mr Butler's card in her notebook and noted:

Agent Stockdale & Leggo - Neil Butler

Auction - best Property 300000 - 350000

Special condition that purchaser is buying inspected property and make no claim against current vendor if any breach of building reg

Commission 2.5% $7500 $500 for auction.

95 At the end of his cross-examination, Dr Sutcliffe conceded that until he was in a position to examine all of the further documentation which was put to him and had another consultation with Mrs Vaclav, in respect of some or all of the documentation, his conclusion about Mrs Vaclav's condition at the time she entered the Contract of Sale was, as he said, "incomplete".

96 The information provided to Dr Sutcliffe was in fact incomplete. I find that for this reason, Dr Sutcliffe's initial opinion as he expressed it was not founded on sufficient material to be reliable.

97 I am not satisfied on the evidence that Mrs Vaclav had mild cognitive impairment or suffered from primary degenerative dementia with cognitive deficits and/or a clinical depressive illness, at the relevant time when she signed the Contract of Sale, which amounted to the special disability as claimed.

98 Nor am I satisfied that Mrs Vaclav suffered from a special disability on the grounds that she signed documents impulsively and without full consideration, or that after her husband's death she was, in effect, without guidance in business affairs and had no meaningful knowledge of such matters. Mrs Vaclav's conduct in engaging McDonald Real Estate to sell her property by the exclusive agency agreement dated 14 March 2008, disengaging herself from this agreement, and subsequently negotiating and entering the Contract of Sale with Mr Anthony together with the negotiation of the additional terms, was inconsistent with her having the special disability of a medical origin as alleged. Mrs Vaclav, at all stages of her negotiation of the sale to Mr Anthony, and prior to her executing the Contract of Sale, acted in a rational and considered manner and was astute in protecting her own interests.

99 Further, her diary notebook, which has already been referred to, revealed a good working knowledge of basic business transactions and the management of her own financial affairs. It also demonstrated her capacity to make the appropriate decisions.

100 However, I am satisfied that she was vulnerable following the death of her husband a year before, she depended upon her late husband to make decisions about the house, she was lonely and she was elderly, being aged 83 years. These factors combined, potentially placed her in the position of having a special disability.

101 However, in this case, she received the independent advice from her solicitor, Mr Vitiello, prior to entering into the Contract of Sale. I am satisfied that Mr Vitiello took care to ensure that Mrs Vaclav understood the essence of the contract that she was about to enter into. He satisfied himself that she knew what she was doing in selling her property to Mr Anthony, and that she was happy to proceed with the sale on the basis of the sale price which had been negotiated. Critically, she was specifically advised by Mr Vitiello on the important issue of the sale price, and understood his advice. The substance of the advice was that, in his opinion, the sale price was too low and that she should not proceed with the transaction. This advice was given to her in private consultation in the absence of Mr Anthony, as were her instructions to proceed with the sale. Mr Vitiello said further in his evidence, which I accept:

And your concern was to ensure yourself that the instructions you obtained, she was happy to proceed?---Yes.

And would you have proceed to draw the documentation and allow their execution had you not been convinced that that was the case?---No.

102 The quality of the advice given by Mr Vitiello to his client Mrs Vaclav, and the timing of such advice, in my opinion, was such that any inequality between Mr Anthony and Mrs Vaclav was neutralised. Having consulted with Mr Vitiello and received his advice, Mrs Vaclav was not placed at a serious disadvantage vis-a-vis Mr Anthony. She was able to properly judge the transaction for herself and make an informed judgment as to her interests.

Whether Mr Anthony Knew of the Special Disability

103 I am satisfied that Mr Anthony had no idea that Mrs Vaclav suffered from any form of dementia or had any cognitive deficits as alleged, nor ought he to have had such knowledge. She did not inform him of this, nor did her conduct in the course of the negotiation towards the Contract of Sale and the additional terms evidence any degree of mental impairment. Indeed, the contrary was the case. Her conduct was consistent with a person who knew exactly the purport of the agreement she had entered into and demonstrated an astute approach to protecting her own interests. Consequently, I am not satisfied that the claimed medical disability, even if it had existed, would have been sufficiently evident to Mr Anthony to make it unfair for the contract to be enforced.

104 However, it was obvious to Mr Anthony, and ought to have been obvious, that he was dealing with an elderly lady. He said in his evidence, in describing his dealings with Mrs Vaclav that it was "like talking to your 84 year old grandmother". Further, Mr Anthony knew that Mrs Vaclav's husband had passed away the year before, that she was living alone, that she was prone to loneliness and was grieving for the loss of her husband. To this extent, he knew or ought to have known that she was a vulnerable person at the time when he negotiated the Contract of Sale and its additional terms with her.

105 Nevertheless, given my finding that Mrs Vaclav received the independent advice from her solicitor which operated to eradicate any serious disadvantage between her and Mr Anthony, mere knowledge of Mrs Vaclav's vulnerability as I have described it, is insufficient to give rise to a relevant special disability where it does not otherwise exist, such as to and enliven the equitable doctrine of unconscionable dealing.

106 If I am wrong in finding that Mrs Vaclav had no relevant special disability in this case, and on the assumption that the first two elements of the doctrine of unconscionable dealing have in fact been satisfied, with the result that the plaintiff assumes the legal or evidentiary burden of proving that the transaction was fair, just and reasonable, the question becomes: has the plaintiff discharged its burden? In other words, can the Court be satisfied that the transaction was in fact fair, just and reasonable?

107 The keystone of the defendant's case on this issue was her assertion that the sale of her property to Mr Anthony was improvident because she sold her house to him at a considerable undervalue. The case was founded on the well accepted statement of Kay J in Fry v Lane,[24] where his Honour, having reviewed the authorities as they then stood, concluded:

The result of the decisions is that where a purchase is made from a poor and ignorant man at a considerable undervalue, the vendor having no independent legal advice, a Court of Equity will set aside the transaction. [Emphasis added]

108 However, I am far from satisfied that Mrs Vaclav did sell her property to Mr Anthony for a considerable undervalue, or indeed an undervalue at all.

109 In Bridgewater v Leahy[25] the High Court accepted that the impugned transaction had the effect of disposing of a significant portion of the weaker party's assets not for their true value of $696,811 but for $150,000.[26] This finding enabled the majority to conclude that the signed documents in question "involved an improvident transaction which was neither fair not just and reasonable".[27] The present case is far removed from the situation in Bridgewater.

110 As already observed, the appraisal of a real estate agent, Mr Chris Gillen of Ray White Mulgrave, dated 14 August 2007 concluded that the value of Mrs Vaclav's property in its then current condition would be between $250,000 and $270,000. Mr Gillen was not called to give evidence, and his appraisal of value was not able to be tested in cross-examination.

111 On the other hand, McDonald Real Estate, in its Exclusive Sale Authority dated 14 March 2008, placed an estimate of the sale price for the property at between $300,000 and $330,000, pursuant to s.47A of the Estate Agents Act 1958. No person from McDonald Real Estate was called to verify this estimate, and the estimate of value was not able to be tested in cross-examination. There was no evidence as to the assumptions on which the estimate was based before the Court. This raises a question as to whether the estimate was undertaken after a full inspection of the property, when the nature and extent of the work required to complete the house would have been revealed, or whether the estimate was undertaken without the benefit of this important information. No reservation is contained in the Exclusive Sale Authority relating to the incomplete condition of the property or any difference in price to be expected if the property was to be sold in its existing condition or with the renovations undertaken.

112 Indeed, no valuer or valuation expert of any kind was called to give any evidence on behalf of the defendant as to the market value of Mrs Vaclav's property at the time when she entered into the Contract of Sale, or at any other time.

113 The market value of the property at the relevant time is left festively plump with possibilities. I find it impossible to arrive at a concluded view on the issue. Accordingly, I cannot be satisfied that the sale price shown on the Contract of Sale of $280,000 was not a fair market price for the property in its incomplete state.

114 In any event, when the transaction is considered as a whole, together with the additional benefits to be provided by Mr Anthony and the absence of a real estate agent's commission and sale expenses, the consideration for the sale is brought close to the lower figure estimated by McDonald Real Estate at $300,000. If the property was sold for $280,000 without a commission, and without the estimated $858 for advertising expenses, $7,500 would be saved. Mr Anthony had also agreed to dispose of her unwanted possessions and move Mrs Vaclav to her new unit in Lexington Gardens, all without charge. A further saving in removal and clean up expenses would be achieved. In addition, Mr Anthony offered to pay an additional $3,000 to Mrs Vaclav, which was agreed not to be recorded in the Contract of Sale. This would bring the value of the sale to Mrs Vaclav to about $290,000, which was only some $10,000 below the lower sale price estimate of $300,000 provided by McDonald Real Estate, and $20,000 above the upper estimate of $270,000 provided by Mr Gillen of Ray White Mulgrave. In addition to this, Mr Anthony agreed to permit Mrs Vaclav to remain rent free in her house after settlement of the Contract of Sale until 30 June 2008. Taking all of these matters into account, if anything, the sale price reflected in the Contract of Sale, when added to the additional agreed components of consideration, prima facie looks to have been a fair and reasonable transaction.

115 Even though Mr Vitiello was of the opinion that the sale price at $280,000 was too low, he did not appreciate the amount of work that was needed on the property to complete the renovations. He did not include any measure of protection for Mrs Vaclav in a special condition in the Contract of Sale which addressed the issue. Further, there is no evidence that at the time of the sale, Mrs Vaclav had given to Mr Vitiello the appraisal of value of Mr Gillen of Ray White Mulgrave, dated 14 August 2007, or that Mr Vitiello was ever aware of this assessment of market value. Mr Vitiello said that he based his opinion of market value solely on the figure estimated by McDonald Real Estate in its Exclusive Sale Authority dated 14 March 2008 which had been given to him by Mrs Vaclav.

116 Furthermore, I am not satisfied that he took into account the removal costs and the unwanted goods disposal costs to be saved by Mrs Vaclav pursuant to her agreement with Mr Anthony and the additional payment of $3,000 to be made. Mr Vitiello was not informed of these matters by Mrs Vaclav. In relation to the saving in the payment of a real estate agent's commission and sale costs to be achieved by a sale to Mr Anthony, together with the rent free saving to Mrs Vaclav following settlement before she moved into her new unit, although Mr Vitiello was informed of these matters, I am not satisfied that he took them into account them in considering the full extent of the consideration to be received by Mrs Vaclav for the sale of her property. Mr Vitiello's advices to Mrs Vaclav focussed on the market price which she might have achieved, rather than on the consideration which she could expect from a sale to Mr Anthony.

117 Accordingly, given the condition of the property at the time of the sale, I am not satisfied that the sale price of $280,000, when added to the other items in the sale package which were agreed to, together with the saving in a real estate agent's commission and sale costs, was in fact a sale at an undervalue, let alone a "considerable undervalue" as pleaded in the Amended Defence and Counterclaim.

118 Further, there were other advantages to Mrs Vaclav of a personal nature which rendered the sale to Mr Anthony attractive to her. Even though these advantages are not readily capable of reflection in monetary terms, in this case they may properly be taken into account in considering whether the transaction overall was fair, just and reasonable.

119 Mrs Vaclav was clearly concerned about the incomplete state of her house when she was in the process of offering it for sale in March 2008. She noted in her diary notebook entitled "Sale of the Property at 11 Scenic Court", immediately following her entry relating to some legal matters relating to the sale which had to be attended to, a list which she described as "Repairs to 11 Scenic Court". The issue of compliance with the applicable building regulations in respect of the work which had already been undertaken by her late husband was also a matter of concern to Mrs Vaclav. She noted in her diary notebook the advice which she had received from Mr Neil Butler of Stockdale & Leggo, that a special condition in the contract was required to the effect that the purchaser has inspected the property and would make no claim against current vendor in respect of any breach of the relevant building regulations.

120 On the other hand, the sale to Mr Anthony, a ready and available buyer, gave Mrs Vaclav the advantage of some peace of mind. This, she appreciated, was a benefit to her. Mr Anthony knew the condition of the property and knew exactly what was involved in completing the works. Further, he was uniquely placed to complete the work himself, given his experience in domestic maintenance and he was prepared to undertake the project. This had personal appeal to Mrs Vaclav who wished to see her late husband's work completed.

121 Further, I am satisfied that there was nothing in the nature of exploitation on the part of Mr Anthony in conducting his negotiations for the sale with Mrs Vaclav. He simply was not in a position to offer any more for the purchase of the property other than that reflected in the agreement negotiated with her. Mrs Vaclav had rejected Mr Anthony's first offer of $260,000 and had negotiated with him up to his limit of $280,000 together with the additional components of the sale agreement. With the contract which they finally settled upon, I am satisfied that he had exhausted his capacity to provide any further consideration for the sale. I am also satisfied that Mr Anthony communicated this to Mrs Vaclav and that she accepted this to be the position prior to signing the written Contract of Sale.

122 When the transaction is considered in its full context, taking into account the various advantages which Mrs Vaclav was to enjoy from it, I am satisfied that the transaction was in fact fair, just and reasonable.

123 Further, particularly give Mrs Vaclav's receipt of independent legal advice from her solicitor, which went to the heart of the question of the sale price, I am satisfied that Mr Anthony did not exploit to his own advantage Mrs Vaclav's alleged special disability, even if such a disability existed when she signed the Contract of Sale.

124 It follows that Mrs Vaclav's case founded on unconscionable dealing must fail.

125 It was next alleged in Mrs Vaclav's Amended Defence and Counterclaim that her signature to the Contract of Sale was obtained by the exercise of undue influence over her by Mr Anthony.

126 The essence of the equitable doctrine of undue influence is that affords relief where the will of the innocent party is not independent and voluntary because it is overborne.[28] In Union Bank of Australia Ltd v Whitelaw[29] Hodges J described undue influence in equity in the following terms:[30]

Influence, as I understand the term in this connection, is the ascendancy acquired by one person over another. "Undue influence" is the improper use by the ascendant person of such ascendancy for the benefit of himself or someone else, so that the acts of the person influenced are not in the fullest sense of the word, his free, voluntary acts.

127 In Johnson v Buttress,[31] Dixon J made an observation to similar effect when he said:

The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter. The source of power to practise such a domination may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party. If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act. 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. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed and that he has obtained a substantial benefit from the other. A solicitor must thus justify the receipt of such a benefit from his client, a physician from his patient, a parent from his child, a guardian from his ward, and a man from the woman he has engaged to marry.

The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree. But while in these and perhaps one or two other relationships their very nature imports influence, the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part.

128 Consistent with this statement of Dixon J in Johnson v Buttress, two broad categories of undue influence may be identified:

(a) Where undue influence is presumed from the nature of a pre-existing relationship between the parties to the transaction whereby one is in a position to exercise domination over the other.[32]

In the words of Dixon J in Johnson v Buttress, in this situation:

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".

In such a situation:

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 done".[33]

Such relationships may in turn be sub-divided into two further categories:[34]

(i) Relationships within certain established categories where a presumption of undue influence arises from the nature of the relationship (for example, doctor and patient, and religious leader and religious devotee); and

(ii) Relationships not within these categories, (for example banker and customer) where the evidence in the case shows that the particular relationship was one of influence, and where a presumption of undue influence also arises from the nature of the relationship.

(b) Where the undue influence does not arise from a pre-existing relationship, but from particular circumstances, there is no presumption of undue influence. To make out the case, the weaker party must prove that the transaction was the result of undue influence exercised by the stronger party.[35]

In the words of Dixon J in Johnson v Buttress, the source of this power:

may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party,

and

If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act.[36]

Whether Undue Influence Exercised

129 In this case, Mrs Vaclav put her case on the basis that a particular relationship arose between her and Mr Anthony, which was one of influence, so as to justify the application of the principle of undue influence to the Contract of Sale.

130 However, on reviewing the whole of the evidence in the case, I am not satisfied that the case of Mrs Vaclav in this respect has been made out. Indeed, on the assumption that Mr Anthony was the stronger party and was in a position to use his relationship to undermine Mrs Vaclav's will or judgment and take a benefit by virtue of the relationship, I am satisfied that the plaintiff has rebutted any presumption of undue influence. Mr Anthony did not exercise unconscionable persuasion and did not exercise undue influence over Mrs Vaclav when she signed the Contract of Sale. There was no evidence which points to such influence being exercised. Indeed, the evidence is to the contrary. Referring again to the evidence of her solicitor Mr Vitiello, which I accept, Mrs Vaclav freely entered into the transaction and was fully cognisant of the independent advice which had been given to her.

131 Further, even if her case of undue influence was said to arise from no pre-existing relationship, but from the particular circumstances which had arisen, such that there is no presumption of undue influence, I am not satisfied that Mrs Vaclav has proven that the Contract of Sale was the result of any undue influence exercised by Mr Anthony as the stronger party.

132 At the time of entry into the transaction, Mrs Vaclav was enthusiastic about the sale. On 22 March 2008, with the prior agreement of Mrs Vaclav, Mr Anthony took his wife and two sons to inspect the property. On 26 March 2008, again with the agreement of Mrs Vaclav, Mr Anthony took his parents through the property. Mrs Vaclav on both occasions made them all welcome, and showed Mr Anthony's family around the interior of the property.

133 Successful completion of the transaction also enabled Mrs Vaclav to move into the retirement village, Lexington Gardens, something she was very much looking forward to.

134 It follows that the defendant's allegation as to undue influence does not succeed.

135 It was next alleged in her Amended Defence and Counterclaim that her signature to the Contract of sale was obtained at a time when she was of unsound mind. The party alleging this basis for setting aside a contract bears the onus of proof of the allegation.

136 The High Court in Gibbons v Wright[37] dealt with the issue. Dixon CJ, Kitto and Taylor JJ explained the degree of mental incapacity required for the validity of a transaction in the following terms:[38]

The learned Chief Justice was clearly right in treating the validity of the instruments in suit as depending upon the possession by Ethel Rose Gibbons and Olinda Gibbons of a degree of understanding relative to the nature of that which they were doing. The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation.

137 I am not satisfied that the defendant, Mrs Vaclav, did have unsoundness of mind such that she did not have the capacity to contract at the time when she signed the Contract of Sale. Further, I am not satisfied that Mr Anthony had any knowledge that she lacked the requisite capacity at the relevant time.

138 I have already found that the evidence of Dr Sutcliffe, to the effect that Mrs Vaclav had a cognitive disability, that she would have difficulty understanding transactions undertaken at the relevant time and judging their import, and that her judgment was likely to be impaired, should not be accepted.

139 Mrs Vaclav was not only capable of understanding the general nature of what she was doing by entering into the Contract of Sale, I am satisfied that she knew precisely what the transaction entailed, including the detail of the essential particulars of the sale and the additional terms she agreed to with Mr Anthony. Mrs Vaclav's diary notebook entries provide eloquent testimony of her knowledge and understanding at the relevant time.

140 It follows that her allegation as to unsoundness of mind must also fail.

141 It was only on about 18 April 2008 that Mrs Vaclav expressed second thoughts about the sale. It was then that, for Mrs Vaclav, a stepping stone became a stumbling block.

142 The evidence points to Mr Iacovelli being significantly involved in encouraging her to take this sad course. He sent the facsimile letter dated 21 April 2008 to Mrs Vaclav's solicitor, Mr Vitiello, on her behalf in which she gave instructions to withdraw from the sale. Further, Mr Iacovelli played a major role in the incident which occurred on 21 April 2008, when Mr Iacovelli confronted Mr Anthony in the presence of Mrs Vaclav, and passionately complained that the sale price was too low. This conduct, in all likelihood, would have been a powerful influence upon her. Mrs Vaclav had a high regard for Mr Iacovelli. To use her words:

He's a wonderful friend to me ... I trusted him. I welcomed him in my home ... He was my friend and confidant.

However, Mr Iacovelli had no sound basis for adopting the position he did in asserting that the sale was at an undervalue and his advice that Mrs Vaclav should avoid the sale on this basis was misplaced.

143 I am satisfied that Mr Anthony had the finance in place to settle the Contract of Sale on the agreed date of completion and was ready, willing and able to do so.

144 I am further satisfied that Mr Anthony presently has the finance in place to settle the transaction, and is ready, willing and able to do so, should this be ordered by the Court.

145 Both Mr Anthony and his wife gave unchallenged evidence to this effect which I accept.

146 In the circumstances of this case and consistently with the framing of relief which, in Lord Blackburn's phrase, is "practically just",[39] I will make an order in favour of the plaintiff for specific performance of the Contract of Sale, but I will do so on the basis of a number of conditions.

147 Decrees of specific performance may be granted subject to conditions.[40] In Summers v Pearse[41] the New South Wales Court of Appeal[42] adopted the following approach:[43]

The decision in London and Birmingham Railway Compnay v Winter ((1840) Cr and Ph 57,61) and the later decisions in Martin v Pycroft ((1852) 2 De G M and G 785); Smith v Wheatcroft ((1878) LR 9 Ch D 223) and Scott v Bradly ([1917] 1 Ch 850) would suggest that, in cases in which, either, a term of an oral agreement benefiting any party has been omitted from a memorandum, or formal record, of that agreement, or, there has been a parol variation of a formal agreement, and the relevant term, or variation, was one benefiting the defendant in a suit for specific performance, the Court, in concerning itself to see "that all parties may have the benefit of what they contracted for" should refuse specific performance unless the plaintiff is prepared, either, to undertake to the Court to perform the term, or variation, or, submit to an order to the same effect.[44]

148 In this case, the additional terms to the Contract of Sale which I have found, when converted into money terms in default of agreement as to the implementation of the obligations, should be part of the price of the order for specific performance, and should be granted in favour of the plaintiff to ensure that the parties may have the benefit of what they contracted for. It will also be necessary to provide for conditions which recognise the reality of the passage of time in respect of the completion date and the date when the defendant is to vacate the property.

1. Subject to the conditions which follow, the Contract of Sale for the sale of the property entered into on 26 March 2008 between the defendant as vendor and the plaintiff as purchaser be specifically performed and carried into execution.

2. The conditions upon which the order for specific performance is made are:

(a) The deposit is to be released to the defendant forthwith;

(b) The settlement date upon which payment of the balance of the purchase price is to be made is 30 September 2009 ("the settlement date");

(c) The defendant is to give vacant possession of the property to the plaintiff by 30 November 2009, or earlier by mutual agreement;

(d) Upon the defendant giving vacant possession of the property to the plaintiff, the plaintiff will pay to the defendant the following sums which shall be in addition to the purchase price under the Contract of Sale:

(ii) in the absence of agreement as to the plaintiff personally undertaking the removal of the defendant to a dwelling within Greater Melbourne, a sum in respect of the reasonable removal costs of the defendant to such a dwelling, which, in the absence of agreement, shall be fixed at $2,500; and

(iii) in the absence of agreement as to the plaintiff personally undertaking the disposal of the defendant's unwanted possessions, a sum in respect of the reasonable costs of such disposal, which, in the absence of agreement, shall be fixed at $500.

(e) No rental is to be charged to the defendant in respect of her occupation of the property for the period after the settlement date and 30 November 2009.

(f) There be liberty to apply in respect of these orders.

150 I will hear the parties on the question of costs.

[1] Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447 at 461 per Mason J cited by Sneddon, M "Unfair Conduct in Taking Guarantees and the Role of Independent Advice", [1990] UNSWLawJl 12; (1990) 13 UNSW Law Journal 302 at 316.

[2] Ibid, Commercial Bank of Australia v Amadio per Deane J at 474.

[3] See: Glover, J "Equity, Restitution & Fraud" (2004), [5.3].

[4] [1983] HCA 14; (1983) 151 CLR 447 at 479.

[5] (1888) 40 Ch D 312 at 321.

[8] [1956] HCA 81; (1956) 99 CLR 362.

[12] Ibid, Commercial Bank of Australia v Amadio per Deane J at 477.

[13] [1998] HCA 66; (1998) 194 CLR 457.

[22] [1970] 3 NSWR 30 at 35.

[23] [2001] UKHL 44; [2002] 2 AC 773 at 807.

[26] [1998] HCA 66; (1998) 194 CLR 457 at 492, per Gaudron, Gummow and Kirby JJ.

[28] Sneddon, M "Unfair Conduct in Taking Guarantees and the Role of Independent Advice", [1990] UNSWLawJl 12; (1990) 13 UNSW Law Journal 302 at 316.

[29] [1906] VicLawRp 119; [1906] VLR 711.

[31] [1936] HCA 41; (1936) 56 CLR 113, per Dixon J at 134.

[32] See: Sneddon, M "Unfair Conduct in Taking Guarantees and the Role of Independent Advice", [1990] UNSWLawJl 12; (1990) 13 UNSW Law Journal 302 at 305.

[33] Johnson v Buttress, ibid at 134.

[34] See: Sneddon, M "Unfair Conduct in Taking Guarantees and the Role of Independent Advice", [1990] UNSWLawJl 12; (1990) 13 UNSW Law Journal 302 at 305, fn. 9.

[35] See: Sneddon, M "Unfair Conduct in Taking Guarantees and the Role of Independent Advice", [1990] UNSWLawJl 12; (1990) 13 UNSW Law Journal 302 at 305.

[36] Johnson v Buttress, ibid at 134.

[37] [1954] HCA 17; (1954) 91 CLR 423.

[39] Erlanger v New Sombrero Phosphate Company (1878) 3 App Cas 1218 at 1278-1279; See too: Vadasz v Pioneer Concrete (SA) Pty Ltd [1995] HCA 14; (1995) 184 CLR 102.

[40] Meagher Gummow and Lehane's Equity: Doctrines and Remedies 4th Ed. [20-275].

[41] [1993] NSWCA 249.

[42] Mahoney AP, Sheller and Powell JJ.

[44] However, if the relevant term sought to be raised be found not to be a term or variation of the agreement in respect of which specific performance is sought, but an independent or collateral agreement, the Court will not require such an undertaking, or submission, as the price of an Order for specific performance. See: Summers v Pearse at 22.