Thelma Langford v Deva and Diane Reddy and Ors

The Background Facts 17The plaintiff was approximately 82 years of age at the date of the trial. The relevant events however occurred some ten years ago, when she was 72. 18In or about 1961 the plaintiff and her husband Mr Eric Langford purchased the property at 42 Caley Street, Chifley with the assistance of the Director of War Services Homes. 19The plaintiff and her husband had two daughters, Alison who was born in 1953 and Diane (the second defendant) who was born in 1958. 20Her husband died on 2 February 1985. The plaintiff continued to make payments on the mortgage and on 3 December 1986 she made her final mortgage payment. 21From about December 1994 the second defendant with her two children then aged 8 and 7 moved from where they had been living in Campbelltown to a caravan in the backyard of the plaintiff's property in Chifley. At or about this time the plaintiff's second daughter Alison was also living at the Chifley property with her boyfriend Moses. 22In early 1995 it is alleged that the plaintiff raised the suggestion of building a granny flat in the back yard of the Chifley property in a conversation with Diane and Alison. Alison it is asserted said that she thought the plaintiff should instead buy a bigger house. 23It is further alleged that the plaintiff inspected a house in Rosebery in February 1995 as part of her consideration of purchasing a bigger house. 24As a result of a family disagreement, Alison and Moses left the Chifley property. There is a dispute as to what caused them to leave. 25In late 1995 the second defendant commenced a relationship with the first defendant. A few months later she, along with her two children moved out of the caravan in the backyard of the Chifley property to live with him in a unit in Hillsdale. The first and second defendants married on 23 February 1996. 26In 1996 it is alleged the plaintiff began to complain that the house at Chifley was too much for her to look after. At the same time the first and second defendants allege that they visited the plaintiff on a regular basis to provide assistance to her for the maintenance and repair of the house and generally to give her assistance in day to day living. 27In about March 1996 it is alleged that the plaintiff told the first defendant that she wanted him and the second defendant to build a small house in the garden that she could use as a granny flat. The conversation, or conversations that occurred at this time are disputed and a significant issue that arose at the trial was who had initiated the conversation between the plaintiff and the defendants in relation to the building of the granny flat. 28It is alleged that the plaintiff went to the city to see her solicitor about matters but discovered her solicitor had died. She saw a younger solicitor who gave her certain advice. 29In late 1996 or early 1997 with a hand drawn plan, the first and second defendants approached Randwick Council for advice as to how they might proceed to get approval for the construction of the granny flat. In late 1997 the first and second defendants together with the second defendant's children moved into the Chifley house it is alleged at the plaintiff's invitation and commenced to pay bills and household expenses. 30In early 1998 it is alleged that as a result of some complaint from the neighbours about the state of fences the first and second defendants agreed to replace the fences at the Chifley property. Later in 1998 the first defendant alleges that he replaced the garage at the rear of the property with a prefabricated shed at his expense. 31Later a second set of plans was prepared for submission to Council following the refusal of the first application. An architect had been retained to prepare a set of plans. A development application was signed by the plaintiff and lodged with Randwick Council for approval. In 2000 Randwick Council granted development approval. 32In or about 2001 Alison moved to New Zealand with Moses where she lived for a number of years. 33In March 2001 the first and second defendants approached the Commonwealth Bank of Australia (CBA) for a loan to assist with the construction of the granny flat. They were granted a loan of $170,000. 34Later in March 2001 it is alleged that discussions took place between the plaintiff and the first and second defendants about getting a solicitor to prepare some documentation. It is further asserted that the plaintiff did not want to go into the city to see a solicitor and that Mr Tsolakis's name was selected by the second defendant from the yellow pages. 35The defendants assert that two meetings took place with the plaintiff at the offices of the fourth defendant. The plaintiff asserts only one such meeting took place. Mr Tsolakis agrees he had two such meetings. The circumstances in which the meetings took place and the conversations which it is alleged took place at the meetings are in dispute. 36In April 2001 work proceeded on the granny flat. Later in that year it was completed. 37From 2001 onwards the first and second defendants also effected renovations to the main house on the property including replacing doors, putting in a new kitchen, two new bathrooms, electrical wiring, putting on a new roof and painting. The second defendant alleges that from the time she lived at Chifley she cared for the plaintiff including doing the cooking. 38In or about 2004 the plaintiff had a knee reconstruction and the second defendant asserts that she continued to do all the cooking and cleaning for the plaintiff. The plaintiff alleges she paid approximately $100 per quarter towards household expenses but she ceased to do this by agreement after one of her periods of hospitalisation. 39In or about 2006 the plaintiff required a hip replacement and again the second defendant asserts that she assisted the plaintiff in her day to day activities. 40In or about 2007 Alison returned to Australia from New Zealand. 41In July 2008 the plaintiff alleges she had a conversation with the second defendant in which she asked the second defendant if she was going to pay for the land. A dispute thereafter erupted between the parties. On 11 August of that year the plaintiff lodged a caveat on the title of the property. 42On or about 20 August 2008 the second defendant consulted Mr Tsolakis. By now the disputation between the plaintiff and the second defendant looked likely to become litigious. 43Mr Tsolakis was made aware that Alison had returned and that the plaintiff was alleging the property had been wrongly transferred into the defendants' names. Mr Tsolakis instructed a Mr Rogers of counsel. In his letter of instructions of 20 August Mr Tsolakis expressed the view that the plaintiff had an equitable interest in the property. Mr Rogers was asked for his opinion. 44On 4 September 2008 Mr Rogers advised that in his opinion the plaintiff had an equitable life estate in the property. 45On 16 September, after a conference on 11 September with the second defendant Mr Tsolakis advised that he could not act for her any further as he would be in a conflict of interest and that it was highly likely he would have to give evidence at any trial. 46Proceedings were commenced by the plaintiff on or around July 2009.

The Contentions of the Parties 47In broad terms the plaintiff asserts that she was in effect duped into transferring her property to the first and second defendants. She does however accept that she raised the possibility of building a granny flat with the second defendant in 1999 because she thought that would be good for her because she was finding the home at Chifley was too big for her. She denies any knowledge or understanding of the nature of the transaction she undertook by signing the transfer. She not only asserts she was lied to by the first and second defendants about their motives and purpose but also in addition fraudulently misled by the fourth defendant and led to believe that she was merely assisting the first and second defendants in some application by them for a first home buyers grant. The plaintiff alleges she had no understanding nor did she ever agree to transfer the title of the property into the names of the first and second defendants. 48The first and second defendants deny any misrepresentation or deceit and say that the plaintiff was estranged from her other daughter Alison. The first and second defendants also made it plain that the plaintiff wanted to transfer the title of the property at Chifley into their names on the basis that they would build a granny flat at the rear entirely at their expense in which she would live and that they would care for her for the rest of her days. In addition the second defendant (and there is no issue about this) decided that she and the first defendant wanted to pay $20,000 in cash to the plaintiff on the signing of the transfer. The defendants assert, contrary to the account given by the plaintiff, that they attended at the office of the solicitor Mr Tsolakis on two occasions, who not only explained the transaction to the plaintiff in their presence but had a private conversation with the plaintiff about the nature of the transaction she was about to effect. 49The case against these defendants is partly based in contract. It is said that they moved into the relevant property agreeing to pay all expenses, and they would live there rent free. 50An alternative agreement is alleged to the effect that in consideration of the payment of $20,000 the first and second defendants would live in the property rent free and the plaintiff would reside in the property rent free. The plaintiff would reside in separate accommodation which accommodation would be built at the expense of the defendants. The plaintiff was paid the $20,000 albeit by instalments and the defendants have at their expense built the granny flat. They have also paid the mortgage, the household expenses and renovated the main house at their expense. The plaintiff has paid some other expenses in relation to the granny flat. 51The plaintiff contends that the first and second defendants wrongfully procured the transfer of the property by a fraudulent misrepresentation. It is also suggested they (deliberately) took advantage of the plaintiff in their dealings with her, and their conduct was relevantly unconscionable and/or she was subjected to undue influence. 52The third defendant contends the plaintiff's claim is statute barred and/or that there are no circumstances which could lead to a claim in damages. The only basis might be fraud but there is none. I have already observed other matters are raised. 53The fourth defendant contends the plaintiff's claim is also statute barred and/or that at no time did he act dishonestly or deceitfully and that he was entirely transparent in the two meetings he had with the plaintiff and that he explained to her in some little detail the effect of what she was about to undertake. He also denies he acted negligently. 54It was submitted the fourth defendant did not dishonestly conceal anything that he was otherwise obliged to disclose to the plaintiff. He asserts there is no fraud of the type envisaged by s 55 of the Limitation Act 1969 (NSW) which would provide the plaintiff with relief from the limitation defence.

Discussion 55It is only fair to observe that the accounts given by the plaintiff as to relevant events and relevant conversations with the first and second defendants and of those with the fourth defendant are dramatically at odds with the various accounts given by each of those respective defendants.

The Plaintiff 56The plaintiff asserts for example that in 1998 the second defendant asked her permission whether she and her husband could build the second house at the back of the property so that they could live there. However, the plaintiff accepts that at least in 1999 she suggested to the second defendant that building a granny flat at the rear of the property would be a lot cheaper than a second house and that she could live in the granny flat while they stayed in the main house because again she accepts that it was getting hard for her to take care of such a large home. 57She also asserts that in late March 2001 the first defendant came to see her and asked whether he could help him and his wife apply for a first home buyers grant. The plaintiff says she readily agreed. 58She then alleges that a few days later the first and second defendants took her to Mr Tsolakis. Mr Tsolakis, she says, did not say one word to her. He did not ask for any identification and he did not even indicate that he knew who she was. 59She asserts that she was seated at a table and handed a small piece of paper which contained the first and second defendants signatures and nothing else and she was asked to sign it. It was a document which would have been about "6 by 4 inches". She asserts she was never told the description of the document she was signing and she did not think to ask what she was signing. 60It was only in 2008 that she was told (and for the first time) that she had signed a transfer of the property which had the effect of transferring the property into her daughter and son in law's name. 61She was asked questions in cross examination about the transfer which it appears she signed in March 2001. She said she did not believe that the signature on the document was hers and she explained in a little detail that certain letters were not in the shape that she would normally write. She asserted consistently with her affidavit material that part of the document was covered over when she was asked to sign it and all she saw was a piece of paper with signatures already on it and was told by the solicitor to "sign there". She denied recognising the transfer document as a document she signed, rather she asserted it was simply a piece of paper which, at the time she signed it, did have the first and second defendant's signatures on it. She was also quite certain that she had only ever once gone to the solicitors offices and had received no explanation of the transaction she was undertaking. 62She acknowledged that when she was at the solicitors office, although she asserted she was there to assist the defendants apply for a first home buyers grant, she recalled that as she was signing the "transfer" the solicitor turned to her daughter and said something about a "dollar" to which her daughter had said 'No $20,000". She had assumed the $20,000 was a deposit towards her daughter and son in law buying the property and that somehow this was needed to assist their application for the first home buyers grant. 63She also asserted at a later point in time having a conversation with her daughter in which she told her daughter that she only wanted $300,000 for the house. She also recalled her daughter saying she could not afford $300,000 to which the plaintiff replied "well you are not having it for $20,000". 64For reasons which later appear I have difficulty in accepting much of what the plaintiff says as to critical events and conversations.

Alison 65The plaintiff's daughter Alison gave evidence. She said nothing which in my opinion relevantly assisted the plaintiff. She of course was absent from Australia for much of the relevant period. What she did confirm which I do accept is that before she left the Chifley property things did become "ugly" between her and the plaintiff. She also accepted the plaintiff had told her that her partner Moses was "ripping" her off. There is no doubt the atmosphere at the time she left the house was it seems acrimonious as between the plaintiff and second defendant on the one hand and Alison on the other.

The first and second defendants 66The second defendant confirmed at least that in or about early 1995 she together with her sister Alison and the plaintiff did have a discussion about the possibility of building a separate dwelling in the back yard. However the second defendant asserts that in or about February 1995 the plaintiff in the course of looking at a house in Rosebery said that she would quite like a granny flat at the rear of the house and in any event would rather live in Chifley because it was close to shops and public transport and she wanted to stay in the area. 67The second defendant also asserts that around February 1995 the plaintiff said to her that she was having difficulty living in the house on her own and that it was getting too big for her to manage but she did not want to leave and go into a nursing home. The second defendant asserts that at a later point in time the plaintiff said to her that she wanted she and her husband to build a smaller house in the garden that she could use as a granny flat and that she and her husband could live in the main house and look after her and that she wanted a house similar to the one built three doors up by her neighbour. 68The second defendant says that she told her mother that although that was a good idea she and her husband were not in a strong enough financial position to go ahead with a project such as that. She asserts that the plaintiff then said to her: I understand but if you build a small house for me and finance the entire project I will transfer the main house into your and Dan's names. You wont have to be paying rent if you come back to live here and the kids will not have to get up as early to go to school 69The second defendant alleges that she responded by saying that although it was a good idea she was concerned at what might happen if her sister Alison came back from New Zealand. She expressed the view to the plaintiff that she thought that her sister Alison would not be happy with the arrangement and she did not want to be in a position where she could just came back and "take the house". The plaintiff she said replied as follows: Don't worry love, I promise you I wont let that happen. Bugger Alison. We will do this legally, so that there is no way she can get her hands on it. I will talk to my lawyer and see what he recommends. 70The plaintiff at some point shortly after this had gone into the city. When she returned she said to the second defendant: I have just been to see my solicitor in the city. When I arrived, I found out that he had passed away and I had to see a younger solicitor in the office. He told me that if I sign the title of the house over into your name and Dan's name, then Alison has no claim to the house. It does not matter that I have previously put her name in the will in relation to the house. 71The second defendant says that she responded by indicating that on that basis she and "Dan" would be prepared to go ahead but they would need to run over their finances and get some quotes. The second defendant asserts that she said to the plaintiff that apart from building the granny flat she would like to give her some money for the transfer of the land. Her mother she said replied as follows: I don't want any extra money. The fact that you are building me the new place and then you will be able to live close and look after me is enough. 72I should say at this point that on balance I prefer and accept the accounts given by the second defendant of conversations she asserts she had with her mother and I find her versions more credible. I do so partly because the plaintiff's version of her attendance at the office of the fourth defendant, the detail of which I consider later in this judgment is so wholly and glaringly improbable that it has caused me to view it initially with great suspicion and then reject her versions of conversations with her daughter unless corroborated by her daughter or someone or something else. 73In particular I am of the view that a first home buyers grant was not mentioned at any point in relation to this transaction by the second defendant or for that matter the first defendant and I so find. I am also of the view and find that the plaintiff did initiate the idea of a granny flat and further indicated the basis of the arrangement which led to the transfer of title. 74There is little doubt that over the next year or so there was significant delay not only in lodging but having plans approved for the redevelopment of the property. 75Shortly after the approval was granted by Randwick Council in or about 2000 the second defendant alleges that the plaintiff said to her that she was happy that the project was finally going ahead and that she was ready then to transfer the property into her and her husband's name. The second defendant told her mother that she needed to engage a solicitor. The plaintiff said according to the second defendant that she wanted to get a local solicitor because she did not want to travel into the city. The second defendant asserts that she looked in the yellow pages and came to the name "Vasso Tsolakis". She said to the plaintiff that a friend of her sister used to work there when they were at school. The plaintiff agreed to use Mr Tsolakis. I again accept the second defendant's account of these events. 76The second defendant asserts that she together with her husband and mother first saw Mr Tsolakis in March 2001. She had not spoken to the solicitor prior to attending the office. She asserts that her mother in her presence informed Mr Tsolakis that she wanted to transfer her house into the first and second defendant's names, that they (the defendants) were going to build a small house in the back yard for her and they were doing the transaction so that they could all help each other. Mr Tsolakis according to the second defendant said at the meeting that another appointment would have to be made because he would have to prepare some papers and he would be able to see them again in about a week. I accept the second defendant's account on this. 77According to the second defendant about a week later she, together with her husband and mother, went back to see Mr Tsolakis. At that point the plaintiff repeated that the first and second defendants were building her a house and that she wanted to transfer the property into their names. Mr Tsolakis handed the paperwork to her mother and that is when the second defendant saw that the consideration on the transfer was only for one dollar. She asserted that she said that that amount ought to be changed as "we are giving mum $20,000 rather than the one dollar and that should be on the paperwork". The second defendant asserts that Mr Tsolakis arranged for his secretary to change the amount. There is no doubt the amount was changed, but not on the transfer. In fact the signed transfer has the amount of $20,000 typed on it. In fact on the same day a document described as a "Form of Declaration to be Furnished in Respect of Conveyances" ("Form U") was also signed by the plaintiff. It is clear from the face of the document that the figure of $1 has been crossed out and replaced by $20,000 in handwriting. Nothing turns on this. Again I accept the second defendant's account. 78The first defendant gave an account of the meetings with Mr Tsolakis which in broad terms corroborates the evidence of the second defendant. I also accept his account.

Ms Kypri 79I should add that the first and second defendants called evidence from a Ms Recy Kypri. She had been the best friend at school of the second defendant. She agreed they were still best friends. She stated that in about 2001 she was at the Chifley property and in a conversation which took place with the plaintiff, the first and second defendants and herself present, the plaintiff said that she was hoping the second defendant was going to build a small house at the back of her to live in and that the first and second defendants would move in and live in the main house. A similar conversation occurred between Ms Kypri and the plaintiff when she went to the house to witness the signatures of the first and second defendants. The plaintiff referred to a loan which the defendants were getting to renovate the Chifley house. The loan document Ms Kypri witnessed was for the loan from the Commonwealth Bank. 80Ms Kypri also said the plaintiff said to her that she was bitterly disappointed with her daughter Alison and that the plaintiff felt let down by her. Most importantly later in a further conversation with the plaintiff she said that her daughter Alison was a "blood (sic) idiot" and that she did not want her to try and benefit from "Dan and Diane's hard work". She indicated that when she died the house was to go to the second defendant "and the kids". 81It was not put to Ms Kypri that she was not telling the truth or was mistaken in her recollection. I accept her evidence.

The fourth defendant 82Mr Tsolakis filed two affidavits in the proceedings. The second is a much more detailed version of events than the first although both are in substance similar if not identical. 83Mr Tsolakis said that he first met the plaintiff in company with the first and second defendants in a conference room in his offices on 26 February 2001. In his diary entry for that day he has the time for 4pm circled adjacent to which he has written "Mr Devanand and Reddy" and a telephone number. He does not recall who wrote the notation but he does not think it was his handwriting. He confirmed though having refreshed his memory from the diary that he did have a conference on that day about the matter at about 4pm. He recalled meeting with the plaintiff and the first and second defendants. Following pleasantries he asked the plaintiff how he could help her. 84The second defendant explained to him that her mother owned a property and that she wanted the defendants to build a house at the back of the property and as a result there is an agreement between the parties that her mother would transfer the property into her and her husband's name so that she could get a loan to build the house that her mother wanted. He said the second defendant indicated that she thought the property was worth somewhere between $350,000 and $450,000 and that they had already spoken with the Commonwealth Bank in particular to a person called Mr Mark Hetherington and they needed to borrow approximately $170,000. 85Mr Tsolakis then asked the plaintiff was that correct. To which she replied: Yes, I want to live in a smaller house and give my house to my daughter and son in law. They are helping me and I would like to help them. 86Mr Tsolakis said during the meeting that the second defendant handed him a letter from the Commonwealth Bank indicating an approval of a loan of $160,000 (which it was asserted was an error). Mr Tsolakis then said he told those present that an independent valuation of the property would have to be obtained for stamp duty purposes but more to the point he needed to have a private discussion with the second defendant's mother. The first and second defendants moved out of the conference room and closed the door. 87During what was a private meeting between the fourth defendant and plaintiff Mr Tsolakis said the following conversation occurred: Me: Do you understand that you are transferring title of the property to Diane and Dan? Mrs Langford: Yes I understand Me: You need to make sure that you are comfortable with that as once it happens Diane and Dan become the owners of the property Mrs Langford: Yes I understand. 88Mr Tsolakis said he explained to the plaintiff that the only way the first and second defendants could obtain a loan was if the property was registered in their names. The plaintiff he said indicated that she understood that and further that the first and second defendants were going to help repair her home and build a new one out the back for her. Mr Tsolakis said that he further said that once the paperwork had been done and the first and second defendants got the money from the bank they would be the owners of the property and a mortgage would be taken out over the property to secure the loan. He asked whether the plaintiff was happy with that. To which she responded "Yes". He then invited the first and second defendants to come back into the conference room and a further brief conversation occurred. He obtained full details as to names and addresses. 89He then set about obtaining an independent valuation from a Theo Stamoulis and Associates which was obtained on 2 March 2001. Once the valuation was received he held a second conference with the parties, that included the plaintiff and first and second defendants. From his appointment diary he was able to conclude that the conference had taken place on 15 March 2001. Again having exchanged pleasantries he informed the parties present that he had prepared documentation to transfer the title. He says that he also asserted to those present: But before you sign I am going to do what I do for all my clients and explain the documents to all of you. 90He said he then placed the transfer documents and what is described as the "Form U" together with an independent valuation from Mr Stamoulis on the table in front of the plaintiff and the first and second defendants. Mr Tsolakis said he pointed to various items on the document and in particular explained in relation to the transfer document that it was the document that transferred title or ownership in the property from the plaintiff to her daughter and son in law. He says that he said in that conference: If you sign this document Mrs Langford, and it is lodged with the Land Titles Office you no longer own the property and Diane and Dan become the owners. Do you understand this? 91He says that the plaintiff answered that she did understand. He then recalls the conversation about the consideration of one dollar which he had previously placed on the document being changed to $20,000. 92He then gave what he asserts was a detailed explanation about the "Form U". He then explained that the valuation obtained from Mr Stamoulis had valued the property at $440,000 and further that stamp duty on the transaction had to be paid on the basis of that value. He stated that he took a bible from his bookshelf and in his presence the plaintiff signed the transfer and also signed the "Form U" in front of him. He asserts unequivocally that there were no other documents on the table except for the valuation, his Law Society diary and the bible. 93Mr Tsolakis denies that there was any mention of a first home buyers grant at either conference. I should observe that the first and/or second defendants equally deny any discussion with the plaintiff about a first home buyers grant. 94It was put to Mr Tsolakis that there was only one meeting and not two and that he could be mistaken. He rejected that suggestion. I accept his rejection. He said he had a clear recollection and of course he has contemporaneous records to support his recollection. 95Although it was not put to Mr Tsolakis that a first home buyers grant was discussed he asserted it was never raised in his presence and I accept his evidence. 96He denied ever asking the plaintiff to sign a small piece of paper with the first and second defendants signatures on it. Indeed this part of the plaintiff's case I have to say is entirely fanciful. Had it been true it would amount to gross professional misconduct if not fraud. No such event in my view occurred as asserted by the plaintiff. 97However Ms Tsolakis accepted he did not advise the plaintiff to consult an independent solicitor. He also accepted he did not advert to the question of what the plaintiff might do to protect her rights to a life interest by, for example, formally documenting it in some way. Further he never adverted to her remaining on the title. He said that he believed as a result of discussions with the first and second defendants and the documentation from the bank the loan from CBA was predicated upon them going on the title and the plaintiff coming off the title. 98He never considered any difficulties that might arise for the plaintiff were the second defendant to die leaving the property to her husband. He agreed that he did not explain to the plaintiff that she was losing any entitlement to leave her interest pursuant to any will she may make. He denied however he was instructed to keep any details of the transaction from the plaintiff. I accept his evidence on this matter. 99Mr Tsolakis said that he understood the arrangement was put in place before the parties came to see him and as he saw it the plaintiff was getting a new dwelling at the first and second defendant's expense and the plaintiff was happy with that arrangement. 100It is plainly obvious Mr Tsolakis never once adverted to any means by which the plaintiff could legally protect her undoubted equitable interest should it ever be the subject of challenge. He was it seems content to assume she was prepared to rely upon the moral obligation of the first and second defendants without ever enquiring of the plaintiff whether she was content with that outcome on its own.

Where does the truth lie? 101The resolution of where the truth lies in respect of the critical events, that is the initial conversations and the visits to the solicitor, very substantially determines the fate of the plaintiff in this litigation in relation to a raft of related issues. The way in which the case is formulated critically depends upon acceptance of the plaintiff particularly when she asserts that she was inveigled and duped in order to supposedly assist the first and second defendants in respect of their first home buyers application. Secondly and most importantly that she only attended the solicitors office once, had no understanding of what she was doing and more to the point was given no explanation of the consequences of her actions and in effect forced to sign the piece of paper, which apart from the first and second defendants signatures was otherwise blank. 102As I have already made clear I am simply unable to accept the plaintiff's assertions on the facts. First I do not believe that a first home owners grant was ever mentioned either by the first and or second defendant and certainly not mentioned in the presence of Mr Tsolakis the solicitor. Secondly, I am firmly of the view that the plaintiff was very likely to have been lonely living at Chifley on her own. Her husband having died some years previously she had two daughters, one of whom had left Australia and resided overseas and had been gone a number of years and was not to return to live until 2007. It is also clear that the relations between the plaintiff and her daughter Alison during this whole period were strained to say the least. She was I believe much more than warmly disposed towards the first and second defendants and their respective children. 103In those circumstances I find it entirely probable and plausible that the plaintiff said what is attributed to by the second defendant, about building the granny flat and importantly transferring the property to she and her husband. There is evidence independently that her daughter Alison and her husband Moses had acquired real estate both in Australia and likely in New Zealand. The plaintiff obviously was aware of that. Equally the plaintiff was aware that the second defendant had two children from her first marriage and that she and first defendant had no property of their own. They lived in a caravan at the back of the property at Chifley for a time and then in a home unit rented in Hillsdale. 104I am quite certain and so find that the plaintiff in conversation with the second defendant made the offer that if the first and second defendants built and financed the "entire project" she would transfer the main house into the first and second defendant's names. I also find that the very reason they went to the solicitors office was out of a mutual concern on the part of the plaintiff to ensure that if her daughter Alison returned she could not be troublesome and interfere and I have little doubt that the second defendant was equally concerned to ensure that the position was incapable of challenge. The plaintiff wanted to go to the solicitor so as to ensure that the first and second defendants interests were properly protected. 105The protection of the plaintiffs interests would never be a matter for the first and second defendants (except morally perhaps) but rather that would fall, if it fell upon anyone, upon the lawyer who was invited to advise upon and implement the transaction. 106There was no doubt in my mind that the second defendant would never have taken her mother to the solicitor unless she wanted to have the transaction implemented properly according to law. This was a very large financial commitment which the first and second defendants were undertaking given their circumstances. They were also committing to the care of the plaintiff for the rest of her life. They were to be largely if not entirely responsible not only for any mortgage but for all repairs and running expenses of the property thereafter. The evidence is that they have done just that. In addition of course they have undertaken the renovation at their expense of the main house. 107Mr Tsolakis as I have already observed prepared two affidavits. One dated 10 May 2010, the other 1 July 2011. The first affidavit is a relatively short affidavit. Notwithstanding the fact that it is pithy it is in relevant respects substantially similar to the second affidavit. However the first affidavit was prepared for the solicitors on behalf of the first and second defendants. This was at a time before Mr Tsolakis was joined as the fourth defendant to the proceedings. His second affidavit was filed after he was made a party to the proceedings and no doubt when he went back to the events in much greater detail and with much greater focus for obvious reasons. 108Unsurprisingly he is the only person who participated in either of those conferences who has any contemporaneous materials of any sort. He has two short diary notes of each of the meetings. But secondly he asserts that he witnessed the plaintiff sign both the transfer and the "Form U". He was not challenged in his evidence in that regard. Both documents prominently display the headings either 'Transfer' or 'Form of Declaration to be Furnished in Respect of Conveyances'. 109 I accept him when he says that he explained not only the consequences of executing the transfer but that the plaintiff acknowledged she understood precisely what she was doing and the consequences of her signing the relevant documents. 110There is little doubt that he did secure a valuation from Mr Stamoulis's company. He was also in correspondence with the Commonwealth Bank in respect of the mortgage and on the date of the second conference (15 March 2001) forwarded a copy of the transfer to the bank for the purposes of them preparing mortgage documentation. 111He attended to the payment of stamp duty on the transaction of $15,294 (which came out of the loan funds) together with a payment of his firm's costs and disbursements. 112In his letter to the first and second defendants of 3 April he wrote: In accordance with your instructions to the Commonwealth Bank the balance of the mortgage advanced in the sum of approximately $153,189.10 remains with that bank to be utilised by the builder during stages of constructions when called upon. You will need to ascertain from the Bank however what fees and charges they have deducted from the mortgage funds. 113I have to say that I found both Mr Tsolakis and the first and second defendants credible and truthful witnesses. They told a consistent story. There was no suggestion that they had inappropriately collaborated in their recollection and as I have said Mr Tsolakis does have contemporaneous documents from which he was able appropriately to refresh his recollection. 114The plaintiff on the other hand, although 72 at the date of this transaction by various descriptions given of her did not come across as a frail or weak minded individual. She had had two periods of hospitalisation. Both were for orthopaedic surgery. She impressed me as a proud and otherwise physically capable woman. She had lived with an alcoholic husband and I am certain was perhaps very largely responsible for bringing up her two daughters. She indeed worked to pay off the mortgage when he died. 115She had previously been employed in the Department of Corrective Services as a prison officer. She had supervised a wing of a women's prison for a period of time. In that role admittedly some years prior to 2001 she had undoubtedly had to perform important supervisory activities which from time to time involved ensuring that bail documentation had been properly executed. 116There is little doubt in my mind that as a result of her daughter Alison's return from New Zealand and as a result of conversations they undoubtedly had she had become unsettled and in one sense perfectly appropriately anxious about securing her future. 117The preservation of her rights going forward in relation to her remaining in the granny flat for the balance of her life and/or being cared for as promised had not in my opinion been the subject of specific and focussed consideration by any person most relevantly Mr Tsolakis. 118The second defendant openly accepted that she and her husband were in 2001 and at the hearing before me willing to affirm a legally binding obligation that the plaintiff be able to live in the granny flat for her life. Further she and her husband would they accepted be bound to maintain the flat and further care for the plaintiff for her life.

119The plaintiff seeks a declaration that the first and second defendants hold the Chifley property on trust for her. She contends it is an appropriate remedy here because of the conduct of the defendants in wresting the property from her 120In Muschinski v Dodds (1985) 160 CLR 583 the High Court dealt with what orders should be made when an unmarried couple purchased land upon which they intended to renovate a cottage. Ms Muschinski had paid the purchase price of the property but the property was transferred to them as tenants in common in equal shares. The parties separated before the cottage was renovated or another house acquired. Ms Muschinski claimed sole beneficial ownership of the land on the basis of unconscionable conduct. 121Deane J wrote the leading judgment and found a constructive trust should be imposed. Deane J said at 620: Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf. Atwood v. Maude, and per Jessel M.R., Lyon v.Tweddell. 122Gibbs CJ and Mason J both agreed with the relief proposed by Deane J and that the relevant property be held by the parties upon constructive trust and repayment of each of their respective contributions. Gibbs CJ decided in favour of a constructive trust on the basis of a common obligation to pay the relevant debt based on notions of quasi-contract. Mason J on the other hand was of the view that a constructive trust was warranted on the basis that the arrangement between the parties was akin to a joint venture, the failure of which required the relevant declaration that the parties hold their respective interests in the property as tenants in common on a constructive trust after the payment of any debts incurred in the improvement of the property, to repay to each his or her respective contributions and to reside for them both in equal shares. 123The reasoning of the High Court in Muschinski was clearly founded on a recognition on the facts of that case that a joint venture as it were, came to an end without attributable blame on either side and the remedial constructive trust was considered appropriate to ensure that Mr Dodds did not unconscionably benefit from the arrangement. 124That decision has been approved and applied in of course many subsequent cases but if I may say so helpfully in a decision of the Queensland Court of Appeal in Swettenham v Wild [2005] QCA 264. 125In that case there was an arrangement between a father and a daughter. The facts of that case are in many respects highly analogous to the circumstances of this case, as Atkinson J noted at [21] The arrangement between them was not, however, just a financial arrangement. In return for his purchase of the house for his daughter to live in with her family, Mr Swettenham would also be living in a family environment. His daughter was to provide an evening meal for him and he would get his own breakfast and lunch. She also cleaned his bathroom. Mr Swettenham did not want her to be out of pocket so suggested he would give her $40.00 per week, which he did for some time. That was subsequently varied so that instead of Mr Swettenham giving that money weekly to Ms Wild, he undertook the responsibility of paying the rates and insurance for the property which worked out to about the same amount. The advantage for Mr Swettenham of this mutual arrangement was that he would be living in a family environment and be looked after as he aged by his daughter, Ms Wild, and her family. 126In Swettenham, the court declared by way of remedy a constructive trust over the property and by declaring that each party was entitled to their respective contributions. As Williams JA noted at [12] - [13] [12] Here the appellant contributed virtually all of the purchase price of the house in question and that was done against the background of an agreed joint endeavour intended to mutually benefit the parties; the respondent was to get the benefit of ownership of the house and the appellant was to get the benefit of a home in which to reside in a family atmosphere and receive comfort and care from the respondent. The formal arrangement between the parties did not make provision for what would happen if that joint endeavour failed. [13] In the circumstances of this case the constructive trust which the Court imposes should be based on the contributions to the acquisition of the property made by each of the parties. 127Atkinson J also noted at [42] In this case, Mr Swettenham intended that Ms Wild would take the legal title to the property. However in return he was to retain not only a right to reside in the granny flat but also receive the support and comfort of living in a family environment with his daughter and her family as he aged. That was the joint endeavour between them and not, as the learned trial judge held, the conferral by Ms Wild on Mr Swettenham of the right to reside in the granny flat for the rest of his life. That joint endeavour between the parties was to be for their mutual benefit but failed through no attributable fault of either party. Mr Swettenham contributed a large proportion of the purchase price. In these circumstances it would be unconscionable for Ms Wild to retain the beneficial interest in the whole of the property subject only to Mr Swettenham's right to reside in the granny flat. 128And declared relief at [44]: It follows that a constructive trust should be imposed so that, irrespective of their intentions, the parties should be proportionately repaid their respective contributions to the property acquired during the relationship.

Unconscionable conduct and undue influence 129The plaintiff also alleges unconscionable conduct on the part of the defendants. There is a distinction between the two doctrines of unconscionable conduct and undue influence which it is necessary to draw. 130The plaintiff relies upon the authority in the case of Bridgewater v Leahy (1998) 194 CLR 457. Although Bridgewater was a case pleaded initially on the basis of both undue influence and unconscionable conduct, the High Court set aside the transaction on the basis of unconscionable conduct only and not undue influence. Put another way, Bridgewater is authority for the application of principles with respect to the setting aside in equity of inter vivos dispositions tainted by unconscionable conduct. As the majority Gummow, Gaudron and Kirby JJ noted at 477 - 478, there is an important distinction between the two doctrines of undue influence and unconscionability: ...it is appropriate to emphasise the distinction between the equitable doctrines concerned with undue influence and unconscionable dealings or conduct. On occasion, both doctrines may apply in the one case. Each doctrine may be seen as a species of that genus of equitable intervention to refuse enforcement of or to set aside transactions which, if allowed to stand, would offend equity and good conscience. However, there are conceptual and practical distinctions between them and these were insufficiently expressed by the primary judge. In Commercial Bank of Australia Ltd v Amadio, Deane J said that the two doctrines are distinct, undue influence looking to "the quality of the consent or assent of the weaker party", whilst unconscionable conduct looks to the attempted enforcement or retention of the benefit of a dealing with a person under a special disability. Further, the recognition of certain special relations, the existence of any of which would itself support a presumption of undue influence, could provide a particular forensic advantage to plaintiffs. 131The Court then noted (at 478 - 479) further, the distinction between the two doctrines as described by Sir Anthony Mason speaking extra curially in "The Impact of Equitable Doctrine on the Law of Contract" Anglo-American Law Review, vol 27 (1998) 1, at pp 6 - 8, where he said: My understanding of undue influence ... is that it denotes an ascendancy by the stronger party over the weaker party such that the relevant transaction is not the free, voluntary and independent act of the weaker party. In other words, it is the actual or presumed impairment of the judgment of the weaker party that is the critical element in the grant of relief on the ground of undue influence. ... Unconscionable conduct, as the term suggests, focuses more on the unconscientious conduct of the defendant. As a ground of relief in England unconscionable conduct has been confined largely to "catching bargains" with expectant heirs and others in particular categories of disadvantage eg those who are illiterate ... In Australia, it has been recognised that unconscionable conduct is a ground of relief which will be available "whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is taken of the opportunity thereby created". Unconscionable conduct is also recognised in New Zealand as a ground of relief in these circumstances. 132The majority in Bridgewater also noted at 479: 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". 133In Blomley v Ryan (1956) 99 CLR 362 Kitto J said: The fact that the defendant's condition was the result of his own self-indulgence could make no difference, for, as was 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. 134In Stern v McArthur (1988) 165 CLR 489 Mason CJ said at 503: Furthermore, to accept the respondents' submission and extend relief against forfeiture to instances in which no exceptional circumstances are established would be to eviscerate unconscionability of its meaning. The doctrine is a limited one that operates only where the vendor has, by his conduct, caused or contributed to a situation in which it would be unconscionable on the vendor's part to insist on the forfeiture of the purchaser's interest. Priestley JA thought that "it would be unreasonable and unconscionable...to permit [the vendors] to shut [the purchasers] out from ownership" (my emphasis), and consequently allowed relief against forfeiture. But, contrary to his Honour's view, the jurisdiction to grant relief against forfeiture does not authorise a court to reshape contractual relations into a form the court thinks more reasonable or fair where subsequent events have rendered one side's situation more favourable. 135In Tanwar Enterprises Pty Ltd v Cauchi and Others (2003) 217 CLR 315 Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ observed at 324: The terms "unconscientious" and "unconscionable" are, as was emphasised in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd, used across a broad range of the equity jurisdiction. They describe in their various applications the formation and instruction of conscience by reference to well developed principles. Thus, it may be said that breaches of trust and abuses of fiduciary position manifest unconscientious conduct; but whether a particular case amounts to a breach of trust or abuse of fiduciary duty is determined by reference to well developed principles, both specific and flexible in character. It is to those principles that the court has first regard rather than entering into the case at the higher level of abstraction involved in notions of unconscientious conduct in some loose sense where all principles are at large. 136Mason J said in Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 462: It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J., that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. 137Deane J in Amadio made the following remarks at 474 - 475: 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 [1906] VicLawRp 119; (1906) VLR 711 at p 720; Watkins v. Combes [1922] HCA 3; (1922) 30 CLR 180, at pp 193-194; Morrison v. Coast Finance Ltd. (1965) 55 DLR (2d) 710, at p 713 ). 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 catalogues. In Blomley v. Ryan (1956) 99 CLR, at p 405, 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-a-vis the other". 138At 480 - 481 Deane J also said: Relief against unconscionable dealing is a purely equitable remedy. The concept underlying the jurisdiction to grant the relief is that equity intervenes to prevent the stronger party to an unconscionable dealing acting against equity and good conscience by attempting to enforce, or retain the benefit of, that dealing. Equity will not, however, "restrain a Defendant from asserting a claim save to the extent that it would be unconscionable for him to do so. If this limitation on the power of equity results in giving to a Plaintiff less than what on some general idea of fairness he might be considered entitled to, that cannot be helped" (per Lord Greene M.R., Wrottesley and Evershed L.JJ., In re Diplock (1948) 1 Ch 465 at p 532).

Undue influence 139Undue influence is a doctrine of equity that allows a court to set aside a transaction that has been unconscionably procured as a consequence of the relationship of the parties. The doctrine is a species of fraud, the crux of which as Sir Anthony Mason has noted, is in the existence of some "ascendancy by the stronger party over the weaker party such that the relevant transaction is not the free, voluntary and independent act of the weaker party". The doctrine therefore requires an examination of the relationship between the parties. Some relationships in their nature raise a presumption of undue influence; in other relationships proof of the existence of particular elements may cause undue influence to be inferred. Once a relationship of influence is established, this will give rise to a presumption that the transaction was procured as a result of undue influence. The burden then falls on the defendant to prove the transaction was in fact the pure voluntary and well-understood act of the plaintiff. 140Undue influence is not limited to circumstances of voluntary transactions (eg a gift), however, in cases where consideration has been given, it is required that either the consideration given was insufficient, or that the transaction was in some way disadvantageous to the plaintiff. 141In National Westminster Bank Plc v Morgan [1985] 1 A C 686 Lord Scarman, with reference to the early case of Poosathurai v Kannappa Chettiar [1919] LR 47 I A noted at 707: ... The wrongfulness of the transaction must, therefore be shown: it must be one in which an unfair advantage has been taken of another ... the doctrine is not limited to transactions of gift. A commercial relationship can become a relationship in which one party assumes a role of dominating influence over the other. 142Similarly, in Chapters on Equity in New South Wales (6th ed) the Honourable Sir Frederick Jordan KCMG noted at p 137: (ii) if a transaction is entered into between (the parties) for value it will be presumed to have been produced by undue influence only if it is shown to be unfair, e.g. for undervalue. 143Thus to presume undue influence in non-voluntary transactions, the bargain struck must be in some manner disadvantageous to the plaintiff. 144The traditional categories of presumed undue influence encompass guardian and ward, solicitor and client, doctor and patient, spiritual adviser and follower, and parent and child. Allcard v Skinner (1887) 36 Ch D 145, 185; Whereat v Duff [1972] 2 NSWLR 147, 168; Quek v Beggs (1990) 5 BPR 11,761. Outside of these established categories, the plaintiff may establish as a matter of fact that there is a special relationship of influence between the parties. The elements required to establish the existence of a special relationship outside the traditional categories are not closed (National Westminster Bank v Morgan), but such relationships necessarily involve some element of influence, ascendancy or dominion on the part of the dominant party or an element of confidence and reliance on the part of the weaker party: Johnson v Buttress (1936) 56 CLR 113, 134-5. 145Early cases such as Huegenin v Baseley (1807) 14 Ves Jun 273; 33 ER 526 applied the principles of undue influence by setting aside a transaction where it was proved the transaction was fraudulently obtained through one party assuming a position of ascendancy, control or management of the affairs of the other and procuring an advantage from that position. As noted by Sir Samuel Romilly at 14 Ves Jun 273, at [286]; 33 ER 526 at 531 - 532: Where a gift is immoderate, bears no proportion to the circumstances of the giver, where no reason appears, or the reason given is falsified, and the giver is a weak man, liable to be imposed upon, this Court will look upon such a gift with a very jealous eye; and very strictly examine the conduct of the persons in whose favour it is made; and if it sees, that any arts or stratagems or any undue means, have been used, if it sees the least speck of imposition at the bottom, or that the donor is in such a situation with respect to the donee as may naturally give an undue influence over him, if there be the least Scintilla of fraud, this Court will and ought to interpose. 146In that case there was a gift over of fee simple estate by a widow to a clergyman. It was pivotal to the case that the widow "placed confidence in him, as high as one individual ever placed in another." (at 534, [294]). 147The element of trust and confidence is rooted in cases where the circumstances suggest a handling of the affairs of the one party by the other, as in the early case of Gartside v Isherwood (1783) 28 E R 1297. 148Later cases continue to correlate the requirements of trust and confidence with ascendancy and influence: In Johnson v Buttress Latham CJ noted at 119: Wherever the relation between donor and donee is such that the latter is in a position to exercise dominion over the former by reason of the trust and confidence reposed in the latter, the presumption of undue influence is raised (Dent v Bennett, 4 My. & Cr. 269; see also Smith v Kay, (1859) 7 H.L. Cas. 750). 149A defendant may rebut the presumption of undue influence if it is shown that the transaction was, per Eldon L. C. in Huegenin v Baseley: "the pure, voluntary, well-understood act of the mind," of the plaintiff. In Johnson v Buttress, Latham C.J. put it as follows at 123: In order to maintain the transaction, it was necessary for the defendant to show affirmatively that the deceased knew what he was doing when he made the transfer, in the sense that he understood its effect and significance in relation to himself, and further to show that the transfer was the result of his own will. 150And Dixon J noted further at 134 that beneficial title obtained by reason of undue influence will only be set aside where the donee: ...satisfies the court that he took no advantage of the donor and that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee 151It is not enough for the defendant to establish the disponor in fact intended to give the gift (Huguenin v Baseley (1807) 14 Ves 273, at 299 - 300) the defendant is required to establish that the disponor acted independently of the influence of the dominant party and that she both knew and understood what she was doing (Watkins v Combes (1922) 30 CLR 180). The burden is therefore a high one.

The presence of independent advice 152The presence of independent advice may go towards establishing the existence of a fully informed, free and independent will on the part of the plaintiff. Per Latham CJ in Johnson v Buttress at 119 - 120: It may not be necessary in all cases to show that the donor received competent independent advice (Inche Noriah v Shaik Allie Bin Omar and Haskew v Equity Trustees, Executors and Agency Co. Ltd); the law as to this matter is still a subject of discussion (Lancashire Loans, Ltd v Black). But evidence that such advice has been given is 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. 153Although no hard and fast rule has been laid to establish the requisite content, scope and effect of the independent advice necessary to rebut the presumption, in Jenyns v Public Curator Qld (1953) 90 CLR 113 at 131 the High Court noted that independent advice "must be that of some independent person who is not connected with the donee in business or in any other confidential way and he has a knowledge of all the material facts and he, in fact, advises the donor on all matters which might affect her consideration in determining whether to make a gift". 154In Inche Noriah v Shaik Alle Bin Omar [1929] A C 127; the Privy Council noted that to satisfy the requisite quality of independent advice, the advice must originate from someone acting solely in the interests of the donor, at 135 - 136: Nor are their Lordships prepared to lay down what advice must be received in order to satisfy the rule in cases where independent legal advice is relied upon, further than to say that it must be given with a knowledge of all relevant circumstances and must be such as a competent and honest adviser would give if acting solely in the interests of the donor.

Contracts Review Act 155The plaintiff also seeks relief against the defendants pursuant to the Contracts Review Act 1980 (NSW) (CRA). 156The CRA is a piece of remedial legislation that must be construed liberally: West v AGC (Advances) Ltd (1986) 5 NSWLR 610 per McHugh JA at 631 and Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 per Meagher JA at 277. 157The definition of "unjust" includes notions of unconscionability, harshness and oppression (section 4). Injustice has a corresponding meaning. As McHugh JA pointed out in West, the definition is not exhaustive. As his Honour said at 620 - 621: The definition of "unjust" in s 4 is not exclusive. It is in my opinion a mistake to think that a contract or one of its terms is only unjust when it is unconscionable, harsh or oppressive. Contracts which fall within any of those categories will be "unjust." But the latter expression is not limited to the so-called "tautological trinity". 158The primary focus of the court in determining if a contract or a provision is unjust is to "have regard to the public interest and to all of the circumstances of the case": s 9(1). 159S 9(2) sets out specific matters to which, to the extent that they are relevant, the court is to have regard. 160Under s 7(1) a contract may be unjust in the circumstances existing when it was made. A contractual provision may be unjust simply because it imposes an unreasonable burden on the claimant when it was not reasonably necessary for the protection of the legitimate interests of the party seeking to enforce the provision: s 9(2)(d). Injustice may flow because the claimant did not have the capacity to make an informed or real choice of whether or not to enter the contract: ss 9(2) (a), (e), (f), (g), (i) and (j). 161The contract may be unjust because its terms, consequences or effects are unjust. This is called substantive injustice. Or it may be unjust because of the unfairness of the methods used to make it. This is called procedural injustice. 162The court is entitled to have regard to the circumstances of the case subject to s 9(4) and the public interest. 163 McHugh JA in West v AGC said at 621 that: Any contract or contractual provision not, excluded from the operation of the Act and which the court considers is unjust in the circumstances existing at the time when it was made may be the subject of relief under the Act.......... If a contract or one of its relevant provisions is neither unfair nor unreasonable so far as the applicant is concerned, it is difficult to see how the existence of inequality in bargaining power or lack of independent advice, for example, can render the contract or a provision of the contract unjust. 164As McHugh JA pointed out at page 621 D-E, it is the contract that must be unjust and not the transaction. 165A party will not cause injustice to another unless the contract or one of its provisions is the product of unfair conduct on his part either in the terms which he has imposed or in the means which he has employed to make the contract. 166Unfairness in commerce, without more, will not for example constitute unconscionable conduct: see Gummow and Hayne JJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 where their Honours said at 238 [80] that: The common law does not respond by providing a generalised cause of action "whose main characteristic is the scope it allows, under high-sounding generalisations for judicial indulgence of idiosyncratic notions of what is fair in the market place". Rather, the common law provides particular causes of action and a range of remedies. These rights and remedies strike varying balances between competing claims and policies.

Conclusion as to the first and second defendants 167The plaintiff has in my view failed to make out any case of fraud, deceit or misrepresentation against the first and second defendants. 168I am also of the view that the plaintiff has made out no case on undue influence. I am unpersuaded that the will of the plaintiff was overborne in the relevant sense required by the authorities: she has not proved she was overborne in the requisite sense by the first and the second plaintiffs, nor has she proved the existence of any ascendancy by the first and second defendants such that the transaction was not her free and independent act. The facts as I have accepted them suggest to the contrary. 169Even assuming the circumstances and the nature of the relationship were such that one could presume undue influence, it seems to me that the defendants have rebutted that presumption. There is no doubt in my mind the plaintiff knew exactly what she was doing. She had been considering it for a number of years. I consider what she did was as a result of the exercise of her own free will vis a vis the first and second defendants. She had made her mind up to secure the arrangement which she fully understood would mean at least the passing of title to the first and second defendants after all. In fact she signed the transfer to do just that and must have given Mr Tsolakis the certificate of title. She initiated the transaction. 170I consider she had made her mind up as to what she wanted to do and her reasons for going to Mr Tsolakis was to have it implemented. She believed she would get a residence of her own and be cared for in her own home for life. I have not taken into account the dealings with Mr Tsolakis in considering any evidence of rebuttal in terms of his having provided independent advice because I do not consider he did consistent with the authorities. 171I am likewise of the view she has made out no case on unconscionable conduct. I am unpersuaded the plaintiff suffered from any special disability on the facts. She was both physically and mentally able to appreciate and thereby understand what she was saying and what was being said to her. She did not suffer from any handicap intellectually, nor was she physically fragile in any relevant respect notwithstanding her two periods of hospitalisation, for her knee and her hip. She did feel the house at Chifley was too much for her but that is not to the point. 172The defendants in my mind have not been involved in any wrongdoing and in particular they have not in the relevant sense taken advantage of her. They could not be said to be exploiting any wrongdoing on their part. 173The case in contract such as it is also fails in my view. The plaintiff has continued to reside in the granny flat on the agreed basis. The second defendant in her evidence as I have made it clear does not wish to resile from the agreement she and her husband made with the plaintiff to permit her for life to live in the granny flat. They also accept they will maintain for her life on the basis that the defendants care for her as agreed. 174The question however is whether the plaintiff is entitled to any relief against the first and second defendants. Notwithstanding my findings and my acceptance of the first and second defendants as witnesses and without attributing any blame to them, this does not mean the plaintiff is not entitled to some form of relief against them. 175Notwithstanding I have found no undue influence and no unconscionable conduct as asserted this does not end the consideration of whether a declaration of a constructive trust of a limited kind is an inappropriate remedy. 176This case is very much like Muschinski v Dodds. The relationship between the plaintiff and the first and second defendants can be characterised as a joint venture which has failed without blame on either side. The arrangements between the parties were clearly consensual whether contractual or quasi-contractual. 177The plaintiff was contributing her property which had been her family home where she and her husband shared their life and brought up their children. She had reached a stage in her life where she decided in 2001 that she wanted to remain in the property but have her own surroundings and at the same time enjoy her family, that is the first and second defendants and their children. She did not clearly envisage her daughter Alison being part of that environment. She however wanted and expected to be looked after for the balance of her life. She also expected the first and second defendants would at their own expense build the granny flat and maintain if not renovate the main house. She has watched whilst that has been done. She also has benefited from the defendants paying for household expenses, repairs and the like. 178Likewise the first and second defendants have the legal title of the property and have been placed in that position by the plaintiff. 179They have expended substantial funds given their resources in honouring that commitment. 180Whilst in evidence the second defendant indicated a continued willingness to honour she and her husband's obligations, that has not been a position they have formally adopted in the defence filed nor in their final written submissions presented on them in which they invite the court to entirely dismiss the proceedings. 181Whilst they have put a good deal of their resources into the house and granny flat it would be unconscionable of them to resist formally or otherwise relief the effect of which would be to deny the plaintiff her equitable life interest in the property. 182Right up until virtually the end of the case the plaintiff submitted that if there was a declaration of constructive trust it should be for the whole of the property. It has been fairly pointed out by the first and second defendants that the case had been pleaded and conducted on an all or nothing basis. In argument plaintiff's counsel submitted if I were against him on that proposition then it would as I understood him be appropriate for the plaintiff to remain in the house for life. 183It was submitted on behalf of the first and second defendants that the appropriate order would be if the court were minded to entertain a lesser case, it should only grant something in the nature of an equitable licence to occupy the granny flat with access to the laundry but coupled with an equitable personal obligation that falls short of a life estate but is more like an enforceable interest in the sense of a life tenancy. 184I am not persuaded such an order would be appropriate. When the arrangements were made the parties were and wished for the foreseeable future to live together harmoniously as a family. It was not contemplated the plaintiff would be restricted to some area, cordoned off as it were, with only specifically defined parts of the property where she could go without the permission of the first and second defendants. That is not only unrealistic but contrary to the arrangements as agreed. The position is that if an order of that sort were made the first and second defendants would in that situation be the recipients of a windfall. 185I am of the view that the dictates of justice require than an appropriate order in broad terms at least is a declaration that the first and second defendants hold their legal ownership of 42 Caley Street (in the Folio Identified No. 4186, Deposited Plan 752015), Chifley, in the state of New South Wales, subject to a constructive trust of a life estate in the property in favour of the plaintiff. I will hear submissions on the precise form of the order. 186I am acutely aware that the parties may not be able to live harmoniously together going forward. That was the clear impression I gained at the trial. That position may have changed. Although there was some evidence as to the value of the Chifley property at the date of the transfer there is no current valuation evidence. As well whilst I have some idea of the amount spent to build the granny flat and of renovations on the existing dwelling the evidence is incomplete. For example I am unaware of precisely what the first and second defendants have spent over the years on the mortgage and household expenses including repairs. None of these considerations are of course relevant if the parties are content to live together for the future. However if not I will hear submissions on the appropriate way forward. 187In the alternative to a declaration of a constructive trust I should indicate I would have been prepared to grant relief pursuant to the Contracts Review Act to effect the same result. In short I am of the view that the contract made between the plaintiff and the first and second defendants was unjust in that it was, in all of the circumstances, that the plaintiff's acknowledged life estate was not formally documented so as to relieve her of having to approach a court to enforce her undoubted personal equity. Bahr v Nicolay (No 2) (1988) 164 CLR 604. 188The consequences of her having to go to these lengths I regard as giving rise to the requisite injustice necessary for the court to intervene.

A claim for compensation 189Compensation can be ordered against the Registrar General in effect from the Torrens Assurance Fund pursuant to s 129 of the Real Property Act 1900 (NSW) (RPA) which provides as follows: 129 Circumstances in which compensation payable (1) Any person who suffers loss or damage as a result of the operation of this Act in respect of any land, where the loss or damage arises from: (a) any act or omission of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land, or (b) the registration (otherwise than under section 45E) of some other person as proprietor of the land, or of any estate or interest in the land, or (c) any error, misdescription or omission in the Register in relation to the land, or (d) the land having been brought under the provisions of this Act, or (e) the person having been deprived of the land, or of any estate of interest in the land, as a consequence of fraud, or (f) an error or omission in an official search in relation to the land, or (g) any error of the Registrar-General in recording details supplied in the notice referred to in section 39 (1B) is entitled to payment of compensation from the Torrens Assurance Fund. 190The claim is for an indemnity against the third defendant by reason of the plaintiff being deprived of the relevant property as a consequence of registration of the transfer on 9 April 2001. 191A claim on the fund has to be brought within six years from the date when the action accrued upon registration of the transfer on 9 April 2001. See s 14(1)(d) of the Limitation Act 1969 (NSW): Sinclair v Registrar-General (NSW) [2010] NSWSC 173. The proceedings against the third defendant were brought in 2009. 192In any event s 129(1) of the RPA provides for compensation in a number of circumstances. Relevantly the only viable basis the plaintiff had upon the transfer being registered was to show registration occurred pursuant to fraud. (s 42 RPA). In this case it is said to be the fraud on the part of the first and second defendants. 193The third defendant points to the hurdles the plaintiff has pursuant to s 129(2) of the RPA. It has been unnecessary for me to consider these arguments. 194As I have found no fraud on the part of either the first or second defendants the claim for compensation pursuant to s 129(1) of the RPA must fail. 195There is no doubt that the claim would otherwise be statute barred. 196It is not necessary for me to consider any of the other arguments advanced by the third defendant.

The fourth defendant 197The plaintiff pleads negligence against the fourth defendant, accordingly time runs from when the plaintiff first suffers damage (again registration of the transfer): s 14 Limitation Act 1969 (NSW); Scarcella v Lettice [2000] 51 NSWLR 302 per Handley JA, with whom Powell JA (on this point) and Giles JA agreed, at [13 - 14]. 198Proceedings were not commenced against the fourth defendant until 24 February 2011. 199In so far as a breach of fiduciary duty is alleged the same limitation period (as for negligence), in my opinion, by analogy applies. (s 23 Limitation Act 1969 (NSW)). This is so because here in substance the fiduciary duty claim is the same as the claim of breach of professional duty. Aussie Ideas Pty Ltd v Turnwind Pty Ltd [2006] NSWCA 286 per Handley JA with whom Giles and Bryson JJA agreed, at [22] - [24]. 200In addition the fourth defendant maintains that the pleading of fraud is defective. Clearly it is. 201The rules relating to pleading fraud in this court are to be found in the Uniform Civil Procedure Rules 2005 (NSW) under which Rule 15.3 states: A pleading must give particulars of any fraud, misrepresentation, breach of trust, wilful default or undue influence on which the party relies. 202And further, under Rule 15.4: 'Allegations as to condition of mind' it is stated: (1) A pleading that alleges any condition of mind must give particulars of the facts on which the party pleading relies. (2) In subrule (1), "condition of mind" includes any disorder or disability of mind, any malice and any fraudulent intention, but does not include knowledge. 203In Bank Commerciale S.A., En Liquidation v Akhil Holdings Limited (1989) 169 CLR 279, 285 Mason C J and Gaudron J noted, applying the then procedural Rules of the Supreme Court at 285: It has long been recognized that fraud may take a variety of forms and is, on that account, incapable of precise definition. See, e.g., Draper v. Dean; Reddaway v. Banham; Allcard v. Skinner. The variety of matters which may constitute fraud prevents any construction of the proviso to s. 69(1) of the Act which would require a defendant to negate fraud. That variety effectively deprives a party who may or may not have acted fraudulently from ascertaining precisely what must be negatived. Indeed, it is this feature of fraud which underlies the rule of practice, now embodied in Pt. 15, r. 13 and Pt. 16, r. 2 of the (Supreme Court) Rules, that fraud must be pleaded specifically and with particularity. 204See also Kirby P in Wentworth v Rogers (No.5) (1986) NSWCA 534 at 538, where his Honour (with whom Hope and Samuels JJA concurred) noted: As in all actions based on fraud, particulars of the fraud must be exactly given and the allegations must be established by the strict proof which such a charge requires.

Putting the pleading issue to one side 205The plaintiff in her reply alleges she should be otherwise relieved of the effect of the Limitation Act by reason of fraud, deceit or fraudulent concealment on the part of the fourth defendant pursuant to s 55 of the Limitation Act. 206The defendant submits in order to show some fraud in the relevant sense pursuant to s 55 the plaintiff must show some form of moral turpitude or dishonesty. 207In considering section 55, Mahoney ACJ with whom Meagher JA and Abadee AJA agreed, made the following remarks in Seymour v Seymour 40 NSWLR 358 at 371[E] - 372[F]: In my opinion, the section is not confined to simple common law fraud. It extends to conduct beyond that. On the other hand, it is not, I think, sufficient merely that for the defendant to take advantage of the statute of limitations would be unconscionable or inequitable in the wide sense of these terms. Terms such as unconscionable and inequitable now are used to describe conduct which, in previous times, would not have fallen within them: see Baumgartner v Baumgartner (1987) 164 CLR 137 at 147 and Hibberson v George (1989) 12 Fam LR 725 at 731. Nor, in my opinion, is "fraudulently" wide enough to include everything which would fall within the description of "equitable fraud". Equitable fraud is a doctrine which depends, for this purpose, too much upon nice distinctions which have been drawn in other times: see Snell's Equity, 29th ed (1990) at 550 et seq; Meagher, Gummow & Lehane, Equity: Doctrines and Remedies , 3rd ed (1992) at par 1208; and see the discussion in Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 553. The history of the English legislation was recently reviewed in Sheldon v RHM Outhwaite (Underwriting Agencies) [1996] 1 AC 102: see, eg, at 144, 153. In my opinion, there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the relevant situation involves wrongdoing. At least, this is so in the generality of cases. (There is in this as in many things, the problem of dealing with the person who "closes his eyes to wrong" or is so lacking in conscience that he is not conscious of his own lack of proper standards.) How does that apply in the present case? I do not think that what the solicitor Mr Lewis did in this case falls within these categories, however they be understood. In order to characterise what he did, it is necessary to define more closely what is impugned. Mr Brereton's submissions suggested, inter alia, that after the receipt of the letter from Mrs Field's solicitors in April 1986, Mr Lewis became aware that he had been negligent. At that point, the suggestion was, honesty required that he bring this to the notice of the plaintiffs so that they could, before the expiration of the six months period in June 1986, commence proceedings for negligence against him. The suggestion was that he did not notify them in order to protect himself. 208The High Court in my view has endorsed this approach in Commonwealth v Cornwell (2007) 229 CLR 519 at 533. 209Counsel for the fourth defendant has put additional arguments on causation, contributory negligence and proportionate liability. In the light of my findings and the relief I propose to grant these matters do not arise for resolution. 210There is no doubt that unless she can avail herself of section 55 of the Limitation Act, the plaintiff's case against the fourth defendant is clearly in my opinion statue barred. This is so whether put as a strict negligence case or a breach of fiduciary duty. 211The plea in negligence is supported by two expert reports of Mr Neville Moses, solicitor. Mr Moses expressed the view that Mr Tsolakis was in a conflict of interest and did not place the plaintiff in a position where she could make an independent and fully informed decision and hence he was negligent. The defendant says the plaintiff got exactly what she instructed Mr Tsolakis to implement. Whether the defendant breached any duty is moot, submits the defendant, because even accepting Mr Tsolakis took no steps to advise or seek to register a life estate, the plaintiff always had an enforceable equity (which is consented) against the first and second defendants. Bahr v Nicolay (No 2) (1988) 164 CLR 604. 212In any event counsel for the fourth defendant submits that on the facts the fourth defendant was not in breach of any duty in particular, as the plaintiff was not concerned with the wisdom of the transaction the fourth defendant was not required to proffer unsought advice. He invites me to disregard the opinions of Mr Moses the expert called by the plaintiff. I should observe Mr Moses points to negligence on the part of the fourth defendant and his reports were read and he was not required for cross examination. He says in substance Mr Tsolakis was in a conflict of interest and he did not give the plaintiff an opportunity to exercise a fully informed decision. 213There is no doubt, as Moses frankly contended, Mr Tsolaks did not advise the plaintiff consult an independent solicitor nor frankly did he give the plaintiff's interest the consideration which would have been given by someone acting solely in her interests. 214I consider it rather simplistic to submit that he was merely confronted with an agreement which he was asked somewhat mechanically to implement. The private discussion he had with the plaintiff was a clear recognition of his view that she needed to have a confidential and separate explanation of the significance of what she was about to undertake. The better view having heard arguments to the contrary is that Mr Tsolakis failed to take the appropriate care and skill when he accepted the retainer from the three persons concerned. Mr Moses' opinions ought to be accepted. 215That said, it is of no assistance to the plaintiff in the absence of a finding of fraudulent conduct on the part of the fourth defendant. There is simply no evidence in my view that could support such a finding, within the relevant sense. In any event there was simply never a pleading of fraud as required by the rules. 216There was a vague attempt on the plaintiff's part to somehow develop a case of fraudulent concealment because of the events which occurred in 2008. I reject that submission. 217The events in 2008 are of no assistance to the plaintiff. The retainer on behalf of the plaintiff came to an end in 2001. There could be no ongoing or continuing (equitable or contractual) duty of loyalty as explained by Brereton J in Kallincos v Hunt (2005) 64 NSWLR 561 at 582. In any event I am unable to accept that Mr Tsolakis acted in any fraudulent or dishonest way in 2008. 218It follows from what I have said the case against the fourth defendant fails.

Relief 219I propose to make a declaration of a constructive trust in favour of the plaintiff along the lines set out in paragraph 185 of this judgment. I will hear submissions if it is requested upon the precise form of relief. 220I would invite the counsel for the plaintiff and the first and second defendants to prepare short minutes to reflect my reasons. 221The plaintiff is not entitled to any relief against the third and/or fourth defendants and I thereby dismiss the proceedings brought against them. 222I would reserve all questions of costs and invite the parties to have the matter relisted so that I can hear and determine that issue.

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