Brian John Harris v Mark Kevin Harris

An unsuccessful amendment application 8On the second (and final) day of the hearing, after his case had closed and his counsel had cross-examined Mark's first witness (Mr David Burgin, at the relevant time a partner in Richardson Burgin Steer ("RBS")), Brian applied to amend his statement of claim to add a further particular of why the contracts for sale and lease of the Property were unjust under the Act. I delivered an ex tempore judgment refusing leave to amend. Because it illuminates the issues in the case, the parties agreed to my suggestion that I would incorporate my revised reasons for that refusal into this final judgment. 9Brian applied to amend the statement of claim (which was originally filed on 18 October 2011) to add a further particular in support of the allegation pleaded in paragraph 14 that "the contract, transfer and lease were unjust in the circumstances at the time they were entered into." In its original form the particulars appended to that allegation were: a. The consequence of compliance with the contract for the plaintiff was that the plaintiff received $83,131 for a property worth $475,000. b. The effective cost to the plaintiff of the right to occupy the property under the lease was $19,593 per year. c. The consequence of compliance with the lease for the plaintiff was that he would have to leave his lifetime home in 2010 at the age of about 70 years and find premises to rent. d. The plaintiff was not reasonably able to protect his position by reason of his limited education and his age. e. The plaintiff was vulnerable by reason of his fear that he would not be able to raise funds to pay for his legal representation on serious criminal charges other than by selling the property. f. The defendant used unfair tactics against the plaintiff by: i. Representing that a 7 year term was the maximum lease term permissible; ii. Representing that further 7 year leases would be given at the end of the lease; iii. Insisting that the plaintiff pay stamp duty; iv. Taking advantage of the plaintiff's fear that the plaintiff could not raise funds for legal representation; v. Offering a price significantly below market value of the Property; vi. Taking advantage of the trust reposed in the defendant by the plaintiff as a consequence of their family relationship. g. The contract, transfer and lease were improvident for the plaintiff. 10Brian applied to amend his statement of claim to add this particular: h. The Plaintiff did not receive any adequate legal advice before entering into the contract, transfer and lease. 11In Mark's defence filed on 27 April 2012 paragraph 14 of the statement of claim was denied in its entirety. 12Mark opposed Brian's application for an amendment. 13The power to grant an amendment arises under s 64 of the Civil Procedure Act 2005 (NSW) (the "CP Act") which provides: (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. ... 14I am satisfied that the question of whether or not Brian received any or any adequate legal advice is a matter germane to "the real questions raised by or otherwise depending on the proceedings" (cf s9(2)(h) of the Act). If the matter rested there, I would be required under s 64(2) of the CP Act to allow the amendment. However, s 64(2) of the CP Act is expressed to be subject to s 58. 15Section 58(1)(a)(i) of the CP Act requires the Court "in deciding whether to make ... any order for the amendment of a document ... [to] seek to act in accordance with the dictates of justice". Section 58 goes on to require the Court to have regard to the provisions of s 56 and s 57 of the CP Act in determining the dictates of justice in a particular case. Section 56(2) requires the Court in exercising any power under the CP Act to give effect to the CP Act's overriding purpose, namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 16Section 57 of the CP Act provides: (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings, in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 17Finally, s 58(2)(b) of the CP Act then lists a series of factors to which the Court may have regard, including (vi) "the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction" and (vii) "such other matters as the court considers relevant in the circumstances of the case". 18Taking into account both the mandatory matters in s 56 and s 57 of the CP Act and the discretionary matters listed in s 58(2)(b), I was of the view that the application should be refused. To have allowed the amendment would have occasioned prejudice to both parties, but especially to Mark. 19I was informed by his counsel and accept that Mark had prepared the case on the basis of the matters particularised in paragraph 14 of the Statement of Claim. Brian's counsel fairly and properly accepted that nowhere in those particulars is there a reference to whether or not Brian received any independent legal advice and the quality of that advice. Nor, on a fair reading of those particulars, could Mark have been expected to infer that the question of the legal advice (if any) received by Brian was an issue in the proceedings. 20The amendment issue was, however, slightly complicated by the fact that some brief evidence was proposed to be led by the parties going to the question of what, if any, legal advice Brian had received. That arose in the context of Brian's alternative claim (which was ultimately abandoned) that an agreement had been entered into between him and Mark whereby Mark would confer a life tenancy on Brian after the Property had been transferred to Mark. Mark had prepared his case on this question by including some evidence that Brian had legal advice from Mr Terry Steer, another partner in RBS, to support the ultimate submission that since the transaction documents made no reference to a life tenancy, and those documents were prepared in the context of Brian being legally represented, the Court would be slow to find that there had been an agreement for a life tenancy. 21So understood, the way the evidence and the case had been prepared by Mark is entirely comprehensible. It was clear that it had not been prepared to respond squarely to an issue of whether or not Brian had, in fact, received any or adequate independent legal advice. The evidence was tangential and there had by no means been a full investigation of the question. 22The parties in these proceedings are obviously of limited means. Brian is represented by the Legal Aid Commission. The proceedings have been on foot for nearly two years and there was no evidence that prior to the commencement of the hearing there was ever any suggestion that the question of the adequacy and existence of legal advice for Brian would be an issue (let alone an important issue) in the proceedings other than in the limited context I have described above. 23I accepted Mark's submission that he would have taken a different forensic course had it been appreciated that the question of legal advice was a live issue in the proceedings relied upon by Brian as a particular of unjust circumstances under the Act. Different and additional inquiries would have been made and evidence called, including inquiries of Mr Steer, who may or may not ultimately have been found to be acting for Brian in connection with the sale of the Property. As it was, neither party had filed any evidence from Mr Steer. 24Additional questions would have been asked of Brian by Mark's counsel in cross-examination. Considerable physical difficulty attended Brian's coming to Court on the first day of the hearing. He would have had to have been recalled. His physical and mental condition meant this would not have been simple. 25Further and different evidence would have to have been adduced from Mr Burgin, whose cross-examination on the case as pleaded had just concluded. The case would not have finished in the two days allocated, would be adjourned for some months and occupy at least another day, if not two days. 26There was also reason to believe that extending the hearing would have been beyond Mark's already depleted resources. 27I was conscious that Brian, who is legally aided, had through his tutor made an offer that if an adjournment was required his client would submit to an order that he pay Mark's costs thrown away. I was not satisfied in the circumstances that such an order would provide any real or meaningful compensation for the delay and additional expenses that would be incurred to investigate the matters raised if the amendment were to be allowed. 28For these reasons I declined the application for an amendment. As a result the parties accepted that matters relating to the existence, adequacy or independence of any legal representation which Brian may have had in selling the Property and taking the lease was not an issue before me.

The witnesses - Brian's statements 29The question of the reliability of Brian as a witness is not straightforward. It needs to be considered in two parts: his written statements and his evidence during the hearing. I will deal with each of these in turn. 30Brian's written evidence consisted of a signed statement dated 12 August 2011 which had been prepared for the CTTT proceedings and an unsigned, undated marked for changes version of the same statement which added further detail. This latter statement was read to Brian (who had not brought his glasses to the hearing) by his counsel out of court and was then adopted by Brian in the witness box. 31There was no evidence before me about the circumstances in which the two statements were prepared. From their form and the fact that Brian was legally represented in the CTTT proceedings and before me, I infer that the statements were prepared by his legal advisers on his instructions and that the marked for changes version was prepared after August 2011. 32Mr C.H. Cassimatis of Counsel, appearing for Mark, submitted that I should not accept Brian's evidence for two reasons. First, Mr Cassimatis submitted that at the time the statements were prepared, Brian was in hospital suffering from depression and related psychiatric difficulties. In support of this argument Brian's clinical notes from the relevant period were tendered without objection. 33Second, it was submitted that much of Brian's evidence, in particular the alleged conversation with Mark which was put at the centre of Brian's case, should not be accepted as it was completely unsupported by any contemporaneous, objective evidence. 34In dealing with Brian's evidence, it is convenient for me to deal with the view I have formed in relation to the critical conversation, which is set out in Brian's amended statement in the following terms. I have deliberately preserved the markings for changes from the first version of Brian's statement of August 2011: Brian: "I do not have $20,000 to pay the solicitor to defend my case. I really need the money, but I do not know what to do. I want to put the property in your name and borrow get money from you; and Property stays with the name of Harris." Mark: "You can sell the property to me for $100,000, so it stays with the name of Harris;. and you can still live at the Property for the rest of your life". Brian: "$100,000 is too low; it is worth far more than that." Mark: "I know that. That is what I can offer to you. If you do not take my offer, then you have no money to pay your solicitor to defend your case. If you do not defend your case, you will lose your case. With that $100,000, you can defend your case, and also you can pay your other bills." Brian: "I want a 99 years lease to make sure that I can live there for the rest of my life." Mark: "The longest lease under the law is 7 years; you only need to pay $1.00 each year." Brian: "What will happen after 7 years?" Mark: "After the first 7 years, we will look at it again and you may have to pay the fair market rent." you can have another 7 years lease and it will carry on for the rest of your life; you may pay rent after the first 7 years." Brian: "How much would be the fair rent after 7 years?" Mark: "Fair rent. It is about $120 per week." We will ask the real estate agents to see how much it would be; and I will give you a bit of discount." 35Brian's clinical notes for 28 July 2011 include a note of a request from Brian's solicitor seeking an assessment from the medical and psychiatric staff regarding Brian's competence to sign "paperwork which is overdue for completion by Brian ...". In the context I infer this refers to Brian's statement for the CTTT proceedings. There is nothing in Brian's clinical notes that has been drawn to my attention to suggest that assessment was ever provided. 36Brian's clinical notes for that day go on to report the following psychiatric evaluation: Brian presented as fixated on why he could remember some things today but was confused & perplexed and was unable to remember the same things yesterday. Frightened he may forget things in the future and presumably this will impact on his presentation at the tribunal [which I infer to be the CTTT] in late August 2011. Ruminating on this issue is maintaining his anxiety and in turn compromising his capacity to own & face sig (sic) in his life. Will review & assess Brian tomorrow. 37Brian's medical records show a diagnosis from a psychiatrist on 29 July 2011 that Brian had "agitated depressive syndrome with mental cognitive impairment, probably due to his severe depression". 38Brian's condition in or about August 2011 is summarised in a psychiatric report dated 7 September 2011: Mr Harris was discharged on the 4th August 2011 after a total of on (sic) week admission in Tamarind and Miri Miri for depression. The depression was in the context of ongoing court case regarding the house he sold to one of his nephews seven years ago. Mr Harris felt the nephew had taken advantage of him. He was extremely anxious and could not cope at home, which led to the first admission. He was discharged at his insistence with community mental health follow up, though he was not fully recovered at the time. His Case Manager, Kathy Cook, found him to be very anxious, not coping well and to be paranoid about doctors working against him. Therefore, he was readmitted on the 19th August 2011. His anxiety and depression have improved to some extent, but he continues to remain flat, ruminating about the past, paranoid and insightless. The patient's mental state is likely to deteriorate if he is discharged prematurely. Therefore, the treating team would like to request a 4 week Involuntary Order for Mr Harris. 39There is no doubt from Brian's medical records for this period that the stress of the events surrounding the termination of the lease and the subsequent CTTT proceedings had brought on a significant depressive episode in Brian. However, in the absence of expert evidence specifically directed to the question, I am not prepared to find that Brian's mental state in August 2011 was such that the statement which he signed is inherently unreliable. Furthermore, I consider that I am entitled to infer that Brian's solicitor would not have propounded the August 2011 statement, or the subsequent marked up version, unless he was satisfied that Brian was competent to give him those instructions. 40Mr Cassimatis's second attack upon Brian's written evidence has more force. As will be apparent from the facts as I find them below, derived in very large part from the objective evidence constituted by RBS's file, there is nothing in the contemporaneous documentary record consistent with a suggestion that Brian asked for a 99 year lease to make sure he could live on the Property for the rest of his life or that Mark told him the longest lease under the law is seven years. As I will develop below, the contemporaneous record is clear that the arrangement between Brian and Mark after the sale was for a seven year lease, that this was drawn to Brian's attention on more than one occasion and that Brian acknowledged he understood the terms and conditions upon which he was selling the Property and taking the lease. It has never been a part of Brian's case that he did not understand the transaction into which he entered in 2003. 41For this reason, where there is a conflict between Brian's and Mark's evidence and the latter accords with the objective, contemporaneous record, I prefer the evidence of Mark. In particular, I conclude that Mark's account of his conversations with Brian (set out in paragraphs 68 and 71 below) is to be preferred to Brian's version set out in paragraph 34 above. One consequence of this is that I am not satisfied there was ever discussion of a life tenancy or a statement by Mark that seven years was the maximum term for a lease in law. 42Having reached that conclusion, it is nevertheless important to note that those areas of conflict, such as they are, would not have changed the conclusions I have reached even if they had been resolved in favour of Brian. That is because even on Brian's own evidence, it was Brian who approached Mark, imposed upon himself (Brian) the limitation that the Property would only be sold to a family member and accepted that Mark would purchase the Property for such price as Mark was able to afford, i.e. $100,000. Furthermore, in relation to the lease there is no suggestion that Brian did not understand that the lease would expire after seven years. On Brian's own version of events, he understood that he would thereafter have to pay a discounted market rent. Mark did in fact proffer a one year lease at the conclusion of the lease and it was Brian who then asserted (departing from his own version of the agreement) that he would not pay rent.

The witnesses - Brian in the witness box 43In relation to Brian's evidence in the witness box I do not conclude that his evidence was unreliable. Rather, Brian was unable to advance or hinder his own case because he simply could not remember. While, again, there was no expert evidence in relation to Brian's mental condition at the time of the hearing, I infer that his lack of memory was a consequence of his ongoing depressive illness and the treatment that he has been receiving for it. To understand why I have reached this conclusion, it is necessary to describe the course of Brian's evidence before me. 44I have mentioned that Brian brings these proceedings by a tutor. By notice dated 26 October 2012, under s 67 of the Evidence Act 1995 (NSW) Brian gave notice to Mark that it was intended that Brian's evidence in the two statements to which I have referred would be tendered on the basis that the hearsay rule did not apply because Brian was unable "to give evidence about the asserted facts contained in the evidence ... because he is not competent by reason of mental incapacity". 45However, as matters turned out, Brian was able to attend the hearing. His attendance was obviously a last minute development. Even then, there was a question as to whether or not he was competent to give evidence. I ultimately asked Brian a number of questions which satisfied me that, while he was obviously suffering from the consequences of a mental illness, he was sufficiently aware of his surroundings and the purpose for his attendance that he was competent to give evidence. I recorded my reasons for this in a separate ex tempore judgment. 46However, when Brian gave his evidence it was apparent that he was a shadow of his former self. In his oral evidence, Mark informed me that in 2003 and before, Brian was apparently a reasonably robust and normal individual, notwithstanding the injuries which had disabled him from work. He owned and used a boat, two motor bikes and various farming equipment. To the extent it is necessary, I have no difficulty in finding that in 2003 Brian was physically and mentally competent to manage his own affairs and to understand what he was doing in relation to the sale of the Property. 47The Brian I saw in the witness box was an old man, on several medications (so I was informed), slow moving and reliant on a walking frame. In the witness box he sat reasonably immobile, stared ahead, generally avoided eye contact and from time to time presented as quite suggestible (e.g. often replying to the cross examiner in words to the effect "If you say so, then I must have done it"). 48Nevertheless, while it was apparent that Brian was capable of and did in fact understand the questions that were being asked of him, on all of the critical issues his answer was words to the effect of "I don't remember". I regard those answers as truthful and reflective of the fact that whatever medical conditions and treatments he has undergone have left him with little or no memory of the relevant events. However he did have clearer memories of his early life and was most insistent in maintaining his evidence that he had promised his mother that he would not let the family property pass out of the Harris name. 49In these circumstances it is not so much a question of preferring Mark's evidence over Brian's oral evidence. Rather, it was the case that Brian could no longer remember almost any of the matters upon which he relied to make out his case.

The witnesses - Mark 50I accept Mark as a witness of truth within the limits of his recollection. He gave his evidence clearly and volunteered when he could no longer recall matters. 51It was clear he has found the proceedings emotionally and financially stressful. While his purchase of the Property for much less than its value has given him a considerable financial benefit, I formed the view that he felt that the proceedings were the last straw in a process in which he had been a reluctant participant from the outset when he had first relented to Brian's request to purchase the Property for what he (Mark) could afford. 52Mark's overall account of events is consistent with the history disclosed by RBS's file. Given the difficulties with Brian's evidence which I have referred to above and the overall impression I formed of Mark as a witness, as I have already stated in paragraph 41 above, I prefer Mark's evidence to the extent of any conflict with Brian insofar as it is otherwise consistent with the probabilities or the contemporaneous documentary record. That record is important because while I accept Mark's evidence of the course and effect of Brian's negotiations with him, I do not accept (and Mark could not justify in the witness box) the precise dates for those conversations to which Mark had deposed in his affidavit evidence.

The witnesses - Mr Burgin 53In 2003 Mr Burgin was a partner in RBS and had been in practice as a solicitor for 24 years. His principal areas of practice were conveyancing and business law. 54There is no doubt that RBS acted for both Mark and Brian in relation to the sale of the Property and that Mr Burgin had the carriage of the conveyance and preparation of the lease. On a couple of occasions he gave advice to or undertook tasks directly relating to Brian (see paragraphs 82 and 90-94 below). However, as noted in paragraph 28 above, it is unnecessary for me to determine the precise extent to which Mr Burgin acted for Brian and how much, if any, advice was given to Brian by Mr Burgin's partner, Mr Steer. The latter was Brian's solicitor in relation to the criminal proceedings against Brian. 55RBS's conveyancing file, maintained under Mr Burgin's responsibility, was produced on subpoena and admitted into evidence. It is the only objective, contemporaneous record of what occurred in relation to the sale of the Property and it is the primary source for many of the factual findings I make below. 56In giving his evidence Mr Burgin was clearly doing his best to be frank and truthful. He did not have any interest to be otherwise. Since at the time he had responsibility for six to seven hundred conveyances a year it is unsurprising that he had very little actual recollection of the transaction. He accepted that was the case. For example, while his best recollection was that he only met Brian once in passing, he recognised that he must have met him more than once, not least when it was pointed out to him that he had witnessed Brian's execution of the lease. 57No contested issue of fact before me depends upon Mr Burgin's actual recollection of events. It is his file which is critical.

The facts 58I find the facts to be as follows. 59Brian was born on 24 May 1940 and left school when he was fifteen. He worked as a labourer at a nursery for about ten years and then drove bulldozers. At some point he suffered work related injuries to his lower spine and right leg. From 1998 he became unfit to work and began to receive a disability support pension. 60Mark was born on 15 April 1960. 61Brian has lived on the Property his whole life. Brian promised his mother that he would do his best to keep the Property in the Harris name. The original family property was larger than the Property in its present form. When Brian's mother died in 1965, his eldest brother decided to sell the original family property. Brian disagreed with this and, consistently with his promise to his mother, borrowed money from the Bank of New South Wales to buy a five acre portion of the original family property where the family house was situated. 62Subsequently, a one acre portion of the five acres was subdivided. It was sold on the open market and purchased by Mark's mother. She applied her superannuation money to start building a home on the one acre portion for her retirement. 63Mark was building his mother's home himself, assisted by a neighbour. Prior to 2002 Mark had worked as a storeman and shop assistant in a small electrical wholesaling business. When the business was taken over he was made redundant. In 2002 he was undertaking a computer course at TAFE, as well as a real estate business management course. Those courses were in Sydney and he would come up to work on his mother's house when he had spare time on weekends and other occasions. 64In late 2002 and early 2003 Brian was charged with certain criminal offences. Mark happened to be at his mother's property when the Police came and he went with Brian to the Police Station at Brian's request. 65Brian was originally represented in the criminal matter by a solicitor, Mr Stephen Marks. Brian applied for legal aid to fund his defence. At some time during this period Mr Marks told Brian that the matter was too large for him (Mr Marks) to handle and Mark introduced Brian to Mr Steer, an accredited criminal specialist solicitor who was a partner in RBS. Mr Steer ultimately acted for Brian in relation to the criminal charges. 66Mr Steer told Brian that he would need to pay at least $20,000 to defend the criminal charges against him and that if he could not pay the legal fees then he (Mr Steer) would not be able to act for Brian in relation to them. 67At this time Brian's only income was the disability support pension of about $400 per fortnight and the Property was his only asset. The Property was subject to a mortgage to Elcom Credit Union securing a debt of $47,000. 68Some time between 13 and 21 February 2003 Mr Marks informed Brian that his application for legal aid had been refused because he failed the means test. I infer this was due to Brian's ownership of the Property. Brian instructed Mr Marks to appeal against the refusal. These matters were confirmed to Brian in a letter to him from Mr Marks dated 21 February 2003. Mr Marks also said in that letter: I am of the view that if the Legal Aid Commission strictly applies its policy the refusal to grant Aid will be maintained. Consequently, it will be necessary for you to find funding for the trial as in my view we could not possibly hope to conduct this matter without proper legal representation. The charges you face are extremely serious and conviction will lead to certain imprisonment. I have consulted with Counsel. The charges should be determined at separate trials. Counsel will charge $12,500.00 for all preparation involved plus five days of trial. This, of course, does not include my own fee. I estimate your legal fees will be approximately $20,000.00-$25,000.00. I recommend you make every effort to ascertain whether or not such funds can be available from other sources. 69Brian asked his nephew Wayne for money for his defence but Wayne could not help. It was Brian who then approached Mark in mid-February 2003 and they had a conversation to the following effect: Brian: I need money to pay for my criminal trial. Legal Aid has rejected my request. I need to raise $20,000. I know you have funds as you're currently building your house. If you give me some of your money for my legal fees, I will leave my house to you in my will. Mark: No. 70On 20 February 2003 Brian executed a will that had been prepared by RBS appointing Mark as his Executor and leaving him the whole of his estate (except for some equipment and vehicles which he bequeathed to his other nephew, Wayne). Rather than being a sign of trust and confidence in Mark, this appointment was made in the context of the negotiation when Brian was offering to leave the Property to Mark. I am not satisfied that there was an existing close relationship between Brian and Mark. Brian was negotiating with Mark because, consistently with his wish to keep the Property in the family name, Mark was the only family member he was prepared to approach who apparently had some capacity to buy the Property. 71Some time later Brian again approached Mark and they had a conversation to the following effect: Brian: I still need money to pay my lawyers. Can you give me some money? Mark: No. Brian: I need money to fund my legal fees. How about I sell my place to you, I have spoken to a real estate agent and he said I could get around $400,000 for it. Mark: Well I can't afford that, the bank won't lend me that sort of money. All I have is what I have left to finish building the house. Why don't you sell some of your possessions to fund your legal bills, rather than sell your house? You can get enough money if you sell your motor bikes, tractors, car and boat, the stuff you hardly use. Brian: No I don't want to sell my stuff and I need more money than just for the solicitors, because I have other things to pay as well. I would rather sell the house to you as I promised my mother I would try my best to keep the family property in the name of Harris. Mark: I can't afford to buy your house at the moment. Why don't you wait until your appeal to Legal Aid is finished? Brian: Ok. 72There were at least one or two more approaches from Brian to Mark to the same effect. At this time Mark had an expectation that he would receive $100,000 from the sale of a property which he owned with his former partner. By 17 March 2003, notwithstanding that Brian's legal aid appeal was still pending, Mark had agreed to buy the Property for that amount on the basis it was all he could afford. But for the intervention of Brian's proposal Mark intended to apply that money towards the completion of the home on his mother's property. The house was never completed. Mark had no other funds he could offer. His taxable income for the year ended 30 June 2003 was $9,862.00. 73On 17 March 2003 Mr Burgin wrote to Mark: We refer to our conference of the 17th instant and note that you have agreed to purchase from your uncle Brian John Harris the property comprising XXX, Wyong Creek which comprises of four acres, dwelling and a shed. We understand that the purchase price agreed upon is $100,000.00. We note that you are in the course of arranging for a valuation to be provided to us as this will be required for Stamp Duty purposes noting that the purchase price will presumably be less than the value. We will advance the matter further when we receive your instructions as to the probable time of settlement and the provision of the Valuation Report. In the meantime we have written to Mr Brian Harris to seek his confirmation of this arrangement. 74On 31 March 2003 the Legal Aid Review Committee wrote to Brian: Your appeal was considered by the Legal Aid Review Committee on 26 March 2003. The Committee resolved that the appeal be disallowed, as it is not satisfied that there are sufficient grounds of hardship to disregard your means. 75Further negotiations ensued between Brian and Mark, presumably after the rejection of Brian's appeal made it clear their transaction would have to proceed. By May 2003 a seven year lease of the Property from Mark to Brian was agreed. Brian asked for a lease and seven years was all Mark was prepared to give. Mark did not arrive at that period by reference to any particular rental value. He arrived at the seven years because at the end of that lease he would be 50 years old, his son would be 10 years old and Brian, if he was still alive, would be 70 years old. Mark did not give much thought to what would happen in seven years time but assumed Brian would pay rent if he wanted to stay on after that. 76On 8 May 2003 Mark instructed Cameron & Links Valuers to assess the fair market value of the Property for stamp duty purposes. By valuation dated 14 May 2003 addressed to Mark, they confirmed their assessment of the fair market value of the Property for stamp duty purposes as at 13 May 2003 to be $475,000. I accept that was the value of the Property at the time. By 2012 its value had increased to $610,000. 77On 14 May 2003 Mark wrote to Mr Burgin: In relation to purchase of the [Property] ... from Brian John Harris for an amount less than market value given the limitation placed on any sale by my uncle's desire to sell only to a family member, and not offer the property to the open market. I want fee simple of the property, nonetheless I am agreeable to offer my uncle a lease for up to seven years for a peppercorn rent to offset this lower price and afford him security, for a prearranged period of time. I have spoken to my uncle regarding this matter and I think this will allow him the use of the Property, and the cash that he requires now to fund defence of his pending criminal matter, and will satisfy both our requirements to not have the Property sold on the open market. I believe it is important to be clear in the way any lease or agreement to compensate my uncle, for the lower than market sale price is acknowledged and that the limits of which are reasonable and are defined beyond potential argument. I expect to pay $100,000.00 and give him 7 years to be able to use the main house. In return for clear title in fee simple. I expect the disbursements would be approx: $47,000.00 to discharge the mortgage to Elcom Credit Union $20,000.00 to Solicitors for legal representation for his pending criminal matter, $20,000 left over for his own use. $15,000 for Stamp Duty Please advise my costs to you a.s.a.p. so that I can put together the necessary financial arrangements 78Mark was using language and a business like approach derived from what he was learning in the real estate business management course he was then doing. 79On 19 May 2003 RBS opened a new file with Brian as the client, describing him as an "existing client" (presumably referring to the criminal proceedings) with Mr Burgin as the partner, Mark as the "other party" and the matter description "Harris sale to Harris" with a reference to the Property. 80On the same day RBS prepared an authority in their favour from Brian irrevocably authorising them to deduct $20,000 from the sale proceeds of the Property to Mark and to apply those funds towards the legal costs of RBS acting on Brian's behalf in relation to the criminal proceedings. Brian signed that authority. 81On 23 May 2003 Mr Burgin wrote an inter-office memorandum to Mr Steer which included: As I indicated to you earlier I have received instructions from Harris to prepare a contract for him to buy his uncle's house at Yarramalong Road. Harris apparently has a sale of his home at Terrigal taking place although I am not acting for him, Patrick McHugh is acting for him. Harris has told me that his sale was due to complete at about the end of May or early June. I received a fax from him yesterday afternoon, which indicates that the house that he is selling is owned jointly with his de-facto. Apparently she has, at the last minute, put on a stink about the division of the sale proceeds and it would seem that unless he resolves the issue with her he wont's (sic) get his share of the proceeds of sale and thereby he won't be able to pay his uncle, who inturn (sic) won't be able to pay you. 82On 15 August 2003 Mr Burgin wrote to Brian: We enclose herewith draft Contract for Sale which provides for the sale of your property to your nephew Mark at a price of $100,000. It is acknowledged that this price is significantly less than the value. Nevertheless we draw the attention to Special Condition 5 which provides that from completion Mark will grant you a lease to occupy the premises at nominal rent of $100 per annum for a period of seven (7) years and this Lease will (as it must being a Lease in excess of three (3) years) be registered on the title. The registration of the Lease will afford you significant protection. If there are any matters relating to this transaction about which you seek clarification please do not hesitate to contact the writer. We note that you acknowledge that in this transaction we also act for Mark on the purchase. 83On 18 August 2003 Mark wrote to Mr Burgin: I acknowledge receipt of the draft contract for sale of said property and am keen to move to complete exchange for contracts and bind the deal as soon as the funds held in trust are made available by Patrick McHugh & Company. ... I draw your attention to the purchase price of $100,000 and say as per my previous letter and agreed to by the vendor my uncle that the amount for stamp duty will need to be calculated and then deducted from this amount, which will in fact realise a purchase price of a lesser amount. With regard to special condition 5, which provides that "I will grant a lease of the whole of the premises for seven years from completion at a rental of $100 per annum" I agree to pay the costs of the preparation, stamping and registration of the lease but have to discuss the exact nature of this lease at a time convenient to you ... 84On 19 August 2003 Mark spoke to Mr Burgin and instructed him to make certain amendments to the draft contract for sale. On the same day Mr Burgin sent counterpart copies of the amended contract for sale to each of Brian and Mark at their respective, neighbouring addresses. The letter to Brian said: We enclose herewith Contract for Sale which has been amended as follows: ... 2. Special Condition 5 has been amended and a new Special Condition 6 has been added. We would be pleased if you could sign the front page of the Contract where indicated and return to our office at your earliest convenience. 85The contract for sale of the Property was in the standard form of a contract for the sale of land (2000 Edition), specifying the purchase price as $100,000 with a 10% deposit of $10,000. The contract included these special conditions: 5. The purchaser shall on completion grant to the Vendor a Lease of the premises for a period of seven (7) years at a rental of One Hundred ($100.00) Dollars per annum which Lease shall contain all the usual and standard particulars relating to a Residential Tenancy but be in registrable form and subsequent to completion be registered on the Title at the purchaser's expense. Such Lease shall contain the following provisions: a) The Lease shall not be assigned except with the consent of the Lessor which he may not give at his absolute discretion; b) The Lessee shall grant to the Lessor a Licence to use the area highlighted on the Plan annexed hereto and marked "A" as a machinery shed and surround and access which Licence shall not preclude the use of this area by the Lessee. 6. The Vendor shall pay the stamp duty assessable in this transaction being an amount of $16,879,00) (sic) Dollars. 86On 20 August 2003 Mark wrote to Mr Burgin: I acknowledge receipt of contract for sale and return said signed. Please check the vendor's solicitor and purchaser solicitor names are correct as they appear on the "Contract for Sale of Land". Our concern is that it appears David Burgin and Terry Steer have been inserted into the wrong sections. You will appreciate that we are mindful to have the contract document 100% correct prior to final execution. I forward a cheque for nine thousand five hundred dollars to Richardson Burgin Steer, which with the $500 previously paid to you with Visacard represents $10,000 as deposit. 87Brian returned the signed contract to Mr Burgin under cover of a letter dated 21 August 2003 (and apparently received by RBS on 25 August 2003) signed by Brian. Brian's letter said: Have received contract for the sale of land and it all appears to be in order, I read it through and understand the special conditions that are part of the contract. I have signed where indicated. 88By reason of this acknowledgment and his earlier conversations with Mark, Brian understood the transaction that he was entering into. In particular, he understood that the Property was being sold at an undervalue and that he was obtaining a seven year lease at a peppercorn rent with no legal entitlement to reside in the Property after that. Nevertheless, both he and Mark expected that he would probably continue to live there if they could come to terms on the rent. 89Mr Burgin gave evidence that the letter referred to in paragraph 87 above was not a document he prepared. Mark gave evidence that he did not remember preparing the letter but did not think he had. The letter was simply addressed to "David Burgin, Richardson Burgin Steer, The Entrance NSW". It was obviously not intended to be posted. The probabilities are, and I find it to be the case, that the letter was prepared by Mark for Brian to sign and that Mark delivered the letter and counterpart contract for sale, both signed by Brian, to Mr Burgin. Mark was clearly concerned to ensure there was a contemporaneous record of Brian's understanding of the transaction. In the circumstances as I have found them his concern about this was neither inappropriate nor sinister. It was prudent. 90RBS exchanged the contracts for sale of the Property and Mr Burgin wrote to Brian: We refer to previous correspondence and wish to confirm that Contracts were exchanged on the 25 August 2003. The deposit of $9,500 has been paid into our Trust Account. We note that the Contract for Sale indicates that settlement shall take place within six weeks from the date of exchange, namely the Monday, 6 October 2003. We shall inquire as to the anticipated date for settlement approximately two weeks before that date to ensure that the purchasers (sic) are still able to settle by that time. We will be contacting your Mortgagee with the view to arranging for a Discharge of Mortgage and pay out figure in anticipation of settlement. Would you please contact the said Mortgagee with a view to establishing whether there are any release papers that should be signed by you prior to settlement. 91On the same day Mr Burgin wrote to Elcom Credit Union advising that he acted "for the Vendors" (sic) and invited it to prepare a discharge of mortgage and to advise of the pay out figure in anticipation of a settlement on 6 October 2003. 92On 25 September 2003 Mark delivered a cheque for $90,000 in favour of RBS which he had collected that day from Patrick McHugh & Company, who had acted on the sale of his Terrigal property. 93On 29 September 2003 Mr Burgin sent Brian the transfer for execution in anticipation of settlement. 94Prior to settlement an issue arose in relation to the discharge of Elcom's mortgage. As a result of a sickness and injury claim which had been made by Brian on an insurer, the insurer was making Brian's loan repayments to Elcom. Mr Burgin sought instructions from Brian to negotiate with the insurer for a lump sum pay out. That is what occurred, with Mr Burgin writing to the insurer on 10 November 2003, opening his letter with the words "We act for Brian Harris the above named insured". Brian signed an authority addressed to the insurer authorising it to provide RBS with whatever information RBS required from time to time. 95In dealing with the insurer, RBS copied to Mark at least some of its correspondence to Brian in which RBS reported on the negotiations with the insurer. Those negotiations were delaying settlement. 96The situation with Brian's workers compensation insurer was ultimately resolved and settlement of the sale of the Property took place on 22 December 2003. In a letter dated 23 December 2003 addressed to Brian and Mark jointly confirming the settlement, Mr Burgin wrote: As indicated in our discussions we confirm that we give this following short summary in relation to the transaction generally. The Property comprising Lot XXX in DP XXX was sold by Brian to Mark for $100,000 being acknowledged that that represented a significant undervalue of the Property. A Valuation was obtained from Cameron & Lynx and stamp duty was paid (by Brian) on the full value of the Property. From settlement the Property has been leased back to Brian as a residence for a period of seven (7) years at a nominal rental of $100 per annum. A Licence has been reserved in favour of Mark to use the area where the machinery shed is located for the purposes of storage and access, although Brian reserves full and free use of this area as well. The purpose of this transaction was to enable the farm property to remain in the family, it being noted that Brian is presently the subject of certain serious criminal charges by certain other related parties and that Brian was in need of urgent funding to meet legal costs in connection with defending those charges which on enquiry could not be sourced from financiers owing to Brian's inability to work in the future and repay the Mortgage. As a consequence of the transaction we were able to negotiate a settlement of Brian's insurance claim with CUNA Mutual Group on the basis of a one off payment of $7,500 and in this regard it should be noted that Brian's insurance benefits would, in any event, have ceased on his 65th birthday. 97As part of the settlement Mark and Brian (as lessor and lessee respectively) executed a seven year lease of the Property expressed to commence on 22 December 2003 and to terminate on 21 December 2010. Each signature was witnessed by Mr Burgin. The lease provided for rental of $100 per annum and that Brian had to pay Mark all of the outgoings in respect of the Property. While the lease contained a holding over clause creating a month to month tenancy, there was no option to renew. 98Mr Burgin's letter of 23 December 2003 accurately summarises the circumstances surrounding the transaction and both Brian's and Mark's understanding of it. 99Brian was ultimately acquitted of the criminal charges. 100In December 2010 Mark told Brian that he could continue to lease the Property for $300-$350 a week. Brian responded that he was not prepared to pay any rent. 101On 16 December 2010 Mark served Brian with a notice of termination requiring Brian to give vacant possession of the Property on 1 January 2011. 102On 7 January 2011 Mark lodged an application in the CTTT for an order for possession of the Property. 103The CTTT heard Mark's application on 9 February 2011. Brian was legally represented on that occasion by counsel and a solicitor from the Legal Aid Commission. Ms Rennie was appointed Brian's tutor in the proceedings due to his mental incapacity. 104The CTTT made orders on that day: The Tribunal is satisfied that Brian John Harris is totally or partially incapable of representing himself in these proceedings because he is mentally incapacitated. Lauris Rennie is appointed under s 36(6) of the Consumer Trader and Tenancy Tribunal Act 2001 to represent him in these proceedings. 2. Order for termination and possession: by consent, the tenancy agreement is hereby terminated. 3. Possession is to be given to the landlord immediately. 4. By consent, the applicant waives any entitlement to outstanding occupation fees or other amounts payable under the lease. 105Brian did not appeal against those orders. 106Brian has not returned to the Property since 27 July 2011, on which day he was admitted to Wyong Hospital Mental Health Unit. 107Brian commenced these proceedings on 18 October 2011. 108Since about October 2012 Brian has resided in Orana Aged Care Centre and is not expecting to return to the Property.

The legal principles applicable to Brian's claim under the Act 109The Act provides: 7. (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: ... (c) it may make an order varying, in whole or in part, any provision of the contract, ... (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order. 9. (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. 110Section 9(2) goes on to set out a list of matters which, without affecting the generality of s 9(1), must be included amongst those the Court takes into account "to the extent they are relevant to the circumstances". The particulars of injustice provided by Brian (set out in paragraph 9 above) have obviously been drawn by reference to s 9 of the Act and I shall return to them later in these reasons. 111Section 4(1) of the Act provides that "unjust includes unconscionable, harsh or oppressive; and injustice shall be construed in the corresponding manner". 112Judicial exposition of the Act has developed the following principles which I apply in this case and summarise to be: (1)The first question to be considered is whether the contract was unjust in the circumstances at the time at which it was made, having regard to the factors referred to in s 9. This is a conclusion of fact, albeit one of ultimate fact involving a broadly based value judgment. (2)If the first question is answered in the affirmative, the second question, which involves the exercise of judicial discretion, is whether any and if so what relief should be granted. (3)The mere fact that a party to a contract can point to circumstances that fall within the words of one or more paragraphs in s 9(2) does not mean there is an arguable case for relief under the Act. (4)The Court must have regard to the public interest and all the circumstances of the case. (5)A contract can be unjust because of the way it operates in relation to the plaintiff ("substantive injustice"). (6)Further and alternatively to being substantively unjust, a contract can be unjust because of the way in which it was made ("procedural injustice"). (7)The improvidence of a transaction is relevant to determining whether a contract is unjust. A transaction can be so obviously improvident as to lead to the conclusion that a party cannot have entered into it with an appreciation of what was involved. 113This summary is derived from the judgment of Ward J (as her Honour then was) in Darmanin v Cowan [2010] NSWSC 1118 ("Darmanin") at [271]-[293]. Although her Honour's consideration of the Act in that case was strictly obiter dicta, her Honour sets out the relevant authorities in, with respect, exemplary detail. I have respectfully adopted her Honour's bringing together of the relevant authorities as a convenient statement of the principles which I have attempted to summarise. In applying those principles, I also bear in mind the observations of McHugh JA (as his Honour then was) in West v AGC (Advances) Ltd (1986) 5 NSWLR 610 ("West") at 621-622: It is important to bear in mind that it is the contract or its provisions which must be unjust. ... If a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a contract and the terms of the contract are reasonable as between the parties, I do not see how that contract can be considered unjust simply because it was not in the interest of the claimant to make the contract or because she had no independent advice. ... ... a contract will not be unjust as against a party unless the contract or one of its provisions is the product of unfair conduct on his part either in the terms which he has imposed or in the means which he has employed to make the contract. 114Finally, in recalling and applying these observations of McHugh JA, I respectfully adopt the observation made in relation to them by Spigelman CJ (with whom Handley JA agreed) in Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 at [73]: His Honour's reasoning is instructive. It was, however, directed to the issues in that case. Where the Court has to apply a standard as general as what is "unjust", it cannot be confined by such reasons as if they were rules. I do not understand McHugh JA to have put forward these observations as rules. Rather, the observations are to be understood, correctly, as identifying relevant considerations entitled to significant weight.

Brian's submissions 115Brian's case was squarely put on the basis that the contract, consequent transfer and the lease were unjust for the reasons particularised in paragraph 14 of the Statement of Claim. It was submitted that they constituted an improvident transaction for Brian, i.e. a substantive injustice, in that he disposed of his life long home for a fraction of its true worth. It was also submitted that there was procedural injustice, in particular by reason of "unfair tactics", also particularised, said to have been used by Mark against Brian. The combination of those matters satisfied the primary inquiry that the contract and lease were unjust in all the circumstances. Relief should then be granted by increasing the contract price (thereby addressing the undervalue). No relief was ultimately sought in relation to the lease, but it was submitted that compensation should also be ordered.

Mark's submissions 116Mark's submissions focus upon the circumstances. He rejected that the sale of the Property for $100,000 was the product of any unfair tactic engaged in by him. Mark submitted that the evidence supports a finding that Brian required money to defend serious criminal charges, that he knew the market value of the Property, would only ultimately treat with Mark and that Mark paid all that he could. Mark submits that there was no predatory conduct engaged in or unfair tactic employed by him against Brian. 117As I now proceed to develop, Mark's submissions should be accepted.

Resolution of Brian's claim under the Act 118As is apparent from ss 7(1), 9(1) and (2), the "circumstances" of a particular case will be determinative as to whether a contract is "unjust". The legislature did not intend the notion of "unjust" to be applied in a vacuum as an objective, idiosyncratic or abstract concept. Stated in isolation, many of the factors identified in s 9(2) are neutral. Depending on the circumstances they could support a conclusion that a particular contract was unjust. In other circumstances the same consideration may retain a neutral character or even militate against a conclusion that a contract is unjust. 119The present case is an excellent example of the importance of the circumstances. The basic facts could support a narrative of injustice. An older relative in desperate need of a relatively small amount of money has sold his home to a younger relative at a considerable undervalue in circumstances where no provision has been made for the ultimate accommodation of that older relative. In some circumstances the contract giving effect to such a transaction will be unjust within the meaning of the Act. It is not so in this case. 120The circumstances which fundamentally inform the broadly based value judgment which I am required to make as to whether or not the contract and lease were unjust within the meaning of the Act are the fact that while Brian had an urgent need for funds, he imposed upon himself the limitation that in selling the Property he would only sell it to a family member in order to honour the promise to his mother; that Mark was apparently the only relative who was in a position to offer any real value for the Property; and, that Brian insisted on treating with Mark in circumstances where all that Mark was able to offer was (to the knowledge of both of them) a considerable undervalue of the Property. The further critical circumstances, to adopt the language of McHugh JA in West, are that I am unable to find any conduct by Mark which deprived Brian of a real or informed choice to enter into the contract, I consider the terms of the contract to be reasonable as between the parties given the limitations which Brian imposed upon himself to which I have referred and I am unable to identify any unfair conduct on Mark's part in the terms which he imposed or in the means which he employed to make the contract. 121I find that after initial reluctance, Mark agreed to enter into the transaction as a result of Brian's persistence and out of some sense of family obligation, albeit rather qualified because it was towards a family member to whom he did not feel particularly close. He was not motivated by a desire to obtain, and neither initiated nor engaged in conduct unfair to Brian to achieve, a financial advantage over Brian, although he understood that was a consequence of the arrangement they were entering into. His proffering of a seven year lease at a peppercorn rent was not, in the circumstances which I have identified, something which made either the contract or the lease unjust. Rather, in my view it is a feature which counts against any suggestion that Mark was out to profit against Brian, given it was very unlikely that any arms length purchaser would be interested in the Property subject to a registered seven year lease at a peppercorn rent. 122The conclusion which I have reached depends upon and is fortified by consideration of the particulars relied upon by Brian which reflect the relevant provisions of the Act. I will now deal with each of those particulars in turn, setting them out in italics and indicating the provisions of the Act to which I understand them to relate.

Brian received $83,131 for property worth $475,000 123The consequence of compliance with the contract for the plaintiff was that the plaintiff received $83,131 for a property worth $475,000 (cf s 9(1)(a) of the Act). That is true. However, the plaintiff was determined to treat with Mark so that the Property would not leave the Harris name. Mark offered all he had, $100,000, which had to pay for the Property, stamp duty and related costs. It was Brian's choice not to go to the market to sell the Property. In the circumstances this consequence was entirely attributable to Brian and was not the product of any impeachable conduct by Mark.

Effective cost of the lease was $19,593 per year 124The effective cost to the plaintiff of the right to occupy the Property under the lease was $19,593 per year (cf s 9(1)(a) of the Act). While this statement may be mathematically correct, it is a consequence of Brian's own conduct, including his preparedness to accept Mark's terms when he (Brian) was not prepared to go to the open market. The seven year lease was all that Mark was prepared to offer and I find it was not done with any intention on the part of Mark to take advantage of Brian.

Brian would have to find premises to rent at the conclusion of the lease 125The consequence of compliance with the lease for the plaintiff was that he would have to leave his lifetime home in 2010 at the age of about 70 years and find premises to rent (s 9(1)(a) of the Act). Again, this is literally correct. It was no part of Brian's case that he did not understand that this would be the consequence of selling the Property and taking the lease. The reasoning in paragraphs 123 and 124 above is equally applicable to this particular. 126The present case bears some similarity to that which confronted Ward J in Darmanin where the plaintiff sought relief in relation to an arrangement where she was permitted to occupy a cottage which she had built on the defendants' land. Her Honour, after referring to West, said: [290] Here, it does not seem to me that the arrangement was so obviously improvident from Ms Darmanin's perspective as to compel the conclusion that any contract pursuant to which the cottage was built on the land was unjust for the purposes of the Act. The improvidence of this transaction lay in the fact that no provision was made (nor indeed does it seem any consideration was given) as to what was to happen after the time during which Ms Darmanin was to stay at the Glenorie property - i.e. whether or how the cottage was to be relocated or how easy it would be to sell the cottage ... [291] I am unable to see that there was any injustice in the arrangements at the time construction of the contract commenced, whether substantive or procedural. [292] Rather, I consider this to be the kind of situation, unfortunate as it has turned out to be, in which though entered into without independent advice and although one which in hindsight was not in the interest of Ms Darmanin, is nevertheless not unjust within the meaning of the Act ... 127In circumstances where Brian insisted on treating with Mark and understood that all he was getting was a seven year lease (which was all that Mark was prepared to offer) the consequence is not unjust within the meaning of the Act. I am fortified in this conclusion by the fact that Brian and Mark shared an expectation that Brian would be permitted to remain at the Property after the conclusion of the lease if they were able to come to terms as to rent.

Brian was not reasonably able to protect his position 128The plaintiff was not reasonably able to protect his position by reason of his limited education and his age (s 9(2)(e) of the Act). Brian was both determined to proceed with the transaction with Mark and understood what he was doing. This particular is not made out as a matter of fact. There is no suggestion Mark discouraged or prevented Brian from seeking legal or other advice. Neither did Mark have an obligation to tell Brian he should get such advice.

Brian was vulnerable by reason of the criminal charges 129The plaintiff was vulnerable by reason of his fear that he would not be able to raise funds to pay for his legal representation on serious criminal charges other than by selling the property (I interpret this to be a relevant circumstance and also seeking to invoke s 9(2)(a) of the Act concerning material inequality in bargaining power). I do not accept this as an accurate statement of the circumstances. Brian, rightly or wrongly, had determined that he had to sell the Property and would only sell it to a relative. He had either been told or he understood that, notwithstanding his equity in the Property, his inability to service a loan due to his low income meant that he could not simply take out a loan against the security of the Property. He determined for himself that he had to sell it. None of those conclusions were influenced or urged upon him by Mark. This was not a case of vulnerability and, even if it were, Mark did not act in an impeachable way to take advantage of it.

Unfair tactics (s 9(2)(j) of the Act) 130Representing that a seven year term was the maximum lease term permissible. For the reasons set out in paragraphs 40 and 41 above, this representation was not made. 131Representing that further seven year leases would be given at the end of the lease. For the reasons set out in paragraph 40 and 41 above, this representation was not made. 132Insisting that the plaintiff pay stamp duty. This was a consequence of Brian insisting upon treating with somebody who only had a limited amount of money to spend. Mark's insistence that Brian pay the stamp duty was not to take advantage of Brian, but was rather the consequence of Brian insisting on treating with Mark, who could not spend more than $100,000 on the transaction. 133Taking advantage of the plaintiff's fear that the plaintiff could not raise funds for legal representation. Even if Brian had that fear, Mark did not take advantage of it. It was Brain who initiated the transaction with Mark and insisted that he would only sell the property to Mark. 134Offering a price significantly below market value of the Property. Both Brian and Mark knew that $100,000 was all that Mark could afford. There was no unfairness to Brian for which Mark can be criticised. Brian was determined to enter into the transaction with Mark to keep the Property in the family name and well understood that he was selling it to Mark at an undervalue. 135Taking advantage of the trust reposed in the defendant by the plaintiff as a consequence of their family relationship. It was not a case of Brian reposing trust in Mark. Rather, Brian's determination to keep the Property in the family name meant, as far as he was concerned, once it became clear that his nephew Wayne was unable to purchase the Property, Mark was the only person who had funds to buy the Property. Mark's role in the transaction was not to take advantage of anything, but rather to respond reluctantly to a request for assistance from Brian. 136The contract, transfer and lease were improvident for the plaintiff (I infer this to be intended to be a s 9(1) circumstance). I understood from Brian's submissions that the essentially improvident features of the transaction were alleged to be disposal of his life long home at a significant under value and that he had no enforceable right to continue to occupy the Property after the termination of the lease, so that at the age of 70 he would need to find a new home to rent. In isolation these matters might appear improvident but I do not find them to be improvident in the circumstances of this case. In particular, the sale at an undervalue was the product of Brian's determination to treat with a member of his family. The same applies to the term of the lease. 137Even if those matters are properly characterised as improvident, they are not attributable to any colourable conduct on the part of Mark. Concepts of improvidence and advantage are either inapplicable, or of limited relevance, where a party initiating a transaction is, by reason of a self-imposed limitation, dealing with only one other party. Brian got the best deal he could in those circumstances, understood the transaction and was determined to enter into it in circumstances where none of the allegedly improvident features are attributable to impeachable conduct by Mark.

Other relevant matters 138The foregoing deals with Brian's case of injustice as particularised in the statement of claim. The general circumstances which I have identified in paragraph 120 above constitute the setting and purpose of the contract for the purposes of s 9(2)(l), but in this case they do not assist Brian. Section 9(2)(h) (independent legal advice) was not open to be relied upon by Brian as the case was pleaded. Section 9(2)(i) (extent of explanation of the contract and its legal and practical effect) is relevant to the present case, but I find that Mr Burgin's letter of 15 August 2003 (see paragraph 82 above) was an accurate explanation of the transaction and was understood by Brian. It therefore also militates against a conclusion that the contract, lease or transfer was unjust. 139None of the other paragraphs of s 9(2) of the Act is relevant in the circumstances which I have identified as relating to the contract, transfer and lease at the time they were made.

Conclusion 140Brian's claim therefore fails. The contract, transfer and lease were not unjust in the circumstances relating to them at the time they were made. Had I come to the opposite conclusion, I would have ordered that the purchase price for the Property be increased and sought to determine an appropriate amount of compensation to be paid to Brian in addition to the increase in purchase price. Allowance would have to have been made for the value of the benefit to Brian of his seven years' occupation of the Property under the lease. 141Mr Batley submitted that the purchase price should be increased to $380,000 and provided the Court with an outline of two ways in which compensation might have been calculated. I have placed that outline with the papers. However, as I indicated at the end of the hearing, had I reached the point where a calculation for increased price and compensation was required, I intended to afford the parties an opportunity to file additional evidence (including expert evidence) and submissions as to how those amounts should be calculated. In the result, it has not been necessary to embark upon that exercise.

Orders 142The orders of the Court are: 1.Statement of Claim dismissed. 2.The Plaintiff pay the Defendant's costs of and incidental to the proceedings. 3.Direct that the exhibits be returned after 28 days. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 July 2013