Blomley v Ryan - [1956] HCA 81 - HCA 1956 case summary — Zoe

CTHHCA

Blomley v Ryan

[1956] HCA 81

High Court of Australia|1956-07-01|Before: Taylor J, Kitto JJ

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Source facts

Court

High Court of Australia

Decision date

1956-07-01

Before

Taylor J, Kitto JJ

Source

Original judgment source is linked above.

Judgment (137 paragraphs)

[1]

For the reasons given I am of the opinion that the plaintiff's suit should be dismissed and that upon the defendant's counterclaim there should be a decree for the rescission of the agreement of 21st April. In these circumstances it is unnecessary to refer to the defences which were based upon the provisions of the agreement dealing with the requirement that the consent of the Minister for Lands should be obtained.

[2]

From this decision the plaintiff appealed to the Full Court.

[3]

The action from which this appeal arises was within the original jurisdiction of this Court because the parties were residents of different States, namely Queensland and New South Wales. The action was tried by Taylor J. at Sydney. There was no controversy whether the law of one State rather than that of the other was applicable, because each State has the same law on the questions in the case in respect of which there might be room for such a controversy. The appellant was the plaintiff in the action. He brought it to enforce a contract made on 21st April 1953 by which the respondent, who was the defendant, sold a grazing property to the appellant for the price of £25,000. This property is a settlement lease of 3,696 acres at Boggabilla, a town in New South Wales. The respondent was in possession of the property. A settlement lease is a tenure created by the Crown Lands Acts of New South Wales. An incident of the tenure is that it is not transferable without the consent of the Minister for Lands. His approval was given to a transfer to be made pursuant to the contract. The respondent in the action counterclaimed for relief against the contract on the ground of constructive fraud. He alleged that it was unfair to him - a hard bargain. Matters upon which he relied to support this allegation were the price, the deposit, the rate of interest and the terms of payment. As already stated, the price was £25,000. This included £550, the value of some chattels sold with the land. The learned trial judge found that the market value of the property as grazing land on 21st April 1953 was £33,444 or "slightly over" £9 per acre. The value of the chattels is not included in this estimate. The deposit payable by the appellant as purchaser was £5. Having regard to the size of the transaction this was an abnormally low deposit. The rate of interest was four per cent upon outstanding purchasemoney. This was one point less than the current rate. The contract stipulated that completion was to be made "not later" than 1st August 1953: that the appellant, that is the purchaser, would pay £9,995 on completion and the balance of the price in four equal annual instalments of not less than £3,500, the last of which would become payable on 1st August 1957. The vendor, that is the respondent, alleged that these terms of payment were upon the whole extremely one-sided and unfair to him.

[34]

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. The price, £25,000, is £8,444 less than the estimate of the market price accepted by the learned trial judge. The price is strikingly disproportionate to the estimate. There is nothing in the evidence, upon which the learned trial judge was prepared to act, by which it could be found that £25,000 is a reasonable measure of the value of the property. His Honour was satisfied that E. F. Blomley and Stemm were aware at every stage of the transaction that £25,000 was a substantial undervalue. E. F. Blomley said in evidence that his estimate of the value of the property in April 1953 was £5 per acre. The learned judge made this comment: " I do not believe that his estimate could have been so erroneous. Nor would such a view be consistent with his reasonably obvious eagerness to obtain it for his son at £25,000" [1] . His Honour then made this finding: "I am satisfied, having regard to the experience of both Stemm and Blomley, that they believed that the purchase of "Worrah" at £25,000 and upon the terms of the contract subsequently executed, represented not only a good bargain but a purchase at a very substantial undervalue" [1] . I have no doubt, upon the evidence, that the learned judge did no injustice to Stemm by finding that his motive in asking the respondent to sign a contract when "he assented or appeared to assent" to sell for £25,000 was to conclude a bargain before the respondent would have any opportunity to consider it; and that his Honour was also right when he said that it was "most decidedly" not the practice for formal agreements for the sale of substantial properties to be concluded in the fashion in which Stemm wanted to conclude this one. It was urged for Stemm that such was the practice. The learned judge added: "There was no urgency about the matter; completion was not to take place for more than three months, the defendant at his best was an old man of failing intellect, he was in the condition which I have attempted briefly to describe and he had no independent advice of any kind."

[69]

The learned judge found that his action in executing a contract to sell the property for £8,000 or £9,000 less than its real value may be explained by the disadvantage under which the decline of his mental equipment placed him in dealing with two such persons as Stemm and E. F. Blomley, and the further incapacitating effects of the drinking bout in the course of which the contract was negotiated and executed. Indeed that bout was continued until 30th April. The incapacitating effects of this drinking bout were really the cause of the change in his, the respondent's, constitution observed by Folk. He was on the morning of 21st sicker and older than Folk ever remembered. Rogers's perception must have been much at fault because it gave him an impression of the respondent more like the untruthful one conveyed by Stemm's evidence than the truthful account given by Folk. The learned trial judge doubted that on the morning of 21st April the respondent had any real recollection of having agreed on the previous day to sell the property for £25,000. Stemm's object was to get a contract signed by the respondent before he emerged from his stupor. That he was emerging from it on the road from Boggabilla to Goondiwindi and the process had continued so far that while in Rogers's office he attained to a hazy understanding of the fact that he was discussing a contract for the sale of his property, need not be doubted. The learned judge so found. But it is another thing to say that the respondent had recovered his senses sufficiently to realise that the price was £25,000 and to judge for himself whether to sell at that price: assuming, of course, that when he was not freshly sodden with rum, the impairing effects of old age and chronic alcoholism had not disabled him from protecting his own interests single-handed in a business transaction. It is a proper inference from the evidence, and I apprehend it was made by the learned judge, that the respondent was not sufficiently in possession of what threads of intellect he retained to protect his interests during the negotiations or while the contract was being concluded. E. F. Blomley and Stemm were well aware of this disability and weakness on the respondent's side. Rogers failed to protect the respondent by giving him any appropriate advice. The relative position of the contracting parties, the haste with which E. F. Blomley and Stemm proceeded to bind the respondent by a contract, the enormous discrepancy between the price and the market value of the property and the other inequalities in the contract raise a strong presumption that they procured this bargain by behaviour which is within the category of constructive fraud. The bargain is unfair to the point of being a hard bargain. The parties were not on equal terms. Stemm and E. F. Blomley took an extremely unfair advantage of the condition and circumstances of the respondent. The facts of the case make it analagous to the cases cited by the learned judge in which relief was given under the same category of fraud.

[71]

The learned trial judge gave in his reasons for judgment an account of the situation which he thought could be properly resolved by the amendment of the defence now complained of. For the appellant it is again contended that he was prejudiced by the amendment. I did not gather that the allegation of prejudice had any more particularity than that to add the counterclaim at so late a stage necessarily resulted in prejudice to the appellant because until then he counted upon being remitted to his legal claim for damages if his claim for specific performance were refused upon equitable grounds. The contention is not meant to involve the assertion that either because of the substance of the amendment or the stage at which it was made, the trial judge exceeded his powers in giving leave to make the amendment. It involves only whether the leave was an erroneous exercise of discretion. If the respondent, as he contends, was seriously prejudiced that would no doubt infect the leave. The contention is met by these facts. All the matters alleged in par. 14 had been dealt with by the evidence: most of them were involved in par. 10: there was a strenuous contest at the trial upon the issues raised in pars. 10 and 11: the appellant was given leave to call further evidence and availed himself of it: the respondent rested upon the evidence already given to prove his equity to have the contract set aside. The appellant could not have been surprised by any allegation in par. 14. Nor could he have been really embarrased in opposing the counterclaim by any contention advanced at the trial in order to enhance damages: because the respondent had alleged in par. 10 (b) that the sale was at a great undervalue. In my opinion there is no substance in the contention that it was unfair to the appellant to make the amendment of which he complains: or that it was productive of any real prejudice to him. I do not agree with the contention that the giving of the leave to make the amendment was an erroneous exercise of discretion.

[79]

There are passages in the reports which, if read alone, would suggest that equity adopted a somewhat lofty and aloof attitude to such cases. For example, in Shaw v. Thackray [9] , Stuart V.C. said: "The material question was with regard to the state of incapacity by intoxication of Thackray at the time of sale to Shaw. Now, upon the evidence on both sides, it was quite plain that Thackray was a man the reverse of sober. The doctrine of that Court was, that, if a man, by habits of drunkenness, had entirely destroyed his capacity as a man of understanding, so far as to be incapable of executing a deed, any instrument executed by him was entirely invalid; but, on the other hand, a man in the habit of drinking to excess, but who had not wholly destroyed his faculties, if he entered into a contract with another individual, was not to derive to himself any advantages from those habits which had lowered him in the scale of humanity" [10] . The Vice-Chancellor added: "The Court was disinclined to interfere in such cases" [10] . There are a number of cases of alleged drunkenness in which specific performance has been refused, but I have found only one (to which I shall refer later) where the contract has been set aside. In Vivers v. Tuck [1] , Knight Bruce L.J., speaking for the Privy Council, said: "It is not the habit of a Court of Equity to decree the specific performance of an agreement more favourable to the Plaintiff than to the Defendant, involving hardship upon the Defendant and damage to his property, if he entered into it without advice or assistance, and there be reasonable ground for doubting whether he entered into it with a knowledge and understanding of its nature and its consequences" [2] . That was a case of a suit for specific performance which was resisted upon various grounds, including the ground that at the time of making it the defendant was in a state of intoxication - in the language of the report "considerably in liquor". It was pointed out that the refusal of specific performance left the plaintiff to his remedy at law, and that it by no means followed that the contract should be set aside. In Scates v. King [3] , a bill for specific performance was dismissed without prejudice to any action at law, and no costs were given. Molesworth J., while conceding that "the degree of drunkenness which should make an agreement bad in equity is less than that which should avoid it at law" [4] , thought that, generally speaking, "courts of equity should not interfere for either party either enforcing or resisting such questionable agreements" [4] .

[83]

The real effect of the cases on the subject was, I think, stated by Sir William Grant M.R. in Cooke v. Clayworth [1] , in a passage which has been quoted in several later cases. The Master of the Rolls said: "I think, a Court of Equity ought not to give its assistance to a person, who has obtained an agreement, or deed, from another in a state of intoxication; and on the other hand ought not to assist a person to get rid of any agreement, or deed, merely upon the ground of his having been intoxicated at the time (Dunnage v. White [2] ): I say merely upon that ground; as, if there was, as Lord Hardwicke expresses it in Cory v. Cory [3] , any unfair advantage made of his situation, or as Sir Joseph Jekyll says in Johnson v. Medlicott [4] , any contrivance or management to draw him in to drink, he might be a proper object of relief in a Court of Equity. As to that extreme state of intoxication, that deprives a man of his reason, I apprehend, that even at Law it would invalidate a deed, obtained from him while in that condition" [5] . This statement of equitable principle was referred to and acted upon in Nagle v. Baylor [6] (where gross inadequacy of consideration was alleged but not proved), in the case already referred to, of Shaw v Thackray [7] , and in Wiltshire v. Marshall [8] . In the first of these cases specific performance was decreed. In the second a bill to set aside was dismissed. The third is the only reported case I have succeeded in finding in which a transaction has actually been set aside by a court of equity on the ground that one party was intoxicated but not so far intoxicated as to make his deed void even at law. Sir William Page Wood V.C. put the principle on which he acted in this way. He said: "And now, having shortly considered what is the state of the law upon this subject, the first thing I have to do is to determine whether it was so entered into as to display absence of judgment in the person making it, and a degree of unfairness in the person accepting it " [9] .

[101]

I do not think that there is any reason for saying that the evidence of Rogers is otherwise than substantially true, and I am not prepared to say that any blame should be imputed to him for his part in the transaction. But there are several comments to be made. I think he was almost certainly unobservant, and it is very unfortunate, as things turned out, that he was acting as solicitor "for both parties". If he had been acting for Ryan alone, it is not to be supposed that he would have passed either the £5 deposit or the four per cent rate of interest. As it was, the facts that Ryan himself (as Rogers says) suggested the absurd deposit and the low rate of interest might well have put him on his guard. But he knew nothing of the value of "Worrah". There was nothing to lead him to suspect the gross discrepancy between price and value, which is so important a feature of this case. Nor had he any knowledge of the events of the previous day. He knew nothing of Ryan's sudden and suprising "shift" from £30,000 (or £9 per acre) to £25,000. He concerned himself simply with putting into legal shape a transaction of the substance of which he had been informed on the previous night by Stemm, and to the terms of which the parties present before him appeared to agree. While I think that an observant and experienced solicitor might indeed well have had his suspicions aroused, it seems to me understandable that Rogers should have failed to realise that the defendant was in no fit state to discuss and determine the terms on which a valuable property was to be sold. In this connexion, it is important to bear in mind exactly what was the view of Taylor J. with regard to the state of the defendant's mind when he was in Rogers's office. It is not to be supposed that he was in that condition of helplessness and semi-imbecility into which he appears to have drunk himself at times during the period of his "bout". The general nature of the transaction was not beyond his comprehension on 21st April. "But", said his Honour, "whilst I feel that this is the proper conclusion upon the evidence I am satisfied that at no time was his participation in the transaction accompanied by any reasonably intelligent consent to it [1] ".

[109]

The trial proceeded for another two days, and judgment was reserved. At a later date, however, the learned judge restored the case to the list and informed the parties, in effect, that he was disposed to take a view of the evidence which would entitle the defendant, if the pleadings were appropriately amended, not only to have the claim for specific performance refused but to escape an award of damages by having the contract set aside by the Court in the exercise of its equitable jurisdiction. The defendant thereupon applied for leave to amend his defence a second time. He sought in the first place to allege that at the time of signing the contract and of the negotiations between the parties he was old, lacking in education, suffering from the effects of intoxication, mentally and physically weak, without proper advice, unable properly to protect himself and on unequal terms with the plaintiff, all of which the plaintiff then well knew, and that the plaintiff took advantage of the defendant's circumstances, that the same solicitor acted for both parties and did not give the defendant full and proper advice, that the plaintiff acted with undue haste and procured the defendant's agreement to the sale at a great undervalue and upon terms highly favourable to himself and unfavourable to the defendant. Secondly the defendant sought to add a counterclaim repeating some of the allegations in the defence, including those which he was desirous of adding by the new amendment, and claiming a declaration that the contract ought to be set aside and an order that it be delivered up to be cancelled. The application for these amendments was opposed on the ground that to allow them would be to place the plaintiff at an unfair disadvantage by raising new issues with which he could not adequately deal at so late a stage in the case. The learned judge, however, allowed the amendments. His decision to do so is challenged in this appeal, and it is said that the event proved that the allowance of the amendments resulted in so real a measure of prejudice to the plaintiff that the judgment ultimately given should not be allowed to stand. It is a sufficient answer to this, however, to say that the amendments were allowed in the exercise of a judicial discretion, and that no ground has been shown for regarding this case as one in which, conformably with established principle, a court of appeal can properly interfere.

[116]

Dalgety's office at Goondiwindi was managed by a man named Folk, and the assistant manager was named Stemm. On 8th or 9th April 1953 the defendant told Folk in his office in Goondiwindi that Blomley (the plaintiff's father will be thus referred to in this judgment) could come out and have a look at "Worrah" at any time. It was four or five days later, on Monday 13th April 1953, that the invitation was accepted. Stemm brought out Blomley, together with the plaintiff who at the time was twenty-five years of age. Apparently Blomley was considering buying the property in his own name. A discussion took place with the defendant, about (as the plaintiff put it) "running capacities, sales of different other properties, and that line of talk in general". It lasted for two or three hours, and before it finished the party inspected a bore drain, which apparently was the only feature of the property which Blomley particularly wanted to see at that stage. According to the evidence called for the plaintiff, Blomley offered £25,000 and the defendant asked £30,000, both remaining adamant to the end of the conversation. According to the defendant, he never mentioned £30,000 or any total figure, but insisted upon £9 per acre. No one suggests that agreement was reached, but, according to evidence which seems to have been accepted, the defendant said that he did not need cash and would sell on terms; whereupon Blomley said that in that case his son, the plaintiff, would be the purchaser if a sale were agreed upon. Stemm and the two Blomleys left, asking the defendant to think the matter over for a week. There are some important points to notice about this conversation, notwithstanding that the trial judge was not satisfied that Stemm and the Blomleys had given a complete account of it and felt unable to place any real reliance upon the defendant's evidence. The defendant was not at that time suffering from any bout of drinking. The bout which is said to be material to this case did not begin until the following Thursday, 16th April. In full possession of his senses, the defendant wanted to sell, and was prepared to give terms for payment of the purchase money. Only the question of price stood in the way of agreement. And it should be added that, although the trial judge thought the defendant had little or no recollection of the events of that day, a perusal of his evidence in regard to it shows that a number of details remained in his mind, such as the inspection of the bore drain and particularly his own firmness as to price, and yet in his evidence he did not question the statements which the other witnesses had made either about his willingness to give terms or about a week having been named as a period within which he might think over the outstanding difference as to price. And it is perhaps even more important to mention that in giving his evidence he made no complaint whatever that any of the persons with whom he was dealing had made the slightest attempt on that occasion to bustle him into agreement or to overbear him in any way.

[117]

Neither Blomley nor Stemm approached the defendant until the week had expired. But before two days had elapsed, viz. on 15th April, the defendant, still unaffected by any bout of drinking, had sufficiently revised his ideas about price to offer to sell "Worrah" to the owner of an adjoining property, Walter Joseph Doran, for "about £25,000" on terms. The trial judge doubted whether this was a firm offer, and he thought that, if it was an offer to Doran as a personal favour and was almost immediately forgotten by the defendant; but he did not reject Doran's evidence as to the making of the offer, and that evidence shows that, even if Doran's impression that the defendant was anxious to sell was ill-founded, at least the defendant was by no means as intent on getting either £30,000 or £9 per acre as he had been, or had affected to be, in his discussion with Blomley and Stemm. There is nothing surprising about this. One needs to be careful not to introduce an artificial element into the consideration of the case by looking at what people did and said through glasses coloured by the knowledge we now have that on conflicting evidence a finding has been made that the real value of "Worrah" was £33,444. It must be remembered that this finding was made with the assistance of information as to subsequent sales and after hearing the evidence of experts. The defendant would naturally have some acquaintance with values, for he was a practical man, capable (as Doran thought) of making a shrewd bargain, and familiar with the district and with local happenings over many years; but his opinion that the place was worth £9 per acre, correct though the trial judge considered it, was not shown to have been reached by reasoning from any concrete facts. It was apparently a general impression or belief of a kind which might alter from time to time under the influence of new information, persuasive argument, or possibly the mood of the moment. All that need be taken from Doran's evidence of what occurred on 15th April is that a sale price of £25,000 was not completely foreign to the defendant's thinking, even while he was still completely sober.

[119]

On Monday, 20th April, Blomley and Stemm came to "Worrah" to renew their negotiations with the defendant. This time the plaintiff was not present, but his place was taken by a young man called Brian Doran, a son of Walter Joseph Doran and a son-in-law of Blomley, who lived, as has been mentioned, on a property called "Toenda", four miles from "Worrah". All three swore at the trial that they found the defendant quite sober, though they all thought he did not look well and Brian Doran said he thought he was recovering from a drinking bout. The defendant, on the other hand, said he was "sick with drinking" and he professed to have no recollection of what he said except that he himself had said he wanted £9 an acre. He described Blomley as "a sort of stand-over cove" who tried to "bounce" him; but he was unable to specify any conduct on Blomley's part which justified this description, except that Blomley had spoken to him "very abrupt". The plaintiff's three witnesses told quite a different story. According to them, after having a drink at the homestead, they walked to the shearing shed, Blomley and Doran falling back to allow Stemm an opportunity of talking to the defendant. Stemm said he asked the defendant: "What is your price today, Tim?", and the defendant replied at once: "£25,000". Stemm reported this to Blomley, and then asked the defendant whether he would give in the fifty head of cattle which were on the property. The defendant refused, stating that he had already promised the cattle to some one else. The date for delivery of possession was discussed, and the defendant stipulated that it should be left until 1st August, giving as his reasons the very sensible one (having regard to income tax) that, as his wool would be sold before the end of June he wanted to defer the sale of his stock until the next financial year. After the party returned to the house, Stemm produced a form of contract and asked the defendant whether he would like to sign it. He said he would sooner his solicitor prepared the contract, and this was at once acquiesced in. Blomley asked who his solicitor was, and he named Mr. Rogers, a solicitor practising in Goondiwindi. Blomley replied that Mr. Rogers was his solicitor too, and, the defendant agreeing that Rogers might act for them both, it was arranged that they should go to him the next day and sign a contract. Stemm promised to call for the defendant and convey him to Goondiwindi, but he made the offer to do so only after asking the defendant whether he had any means of transport and receiving the reply that he had not, as his nephew Cooney was needed at "Worrah" in connexion with the shearing.

[120]

The only other witnesses who touched on this occasion were Mr. and Mrs. Binney and Mr. and Mrs. McEwan, but, although a perusal of their evidence suggests strongly that the defendant must have been suffering to some extent from the effects of the excessive drinking in which he had indulged over the preceding three or four days, none of them gave any definite description of him as he appeared during the actual period of the visit by Blomley, Stemm and Brian Doran. The trial judge, however, formed an opinion which he expressed in these words: "Upon a consideration of the evidence I have no doubt that during the afternoon of the 20th the defendant's condition was such that he was incapable of considering the question of the sale of his property with any real degree of intelligent appreciation of the matters involved, and that this was so must have been reasonably apparent to both Stemm and Blomley." His Honour apparently did not reject the evidence of Blomley, Stemm and Brian Doran in so far as it described things said and done, and indeed the sequel fits that evidence satisfactorily. Even the evidence of the cardinal fact that £25,000 was agreed upon cannot well be disbelieved in all the circumstances; and his Honour does not seem to have disbelieved it, for he commented that, as Stemm and Blomley may have seen the defendant on other occasions in a not dissimilar condition, and as he wished to dispose of his property, they may have induced themselves to think that they were not doing him a grave injustice by undertaking to relieve him of it for the sum of £25,000. The view which his Honour took seems to have been that although the defendant did give to the transaction the measure of agreement which the others present described in their evidence, it must have been apparent to them that his mind was so muddled, in consequence of his recent excesses, that his words did not reflect reasoned or sensible decisions. There are two difficulties in the way of adopting this view: it takes a very considerable step by way of inference from general evidence, and it is not easy to reconcile with subsequent events.

[125]

Let us see what actually occurred, according to Rogers's evidence. Stemm brought the defendant into Rogers's office about 11.30 a.m., but he was obviously not shepherding him, for he left him alone with Rogers for ten or fifteen minutes while he himself went up the street to look for Blomley. Now, the defendant was no stranger to Rogers; they knew each other "reasonably well", as Rogers put it; and they spent the waiting time in general conversation. The defendant had no difficulty in walking, or in talking on general subjects; he did not smell of liquor; and he spoke intelligently of his plans for the future. Asked what he intended to do when he had sold "Worrah", he replied that he intended to buy a small place near Parramatta and to retire there. He seemed to Rogers "quite enthusiastic about the whole sale". Then Stemm and Blomley came in, and Folk also. Rogers went through the draft contract he had prepared, filling in blanks in accordance with the joint instructions of Blomley and the defendant, and forming an impression which he stated in cross-examination by saying that he had no doubt the defendant understood the price and the terms as much as any layman would. Rogers asked what the deposit was to be, and Blomley said "That is up to Tim" (the defendant). The defendant said he did not care what it was. Rogers said ten per cent was the usual deposit, and that a vendor usually preferred a high deposit and a purchaser a low one. He also said that an agent generally liked to see a deposit sufficient to cover his commission, an aspect about which Folk said he was not worried. It was the defendant who named a figure. He said "What about a fiver?" And Blomley, naturally enough, said that that would suit him. Stopping there, it could be, of course, that the defendant was sitting in a state of mental torpor, and following the discussion just enough to give an answer that fitted the question but naming the first amount that came into his fuddled head. But, if so, Rogers would surely have had to be blind not to see it. He inserted the £5 in the contract, however, and went on to the next question which was the method of payment of the purchase money. On this, the defendant's general attitude had been defined days before. Blomley suggested that £10,000 be paid on delivery of possession, and the balance by instalments over a period of four years. To this the defendant replied, "That will suit me. I do not want all the money now, as I am going to retire." Rogers asked about the rate of interest, and it was the defendant who nominated four per cent.

[126]

So far, unless Rogers was simply inventing all this, the defendant's attitude was intelligent enough to all appearance. True the four per cent was low; the current bank rate at the time was five per cent. But the statement that he was going to retire and did not want full payment at once was sensible and accorded with what he had said previously; and he repeated to Rogers the thoughtful income-tax reason that he had stated at "Worrah" on the previous day for wanting the date for delivery of possession put forward to 1st August, namely that that would give him time to sell his sheep after the end of the financial year. There was not the slightest attempt to bustle him, or cajole, or persuade him. He had raised no question or demur when the price had been read out as £25,000. But there next occurred an incident, relating to the very matter of the sale price, which makes it exceedingly difficult to suppose that the defendant was labouring under any handicap in the settling of the terms of the contract. After Rogers had gone through various provisions which excited no comment from any of those present, he came to the question of apportioning the sale price as between the various items comprised in the property sold. This, as he said at the time, could help to protect the defendant in relation to income tax, that is in relation to recoupment of depreciation on capital assets which had been allowed in his assessments for past years. Rogers, with the defendant's assent, spoke on the telephone to a local accountant named White, who had kept the defendant's books and attended to his income-tax affairs for the preceding six years, and made an appointment for the defendant to see him that day. To prepare a draft clause on this topic Rogers asked what movables were to be included, and the defendant replied: "There is no stock. Everything goes in except the Land Rover, my clothing and ports to take the clothes away in." Rogers asked about tools and furniture, and the defendant said: "Yes, I will not want any of that stuff where I am going to." After Blomley had said not to worry about an inventory, as he had known the defendant for over thirty years and could accept his word, the parties dispersed, agreeing to assemble again after lunch when Rogers should have received the suggested apportionment from Mr. White the accountant, and have had time to engross the contract. The defendant went straight to White's office, and he went alone. That he discussed with White the details of the apportionment, and therefore the fact that the total price was £25,000, is certain, for Rogers produced a draft containing figures which he swore and White acknowledged had been written by White, and these figures included the £25,000 itself. White, however, had no independent recollection of the interview by the time he went into the witness-box - a fact which tells against the defendant, for if he had been so drinksodden as to be incapable of intelligent consideration of the sale he was making it is difficult to imagine that White would not have observed the fact and been scandalised to find himself asked to assist a man to part with his property while in such a condition. And moreover, if to men like Blomley and Stemm £25,000 was as obviously an undervalue as is now suggested, one might have expected it to cause some little surprise to White also. But evidently there was nothing about the defendant's visit which interested White sufficiently to leave any lasting impression.

[134]

On a full review of the evidence, the main features of which have now been surveyed, the conclusion to which I have come, with great respect to the learned trial judge and with much hesitation, is that the evidence in the case does not provide a sufficient foundation for the findings which entitled the defendant to the relief granted him. The hypothesis in applying the relevant head of equity is that the person claiming relief possessed at the material time such a degree of understanding that the contract or dealing which he impugns is not voidable at law for want of mental capacity, on the principles to which reference has recently been made in Gibbons v. Wright [1] . Where that capacity exists, no imperfection of reasoning power, no difficulty of comprehension, can suffice by itself to give a title to, or a defence to a claim for, equitable relief. But such deficiencies may combine with other circumstances to form a total situation of such a character that the Equity Court will see in it a ground for active interference or for refusal of equitable remedies to the opposite party. Even though the bargain made may be onerous, there still may not be enough in the case for either purpose. So, as Isaacs and Rich JJ. mentioned in Fullers' Theatres Ltd. v. Musgrove [2] ; "In Stewart v. Kennedy [3] Lord Watson says: "Specific performance is not a matter of legal right, but a purely equitable remedy, which the Court can withhold when there are sufficient reasons of conscience or expediency against it. " In Davis v. Maung Shwe Go [4] the Privy Council were urged on the ground of discretion not to affirm a decree for specific performance having regard to the onerous nature of the bargain. But their Lordships held that in the absence of fraud or misrepresentation or any unconscionable feature, or proof of improper advantage having been taken, they could not accede to the argument" [5] . Cf. Boyd v. Alexander [6] ; Yerkey v. Jones [7] ; Wilton v. Farnworth [8] . The essence of the ground we have to consider is unconscientiousness on the part of the party seeking to enforce the contract; and unconscientiousness is not made out in this case unless it appears, first, that at the time of entering into the contract the defendant was in such a debilitated condition that there was not what Sir John Stuart called " a reasonable degree of equality between the contracting parties"; Longmate v. Ledger [9] , and secondly, that the defendant's condition was sufficiently evident to those who were acting for the plaintiff at the time to make it prima facie unfair for them to take his assent to the sale. If these two propositions of fact were established the burden of proving that the transaction was nevertheless fair would lie upon the plaintiff: Earl of Aylesford v. Morris [1] ; Permanent Trustee Co. Ltd. v. Bridgewater [2] . If the burden were not discharged the defendant would be entitled to hold the judgment appealed from, since in that event it would be right to draw the conclusion that, as was said in Evans v. Llewellin [3] , " though there was no actual fraud, it is something like fraud, for an undue advantage was taken of his situation" [4] . The fact that the defendant's condition was the result of his own self-indulgence could make no difference, for, as is shown by Cooke v. Clayworth [5] , the principle applied is not one which extends sympathetic benevolence to a victim of undeserved misfortune; it is one which denies to those who act unconscientiously the fruits of their wrongdoing.