Sybil Dawne Hintze v Ratna Tsering & Anor [2018] NSWSC 1190 | Case summary

Supreme Court of NSW|2018-07-19|Before: Sackar J

Solicitors: Patrick McHugh & Co Solicitors (Plaintiff) Wight & Strickland (Defendants) File Number(s): 2018/82164

Judgment Proceedings Background facts Legal principles Gift or loan Failure to complain or react Unconscionable conduct Undue influence Parties' submissions The Plaintiff Gift or loan Unjust enrichment Undue influence and unconscionable conduct The Defendants Gift or loan Unjust enrichment Undue influence and unconscionable conduct Evidence The evidence The Plaintiff Ms Sharon Middleton Mr Craig John Davis Dr Peter John Purches The First Defendant The Second Defendant Mr Charles McCooe Consideration Gift or a loan Unjust enrichment Undue influence Unconscionable conduct Conclusion

Background facts

The Plaintiff was born on 27 April 1929 and is currently 89 years of age. She worked as a nurse during her professional life (CB 31). She was an only child. Her father died in 1935 and her mother passed away in 1990. Her mother remarried Alfred Frederick Wetzel in about 1941. He had three children, however they have all died and the Plaintiff did not attend any of their funerals as she did not know of their passing at the time (CB 31).
The Plaintiff married her husband Harry Hintze on 12 December 1958, whom she had met through social tennis events. At the time he was studying and working as an accountant. He was born in Estonia and he and his brother came to Australia after World War II. Her husband worked as an accountant from the time they first met until he retired some years before he died (CB 31).The couple had no children and no other relevant family (CB 32).
The First Defendant was born on 20 April 1942 and is currently 76 years of age. She trained as a nurse and worked in Kathmandu as a nurse in a mission hospital in 1965 and 1966. She married her husband the Second Defendant in 1967. In 1973 she and her husband moved to Australia, and upon arrival she worked in a factory for 5 years as her nursing qualifications were not recognised in Australia (CB 84). In 1978 she commenced a 6 month nursing training course at the Sydney Adventist Hospital Wahroonga and after completion became a Registered Nurse. She then worked for 7 years testing medical equipment before doing a refresher course in nursing (CB 84-85).
The Second Defendant was born on 21 June 1943 and is currently 75 years of age. From 1947 to 1952 he studied to become a monk in Tibet before studying in India and spending time with the resettlement of other Tibetan refugees. In 1964 he received a scholarship and attended Cornell University studying political science before returning to Darjeeling in India to marry his wife in 1967 (CB 144-145). When the couple migrated to Australia in 1973, he worked as a computer programmer and then at Canon from about 1977 to 2006 (CB 146). He has an interest in Tibetan politics and charity having been awarded the Order of Australia Medal in 2007 for humanitarian work and promoting awareness of Tibet (CB 146).
As a couple the Defendants were unable to have children, however in the late 1990s and early 2000s the First Defendant began sponsoring children (CB 85).
In about 1987 the Plaintiff and First Defendant met for the first time. They were each working as nurses in the War Veterans Home in Collaroy (CB 33-34).
In 1990, the Plaintiff left the War Veteran Home. The Plaintiff and First Defendant kept in contact as friends. They saw each other once or twice a month.
In 1998, the First Defendant retired. She asserts that from that time she spoke to the Plaintiff on the phone about once a week and continued to see her about twice a month until 2010 (CB 85-86).
In January 2009, the Defendants sold their home. They wished to assist the Second Defendant's younger sister who had lost her job and whose daughter had died (CB 86, 147). According to the evidence of the Second Defendant, he and his wife provided approximately $730,000 to the Second Defendant's sister toward the construction of a house in Beacon Hill on the basis this money would be repaid (CB 148).
In May 2010 the Plaintiff's husband died. As a couple they had kept mostly to themselves and did not socialise or go out much, but did have a custom of having dinner each Christmas Eve at the Manly Pacific Hotel (CB 32). As a couple they had had an interest in property investment, with her husband managing their finances, such that at the time of his death the couple had bought and sold a number of properties and had substantial assets worth between $4,000,000 and $5,000,000 and a share portfolio with no liabilities or debts (CB 32-33).
From the time of the Plaintiff's husband's death the First Defendant and Plaintiff developed a closer friendship. They began to speak on the phone most nights at about 9:00pm. The First Defendant says these conversations were between 30 minutes and 1 hour, whilst the Plaintiff says they were of a shorter duration (CB 34, 87, 175). They were at this time very close friends. For example they would have lunch together and the First Defendant would make meals for the Plaintiff. The Plaintiff took the First Defendant on three cruises (the Second Defendant accompanied them on two occasions). The Plaintiff paid for these cruises (CB 175).
After her husband's death the Plaintiff sold two of their investment properties as stipulated in his will. She used the sale proceeds to purchase two more investment properties which she still owns: one in Sydney Road Balgowlah and one in Ocean Street Narrabeen both of which are tenanted (CB 33).
On 15 September 2010 the Plaintiff made a will (2010 Will) (CB191-193). This will: 1. Appointed the First Defendant, Second Defendant and Mr Craig Davis as executors. 2. Gave to each of the executors a legacy of $50,000 for carrying out their duties as executors. 3. Otherwise bequeathed her entire estate to charity.
In approximately December 2010 the Defendants moved into the newly completed house in Beacon Hill with the Second Defendant's sister and her family (CB 86).
By this time the Defendants were retired, with the First Defendant retiring in 1998 (CB 85) and the Second Defendant retiring in approximately 2006 or 2007 (T78/36-37).
By approximately the middle of 2011, the Defendants decided they wished to leave the Beacon Hill property because they found living with the family too noisy. At this point although the evidence is contested the Plaintiff and First Defendant discussed in some way the possibility of the Defendants buying a property of their own to live in. This conversation is at the core of one important aspect of the case. Unsurprisingly I shall return to these events in some detail.
In late 2011, Mr Davis asserts that the Plaintiff provided him with a loan of $800,000 enabling him to purchase an investment apartment in Manly (CB 189). According to him it was a term of the loan agreement that he repay $2,000 per month but not pay any interest. He has made the repayments since early 2012 (CB 189).
On 1 February 2012 the Plaintiff wrote a cheque for $70,000 made payable to "cash" to the Defendants (CB 104).
On 9 February 2012 the Plaintiff wrote a cheque for $50,000 allegedly made payable to the Defendants. However it is no longer pressed by the Plaintiff.
On 9 February 2012 the Defendants exchanged contracts to purchase a property at 4/39 Ethel Street Seaforth (First Seaforth Property) (CB 91).
On 10 February 2012 the Plaintiff wrote a cheque for $500,000 made payable to the Defendants (CB 105).
On 22 February 2012 the Plaintiff executed a new will (February 2012 will) witnessed by Charles McCooe solicitor (CB 194-196). This will: 1. Appointed the First Defendant and Second Defendant as executors of her estate. 2. Gave to each of the executors $50,000 for carrying out their duties as executors. 3. Referred to a loan given to Mr Davis in the sum of $805,000 to assist him to purchase a unit in Manly. The will stated "I FORGIVE the said CRAIG JOHN DAVIS the balance outstanding if any of a loan of eight hundred and five thousand dollars ($805,000.00) made by me to Craig in late 2011 to assist him in the purchase of a home unit in Manly." 4. Bequeathed the balance of the Plaintiff's estate to charity.
Again this will did not mention any loan provided to the Defendants.
Shortly after the Defendants moved into the First Seaforth property they recall they signed a card to the Plaintiff thanking her for her 'magnanimous gift' (T27/11-26).
On 22 March 2012, settlement on the First Seaforth Property took place. The purchase price was $618,000. A deposit of $61,800 had been paid (CB 91). On settlement, a further amount of $556,188.32 was paid. When the Defendants moved into the property they assert the Plaintiff sent them flowers and a card (CB 106-107): To my friends, Ratna & Namgyel HAPPINESS TO YOU IN YOUR NEW HOME From Your friend - Dawne
On 25 May 2012, the Plaintiff executed a new will (May 2012 will) witnessed by Mr McCooe solicitor (CB 108-111). This will: 1. Appointed the First Defendant, Second Defendant and Mr Bruce Towill as executors of her estate. 2. Gave to each of the executors $50,000 for carrying out their duties as executors. 3. Referred to a loan given to Mr Davis. The will stated "I DECLARE that late in 2011 I loaned to CRAIG JOHN DAVIS the sum of eight hundred and five thousand dollars ($805,000.00) free of interest to assist him in the purchase of a home unit in Manly. I FURTHER DECLARE that as at the date hereof the balance outstanding on that loan is about seven hundred and thirty thousand dollars ($730,000.00) and I DIRECT the Executors to collect the balance outstanding on that loan as part of the administration of my estate." 4. Bequeathed the Plaintiff's estate to charity.
This will did not mention any loan provided to the Defendants.
In late 2012, the Plaintiff told the First Defendant that she wanted to give the First Defendant $25,000 to pay for the Plaintiff's funeral and to maintain the Plaintiff and her husband's gravesites. Although the evidence on this point is somewhat contested, the First Defendant asserts that she together with the Plaintiff attended St George Bank and opened an account in the First Defendant's name and deposited the money (CB 39, 94, 180).
In about May 2014 an apartment located at 1/45 Ethel Street Seaforth (Second Seaforth Property) was advertised for sale. The Plaintiff and First Defendant discussed the Plaintiff assisting with the purchase of this property however the nature and meaning of this discussion is contested between the parties (CB 94).
On 21 May 2014 the First Defendant says the Plaintiff gave her a cheque for the sum of $85,000 equalling 10% of the purchase price of the Second Seaforth Property (CB 48-49).
On 22 May 2014 the Defendants exchanged contracts to purchase the Second Seaforth Property (CB 116).
On 23 May 2014 the Plaintiff executed a further will (2014 will) witnessed by Mr McCooe solicitor (CB 117-119). This will: 1. Appointed the First Defendant, Second Defendant, Mr Davis and Mr Towill as executors. 2. Forgave the loan provided to Mr Davis and bequeathed to Mr Davis the apartment he was living in namely 1/11 Laurence Street Manly. The will stipulated "I DIRECT that this gift is in lieu of any right to claim commission in respect of his duties as an executor of my Will I also DIRECT my Executors to give CRAIG the opportunity to purchase my property at 2/11 Laurence Street Manly, subject to their obtaining a Valuation of that property and giving CRAIG a period of six months after the date of my death to sign any contract relevant to this purchase". 3. Bequeathed the residue of the Plaintiff's estate to charity.
This will did not bequeath a legacy of $50,000 to any of the executors for carrying out their duties as executors and did not mention any loan provided to the Defendants.
During 2014 and 2015 the Plaintiff and First Defendant continued to be in close contact and spoke each night (CB 96).
In about June 2014 the Second Defendant's sister sold the Beacon Hill Property for approximately $1,400,000 with the arrangement being that when the property was sold the Second Defendant's sister would repay the $730,000 she had been given. The Second Defendant asserts that when the Beacon Hill Property was sold he told his sister "I want to help you out. When the property sells, you don't have to repay everything we put into the property. $300,000 is enough for us" (CB 152).
On 19 June 2014 the First Defendant received $300,000 from his sister from the sale of the Beacon Hill Property. Following receipt of this amount the Defendants assert they decided to repay the $85,000 given to them by the Plaintiff but the Plaintiff refused to accept the amount. The account of this conversation is denied by the Plaintiff (CB 153).
On January 2015, the Plaintiff executed a new will (January 2015 will) witnessed by Mr McCooe solicitor (CB 197-199). This will: 1. Appointed the First Defendant, Second Defendant and Mr Davis as executors. 2. Forgave the loan provided to Mr Davis and bequeathed to Mr Davis the apartment he was living in namely 1/11 Laurence Street Manly. The will stipulated "I DIRECT that this gift is in lieu of any right to claim commission in respect of his duties as an executor of my Will I also DIRECT my Executors to give CRAIG the opportunity to purchase my property at 2/11 Laurence Street Manly, subject to their obtaining a Valuation of that property and giving CRAIG a period of six months after the date of my death to sign any contract relevant to this purchase". 3. Bequeathed the residue of the Plaintiff's estate to charity.
This will did not mention any loan or loans provided to the Defendants.
In November 2015 the Plaintiff executed a further will (November 2015 will) witnessed by Mr McCooe solicitor (CB 184-187). This will: 1. Appointed the First Defendant, Mr Davis and Ms Gwen Cook as executors. 2. Forgave the loan provided to Mr Davis and bequeathed to Mr Davis the apartment he was living in namely 1/11 Laurence Street Manly. The will stipulated "I DIRECT that this gift is in lieu of any right to claim commission in respect of his duties as an executor of my Will I also DIRECT my Executors to give CRAIG the opportunity to purchase my property at 2/11 Laurence Street Manly, subject to their obtaining a Valuation of that property and giving CRAIG a period of six months after the date of my death to sign any contract relevant to this purchase". 3. Stated: "IN LIEU of any right to claim commission I FORGIVE Ratna and Namgyel Tsering all monies loaned by me to them". 4. In lieu of any right to commission gave the Plaintiff's property at 6/146-148 Ocean Street Narrabeen to Ms Cook and directed this is a gift free of any encumbrance and directed the executors to pay the mortgage debt on that property to St George Bank from the rest and residue of her estate. 5. Bequeathed the residue of the Plaintiff's estate to charity.
In December 2015 the Defendants sent a Christmas card to the Plaintiff (CB 277).
In late 2015 and again in early 2016 the Defendants went overseas to the Himalayas. During these times overseas the First Defendant only spoke to the Plaintiff a few times (CB 97). Upon returning the First Defendant asserts that Mr McCooe told the First Defendant that she should contact the Plaintiff. She asserts when she contacted the Plaintiff, the Plaintiff asked her to repay the $25,000 she had received to maintain the Plaintiff's gravesite. The First Defendant asserts she agreed to do so but asked to repay the money by instalments of $2,000 per month which the Plaintiff agreed to (CB 97-98).
In early 2016 the Defendants went away and it appears at this time the friendship between the First Defendant and Plaintiff ended, although the reason for the end of the friendship is contested. The First Defendant returned from the Himalayas in about April 2016.
On 27 April 2016 the First Defendant send a birthday card to the Plaintiff (CB 275-276): To, Dear Dawne, They bring a smile to your heart Happy birthday dear friend With love and best wishes always. From Ratna
In July 2016 the Plaintiff sent the First Defendant a handwritten letter demanding repayment of $618,000 (CB 128): Dear Ratna Re money owed. The sum in good faith was loaned to you. Dates: February 2012 Settled 22 March, 2012 Amount $618-000 To be paid by 2 bank cheques. I have a new solicitor/consultant and been advised to get my affairs in order. Kind regards Dawne Hintze
Clearly the Defendants had obviously told the Plaintiff the purchase price of the First Seaforth Property which had a purchase price of $618,000 (CB 91).
From that date the First Defendant asserts she stopped making repayments of $2,000 per month to the Plaintiff (CB 98).
On 17 January 2017 the First Defendant received a letter from a law firm demanding that she pay the Plaintiff $722,000 (CB 129): We act for Ms Dawne Hintze who has requested us to make arrangements for the repayment of several loans made by her to you. You were advanced the following loan: 1. $70,000 on 1 February 2012; 2. $50,000 on 9 February 2012; 3. $500,000 on 10 February 2012; 4. $85,000 on 21 May 2014 as deposit on the purchase of 1/45 Ethel Street Seaforth; 5. $25,000 on advance to you in consideration for your undertaking that you maintain the appearance of her gravesite after her death. This agreement is now abandoned as alternative arrangements are to be put into place. We note that you have repaid $8,000 during the period of February to April. The balance, therefore, is $17,000. We now require payment of these monies, in total $722,000 within 30 days of the date of this letter, 10 January 2017.
On 13 February 2017 the First Defendant instructed a solicitor to send a letter in response denying that the amounts paid were loans (CB 130-132).

Gift or loan

It is useful to repeat the oft-cited words of McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-9, cautioning generally about the reliability of oral evidence: Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, 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. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712.
Further, as observed by Hammerschlag J in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451: Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.
It is however uncontroversial that post-contractual conduct is admissible to determine whether a contract exists between the parties: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 547-548 per Gleeson CJ (Hope and Mahoney JJA agreeing); Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25] per Heydon JA; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [103] per Giles JA (Hodgson and Campbell JJA agreeing); Johnston v Brightstars Holding Co Pty Ltd [2014] NSWCA 150 at [121] per Basten JA (Gleeson JA agreeing).
More broadly in South Australia v Commonwealth (1962) 108 CLR 130 at 154; [1962] HCA 10 Windeyer J observed: An agreement deliberately entered into and by which both parties intend themselves to be bound may yet not be an agreement that the courts will enforce. The circumstances may show that they did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts. The status of the parties, their relationship to one another, the topics with which the agreement deals, the extent to which it is expressed to be finally definitive of their concurrence, the way in which it came into existence, these, or any one or more of them taken in the circumstances, may put the matter outside the realm of contract law.
In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352-3; [1982] HCA 24 Mason J (with Stephen and Wilson JJ agreeing) said: It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
In Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 McHugh JA observed (at 336-7): Although Lewis v Brass seems to have escaped both criticism and overruling, I do not think that it can now be accepted as authority for the proposition that a subjective intention to contract is a necessary element in the formation of a contract. The weight of authority in favour of the objective theory is too great. But the decision is consistent with what I think is clearly the Anglo-Australian law, namely, that an intention to create a legally enforceable contract is a necessary element in the formation of a contract: see Cheshire & Fifoot, Law of Contract, 4th Aust ed (1981) at 92. Nor does the rejection of the subjective element in Lewis v Brass mean that the intention to create an enforceable contract can only be deduced from the terms of the document when a document has "integrated" the parties' negotiations and discussions. Thus a party may show that a document, which to all outward appearances constitutes a contract, is subject to a condition precedent. … Moreover, the court is entitled to look beyond the promissory words to the relationship of the parties for the purpose of determining whether they intended to create a legally enforceable contract. In Balfour v Balfour [1919] 2 KB 571 and Cohen v Cohen (1929) 42 CLR 91 it was held that agreements made between husband and wife were not legally enforceable. … The intention to create a legally binding contract although a matter to be proved objectively, may, nevertheless, in my opinion, be proved by what the parties said and did as well as by what they wrote. The intention may be proved in that way even in a case where the document is intended to comprise all the terms of their bargain. This is because the intention to be bound is a jural act separate and distinct from the terms of their bargain.

Failure to complain or react

It is well established that remaining silent when speech could have been expected, or failing to raise a matter in correspondence where the relationship between the parties is such that a particular reply might be expected, may amount to an admission, and is at least relevant evidence: Young v Tibbits (1912) 14 CLR 114 at 121-2 (Griffith CJ) and 128-9 (Barton J); [1912] HCA 23; Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 143 (Rich, Dixon, Evatt and McTiernan JJ); [1935] HCA 71; L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 at 230 (Gibbs CJ); [1981] HCA 59; Thomas v Hollier (1984) 156 CLR 152 at 157 (Gibbs CJ); [1984] HCA 35.
A failure to complain regarding breach after becoming aware of the true facts may enable the court to infer that the conduct was not relied on: Jones v Acfold Investments Pty Ltd (1985) 6 FCR 512 at 521-2 Sheppard, Morling and Spender JJ.
A failure to complain may adversely affect the credibility of a witness: see, for example, the decision of the NSW Court of Appeal in Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176 at [85] (per Heydon JA as his Honour then was): There were other grounds for the trial judge's conclusions about Mr Slattery's credibility. In many places he did appear argumentative, evasive and prone to volunteer material not responsive to the question. Under cross-examination he sometimes gave potentially important evidence which would appropriately have appeared in his affidavits if it proceeded from genuine recollection. Mr Slattery also appeared to lack genuine recollection in other respects and to be defensive about answering without first having access to whatever document might help. In addition, there was a substantial lack of credibility in his assigning to the cinema centre and food court representations, whatever the detail of what was said, a central role in view of his years of failure to complain about non-compliance with them despite the many occasions on which it would have been appropriate to - not only 23 February 1993 (after Mr Slattery noticed disparities between the letter of offer and Mr Levin's representations), not only occasions when LLPM's pre-contractual and contractual documentation ought to have stimulated some statement about the representations, but also the many post-contractual occasions when Mr Slattery was remonstrating with LLPM about what he saw as its role in the losses which the shop was suffering.
A failure to complain may also be relevant for the element of reliance in estoppel, or the adoption of the relevant assumption: see Civoken Pty Ltd v Madden Grove Developments Pty Ltd [2006] VSC 283 per Whelan J.
Finally, in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 the High Court considered inter alia the relevance of a failure to complain in relation to contractual breaches (in relation to repudiation). Gleeson CJ, Gummow, Heydon and Crennan JJ observed (at [67]): The legal significance of the conduct of the Koompahtoo representatives on the Management Committee, in not complaining about Sanpine's failure to adhere to the requirements of the Agreement, and in acquiescing in some aspects of the failure, is said to be, as held by Giles JA, that it is a circumstance which tends against a finding that Sanpine evinced an intention to perform the Agreement only in a manner that suited it and in no other way...

Unconscionable conduct

In Blomley v Ryan (1956) 99 CLR 362 at 428-9; [1956] HCA 81, 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 also said (citations omitted): 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.
See also the judgment of Latham CJ in Johnson v Buttress (1936) 56 CLR 113 at 120; [1936] HCA 41, noting that evidence of independent legal advice as "one means, and the most obvious means, of helping to establish that the gift was the result of the free exercise of independent will; and the absence of such advice, even if not sufficient in itself to invalidate the transaction, would plainly be a most important factor in determining whether the gift was in fact the result of a free and genuine exercise of the will of the donor".
In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474-5; [1983] HCA 14 ("Amadio"), 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".
The distinction between unconscionable conduct and undue influence reinforced by Deane J in Amadio was also affirmed by Brennan J in Louth v Diprose (1992) 175 CLR 621 at 626-7; [1992] HCA 61 ("Louth v Diprose") (citations omitted): The jurisdiction of equity to set aside gifts procured by unconscionable conduct ordinarily arises from the concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-à-vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest. A similar jurisdiction exists to set aside gifts procured by undue influence. In Commercial Bank of Australia Ltd v Amadio, Mason J distinguished unconscionable conduct from undue influence in these terms: "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." Deane J identified the difference in the nature of the two jurisdictions: "Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party … 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." Although the two jurisdictions are distinct, they both depend upon the effect of influence (presumed or actual) improperly brought to bear by one party to a relationship on the mind of the other whereby the other disposes of his property.
In Louth v Diprose, Brennan J also examined the question of finding unconscionable conduct within the context of the giving of a gift from a donor to a donee, at 630-1 (citations omitted): Equity intervenes "whenever one party to a transaction is at a special disadvantage in dealing with the other party ... and the other party unconscientiously takes advantage of the opportunity thus placed in his hands". Citing this passage in Amadio, Dawson J said: "What is necessary for the application of the principle is exploitation by one party of another's position of disadvantage in such a manner that the former could not in good conscience retain the benefit of the bargain." What his Honour said of a bargain can be said equally of a gift. … When a donor who stands in a relationship of special disadvantage vis-à-vis a donee makes a substantial gift to the donee, slight evidence may be sufficient to show that the gift has been procured by unconscionable conduct. Whether that finding should be made depends on the circumstances. In Watkins v Combes, Isaacs J said: "It is not the law, as I understand it, that the mere fact that one party to a transaction who is of full age and apparent competency reposed confidence in, or was subject to the influence of, the other party is sufficient to cast upon the latter the onus of demonstrating the validity of the transaction. Observations which go to that extent are too broad." But where it is proved that a donor stood in a specially disadvantageous relationship with a donee, that the donee exploited the disadvantage and that the donor thereafter made a substantial gift to the donee, an inference may, and often should, be drawn that the exploitation was the effective cause of the gift. The drawing of that inference, however, depends on the whole of the circumstances.
In Louth v Diprose Mason CJ concluded at 626 (emphasis added): I agree also with his Honour's conclusion that, viewed from the respondent's perspective, it was an improvident transaction; indeed, it was so improvident, judged in the light of the respondent's financial position, that it is explicable only on the footing that he was so emotionally dependent upon, and influenced by, the appellant as to disregard entirely his own interests. By dishonestly manufacturing an atmosphere of crisis with respect to the house, the appellant played upon the respondent's susceptibility where she was concerned. Her conduct was unconscionable in that it was dishonest and was calculated to induce, and in fact induced, him to enter into a transaction which was improvident and conferred a great benefit upon her.
Likewise in this case Deane J said at 638 (citations omitted) (emphasis added): In these circumstances, the learned trial judge's conclusion that the appellant had been guilty of unconscionable conduct in procuring and retaining the gift of $59,206.55 was not only open to him. In the context of his Honour's findings of fact, it was inevitable and plainly correct. On those findings, the case was not simply one in which the respondent had, under the influence of his love for, or infatuation with, the appellant, made an imprudent gift in her favour. The case was one in which the appellant deliberately used that love or infatuation and her own deceit to create a situation in which she could unconscientiously manipulate the respondent to part with a large proportion of his property. The intervention of equity is not merely to relieve the plaintiff from the consequences of his own foolishness. It is to prevent his victimization.
In Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66 Gaudron, Gummow and Kirby JJ said at 479 (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.
In McCulloch v Fern [2001] NSWSC 406, Palmer J observed at [69]: The circumstances by which a party may be placed at a special disadvantage in the ability to conserve his or her own interest are as infinitely various as human relationships: Commercial Bank of Australia Ltd v Amadio (supra) at 461, 474; Garcia v National Australia Bank Ltd (1998) 72 ALJR 1243, at 1249. What is necessary for the intervention of equity is exploitation by one party of another's position of special disadvantage in such a manner that the former cannot, in good conscience, retain the benefit of the bargain: Commercial Bank of Australia Ltd v Amadio (supra) at 489. The doctrine applies just as much to a gift as to a commercial transaction: Louth v Diprose (supra) at 630.
The New South Wales Court of Appeal in Australia and New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344 has observed at paragraphs [45]-[46]: In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, Mason J identified a significant distinction between a claim that a transaction should not be enforced because it has been induced by "undue influence" and one which should not be enforced because of "unconscionable conduct". His Honour stated (at 461) after reference to a number of bases upon which equity might decline to enforce a transaction: "But relief on the ground on 'unconscionable conduct' is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage … Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. 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." As was noted in the joint judgment of Gaudron, Gummow and Kirby JJ in Bridgewater v Leahy (1998) 194 CLR 457 at [73] despite the overlap between these concepts, there is danger in failing to attend to the "conceptual and practical distinctions between them". But it may be noted that the matters which must be considered under each will fall into three broad categories, namely: (a) those affecting the status, characteristics or situation of the party seeking to resist enforcement of the document or transaction; (b) factors relating to the position of the enforcing party, and (c) the conduct of the one with respect to the other.
In Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25 French CJ, Hayne, Crennan, Kiefel, Bell, Gageler and Keane JJ said at [122] (citations omitted): In Jenyns v Public Curator (Qld) Dixon CJ, McTiernan and Kitto JJ explained that the invocation of equitable doctrines, such as those concerned with the conscience of a party to a transaction, in order to impugn that transaction: "calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case': The Juliana."
Their Honours also observed at [144] (citations omitted) (emphasis added): It is pertinent to note here the observations by Dawson, Gaudron and McHugh JJ in Louth v Diprose that proof of the interplay of a dominant and subordinate position in a personal relationship depends, "in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties". Their Honours observed that findings by a trial judge, "which were substantially dependent on the trial judge's assessment of character and credit and which were reached having regard to the demeanour of the parties in the witness box … are findings which, unless some error is to be discerned, an appeal court must respect."
In Thorne v Kennedy (2017) 91 ALJR 1260; [2017] HCA 49 ("Thorne v Kennedy"), Kiefel CJ, Bell, Gageler, Keane and Edelman JJ observed at [37]-[40] (citations omitted) (emphasis added): 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. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1), the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct. 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.
Their Honours further observed at [64]: The Full Court recognised that Ms Thorne was labouring under a disadvantage, although the Court did not add the adjective "special", which, as Mason J in Commercial Bank of Australia Ltd v Amadio explained, is used to emphasise that the disadvantage is not a mere difference in the bargaining power but requires an inability for a person to make a judgment as to his or her own best interests. The findings by the primary judge that Ms Thorne was subject to undue influence - powerless, with what she saw as no choice but to enter the agreements - point inevitably to the conclusion that she was subject to a special disadvantage in her entry into the agreements.

Undue influence

In Brown v The NSW Trustee & Guardian [2011] NSWSC 1203 Brereton J observed with respect to undue influence at [46]: To establish such a relationship, more than mere confidence and reciprocal influence is required. For a relationship to be brought within the doctrine, it must go beyond one of mere confidence and influence to one involving dominion or ascendancy by one over the will of the other and, correlatively, dependence and subjection on the part of the other. It is not necessary to establish a relationship of actual dominion by one party over another, and it is enough to show that the party in whom trust and confidence is reposed is in a position to exert influence over the party who reposes it. But more is required than the influence that any person might have on another by making a recommendation or giving advice; as a minimum, it is necessary that one have some element of authority or superiority - which may be moral or practical, as distinct from legal - over the other.
With respect to the distinct but related doctrine of undue influence again Kiefel CJ, Bell, Gageler, Keane and Edelman JJ observed in Thorne v Kennedy at [30]-[36] (citations omitted) (emphasis added): In Allcard v Skinner, Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper. In 1836, in a passage which was copied verbatim by Snell thirty years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person "has no free will, but stands in vinculis [in chains]". He explained that "the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him". In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of "free agency". In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a "free agent". In Johnson v Buttress, Dixon J described how undue influence could arise from the "deliberate contrivance" of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a "free act". And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a "free and well-understood act" and Williams J referred to "the free exercise of the respondent's will". The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another. An example which illustrates the characterisation by a court of a lack of free will sufficient to amount to undue influence is the decision of this Court in Johnson v Buttress. In that case, Mr Buttress was a 67 year old man, who was "wholly illiterate, not very intelligent, and of little or no experience or capacity in business". He made a voluntary transfer of land to a relative of his wife. The land was his only property and his only means of livelihood. When he made the transfer he did not understand that he had parted with the land irrevocably. After Mr Buttress died, the administrator of his estate brought an application to set aside the transfer. The trial judge set aside the transfer on the basis of undue influence. This decision was upheld in this Court. Although other members of the Court relied upon a presumption of undue influence, which is considered below, one member of the Court, Starke J, concluded that it was open to the trial judge to find that undue influence arose without any presumption. His Honour upheld the conclusion of the trial judge that the circumstances of the transfer invited the inference that it was "not the result of the free and deliberate judgment of the deceased". There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction. That was the approach relied upon by the primary judge in this case. Another way in which undue influence can be proved is by presumption. This presumption was relied upon by Ms Thorne in this Court as an alternative. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists. Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a "substantial benefit" to another, which cannot be explained by "ordinary motives", or "is not readily explicable by the relationship of the parties". Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust. In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will. Ms Thorne submitted that she was entitled to the benefit of a presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attaches. This submission was concerned with a presumption of undue influence (that a transaction was the result of a lack of free will) and not with the different doctrine concerning the possibility of an abuse of confidence in any relationship of intimacy. The submission should not be accepted. Although the relationship of fiancé and fiancée was first seen as falling within the recognised categories by Lord Langdale MR in 1848, and although it was also recognised in this Court by Dixon J in 1936 and 1939, in 1961 in England Lord Evershed MR refused to apply the established presumption, saying that "this is 1961 and what might have been said of the position, independence, and the like, of women in 1848 would have to be seriously qualified to-day". In 1992 in Louth v Diprose Brennan J observed that it "may no longer be right to presume that a substantial gift made by a woman to her fiancé has been procured by undue influence". Common experience today of the wide variety of circumstances in which two people can become engaged to marry negates any conclusion that a relationship of fiancé and fiancée should give rise to a presumption that either person substantially subordinates his or her free will to the other.
Their Honours also observed at [42]-[43] (citations omitted): In Kakavas v Crown Melbourne Ltd, quoting with approval from the judgment of Dawson, Gaudron and McHugh JJ in Louth v Diprose, this Court described how the "proof of the interplay of a dominant and subordinate position in a personal relationship depends, 'in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties'". As Rich J said, in the context of a claim to set aside a transaction, the advantage of the trial judge "of seeing the parties and estimating their characters and capacities is immeasurable". These matters led Toohey J, in Louth v Diprose, to say that the "formidable obstacles" involved in an attack on findings of fact by a trial judge "may be enhanced where issues of undue influence and unconscionability are involved". Related to the fact finding advantage of the trial judge is the evaluative nature of the judgment involved in determining whether the vitiating factors have been established. For example, in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person's will has been subordinated to another's is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Qld) which emphasised how the application of these equitable principles: calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: "A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case."
Their Honours further observed at [60]: In the particular context of pre-nuptial and post-nuptial agreements, some of the factors which may have prominence include the following: (i) whether the agreement was offered on a basis that it was not subject to negotiation; (ii) the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement; (iii) whether there was any time for careful reflection; (iv) the nature of the parties' relationship; (v) the relative financial positions of the parties; and (vi) the independent advice that was received and whether there was time to reflect on that advice.

Gift or loan

The Plaintiff's case is that in 2012 and 2014 the Defendants requested she advance certain monies to them for the purposes of acquiring various properties and that there was an agreement these monies were an interest-free loan to be repaid upon demand by the Plaintiff (Submissions [9-[20]; Closing Submissions [3]-[14]).
For example the Plaintiff asserts the First Defendant said to her "I don't suppose we could borrow some money from you?" and she replied "I can lend it to you interest-free as long as you give it back when I ask" (Closing Submissions [6]). The Plaintiff submits these loans were given to the Defendants because she trusted the First Defendant, she had no relatives and few other friends at the time and relied upon the First Defendant for company and support (Submissions [16]).
The Plaintiff accepts there is no written loan agreement and the Plaintiff did not seek legal or other advice prior to making the loans because she trusted the First Defendant and did not want to offend the Defendants (Submissions [21], Closing Submissions [15]). Notwithstanding the absence of a written loan agreement, the Plaintiff submits there is a strong inference that the monies were advanced by way of a loan (Submissions [22]-[30], Closing Submissions [33]-[42]): 1. The Plaintiff had on other occasions made loans to her friends without requiring a written loan agreement; 2. The Plaintiff recorded the monies as a loan in her November 2015 will; and 3. The Plaintiff forwarded a handwritten letter of demand to the Defendants which the First Defendant says she received on 28 July 2016. There is no evidence of a reply to this letter, which the Plaintiff submits is entirely inconsistent with the case the monies were a gift.
In addition, the Plaintiff submits she was vigorously cross-examined in relation to her evidence as to the provision of a loan and maintained at all times that the monies were provided as a loan, including because she thought the money was not hers but that of her husband (Closing Submissions [19]). By contrast she submits the Defendants' evidence that she said to them "I will buy you a unit" or "I will buy it for you" is ambiguous, unsatisfactory and ought not be accepted (Closing Submissions [16]-[32]).

Unjust enrichment

In the alternative, the Plaintiff alleges by reason of the Defendants' total failure to repay the loan monies, the Defendants have been unjustly enriched at the expense of the Plaintiff such that, in the circumstances, the Defendants are liable to the Plaintiff in restitution (Submissions [30], Closing Submissions [43]).

Undue influence and unconscionable conduct

The Plaintiff further submits in the alternative that if the monies were provided by way of gifts, they are liable to be set aside on the grounds of undue influence or unconscionable conduct (Submissions [32]-[36] and [39]-[46], Closing Submissions [44]-[48]).
The Plaintiff submits there are various factors that establish her special disadvantage as against (if not both) the First or Second Defendants (Submissions [37], Closing Submissions [49]-[64]): 1. The Plaintiff was an elderly lady at the time of the relevant transactions; 2. There is evidence of a clear long term and close friendship between the Plaintiff and the First Defendant especially after the Plaintiff's husband died and she was grieving his loss; 3. The Plaintiff lacked close family and other emotional support; 4. The Plaintiff was emotionally vulnerable and grief-stricken following the death of her husband; and 5. The Plaintiff was substantially wealthy.
The Plaintiff asserts both Defendants knew of these circumstances so as to be in a position to unconscientiously seek to procure an advantage (Submissions [38], Closing Submissions [65]-[74]).
With respect to unconscionable conduct, the Plaintiff submits there was an absence of reasonable equality between the Plaintiff and the Defendants in the circumstances in which the monies were provided. For example the First Defendant told the Plaintiff that their Beacon Hill premises were noisy and they could no longer live there, and neither Defendants told the Plaintiff she should see a lawyer in relation to the monies (Closing Submissions [75]-[90]). In addition the Defendants acted unconscionably by seeking to retain the monies when it became clear to them in July 2016 the Plaintiff considered at least $618,000 of the monies were a loan and she required repayment (Closing Submissions [91]-[97]).
With respect to undue influence, the Plaintiff submits the First Defendant was in a position of ascendancy or influence and the Plaintiff was in a corresponding position of dependency or trust (Closing Submissions [98]-[103]).

Gift or loan

The Defendants' case is that there was no oral loan agreement because first, they deny they ever agreed to repay the moneys provided by the Plaintiff and secondly, in the alternative, there was never an intention to create legal relations (Submissions [81]-[82]).
The Defendants submit there are a number of reasons why the Plaintiff's submission that there was a loan agreement should be rejected (Submissions [83]-[100], Closing Submissions [92]-[115]): 1. The evidence adduced by the Plaintiff is unreliable and relies on two conversations; 2. The only contemporaneous documents (the February 2012, May 2012 and 2014 wills) are inconsistent with the Plaintiff's allegation that she made a loan. It is not likely the Plaintiff overlooked the monies in making these wills; 3. The absence of any significant bequest to the First Defendant in the February 2012, May 2012 and 2014 wills is consistent with the Plaintiff making an inter vivos gift to the First Defendant; 4. It is implausible the Defendants would have agreed to a loan on the terms suggested by the Plaintiff, including that the loan be repayable on demand; 5. The Plaintiff was well able to afford a gift to the Defendants; 6. A finding that the Plaintiff made a gift is consistent with the Plaintiff's relationship with the First Defendant and generous nature; and 7. The Defendants' subsequent conduct is consistent with them holding the belief that the money the Plaintiff provided was a gift. For example the Second Defendant told his sister that she did not need to repay the full amount he had loaned her.
The Defendants also submit that the Plaintiff's loan to Mr Davis is not comparable. Further they suggest that the reference to a loan in the Plaintiff's letter of demand in 2016 and November 2015 will are not contemporaneous documents and do not establish the monies were given as a loan (Submissions [101]-[105], Closing Submissions [116]-[122]).
The Defendants assert there are four reasons why there was no further intention to create legal relations (Submissions [106]-[115], Closing Submissions [123]-[132]): 1. The close relationship between the parties as close friends; 2. The alleged agreement is expressed in vague and uncertain terms; 3. There was no time specified for repayment; and 4. The extreme informality of the arrangement with no parties seeking legal advice or recording anything in writing.

Unjust enrichment

The Defendants submit the claim in unjust enrichment is superfluous, with the defence of change of position meaning that the Plaintiff is not entitled to establish a claim in restitution or unjust enrichment (Submissions [116]-[126], Closing Submissions [133]-[143]).

Undue influence and unconscionable conduct

With respect to undue influence, the Defendants deny that the Plaintiff was the weaker party such that her will was overborne, nor were the transactions improvident, and in any event the defence of laches is applicable (Submissions [127]-[128]). The relationship between the Plaintiff and the Defendants does not fall into any of the established categories of undue influence and a confidential friendship is not enough to establish a special relationship of influence (Closing Submissions [144]-[155]). Further, on the facts there is no evidence that the Plaintiff by her age or social isolation was dependent personally or financially upon the Defendants. The Plaintiff did not have a subservient position in her relationship with the First Defendant (Submissions [129]-[142], Closing Submissions [156]-[177]).
Even if there was a relationship of undue influence the Defendants submit the transaction was not improvident on the basis of the Plaintiff's wealth, lack of need for funds, genuine altruistic nature, close relationship with the First Defendant and desire to help her (Submissions [143]-[145], Closing Submissions [179]-[181]). The Plaintiff had no mental impairment and exercised her free will and therefore the presumption of undue influence is rebutted (Submissions [146]-[148], Closing Submissions [182]-[184]).
The Defendants submit in the bringing of proceedings and the Defendants' change in position during this time establishes the defence of laches to the claim in undue influence (Submissions [149]-[155], Closing Submissions [185]-[191]).
With respect to unconscionable conduct, the Defendants deny the Plaintiff suffered from any special disability nor did they take advantage of any such disability, and finally the defence of laches is likewise applicable (Submissions [156]-[157], Closing Submissions [192]-[198]). The Defendants suggest that the Plaintiff's age did not put her in any position of disadvantage, nor was she socially isolated, nor was she poor or suffering from a lack of care, and there is no aspect of her relationship with the First Defendant to place her at a special disadvantage (Submissions [158]-[165], Closing Submissions [199]-[201]). Even if she suffered from a special disadvantage the Defendants did not take advantage of any special disability and further the defence of laches operates (Submissions [166]-[172], Closing Submissions [202]-[207]).

Evidence

In closing the Defendants also criticise the Plaintiff as an unreliable witness who was firm in her views but had a lack of grasp for detail and a poor memory, highlighting a number of errors in evidence (Closing Submissions [8]-[12]). The Defendants also draw attention to the evidence of Mr Charles McCooe who expressed the view that the Plaintiff was competent to sign her wills and not subject to pressure from the First Defendant (Closing Submissions [20]).

The Plaintiff

The Plaintiff swore two affidavits on 14 March 2018 and 18 June 2018.
The Plaintiff outlined in her first affidavit (14 March 2018) that she was born on 27 April 1929 and is currently 89 years of age. She married her husband on 12 December 1958 and her adult life revolved around her husband and her work as a nurse. The couple kept mostly to themselves and did not socialise or go out much.
The Plaintiff's husband had an interest in property investment and bought and sold a number of investment properties over the years. Their home was at 2/11 Laurence Street Manly NSW 2095.
The year after the couple bought their home, the Plaintiff's husband purchased the adjoining downstairs dwelling 1/11 Laurence Street Manly.
The Plaintiff's husband died on 28 May 2010. Upon his death the Plaintiff became the sole owner of their home and 1/11 Laurence Street Manly. The 1/11 Laurence Street Manly property has been let to Mr Davis for the last twelve years. Her husband's will specified that his two investment properties at 23/91 West Esplanade Manly and 18/5 Wentworth Street Manly were to be sold and the proceeds to be given to the Plaintiff. The Plaintiff used the sale proceeds to purchase two more investment properties in Sydney Road Balgowlah and Ocean Street Narrabeen which are both tenanted.
The Plaintiff had worked as a registered nurse for most of her working life retiring not long after her husband's death in 2010. In early 1987 she started working at the War Veterans Nursing Home where she usually worked with the First Defendant. Their relationship was initially professional in nature.
After the Plaintiff left the War Veterans Nursing Home in 1994, she kept in touch with the First Defendant perhaps once a month or so between 1994 and 2010. The First Defendant did not have a car and her husband apparently did not let her use his. The Plaintiff would pick the First Defendant up and they would go to nursing seminars together. The Plaintiff felt the First Defendant "had not fully assimilated into the ways of life in Australia".
After the death of the Plaintiff's husband the First Defendant was very good to her and the Plaintiff would call her every night at around 9:00pm to talk. In 2010 and 2011, the Plaintiff took the Defendants on two cruises and paid for them as she wanted the company.
In early 2012, the Plaintiff asserted the First Defendant said to her that they really wanted to move out of their property or build extensions which she believes was in Beacon Hill. The Plaintiff asserted the First Defendant asked if she could borrow some money from her, and the Plaintiff replied "All right, I don't suppose I need the money at the moment. I can lend it to you interest-free as long as you give it back when I ask".
The Plaintiff then wrote out three cheques, one on 1 February 2012 for $70,000, one on 9 February 2012 for $50,000 and one on 10 February 2012 for $500,000. The Plaintiff believed these three cheques were to be used by the Defendants to pay out the Second Defendant's sister to acquire full ownership of the Beacon Hill property and for the extensions that were proposed.
On 12 August 2012 the Plaintiff granted enduring power of attorney to the First Defendant. She asserted during the next two years she saw the First Defendant on occasions and introduced her to the Garvin Institute
The Plaintiff asserted in early May 2014 the First Defendant told her "[w]e have found a fantastic place to buy in Seaforth. It's still not working out at Beacon Hill". The Plaintiff stated she believed the property the First Defendant was talking about was 1/45 Ethel Street Seaforth. The Plaintiff asserted the First Defendant said to her "[i]n hindsight, I regret this from a money point of view. I don't suppose you could lend us the 10% deposit?" The Plaintiff stated she replied "[w]ell, yes, I can lend it to you that like before". On 21 May 2014 she wrote a cheque to cash to the First Defendant in the amount of $85,000.
At that time she did not recall the Plaintiff asserted she gave the First Defendant $25,000 for her to arrange the Plaintiff's funeral and gravesite.
The Plaintiff expected the First Defendant to keep her company, care for her and be a trustworthy companion. The First Defendant had not contacted her since late 2016 and such a relationship is no longer possible. The Plaintiff has had no contact with the Defendants since late 2016.
She did not get anything in writing about the loan or independent legal advice at the time. This was because she honestly believed it was unnecessary and would have offended the Defendants.
The Plaintiff's second affidavit (18 June 2018) is largely responsive to the Defendants' affidavits. The Plaintiff denied various factual allegations made by the Defendants and expressly denied the Defendants' accounts of conversations that purported to say the Plaintiff ever said "I will buy you a unit". The Plaintiff did not recall every receiving a card from the Defendants referring to a "magnanimous gift" and stated it was always her understanding that the monies were provided as a loan not a gift.
In cross-examination it was put to the Plaintiff that she felt the First Defendant had not fully assimilated into the way of life in Australia. The Plaintiff said the First Defendant did not seem to go out to lunches and meetings like her friends (T16/23-26). The Plaintiff accepted the First Defendant did not drive a car and that sometimes the Plaintiff would drive her to nursing seminars (T16/42-46).
The Plaintiff admitted she introduced the First Defendant to Mr Charles McCooe (T17/17-19) and took her on cruises with her (T17/21-22) and to functions at the Garvan Institute (T18/19-26).
The Plaintiff denied she relied upon any housekeepers, and asserted she drove herself, did her own shopping and arranged her own food (T20/1-19).
The Plaintiff admitted she sold two investment apartments after the death of her husband but said most of the money went to charity (T21/42-50). She accepted however she did not have any records of this but when pressed asserted "I just gave it away, I didn't need it" (T22/1-8).
When cross-examined on whether it was true that she had well over a million dollars of shares in 30 June 2011 as evident on her 2011 tax return the Plaintiff asserted she does not worry about money as she has enough to live on (T23/1-3).
The Plaintiff accepted that the First Defendant had told her she wanted to move out of the Beacon Hill Property and accepted she was happy to help her at that time (T23/39-47). The Plaintiff admitted she had experience in buying properties (T23/49-50). The Plaintiff said the First Defendant had helped her when her husband was sick and it was a way of repaying her (T24/24-28). She denied she told the First Defendant she would buy an apartment for her and that she would never have to repay the money (T24/39-50).
When cross-examined on whether the money given to the First Defendant was a gift the Plaintiff asserted it was a loan and accepted it was one which she could ask for back at any time (T25/1-17). She could not remember whether she helped the First Defendant by showing her advertisements for apartments (T25/22-24).
The Plaintiff accepted she gave the First Defendant cheques but asserted "[y]ou certainly don't give money away when you never see a person again" (T26/31-32). When pressed that it was from the time of the breakdown of their friendship that the Plaintiff considered the money a loan she said it was always a loan never a gift (T26/39-40). She admitted the First Defendant thanked her and the Defendants sent her a thank you card and accepted that the card thanked her for her "magnanimous gift" (T27/5-26). She however accepted she did not want to remember her relationship with the First Defendant (T27/19-20).
The Plaintiff denied she ever knew the Defendants had moved into their first apartment in Seaforth (T29/13-19). She asserted she only knew about one apartment (T29/20-48). However she did later accept her May 2012 will did refer to the First Seaforth Property at 4/39 Ethel Street Seaforth (T33/6-8) (see also CB 181).
The Plaintiff accepted that on 9 February 2012 she deposited $50,000 to her account not to the First Defendant's account and stated "well I must have needed the cash for something. I don't know what I did with the money" (T31/3-25). When cross-examined on a discrepancy in dates between 2012 and 2014 and asked whether her memory on dates is unreliable the Plaintiff said "I've never had trouble before. I don't look back" (T31/31-T32/2).
When cross-examined on whether she could not remember what she had intended in 2012, the Plaintiff replied she was not thinking about it and had not thought about it (T34/38-39). She accepted she could not remember what she had told the First Defendant with respect to the First Defendant buying the Second Seaforth property but said she loaned her the deposit (T35/23-28).
The Plaintiff accepted she had decided to forgive her loan to Mr Davis (T36/14-16) and had intended to gift her property to Mr Davis (T36/47-48). When it was put to her that she left no gift to the First Defendant in the 2014 will the Plaintiff stated "[w]ell, I loaned her the money" (T37/30-33).
The Plaintiff said she could not remember whether she had $3,000,000 in cash at July 2014 as evident on her 2014 tax returns and bank accounts nor the value of the Tallinn Investments company as she left it to her accountant and did not know anything about the share market (T39/19-T40/21).
The Plaintiff could not remember whether the Defendants went to assist their family and earthquake victims in 2015 but accepted she probably missed the First Defendant's company while she was away (T41/7-22). She accepted that in October 2015 she was becoming increasingly close with Ms Gwen Cook and that they went on about four cruises together which she paid for (T41/24-35).
When shown her November 2015 will the Plaintiff was pressed on whether "at that time" she could not think of any money she had loaned to them and the Plaintiff replied "[a]t that time, I can't think" (T42/23-28). She did not remember saying to the First Defendant that she no longer wanted her to maintain her gravesite (T42/34-36). She could not remember how the First Defendant repaid the $25,000 for this purpose as she had "very important things to remember to keep myself alive" (T43/5-8).
When cross-examined that it was in early 2016 that the Plaintiff decided she wanted all the money back she said "it would be good to have it" (T43/49-T44/5). She accepted it was at this time she decided she wanted all of the money she had provided to the First Defendant repaid (T44/20-22).
The Plaintiff did not remember that the First Defendant called her to wish her a happy birthday on 27 April 2016 (T46/19-21). She agreed she stopped calling the First Defendant in the evening as she felt the time was up (T46/30-35). The Plaintiff was not sure whether the First Defendant had never told her it was too hard to repay the money (T47/6-11).
The Plaintiff could not recall calling the First Defendant and asking for the money back but said she felt guilty for anything regarding money because it was not her money (T47/27-33).
When cross-examined on whether she never intended to ask for the money back the Plaintiff said "[m]aybe, I don't know. When things get bad out of hand you know" (T49/1-2).

Ms Sharon Middleton

Ms Middleton swore one affidavit (28 March 2018) where she stated she was born on 4 October 1958.
She became acquainted with the Plaintiff in early 2010 when the Plaintiff's husband was a patient of Doctor Peter Purches. Ms Middleton works as a part-time medical secretary at that practice.
Ms Middleton has remained in contact with the Plaintiff since 2010 and they became good friends particularly since 2012 when the First Defendant went overseas for six weeks.
Ms Middleton explained how she first met the First Defendant in early 2011 and how the Plaintiff was concerned with her health. She described the nervous and fidgety state of the First Defendant on their first social occasion in May 2012.
In mid-2016 Ms Middleton asserted the Plaintiff said to her "Ratna doesn't take my calls anymore or want to meet with me. A few years ago, I lent her a lot of money. Now I asked for it back and she said, 'It's too hard'. She then told me she had been to a solicitor about it". The Plaintiff is asserted to have said "I was too embarrassed. I felt guilty because it was Harry's money really. He would never have lent money to her".
In cross-examination Ms Middleton accepted she is a good friend of the Plaintiff and has been for a number of years (T12/37-41). She accepted she spoke to the Plaintiff from time to time in 2011 on the telephone and went for lunch or morning tea but at that time the Plaintiff had never visited her home (T13/25-43).

Mr Craig John Davis

Mr Davis swore two affidavits (28 March 2018 and 19 June 2018).
In his first affidavit (28 March 2018) Mr Davis asserted he had known the Plaintiff for 10 years since moving into the home unit below hers which was then owned by the Plaintiff and her late husband. He works overseas regularly and the Plaintiff often comes down to chat with him and is fond of his Burmese cats.
Mr Davis stated he is aware the First Defendant was an acquaintance of the Plaintiff and may have seen her once or twice. He has never met the Second Defendant.
In mid-June 2016 Mr Davis said the Plaintiff said to him "I lent Ratna a lot of money a few years ago and now she says she can't repay it, or won't repay it". When asked why she did not sign a document about it the Plaintiff is asserted to have said "[n]o, I trusted Ratna".
On 20 October 2017 the Plaintiff appointed him as her enduring power of attorney jointly with her friend Ms Middleton.
In his second affidavit (19 June 2018) Mr Davis said he entered into an agreement with the Plaintiff in December 2011 for an interest-only loan in the amount of $800,000 enabling him to purchase an investment unit in Manly in his sole name. He has always made repayments to her of $2,000 per month since early 2012 and continues to make such monthly repayments. It was an oral agreement never reduced to writing. He has never communicated with McCooe & McCooe solicitors or any other law firm with regard to the loan.
In cross-examination Mr Davis agreed he is a good friend of the Plaintiff and has been for a number of years (T50/32-36). He accepted the Plaintiff had told him they were good friends (T51/11-12). However he said he may have only seen the First Defendant once or twice at the Plaintiff's home (T51/16-19). He accepted he is unaware of all the people who attend the Plaintiff's apartment throughout the day (T51/41-46).

Dr Peter John Purches

Dr Purches swore one affidavit (19 April 2018) and has been consulted by the Plaintiff regularly since 2010 as her general medical practitioner (not a specialist geriatrician). He attached his curriculum vitae outlining his medical experience and agreed to be bound by the Expert Witness Code. He attached his signed report dated 12 April 2018 which includes the following observations: [The Plaintiff] has been seeing me regularly in connection with her arthritic condition, hypertension, and chronic pain, and incidental illnesses since then. Over the eight years since, her medical condition has changed in that her mobility has gradually reduced, but this has been a gradual decline and she still manages to get about, and to drive. She does depend on friends and helpers with such things as non-routine medical appointments, vacations, especially cruises, as these are too difficult for her otherwise. She has been on cruises once or twice a year over the period outlined. I do not consider that her age or medical condition impairs her cognition, but she is an outgoing person who engages easily with new acquaintances, and is often over these eight years over generous with gifts. These gifts to me have included chocolates, biscuits, a medallion and other small gifts, usually after one of her cruises. I have not been privy to any of her financial dealings, but I have assumed she pays for the cruise fares for these friends and helpers.
Dr Purches was not required for cross-examination.

The First Defendant

The First Defendant swore one affidavit (4 June 2018) where she stated she was born on 20 April 1942 and outlined her early years studying as a nurse and working in Tibet before migrating to Australia with her husband in 1973.
In or around 1987 or 1988 the First Defendant started working about 3 days a week at the War Veterans Nursing Home in Collaroy where she met the Plaintiff. In about 1990 the Plaintiff left the nursing home. She would telephone the Plaintiff occasionally perhaps a few times a month and considered the Plaintiff a friend.
In 1998 the First Defendant retired for ill health, and was diagnosed with breast cancer in 2000 (which returned in 2014). After retiring the First Defendant spoke to the Plaintiff on the phone about once a week.
In January 2009 the Defendants sold their home in Curl Curl, with the plan to build a new house on the Second Defendant's sister's property and live with the sister's family. When the property was eventually sold, the First Defendant stated she understood that they would all share the proceeds of sale. During the construction of the new house the Defendants rented with the Second Defendant's sister and her family. They moved into the completed house in around December 2010.
In May 2010 the Defendants assisted the Plaintiff when her husband died and immediately after. The First Defendant and Plaintiff would speak most nights on the telephone at about 9:00pm. The First Defendant asserted the conversations would last between 30 minutes and 1 hour. Once a week on a Sunday the First Defendant would make brown rice with beans for the Plaintiff and occasionally brought her some fruit.
The First Defendant stated in about 2011 or 2012 the Plaintiff told her about a loan she had given to Mr Davis and the details of that loan.
In July 2011 the Defendants were residing with the Second Defendant's sister's family in Beacon Hill. The First Defendant expressed her displeasure about her living arrangements when the Plaintiff allegedly said "[y]ou don't have to rent. I will buy you a unit … I want to. But you will have to pay for the stamp duty and other expenses". The First Defendant asserted the Plaintiff then began pointing out advertisements for properties she had seen in Freshwater and the Defendants began to look at properties. The Defendants found a property in 4/39 Ethel Street Seaforth and they inspected the unit. The First Defendant stated the Plaintiff inspected the unit and said words to the effect "[i]f you like it, go for it".
The First Defendant outlined the two cheques of 1 February 2012 for $70,000 and 10 February 2012 for $500,000 the Plaintiff handed to her. The First Defendant stated there "was never any discussion of a loan". In or around April or May 2012 the Plaintiff stated she remembered her husband writing a card thanking the Plaintiff for the "magnanimous gift" which they both signed. She remembered when they moved in the Plaintiff sent them flowers and a card.
In or around May 2012 the First Defendant accompanied the Plaintiff to Mr McCooe's office at which time the Plaintiff made a will appointing the Defendants as executors. In or about late 2012 the First Defendant stated the Plaintiff gave her $25,000 to pay for the Plaintiff's funeral and gravesite.
In May 2014 the Defendants became aware that a unit in Seaforth was available to buy. She asserted she had a conversation where the Plaintiff said to her "[d]o you need a hand with any money … No, no you will need money for a deposit, I will pay it. I want you to get the unit". On 21 May 2014 the First Defendant asserted the Plaintiff gave her a cheque for $85,000 for the deposit. On 22 August 2014 the Defendants settled on the house. At around that time the First Defendant offered to repay the Plaintiff the $85,000 however she refused.
In early 2016 the First Defendant went overseas for 6-8 weeks and upon returning telephoned the Plaintiff to wish her a happy birthday. The First Defendant asserted the Plaintiff was abrupt and rude on the phone and the two stopped speaking to each other. The First Defendant also recounted how the Plaintiff requested her to repay the $25,000 given to her for maintaining the Plaintiff's gravesite. The First Defendant said she asked to pay $2,000 per month and the Plaintiff said "[y]es, that is fine".
The First Defendant received a handwritten letter of demand from the Plaintiff on 28 July 2016 for $618,000. At this time she stopped repaying the $2,000 instalments.
In cross-examination the First Defendant accepted that during 2012 and 2014 she and her husband had received $655,000 from the Plaintiff and this is a large sum of money (T57/24-43). The First Defendant accepted she was very close with the Plaintiff and knew that the Plaintiff trusted and relied on her (T59/1-14). However the First Defendant said "we used to rely on each other" (T59/17-18).
The First Defendant denied she knew the Plaintiff's husband had been very successful as an accountant but knew he had been an accountant for his whole life (T60/25-27). She said she was the first person to arrive at the Plaintiff's house when her husband died and knew that they had no children (T61/22-34). The First Defendant knew that the Plaintiff grieved after her husband's passing (T62/35-37).
The First Defendant denied the Plaintiff informed her that the First Defendant would look after her when she got old (T63/4-7).
The First Defendant accepted she went with the Plaintiff on a cruise because the Plaintiff had no one else to invite (T64/42-45). She accepted the Plaintiff paid for the cruises and knew she was very interested in real estate (T65/36-44). She denied she knew the Plaintiff was very wealthy (T66/1) and denied she knew the Plaintiff had access to a large amount of funds (T66/28-30). She knew the Plaintiff lent $800,000 to Mr Davis (T66/47-48).
The First Defendant denied that the Plaintiff never said "I will buy you a unit" (T68/27-28). She denied she ever asked the Plaintiff to borrow money (T68/30-31). However the First Defendant admitted the Plaintiff did not use the word gift but said she would "buy me a unit" (T69/26-33). She reiterated the Plaintiff said to her she would "buy" the unit for her (T70/34-42). She did not remember the Plaintiff using the word "gift" (T71/5-23). She said they would not have taken the money if it was a loan (T74/3-4).
The First Defendant accepted the Plaintiff greatly trusted her and knew that as the Plaintiff got older she would be hoping that the First Defendant would be there to help care for her (T77/1-6).
When cross-examined the First Defendant affirmed the Plaintiff was very abrupt and rude to her when she called her on her birthday (T78/43-48). The First Defendant denied her payments of $2,000 per month were repayments of loans to the Plaintiff, but limited only to the money she had received from the Plaintiff in relation to maintaining the gravesite (T80/13-19). She asserted she stopped paying the $2,000 repayments when she received a letter demanding repayment of monies because she was very upset (T81/3-9). She said it was the first time that she understood the Plaintiff to be of the view that the monies were a loan (T82/12-14). She was shocked when she saw reference to a loan (T82/21-23).
The First Defendant admitted she did not contact the Plaintiff upon receiving the letter demanding payment (T83/1-12). She accepted the first time a letter was ever sent to the Plaintiff stating the monies were gifts was when she instructed Spooner & Hall solicitors to send such a letter (T85/45-50).

The Second Defendant

The Second Defendant swore one affidavit (4 June 2018). He stated he was born on 21 June 1943 and outlined his early life in Tibet and India. He outlined his professional work including at Canon as an administration assistant and study including obtaining a Masters of Business Administration. The Defendant also works in promoting humanitarian awareness for Tibet to which he received the Order of Australia Medal in 2007.
He met the Plaintiff approximately 30 years ago as she was friends with his wife.
In January 2009 the Second Defendant sold the Defendants' house at 2/16 Beach Street Curl Curl for $1,100,000 intending to use the money to build a five bedroom house on his sister's property in Beacon Hill. He wished to help his sister whose daughter had died in 2007 and who suffered depression. The plan was that the two families would live on different floors of the house. The Defendants provided over $730,000 to his sister from 2009 to about 2011 to assist in construction of the Beacon Hill property.
In about December 2010 the Defendants moved into the house with his sister and her family. In about middle 2011 he decided to leave as the house was quite noisy.
The Second Defendant stated in 2011 his wife told him "Dawne told me she wants to buy us a unit". He found a property at 4/39 Ethel Street Seaforth and attended the property. He said the Plaintiff inspected the property with the Defendants before they bought it. On 30 January 2012 he withdrew $143,432 from his superfund to put it towards purchase of the property and on 1 February 2012 the Defendants received $70,000 from the Plaintiff.
On 9 February 2012 the Defendants paid a deposit of $61,800 on the property. The Second Defendant asserted in February 2012 he heard his wife having a conversation with the Plaintiff where the Plaintiff said "I might as will [sic] give you $500,000. Come and pick up the cheque". On 10 February 2012 the Defendants drove to the Plaintiff's house and the Second Defendant stated his wife returned with a cheque for $500,000.
After the Defendants moved into the property the Plaintiff sent them a big bouquet of flowers and a card wishing them well. The Second Defendant sent her a card thanking her, writing a long message which was spiritual and said word to the effect "[t]his is a magnanimous gift you have made to us". The Defendants both signed the card.
In 2014 unit 1/45 Ethel Street became open for sale and the Second Defendant said his wife said to him "Dawne thinks we should go for it" and they exchanged contracts on 22 May 2014. The day prior he said his wife had received an $85,000 cheque from the Plaintiff. After buying this property his sister sold the Beacon Hill property for $1,400,000. When this occurred the Second Defendant said to his sister "[w]hen the property sells, you don't have to repay everything we put into the property. $300,000 is enough for us". He said if he had known the money provided to them from the Plaintiff was a loan he would have insisted his sister repay the full amount of $730,000 and he would have pursued work as a consultant.
After the sale of Beacon Hill the Second Defendant discussed with his wife repaying the Plaintiff the $85,000 however his wife told him "Dawne was crying. She said you are my best friend. You don't have to do that".
From around 2010 until 2015 the Second Defendant asserted they would always celebrate Christmas and birthdays with the Plaintiff and his wife was often in the company of the Plaintiff. He asserted the money given to his wife "was only ever referred to as a gift".
The Second Defendant also outlined the various donations and charitable causes he and his wife have contributed to.
In cross-examination the Second Defendant agreed he and his wife had received $655,000 from the Plaintiff and this is a very large sum of money (T90/36-44). He asserted he was asking the court to believe and accept this was a gift from the Plaintiff (T90/46-48).
The Second Defendant accepted the Plaintiff spoke to his wife about personal matters (T91/39-40). He accepted the Plaintiff's late husband had spoken to him about his investments in property and her husband had been an accountant (T92/20-29). He denied he knew her husband had been a successful accountant (T92/34-35) and denied he knew the Plaintiff and her husband were wealthy (T92/47-48). He accepted he knew the Plaintiff and her husband owned properties (T93/4-10).
The Second Defendant accepted he knew when the Plaintiff's husband died the Plaintiff was alone with no children (T93/43-T94/2). He said he did not know whether the Plaintiff inherited her husband's estate when he died (T94/16-17).
The Second Defendant accepted his wife and the Plaintiff were very close and would speak on the telephone every night (T94/23-40). He denied his wife ever told him the Plaintiff was grieving the loss of her husband but accepted his wife told him the Plaintiff missed her late husband (T95/16-25).
The Second Defendant accepted his wife talked to the Plaintiff about them moving out of the Beacon Hill property but denied he knew his wife told the Plaintiff they wanted to move out but could not afford to (T97/8-17).
He affirmed his wife said to him (referring to the Plaintiff) "[s]he wants to buy us a unit" but denied that this money was being provided by way of loan (T97/26-38) although he could not recollect the exact term "give" (T97/47-48) and accepted the Plaintiff never told him herself that she wanted to buy them a unit (T98/13-14).
The Second Defendant asserted the Plaintiff did accompany them on an inspection to a property (T99/4-6). He denied he knew that the monies being provided to them were being provided as a loan (T99/45-47). He said he was surprised when he heard the Plaintiff say on speaker phone "I'll give you" (T100/7-17).
When cross-examined on if he ever told the Plaintiff to think before giving them the monies or suggested she should put it in writing, the Second Defendant asserted there was no occasion and if he had asked for a loan he would have asked it to be written down(T100/46-T101/2). He said he never told the Plaintiff to go see a lawyer because he had few dealings with the Plaintiff; it was between his wife and the Plaintiff (T101/13-16). He said they had no intention of taking any loan from the bank because they were debt free and it was not a requirement for them to do so (T102/3-5).
With respect to the $85,000 from the Plaintiff the Second Defendant said he did not warn the Plaintiff that she should not do so as he had not had dealings with the Plaintiff, as it was his wife dealing with the Plaintiff (T103/35-37). He denied he ever said to his wife the Plaintiff should not be doing this again or ever said to the Plaintiff she should speak to a lawyer about it (T103/35-43). He asserted he and his wife did offer to repay the $85,000 (T103/49-T104/5).
He said he "absolutely" did maintain the monies provided by the Plaintiff were by way of a gift not a loan (T104/22-24). He accepted if the money was a loan he would have done different things including seeking other employment opportunities and minimising his outlay to charitable organisations (T106/8-24).
The Second Defendant accepted he and his wife received the letter of demand from the Plaintiff in July 2016 and said his wife was absolutely shocked and that he was surprised and shocked (T106/43-T107/11). He said this was the first time that he came to know that a demand as a loan was made against them (T107/15-16). He said he had had a discussion with his wife about speaking to the Plaintiff where his wife had said there was no point ringing the Plaintiff because she would be absolutely upset and later said she would deal with it by seeking a solicitor (T107/36-38). He said he did not ever suggest to his wife to write to the Plaintiff (T107/44-45). He did not assist his wife to provide instructions to Spooner & Hall to send the letter to the Plaintiff (T108/39-41). He accepted to his knowledge this was the first time he and his wife had ever said in writing to the Plaintiff these payments were gifts (T108/49-T109/1).
The Second Defendant accepted his total assets as of 14 July 2014 would be $1.992 million (T110/46-47) and estimated his financial position as $1.6 million as of the present (T111/32-33).
In re-examination the Second Defendant accepted he had referred in writing to a "magnanimous gift" which he sent to the Plaintiff soon after he and his wife moved into the First Seaforth property (T112/1-7).

Mr Charles McCooe

Mr McCooe did not depose to any affidavits however gave oral evidence.
In examination-in-chief Mr McCooe said he was a solicitor and had acted for the Defendants in respect of three conveyancing matters that he could recall (T113/11-15).
He accepted he had also acted for the Plaintiff, including a conveyance for a purchase of a property in Narrabeen in approximately 2015 (T113/22-32). He had also acted for the Plaintiff with respect to a number of wills and in taking instructions on the wills he generally took instructions from the Plaintiff herself and as far as possible without anybody else in the room other than maybe office staff (T113/34-49).
With respect to the February 2012 will when Mr McCooe took instructions from the Plaintiff he was satisfied she was mentally competent to sign the will as "she was quite astute, quite clear headed as far as I could tell and she certainly in my observation knew what her assets were and knew how she wanted to leave them" (T114/8-18). At 2012 he had no reason to believe she was being pressured or influenced by any other person with respect to her will including by the First Defendant (T114/20-29). With respect to subsequent wills with which he assisted the Plaintiff he held the same opinion about her mental capacity and the same opinion about her not being the subject of any influence by the First Defendant (T114/34-40).
Mr McCooe said with respect to the Defendants purchasing company title property he asked them whether they were taking a loan and they said no and there was no mention of any loan from the Plaintiff at that time (T115/6-11). When he acted for the Defendants in relation to the sale of that apartment and purchase of a new apartment in 2014 the Defendants told him they borrowed some money from ANZ Bank (T115/17-18). He said in 2012 and 2014 no one told him that the Defendants had borrowed money from the Plaintiff (T115/23-25).

Gift or a loan

On the critical conversations the principal witnesses give diametrically opposed versions of events.
The Plaintiff says the First Defendant specifically asked for a loan. The First Defendant on the other hand asserts that in the context of a discussion about she and her husband's living arrangements the Plaintiff offered a gift.
Demeanour alone can be a very crude guide to determining which of two competing versions to believe. However crude, on impressions and appearances alone I formed the view that the First Defendant was the more believable witness. Whilst both were resolute in their recollection of the critical distinction in their so-called arrangement I observed the Plaintiff was somewhat argumentative and defensive. I did not get that impression with the First Defendant. Left there I would on balance favour the evidence of the Defendants as the more likely and truthful. In addition in not unimportant matters the Plaintiff's recollection was quite flawed. Of particular relevance was her flawed recollection as to the $50,000 cheque on 9 February 2012 and the First Seaforth Property. However there is much more by way of context that persuades me the Defendants' case on this issue is to be preferred.
One factor is the respective positions and precise circumstances of each the Plaintiff and the Defendants at the time of the relevant transactions.
At the time the crucial conversation took place in 2012 the Plaintiff was approximately 82 years old, extremely well-off financially, well able to afford giving approximately $600,000 away without any change in her life or lifestyle (CB 200-244). She was a generous woman intent at one stage on giving her entire estate to charity (evident for example in her 2010 will) and she was having a private conversation with her best friend about a major life event: the First Defendant selling her home and moving out of her current family living arrangements in Beacon Hill.
The Plaintiff was exceedingly generous with her friends, having no family and no children. For example Dr Purches described her as "over generous with gifts" and her various wills from 2010 onwards demonstrate a person who was happy to gift substantial amounts of money or property to her friends and give the residue of her estate to charity.
Moreover the Plaintiff was obviously experienced in the investment property market and more than capable of managing her own financial affairs. She resorted occasionally to professional assistance in relation to her finances including legal and accounting assistance. Her tax returns showed she had considerable income from investments. As stated by Mr McCooe she knew what her assets were and how she wanted to leave them (T114/8-18).
The death of the Plaintiff's husband was no doubt traumatic but she bought a further two investment properties to replace those two properties which her husband's will required be sold. The evidence is that she made all relevant decisions in relation to the two purchases. When she made each of her relevant wills (2012, 2014 and 2015) according to Mr McCooe she fully appreciated her assets and to whom she wanted them to go.
Furthermore notwithstanding the Plaintiff's age, in my view she appeared in the witness box and on the evidence, active, alert and in my view astute. For example in cross-examination she corrected counsel for the Defendants on a simple error he made in referring to "paragraph 117" instead of "page 117" (T36/36-40). This correction highlights how in general in the witness box the Plaintiff appeared to me alert and not the least intimidated by the court process, whereas many would be. Further Dr Purches' affidavit and the evidence of Mr McCooe likewise suggest that the Plaintiff enjoys a high level of cognition and mental acuity notwithstanding her age. She is also physically active and still drives her own car.
On the other hand, at the time of the crucial conversation, the First Defendant had been a nurse and she and her husband were retirees who shared the house they lived in with the Second Defendant's sister and her family in circumstances they were unhappy with. Both the Plaintiff and the First Defendant would no doubt have been aware each showed an interest in charity. Between the Plaintiff and the First Defendant, there is no doubt the Plaintiff was the astute and alert woman with experience in the investment property market, whereas the First Defendant had been a nurse and had periods of no doubt illness brought about by her breast cancer, of which the Plaintiff would undoubtedly have been aware.
The Defendants at the time were retirees who I accept although they wished to move to quieter surroundings, did not want to borrow any funds even on a short-term basis and did not want further financial burden. This is because they had no way of repaying a loan, absent sale. The First Defendant had been very ill and together she and her husband were very much concerned in Tibetan affairs and wanted to devote more time to that. I am satisfied that a mortgage or loan and with it the obligation at some unspecified time when it did not suit them to repay was simply not an option.
Although it is theoretically possible they might have been amenable to a short term bridging loan until they sold the Beacon Hill property I am satisfied they would not have even contemplated that as an option.
I am satisfied the Plaintiff must have understood therefore that it would have been exceedingly difficult if not impossible to pay back the monies on demand without causing some hardship to the Defendants. There was further no notice period or other time period specified as to when and how the monies were agreed to be repayable.
The contemporaneous documents, such as they are, do not support the notion of a loan. The first amount of money was paid over in February 2012 and there is no issue it was not accompanied by any documentation (nor was the 2014 amount of $85,000).
However in early 2012 the Second Defendant has a distinct recollection of sending a card to the Plaintiff thanking her for her "magnanimous gift". The Plaintiff does not recall receiving such a card or at least said "I have more to do with my life than remembering things I don't want to remember" (T27/16-17). However she did seem to accept that in the card the Defendants thanked her for her "magnanimous gift" (T27/35-26). I accept the evidence of the Defendants that they did send a card thanking her for the gift and that the Plaintiff in fact received this card. In that event the Plaintiff's failure immediately to disabuse the Defendants of their obvious belief is potent evidence the monies were indeed a gift.
In addition the Plaintiff made two wills in 2012 in relatively quick succession and virtually immediately after she had provided the monies to the Defendants and in neither is there mention of a loan. Again that fortifies my view as to the basis upon which the monies were provided as a gift. Even if for some reason she was diffident because of the closeness of her relationship with the First Defendant to require the execution of a loan agreement, this would not prevent her from recording the fact of a loan expressly in her will or independently in a contemporaneous note. It would be especially important for her executor(s) to know what if any amounts were loans to be recovered by her estate.
Indeed the Plaintiff did this in the case of her loan of about $800,000 to Mr Davis and recorded the amount of that loan in her wills. She recorded the loan and forgave him the balance of the loan in her February 2012 will (CB 194-196). She then changed her mind and directed in her May 2012 will that her executors were to recover from Mr Davis the balance of that loan (CB 108-111). She then changed her mind again and in her 2014 will forgave the loan to Mr Davis and also gave him the option to purchase the apartment she was living in after her death (CB 117-119). This does on one view portray a person who was somewhat fickle; on the other hand it portrays someone who regularly reviews her affairs.
All of the relevant wills were prepared by Mr McCooe her solicitor. He said he was confident the Plaintiff was alert and astute as to her assets and she knew what she wanted. With respect to these wills Mr McCooe said he had no reason to believe she was being pressured or influenced by any other person with respect to her wills including by the First Defendant (T114/20-40).
In addition the Plaintiff in her wills regularly changed the charities to which she bequeathed the residue of her estate and the precise percentage contributions to each. As an example in her 2010 will WIRES received 18% of the residue of her estate (CB 191), then 20% in her May 2012 will (CB 109) and then 10% in her 2014 and 2015 wills (CB 117, 185 and 197). Likewise in her 2010 will Wesley Mission received 5% of the residue of her estate (CB 191), then 20% in her May 2012 will (CB 109) and then 15% in her 2014 and 2015 wills (CB 118, 185 and 198). It was only in her 2015 wills that the Plaintiff bequeathed a percentage to Alzheimer's Australia (CB 186 and 198). These percentages on the evidence account for considerable sums of money.
Given the proximity of the gift in 2012 and the date of her two wills prepared in that year in my view I would draw the inference her decision not to record in her wills the monies as a loan was deliberate and is explained by reason of it being a gift.
In her November 2015 will only, the Plaintiff recorded: "IN LIEU of any right to claim commission I FORGIVE Ratna and Namgyel Tsering all monies loaned by me to them" (CB 184-187). This was some time after the relevant transactions in 2012 and 2014 and importantly did not refer to what amount was loaned to them. Her state of mind in 2015 is on one view equivocal but is also consistent with the monies being a gift.
It was only in her 2016 letter of demand did the Plaintiff outline the amount of monies she purported to say she had loaned to the Defendants (CB 128).
By July 2016, the Plaintiff clearly felt differently about the Defendants. She felt I am satisfied that her closest friend the First Defendant had somehow deserted her, demonstrated for example by her statement that she thought she had not heard from her friend for her birthday for a couple of years (T45/23-24). She must have felt the First Defendant was or had become ungrateful. I am satisfied that her letter of demand in July 2016 was motivated out of a fit of pique. I am prepared to accept she may have believed the Defendants should in the circumstances repay the monies not because it was a loan, but because she felt that they no longer deserved the monies. The obligation to repay was their penalty as it were for not continuing contact (although this was not put in cross-examination).
The Defendants said they were shocked by this letter. It is said their failure to respond or complain was tantamount of an admission. On the other hand, they had all (including the Plaintiff) on my findings proceeded for years on the basis of it being a gift without a word suggesting it was a loan to be repaid on demand. Out of the blue the Plaintiff claimed it was a loan to be repaid on demand. The First Defendant knew her well and believed that to have a discussion with the Plaintiff would be fruitless and upsetting.
I am inclined to accept that evidence as providing a plausible reason why neither she nor her husband responded. A failure to complain assumes that behaviour is typical or that certain consequences ought to follow as a matter of human nature. However this assumes all people are going to act in a certain way. Such an assumption can therefore only go so far, as it cannot overcome the particular facts and contexts of each case. In this particular case I am satisfied the First Defendant did not respond as she knew it would be an unproductive and upsetting exercise to respond to the letter she and her husband viewed as quite false.
The Defendants in any event did respond (via their own solicitors) to the letter sent by the Plaintiff's solicitors in 2017, and clearly chose not to respond to the letter of demand which was informal and what they saw as quite false. I also note the delay between the Plaintiff's letter of demand sent in July 2016 and the solicitors' letter in January 2017.
I note it was put by the Plaintiff that the size of the amount provided by the Plaintiff pointed to it being a loan. I do not accept this. The size of the amount is clearly an amount which has to be seen in context. In other words it is relative. The Plaintiff clearly appreciated when she parted company with the monies that she was not in need of it. It is also important to recall that apart from charities she obviously felt she had no one else she wanted to give her money to. Why not her closest friend at the time, whose life she could so generously enrich?
In my view the monies were only ever provided to the Defendants as a gift. There was no oral loan agreement or intention to enter into legally binding relations such that the Defendants or Plaintiff at the time of the relevant transactions intended to enter into a loan interest-free and repayable on demand.

Unjust enrichment

The case in unjust enrichment was not fully ventilated in argument nor was it really developed in the evidence. In my view in any event the change in position of the Defendants, including not the least of which allowing the Second Defendant's sister only to repay a part of the monies she owed to them, defeats any claim the Plaintiff may have in unjust enrichment.

Undue influence

Further I am not satisfied the Plaintiff's case should succeed under the equitable principles of undue influence or unconscionable conduct.
I am not satisfied the relationship between the Plaintiff and the First Defendant or Second Defendant is one in which a presumption of undue influence arises. Although the Plaintiff and First Defendant undoubtedly had an intimate relationship as very close friends, as observed in Thorne v Kennedy (at [35]-[36]) not even the intimate relationship between fiancé and fiancée necessarily gives rise to a presumption of undue influence. There is no presumption that should apply to close friends and the relationship between the Plaintiff and the Defendants does not fall within any set or established category in which a presumption of undue influence arises. Relationships which typically give rise to a presumption include those that typically involved fiduciary obligations such as that of doctor and patient or solicitor and client.
Further even if it did, in my view there was sufficient material to rebut the presumption of undue influence.
In my assessment of the evidence the Plaintiff has not established there was any subordination of her will to either or both of the Defendants so as to correctly characterise that person as lacking free will. To the contrary, in my evaluation the Plaintiff was indeed the stronger of the parties. She was the more financially astute and the wealthier of the parties. The Plaintiff was and is capable of managing her personal and financial affairs with the assistance of lawyers and accountants which she evidently engaged for that purpose. She is not dependent in my view physically or mentally on anyone. She is evidently self-sufficient. She does her own cooking for example and continues to drive herself around. She clearly appreciated the detail of her various assets.
I am therefore not satisfied there was any imbalance or subordination of the Plaintiff to the Defendants' will such that it is correct to characterise her decisions to provide monies to them as lacking free will. The Plaintiff was not overborne by the Defendants and her decision to provide them the monies is clearly explicable by her once close friendship to the First Defendant. I am not satisfied the Plaintiff had an inability to judge what was in her own best interests. She was neither victimised, exploited nor manipulated by the Defendants.
Furthermore as observed in Thorne v Kennedy by Kiefel CJ, Bell, Gageler, Keane and Edelman JJ at [32] in my view the facts do not establish the judgmental capacity of the Plaintiff was "markedly sub-standard" as a result of the effect on her mind of the will of either of the Defendants. It was a legitimate exercise of her free will to gift the monies to the Defendants and I am satisfied this decision came about as a result of the Plaintiff's own free will. The whole idea of a gift came spontaneously from her as I see the facts and was motivated by her desire generously to assist her friend as opposed to any undue influence on the part of the Defendants. The Defendants did not I am satisfied ask the Plaintiff to buy them a house. The money was readily available and there is no suggestion the Plaintiff had to compromise her lifestyle one bit as a result of the gift.

Unconscionable conduct

With respect to unconscionable conduct, I am not satisfied the Plaintiff suffered from any special disadvantage which seriously affected her ability to make a gift of the monies or make a judgment as to her own best interests. As I have said she was and is mentally competent, astute and reasonably healthy at the time of the relevant transactions. Whilst I do accept she did grieve for her husband and missed him after his death, I do not accept that this grief amounted to any special disability or impaired the Plaintiff in any relevant sense. I have already noted that after her husband's death the Plaintiff purchased two investment properties, demonstrating her financial awareness and interest in the investment property market. It was a further two years after her husband's death that the first amounts of monies were provided to the Defendants in 2012.
In my view there was no relevant inequality of bargaining power between the Plaintiff and either of the Defendants. As again I have said the Plaintiff was if anything in a position of ascendancy above the Defendants. I therefore do not accept that the Defendants knew or ought to have known of any special disadvantage of the Plaintiff.
In evidence she repeated how busy she was, she bought property, she went to social events and on cruises, she regularly revised her will and maintained independence over her housework. These activities suggest she had not become withdrawn or antisocial. Further there are no emails or letters in evidence which contemporaneously document some overbearing grief for the loss of her husband. There is no evidence that age or grief robbed the Plaintiff of her capacity to make worthwhile decisions. There is no contemporaneous evidence the Plaintiff ever told the Defendants she thought her asserts were truly not hers but her husband's, as on the contrary the Plaintiff showed an active interest in managing her finances and assets, as I have said by revising her will and buying property.
I am not satisfied the Defendants engaged in any emotional dominance or unconscientiously took advantage of any special disadvantage of the Plaintiff. As I have said I am satisfied that the suggestion of a gift arose spontaneously during a conversation between the Plaintiff and her best friend the First Defendant.
Furthermore in my view the Defendants were under no obligation to advise the Plaintiff at the time of the relevant transactions to obtain independent legal and/or financial advice and there is no authority to establish that. The Defendants did not hold themselves out as lawyers or accountants or even advisors of the Plaintiff. They did not stand for example in any fiduciary relationship to the Plaintiff.
Furthermore even if the Plaintiff had seen an accountant or lawyer, in my view she would have presented as a person who had no debts but substantial assets and was mentally competent. There is no reason why an advisor would stand in the way of her making a gift of the sort outlined here. She could readily afford the money and if it was her wish she was perfectly capable of gifting these sums of money to the Defendants. The advice given to her by an accountant or lawyer may be that it would be prudent to record the amounts in writing as gifts, but even this may not have been seen by the advisor as necessary given the transactions were gifts and not loans.

Conclusion

In my view the Plaintiff provided the relevant amount to the Defendants as a gift.
No question of unjust enrichment arose on the facts.
Further, and in the alternative, I am of the view that the above facts do not support a finding of undue influence or unconscionable conduct. That is, I am not satisfied the Defendants engaged in undue influence or unconscionable conduct such that they ought to be set aside. The Plaintiff was not in a position of special disadvantage or subordination and the transactions were not improvident.
In light of my above findings, I invite the parties to provide short minutes of order to reflect my reasoning.
I will also hear the parties on costs if necessary.

Amendments 03 August 2018 - paragraph [52] should read McLelland CJ in Eq 03 August 2018 - para [52] should read McClelland CJ in Eq 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: 03 August 2018

Sybil Dawne Hintze v Ratna Tsering & Anor

At a glance

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Judgment (28 paragraphs)

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Cases Cited (48)

Cited By (6)