Archer v Archer

(The references in the note to "Bob" were a reference to Mr Archer Snr and to "Trevor" to the respondent) 130 The note is dated 1 December 1989. It will be recalled the documents had been signed on 24 November 1989. The trial judge found the diary note was a fabrication. His Honour then stated: "Once it is found that exhibit 18 is a fabrication then one is bound to find that it was concocted for the purpose of supporting the plaintiff's case on undue influence. Once that is found then the whole basis of her case falls to the ground at least on undue influence." 131 Nonetheless, his Honour reviewed the evidence and, independently of his finding on the diary note, concluded that the appellant "well knew what she was doing and did it freely". The fact that the appellant had signed the authority to the National Australia Bank in March 1990 provided significant support to his Honour coming to this conclusion. 132 In finding there had been no undue influence, his Honour applied the statement of Dixon J in Johnson v Buttress (1936) 56 CLR 113 at 134: "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." 133 As Mason CJ pointed out in "The Impact of Equitable Doctrine on the Law of Contract", Anglo-American Law Review, vol 27 (1998) 1, at 6-7: "… undue influence … denotes an ascendancy by the stronger party over the weaker party such that the relevant transaction is not the free, voluntary and independent act of the weaker party. In other words, it is the actual or presumed impairment of the judgment of the weaker party that is the critical element in the grant of relief on the ground of undue influence." 134 In Commonwealth Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Deane J noted at 474 that: "Undue influence … looks to the quality of the consent or assent of the weaker party." 135 Senior counsel for the appellant accepted that his Honour had stated the correct principles of law to be applied, but disputed that his Honour had correctly applied the law to the facts. He submitted that: "[T]he Respondent, by a deliberate contrivance in arranging the appointment with Mr Cheney for signing the transfer documents, had a 'special capacity or opportunity' to affect from the … Appellant's will or freedom of judgment of which the Respondent made unconscientious use, through the agency of Mr Cheney, to 'unduly influence' the … Appellant to sign the transfer documents."

and that: "The … Appellant's will was overborne by the whole of the circumstances in which she found herself." 136 Senior counsel relied upon a number of factors in support of this submission. In particular, he referred to the respondent's admission that it was his intention to cut across the appellant's intention to leave the property to all three sons and "to thwart her desires for [his] own advantage". He submitted that the respondent arranged for the property to be transferred to him and he thus protected his own interests at a vulnerable time for the appellant, given Mr Archer Snr's precarious state of health and the appellant's preoccupation with that at the time of signing of documents. Further, he submitted that the appellant did not receive any independent legal advice or have the opportunity to obtain any. She was, in effect, presented with a fait accompli when taken to the solicitor's office. 137 On the evidence accepted by the trial judge, I consider his Honour's conclusion that the transfer was the product of the appellant's free and independent will was inevitable. The making of a filial claim, inconsistent with either the wishes of a parent or the potential claims of other siblings, does not, of itself, constitute the exertion of undue influence. Nor does acquiescence in such a claim. The appellant in this case has not demonstrated that her will was overborne, although it must be accepted even on the evidence accepted by the trial judge that she was a reluctant participant in the transaction. There are also countervailing factors which meet or neutralise the factors she relied upon in support of the claim of undue influence. For example, although the appellant relies upon her preoccupation with her husband's health at the time she signed the documents, her consent to the transaction itself was obtained several weeks before her husband's illness. Another important indicator against her will being overborne was that she was prepared to agree to the transfer provided her daughter-in-law was not a transferee.

Unconscionability Claim 138 Again there was no dispute as to the correct legal principles to be applied in determining whether a transaction could be impugned as an unconscientious bargain.

Commercial Bank of Australia v Amadio 139 In Amadio Mason J at 461-462 referred to the well known passage of Fullagar J in Blomley v Ryan (1956) 99 CLR 362 at 405: "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-a-vis the other." 140 His Honour added: "It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J, 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 of circumstance is placed at a special disadvantage vis-a-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 emphasize 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." 141 As his Honour pointed out in "The Impact of Equitable Doctrine on the Law of Contract" at 7 "[u]nconscionable conduct, as the term suggests, focuses … on the unconscientious conduct of the defendant". 142 A similar approach is to be found in the judgment of Deane J in Amadio. His Honour said at 474: "Unconscionable dealing 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. 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 catalogue[d]."

Bridgewater v Leahy 143 In Bridgewater v Leahy (1998) 194 CLR 457 (Bridgewater) the High Court revisited the principles which govern whether a transaction has been procured unconscientiously. After referring extensively to Mason CJ and Deane J in Amadio, the majority stated at 479: "It should also be noted that in Hart v O'Connor an appeal from New Zealand, the Privy Council described unconscionable conduct which provided a basis for equitable relief as 'victimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances'. … it was the 'ordinary jurisdiction' of the Court of Chancery to deal with instruments and transactions 'in which the Court is of the opinion that it is unconscientious for a person to avail himself of the legal advantage which he has obtained." 144 The facts in Bridgewater were as follows. The owner of grazing land entered into a contract to sell it to his nephew and the nephew's wife for approximately $700,000. The owner forgave a substantial proportion of that amount, leaving only an amount of $150,000 to be paid. There was another party involved in the overall transaction. The same solicitor acted for all parties. The solicitor made no recommendation that any party have separate legal advice. 145 The owner, who had four daughters and no sons, treated the nephew "as the son he never had". The nephew had lived on and worked the subject land for many years and the owner depended on him to manage it. It was the owner's long term wish that the land not be broken up. 146 By his will made three years earlier than the contract, the owner had given his nephew an option to purchase certain of his property which included the transferred land for $200,000. The residuary estate was left to his four daughters. The owner died after the transfer of land to the nephew. 147 The nephew exercised the option and paid $200,000 for the property (apart from the land already transferred). 148 The effect of selling the land to the nephew was to remove from the owner the power of testamentary disposition over it for a return substantially below its true value, or as was said by the majority (at 484) "for a seriously inadequate consideration". His estate was consequentially depleted and this in turn affected the value of the estate for the purposes of any family provision application. 149 The trial judge considered that a prudent solicitor should actively have canvassed with the owner the issue of obtaining independent legal advice, but given the owner's wish to benefit the nephew concluded the result would have been no different, even if independent legal advice had been obtained. 150 The majority in the High Court noted that the trial judge's approach in relation to independent legal advice had some authority in cases of alleged undue influence: see Linderstam v Barnett (1915) 19 CLR 528 at 530-531; Watkins v Combes (1922) 30 CLR 180 at 197. They noted however at 485: "Where the complaint is of unconscionable dealing, the point is rather different. As Manning J put in Re Levey; Ex parte Official Assignee, 'the Court does not allow any person to take advantage of any known weakness of the vendor' and the Court asks whether that party had 'the opportunity' of professional advice as to 'the effect of what he [was] doing'. This denial of the opportunity to have 'the assistance of a disinterested legal adviser', rather than speculation as to what might have followed had it been pursued, is an element in the unconscientious conduct in respect of which equity intervenes to deny the entitlement of the disponee to retain the property in question, unless the disponee shows the disposition to have been 'fair, just and reasonable'."

At 490 their Honours stated: "The position of disadvantage which renders one party subject to exploitation by another such that the benefit of an improvident disposition by the disadvantaged party may not in good conscience be retained may stem from a strong emotional dependence or attachment. Louth v Diprose was such a case. In his judgment in the South Australian Full Court, a decision which was upheld in this Court, Jacobs A-CJ said: 'It is an oversimplification to say that because the respondent acted as he did with his eyes open, and with a full understanding of what he was doing, he was not in a position of disadvantage, and therefore not a victim of unconscionable conduct.'" 151 Their Honours pointed out (at 490) that a position of disadvantage does not "necessarily involve[s] physical frailty and enfeeblement with diminished knowledge by the party in question of that party's property and affairs generally". They also pointed out (at 491) that the question whether there had been unconscionable conduct "involved more than issues of contractual capacity or those issues which arise upon a defence of non est factum". They noted the following matters as being relevant to the transaction under their consideration:

(i) the initiative leading to the execution of the transfers and the fact the deed had been taken by the nephew;

(ii) the owner had "enormous affection" for his nephew but only what was described as a "reasonable relationship" with his daughters;

(iii) the owner wished to retain the properties as an integrated farming enterprise under reliable and experienced management. However, "the transfers … as a means to attain that goal, involved an improvident transaction which was neither fair, just or reasonable" ;

(iv) the transaction put it out of the owner's power to change his testamentary arrangements in respect of portion of his assets;

(v) the transfer did not necessarily secure his objective of ensuring that his properties remained as a whole farming unit. 152 Their Honours concluded at 493: "[The owner's] goal to preserve his rural interests intact and his perception that [the nephew] was the candidate to provide reliable and experienced management thereof were significant elements in his emotional attachment to and dependency upon [the nephew]. … The relationship between [the owner and his nephew] meant that, when [the nephew] raised the question of using the proceeds of sale of the Injune Land, they were meeting on unequal terms. [The nephew] took advantage of this position to obtain a benefit through a grossly improvident transaction on the part of his uncle."

Was This An Unconscionable Dealing? 153 Although each case must be judged on its own facts, the case with which we are dealing bears a number of similarities to Bridgewater, and as Gleeson CJ and Callinan J said in that case (at 472) "the facts [of particular cases] illustrate the practical content of the principles". The similarities relate to the transfer of the property in circumstances which make the transaction improvident. I deal with those, in so far as they relate to this transfer, in detail below. There is also a significant difference. 154 The significant difference between the facts of this case and those of Bridgewater is the nature of the relationship between the appellant and the respondent. The question which arises first therefore, is whether the relationship between the appellant and respondent was unequal so as to bring her into a position of disadvantage in relation to him. If she was, the question which then arises is whether the respondent took unconscionable advantage of that disadvantage. 155 The trial judge found: "None of the pleaded claims of disability stated to arise from the illness of Mr Archer; inexperience; inequality of bargaining power and inability to protect her own interests is made out. Trevor was not very well educated and has difficulty in reading and there was nothing to show that Mrs Archer was in any unequal position as against him. … The medical evidence does not support the fears for her husband's future which she said that she had when she was signing, which evidence was necessary to make good what was said in the note. That is not to say he was in perfect health but to say the stated concern about a further heart attack is not true. The only evidence which could possibly support the claim based on unconscientious behaviour was that passage of the cross-examination of Trevor, which I have set [out]. That however must be considered in light of my acceptance that he went to see the solicitor having been told to do so by his father and the natural progression of events after that. Mrs Archer was never shown to be under the influence of Trevor; she was never shown not to have acted as she wished to act; she was not lured into an office to sign. It was not unreasonable of Trevor to put forward his claims. What has happened in this unfortunate case is that Mrs Archer did what she did because she had agreed to do so but later changed her mind and concocted a story probably because of dissatisfaction expressed by her other sons. The claim based on unconscionability must be dismissed." 156 In my opinion, a number of the factors which his Honour identified in this paragraph did not precisely accord with or overlooked certain evidence. 157 There was no doubt that the appellant did not, initially, wish to make an inter vivos gift of "Sussex" to the respondent. Rather, she had two concerns: first to provide for her "old age"; secondly, to provide equally for her three sons. She considered she needed both "Glenroy" and "Sussex" for both these purposes, but particularly the first. When the respondent realised that he may not have been the recipient of "Sussex" (or at least of its full value), he appealed, not to the appellant, whose concern at the loss of her property interest the respondent wished to overcome, but to his father, Mr Archer Snr. As he admitted, it was his intention "to thwart [the appellant's] desires for [his] own advantage". It is true that the appellant both acquiesced in and understood that she was transferring the property to the respondent for no return. In doing so, I do not consider that she was on equal bargaining terms with the respondent. Mr Archer Snr clearly thought the respondent was entitled to the property. The respondent not only considered he was entitled to it, he appealed to his father to look after his interests in priority to the appellant's. Thus, the appellant found herself isolated from both her husband and her son in relation to her wishes as to the property. 158 There is no evidence as to what occurred as between the appellant and Mr Archer Snr. Only the result is known - the appellant agreed to do something which was against her wishes and against her interests. In my opinion, being placed in a position of having to stand on her own against the wishes of her husband and son or acceding to those wishes and interest at the expense of her own, placed her in a position of disadvantage vis-a-vis the respondent. I consider that circumstance of its own was sufficient to qualify the appellant for relief it if was established that the appellant took unconscientious advantage of her position. 159 Another of the factors which the appellant had relied upon as putting her in a position of disadvantage was her concern over her husband's health. The medical evidence was that Mr Archer Snr had an acute myocardial infarction in early November 1989, for which he was hospitalised for two weeks. Whilst in hospital he had a number of setbacks. For example, three days after admission he had a "severe episode of pain with new inferior changes … and [indications] he had extended his inferior infarction". Progress after that was satisfactory until discharge. However, on return home he developed a respiratory infection. As his specialist reported on 4 December 1989 "[h]e understandably feels less well than he should". It was also probable he "had one or two episodes of angina since his discharge from hospital and these have occurred on minor exertion". (Emphasis added). 160 By 21 December 1989 he was "feeling better and walking about 300 yards twice a day". Walking 300 yards twice a day, I would think, is very limited physical activity for a farmer. By February 1990, Mr Archer Snr had "accelerating angina" which limited him to walking twenty to thirty yards on the flat. By early April he had undergone coronary artery bypass grafting. 161 The history of hospitalisation, setbacks in hospital, angina attacks on minor exertion after his discharge from hospital and feeling less well than expected after discharge would, in any reasonable relationship, be matters of real concern. Although his Honour made no finding on this point, such evidence as his Honour accepted indicated a close and supportive relationship between the appellant and Mr Archer Snr. It would be extraordinary if the appellant did not have concerns about her husband's health at the time. Although Mr Archer Snr's health after 24 November is not relevant to the appellant's concerns as at that date, the later medical history demonstrates that her earlier concerns were not unfounded. But in any event, the fact he had suffered a number of infections and the fact his post hospital progress was not as smooth as was hoped for was a sufficient basis for the appellant to have real concerns about his health. It should also be remembered that one of the factors relied upon by his Honour was the fact that the appellant signed the authority to the National Australia Bank on 2 March 1990. At that time Mr Archer Snr had just been discharged from a further period of hospitalisation and was on a hospital waiting list for bypass surgery. 162 In my opinion, the evidence does not support his Honour's finding that "the medical evidence does not support [the appellant's] fears for her husband's future". Because I consider that premise to be wrong, his Honour's conclusion that "the stated concern about a further heart attack is not true" does not follow. In saying that I am conscious that his Honour did not accept the appellant as a creditworthy witness. However, this conclusion is not based on a lack of creditworthiness as such, but on a supposed lack of supporting evidence. I do not consider there was such a lack of supporting medical evidence. 163 That being the case, I can see no reason why the appellant should not be accepted on that issue. If she is, then her concern for her husband's health contributed to the disadvantage in which she was place. However, as I have identified, even without that factor, I consider that the appellant was in a position of disadvantage in the sense that term is used in Amadio and in Bridgewater. 164 Having concluded that the appellant was in a disadvantageous position it is necessary to determine whether the respondent took unconscientious advantage of that. I consider the following matters to be relevant to that question:

(i) the appellant gifted her interest in a substantial property to the respondent. She expected to outlive her husband (a not unreasonable expectation given she was younger than the respondent and he was experiencing health problems) and so would in due course have sole title to that property;

(ii) she believed that she would need the property to provide for her in her old age;

(iii) the other property "Glenroy" was not hers. It was Mr Archer Snr's;

(iv) "Glenroy" had became burdened with a debt which had been incurred in the purchase of "Sussex";

(v) she did not have any independent legal or other advice, nor was any recommended or suggested to her;

(vi) the respondent initiated the discussion and arranged the processes which eventually led to the property being transferred to him;

(vii) the respondent actively pursued his own interests in having the property gifted to him. In doing so it was his intention to thwart the appellant's desires;

(viii) having transferred the property to the respondent, the appellant did not have the power to change her testamentary arrangements, including to make provision for her children in the manner she saw appropriate. 165 The gifting of her interest in "Sussex" of itself made the transaction an improvident one. The additional factors referred to in (ii) - (iv) above underscore this. There were other disadvantages associated with the transfer. For example, it made it easier for the respondent to withdraw from the partnership - either to farm "Sussex" for his own benefit or to sell it for any reason he chose. Although there was no analysis of the partnership accounts provided to the Court, it is known that even with both properties being worked in partnership they were, for some years before the transfer, insufficient to support the appellant and Mr Archer Snr and the respondent and his family. There was no countervailing benefit to the appellant in the transfer. 166 The transaction is even the more improvident when it is remembered that "Glenroy" was not registered in the appellant's name. She was thus solely dependent for her future security on the testamentary largesse of Mr Archer Snr should she survive him. Although their relationship was a good one, and the history of the wills indicated that the appellant would receive "Glenroy" should Mr Archer Snr die first, that was not absolutely certain. He could always change his will. Nor is the likelihood of being beneficiary under a will property of the same type as having property in one's own right. 167 It was also suggested that there was no evidence that "Glenroy" would be insufficient to meet the appellant's needs in the future. That is correct. However, the Court cannot assume the opposite. Further, the question of sufficiency of means is a relative one and there is no reason why the appellant should not have the security of property or assets which would not only provide her with a home, but which would provide her with an income to sustain an appropriate standard of living, including the need to provide for her long term health needs. In any event, if the respondent wished to assert the transaction was not improvident because of that factor, he bore that onus. 168 It was postulated in argument that if for some reason Mr Archer Snr did not provide or provide adequately for the appellant in his will, she would have a strong claim for relief under the Family Provisions legislation in this state. That is undoubted. However, provision made by a court under that legislation is couched within the parameters of the exercise of judicial discretion and such provision would involve the incurring of legal costs. That is a far less advantageous position to be in than having property in one's own right. 169 It is also relevant that the appellant did not have the benefit of independent legal or other advice. It was submitted that the solicitor was acting for and in the interests of the respondent only. It is clear from Mr Cheney's file note of 21 September 1989 and subsequent letter to the respondent, that he was acting in the respondent's interest. The appellant, for her part, was entitled to independent legal advice. It is by no means sure that if she received such advice the appellant would have transferred the property to the respondent. Indeed, the contrary is the more likely, but that is not an issue which needs to be determined. As Gaudron, Gummow and Kirby JJ said in Bridgewater: "…the Court asks whether [the] party [in a position of weakness] had the opportunity of professional advice. … The denial of this opportunity … is an element in the unconscientious conduct in respect of which equity intervenes …"

Relief 170 It follows from my reasons that I consider that the appellant is entitled to relief. The question arises as to what relief is appropriate. 171 It has not been necessary up until this point to review the history of the proceedings. However, the history is relevant, not only to the question of appropriate relief but also to the question of costs. 172 The appellant and Mr Archer Snr commenced proceedings in 1995 claiming that the transfer had been obtained by the exercise of undue influence over each of them. The matter was heard by Simos J in late 1995. His Honour dismissed Mr Archer Snr's claim. He upheld the appellant's claim in part and declared that the transfer of her interest in "Sussex" was as to two-thirds of that one half procured by the respondent's undue influence. 173 The respondent appealed to the Court of Appeal against the finding of undue influence. The Court of Appeal allowed the appeal and set aside the orders made by Simos J and ordered a new trial regarding the appellant's claim. 174 The appellant's claim was re-heard by Windeyer J in May 1999. His Honour also dealt with the question of costs of the first trial as against both the appellant and Mr Archer Snr. 175 The appellant's claim as heard by Windeyer J was only in respect of the fund representing two-thirds of her notional one-half interest in the property (the property having been sold in the meantime) - that is one-third of the proceeds of sale of that property. The claim heard by Windeyer J was based on undue influence and unconscionability. 176 The question which arises is, given these circumstances, to what relief is the appellant entitled. Deane J said in Amadio at 480-481: "Relief against unconscionable dealing is a purely equitable remedy. The concept underlying the jurisdiction to grant the relief is that equity intervenes to prevent the stronger party to an unconscionable dealing acting against equity and good conscience by attempting to enforce, or retain the benefit of, that dealing. Equity will not, however, 'restrain a defendant from asserting a claim save to the extent that it would be unconscionable for him to do so. If this limitation on the power of equity results in giving to a plaintiff less than what on some general idea of fairness he might be considered entitled to, that cannot be helped' (per Lord Greene MR, Wrottesley and Evershed LJJ, In re Diplock). Where appropriate, an order will be made which only partly nullifies a transaction liable to be set aside in equity pursuant to the principles of unconscionable dealing (see Bank of Victoria Ltd v Mueller and the cases there cited)." 177 The relief to which the appellant is entitled has been predetermined to the extent that the claim on the rehearing was limited to the fund representing one-third of the proceeds of the sale of the property (the fund). The genesis of the proceedings being so limited is to be found in the order of Simos J followed by the sale of the property and the agreement between the parties that the fund would be retained out of the proceeds of sale and the claim limited to that fund. 178 Although the appellant gifted away her entire interest in the property, she had always had and retained an intention that the respondent in due course would be entitled to one-third. Indeed, on the original purchase, it was contemplated that the respondent would have a one-third interest. The amount retained in the fund represents what her long term wishes were in respect of the property. In my opinion, the appellant is entitled to an order that the moneys represented by the fund be paid to her. 179 Accordingly, I propose the following orders:

(iii) Order that there be paid to the appellant the sum separately retained out of the property and representing two-thirds of the appellant's notional half interest of the property;

(iv) Order that the respondent pay the costs of both proceedings at first instance.

(v) Order that the respondent pay the costs of the appeal, but have a certificate under the Suitor's Fund Act 1951 (NSW), if so qualified. 180 FITZGERALD JA: The first appellant ("Mrs Archer"), who was born in 1920, and the second appellant ("Mr Archer"), who was born in 1919, are the parents of the respondent ("Trevor"), and two other sons, Colin and Neville. All three of the appellants' sons were born on "Glenroy", a mixed farming and grazing property about 40 kilometres from Orange, which was owned by Mr Archer. 181 Mrs Archer's family owned another property, "Sussex", which is located about 12 kilometres from "Glenroy". Late in 1979, Mr and Mrs Archer purchased "Sussex" as joint tenants. A large part of the purchase price was borrowed, part from the Rural Assistance Board. Because the loan obtained from the Rural Assistance Board was a "farm build-up loan", the property was required to be purchased by Mr Archer, or Mr and Mrs Archer, and Trevor was unable to be one of the purchasers, as had been intended. However, Trevor was responsible with Mr and Mrs Archer for repayment of some of the total amount borrowed to purchase "Sussex". 182 After Trevor married in 1982, he and his wife lived on "Sussex". From about mid-1987, Mr Archer, Mrs Archer and Trevor operated the two properties in a partnership in which Trevor had a half share and each of Mr and Mrs Archer had a quarter share. Mr Archer and Trevor worked on the properties. Colin did not work on either property as an adult, and Neville did not work on either property after mid 1987. 183 Partnership funds were used to repay some of the money borrowed to purchase "Sussex". On the other hand, Trevor and his family lived rent-free on that property. 184 On 24 November 1989, Mr and Mrs Archer signed documents for the transfer of their interests in "Sussex" to Trevor. "Sussex" was subsequently transferred to Trevor, who did not provide any consideration to either Mr or Mrs Archer. "Sussex" has subsequently been sold by Trevor, but part of the proceeds of sale have been retained in a trust account to meet Mrs Archer's claim in the present litigation. 185 Initially, Mr and Mrs Archer sought to set aside their transfer of "Sussex" to Trevor on the ground of undue influence." Later, Mrs Archer added a claim alleging unconscionable conduct. 186 At the first trial in the Equity Division, Mr Archer failed but Mrs Archer partially succeeded. Simos J determined that Mrs Archer's transfer to Trevor "was, as to two thirds of her notional half interest …procured by [his] undue influence." Trevor appealed in respect of the orders made in favour of Mrs Archer, and this Court ordered a new trial of her claim. Neither Mr Archer nor Trevor appealed in respect of any order made in respect of Mr Archer's claim. 187 At the second trial between her and Trevor, at which Windeyer J presided, Mrs Archer failed in the Equity Division. She was ordered to pay Trevor's costs of the second trial, and she and Mr Archer were ordered to pay Trevor's costs of the first trial. The costs of the second trial and part of the costs of the first trial were ordered to be paid "on the indemnity basis". 188 Mr and Mrs Archer have appealed, although Mr Archer's appeal relates only to "the question of costs". The orders sought in the notice of appeal were:

3. In place of the judgment below, a declaration that the transfer by [Mrs Archer] to [Trevor] of her interest in the property 'Sussex' was, procured by unconscionable conduct or by undue influence either as to the whole of her interest therein or as to two thirds of her notional one half interest therein.

4. A declaration that the net proceeds of sale of 'Sussex' are held on trust for [Mrs Archer] as to a one half share.

5. In the alternative, a declaration that the net proceeds of sale of 'Sussex' are held on trust as to a one third share thereof.

6. Order that [Trevor] pay [Mr and Mrs Archer's] costs of the appeal and the [second trial]. And that each party pay its own costs of the [first trial]". 189 Although Mrs Archer did not apply to amend the relief sought by her notice of appeal, the argument in this Court proceeded on the basis that whoever of Mrs Archer and Trevor succeeds is entitled to the portion of the proceeds of sale of "Sussex" which is held on trust pending the outcome of this litigation and that no other relief, apart from costs, is sought. 190 In a written submission lodged after the hearing in this Court, the appellants submitted that Mrs Archer ".. should have her costs of (i) this appeal; (ii) the [second] trial before Windeyer J; and (iii) the [first] trial before Simos J, at least after the amendment of 27 November 1995 to claim unconscionable conduct", and that Mr Archer "should (i) have his costs of the appeal; (ii) have no order for costs against or for him in respect of the [first] trial before Simos J for the reasons given by Simos J….". 191 In late 1988, and in any event before 1 March 1989, there were two material conversations in relation to Sussex, the first between Mrs Archer and Trevor, and the second, a short time later, between Mr Archer, Mrs Archer and Trevor. 192 In the first of the two conversations, Mrs Archer told Trevor that "Sussex" would one day be owned by him and his two brothers. Trevor protested, and pointed out that he had remained and worked on "Sussex", and had helped Mr and Mrs Archer to obtain and pay off loans which had been used to buy "Sussex", including a loan from the Rural Assistance Board. Mrs Archer said "I suppose that's right. I'll have to think about that. Anyway we can't do anything until we have paid out the Rural Assistance Board." In the previous judgment of this Court, Mrs Archer's statement was described as ".. a reluctant indication … that she would at least consider whether she would change her, until then, strongly held intention of leaving her share of "Sussex" to her three sons to that of leaving it to [Trevor] only." 193 In the second of the two conversations, when Trevor asked what Mr and Mrs Archer planned in relation to "Sussex", he was again told that nothing could be done until the Rural Assistance Board had been paid out. 194 On 1 March 1989, each of Mr Archer and Mrs Archer made a new will. Each appointed the other and Trevor as executors and left the whole of his or her property to the other. In the event that he or she survived the other, each left "Sussex" to Trevor, and broadly speaking, each divided his or her other property equally between their three sons. 195 After Mr Archer and Mrs Archer made wills on 1 March 1989, copies were given to Trevor. Initially, he thought that he would inherit "Sussex". However, in about August 1989, Mrs Archer informed him that, if Mr Archer died before her, she would have to sell both "Sussex" and "Glenroy" to provide for her old age. When asked by Trevor whether "Glenroy" would not be enough for her, Mrs Archer replied "I don't really know." 196 A few days later, Mr Archer and Trevor had a conversation in which Trevor told Mr Archer what Mrs Archer had said, pointed out how difficult it would be for Trevor, who would be left without a house, if "Sussex" was sold, and asked whether there was any chance of getting "Sussex" transferred into his name. Mr Archer replied "yes, I suppose it's time that we transferred to you. You had better make some inquiries with the solicitor to see what's involved and let me know." 197 Trevor and his wife consulted a solicitor in Orange, Mr Cheney of Cheney and Wilson, on 21 September 1989. None of the parties had dealt with Mr Cheney prior to that time. Trevor then became aware that, because Mr and Mrs Archer were joint tenants of "Sussex", Mrs Archer would become the sole owner if, as was apparently anticipated, Mr Archer predeceased her. Mr Cheney advised Trevor that it was desirable that he obtain a transfer of "Sussex" to himself or himself and his wife, and that the stamp duty would be about $27,000. 198 In a letter to Trevor and his wife the following day, Mr Cheney said: "… As advised in our conference, having regard to the fact that Mr and Mrs Archer senior hold the property as joint tenants, it is important from your point of view to discuss with them the possibility of transferring the property to yourselves at the earliest possible time. While this course of action involves a substantial payment of stamp duty we are of the view that the long term protection and certainly that the transfer will ensure outweigh the cost. ..." 199 Trevor told Mr Archer that he would be prepared to pay the stamp duty and other costs associated with the transfer of "Sussex", and Mr Archer said "That's O.K., go ahead." 200 On 26 September 1989, Trevor had a conversation with Mr and Mrs Archer in which he said to Mrs Archer "I am relieved that you and dad have agreed to transfer 'Sussex' to me." Mrs Archer said "I am prepared to give it to you, but not to Sue [Trevor's wife]. I won't have her name on the papers. We will give it to you but not to her." That was accepted by Trevor and his wife. 201 On the same day, Mr Archer, Mrs Archer and Trevor went to the State Bank at Canowindra and obtained a loan, which was used in part to repay the Rural Assistance Board's mortgage over "Sussex". At Mr Archer's suggestion, the State Bank's loan was secured only on "Glenroy". 202 There was another security over "Sussex" in favour of Mrs Archer's sisters. Sometime prior to 16 October 1989, Mr Archer told Trevor that he and Mrs Archer were in the process of satisfying that debt, and the security was discharged on 23 October. 203 Earlier, another security over "Sussex" in favour of the National Australia Bank had also been paid out although the security had not been released. 204 On 16 October 1989, Trevor and his wife again saw Mr Cheney and told him that Mr and Mrs Archer had agreed to transfer "Sussex" into Trevor's name only. There was a discussion about the value of the property and the amount of the stamp duty which the transaction would attract, and Mr Cheney said he would arrange for a valuer to visit "Sussex" in due course. 205 On 17 October 1989, Trevor received a letter from Mr Cheney informing him that documents for the transfer of "Sussex" were ready for signature and stating that the parties should attend on Mr Cheney for that purpose. For reasons which were never satisfactorily explained, Mr Cheney prepared a contract for the sale of "Sussex" by Mr and Mrs Archer to Trevor. No purchase price was paid or intended to be paid, and the parties have proceeded on the footing that, notwithstanding the contract, "Sussex" was given, not sold, by Mr and Mrs Archer to Trevor. 206 On 6 November 1989, Mr Archer consulted Dr Winkworth with chest pains, and was admitted to Orange Base Hospital. He was discharged from hospital and returned home to "Glenroy" on 17 November 1989. 207 Sometime in the ensuing week, Trevor informed Mr and Mrs Archer that the documents for the transfer of "Sussex" to him were ready for signature and asked when they could be signed. Either Mr or Mrs Archer said that Mr Archer had an appointment to see Dr Winkworth on 24 November, and they could call into the solicitor's office and sign the documents that day. Trevor made the necessary arrangements, and informed Mr and Mrs Archer. 208 On 24 November 1989, Mr and Mrs Archer and Trevor and his wife went to Mr Cheney's office. Mr and Mrs Archer confirmed that the transfer of "Sussex" to Trevor had been discussed with them and that they understood that, if they signed the documents which Mr Cheney had prepared, "Sussex" would be transferred into Trevor's name but they would remain the owners of "Glenroy". There was discussion about the transfer being a gift, Trevor being the sole transferee, Trevor's payment of all costs and expenses associated with the transfer, the valuation for "Sussex", the possibility of a reduction in stamp duty, and the discharge of securities over "Sussex". 209 At that meeting, Mr Cheney also explained the general terms of the contract which he had prepared and the transfer to Mr and Mrs Archer, who signed those documents and a document authorising the State Bank to deliver the title deeds to "Sussex" to Mr Cheney. Although the authority was correctly dated that day, the contract and transfer documents were later dated 20 March 1990, after "Sussex" had been coincidently valued at the exact purchase price already stated in the contract. 210 In his evidence, Mr Cheney said that, although his first instructions came from and his first advice was given to Trevor, he considered that he was acting for everyone involved in the transaction after he was informed that Mr and Mrs Archer had agreed to proceed. He said, and the trial judge accepted, that it is not unusual for one solicitor to act for all families in "inter-generational transfers." 211 While Mr Cheney did not consciously assist Trevor to take advantage of Mrs Archer, he acted foolishly. There was an obvious potential conflict of interests between mother and son, and the same solicitor could not diligently act for both. It does not seem to have even occurred to him to discuss the practical implications of the step which they were taking with Mr and Mrs Archer or even to inquire of them their reasons for agreeing to do what Trevor wanted or to ascertain whether they were enthusiastic or reluctant donors of "Sussex". He did not inquire as to their financial position, their health or future prospects or their plans, and he did not advise them that they should obtain independent legal or financial advice. 212 After they left Mr Cheney's office, Mr and Mrs Archer and Trevor and his wife went to Dr Winkworth's surgery, where Mr Archer had a consultation with another medical practitioner because Dr Winkworth was unavailable. 213 Mr Archer's health remained poor at all material times thereafter, and he was later again hospitalised with heart problems. 214 A few days later, Mrs Archer asked Trevor whether he was happy that "Sussex" had been transferred to him and he thanked her. 215 Shortly after 6 December 1989, Mr Archer and Mrs Archer received a letter from the National Australia Bank asking them to call to sign a document authorising the release of the certificates of title in respect of "Sussex" to Mr Cheney. 216 On 11 December 1989, there was a party in Orange to celebrate Mr Archer's 70th birthday. Mr and Mrs Archer and Trevor and his wife attended. 217 On 18 December 1989, a valuer inspected "Sussex" for the purpose of a valuation. 218 On 25 December 1989, there was a family Christmas celebration at "Glenroy" at which Mr and Mrs Archer and Trevor and his wife were present. 219 Mr Archer was still in poor health, and was hospitalised again in the new year. 220 On 2 March 1990, Mr and Mrs Archer signed an instruction to the National Australia Bank authorising it to hand over the title deeds to "Sussex" to Mr Cheney. Windeyer J rejected Mrs Archer's claim that she had no recollection of signing that document. 221 In the same month, Mrs Archer asked Trevor whether the transfer of "Sussex" had been completed. 222 On 12 September 1990, Mr and Mrs Archer made new wills, each appointing Trevor a co-executor, and each stating that no provision had been made for him in the will as he had been adequately provided for. The trial judge rejected Mrs Archer's claim that she then believed that she had transferred only a one third share of her interest in "Sussex" to Trevor, and that it was only after her other sons questioned her, and she obtained copies of documents, that she realised that she had transferred her entire interest in "Sussex" to Trevor. 223 In about April 1992, Mrs Archer collected a copy of the contract for the transfer of "Sussex" to Trevor from Mr Cheney. 224 Sometime in 1992, when her other sons raised the ownership of "Sussex" with Mrs Archer, she told them that she had only wanted to transfer one third of her interest to Trevor but had been tricked into transferring her whole interest. Colin and Neville suggested that she act to correct the situation. 225 On 10 December 1992, another firm of solicitors, Timmins and Partners, wrote to Mr Cheney on behalf of Mr and Mrs Archer seeking information concerning the transfer of "Sussex" to Trevor. That letter was received by Mr Cheney on 21 December 1992, and he replied on the following day. 226 Following a threat by Mr and Mrs Archer to overturn their transfer of "Sussex" to Trevor, there were inconclusive discussions between the parties and their lawyers in 1993. 227 Trevor dissolved his partnership with Mr and Mrs Archer on 30 June 1994. 228 In 1995, Mr and Mrs Archer lodged caveats over "Sussex", and, in April that year, they commenced their Equity Division proceeding seeking the have the transfer of "Sussex" wholly set aside. 229 Windeyer J held that Mrs Archer was an untruthful witness. His Honour found that she had fabricated a document which she said was a note which she had written at about 11.00 p.m. on the day when the documents were signed, which she asserted was not 24 November but 1 December 1989. His Honour also referred to inconsistencies in Mrs Archer's evidence, which included conflicting assertions that she had not understood that she had signed documents to transfer her interest in "Sussex" to Trevor, that she had intended to transfer only one third of her interest in "Sussex" to Trevor, and that she had understood that she had transferred her interest in "Sussex" to Trevor but she had done so only because of circumstances involving undue influence or unconscionable conduct by Trevor. Mrs Archer's evidence that she was surprised when she and Mr Archer were taken to Mr Cheney's office on 24 November 1989 but decided to sign and say nothing because she was so worried about Mr Archer's health was rejected. His Honour found that, when she transferred the whole of her interest in "Sussex" to Trevor, Mrs Archer "well knew what she was doing and did it freely", that "she was never shown not to have acted as she wished to act..", and that she "did what she did because she had agreed to so but later changed her mind and concocted a story..". His Honour also found that "[n]one of the pleaded claims of disability stated to arise from the illness of Mr Archer; inexperience; inequality of bargaining power and inability to protect her own interests [was] made out". 230 Subject to what follows, those findings were open. Mrs Archer cannot succeed on the ground of undue influence if she cannot succeed on the ground of unconscionable conduct. 231 The issue raised by Mrs Archer's claim of unconscionable conduct is whether Trevor obtained a gift of her interest in "Sussex" by unconscionable conduct. If that issue is determined in Mrs Archer's favour, Trevor does not dispute that she is entitled to the part of the proceeds of sale of "Sussex" which is held in trust. Events subsequent to Mrs Archer's gift of her interest in "Sussex" to Trevor were relied on by him for any assistance which they provided in understanding the circumstances of that gift, but were as disentitling Mrs Archer to any relief to which she would otherwise be entitled by reason of the circumstances of that gift, properly understood. 232 Windeyer J found that the "only evidence which could possibly support the claim based on unconscientious behaviour" was Trevor's statement that he intended "to thwart [Mrs Archer's] desires for [his] own advantage", which was the "natural progression" of events after he saw Mr Cheney "having been told to do so by his father". On the basis of his findings, his Honour held that the "claim based on unconscionability must be dismissed." 233 However, the desire of Mrs Archer which Trevor intended "to thwart", and succeeding in thwarting, was her desire to retain her interest in "Sussex", not give it to Trevor. In deciding whether he acted unconscionably in obtaining a gift of Mrs Archer's interest in "Sussex" in those circumstances, it is necessary to consider Mrs Archer's position, which was known to Trevor, including the reasons for her to retain her interest in "Sussex", and the means which Trevor used to obtain a gift of her interest in "Sussex". 234 Trevor's attitude was understandable. "Sussex" was his family's home, and he derived his income from the partnership conducted on "Glenroy" and "Sussex". If Trevor obtained "Sussex", he would own his own property, and would no longer be dependent on the partnership with his parents and the use of their properties for partnership purposes. Unless he obtained "Sussex" while his father was alive, Trevor's family would probably have to leave "Sussex" at some time, and he would have to find another source of income. He would probably eventually inherit only a third share of whatever Mrs Archer owned at the end of her life, which might not be much. 235 Mrs Archer was about 69 or 70 years old, would probably survive Mr Archer and might live for many years. She would probably inherit "Glenroy" from Mr Archer, and, as matters stood, she would be the sole owner of "Sussex" after Mr Archer's death. If she chose to do so and Trevor agreed, she might be able to operate "Glenroy" and "Sussex" with Trevor's assistance. If that was not possible, or she chose not to do so, the sale of the properties would provide her with money for another home and for investments to obtain an income for living expenses. Mrs Archer would probably not be able to operate "Glenroy" and live on the income after Mr Archer died without Trevor's assistance, which might not be forthcoming if he owned "Sussex". While "Glenroy" was larger and probably more valuable than "Sussex", it was mortgaged, and its sale might not provide Mrs Archer with sufficient money to buy another home and obtain an adequate investment income. Mr Archer's transfer of his interest in "Sussex" to Trevor involved a considerable detriment to Mrs Archer and her transfer of her interest in "Sussex" to him might leave her without adequate assets for a secure future. Trevor also knew that Mrs Archer was displeased that her other sons would receive less from their parents if he was given "Sussex". He was aware that, although she understood what she was doing, Mrs Archer did not want to give him her interest in "Sussex" but was anxious about Mr Archer's health and desirous of complying with his wishes about their properties. 236 No attempt was made to find a solution which would be reasonably satisfactory to Trevor and Mrs Archer; for example, consideration was never given to possible agreements which would guarantee Trevor's ultimate ownership of "Sussex" but ensure that he continued to work both properties in partnership with Mr and Mrs Archer during their respective lifetimes. 237 When Mrs Archer signed the documents which Mr Cheney had prepared and returned them to him on 24 November 1989, she was in a position of disadvantage relative to Trevor. The trial judge said that "Mrs Archer was not a person who could be dominated". However, Trevor effectively acknowledged that he was able "to thwart [Mrs Archer's] desires for [his] own advantage", and he did so. 238 Quite possibly, Mrs Archer did not need to retain her interest in "Sussex" in order to be financially secure after Mr Archer's death. Perhaps that was Mr Archer's opinion, although he might simply have had a father's optimistic view of Trevor's future attitude to his mother's well-being. Nonetheless, it is significant that Trevor enlisted Mr Archer to influence Mrs Archer to abandon her own wish and give Trevor her interest in "Sussex". Trevor also obtained advice and assistance from Mr Cheney and took Mr and Mrs Archer to Mr Cheney's office to sign the documents. Importantly, although he knew that Mrs Archer did not want to give him her interest in "Sussex", Trevor did not suggest that Mr and Mrs Archer, or Mrs Archer, should obtain independent assistance and advice. I consider that the methods used by Trevor to obtain Mrs Archer's signature of the documents on 24 November 1989 were unconscionable in the circumstances. 239 However, the gift of her interest in "Sussex" to Trevor which Mrs Archer impugns was not completed when she signed the documents which Mr Cheney had prepared on 24 November 1989 or until some months later. Further, the gift could not have been completed without Mrs Archer's cooperation, which was forthcoming. 240 During the period taken to complete Mrs Archer's gift of her interest in "Sussex", Trevor still did not suggest that she obtain independent advice and assistance, she was still susceptible to Mr Archer's influence and the documents which she had signed complicated her position and probably made her withdrawal from the gift more difficult, or at least appear so. Nonetheless, even if it should be concluded that Mrs Archer remained in a position of disadvantage relative to Trevor, I do not consider that his conduct in that period, including his continuing omission to suggest to Mrs Archer that she obtain independent advice and assistance, constituted operative unconscientious conduct at that point. 241 Despite the attempt made in supplementary written submissions to explain Mrs Archer's cooperation in the completion of the transaction, I am persuaded that she decided to proceed with the gift of her interest in "Sussex" to Trevor, implicitly affirming her earlier signature and delivery of the relevant documents, and that her decision at that time was unaffected by any position of special disadvantage relative to Trevor or any unconscionable conduct in which he had engaged. The trial judge's finding that "Mrs Archer was not a person who could be dominated" is material to her cooperation at that time. If she had remained an unwilling participant in the gift of "Sussex" to Trevor, it is probable that she would have raised it with Mr Archer and, if necessary, her other sons, and would have sought advice and assistance. 242 The conclusion that I have reached, namely, that Mrs Archer became a willing participant in the decision to give "Sussex" to Trevor, unaffected by any special disadvantage relative to Trevor or any unconscionable conduct by him, by the time when her gift was completed is supported by Mrs Archer's subsequent attitude and conduct until her other sons raised the ownership of "Sussex" with her more than a year later. 243 Mrs Archer's appeal against the trial judge's dismissal of her claim against Trevor should be dismissed with costs. ***********

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