Bridgewater v Leahy

High Court of Australia|1997-03-14|Before: Gleeson CJ, Callinan JJ, Jersey J, Callinan J, Macrossan CJ, Davies JA, Fitzgerald P

High Court of Australia Gleeson CJ Gaudron, Gummow, Kirby and Callinan JJ Bridgewater v Leahy [1998] HCA 66

The second respondents pay the appellants' costs of the appeal.

Set aside the orders of the Court of Appeal of Queensland made on 14 March 1997. In place of those orders:

(iii) set aside the orders as to costs made by de Jersey J on 15 September 1995;

(iv) declare that the deed of forgiveness of debt made between William York of the one part and Neil William York and Beryl Elizabeth York of the other part, executed on 19 July 1988 (the Deed), has no effect as to the forgiveness of the amount to be declared in accordance with par 4(i) of these Orders;

(v) order the second respondents to pay the appellants' costs of the appeal to the Court of Appeal of Queensland and half the appellants' costs of all proceedings before de Jersey J.

Remit the matter to a Judge of the Supreme Court of Queensland for:

(i) the determination, in accordance with the reasons for judgment of this Court, of the amount as to the forgiveness of which the Deed has no effect, and the making of an appropriate declaration;

(ii) subject to any determination by the Supreme Court of Queensland, which is made by that Court after exercise of the liberty to apply provided in par 5 of these Orders and in accordance with the reasons for judgment of this Court, the making of a declaration that the estate of William York has a vendor's lien on each of:

(a) the property comprising the Perpetual Lease Selection at "Wonga Park", Wallumbilla and described in the transfer from William York to Neil William York and Beryl Elizabeth York executed on 19 July 1988;

(b) the property comprising the fee simple in "Wonga Park", Wallumbilla and described in the transfer from William York and Samuel York to Neil William York executed on 19 July 1988; and

(c) the property comprising the fee simple in "Risby", Wallumbilla and described in the transfer from William York and Neil William York to Neil William York executed on 19 July 1988,

to secure the amount the subject of the declaration made in accordance with par 4(i) of these Orders and interest at commercial rates allowed on that amount from time to time by the Supreme Court of Queensland from 28 November 1988.

There be liberty to apply to the Supreme Court of Queensland.

Reserve to the Supreme Court of Queensland the determination of the costs of any further proceedings in that Court.

At first instance, in the Supreme Court of Queensland, the appellants made an unsuccessful challenge to the validity of certain provisions of the will of the late William York (known as Bill York), who died in April 1989 at the age of eighty-five. The will was made in April 1985. The appellants also made an unsuccessful challenge to a transaction entered into between Bill York, his nephew Neil York, and Neil York's wife Beryl York, during 1988.

In the Court of Appeal, the appellants abandoned their attack upon the will, but pursued their claim to relief in relation to the 1988 transaction. By majority (Macrossan CJ and Davies JA, Fitzgerald P dissenting) the appeal was dismissed.

The 1988 transaction can only be understood in a wider context. The provisions of the 1985 will formed an important part of that context.

Bill York, a grazier, was born in Wallumbilla, and lived there all his life. When he died, he was survived by his wife and his four daughters, all married women. The widow and daughters are the appellants.

Bill York had a younger brother, Sam. The two brothers had substantial rural interests, including interests which they held in common. They carried on a grazing partnership on land, some of which had been passed down to them by their father. Bill York had no sons. The respondent, Neil York, was Sam's youngest son. Neil York worked on the properties for substantially the whole of his working life, and formed a close relationship with his uncle. In 1981 a new partnership was formed between Bill York, Sam York and Neil York. Neil was made a one-third partner, without any capital contribution. Some years earlier, Bill and Sam York had purchased a grazing property for Neil's two older brothers. Neil took over responsibility for the day to day management of the partnership business de Jersey J found that "[t]here is no doubt that Bill greatly admired Neil, and fully trusted him. For his part, Neil appreciated the high regard his uncle felt for him".

In April 1985, Bill York made his last will. He gave his house at Wallumbilla, his car, and his money in the bank (about $150,000) to his widow. The residue of his estate was left to his four daughters in equal shares. That provision, however, was subject to an important qualification. The testator gave Neil York an option to purchase all his pastoral holdings, together with his interest in the current grazing partnership, and livestock and machinery, for the sum of $200,000. In due course, Neil York exercised that option, and the four daughters each received $50,000 under the will. At the time of the making of the will the value of the land the subject of the option was $694,922. Thus, the will gave Neil York an option to purchase the whole of the testator's rural interests at a substantial undervalue.

Bill York appointed Kevin Leahy, his son-in-law, as executor of his will. Kevin Leahy's wife is one of the appellants. He is a respondent, but has taken no active part in the proceedings.

The will was made on the initiative of Bill York. It was prepared by a solicitor, Mr Pack of Taylor and Pack. Mr Taylor had previously acted for both Bill and Sam York. He was busy on the day Bill went to make his will, so the will was prepared by Mr Pack. Neil was not present when instructions were given by Bill to Mr Pack. He did not accompany his uncle when he later returned to sign the will.

Bill York never discussed his business affairs with his wife or daughters. However, they became aware of the general nature of his will.

At first instance, before de Jersey J, the appellants sought to challenge the validity of the option contained in the will on the grounds of undue influence and unconscionability. That claim was unsuccessful. It was not pursued on appeal. At the time he made his will in 1985, Bill York had full testamentary capacity. de Jersey J held that he was not acting under any pressure or any influence from Neil York; that, on the contrary, he had himself initiated the proposal reflected in the will; and that the manner in which he disposed of the estate reflected, and was entirely consistent with, his strongly felt personal wishes. He was fond of, and grateful to, his nephew, whom he regarded and treated as a son. The nephew had, over a long period, assisted in the development of his rural holdings and had devoted a major part of his working life to the York brothers' grazing business. Bill did not want the holdings to be broken up upon his death, but intended that they would pass, intact, to his nephew. Rightly or wrongly, he regarded the provision he was making for his widow, and his adult married daughters, as adequate. Whilst it was theoretically possible that Bill York might, at some time after April 1985, change his will, the circumstances were such that this was very unlikely.

The position was summed up by de Jersey J as follows:

In light of Bill's enormous affection for Neil, Neil's life-long dedication to those particular properties, and Bill's determination to keep Neil in the partnership, it is hardly surprising that Bill would wish to pass the properties to Neil - especially regarding him, as he did, as the "son" he always wanted but never had.

In late 1987 or early 1988, Neil York approached Bill York and put to him a suggestion that Bill should sell to Neil certain land, being part of the land which was the subject of the option granted by the will, for the price of $150,000. Neil York had that amount of cash available as a result of a sale of certain other land. The property which Neil had sold was called Injune. It appeared that Neil's approach was in line with Bill's wishes. Bill York had wanted Neil to sell Injune, and had requested him to put it on the market. He knew of its sale, and was pleased. He knew how much money Neil had available as a result of the sale. A neighbour gave evidence that Bill York had said to him that he hoped Neil would sell Injune and "buy (Bill) out". The land which Neil York suggested should be the subject of the transfer represented a substantial part, but not the whole, of the land the subject of the option in the will. Its value in July 1988 was $696,811. Bill York agreed to Neil's proposal. Neil York's father, Sam, also had an interest in part of the subject land as co-owner, and he agreed to transfer his interest to Neil for no consideration.

The involvement of Sam York appears to have received insufficient attention in some aspects of the appellants' submissions. He was not joined in these proceedings, even though there is a claim to set aside a transfer to which he was a party.

There was a deal of evidence as to Bill York's physical and mental condition in 1988. As would be expected of a person of his age, his capacities deteriorated. de Jersey J concluded that his condition probably waxed and waned. His eyesight was failing. His driver's licence was cancelled. The evidence of witnesses as to his mental acuity varied. His wife, although one of the plaintiffs in the action, gave no evidence.

The transaction proposed by Neil York did not proceed with any haste. The solicitor who had prepared the will in 1985, Mr Pack, was consulted by Bill and Neil, and on 19 July 1988 the contractual documents necessary to give effect to their agreement were signed. Mr Pack did not suggest that Bill York should seek independent advice, but he had him examined by a doctor who confirmed that he was of sound mind and capable of making decisions about his personal affairs. The form of the transaction was decided by the solicitor. The relevant land was valued at, and sold to, Neil and Beryl York for $696,811. The difference between that and the amount of $150,000 which Neil York had agreed to pay, and Bill York had agreed to accept ($546,811), was to be forgiven under a deed. Bill York had a further meeting with Mr Pack on 28 July 1988. On that occasion he discussed whether he should request Neil to pay for the balance of his interest in the partnership or simply give it to him. Although the contracts were entered into in July 1988, the transfers were not completed, and the $150,000 was not paid, until November.

It is to be noted that, although the legal form of the 1988 transaction as arranged by the solicitor was a sale of the subject land at full value, coupled with a forgiveness of so much of the sale price as exceeded $150,000, the substance of the transaction, as agreed between Sam, Bill and Neil York, was a sale of Bill's land for $150,000, and a gift of Sam's land. In the background stood the provisions of the 1985 will.

It was submitted for the appellants that it ought to be inferred that Bill York did not, in 1988, know the true value of the property he was selling to Neil York for $150,000. This submission should be rejected. No such finding was made in the courts below, and it is not justified by the evidence. On the contrary, the evidence indicates that Bill York took a close and well-informed interest in the value of his pastoral properties.

In late November 1988 one of Bill York's daughters, Mrs Leahy, took her father to see Mr Pack, together with her husband, the executor of the will. She remonstrated with her father about his generosity, in the will, to Neil York. The 1988 transaction was revealed to her. Bill York justified his conduct, saying that he had made provision for his daughters in past years, giving details, and that he regarded the provision in the will as adequate. He also explained his generosity towards Neil, saying that Neil was a capable manager of the land and that he had worked, and was still working, to help Bill. Notes taken by the solicitor record Bill York as saying "I think he (Neil) is entitled to it. Neil has stuck with me through thick and thin". The notes also record that Bill York discussed the value of the land, and spoke in terms which showed that he was aware that market values had risen.

de Jersey J found that Bill York "had the capacity then to know what he was doing and to make informed decisions about the disposition of his property". Mr Pack was criticised at the trial for not arranging for Bill York to seek independent advice. The form in which the transaction was documented was also criticised for its artificiality. de Jersey J was not prepared to find dishonesty or impropriety against Mr Pack. He considered that the solicitor had not applied his mind with great care to the form of the transaction. As to the lack of independent advice, de Jersey J was satisfied that had Bill been independently advised that the end result would likely have been the same. This conclusion is to be understood in the light of Bill York's continuing determination to do what appeared to be necessary or appropriate to ensure that, subject to his ideas as to what constituted sufficient provision for his wife and daughters, his pastoral lands and interests should pass to his nephew, Neil.

The primary claim of the appellants, and that which Fitzgerald P would have granted, was simply to set aside that part of the 1988 transaction which involved the forgiveness of the debt for the difference between the market value of the property in question and the sum of $150,000. Assuming, in accordance with the unchallenged finding by de Jersey J, the validity of the option in the will, setting aside the whole of the 1988 transaction would have left the appellants in a worse position than that in which the transaction left them, unless they could obtain an order varying the provisions of the will including the option provisions, under the Succession Act 1981 Q. Neil York's option, which he ultimately exercised, entitled him to acquire for $200,000 the whole of Bill York's pastoral interests. One effect of the 1988 transaction was that he was agreeing to pay a further $150,000 for part of the same land.

The relief primarily sought by the appellants would involve leaving intact the transfer of the land the subject of the 1988 transaction from Bill to Neil and Beryl York in consideration for $696,811, (a price which Neil never agreed to pay and Bill never intended to seek), together with the payment of $150,000, but cancelling the deed by which the balance of $546,811 was forgiven. The result would be to defeat the intentions of all the parties to the transaction. The appellants, however, would be substantially better off than they would have been had the transaction never been entered into. Neil would be compelled to pay for the land transferred in 1988, not only an amount over and above that for which he was entitled to acquire that and other land under his option, (which he exercised), but also an amount over and above that which he offered to Bill York and which Bill York accepted.

There were other problems about setting aside the whole of the 1988 transaction. One of the persons involved in the transaction, Sam York, was not made a party to these proceedings. Furthermore, the rights of third parties, such as mortgagees, had intervened. However, since the practical effect of setting aside the whole transaction would be to leave the appellants worse off, because of their failure to have the option in the will set aside, they showed little enthusiasm for this form of relief.

Part 4 of this Act deals with the matter of family provision. Section 41 provides that if adequate provision is not made from a deceased's estate for the proper maintenance and support of the deceased's spouse, child or dependant, the court may, in its discretion, make an order for provision out of the estate. The principles according to which relief of that nature is granted are well settled. They involve, amongst other things, paying regard to the needs of an applicant.

Each of the appellants made such an application following the death of Bill York, but their applications were dismissed for want of prosecution. We know little about the circumstances in which that occurred. Nor are we aware of the financial position of the daughters of Bill York, or their husbands. The matter of their potential entitlements under s 41 of the Succession Act has never been litigated. This Court is in no position to make an informed judgment as to those entitlements, and has not been asked to do so. We do not have the necessary information, and we have heard no argument on the matter. We do not know why the applications under the Succession Act were not diligently pursued.

A judge dealing with an application under the Succession Act would have had to form a view, on the basis of proper evidence, as to the adequacy of the provision by Bill York for the appellants. It is not for this Court, without such evidence, and without hearing argument, to decide that question, or to conclude that it is self-evident that it should be given an answer favourable to the appellants. In so far as the appellants had any rights under Pt 4 of the Succession Act they lost them, some seven years ago, through their failure to prosecute their claims.

There is a different aspect of the Succession Act, which is of some importance to the nature of these proceedings, and which may conveniently be mentioned at this point.

The standing of the appellants to bring these proceedings depends upon s 49 of the Act. This is an action which, so far as is presently relevant, is brought to vindicate an equity of the late Bill York. Prima facie, it is the executor of his will (Kevin Leahy) who would have had standing to bring the proceedings. Section 49(2) permits another person, or other persons, to bring actions in the exercise of the powers of a personal representative, with the consent of the court. It was held in the courts below that, if the appellants otherwise succeeded, this would be a proper case for such consent. However, the fact that it is the appellants who have sued should not be permitted to obscure the position that what is at issue is an equity claimed on behalf of the late Bill York and, because of his death, his estate. It is not a personal equity of any of the appellants which is involved. They cannot, for example, claim any relief superior to that which would be appropriate if the action had been commenced by Kevin Leahy in his capacity as personal representative of the estate of Bill York. Furthermore, in relation to the primary claim for relief advanced on behalf of the appellants, it is instructive to consider the response the late Bill York would have received if, during his lifetime, he had approached a court of equity seeking to set aside only that part of the 1988 transaction which involved the forgiveness of debt.

Although at first instance it was argued that the 1988 transaction resulted from undue influence, there are concurrent findings of fact by de Jersey J and the Court of Appeal adverse to the appellants, and undue influence has not been relied upon in this Court. It is not mentioned in the grounds of appeal.

The reasons given for refuting the claim of undue influence are not unrelated to the claim of unconscionability, to be considered below. We are unable to accept the appellants' argument that the findings of fact made by de Jersey J, and the majority in the Court of Appeal, were either irrelevant to, or reflected a lack of appreciation of, the principles governing the claim of unconscionability. Naturally, de Jersey J addressed all the arguments that were pressed on him, and, in the forefront of those, was the challenge to the option in the will. That challenge is not pursued, but, whilst it accounts for some of the language used by his Honour in expressing his findings of fact, many of the findings were of significance for all the issues in the case. The will was part of the background to the 1988 transaction. As Macrossan CJ observed, the plan enshrined in the will, which was not kept secret from the appellants, was adhered to by the deceased during the remaining few years of his life. The later suggestion that the deceased should sell to Neil some of the lands covered by the option in the will came from Neil, but it coincided with Bill's expressed wish, and while it involved an acceleration of part of the plan which would come into effect under the will, it also provided for the payment of an additional sum.

The evidence did not show, and the judges below did not find, that Neil exercised influence over his uncle in relation to his private affairs. To the limited extent to which Bill York discussed his personal financial affairs with anyone, it appears to have been with his son-in-law, the executor of his will.

The widow of Bill York, herself one of the appellants, gave no evidence, and her absence from the witness box was not explained. If her late husband had been a man susceptible to influence by others, and in particular by Neil York, or a person lacking independence of mind, or the capacity to exercise judgment, she might have been expected to know that, and to say so. It ought to be inferred that her evidence on that subject would not have assisted her case.

Bill York's independence of mind, and capacity to exercise judgment, are matters that were relevant to all aspects of the case which the appellants sought to make at first instance. They did not lose their significance once the claim of undue influence was rejected.

The appellants claim equitable relief in relation to the 1988 transaction, (or part of it), contending in their statement of claim that at the time of the death of Bill York he had a right to such relief.

That Neil and Beryl York acquired property from Bill York at a substantial undervalue is not in doubt. Both Bill York and Neil York were well aware of that. As part of the same transaction, Neil York acquired property from Sam York for no consideration.

The essence of the appellants' claim is that, in 1988, Neil York took unfair advantage of Bill York. His conduct, it is said, involved an unconscientious use of power arising out of the circumstances and condition of the parties to the transaction, of the kind considered in Blomley v Ryan [1] . On this approach, Bill York was a "victimised party" [2] .

(1956) 99 CLR 362 at 386. 2. Blomley v Ryan (1956) 99 CLR 362 at 386

It would not be to the point had Bill York entered into a transaction which was unfair to his wife and daughters, if there were nothing more to it. The appellants based their argument upon what they said was a special disability on the part of Bill York, and an unconscientious taking advantage of such disability by Neil. That is the way their case was put, and it was to that proposition that the judgments in the courts below responded.

What was the special disability? The trial judge, and the majority in the Court of Appeal, found there was none. They found that Bill York knew and understood what he was doing in 1988, and that the transaction into which he entered gave effect to his long standing and firmly held wishes. They also pointed out that it is impossible to separate the 1988 transaction from the 1985 will, and that any characterisation of the dealings between Bill and Neil York in 1988 must take account of their common understanding of what was to take place on the death of Bill in relation to the subject lands. There is no evidence, and no finding in the courts below, that the 1988 transaction resulted from any apprehension on the part of Neil York, either that his uncle would alter his will to Neil's disadvantage, or that a successful challenge to the will might be made after Bill York's death. As was noted above, almost a year elapsed between the time when the 1988 transaction was first proposed and the time when it was completed; and this was when Bill York was aged about eighty-four. The transaction can scarcely be regarded as some kind of pre-emptive strike.

The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy, or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other. 1. (1956) 99 CLR 362 at 405.

The nature of the relevant disadvantage concerns the ability of the weaker, or victimised, party, to make an informed judgment as to his or her interests. This is made clear in Commercial Bank of Australia Ltd v Amadio [4] . Mason J, after referring to Fullagar J in Blomley v Ryan said [5] :

It is made plain enough that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. 1. (1983) 151 CLR 447. 2. Amadio (1983) 151 CLR 447 at 462

In the same case Deane J [6] , identifying the weakness which attracts the jurisdiction, referred to the statement of McTiernan J in Blomley v Ryan [7] that the "essence of such weakness is that the party is unable to judge for himself".

Amadio (1983) 151 CLR 447 at 476-477 2. (1956) 99 CLR 362 at 392.

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

Here there are concurrent findings of fact in the courts below, based upon ample evidence, to the effect that Bill York was not under any special disability, in the sense in which that expression was explained in Amadio . It may be acknowledged that the requisite capacity for judgment goes beyond an understanding of the salient features of the transaction. However, it is relevant to observe that it cannot properly be concluded that Bill York was unaware of any of those features; much less that they were concealed from him. It was argued for the appellants that Bill York may not have appreciated the value of the land in question. This is most unlikely. That was a subject of close and abiding interest to him, and the argument has no foundation in the evidence. Nor is there any reason to doubt that he appreciated the significance of the transaction, both for himself and for his family. His justification of his conduct, when he was challenged by his daughter in November 1988, indicates both independence of mind and determination.

In Louth v Diprose [8] Deane J explained the significance of concurrent findings of fact when this Court is invited to address an issue such as that presently in question. This Court "should not, in the absence of special reasons such as plain injustice or clear error, disturb such concurrent findings". It is irrelevant that there has been a dissentient in the first appellate court.

The present is not a case in which the trial judge had the benefit of assessing the person now said to have had an equity to set the 1988 transaction aside. However, the judge had evidence as to how that person, not long before he died, set out to explain and justify his apparent generosity to Neil York. In the context of a charge of unconscientious conduct, the trial judge had an opportunity to assess Neil York, and Mr Pack, and others involved in the matter.

The appellants have not demonstrated plain injustice or clear error of the kind referred to by Deane J. Rather, the findings of fact made in the courts below appear to be correct.

It is of interest to note the findings of fact at first instance in some of the leading cases on this topic. In Wilton v Farnworth [9] a person who was "markedly dull-witted and stupid" [10] was persuaded to sign over to another his interest in his wife's estate without having any idea of what he was doing. In Blomley v Ryan [11] the defendant took advantage of the plaintiff's alcoholism to induce him to enter a transaction when his judgment was seriously affected by drink [12] . In Amadio [13] the special disability of the guarantors included a limited understanding of English, pressure to enter in haste into a transaction they did not understand, and reliance upon their son [14] . In Louth v Diprose [15] the primary judge found that the donee, with whom the donor was "utterly infatuated", had threatened suicide, manufactured a false atmosphere of personal crisis, and engaged in a process of manipulation to which the donor was vulnerable. The judge found that the donee's conduct "smacked of fraud" [16] .

(1948) 76 CLR 646. 2. Wilton v Farnworth (1948) 76 CLR 646 at 649 3. (1956) 99 CLR 362. 4. Blomley v Ryan (1956) 99 CLR 362 at 405 5. (1983) 151 CLR 447. 6. Amadio (1983) 151 CLR 447 at 476 7. (1992) 175 CLR 621. 8. Louth v Diprose (1992) 175 CLR 621 at 637

Of course, it is the principles enunciated in those cases, and not their particular facts, which are of importance. The facts, however, illustrate the practical content of the principles; and they are a long way removed from the facts of the present case. As to the principles expounded in the cases, the findings in the court below establish Bill York's independence of mind and capacity for judgment when he entered into the 1988 transaction; a transaction which can only be understood in a wider context, including the provisions of the 1985 will, and Bill York's long and firmly held intention that Neil York should succeed to his pastoral interests. The findings deny the existence of any special disability in Bill York, and they acquit Neil York of unconscientious conduct. It is not a sufficient answer to these concurrent findings of fact to suggest that the members of the courts below failed to address the correct issues. The issues were squarely before them and, in particular, the principles in Amadio were considered.

We do not accept that de Jersey J failed to give separate and independent consideration to the claim which is presently in issue, and treated its failure as a necessary consequence of the failure of the challenges to the will. Rather, his Honour treated the will as an important part of the factual background to the 1988 transaction. In that he was correct. The reasoning of the majority in the Court of Appeal reflected an accurate appreciation and application of the relevant principles.

The claim based on unconscionability should fail.

It is desirable to add some observations on this question, even though, upon the view expressed above, it does not arise.

In the Court of Appeal, Davies JA said that the only relief then sought by the appellants was "setting aside the Deed of Gift thereby requiring the respondents to complete the purchase for full consideration". This was a reference to the forgiveness of the debt for the balance of the purchase price under the 1988 sales and transfers. This identification of the relief sought is consistent with the approach taken by Fitzgerald P, who dissented, and would have granted relief in the form of simply setting aside the deed of forgiveness, and with the observation of Macrossan CJ that the appellants were attempting, for tactical reasons, to separate the two aspects of the 1988 transaction, that is to say, the transfers for full value and the forgiveness of part of the consideration.

In Vadasz v Pioneer Concrete (SA) Pty Ltd [17] this Court examined the principles underlying equitable relief of the kind now in question. "He who seeks equity must do equity." The objective is to do "what is practically just".

There would be no practical justice as between the estate of the late Bill York, on the one hand, and Neil and Beryl York on the other, in severing the 1988 transaction and simply setting aside the forgiveness of debts. That would produce practical, and substantial, injustice. In this connection, the nature of the proceedings is to be emphasised. It is impossible to accept that, if Bill York had commenced proceedings during his lifetime, and succeeded, a court of equity would have granted such relief.

The proper relief would have been to set aside the entire transaction and make an order for accounts. The fact that it is far from clear that such relief would have been to the benefit of the appellants (bearing in mind the terms of the will) no doubt explains the manner in which the claim for relief was formulated, but it cannot alter the principles to be applied, especially when it is remembered that the equity which the appellants assert is that of the late Bill York.

The course now proposed by the majority in this Court involves sending the matter back to the Supreme Court of Queensland to determine an appropriate allowance, against the debt of $546,811 which would result from setting aside the deed of forgiveness, which ought to be made on a basis related to the rights the appellants would have had under the Succession Act. This proposal was not advanced by either side in argument in this Court, or in the courts below. Its implications have not been the subject of submissions, and they are unclear to us.

This action was commenced in 1991, after the appellants' proceedings under the Succession Act were dismissed for want of prosecution. It was for the appellants to bring such evidence at first instance as was necessary to enable the court to grant appropriate relief. No reason has been shown why the appellants could not have led the evidence necessary for a determination of the appropriate relief, assuming an allowance of the kind now proposed to be a necessary condition of relief. There is no occasion for a fresh round of litigation. If the evidence necessary to enable this Court to grant appropriate equitable relief is missing, that is an additional reason for dismissing the appeal.

This appeal from the Queensland Court of Appeal (Macrossan CJ, Davies JA, Fitzgerald P dissenting) involves the application of principles with respect to the setting aside in equity of inter vivos dispositions tainted by unconscionable conduct. The principles are expounded and developed in the decisions of this Court in Wilton v Farnworth [18] , Blomley v Ryan [19] , Commercial Bank of Australia Ltd v Amadio [20] and Louth v Diprose [21] .

(1948) 76 CLR 646. 2. (1956) 99 CLR 362. 3. (1983) 151 CLR 447. 4. (1992) 175 CLR 621.

Mr William York (Bill) was a grazier who owned substantial landholdings. He was born on 1 February 1904 and died, aged eighty-five, in Roma Hospital on 22 April 1989, having made his last will and testament on 12 April 1985 (the will). The will provided for his residuary estate to pass to his daughters, subject to an option to purchase in favour of his nephew, Mr Neil York (Neil).

The primary judge (de Jersey J) accepted evidence that Bill provided only very basic accommodation for his wife and daughters and that he was remarkably frugal. His Honour added:

There is no doubt in my mind that in view of the size of his estate, Bill could have treated [his wife] and his daughters more generously. That he did not do so is consistent, however, with the fairly ungenerous way he treated them throughout his life.

The primary judge ordered a grant of probate of the will in solemn form. His Honour dismissed a claim that the execution of the will was procured by the exercise upon the testator of undue influence by Neil. This attack upon the will was not renewed in the Court of Appeal but some reference to it assists an understanding of the issues before this Court.

The position taken by courts of probate has been that to show that a testator did not, by reason of undue influence, know and approve of the contents of the instrument propounded as a testamentary instrument, "there must be - to sum it up in a word - coercion" [22] . The traditional view, repeated by Sir Frederick Jordan [23] , has been that a court of equity will not, on the ground of undue influence as developed by the Court of Chancery, set aside a grant made by a court of probate [24] .

Wingrove v Wingrove (1885) 11 PD 81 at 82-83See also Baudains v Richardson [1906] AC 169 at 184-185 Craig v Lamoureux [1920] AC 349 at 357 Winter v Crichton (1991) 23 NSWLR 116 at 121-122 2. In his "Chapters on Equity in New South Wales", reprinted in Jordan, Select Legal Papers (1983), p 137. 3. Allen v M'Pherson (1847) 1 HLC 191[9 ER 727]; cf Birmingham v Renfrew (1937) 57 CLR 666 at 674, 676, 683, 690.

The approach taken in the probate jurisdiction appears to be concerned with the existence of a testamentary intention rather than the quality of that intention or the means by which it was produced. It is a concern of this latter nature which finds expression in the treatment by equity of dispositions inter vivos. In the present litigation, with respect to the dispositions made by the will, no party submitted that equity might apply or extend its principles respecting undue influence and dispositions inter vivos, not to attack a grant of probate itself, but to subject property passing under a will to a trust in favour of the residuary beneficiaries or the next of kin.

The principal issues which remained in the Court of Appeal (and now in this Court) concerned the dismissal by the primary judge of claims to have set aside, as procured by unconscionable conduct, three transfers dated 19 July 1988 of certain of Bill's interests in land (the transfers) and a deed bearing the same date (the deed) which forgave a debt of $546,811. The appellants also rely in this Court upon breach of alleged fiduciary duty owed by Neil to Bill. In Jenyns v Public Curator (Q) [25] , Dixon CJ, McTiernan and Kitto JJ observed that whilst the expressions "relation of influence", "relation of confidence" and "fiduciary relation" are often used as interchangeable, they are not necessarily the same or co-extensive in their application. It will be possible to dispose of the present appeal without any separate treatment of the fiduciary duty point. The appellants do not press in this Court an argument that the transfers and the deed were tainted by undue influence of Neil upon his uncle. Nor do the appellants dispute the failure of their case in the Supreme Court that these inter vivos transactions adeemed the gift made to Neil by the will. However, it will become apparent in the course of these reasons, particularly in dealing with the appropriate measure of equitable relief to the appellants, that there are significant links between the two types of disposition made by Bill in favour of Neil.

The appellants do not submit that the transfers and the deed are voidable by Bill's estate on the ground that, when they were executed, Bill was incapable of understanding their effect, in the sense of their general purport [26] . Further, this is not a case where the instruments are said to be void at law on the footing of non est factum. It is not alleged that Bill's faculties were so defective that "he [did] not really know what he [was] doing - that his mind [did] not go with his deed" [27] . The case with respect to the transfers and the deed is, like that identified by Fullagar J in Blomley v Ryan [28] , one "in which relief [can] be obtained by the [appellants], if at all, only in equity".

Gibbons v Wright (1954) 91 CLR 423 at 449 2. Blomley v Ryan (1956) 99 CLR 362 at 401 3. (1956) 99 CLR 362 at 401.

The point requires emphasis due to the structure of the reasons of the primary judge and the continuing focus upon and significance attached to questions of intention and mental capacity. In this area, however, equity does not confine itself to such questions. The primary judge found that there was not a great deal of difference between the witnesses and that any differences related more to questions of emphasis. That may readily be acknowledged. However, this appeal turns upon what the appellants contend is the misconception in the reasons of the primary judge (uncorrected in the Court of Appeal) of the determinative equitable doctrine and the consequent misapplication of principle to the primary facts.

In Watkins v Combes [29] , Isaacs J remarked upon: "the circumstance that conclusions of fact sometimes become intermingled with what are properly directions in law by the tribunal which has to determine both." The strength of the appellants' case in this Court is that, whilst there is little disagreement as to the primary facts, neither de Jersey J nor the majority in the Court of Appeal correctly applied the relevant principles to those facts and, upon that false basis, drew inferences which are either irrelevant or incorrectly focused.

The challenge in this Court is not to concurrent findings of fact but to concurrent misapplication of principle to uncontentious primary facts. The situation thus differs from that in cases such as Louth v Diprose [30] . There, as Deane J put it, the primary facts and the proper inferences to be drawn from those facts "turned largely on conclusions about the credibility of the evidence of the donor and the donee of the impugned gift" [31] .

(1992) 175 CLR 621. 2. Louth v Diprose (1992) 175 CLR 621 at 634

The primary judge had begun his analysis of the doctrine of undue influence with respect to the will by referring to the statement as to coercion of testators in Wingrove v Wingrove [32] and to the proposition, attributed to the speech of Lord Cranworth LC in Boyse v Rossborough [33] , that the will of the testator "must have been overborne". His Honour posed the question "was Bill's will overborne?" and answered it by concluding that, when Bill executed the will, "he understood what he was doing and was acting voluntarily, not subject to the influence of any other person".

(1885) 11 PD 81 at 82-83. 2. (1857) 6 HLC 2 at 47-50 [10 ER 1192 at 1211].

After dismissing the undue influence submissions with respect to the execution of the will, his Honour went on to hold that Bill's fondness for his nephew had not "degenerated into utter, [un]questioning reliance or dependence" and that "there was no undue influence exerted by Neil upon Bill to induce [the transfers and the deed]". Such "degeneration" would have a greater affinity with the doctrine of undue influence as expounded in Wingrove than with undue influence as understood in equity. The primary judge also emphasised that on 19 July 1988 Bill had had "the capacity then to know what he was doing and to make informed decisions about the disposition of his property". In the Court of Appeal, Fitzgerald P would have allowed the appeal and set aside both the transfers and the deed on the footing that Neil had acted unconscionably in taking advantage of Bill. Davies JA (who, with Macrossan CJ, comprised the majority) held that on the facts the primary judge had been justified in concluding both that no undue influence was exerted and that Bill had not been under a special disability in dealing with Neil. The evidence was "[f]ar from showing that [Bill] was unable to make a judgment as to what was in his own interests".

However, in dealing with the case as to undue influence with respect to the transfers and the deed, capacity in this sense was not determinative. The "critical question", to adopt remarks of Burt CJ and Kennedy J in Adenan v Buise [34] , was not whether Bill "understood the nature of the document[s]" but whether he executed them "as the result of the free exercise of his independent will".

With respect to the ground now pressed, that of unconscionable dealing, de Jersey J said:

From what I have said already, it will be apparent that I do not regard Bill as having been in a position of "special disability" vis-a-vis Neil, in July, 1988, and so that doctrine does not apply. (Emphasis added.) It is apparent from the reasons of the primary judge that his Honour treated the fate of the case with respect to unconscionable dealing in a real sense as consequent upon the failure of the claim with respect to undue influence and that the failure of that claim in turn was linked with the initial holding with respect to the execution of the will.

In addition to the distinction between the doctrine of undue influence as understood in courts of probate and courts of equity, it is appropriate to emphasise the distinction between the equitable doctrines concerned with undue influence and unconscionable dealings or conduct. On occasion, both doctrines may apply in the one case [35] . Each doctrine may be seen as a species of that genus of equitable intervention to refuse enforcement of or to set aside transactions which, if allowed to stand, would offend equity and good conscience. However, there are conceptual and practical distinctions between them and these were insufficiently expressed by the primary judge.

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461

In Commercial Bank of Australia Ltd v Amadio [36] , Deane J said that the two doctrines are distinct, undue influence looking to "the quality of the consent or assent of the weaker party", whilst unconscionable conduct looks to the attempted enforcement or retention of the benefit of a dealing with a person under a special disability. Further, the recognition of certain special relations, the existence of any of which would itself support a presumption of undue influence [37] , could provide a particular forensic advantage to plaintiffs.

(1983) 151 CLR 447 at 474. 2. The examples of such relations given by Latham CJ in Johnson v Buttress (1936) 56 CLR 113 at 119included parent and child, guardian and ward, solicitor and client, physician and patient, "and cases of religious influence". Cf as to presumptions of advancement, Nelson v Nelson (1995) 184 CLR 538 at 574-576, 583-586, 600-603.

Sir Anthony Mason, with reference to the well developed Australian body of authority on the subject, has contrasted the two doctrines as follows [38] :

My understanding of undue influence is that it denotes an ascendancy by the stronger party over the weaker party such that the relevant transaction is not the free, voluntary and independent act of the weaker party [39] . In other words, it is the actual or presumed impairment of the judgment of the weaker party that is the critical element in the grant of relief on the ground of undue influence [40] .

Unconscionable conduct, as the term suggests, focuses more on the unconscientious conduct of the defendant. As a ground of relief in England unconscionable conduct has been confined largely to "catching bargains" with expectant heirs and others in particular categories of disadvantage eg those who are illiterate In Australia, it has been recognised that unconscionable conduct is a ground of relief which will be available "whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is taken of the opportunity thereby created" [41] . Unconscionable conduct is also recognised in New Zealand as a ground of relief in these circumstances [42] .

Amadio (1983) 151 CLR 447 at 462 2. Hart v O'Connor [1985] AC 1000 Bowkett v Action Finance Ltd [1992] 1 NZLR 449
1. Mason, The Impact of Equitable Doctrine on the Law of Contract, Anglo-American Law Review, vol 27 (1998) 1, at pp 6-8.
2. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461, 474.
3. See Peter Birks and Chin Nyuk Yin, On the Nature of Undue Influence in Beatson and Friedmann (eds), Good Faith and Fault in Contract Law, pp 57 et seq.
4. Amadio (1983) 151 CLR 447 at 462
5. Hart v O'Connor [1985] AC 1000 Bowkett v Action Finance Ltd [1992] 1 NZLR 449

In Commercial Bank of Australia Ltd v Amadio [43] , Deane J spoke of unconscionable conduct as occurring where, in the circumstances, it is unconscientious to "procure, or accept, the weaker party's assent to the impugned transaction". It also should be noted that in Hart v O'Connor [44] , an appeal from New Zealand, the Privy Council described unconscionable conduct which provided a basis for equitable relief as "victimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances " [45] . In so giving the judgment of the Privy Council, Lord Brightman was reflecting a general proposition put by James LJ in Torrance v Bolton [46] . This was that it was the "ordinary jurisdiction" of the Court of Chancery to deal with instruments and transactions "in which the Court is of opinion that it is unconscientious for a person to avail himself of the legal advantage which he has obtained". In any event, it will become apparent from the facts of this case that more was involved than passive acceptance by Neil of Bill's bounty and that, at a crucial juncture, the initiative came from Neil.

(1983) 151 CLR 447 at 474. 2. [1985] AC 1000. 3. Hart v O'Connor [1985] AC 1000 at 1024(emphasis added). 4. (1872) LR 8 Ch App 118 at 124. See also observations to the same effect by Lord Selborne LC in Earl of Aylesford v Morris (1873) LR 8Ch App 484 at 490-491, by Sir George Jessel MR in Redgrave v Hurd (1881) 20 Ch D 1 at 12-13and by Mason J, Deane J and Dawson J in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462, 474, 489 respectively.

The second respondents are Neil and his wife, Beryl. They married in 1968 and have two children. The litigation has been conducted on the footing that no distinction is to be made in the position of these respondents and any relief against Neil should lie against Beryl as well.

Neil was born in 1946 and is the youngest of three brothers. His elder brothers are Philip and Kenny. Norma is their sister. Neil's father, Mr Samuel York (Sam), was born in 1910, some six years after his brother, Bill. Bill and Sam had a brother, Alf. It appears that on their father's death in 1943, Bill and Sam received their father's property and Alf received nothing. Alf had a son, Noel, who lived locally and now and then would have a beer with Neil.

The fifth appellant, Mrs Stella York (Stella), is the widow of Bill. At the time of his death in 1989 they had been married for fifty-three years. There were four children of the marriage. They are the first four appellants, Mrs Desley Bridgewater (Desley), Mrs Joan O'Neill (Joan), Mrs June Ashton (June) and Mrs Shirley Leahy (Shirley). At the time of their father's death, Joan was aged fifty, June forty-seven, Desley forty-five and Shirley forty-four.

By the will, Bill appointed his son-in-law, Mr Kevin Leahy (Kevin), the husband of Shirley, his executor. The appellants claimed standing, on behalf of the estate of their father, to seek relief in respect of the transfers and the deed. They asserted that Kevin had failed and refused to do so himself. Section 49(2) of the Succession Act 1981 Q states:

Upon the making of a grant and subject thereto, the powers of personal representatives may be exercised from time to time only by those personal representatives to whom the grant is made; and no other person shall have power to bring actions or otherwise act as personal representative without the consent of the court. In the Court of Appeal, Davies JA pointed out that, prior to the enactment of s 49, the authorities referred to in Ramage v Waclaw [47] indicated that, upon establishing special circumstances, a beneficiary might sue to recover assets where the executor declined to take action. All members of the Court of Appeal were of the view that consent under s 49(2) should be granted nunc pro tunc. In this Court, there is no issue as to the standing of the appellants to pursue the matter as if an order had been made in their favour under s 49(2). Further, Kevin, the executor, is the first respondent and submits to any order the Court makes, save as to costs. 1. (1988) 12 NSWLR 84 at 89-93.

It also should be noted that on 11 January 1990 the appellants applied to the Supreme Court of Queensland for an order under Pt 4 of the Succession Act for provision out of Bill's estate (the family provision application). Part 4 (ss 40-44) is headed " Family Provision ". Section 41(1), in certain circumstances, empowers the Supreme Court, "in its discretion" [48] and on application by or on behalf of persons including the spouse or child of a deceased person, to order the making of such provision as it thinks fit out of the deceased's estate.

See, as to the significance of this phrase, Singer v Berghouse (1994) 181 CLR 201 at 218-219

By order of the Supreme Court made on 17 May 1991, the family provision application was struck out for want of prosecution. This order was made on Neil's application. On 14 May 1991, the solicitors for the executor, Kevin, had informed Neil's solicitor that the present appellants were considering an action for proof of the will in solemn form. The action giving rise to this appeal was instituted on 6 June 1991. In those circumstances, a more prudent course may have been to stand over the family provision application until the status of the will, the transfers and the deed had been determined but this was not done. For the appellants in the meantime to have pressed on with the family provision application at best would have led to an order in their favour out of a testamentary estate, the assets of which had been seriously depleted by the forgiveness by the deed of a debt of $546,811. This debt would have formed part of the residue passing to Bill's daughters under the will.

Although no issue remains as to the admission of the will to probate, its terms are important for an understanding of the significance of the execution by Bill of the transfers and the deed more than three years after he made the will.

The will was drawn by a solicitor, Mr Alan Pack, upon instructions provided by Bill, with, in one respect [49] , the assistance of Neil. Mr Pack was a member of the firm which was Neil's solicitors and he carried on a practice in Roma. The will provided for the appointment of Bill's son-in-law, Kevin, to be sole executor and trustee. Clause 3 gave to his wife the matrimonial home at May Street, Wallumbilla, together with any motor vehicle owned by Bill at the time of his death and all moneys invested in his name in any bank or building society. Clause 4 is the provision of principal importance. It dealt with the residuary estate and provided Neil with an option to purchase, exercisable within twelve months of Bill's death. Clause 4 stated:

I Give Devise and Bequeath the rest and residue of my estate both real and personal of whatsoever nature and kind soever and wheresoever situated of which I may die seized possessed or entitled unto and to the use of my Trustee Upon Trust to sell call in and convert into money the same or such part or parts thereof as shall not consist of money to pay my just debts funeral and testamentary expenses and my Trustee shall stand possessed of the balance of such monies for such of them my children in the following proportions or shares:

Joan Margaret O'Neill Twenty-Five Per Cent (25%) June Lorraine Ashton Twenty-Five Per Cent (25%) Desley Fay Bridgewater Twenty-Five Per Cent (25%) Shirley Joy Leahy Twenty-Five PerCent (25%)

Provided However that I give my nephew Neil William York the option to purchase for the sum of Two Hundred Thousand Dollars ($200,000.00) all my interest in the partnership known as "Mt Leigh Pastoral Company" together with livestock and machinery and my interest in the following lands all in the County of Waldegrave Parish of Wallumbilla Subject to any Mortgages which may be in existence at the time of my death:

(a) Portions 8V, 9V, 39V, 40V, 41V, 42V, 43V, 44V, 45V, 46V, 94V, 96V, 100V, 102V, 108V, 120V, 121V, 138AV, 140V, 162, 399V, 400V, 401V, 427V and Road License 876, 480V, 481V, 482V (held as tenant in common with my brother Samuel York)

(b) Portions 294V, 295V, 296V and 691 (held as tenant in common with my said nephew Neil William York)

I Direct that such option to purchase is to be exercised within twelve (12) months of the date of my death by notice in writing to that effect to my Executor But in the Event of the said Neil William York failing to exercise the said option I Direct my Trustee to sell my interest in the said lands livestock and machinery in such manner as he in his absolute discretion may think fit And I Declare that all monies from the sale of my interest in the said lands livestock and machinery are to form part of my residual estate. 1. The inclusion of all the lots forming part of what is later identified herein as the Wonga Park Fee Simple.

The significance of cl 4 appears from an understanding of the business interests which Bill and Sam had amassed to augment the inheritance from their father after his death in 1943. Their father had been a butcher in Ipswich who had moved into the Wallumbilla area and taken up a selection, probably at about the turn of the century. In partnership with Sam, Bill had carried on a cattle grazing and wheat growing business under the name "York Brothers" on four properties in the Wallumbilla area. The first property, which consisted in part of an area known as "Wonga Park", was owned in fee simple by Bill and Sam as tenants in common in equal shares (the Wonga Park Fee Simple).

The second property, comprising the balance of the area of "Wonga Park", was held by Bill solely under a perpetual lease selection (the Wonga Park Perpetual Lease Selection). This "perpetual" lease had been issued on 27 September 1934 under s 104 of the Land Act 1910 Q, and transferred in 1948 to Bill and Sam as joint tenants and then to Bill in 1966. Section 104, in providing for a "perpetual" lease, went beyond the common law characteristics of a lease [50] . Section 104 was replaced in its operation with respect to the Wonga Park Perpetual Lease Selection by ss 4(2) and 127 of the Land Act 1962 Q and, in turn, the Selection was protected by the savings provisions in Pt 1 of Ch 9 (ss 508-522) of the Land Act 1994 Q.

Wik Peoples v Queensland (1996) 187 CLR 1 at 153, 198-199.

The third property, known as "Tooks", was owned in fee simple by Bill and Sam as tenants in common in equal shares (the Tooks Land). It appears to have been inherited by Bill and Sam from their father. A fourth property, known as "Mt Leigh", also was owned in fee simple by Bill and Sam as tenants in common in equal shares (the Mt Leigh Land).

Sam's three sons, Neil and his elder brothers, had commenced working for York Brothers on the properties after they left school. Philip worked from 1952 to 1962 and Kenny from 1955 to 1968. Neil had commenced to work for York Brothers in 1962 after he left school. Initially all three received low wages in return for their work. In 1955 or 1956, York Brothers provided money for Philip and Kenny to purchase the fee simple in a grazing property, "Halden Park". Subsequently, York Brothers supplied money for the purchase by Bill and Neil, as tenants in common in equal shares, of land known as "Risby" (the Risby Land).

In 1981, the York Brothers partnership had been dissolved. A new partnership, consisting of Bill, Sam and Neil, was formed under the name "Mt Leigh Pastoral Company". Bill was then aged about seventy-seven. Clause 4 of the will is concerned with this partnership. It was Bill who had suggested that Neil be admitted to the new partnership. The assets of the York Brothers' partnership, valued at $229,500, were transferred to the Mt Leigh Pastoral Company partnership. Neil did not provide any capital contribution.

Neil took over from Bill the responsibility for preparing the books of the new partnership. In the years after 1981, Neil became the day-to-day manager of the partnership. Bill lived in the matrimonial home at May Street, Wallumbilla, later the subject of the gift in cl 3 of the Will, and he travelled less frequently to the properties. However, Bill remained a participant in the financial affairs of the partnership and was involved in discussions with the bank manager concerning its business.

In 1983, the Mt Leigh Pastoral Company provided money for Neil and his wife, Beryl, to purchase land known as "Injune" (the Injune Land). This was situated at a distance of approximately one hour and forty minutes drive from the other properties upon which the partnership conducted its operations. Bill depended upon Neil and feared that Neil would cease working for the partnership and would concentrate his efforts instead on the Injune Land. He encouraged Neil to sell it. Neil knew of this dependency upon him.

The lands referred to in par (a) of the option in cl 4 of the will comprised the Wonga Park Fee Simple, the Tooks Land and the Mt Leigh Land. The lands identified in par (b) comprised the Risby Land and the lands specified in par (c) was the Wonga Park Perpetual Lease Selection. The interest in the partnership comprised the cattle, plant and equipment owned by the Mt Leigh Pastoral Company.

The effect of cl 4 was to provide Neil with the option of acquiring for $200,000 the above interests in the nominated lands and the partnership interests. At the time Bill executed the will, the value of his interests in the lands was $694,922 and the value of his partnership interests was between $76,000 and $95,000. In accordance with general principle, the will was liable to revocation. There was no case made that Bill undertook any legal or equitable obligation (of the nature discussed in the authorities [51] ) not to revoke cl 4. Moreover, cl 4 would operate only to the extent that an order was not made under the Succession Act for provision out of the residuary estate.

Such as Horton v Jones (1935) 53 CLR 475 Schaefer v Schuhmann [1972] AC 572 Palmer v Bank of New South Wales (1975) 133 CLR 150

In late 1987 or early 1988, whilst at Bill's house, Neil proposed to Bill that he acquire Bill's interests in the Wonga Park Fee Simple, the Wonga Park Perpetual Lease Selection and the Risby Land for a price of $150,000. Neil's evidence was that Bill said he would take the $150,000 "and that was that". At that time, Neil was living, rent free, on the Wonga Park Fee Simple. Neil and Beryl by this time had sold the Injune Land and the suggested price of $150,000 was based upon the net proceeds received from that sale. Neil told Bill that this was the basis of his proposal. Neil was aware that the value of the three properties had increased and he sought to offer a price which was "getting more equitable".

It would appear that, by using the phrase "getting more equitable", Neil recognised that the value of the land he would be acquiring and obtaining under the option had risen since 1985 and was continuing to do so. Neil retained the intention to exercise the option with respect to the remaining parcels of land. The price of $150,000 when combined with the option price of $200,000 would be more equitable to Bill's four daughters. On the other hand, the effect of the contemplated inter vivos transaction would be to put beyond recall by Bill the disposition in favour of Neil of his interests in the Wonga Park Fee Simple, the Wonga Park Perpetual Lease Selection and the Risby Land, together valued at $696,811, for a seriously inadequate consideration of $150,000. Neil would retain the option under cl 4 of the will in respect of the other lands for a consideration of $200,000.

Further, the inter vivos transaction would remove from Bill's testamentary estate substantial assets which would otherwise have been available to be brought into account in the formulation of an order in favour of the appellants upon the family provision application [52] . Whilst it was plainly the case that Bill's goal was substantially to benefit his nephew, his scope to do so by testamentary provision was qualified by the possibility of such an order for provision out of his estate being made in favour of his widow and children.

The Queensland legislation does not include a counterpart of the "notional estate" provisions in s 22 of the Family Provision Act 1982 NSW.

The Wonga Park Fee Simple, which was included in Neil's proposal, was in part owned by Sam. At the time that Bill agreed to transfer the lands to Neil, Sam agreed to provide Neil with his interest in the property by way of gift.

Neil approached Mr Pack to draw up the relevant documents to implement the proposal. Mr Pack acted as solicitor for both Bill and Sam as vendors, and Neil and (in one case) Beryl as purchasers. He made no suggestion or recommendation that any party obtain independent legal advice. Later, Mr Pack acted on behalf of Neil to resist the family provision application. He withdrew after suggestions were made of a conflict of interest.

The primary judge dealt with the absence of independent advice with respect to the steps taken by Bill on 19 July 1988 in a passage which included the following:

On the one hand, Neil's interest was to secure a very substantial block of property for what was, on any view, a very low consideration. Bill's differing interest, on a purely rational level, was to secure adequate return for that property. Bill was in my view content to take the $150,000 because of other considerations. But a rational analysis does plainly point up that conflict.

Adding in other objectively discernible factors - Bill's age (then eighty-four), Bill's obvious physical debility, Bill's probable mental decline (ordinarily associated with such advancing years), and the high likelihood of dismay in Bill's immediate family at his being prepared to part with such valuable property for such disproportionately small return - a prudent solicitor should actively have canvassed with Bill the issue of his taking independent advice from another solicitor who was not also acting for Neil.

However, his Honour concluded that he was "satisfied that had Bill been independently advised by another lawyer, the end result would likely have been the same". Such an approach to the matter is supported by some authority in this Court with respect to alleged undue influence [53] . There the focus is upon the quality of the assent of the disponor to the transaction. 1. Linderstam v Barnett (1915) 19 CLR 528 at 530-531 Watkins v Combes (1922) 30 CLR 180 at 197

Where the complaint is of unconscionable dealing, the point is rather different. As Manning J put it in Re Levey; Ex parte Official Assignee [54] , "the Court does not allow any person to take advantage of any known weakness of the vendor" and the Court asks whether that party had "the opportunity" of professional advice as to "the effect of what he [was] doing". This denial of the opportunity to have "the assistance of a disinterested legal adviser" [55] , rather than speculation as to what might have followed had it been pursued, is an element in the unconscientious conduct in respect of which equity intervenes to deny the entitlement of the disponee to retain the property in question, unless the disponee shows the disposition to have been "fair, just and reasonable" [56] .

(1894) 15 NSWR (B&P) 30 at 36. 2. Longmate v Ledger (1860) 2 Giff 157 at 163[66 ER 67 at 69]. 3. Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474

On the advice of Mr Pack, Neil arranged for the lands to be valued for stamp duty purposes. The Wonga Park Fee Simple was valued at $175,752, the Wonga Park Perpetual Lease Selection at $521,735 and the Risby Land at $174,400. On 19 July 1988, Bill and Sam executed a contract of sale to dispose of their interests in the Wonga Park Fee Simple to Neil. Bill also entered into a second contract of sale to dispose of the Wonga Park Perpetual Lease Selection to Neil and Beryl. Furthermore, Bill executed a third contract of sale to sell his half-interest in the Risby Land to Neil. Settlement under the contracts was stated to occur on 9 September 1988.

The subject matter of the dispositions by Bill in favour of Neil (and Beryl) and the prices attributable to them were Bill's half-interest in the Wonga Park Fee Simple ($87,876), his half-interest in the Risby Land ($87,200) and his complete interest in the Wonga Park Perpetual Lease Selection ($521,735). The total value of the consideration to be provided to Bill was stipulated in the three contracts as $696,811. However, it should be remembered that there were two vendors in the contract for the Wonga Park Fee Simple, Bill and Sam, the total price being $175,752. The total consideration payable by Neil and Beryl to Bill was $696,811.

The respective contracts for sale disclosed the existence of various registered mortgages in favour of Westpac Banking Corporation. In the case of each of the Wonga Park Fee Simple and the Risby Land, there were two such mortgages and there was one mortgage upon the Wonga Park Perpetual Lease Selection. The contracts stipulated for completion free from encumbrances other than these securities.

On the same day as the contracts of sale were executed, 19 July 1988, Bill, Neil and Beryl entered into the deed. This provided:

The Donor [Bill] hereby forgives the Donees [Neil and Beryl] payment of part of the purchase price of the Donor's interest in the following lands in the County of Waldegrave Parish of Wallumbilla in the amount of Five Hundred and Forty Six Thousand Eight Hundred and Eleven Dollars ($546,811.00): - [the Lot and Plan Numbers for the Wonga Park Fee Simple, the Wonga Park Perpetual Lease Selection and the Risby Land were then set out]. The effect of the forgiveness by the deed of the obligation with respect to payment of $546,811 was that Neil and Beryl would be required to pay only $150,000 to acquire the interests the subject of the transfers. Sam and Neil also entered into a deed of similar effect by which Sam forgave Neil the payment of $286,036 for the acquisition of Sam's interest in the Wonga Park Fee Simple.

Later, on 28 November 1988, Mr Pack wrote a diary note in which he attributed $43,600 as the contract price for Bill's half-interest in the Risby Land. That was an error. The price was in fact double that sum ($87,200). This had represented one half of the valuation of the whole property, $174,400. The Risby Land was held by Bill and Neil as tenants in common in equal shares. The form of the contract was expressed as a sale by Bill and Neil to Neil alone for a consideration representing half the value of the Risby Land. The position was accurately reflected in the computation of the sum forgiven by the deed and the respective rights of the parties thereunder. In his cross-examination upon the diary note, Mr Pack agreed, in error, that the note was accurate and that this meant he had, when drafting the deed in July, overstated the $150,000 which remained unforgiven by the deed, by $43,600, thereby later leading to an overpayment by Neil. There was no such overpayment and submissions that there was are not well founded.

The transfers relating to the three contracts of sale also were executed on 19 July 1988. The transfers were not presented for registration until after completion had occurred and the purchase price had been paid. The net purchase price of $150,000 was not paid on the stipulated settlement date of 9 September 1988. Apparently, the settlement date was extended until 28 November 1988. The proceeds from the sale of the Injune Land which was to provide the $150,000 had been invested on an interest bearing deposit. On 28 November 1988, Mr Pack instructed a bank to transfer the $150,000 to an account held by Bill. It follows from what has been indicated above with respect to Mr Pack's diary note of 28 November that, notwithstanding what it showed, the $150,000 reflected the remaining indebtedness and was not an overpayment by Neil to Bill. The transfers were then lodged and registered. On 12 October 1988, Mr Pack had been placed by Neil and Beryl in funds to meet the stamp duty liability.

On 28 July 1988, Bill returned to see Mr Pack, in the absence of Neil. However, Bill could not decide whether to give Neil the balance of the properties still the subject of the option in cl 4 of the will or to retain the option price of $200,000. The will was not altered.

On 24 May 1989, a little more than a month after Bill's death, Neil exercised the option conferred by cl 4 of the will. On 28 August 1989, the will was admitted to probate in common form and, on 1 April 1990, Neil paid $200,000 to the executor.

The result of the dispositions in 1988 was that, at the time of Bill's death, he no longer held any of the interests identified in pars (b) and (c) of cl 4 of the will. Further, all that remained of the interests identified in par (a) were the Tooks Land and the Mt Leigh Land. It was for the acquisition of this property, together with the interests in the partnership, livestock and machinery, that Neil paid $200,000 in exercising the option. There was no clear finding as to the value of the partnership interest, the Tooks Land and the Mt Leigh Land at the time that the option was exercised. It appears that the interest in land was worth about $153,000 and the partnership value about $95,000, giving a total of about $248,000 value in exchange for the payment of $200,000. It was this sum which was the significant element in the residuary estate to be divided equally between Bill's four daughters. The moneys invested in Bill's name, which passed to his widow under cl 3 of the will, were in an amount probably in excess of $150,000.

Had it not been for the forgiveness of payment contained in the deed, the completion of the contracts for sale in November 1988 with full payment would have attracted the operation of a vendor's lien over the subject lands. The vendor's lien is created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying, unless negatived, to every ordinary contract for the sale of land [57] . The doctrine has been treated as based upon the principle that equity regards that as done which ought to be done [58] and upon the apprehended unconscientious behaviour of the purchaser in disposing of the property to a third party without the liability to the vendor having been discharged [59] . As Gibbs CJ explained in Hewett v Court [60] , "the lien is the security for the money which is justly due".

Davies v Littlejohn (1923) 34 CLR 174 at 185 2. Wossidlo v Catt (1934) 52 CLR 301 at 307 Ashburner's Principles of Equity, 2nd ed (1933), p 250. 3. Hewett v Court (1983) 149 CLR 639 at 668 4. (1983) 149 CLR 639 at 645.

The principal relief which the appellants have sought in this litigation is an order setting aside the deed. Whilst it stands, the deed would negative the operation of the vendor's lien otherwise available to the estate of Bill against Neil and Beryl. The amount secured by the lien would be the sum forgiven by the deed, together with interest at a commercial rate as allowed from time to time by the Supreme Court of Queensland [61] and any costs of enforcing the lien [62] . The amount so secured to the estate would fall into the residue divisible under cl 4 equally between Bill's four daughters [63] .

See Maguire v Makaronis (1997) 188 CLR 449 at 477, 500. 2. See the decrees set out in Seton's Judgments and Orders, 7th ed (1912), vol 3, pp 2220-2221. 3. There may be a question, upon the answer to which we express no opinion, as to whether, upon its true construction, the legislation which presently governs the Wonga Park Perpetual Lease Selection permits the operation of the equitable doctrine of the vendor's lien; cf Davies v Littlejohn (1923) 34 CLR 174 Minister for Lands and Forests v McPherson (1991) 22 NSWLR 687 Queensland v Litz [1993] 1 Qd R 343 Wik Peoples v Queensland (1996) 187 CLR 1 at 197-198

At the trial, the appellants in several respects unsuccessfully sought to obtain the particular findings which would have presented the conduct of Neil in a harsh light. Neil denied the conversation, after Bill's death, with his cousin, Noel (whose father, Alf, had received nothing under the will of their grandfather), to the effect: "We've made sure that what happened to your father won't happen again because we fixed up Bill's land." Neil also resisted the suggestion put in cross-examination that the termination of the delay in completing the contracts, by the payment of $150,000 eventually made on 28 November 1988, was triggered by a response to the news that on 24 November Bill, in the company of his daughter, Shirley, and son-in-law, Kevin, had been in to see Mr Pack in Roma and that Shirley was upset when told of the arrangements made by Bill on 19 July 1988.

Mr Pack had assumed that Bill was attending on 24 November 1988 to give instructions to revise the will. That was not the case. Shirley and her husband were interested in securing a power of attorney from Bill. Before they left the room, Bill indicated that he understood that his daughters were unhappy about the arrangements he had made to favour Neil. When alone with Mr Pack, Bill said: "They don't give me a tremendous lot of help," and "I don't think my son-in-laws would be capable." He said that he had often helped his daughters, buying a hairdressing salon in Chinchilla for June, land for Kevin and Shirley at Dulacca and a house for Desley in Cairns. Dealing with the reasons why Neil had been given the land, Bill said that Neil "has worked hard", that Neil had stuck with him "through thick and thin" and that he thought Neil was "entitled to it". Of his daughters, he said that they "married blokes and they never helped me", that they had "never worked on the place", "never picked up sticks", had "got their own jobs" and that he had "never asked them to do anything for [him]". He also said to Mr Pack that he was "very disappointed I never had a boy" and, after signing a written record of his conversation, he concluded by saying to Mr Pack, "I hope I haven't got to walk home".

The closeness of the relationship between Neil and Bill, and the tendency of the older man to fall in with the wishes of the younger, is illustrated by the following passages from Neil's cross-examination:

Bill York respected your opinions, didn't he? - Yes.

And he respected your judgment about matters? - I would have thought so.

And you knew that, didn't you? - Yes, I got on very well with Bill.

You knew that Bill York trusted you implicitly, didn't you? - Yeah, I think he did, yes.

And treated you as though you were his son effectively, didn't he? - Yes.

And you knew that he was bitterly disappointed that he had never had a son of his own? - He said he would have liked to have had a son, yes.

And so all the affection he would have given to his own son he gave to you, didn't he? - Possibly, yes.

You have no doubt about that, do you? - Not really, no.

In fact, your counsel opened your case to His Honour as saying that you would give evidence that you had a special and close relationship with this man. You haven't said that, but that's an accurate statement, isn't it? - Yes.

In the context of the provision by Bill of security over the Risby Land for Neil to obtain a farm development loan and personal borrowings, Neil added: So, notwithstanding that your uncle got no benefit out of this he was quite happy for you to put up his land as security for your borrowings? - Yeah, that's right, yeah.

That's the way he reacted to you all the time, wasn't it? - Most of the time, yes.

Whatever you wanted you could have? - Not all the time.

Well, can you give me one instance of when you wanted something and he wouldn't give it to you? - Well, early in the piece I know when I wanted to buy a new tractor he wouldn't let me do that.

How many years ago was that? - Probably 1980 and that.

The position of disadvantage which renders one party subject to exploitation by another such that the benefit of an improvident disposition by the disadvantaged party may not in good conscience be retained may stem from a strong emotional dependence or attachment [64] . Louth v Diprose [65] was such a case. In his judgment in the South Australian Full Court, a decision which was upheld in this Court, Jacobs A-CJ said [66] :

It is an oversimplification to say that because the respondent acted as he did with his eyes open, and with a full understanding of what he was doing, he was not in a position of disadvantage, and therefore not the victim of unconscionable conduct. 1. Louth v Diprose (1992) 175 CLR 621 at 626, 629-630, 637-638, 643. 2. (1992) 175 CLR 621. 3. Diprose v Louth [No 2] (1990) 54 SASR 450 at 453

There are passages in the reasons of the primary judge which appear to suggest that the existence of such a position of disadvantage necessarily involves physical frailty and enfeeblement with diminished knowledge by the party in question of that party's property and affairs generally. That will not necessarily be the case. In any event, the primary judge did find that, probably from the time of his eighty-fourth birthday in February 1988, when his driving licence was not renewed, Bill's condition deteriorated and that thereafter he had "good days" and "bad days". His Honour said that Bill's condition "did probably wax and wane, leaving open the possibility that 19 July, 1988 was a "good" day".

Before Bill executed the transfers and the deed on 19 July 1988, Bill (and his brother, Sam) were briefly examined, for a period of some ten minutes, by a practitioner in Roma, Dr Hatcher. This was the only occasion on which Dr Hatcher had seen Bill. He found evident in Bill no signs of senile dementia and found his physical condition appropriate for his age, saying, "[h]e was a fragile elderly man". The primary judge found to be of "considerable significance" Dr Hatcher's contemporaneous report that Bill was of sound mind and capable of making decisions about his personal affairs.

We have referred to the primary judge's conclusion that Bill had "the capacity then to know what he was doing and to make informed decisions about the disposition of his property". That however is not an answer to the question whether, on the primary facts, the conclusion should have been reached that advantage was taken of Bill's disadvantaged position. Even with respect to the doctrine of undue influence, as distinct from that dealing with unconscionable conduct, equitable principles may be invoked to set aside a gift where a donor is perfectly competent to understand and intend what he or she did. In Huguenin v Baseley [67] , Lord Eldon LC said, in a well-known passage [68] :

Take it, that she intended to give it to him: it is by no means out of the reach of the principle. The question is, not, whether she knew what she was doing, had done, or proposed to do, but how the intention was produced. Thus, as Turner LJ put it of the disponor in Rhodes v Bate [69] , the case was not determined by deciding that she had been "perfectly competent to understand what she did" and had not been "of weak mind". Further, as Lindley LJ observed in Allcard v Skinner [70] , enthusiasm itself may be the result of the exercise of undue influence. 1. (1807) 14 Ves Jun 273 at 299-300 [33 ER 526 at 536]. 2. See also Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573 at 576and, in Canada, Geffen v Goodman Estate [1991] 2 SCR 353 at 376See further Cope, Duress, Undue Influence and Unconscientious Bargains (1985), par [201]. 3. (1866) LR 1 Ch App 252 at 256. 4. (1887) 36 Ch D 145 at 183.

The questions with which the primary judge was here concerned, those as to undue influence of Neil upon Bill and of unconscionable conduct of Neil, involved more than issues of contractual capacity or those which arise upon a defence of non est factum [71] . The initiative leading to the execution of the transfers and the deed had been taken by Neil. The primary judge found that, having the proceeds of sale of the Injune Land available to him, Neil approached Bill in late 1987 or early 1988 and asked whether Bill would be interested in selling to him Bill's interests in certain lands for a suggested price of $150,000. His Honour concluded that, in the end, it was unnecessary to decide between the contentions that, by not offering more, Neil deceived Bill or whether, by offering only a sum much less than the value of the land in question, Neil was merely "floating" a possibility which Bill might or might not have accepted. His Honour went on:

Bill did however agree to the proposal, saying that he had better do it "before someone causes bloody trouble" or as [Neil] put it during cross-examination: "I had better do that just in case them bastards cause trouble." 1. See Petelin v Cullen (1975) 132 CLR 355 at 359-360

Bill had been born in Wallumbilla and lived there all his life. We have referred to the evidence which showed the amassing by him of considerable land and interests. He was a quiet, reserved man of limited education. He travelled only infrequently away from his home. The primary judge found:

He had a reasonable relationship with his daughters, although he really excluded both them, and Stella his wife, from his business affairs, and rather stolidly considered their true place to be "in the home". Bill's life revolved substantially about his interest in cattle, and the recreations of shooting and football.

Bill provided only very basic accommodation for his wife and daughters. He was remarkable [sic] frugal. He did not even give birthday presents. His treatment of his wife and daughters in this will was therefore consistent with that general approach

Bill felt that the place for Stella and his daughters was in the home, not on the land or engaged in business affairs.

On the other hand, he had an "enormous affection" for Neil, "fully trusted him" and, for his part, Neil appreciated the high regard his uncle felt for him.

Bill had the goal of retaining the properties as an integrated farming enterprise under reliable and experienced management. His Honour found that this goal was important to him. The transfers and the deed, as a means to attain that goal, involved an improvident transaction which was neither fair nor just and reasonable. The effect of the transfers and the deed was to dispose of a significant portion of Bill's assets not for their value of $696,811 but for $150,000. This transaction put it out of Bill's power to change his testamentary arrangements with respect to that portion of its assets. Further, for all his deep concerns that all his properties be kept together under the one manager, even at the expense of the interests of his children, the form of the transaction was such as to provide no certainty that this necessarily would follow for the remainder of Bill's life or after his death. Nor is it any sufficient response that, were Bill to retain the $150,000 or assets representing such sum, this would augment the $200,000 which would fall into the residue under cl 4 of the will upon exercise of the option after his death.

Bill's goal to preserve his rural interests intact and his perception that Neil was the candidate to provide reliable and experienced management thereof were significant elements in his emotional attachment to and dependency upon Neil. The initiative to utilise the circumstance of the sale of the Injune Land (to the retention of which Bill had been opposed) for the irreversible implementation of Bill's wishes during his lifetime came from Neil. It is not an answer that there was no finding that Neil had pursued the initiative to its implemention in July and November 1988 with the motive or purpose of forestalling any change in Bill's testamentary intentions. The equity to set aside the deed may be enlivened not only by the active pursuit of the benefit it conferred but by the passive acceptance of that benefit.

The relationship between Bill and Neil meant that, when Neil raised the question of using the proceeds of sale of the Injune Land, they were meeting on unequal terms. Neil took advantage of this position to obtain a benefit through a grossly improvident transaction on the part of his uncle.

In some cases, the equity that arises by reason of an unconscientious or unconscionable dealing of the nature with which this appeal is concerned may be satisfied only by setting aside that dealing in its entirety. The dealing may be embodied in the one instrument which contains several provisions or in several instruments. In other circumstances, of which this case is an example, the equity may be satisfied by orders setting aside some but not all of these instruments or some but not all of the provisions thereof [72] .

See Willis v Barron [1902] AC 271 at 272-273 Maguire v Makaronis (1997) 188 CLR 449 at 474-475

It is unconscionable for Neil and his wife to retain the benefit of the improvident transaction by asserting the forgiveness of the whole of the debt which would otherwise be owing to Bill's estate. On the findings of fact made by and available to him, the primary judge should have held that the deed should not be allowed to stand and be given its full effect; the Court of Appeal also should have intervened. A similar conclusion would have followed with respect to the transfers but for the complexities that would arise in the disentanglement of the transactions involved, including the absence of Sam and the mortgagee as parties to this litigation. In the circumstances of this case and consistently with the framing of relief which, in Lord Blackburn's phrase, is "practically just" [73] , the appellants, as representatives of Bill's estate, properly may elect that only the deed itself be set aside. However, in seeking equity, the estate must be prepared to do equity [74] . In particular, weight has to be given to the testator's wish significantly to benefit his nephew which was expressed in cl 4 of the will.

Erlanger v New Sombrero Phosphate Co (1878) 3 AppCas 1218 at 1278-1279. See also Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102 at 113-114 2. Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102 at 115 Maguire v Makaronis (1997) 188 CLR 449 at 474-475, 496-499.

In the course of argument on this appeal, there was discussion as to the appropriate form of equitable relief if the appeal was successful. In accordance with the authority referred to above, counsel for the respondents stressed the requirements of "practical justice". Reference was made to Vadasz v Pioneer Concrete (SA) Pty Ltd [75] to emphasise the importance of the consideration that in the particular circumstances of a case the equity may be satisfied by orders having the effect of setting aside no more than so much of a disposition as prevents the moving party "obtaining an unwarranted benefit at the expense of the other" [76] . Attention also was drawn to the significance in framing relief of the personal rights of the appellants against the estate under Pt 4 of the Succession Act.

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