Mortimer v Ah Sam

Supreme Court of NSW|2020-11-05|Before: Sackar J, Russell J

Background facts

The plaintiff is the sole registered proprietor of the above described land and has been since about 1989 or 1990.
The property has two houses on it and is a short drive from Coolangatta and Byron Bay. Both houses are air conditioned and spring water is piped to both houses.
The property currently has a mortgage of $230,000.
The plaintiff is 72 years of age. He worked in Sydney as a Manager for Metro Environmental Services. He is an electrician by trade although he has worked as a company manager and chief engineer.
He moved to Stokers Siding about thirty years ago with his then wife. They had three children. They divorced about twenty years ago.
He remarried about eleven years ago and he and his wife have two children aged nine and eight.
When he first moved to the far north coast he worked for Holiday Inn at Surfers Paradise. He then worked for Dreamworld but returned to sub-contracting, doing electrical and air-conditioning work. He is now retired.
His current wife is much younger, aged forty four, and although she is employed as a kitchen hand he has been accessing his superannuation to meet expenses. He is not eligible for a pension.
He has not enjoyed good health over the years. He is diabetic and is insulin dependent. In December 2017 he suffered a heart attack.
After his heart attack although he did not want to sell the property he was very concerned and stressed about his financial situation. He devised what he thought what was a pragmatic solution. He thought that he would offer a commercial opportunity of a joint venture by using his land for some sort of income generating purpose. To that end he advertised in Gumtree. In the advertisement he suggested some ideas. It was in the following terms (sic): partner wanted for 86 acres 34.8 hectares [in] the tweed valley , with two homes and a concrete floor nursery , all in a quite N/E valley, just 35 min drive to Coolangatta and Byron Bay . school bus pick up in same street 1km from house .Both homes have split a/c units and wood heaters .permanent spring water that is piped to both homes and the nursery .the property has a 4wd tractor and slasher, post hole digger, chain saws , brush cutters ,creek running through the property with Taro along the creek banks ,macadamia, custed apple,mango, and avocado as the property is backing onto the national park and the fire trails it is well suited for horse or trail bike. The nursery could be converted to dog kennels . email for more information price $300,000 .most of the money is to be put back into the property. The owner would like to start up a Pet Cemetery in a private part of the property. As a partner , and 50% owner in the property , you can move into one of the homes ,and work on the property , or have it as an investment ,or do what work you like on the property.or just live there

Unconscionable conduct

The plaintiff submits the defendant took unconscientious advantage of his special disability, namely his "poor to very poor vision on 21 February 2019" and "heightened sense of anxiety" on the day. He submits the defendant knew of his weaknesses in health and financial status and gained an advantageous transaction as a result, having purported to read the agreement to the plaintiff but in terms that did not resemble the original Gumtree advertisement or the document the plaintiff actually signed (Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Blomley v Ryan (1956) 99 CLR 362; Bridgwater v Leahy (1998) 194 CLR 457).
The plaintiff submits the defendant attended the meeting on 21 February as a successful businessman driving to have the contract signed by the plaintiff for an interest in land, a business venture and a place to live rent free. He submits the defendant acted rapidly in finalising the deal, reflecting his rapaciousness and the fact he had been put on notice of the plaintiff's procedure that day which would ameliorate the problems with his eyesight.
The plaintiff submits the court should accept Dr Walker's evidence that the plaintiff's eyesight was poor and his reading vision was correlatively so, although not measured on 21 February 2019 (citing Dasreef v Hawchar (2011) 243 CLR 588).
The plaintiff further submits the court should not accept the defendant's evidence that he did not know about the plaintiff's health and vision impairment because the plaintiff had told him about his eye impairments on 17 and 21 February 2019 and could not read their written agreement on the day it was signed.

Breach and termination

The plaintiff submits the defendant is in breach of the agreement because he has not paid the amounts due under it, which are essential terms. It is clear the plaintiff says that the defendant is not in a position to pay forthwith, if such an order was made.
Accordingly the plaintiff submits that the defendant repudiated the contract and the plaintiff validly terminated it by oral indications that the defendant should leave and by a written email his legal representative sent the defendant on 16 March 2020 (Shevill v Builder's Licensing Board (1982) 149 CLR 620 at 625-626; World Best Holdings Limited v Sarker [2010] NSWCA 24 at [38], citing Marshall v Snowy River Shire Council (1994) 7 BPR 14,447 CA).

Response to the defendant's claim for expenditure

The plaintiff submits the defendant is not entitled to be compensated for any expenditure or improvements he made to the property because the plaintiff did not authorise any of the work he did and neither was the work the subject of an agreement between the parties.
The plaintiff also submits there is an absence of evidence supporting the defendant's expenditure.

Possession and trespass

In written opening submissions the plaintiff said the defendant had been given notice to vacate the premises as early as 5 March 2019 orally and formally in writing on 16 March 2020. However in written closing submissions the plaintiff said that Mr Lay's evidence confirms the defendant commenced occupation on or about 10 March 2019, was an "unauthorised presence" between the commencement of these proceedings and the final hearing, and that a formal notice was issued indicating orders for possession would be sought.
The plaintiff submits the procedural requirements that apply to a claim for possession of land are set out in UCPR r 6.8 and that the plaintiff's claim for possession of land may result in an order/judgment for possession in compliance with s 92 of the Civil Procedure Act 2005 (NSW). A writ of possession would lie for the enforcement thereof, with leave of the court.
The plaintiff also submits that in "usual orders where possession of land is at stake and a writ or an order might be made, there would usually be an unwinding of the transaction previously entered into and that there would be a return of the deposit" (T.167/19-22).
The plaintiff submits the house which the defendant occupied was leased for approximately $250 per week before the defendant moved in and therefore the plaintiff has lost approximately $18,000 in rent due to the defendant's occupation. He seeks to recoup this amount pursuant to a claim for mesne profits or as losses suffered due to the defendant's wrongful occupation of the secondary house.

Unconscionable conduct

The defendant submits that the 21 February 2019 agreement is binding and enforceable. He submits the parties have acted on the contract in that the plaintiff accepted the defendant's $100 deposit and let him onto the property on 5 March 2019 and the defendant has made substantial improvements to the property.
He submits that the agreement was not the result of unconscionable conduct and that he did not take advantage of the plaintiff. He says he was not aware of the plaintiff's poor eyesight and believed the plaintiff was strong, healthy, smart, well-educated and financially secure. He submits he and the plaintiff were in a similar position, for example being of similar ages and work backgrounds. He also submits that the agreement is a simple document.
The defendant denies that he guided the plaintiff's hand to sign the agreement and submits the signature shows no evidence of being forced or guided by him. He also submits that Dr Walker's evidence should be rejected for example because all the reports he considered (except for one concerning a meeting he had with the plaintiff on 15 February 2019) postdate 21 February 2019 and no eye test was undertaken on that date.
The defendant submits that the plaintiff is attempting to kick the defendant out and take advantage of the work he did on the property, as he was required to under Special Condition 3 of the agreement.

Breach and termination

The defendant submits he was ready, willing and able to perform the agreement but the plaintiff was not.
Further the defendant denies that he breached the parties' agreement and contends the plaintiff breached the agreement by:

failing to offer settlement on 1 March 2020;
failing to ask for the deposit of $12,400 on 30 January but then asking for it on 16 March, knowing they could not settle on 1 March;
failing to improve the property; obstructing the defendant from exercising his rights under the agreement by barring him from using farm tools; and
bringing this claim in the Supreme Court.

He also states that the plaintiff has threatened and assaulted him and hired "hitmen".
He says that the settlement date was "based on everything going normally without any dispute. The dispute and Supreme Court Action changed all that. And no settlement date was ever agreed to since and up to the present". He submits the plaintiff's action has put the agreement on hold.
He submits that the payment of the $12,400 deposit 30 days prior to settlement "goes hand in hand" with the settlement date in that if the deposit was paid then the settlement must occur within 30 days, and conversely, if a settlement date was agreed to then the deposit would have to be paid 30 days prior. As no settlement date was agreed, the defendant says the deposit was not payable. However he also submits that he has paid off the deposit with time and money he has spent on improving the property.
The defendant submits that the 16 March 2020 email was not a proper valid notice of repudiation/termination of the agreement because for example it was not signed, because he has a legal interest in the property, and because this action in the Supreme Court is active. The defendant submits the plaintiff should have issued him with a reminder or demand notice in relation to the deposit before terminating the agreement.
The defendant also says that he attempted to negotiate a solution with the plaintiff which included an offer to purchase 100% of the plaintiff's property.

Claim for expenditure

The defendant submits he improved the property by cleaning, landscaping, gardening and performing regular maintenance.
In his "Defense Affidavit 27 September, 2019", filed on 26 August 2020, the defendant stated that "[a] deposit of over $250,000 had already been paid in money and time spen[t] on repairs to house, nursery, hours worked on the farm for 18 months" and claimed $195,000 in compensation for the work done.
In his "Defense to Amended Statement of Claim" which was emailed to the court on 10 September 2020 the defendant said he had spent over $85,000 on house repairs, over $20,000 in nursery repairs and over $20,000 in creating vegetable and flower gardens and buying plants and fruit trees. He said he purchased tools and had spent over 18 months working on the farm which would have been worth at least $70,000. This totals $195,000.
In his final written submissions the defendant said he worked a total of 4,196 hours on the property, which at an hourly rate of $33 equates to $138,468. In addition he says he spent $37,513.19 on house repairs and a further $20,150 on nursery repairs and plants. This totals $196,132.19.
In his "Defense to Amended Statement of Claim" of 2 November 2020 the defendant stated he spent $195,000 improving the property and maximising its potential.
He submits that in any partnership arrangement a partner who contributes more than another is compensated for their contributions before the partners "can see any profit" (T.178/16).

Trespass and possession

The defendant submits he is in legal possession of the property and is not trespassing and therefore no damages should be awarded. He submits the plaintiff happily gave him possession on three occasions, namely on 26 February 2019 (to store furniture), on 5 March 2019 (to live in the caravan), and on 10 March 2020 (to live in the two bedroom house).
Again the defendant submits the 16 March 2020 email was not a valid notice.
The defendant also submits that the prior rent the plaintiff received for the property was $230 not $250 per week and contends that if rent if payable by the defendant the plaintiff should also have to pay rent of $450 per week for the 4 bedroom house.

Further submissions

Finally, both parties referred to the comments made by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 and 319: …human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
The plaintiff submits the court should focus on the documentary record and the circumstances surrounding the making of the agreement rather than the "confusion that is generated by conversations" (T.166/30-35). The defendant submits the agreement was signed a long time, some 18 months ago, and the plaintiff's recollection of the events is false.

Contractual construction

The principles of contractual construction are well known. In Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, Gibbs J explained (at 109): [T]he primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another.
This passage was adopted as authoritative by a majority of the High Court in Westfield Management v AMP Capital Property Nominees (2012) 247 CLR 129, 139-40 (French CJ, Crennan, Kiefel and Bell JJ).
Further, as stated by the High Court in Electricity Generation Corporation v Woodside Energy Pty Ltd (2014) 251 CLR 640 at 656-657 (French CJ, Hayne, Crennan and Kiefel JJ): The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties ... intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience".
In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Mason J (Stephen and Wilson JJ agreeing) said (at 352): The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning.
In Cherry v Steele-Park [2017] NSWCA 295 Leeming JA (Gleeson and White JJA agreeing) stated (at [72]): … the "plain meaning" reflects the primacy of the text of a written contract. The starting point and the ending point of the construction of a written commercial contract is the language chosen by the parties to record their bargain…
However at [78] his Honour also confirmed: There is now a deal of authority for the proposition that whether there is in truth a constructional choice available to a written contract cannot be determined without first at least considering evidence of surrounding circumstances.

Unconscionable conduct

In Blomley v Ryan (1956) 99 CLR 362 at 428-9 Kitto J observed (citations omitted): The essence of the ground we have to consider is unconscientiousness on the part of the party seeking to enforce the contract; and unconscientiousness is not made out in this case unless it appears, first, that at the time of entering into the contract the defendant was in such a debilitated condition that there was not what Sir John Stuart called "… a reasonable degree of equality between the contracting parties"; Longmate v Ledger, and secondly, that the defendant's condition was sufficiently evident to those who were acting for the plaintiff at the time to make it prima facie unfair for them to take his assent to the sale. If these two propositions of fact were established the burden of proving that the transaction was nevertheless fair would lie upon the plaintiff …
At 429 his Honour further stated: If the burden were not discharged the defendant would be entitled to hold the judgment appealed from, since in that event it would be right to draw the conclusion that, as was said in Evans v Llewellin, "… though there was no actual fraud, it is something like fraud, for an undue advantage was taken of his situation". The fact that the defendant's condition was the result of his own self-indulgence could make no difference, for, as is shown by Cooke v Clayworth, the principle applied is not one which extends sympathetic benevolence to a victim of undeserved misfortune; it is one which denies to those who act unconscientiously the fruits of their wrongdoing.
In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474-5 Deane J (with Wilson J agreeing) said (citations omitted): The jurisdiction of courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty (see O'Rorke v Bolingbroke). The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract" (see per Lord Hatherley, O'Rorke v Bolingbroke; Fry v Lane; Blomley v Ryan). The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party (see Union Bank of Australia Ltd v Whitelaw; Watkins v Combes; Morrison v Coast Finance Ltd). Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued. In Blomley v Ryan, Fullagar J listed some examples of such disability: "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". As Fullagar J remarked, the common characteristic of such adverse circumstances "seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other".
At 462 Mason J stated: It is made plain enough, especially by Fullagar J, that the situations mentioned are no more than particular exemplifications of an underling general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.
In Bridgewater v Leahy (1998) 194 CLR 457 at 479 Gaudron, Gummow and Kirby JJ said (citations omitted): In Commercial Bank of Australia Ltd v Amadio, 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, 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". In so giving the judgment of the Privy Council, Lord Brightman was reflecting a general proposition put by James LJ in Torrance v Bolton. 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.
More recently in Thorne v Kennedy (2017) 263 CLR 85, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ confirmed at [37]-[40] (citations omitted): There was no controversy on this appeal concerning the principles of unconscionable conduct in equity. Those principles were recently restated by this Court in Kakavas v Crown Melbourne Ltd. A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring "victimisation", "unconscientious conduct", or "exploitation". Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage. In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence… Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows: In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position.
Further in Commercial Bank of Australia Ltd v Amadio 151 CLR 447 at 480-481 Deane J stated (emphasis added; citations omitted): Relief against unconscionable dealing is a purely equitable remedy. The concept underlying the jurisdiction to grant the relief is that equity intervenes to prevent the stronger party to an unconscionable dealing acting against equity and good conscience by attempting to enforce, or retain the benefit of, that dealing. Equity will not, however, "restrain a defendant from asserting a claim save to the extent that it would be unconscionable for him to do so. If this limitation on the power of equity results in giving to a plaintiff less than what on some general idea of fairness he might be considered entitled to, that cannot be helped" (per Lord Greene M.R., Wrottesley and Evershed L.JJ., In re Diplock). Where appropriate, an order will be made which only partly nullifies a transaction liable to be set aside in equity pursuant to the principles of unconscionable dealing (see Bank of Victoria Ltd. v. Mueller and the cases there cited). Where an order is made setting aside the whole of a transaction on the ground of unconscionable dealing, the order will, in an appropriate case, be made conditional upon the party obtaining relief doing equity.
Examples of situations in which such considerations may arise include those where a plaintiff seeks to recover land from a defendant in circumstances where the defendant has to the knowledge of the plaintiff expended moneys in the mistaken belief that the land was the defendant's. In such circumstances the plaintiff may only be able to recover by offering to reimburse the defendant for the expenditure made (see JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths, 2015) p 77; see also Morris v Morris (1982) 1 NSWLR 61; Hamilton v Geraghty (1901) 1 SR (NSW) Eq 81; Brand v Chris Building Co Pty Ltd [1957] VR 625).
In Ramsden v Dyson (1866) LR 1 HL 129 The Lord Chancellor (Lord Cranworth) said (at 140-141): If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own. It considers that, when I saw the mistake into which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion, in order afterwards to profit by the mistake which I might have prevented. But it will be observed that to raise such an equity two things are required, first, that the person expending the money supposes himself to be building on his own land; and, secondly, that the real owner at the time of the expenditure knows that the land belongs to him and not to the person expending the money in the belief that he is the owner. For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights. It follows as a corollary from these rules, or, perhaps, it would be more accurate to say it forms part of them, that if my tenant builds on land which he holds under me, he does not thereby, in the absence of special circumstances, acquire any right to prevent me from taking possession of the land and buildings when the tenancy has determined. He knew the extent of his interest, and it was his folly to expend money upon a title which he knew would or might soon come to an end.

The evidence

The plaintiff made two affidavits, one dated 9 August 2019 and the other dated 30 August 2019. The plaintiff also relied upon an affidavit of a Mr Colin Lay of 30 August 2019. In addition the plaintiff served a report from a Dr Nathan Walker, ophthalmic surgeon, of 25 March 2020. The defendant cross examined each of those persons.
The defendant appeared in person. He filed no evidence at least in conventional form. He resisted the invitation for legal assistance (5 June directions hearing T.5/49) and instead filed a series of documents purporting to be a combination of evidence, pleadings and submissions. Although objections were taken by counsel for the plaintiff to much of that documentation I adopted a liberal approach and did not make any evidentiary rulings as such disallowing any of the defendant's materials. I allowed the defendant to state from the witness box that the statements of fact in his various documents were in effect the truth and he gave an affirmation to that effect and was cross examined.

The plaintiff

The plaintiff gave evidence of his ailing health in particular his heart attack and his eyesight problem and family situation and how he was, at his age worried about the future. He told of his plan to raise money and his advertisement on Gumtree. He recounted how the defendant inspected the property on 17 February. He explained how the defendant told him he was a cash buyer and had experience with property deals and would assist the plaintiff with his troublesome tenant.
He said he attended the meeting on 21 February at the Casino and that the defendant produced a written document. His counsel said that two documents were produced but the plaintiff in his evidence only spoke of one. The plaintiff said he thought the agreed price of $300,000 was on the document and he could not read the document when he put his signature on it. He read it after his eye procedure a few days later on 25 February and realised it provided only for $250,000. The defendant guided his hand to where he was to sign as he could not see the document. The defendant he said assured him it was being signed so that in due course they could in effect work out a detailed arrangement with a solicitor.
The plaintiff accepted that a few days later the defendant came out to the property and gave him an envelope which he did not open. He felt so foolish about the matter he later gave the envelope to his solicitor who opened it and it contained two $50 notes. The defendant in effect moved into the property at first in a caravan and then into the secondary house. The defendant refused to leave the property.
In cross examination the plaintiff denied that he wanted someone to help him improve his property (T.13/25). He wanted someone to buy so that he could pay off his mortgage not for someone to work on the property (T.13/35-40).
He had in excess of forty or fifty inquiries and one offer of $250,000 in writing which he did not accept because he wanted $300,000 (T.14/5-35).
The plaintiff denied that the defendant had said he would draw up an agreement but he did agree that he wanted the property transferred into a company as part of the deal (T.16/35-45). He had sought advice from a solicitor on that point before he advertised the property for sale (T.17/1-10).
The plaintiff denied the defendant told him he had drawn up an agreement before their meeting on 21 February (T.17/25-40). The plaintiff insisted the meeting took place at 12.05pm on the 21 February whereas the defendant asserts it took place at 10am (T.18/1-15). On 21 February the plaintiff had laser surgery on his eyes and not just a check-up (T.18/40-45).
He drove himself home the next day (T.21/10-15). The plaintiff agreed that a time later the defendant rang up and said he wanted to bring some things out to the property (T.24/1-5). The plaintiff also agreed that he allowed the defendant to use some dishes, pans and his bathroom when he was staying in the caravan (T.25/5-20).
The plaintiff agreed that the defendant cleaned up the mess in the second house after the tenant vacated (T.26/5-25). The defendant asserted that the plaintiff after 15 March started calling the defendant names and assaulting him. The plaintiff denied this (T.28/1-25). The plaintiff denied hiring a "hit man" to run the defendant down (T.28/30-40).
The plaintiff said although he could not read during their meeting he could drive "okay", and although he could not drive immediately after the procedure on 21 February he rested his eyes that night and drove the next day. He agreed that he had been advised not to drive by the hospital (T.30/25-45).
The plaintiff denied that the defendant read the agreement to him over the phone prior to their meeting on 21 February. The defendant asserted in his questions that the only matter not discussed was the price. The plaintiff denied that as well (T.31/5-10). The plaintiff asserted the agreement looked like straight lines and that the defendant read the agreement to him at the meeting (T.31/10-30). The plaintiff also asserted that the defendant told him the price was $300,000 and that he trusted the defendant when he told him that (T.31/35-45).
The plaintiff denied getting a second agreement at the 21 February meeting. The plaintiff denied seeing at the meeting two documents with different prices in them (T.32/20-45). The plaintiff asserted that the defendant had to take his hand and put the pen where he was to sign (T.33/1-3).
The plaintiff agreed that he had an air conditioning business and jobs at different companies in managerial positions in which he had to sign contracts (T.33/5-25).
The plaintiff denied promising the defendant he would improve his own house and that he encouraged the defendant to fix his house. The plaintiff denied showing tiles and pavers to the defendant saying he was going to improve his house (T.36/ 5-40).
The plaintiff insisted the defendant said they were signing the agreement to keep negotiating and believed the defendant when he told him that (T.38/5-30). The plaintiff said he had only ever been involved in one real estate agreement 30 years before (T.38/35-40).
The plaintiff agreed that the defendant did not force him to sign the agreement but he believed what the defendant was telling him and he guided his hand to the paper (T.39/10-25). The plaintiff said that the defendant bullied and threatened him (T.41/34-35).

Mr Lay

Mr Richard Lay is a neighbour of the plaintiff. He gave evidence about the defendant causing trouble at the plaintiff's property. He had loaned the defendant a TV box but then demanded it back (T.50/5-25). Mr Lay believed that the defendant had done damage to Mr Lay's property and stole taros from Mr Lay as well (T.53/20-30). Mr Lay indicated he had done some odd jobs for the plaintiff (T.56/15-30).

Dr Walker

Dr Nathan Walker is a Visiting Medical Officer at Gold Coast Hospital and is an eye specialist (T.65/10-15). He had examined the plaintiff on 15 February, the plaintiff having been seen by other technicians beforehand. He has not seen him since however he had access to the plaintiff's medical records. As a result he was of the view given the various readings taken the plaintiff could well have had difficulty reading on 21 February when he was at the meeting with the defendant. The plaintiff suffered from diabetic retinopathy, his retina was bleeding and he also had cataracts. He had some procedures and his vision improved (T.81/5-10).
Dr Walker could not answer categorically whether the plaintiff could read documents on 21 February but there is a correlation between distance vision and reading ability. The plaintiff had reduced vision in both eyes and he would have had patchy vision with the blood at the back of his eyes obscuring some of his vision, but a more accurate assessment of his reading ability would have been useful (T.83/5-20).

The defendant

The last witness was the defendant. I have previously described the approach I took to his evidence.
He said in his evidence in chief that amongst other things he had been a successful businessman who had bought and sold properties internationally, in Australia, New Zealand and the USA (T.92/15-30).
He has both a Bachelors and a Masters degree in science from the University of Auckland and he is also a trained teacher (T.92/40-50).
He described himself as an investor. He asserted that the plaintiff said when they met that he was looking for somebody to help him with the land and make some profit and they got on really well when they met (T.97/35-40, T.99/30-35).
He denied that at the first meeting they discussed the tenant. He also denied at the first meeting on 17 February learning the plaintiff had a mortgage; he discovered those facts after they did the deal (T.98/20-45). He agreed that having decided to invest he told the plaintiff he wanted to meet to do a deal and if a deal was not done he would go elsewhere (T.101/25-35).
The plaintiff told him he was to have a check up on the 21 February. During his conversation with the plaintiff on 17 February he was not listening to the plaintiff and the whole focus was on doing a deal (T.103/7-15).
It was put to the defendant that he produced two versions of the contract on the day and he agreed (T.104/40-45). At the meeting the plaintiff said he needed his glasses to read and he took them out, but before the meeting the defendant said he read the agreement to the plaintiff and he read it to him again on the morning of 21 February (T.105/1-10). The defendant said that the plaintiff indicated at the 21 February meeting that the first document he showed him was not enough but he indicated he would accept $250,000 (T.105/15-30).
The defendant agreed that the first time he showed the plaintiff anything in writing was at the lunch on 21 February (T.106/10-12).
The defendant agreed that during the meeting on 17 February the plaintiff may have said something about running out of money or at another time (T.107/40-45).
The defendant having read paragraphs 11, 12 and 13 of the plaintiff's 30 August affidavit, in which the plaintiff stated that he told the defendant he was in desperate need of money and about his health problems, agreed that what was recorded there could have been said to him by the plaintiff but he was not taking particular notice (T.108/1-2). He however learned a lot more about the situation when he moved onto the property (T.108/5-25). He did not deny being told about the plaintiff's eye problems on 17 February (T.108/29-30). He also agreed that the plaintiff may well have asked him to read the document to him on 21 February (T.109/18-22).
The defendant denied saying the document was everything the plaintiff wanted on 21 February (T.110/10-15). He also denied at the meeting telling the plaintiff that signing the agreement would assist the plaintiff to get the pension (T.111/18-22). The defendant did know that the plaintiff did not show the agreement to any lawyer before signing it (T.112/31-45). He denied pointing to where the plaintiff was to sign the agreement (T.113/25-30). The defendant also asserted that on the morning of the meeting he again rang the plaintiff to make sure he was happy with the agreement (T.115/25-30).
The defendant says he attended on the plaintiff on 25 February and paid the deposit and he and the plaintiff initialled the document and there was a change to the possession date in special condition 1 from 1 October to 15 April. He moved into the caravan on 24 March (T.117/20-25).
The defendant accepted that the plaintiff was upset by the payment but he denied ever saying to the plaintiff that he would sue him for everything he had (T.118 /19-24).
He was asked whether he asked the plaintiff for permission to do work on the garden and the house and he responded by saying that it was his responsibility (T.120/40-50).
The defendant was not at the date of the trial able to make either the payment of the $12,400 or the balance of the purchase monies as agreed (T.123/15-16).

Consideration

The plaintiff initially put his case on the basis of fraud, alleging in the pleadings that the defendant made fraudulent representations to the plaintiff, including that he a was a cash buyer and as to the terms of the Real Estate Sale and Purchase Agreement dated 21 February, which induced the plaintiff to sign the agreement. However the plaintiff did not address me on fraud in the end and the final amended statement of claim sought to set aside the Real Estate Sale and Purchase Agreement for unconscionability, alternatively that the agreement was validly terminated and of no effect.
The written agreement between the parties I am satisfied was procured as a result of unconscionable conduct on the part of the defendant.
The defendant clearly has at all times when such a suggestion was made been ready strenuously to deny that he took an unconscientious advantage of the plaintiff. Quite the opposite. He at all times has been ready to assert that the plaintiff was every bit his equal and as an experienced businessman was well able to look after himself and did so during the negotiations.
But I am satisfied that the plaintiff foolishly entered so called negotiations with the defendant as a result of his Gumtree advertisement. He was ill-equipped to do so. He was unwell and had poor eyesight. I accept the plaintiff's evidence that his eyesight was compromised on 21 February. Dr Walker's views support that conclusion and I also accept the latter's evidence on that point. The plaintiff was stressed about his health, his much younger wife and family and a mortgage which he had had on the property for some time. Indeed I do not consider it to be far fetched to describe him as desperate. One further corroboration of the plaintiff's foolishness is his even driving to the medical appointment on 21 February given the condition of his eyes.
Further I accept the plaintiff's evidence that on 17 February when he first met the defendant he told the defendant about his health and financial predicament. I am satisfied he told the defendant in effect that he was running out of money, could not get the pension and was getting desperate. He told the defendant he had had a heart attack the year before and was having eye surgery because he could not see properly or read anything and had bleeding behind the eyes (plaintiff's affidavit of 30 August 2019 [11]-[13]). I reject the defendant's denial that these things were said or that he was in effect not taking any interest.
In my view the defendant was taking a keen interest and in my view astutely assessed how vulnerable and indeed foolish the plaintiff was. He prepared two versions of the written contract in advance of their meeting on 21 February. He drafted the terms and I do not accept his evidence that he read it out over the phone at least twice to the plaintiff before the meeting. In that regard I accept the plaintiff's denial that that occurred.
The terms of the agreement were commercially improvident from the plaintiff's point of view and indeed farcical. For a deposit of a mere $100 the defendant had a year to pay the full purchase price. He was to have free accommodation which he had clearly observed during his lengthy inspection. He was under no express obligation to do anything except to undertake the entirely and one might think deliberately vague notion of doing things so that the full potential of the land could be realised.
The plaintiff did not know the defendant, made no inquiries of him, required no proof of any of the grandiose promises made about the defendant's financial ability to make anything other than the $100 down payment which is the only amount the defendant has ever paid. At the date of the trial the defendant has not offered to pay any additional amount.
In his document entitled "Final Submissions for the Defendant" the defendant sets out what he asserts are his assets after I had raised the question of whether it could be said that he was ready, willing and able to complete the contract (T.122/9-41).
His assets are described to consist of "real and intellectual properties". The first thing to observe is that there is no real property disclosed as such. What is disclosed is a description of alleged assets for which there is no value attributed, let alone attributable. Apart from bare assertions there is no evidence of precisely what the assets are, although they appear to be intellectual property rights which may on one view have no tangible value at all.
The defendant provided no security for the payment or offered any proof he could complete the purchase on the due date. Payment of the $12,400, 30 days before settlement makes no real sense and is not explained in the evidence. No interest was to be payable on the outstanding monies. The plaintiff was to give up possession of his land on the basis of these promises from a total stranger. The plaintiff was not only foolish, he was entirely gullible and I am satisfied the defendant clearly appreciated the plaintiff's vulnerabilities and exploited them. He was a successful or otherwise highly educated shrewd so called businessman. The plaintiff just wanted to make a deal because he was desperate.
The plaintiff claims he has spent large sums of money on the property. I do not accept that evidence. There is no proof of such except for receipts totalling some $3000. The fact that he painted the house he lived in and renewed its iron roof is minor in the scheme of things given he was living there rent free.
Although not pleaded there is scope in all the circumstances to conclude that the defendant never ever intended to make any payments other than the $100. He has acted in my view dishonourably and dishonestly in relation to the transaction. Again having observed him give his evidence I am satisfied he lied about not being at all interested in what the plaintiff was saying during their first meeting. He must in my view have summed up the plaintiff as foolish and gullible and susceptible to his charm and patter. The talk of overseas assets and a cash purchase with a man so obviously desperate as the plaintiff was a clear invitation to the plaintiff that he should feel sufficiently persuaded to accept without too much hesitation the offer over lunch. The defendant's first offer as it were provided for a 33% discount on the asking price. Both offers were in any event to be subject to the same improvident terms from the plaintiff's point of view so the defendant in a sense must have thought he could not lose either way. He clearly intended and clearly succeeded in having the plaintiff sign on the spot at lunch.
The mere fact the plaintiff was as I find on the evidence prepared to sign a document he had never seen before is further confirmation of his gullibility and vulnerability. He was given no opportunity to consult a lawyer nor did he think to do so is also confirmation of his foolishness. But as the authorities point out foolishness alone is perhaps not enough. I am satisfied the defendant knowingly took advantage of the plaintiff.
The defendant contends that there is a binding agreement and also that the plaintiff owes the defendant substantial monies by reason of his expenditure on the property.
The basis of the claim is not all together clear. But either the claim has to be based on the express or implied terms of the contract, a separate oral agreement, some form of estoppel or perhaps a claim in quantum meruit. In the context of the plaintiff's claim of unconscionable conduct the question also arises as to whether the plaintiff should be required to do equity by compensating the defendant for any time or money he spent improving the property (Commercial Bank of Australia Ltd v Amadio 151 CLR 447 at 480-481; see also Maguire v Makaronis (1997) 188 CLR 449 at 475).
The first question is whether the written agreement permits of a construction or has implicit within it a provision which would allow the defendant to recover compensation by reason of his having expended monies on the property.
The agreement is cryptic. It has no express term providing for the reimbursement of monies expended by the defendant on the property.
In the so-called "Special Conditions" it is said that the plaintiff and the defendant would respectively live in the two and three bedroom houses "both for free". The agreement also contemplated the property would be owned by a company and that the two individuals would pay it seems no rent for the houses each would occupy.
The agreement in clause 3 of the "Special Conditions" states that the parties were to work the "Farm" to maximise its full potential but that "Any major plans or development to be agreed to by both parties".
There are no definitions in the document. The notion of maximising the "Farm" potential could on one view be a reference to some agricultural activity or other activity for the use of the land. One thing is clear; the parties did not speak of the potential for subdivision or some other form of resale. There is no hint expressly as to what the "major plans" are, although the Gumtree advertisement does speak of a possible pet cemetery.
In my view in so far as the defendant allegedly spent monies on the property his claim for compensation does not arise from any express or it seems to me any implied term of the written agreement. The defendant asserts that at the least he improved the property in particular the two bedroom house he has occupied by either agreement or the acquiescence of the plaintiff.
The plaintiff seems to accept that the defendant has done some work but insists it was not with his agreement or on the basis that the defendant would be reimbursed for it. He asserts the defendant went about the work without his permission or consent. And he disputes the amount of work the defendant says he has done. There are photographs purporting to show what the defendant did but it is not possible to gain a precise indication from them. It must of course be observed that the defendant has resided at the property without it seems the payment of rent or storage charges for his goods.
The plaintiff's case is that the defendant has bullied his way onto the property, has taken a high handed proprietorial stance and has contrary to the plaintiff's wishes and intentions simply trespassed. I accept the plaintiff's evidence on this point and am not satisfied on the evidence that there was any legally binding oral agreement that the plaintiff would pay compensation to the defendant for his expenditure. I am also not satisfied the plaintiff in any way acquiesced in the defendant doing whatever he asserts he did.
Rather I am satisfied that the defendant effectively duped the plaintiff into believing he was the answer to his financial problems. However as time went on it dawned on the plaintiff that for $100 only the defendant had taken up residence and was treating the whole property as his own and that the arrangement was one that entirely suited the defendant. The plaintiff consulted his solicitor in April of 2019.
I am also satisfied that the defendant well knew he had no consent to do the work or agreement from the plaintiff that he would be compensated for any work done. The defendant spent those monies to improve his own living conditions in lieu of rent but at the same time with an eye to manipulating a situation where he could somehow claim a credit against the plaintiff so as to reduce the purchase price he had agreed to pay.
The defendant makes claims as to his expenditure which are grandiose in the extreme. For example he claims some $12,000 for replacing the roof of the house he occupies along with some compensation for renovations to the house.
In a schedule to his final submissions which were provided to the court on 24 September 2020 the defendant purports to set out in diary form the number of hours he spent working on the property from 10 March 2019 to August 28 2020. That totals 4,196 hours at $33 per hour. Apart from the assertion that he has done so there is no proof. His so called "Hours Worked on Property" I am satisfied are a contrivance and without any independent corroboration are implausible.
Likewise are his assertions about painting, tiling, and other repairs in his document, "House Repairs", and the $20,150 claimed for "Nursery Repairs and Plants". No receipts, contemporaneous records and certainly no corroboration for that expenditure are provided. There are no receipts for materials of any kind except some receipts from Bunnings and Mitre 10 which the defendant says total $3,113.19.
He does claim monies were paid in cash to tradesmen. No proof is offered for this except his say so. No evidence from any tradesman has been proffered. Indeed apart from his own alleged activities no tradesman is even identified. More to the point no bank records of any sort have been produced to show how the defendant could have had let alone had access to the amounts of cash he asserts he has spent. No details of any bank accounts are provided.
On the materials in the final submissions he claims a total of $196,131.19 as having been expended on the property. I am unable to accept that amount. As I have found there are no receipts, no corroborating materials but for the receipts for the $3000 odd. I regard the claim otherwise as fanciful in the extreme and contrived so as to create a set off that would enable him to avoid the payment of the purchase price. To that extent I regard the defendant as quite dishonest. I consider he told a deliberate untruth when he pretended not to be aware of the plaintiff's infirmities and difficult financial situation. I have already expressed the view that I am satisfied he deliberately took advantage of them to advance his own interests.
My views are fortified by the so called disclosure of his so called assets. They amount to "digital assets" which are said to be valuable with a "big future potential". This only serves to expose the fantasy life led by the defendant. As I have said apart from his appraisal of their value there is no evidence of value from any independent source. They do not expose a person ready, willing or for that matter able to complete the contract. Relevantly he seemingly has no cash available and no ability to raise funds for the purposes of completing the purchase. He would therefore not be entitled to an order for specific performance (see, e.g, Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737 at 742 (Lord Radcliffe); Mehmet v Benson (1965) 113 CLR 295 at 307-309 (Barwick CJ)) and I would dismiss the defendant's claim for such an order.
The defendant has in my view deliberately avoided completing the contract as he promised on the basis that it is he who is owed money. He is clearly in a parlous financial state unable to complete the contract. More to the point he is in breach of the very terms he drafted. He has not once apart from his $100 either offered completion on the agreed terms nor has he placed himself in a position where he could complete the purchase. I cannot accept the defendant's argument that the agreement was for some reason on hold during the course of these proceedings, or that he was not required to pay because the parties had not agreed on a settlement date. The Real Estate Sale and Purchase Agreement clearly states that the settlement date was to be "on or before 1 March 2020 or a date mutually agreed to by both parties". There is no evidence of, or even any assertion made by the defendant, that the parties agreed to some other date. In my view the relevant settlement date was 1 March 2020.
However for the reasons stated above I am satisfied that as a result of the defendant's unconscionable conduct in so far as the agreement dated 21 February 2019 was binding it should be set aside. It follows that the defendant has no right to remain on the property. He is in effect a trespasser and should be ordered to leave the property.
I would therefore make the declaration sought by the plaintiff in paragraph 1 of his amended statement of claim and enter judgment for possession of the property in favour of the plaintiff (s 92 of the Civil Procedure Act 2005 (NSW)). I would also make an order that a writ for possession of the subject property issue (s 104 of the Civil Procedure Act 2005 (NSW)).
Further this is not a case where in my view the plaintiff should be obliged to do equity by any payment to the defendant as a condition for the relief granted. There was no contractual right on the part of the defendant to expend monies and expect reimbursement. He drafted the contract and could have provided for such a contingency. He was residing on the plaintiff's property rent free and made a choice to expend those moneys in my view with a view to avoiding the payment of the purchase price. He expended whatever he did at his own risk I am satisfied neither pursuant to any contractual arrangement he had with the plaintiff nor with the plaintiff's consent or acquiescence. And in any event the amounts he claims are unproven.
However I agree that the defendant should be repaid his $100 on the basis that the agreement is to be set aside and the transaction in effect unwound.
There are also claims for defamation and other injuries said to have been suffered by the defendant. However there is simply no evidence apart from the defendant's assertions that could ground the relief sought. I would in the circumstances dismiss any cross-claim brought by the defendant.
The final issue that arises is the plaintiff's claim for damages trespass or mesne profits. There was no material provided in support of this claim aside from the assertion in the plaintiff's submissions that "there is evidence of the secondary house being leased for $1000 per month or approximately $250 per week before the occupation of the defendant". I was not directed to any such evidence nor were any oral submissions made on the point. I would therefore dismiss the plaintiff's claim for damages and/or mesne profits but uphold the balance of the plaintiff's claim.
I invite the plaintiff to bring in short minutes of order reflecting these reasons and would hear the parties further in relation to the date on which the writ of possession should issue and, if necessary, costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 December 2020

nt v AMP Capital Property Nominees (2012) 247 CLR 129 World Best Holdings Limited v Sarker [2010] NSWCA 24 Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths, 2015) Category: Principal judgment Parties: Christopher John Mortimer (plaintiff) Julius Iulai Ah Sam (defendant) Representation: Counsel: K Tang (plaintiff) Self-represented (defendant)

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