Johnson v Buttress [1936] HCA 41

Johnson v Buttress [1936] HCA 41 - HCA 1936 case summary — Zoe

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were also alive, with whom he was apparently on good terms. His wife had died some few months before the transfer, and he was much affected by her death. The appellant, who was a daughter of a step-sister of the deceased's wife, had treated the wife with some kindness during the illness which preceded her death, and the deceased was grateful. The deceased had a little property at Maroubra, which was worth about £700 or £800, and returned him about £1 a week in rent. Substantially this was all the property the deceased had, and his only means of livelihood. About March 1931 he either went to live with the appellant, or else went almost daily to her home. Almost immediately, the appellant took the deceased to her solicitor, and a will was made in her favour. It was only in February 1931 that he had made a will in favour of 'his sister, Mrs. Job. In New South Wales there is a Testator's Family Maintenance and Guardianship of Infants Act 1916, which enables the Supreme Court to order provision for children out of the estate of a testator who disposes of his property in such a manner that his children are left without adequate provision; one may suspect, but cannot be sure, that this Act influenced the next step. At all events, we know that when the will was executed, the deceased, according to the appellant, asked whether his son could upset it, and was told he could not; however, in April 1931, the deceased, according to the appellant, suddenly resolved that he would " deed " his place over to her and that he did not wish to leave anything to his son or any of the others. He was again taken to her solicitor, and the property was absolutely transferred to the appellant, without any consideration, and without any enforceable provision being made for his declining years. The improvidence of the transaction is upon its face. But the solicitor, or rather his clerk, gave the deceased no advice upon the subject. The transfer was not disclosed to the son or any of the members of the deceased's family. About the end of September 1931 the deceased was relegated to the mountains to "a bit of property " the appellant had there. He lived there alone, in a tent, dug out the rocks and cleared the property, and never before did he so " appreciate the beauties of nature." But he did all this for nothing, and for the

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title and said that that was the property. To a question whether 4. ©. oF Ay he was selling it, he replied, no, that he was giving it, that he wanted bes the witness to deed it over to her. The witness asked if he under- Jonyson stood that Mrs. Johnson was not paying anything for it and could Borrmss; he tell him if there was any reason for it. Buttress answered that - pyyon 3, he wanted her to have it; she was very good to his wife and he was very fond of her. The transfer was then prepared. In it Mrs. Johnson was described as Buttress' niece and the consideration was given as natural love and affection. The nature of the consideration was stated to Buttress. A question as to the value of the property. produced the reply from Mrs. Johnson that it was worth £700 to £800, a value which seems to have been overestimated. He 'was taken away to a justice of the peace, before whom he made his mark. After the transfer was executed, Mrs. Johnson went off to the municipal offices to give a notice of change of ownership. The transfer was not lodged for registration until 18th December 1931, but the delay does not seem to have been deliberate. Stamp duty: and fees were found by the Johnsons. The reason for this transaction can be given now by no one except the Johnsons. It is not stated by any of them in a satisfactory manner. Mrs. Johnson says that Buttress paid three or four visits only between the date of making his will and the date of the transfer: At one of them he said he wished to give her the property and leave everything to her, nothing to anybody else. She remonstrated, but, at a subsequent visit, he returned to the subject and she took him in to her solicitor. She said that after the transfer she gave the rents to Buttress, because she knew he could not live on nothing and she had to give him something; she provided him also with necessaries. Her husband's evidence was that one morning, at about 9 o'clock, Buttress came to their house and said that he had been unable to sleep and had been thinking over the thing and thought that Mrs. Johnson was the rightful person to have the property. The witness at first said that this was some days before the transfer was actually made, and, later, that it was the same day. Her son said that he remem- bered his father and mother talking about the transfer of the

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The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter. The source of power to practise such a domination may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party. If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act. But the parties may antecedently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed and that he has obtained a substantial benefit from the other. A solicitor must thus justify the receipt of such a benefit from his client, a physician from his patient, a parent from his child, a guardian from his ward, and a man from the woman he has engaged to marry. The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree. But while in these and perhaps one or two other relationships their very nature imports influence, the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes

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influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position. He may be taken to possess a peculiar knowledge not only of the disposition itself but of the circumstances which should affect its validity ; he has chosen to accept a benefit which may well proceed from an abuse of the authority conceded to him, or the confidence reposed in him; and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour. But, except in the well-recognized relations of influence, the circumstances relied upon to establish an antecedent relation between the parties of such a nature as to necessitate a justification of the transaction will be almost certain to cast upon it at least some measure of suspicion that active circumvention has been practised. This often will be so even when the case falls within the list of established relations of influence. Because of the presence of circumstances which might be regarded as presumptive proof of express influence, cases outside the list but nevertheless importing a special relationship of influence sometimes are treated as if they were not governed by the presumption but depended on an inference of fact. Scrutton LJ. has remarked on the inclination of common law judges "to rely more on individual proof than on general presumption, while considering the nature of the relationship and the presence of independent advice as important, though not essential, matters to be considered on the question whether the transaction in question can be supported " (Lancashire Loans, Ltd. y. Black (1) ). Further, when the transaction is not one of gift but of purchase or other

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and of influence as if they were separate elements (Cf., per Christian L.J., Armstrong v. Armstrong (1)). But, in any case, in this peculiar case it is the man's illiteracy, his ignorance of affairs, and his strangeness in disposition and manner that provide the foundation for the suggested relation. For many years he had leant upon his wife, and it is evident that, after her death, he was at a loss for guidance and support. He turned first to one and then to another for a prop. His affairs of business were in reality few and simple. But to him they seem to have loomed large. A claim that his deceased wife owed money for some cash orders threw him into a state of great excitement. The question whether he could obtain an old-age pension troubled him. The failure of the arrangement that his son and daughter-in-law should share his home was succeeded by negotiations with his stepson. In some of these matters he quoted the advice of Mrs. Johnson. In making a will in favour of his stepson's child, and then a second will in favour of Mrs. Job, he showed how unstable his attachments were. It is possible that he regarded will-making as a means of securing that help and support which he so much needed. After his return from Melbourne, he began to place increasing reliance upon Mrs. Johnson and the members of her family. Then the difficulties with his tenants developed. Whether Mrs. Johnson's advice on her visit to the premises or his own temperament was the cause of the trouble, it is clear that the attempt to get his tenants out became the source of great concern and difficulty to him. It was a matter with which he could not cope. He relied on the Johnsons to manage it for him. From the beginning of March his connection with them must have steadily grown. His will in favour of Mrs. Johnson marks its progress. From 13th April 1931, although he did not live at Rose Bay, he must have spent the greater part of his time there. Little doubt can be felt that ultimately he came so to depend upon Mrs. Johnson that a full relation of influence over him subsisted. It would be a mistake to lay much stress on the statements made in cross-examination by Mrs. Johnson, her husband and her daughter as to the degree and kind of confidence the old man placed in Mrs,

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Johnson. They are general statements expressed in terms dangerous in their ambiguity. But they do draw a picture of an ignorant labouring man depending in many essential matters upon one whom he regarded as having all the advantages of education and position and in whom he confided. This picture is borne out by the descrip- tion of his manner of life and the accounts of what he said from time to time. But the question remains whether, at the time of the transfer, she stood in that or any less relation of influence. It is not, I think, illogical to consider as an additional piece of evidence bearing upon this question the significance of the transfer itself. Whether its purpose was to prevent an application under the Testator's Family Maintenance and Guardianship of Infants Act, or simply to confer an immediate benefit upon Mrs. Johnson in the confident expectation that she would look after him for the rest of his life, the fact that Buttress was prepared to make over to her his sole property shows how far his trust in her had advanced. Faith in her future beneficence towards him must not be confused with present dependence and subjection. But the condition in which his ignorance and illiteracy placed Buttress must be kept in view. That condition coupled with his temperament, his odd behaviour and his inferior mental faculties made the habitual guidance and support of some one almost essential to him. That person would be called upon either to tolerate or to manage him. At a later date, Mrs. Johnson occupied this position. At an earlier date, Buttress was instinctively seeking someone who would under- take it. The evidence of the course of events in the short intervening period which includes the will and the transfer is meagre. But it shows beyond doubt that such matters of business as he had occasion to transact were managed by, or under the supervision of, Mrs. Johnson. It shows that he was constantly in her company and that he relied upon her advice and depended on her kindness. I think that when: the circumstances of the case are considered with the character and capacity of Buttress they lead to the conclusion that an antecedent relation of influence existed which throws upon Mrs. Johnson the burden of justifying the transfer by showing that it was the result of the free exercise of the donor's independent will. This, in my opinion, she has quite failed to do. Her appeal should, therefore, be dismissed.

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one or two years. He lived in a room in the cottage and took meals at his sister's house. After his return from Melbourne he visited the Johnsons. Miss Johnson said: "' He used to pop over quite frequently in the mornings and have lunch with us and then go away." The intimacy and closeness of the association between him and them is shown by the fact that on 18th March 1931 he went with Mrs. Johnson to her solicitor's office and made a will leaving her all his property. The month before, he made a will under which the sister whom he visited in Melbourne took a life interest in his property and the niece who provided him with meals the remainder. A month before that, again, he disposed of his property by will to his stepson's child. Before that he had made a will in favour of his own son. Mrs. Johnson's solicitor had not acted for Buttress before. It was she who gave the clerk his full name and spelt it. Despite all these wills Buttress had to inquire of the clerk what he meant by an executor. He readily agreed to the appointment of Mrs. Johnson. According to the evidence he was most concerned about preventing his son from getting anything because he was "a rotter and a waster." There is nothing in the evidence which at all supports this description. The clerk was unaware of Buttress' inability to read or write until Mrs. Johnson told him as he was about to hand the testator a copy of the will. Buttress gave the will to Mrs. Johnson to mind. Mrs. Johnson agreed to the suggestion made in cross-examination that he did so because he thought she was the person to have it as she was looking after him, and he looked to her for protection and help. That Mrs. Johnson was engaged in minding his affairs is also shown by her visit to the cottage with him. Although Buttress appeared to be satisfied with the tenants, Mrs. Johnson on this inspection pronounced the place to be dirty and this was the prelude to a demand that the tenants should leave. The ensuing dispute concluded with the ejectment of the tenants by legal process which was served by Mr. Johnson, and during the dispute he and his son joined forces against the tenants. In the meantime the transfer was executed. It should be observed that after Mrs. Johnson's visit to the cottage she arranged for the removal of Buttress' furniture to her house. Owing to the dispute with the tenants Buttress stayed for a few days with

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his sister who lived in the neighbourhood. This event approaches the date of the transfer. How he managed to live in a small cottage while quarrelling violently with the tenants is a question which the evidence does not elucidate. His relatives always rang up the Johnsons when they wanted to communicate with him. The members of the Johnson family, however, denied that at the time he lived with them and the learned judge accepted their denial. On 24th April Mrs. Johnson again conducted Buttress to her solicitor's office. He had with him the certificate of title of the cottage. She said to the clerk : - " [have brought Mr. Buttress in again, Mr. Lackey. He wished to transfer the property to me." Buttress assented and gave him an envelope containing the certificate. He said he wanted Mrs. Johnson to have it because she was very good to his wife and he was very fond of her. According to the clerk's evidence, when he asked Buttress what was the value of the property the latter looked at her and she answered between £700 and £800. Buttress signed the memorandum as a marksman. He took no further part in the matter than to bring in the certificate of title, state the reasons for the gift which have been mentioned and to execute the transfer. It is probable, in view of her assumption of responsibility for Buttress' affairs, that Mrs. Johnson had previously seen the rate notices for the property, because she said they were her source of information that a change of ownership should be notified to the municipal council and she did this immediately after the transfer was executed. Buttress did not inform anyone outside the Johnson family of his intention of making this gift. Mrs. Johnson and her daughter say that he warned them against disclosing it to his relatives. The members of the family gave various if not inconsistent explanations of Buttress' reasons for making the gift. The learned trial judge inferred that the gift was prompted by Mrs. Johnson. A conveyance of property inter vivos as a method of defeating any attack by the son on the will already made in her favour was quite outside Buttress' experience, yet Mrs. Johnson said that he insisted that she should take the property there and then so that his son would not be able to get it. Mr. Johnson said that he was not aware of Buttress' intention until the day it was made. Miss Johnson's account is that her mother at first refused to accept the gift but later she and

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Judgment (123 paragraphs)