Ah Sam v Mortimer

[2021] NSWCA 327

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Ah Sam v Mortimer [2021] NSWCA 327

Hearing dates:

17 August 2021

Date of orders:

17 December 2021

Decision date:

17 December 2021

Before:

Basten JA at [1];
Payne JA at [2];
Brereton JA at [3].

Decision:

Appeal dismissed with costs.

Catchwords:

CONTRACTS – Unconscionable conduct – Special disadvantage – Contract for sale of 50% of real property – Advertisement by respondent for $300,000 – One page agreement for $250,000 presented by appellant – Other terms of agreement improvident – Respondent suffering from very poor eyesight – Appellant aware or ought to have been aware of such facts – Appellant unable to surmount high bar for overturning demeanour-based findings that respondent could not read agreement and was unaware of different price – Special disadvantage established – Agreement void – Appeal dismissed

CONTRACTS – Remedies – Specific performance – Appellant unable to demonstrate that ready, willing, and able to complete – No entitlement to specific performance in alternative that agreement not void

EQUITY – Equitable remedies – Equitable compensation – Order setting aside agreement for unconscionability conditional upon party obtaining relief doing equity – Insufficient evidence of appellant’s expenditure on property or of enhancement to property’s value – Any entitlement offset by appellant’s rent-free enjoyment of property despite void agreement – No compensation payable

APPEALS – Procedural fairness – Bias or apprehension of bias – Interventions by primary judge during appellant’s questioning of witnesses – Rejection of evidence and strong adverse findings – Allegations that primary judge lied – Late grant of leave to respondent to amend pleadings – No bias demonstrated

CIVIL PROCEDURE – Hearings – Adjournment – Appellant received material from respondent shortly before taking of evidence – Evidence had been served long before – Submissions did not commence for another three weeks – Ample time to respond – No injustice identified

CIVIL PROCEDURE – Hearings – Procedural Fairness – Use of audio-visual link – Technology imperfect but no resulting injustice identified

CIVIL PROCEDURE – Pleadings – Amendment – Late application for amendment – Primary judge suggested that respondent amend originating process to explicitly plead unconscionability – Case always conducted on basis of unconscionability – No injustice identified

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56-58, 64

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Babic v Williams (1974) 5 BPR 11,242

Beaton v McDivitt (1985) 13 NSWLR 134; 3 BPR 9,576

Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81

Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66

Brien v Dwyer (1978) 141 CLR 378; [1978] HCA 50

Charisteas v Charisteas (2021) 95 ALJR 824; [2021] HCA 29

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63

Knaggs v Director of Public Prosecutions (2007) 170 A Crim R 366; [2007] NSWCA 83

Michael Wilson & Partners v Nicholls (2011) 244 CLR 427; [2011] HCA 48

Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165; [2003] HCA 30

Mortimer v Ah Sam [2020] NSWSC 1763

Muriniti v Lawcover Insurance Pty Ltd (No 2) [2018] NSWCA 311

Myton Ltd v Schwab-Morris [1974] 1 All ER 326; (1974) 28 P & CR 1

Payne v City Syndicate Management Pty Ltd (Supreme Court (NSW), Holland J, 3 May 1973, unrep)

Prouten v Chapman [2021] NSWCA 207

Queensland v Masson (2020) 94 ALJR 785; [2020] HCA 28

R v Watson; Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39

Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 89

Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49

Tildesley v Harper (1878) 10 Ch D 393

Vakauta v Kelly (1989) 167 CLR 568; [1989] HCA 44

Webb v The Queen (1994) 181 CLR 41; [1994] HCA 30

Texts Cited:

M Cope, Duress, Undue Influence & Unconscientious Bargains (1985, Law Book Co)

Category:

Principal judgment

Parties:

Julius Iulai Ah Sam (Appellant)
Christopher John Mortimer (Respondent)

Representation:

Counsel:
Self-represented (Applicant)
K Tang (Respondent)

Solicitors:
Russell J Baxter Solicitor (Respondent)

File Number(s):

2021/146866

Publication restriction:

N/A

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2020] NSWSC 1763

Date of Decision:

9 December 2020

Before:

Sackar J

File Number(s):

2019/197941

HEADNOTE

[This headnote is not to be read as part of the judgment]

The respondent advertised for a purchaser of 50% of his property for $300,000. The appellant responded and on 21 February 2019 the parties executed a one page document entitled “Real Estate Sale and Purchase Agreement” for a price of $250,000. The agreement, which was prepared by the appellant, provided for payment of an initial $100 deposit (which was paid), a further $12,400 deposit thirty days before settlement, and the balance on settlement by 1 March 2020. It also contemplated the appellant moving into a second house on the property, a company being formed to own the property (with each party having a 50% shareholding), and both parties performing work to maximise the property’s value.

The appellant began residing on the property in March 2019. However, relations deteriorated, and the respondent commenced proceedings in the Supreme Court seeking a declaration that the agreement was void and of no effect, pleading that he had executed the agreement involuntarily, without knowledge of its contents, and in reliance on false and fraudulent representations by the appellant.

The transaction was not completed by 1 March 2020 nor at all, nor was $12,400 paid thirty days before that date. On 16 March 2020, the respondent’s solicitors emailed the appellant asserting that he was thereby in default. An Amended Statement of Claim (“ASOC”) was filed on 16 June 2020, adding a pleading that the respondent had accepted the appellant’s repudiation and terminated the agreement via the email. Trespass allegations were also included. Accordingly, before the primary judge, the respondent contended for orders setting aside the agreement for unconscionability, and alternatively a declaration of valid termination, ejectment of the appellant, and damages for trespass and lost rental income. The appellant cross-claimed seeking specific performance, compensation for works undertaken by him on the property, and damages for personal injury and defamation.

The hearing commenced on 14 September 2020 via audio-visual link, due to pandemic-related constraints. At the outset, the appellant sought an adjournment because he had received a quantity of material from the respondent’s lawyers in the preceding three days. This application was refused, and the primary judge proceeded to take evidence over the course of two days. The matter then resumed for submissions on 8 October 2020, at which point the primary judge raised with respondent’s counsel that although the case was being conducted on the basis of unconscionability, such a claim was not explicitly pleaded. Leave was granted for a Further Amended Statement of Claim (“FASOC”), and for the appellant to respond to it, which he did.

Ultimately, the primary judge found that the agreement was procured by the appellant’s unconscionable conduct, and made orders declaring the agreement void and of no effect and requiring the appellant to give up vacant possession. The appellant now appeals to this Court, challenging the finding of unconscionability, the decision to decline specific performance and compensation, the refusal of an adjournment, and the grant of leave for the FASOC. Complaint is also made that the primary judge exhibited bias, and that the appellant was prejudicially disadvantaged by having to conduct his case via audio-visual link.

Held (per Brereton JA; Basten JA and Payne JA agreeing), dismissing the appeal with costs: [1] (Basten JA), [2] (Payne JA), [3] (Brereton JA).

As to the refusal of an adjournment:

1. All that occurred on 14-15 September 2020 was the taking of evidence in respect of affidavits served well beforehand. Submissions were deferred until 8 October 2020, hence the appellant had ample time to respond to the respondent’s material. No injustice was occasioned: [13]-[19].

As to the audio-visual link:

1. Although audio-visual link technology is imperfect, the appellant has not identified how the problems encountered occasioned him any practical injustice: [20]-[22].

As to the grant of leave to amend the ASOC:

1. The case was always conducted on the basis of unconscionability, and the appellant was permitted to (and did) respond to the FASOC. While he also ought not to have been precluded from adducing further responsive evidence, he did not seek to do so, and he did not identify before this Court any relevant further evidence that might have been adduced, nor otherwise demonstrate any substantive injustice caused by the amendment: [23]-[36].

As to bias:

1. The primary judge’s interventions during the appellant’s questioning were not inappropriate, the complaints that the primary judge rejected the appellant’s evidence and made strong adverse findings do not demonstrate bias, the allegations that the primary judge lied are misconceived, and the grant of leave to amend was consistent with the primary judge’s power and duty to ensure that the pleadings reflected the real matters in issue. Accordingly, no fair-minded lay observer might reasonably have apprehended that the primary judge might not bring an impartial mind to bear on the proceedings: [37]-[62].

As to unconscionability:

1. The terms of the agreement, which were prepared by the appellant and differed from the respondent’s advertisement, were improvident from the respondent’s perspective, and this must have been apparent to the appellant, a not inexperienced businessman. The respondent was suffering from very poor eyesight, and the appellant was aware of this. The appellant is unable to surmount the high bar for overturning the primary judge’s demeanour-based findings to the effect that the respondent was unable to read the agreement, was thus not aware of its disadvantageous terms, and, in particular, did not know that the price was $250,000, not $300,000. These facts constitute a sufficient special disadvantage affecting the respondent’s ability to safeguard his interests as to support the finding of unconscionability: [63]-[122].

   Queensland v Masson (2020) 94 ALJR 785; [2020] HCA 28; Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49; Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14; Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81, applied.

As to specific performance:

1. The respondent’s 16 March 2020 email was equivocal and did not purport to terminate the contract. Moreover, had the agreement been enforceable, the respondent was not entitled to terminate it when he was repudiating it by contending that it was void. Accordingly, had the agreement not been affected by unconscionability, it would have remained on foot. However, the appellant was not ready, willing, and able to pay the purchase price, as on his own case he needed time to raise funds, and he was therefore not entitled to specific performance: [123]-[134].

As to compensation:

1. An order avoiding an agreement for unconscionability may be conditioned on the party obtaining relief doing equity, such as by paying compensation for benefits received. However, the appellant has provided insufficient probative evidence of expenditure on the property, nor of how his work has enhanced the property’s value. Moreover, any equity the appellant may have is offset by his rent-free enjoyment of the property since March 2019: [135]-[140].

   Beaton v McDivitt (1985) 13 NSWLR 134; 3 BPR 9,576, applied; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, considered.

Judgment

1. BASTEN JA: I agree with Brereton JA.

2. PAYNE JA: I agree with Brereton JA.

3. BRERETON JA: In January 2019, the respondent Christopher John Mortimer, a 72 year old man who since about 1989 or 1990 has been the sole registered proprietor of a rural property including two dwelling houses at Stokers Siding, not far from Coolangatta and Byron Bay (“the property”), placed an advertisement on “Gumtree” in the following terms:

“partner wanted for 86 acres 34.8 hectares [in] the tweed valley, with two homes and a concrete floor nursery, all in a quite N/E valley, just 35 min drive to Coolangatta and Byron Bay. school bus pick up in same street 1km from house. Both homes have split a/c units and wood heaters. permanent spring water that is piped to both homes and the nursery. the property has a 4wd tractor and slasher, post hole digger, chain saws, brush cutters, creek running through the property with Taro along the creek banks, macadamia, custed [sic] apple, mango, and avocado

as the property is backing onto the national park and the fire trails it is well suited for horse or trail bike.

The nursery could be converted to dog kennels.

email for more information price $300,000. most of the money is to be put back into the property. The owner would like to start up a Pet Cemetery in a private part of the property.

As a partner, and 50% owner in the property, you can move into one of the homes, and work on the property, or have it as an investment, or do what work you like on the property. or just live there.”

4. On 21 February 2019, the appellant Julius Iulai Ah Sam (aged 71) as purchaser and Mr Mortimer as vendor executed a one page document entitled “Real Estate Sale and Purchase Agreement” which provided for the sale to Mr Ah Sam of a 50% interest in the property for a price of $250,000. Relevantly, the agreement contained the following provisions:

“FINANCE:

1.   Initial Deposit of $100 after Signing of this contract

2.   Further Deposit of $12,400 within 30 days before settlement

3.   Cash on settlement for the balance.

SETTLEMENT: On or before 1 March 2020 (date can be changed by mutual agreement of the parties)

SPECIAL CONDITIONS

1.   Julius Ah Sam to live in the 2 bedroom house on or before 1 October, 2019 and Christopher John Mortimer and his family to live in the 3 bedroom house, both for free.

2.    Julius Ah Sam and Christopher Mortimer to form a Company with equal shareholding of 50% each, and ownership of the property to be transferred to the Company on Settlement or a date mutually agreed to by both parties

3.    Julius Ah Sam and Christopher Mortimer are to work the Farm to maximise its full potential. Any major plans or development to be agreed to by both parties

SETTLEMENT DATE:

On or before 1 March 2020

or a date mutually agreed to by both parties during the duration of this Agreement.”

5. On 23 February 2019, amendments were made, and initialled by both parties, acknowledging the payment on that day of the initial deposit of $100, and changing the date from which Mr Ah Sam would reside on the property to 18 April 2019. Mr Ah Sam commenced to reside in a caravan on the property on or about 4 March 2019, and, after a tenant had vacated, moved into the two-bedroom house on or about 10 March 2019.

6. Before long, relations between the parties soured. On 26 June 2019, Mr Ah Sam obtained interim apprehended violence orders against Mr Mortimer and his wife. On the same day, Mr Mortimer commenced proceedings in the Equity Division, seeking a declaration that the agreement was void and of no effect, and alternatively an order that it be rescinded. The Statement of Claim pleaded that Mr Mortimer had executed the agreement in reliance on representations as to its contents and effect which were false and fraudulent; that Mr Mortimer did not know the contents of the agreement and executed it involuntarily; and that he was mistaken as to its true terms. It claimed that Mr Mortimer had suffered damage from selling for $250,000 rather than $300,000, from loss of rental income, and from damage to the property caused by Mr Ah Sam’s occupation.

7. 31 January 2020 came and passed without payment of the further deposit of $12,400, which under the agreement was payable “within 30 days before settlement”, which was due on 1 March 2020. In turn, 1 March 2020 came and passed without tender of the balance of the purchase price. On 16 March 2020, Mr Mortimer’s solicitors sent an email to Mr Ah Sam, asserting that he had breached a fundamental term of the contract by not paying the deposit and not endeavouring to arrange completion, and foreshadowing that these would be relied on in the proceedings in addition to the claim of unconscionability. However, the email also alleged that Mr Ah Sam had not complied with the contract because he was impecunious, and sought information as to the source of his funds if he disputed this.

8. An Amended Statement of Claim dated 12 June 2020 was filed on 16 June 2020. In lieu of the relief previously claimed, it claimed a declaration that the agreement was validly terminated by notice of 16 March 2020, that by reason of Mr Ah Sam’s breaches of the agreement it was terminated, cancelled, and of no effect, and judgment for possession and for “damages for continuing trespass after 16 March 2020”. Added to the pleading, under the new heading “Termination of Agreement”, were allegations that, in breach of the agreement, Mr Ah Sam did not pay the further deposit of $12,400 on 30 January 2020, ^[1] nor the balance of the purchase price on 1 March 2020, and that an email of 16 March 2020 to Mr Ah Sam from Mr Mortimer’s solicitor “confirmed the defendant’s repudiation” and terminated the agreement. Also added to the pleading was a paragraph headed “Possession”, and under the heading “Trespass” allegations that Mr Ah Sam had been a trespasser since the date of the email notice given on 16 March 2020.

   1. As alleged in the Statement of Claim, although 2020 being a leap year, 30 days before 1 March 2020 is apparently 31 January 2020.

9. Before the primary judge, Mr Mortimer contended primarily for orders setting aside the agreement for unconscionability, and alternatively a declaration that it had been validly terminated, ejectment of Mr Ah Sam from the property, and damages for trespass and lost rental income. Mr Ah Sam cross-claimed for specific performance of the agreement, compensation for works performed by him on the property, and damages for physical and psychological injury and defamation. Following an expedited hearing (essentially on grounds of the difficulties arising from the parties occupying the one property, in the context of Mr Mortimer’s health), conducted remotely by audio-visual link due to COVID‑19 constraints, Sackar J held that the agreement should be avoided for unconscionability, and that Mr Ah Sam was not entitled to any compensation other than repayment of the deposit of $100. On 12 February 2021, orders were made declaring the agreement void and of no effect, and requiring its delivery up to the Court for cancellation; for repayment to Mr Ah Sam of the $100 deposit; dismissing the cross-claim; requiring Mr Ah Sam to give up vacant possession of the property and issuing a writ of possession; and that Mr Ah Sam pay Mr Mortimer’s costs. From those orders, Mr Ah Sam appeals to this Court. Execution of the writ of possession has been stayed in the meantime.

10. At first instance and before us, Mr Ah Sam was self-represented. From his Notice of Appeal and his written submissions, it appears that the grounds of appeal on which he relies are that:

1. the primary judge erred in finding unconscionability;

2. the primary judge erred in declining specific performance;

3. the primary judge erred in finding that Mr Ah Sam was not entitled to compensation for his work on the property;

4. the primary judge erred in granting leave, after the evidence was complete, for the further amendment of the Statement of Claim, in order to plead unconscionability in more explicit and complete terms;

1. Mr Ah Sam was prejudicially disadvantaged in the conduct of his case by its having been conducted by audio-visual link and not conventionally;

2. the primary judge was biased; and

3. the primary judge erred in declining an adjournment on the first day of the trial.

11. It is convenient to deal first with what might be called the procedural grounds, and then the allegation of bias, before turning to the substantive issues of unconscionability, specific performance, and compensation.

The procedural complaints

12. Under this rubric are addressed the appellant’s complaints that the primary judge erred in declining an adjournment on the first day of the trial; that Mr Ah Sam was prejudicially disadvantaged by the conduct of the case remotely by audio-visual link; and that the primary judge erred in granting leave for the further amendment of the Statement of Claim to plead unconscionability more explicitly and completely, after the evidence was closed.

Refusal of adjournment

13. The hearing commenced on Monday 14 September 2020. As has been mentioned, it was conducted remotely, by audio-visual link. Mr Ah Sam was located at the Murwillumbah Courthouse. At the outset, Mr Ah Sam raised his “really deep concerns” arising from his receipt over the preceding three days of a quantity of material from the respondent’s lawyers, and proposed that the case be adjourned. It was ascertained that the material in question included the plaintiff’s submissions, a list of affidavits, a list of objections, and a chronology. Mr Ah Sam submitted, in effect, that he needed time to consider the submissions, and the authorities referred to in them.

14. His Honour responded to the effect that Mr Ah Sam could agree or disagree with the chronology; that the notice of objections was entirely conventional in that objections were usually not taken in advance of the evidence being read; and that he proposed to deal with the evidence on that and the following day, as the affidavit evidence had been served quite some time earlier, but would be inclined not to require Mr Ah Sam to address without allowing a reasonable opportunity to research the cases and make submissions at some time in the very near future. Mr Ah Sam confirmed that he had received, shortly after the dates they bear, the plaintiff’s evidence, namely affidavits of Mr Mortimer sworn on 9 August 2019 and 30 August 2019, an affidavit of his solicitor Mr Baxter of 15 August 2019, an affidavit of Colin Richard Lay of 30 August 2019, and an affidavit of Dr Walker of 25 March 2020. His Honour said that if Mr Ah Sam was disadvantaged and wanted time to research the law and put on further submissions, he would give consideration to that, but that he wanted to proceed with the evidence.

15. Counsel for the respondent said that the respondent could not afford to consent to an adjournment, given Mr Mortimer’s age and health, which was why the matter was in the expedition list.

16. The hearing proceeded on 14 September 2020, when Mr Mortimer gave evidence and was cross-examined; followed by Mr Lay. On 15 September 2020, Dr Walker gave evidence and was cross-examined. That concluded the plaintiff’s case. Mr Ah Sam then gave evidence and was cross-examined. The proceedings were then adjourned to 25 September 2020, for submissions.

17. As to the objections, as his Honour recorded in the substantive judgment:^[2]

“The defendant appeared in person. He filed no evidence at least in conventional form. He resisted the invitation for legal assistance (5 June directions hearing T.5/49) and instead filed a series of documents purporting to be a combination of evidence, pleadings and submissions. Although objections were taken by counsel for the plaintiff to much of that documentation I adopted a liberal approach and did not make any evidentiary rulings as such disallowing any of the defendant’s materials. I allowed the defendant to state from the witness box that the statements of fact in his various documents were in effect the truth and he gave an affirmation to that effect and was cross examined.”

2. Mortimer v Ah Sam [2020] NSWSC 1763 at [91] (Sackar J) (“Primary judgment”).

18. As it transpired, therefore, the notice of objections received by Mr Ah Sam shortly before the hearing resulted in no detriment to him. After the evidence was taken, the proceedings were adjourned for submissions, so that he was afforded a reasonable opportunity to research the law and respond to the plaintiff’s submissions. All that occurred on 14 and 15 September 2020 was the taking of evidence, in circumstances where the affidavits relied on by the plaintiff were served well beforehand, and Mr Ah Sam knew that the matter was fixed for hearing commencing on 14 September 2020.

19. In those circumstances, there was no error or injustice in the primary judge’s discretionary decision to decline to adjourn a hearing which had been fixed for some time, and to proceed to take the evidence as his Honour did on 14 and 15 September 2020.

Audio-visual link

20. The appellant complains that the conduct of the hearing remotely by audio-visual link was prejudicial to him. He elaborates his submission to say that the format and technology used was “inefficient [and] unreliable”, resulting in poor quality audio-visual presentation with frequent dropouts, and submits that the proceedings ought to have been conducted in a traditional courtroom format, or at least with professional audio-visual equipment and a competent operator, so as not to prejudice him. He submitted that his own iPhone had to be used for the audio connection, that he could not hear the judge and the respondent’s barrister several times, especially during cross-examination, and that questions were often misheard or misinterpreted, causing him to give incorrect answers. He referred to the following passage in the transcript: ^[3]

“DEFENDANT: The other thing I want to mention is yesterday I couldn’t hear some of the responses when I was doing the questioning from the witnesses because the phone was keep on breaking - cutting off. So that’s why I repeated some of the questions and so I just hope your Honour won’t hold that against me because I didn’t hear what - and so I have to repeat the questions, your Honour.

HIS HONOUR: I’ll tell you why it won’t be held against you, Mr Ah Sam. There are two reasons why you will not be disadvantaged. The first one is that I’m going to supply you with a copy of the transcript from yesterday. Number (1), and today. Number (2) I already indicated yesterday that when we conclude the evidence today I will give you and Mr Tang a reasonably short opportunity to put in some written material if you wish and I will allow you some time to consider the answers given by Mr Mortimer, and for that matter you because you will be cross-examined today. So you will not be disadvantaged in terms of not having heard anything. I will make sure you get copy of transcript.

DEFENDANT: Thank you very much, your Honour, that puts my mind at ease. I was a little sleepless last night, you know, worrying about it, so I have to say thank you.”

3. Tcpt, 15 September 2020, p 64(1)-(20).

21. He submitted that the transcript, when received, included several mistakes and problems, including occasional “not transcribable” notations, misspellings, incorrect words, and gaps where there was no audio link.

22. The problems with the audio-visual link described by Mr Ah Sam are, regrettably, not unfamiliar. They are borne out by the transcript available to this Court. It may readily be accepted that the conduct of proceedings remotely, using imperfect technology, presents additional difficulties for all parties. However, what the appellant has conspicuously failed to do is to identify how those problems caused him any practical injustice. He had the opportunity to make submissions after receiving the transcript, and, if he wished, to correct any errors in it. In particular, he has not identified any material matter which influenced the primary judge’s judgment which he was precluded from addressing, nor any matter which he wished to place before the Court that he was unable to adduce. Nor has he shown how any finding of the primary judge adverse to him was affected by any shortcoming of the audio-visual link. It does not appear that the conduct of these proceedings remotely operated in any practical way prejudicially to the appellant, nor that it resulted in any injustice to him.

Late amendment

23. As has been noted, the hearing commenced on 14 September 2020, and continued on 15 September 2020, when the evidence was concluded. At the end of the day on 15 September 2020, the proceedings were adjourned to 25 September 2020, for submissions. On that day, for reasons that are not entirely clear but which may have been associated with difficulties in establishing a satisfactory audio-visual link, submissions did not proceed, although some additional documentary evidence was tendered, and the matter was adjourned to 8 October 2020 for submissions.

24. When the matter resumed on 8 October 2020, his Honour raised with counsel for Mr Mortimer that although the case had been opened and conducted on the basis of unconscionability, it was not pleaded, and that the primary relief claimed in the pleading was that the agreement had been terminated pursuant to notice given and dated 16 March 2020. His Honour continued: ^[4]

“HIS HONOUR: Well the problem at the moment is you neither plead unconscionability as such nor do you seek relief on the basis of unconscionability. … And let me just [go] one step further. … You plead the meeting in para 4. … You say that at the meeting certain things were disclosed. You then say in (5) that certain things were represented. You then say in (6) at a subsequent meeting on the 21st there was the document; you then further say in (7) that at the subsequent meeting the defendant purported to read out the document and made certain representations. You then plead in (8) in reliance upon the representations he was induced to sign. You then plead the terms of the agreement. In (11) you then say the defendant knew at all relevant times that they were false and untrue, made fraudulently, et cetera. You then plead in (12) that the plaintiff’s [sic] had no knowledge of any terms; and in (13) he was mistaken. Now you do not plead anywhere that the defendant knew of the special disability. You do not plead anywhere that it was unconscionably taken - that he unconscionably as it were took advantage of Mr Mortimer. I do not know whether you are pleading fraud but if you are that may not really amount to a fraud particularisation in (11). You don't - I don't know whether when you say he had no knowledge I presume you're not running a non est factum case, but it's not clear. Then you say he was mistaken and are you running a mistake case and I don't know. … But let me just bring you to where I'm at. There is no doubt that the case has been run both on the evidence and the cross-examination on the basis that the bargain was unconscionably procured by Mr Ah Sam. That he knew because he was told but he knew relevantly, not that simply matters were disclosed. He knew or should be taken to have known the various matters inter alia in para 4(i) through to (ix).

TANG: Yes.

HIS HONOUR: And therefore your primary relief as I understood it because of the notion of you keep referring to a catching bargain and you've always been referring to Blomley v Ryan, Amadio, but your primary argument is not that the agreement is in breach. Your primary argument - that's your secondary argument, namely and of course even if it's unconscionable there's still - it may well be a binding contract but it's of no effect or is not enforceable because of unconscionable behaviour.”

4. Tcpt, 8 October 2020, pp 141(43)-142(44).

25. After some further discussion, counsel applied for leave to amend: ^[5]

“TANG: And your Honour, I thank your Honour for those observations, it has occurred to me during the adjournment period that there is and what I loosely call a Dare v Pulham point that the notice, the clarity of the notice of the claims, the order in which they are claims and the correlation to the specific relief that we claim. Your Honour has outlined some of my concerns. The written submissions of the plaintiff reflect the case that I have run.

HIS HONOUR: I agree with that.

TANG: The, however the pleadings themselves in the amended form, do not precisely reflect that. And it would be in my respectful submission appropriate and if I might make either application or join your Honour's comments, that sufficient notice be, well that the pleadings are actually put in a form as a matter of late amendment that, that the defendant be under absolutely no illusions as to what it is the plaintiff claims. So, we're not talking about a situation where because the case was run in a certain way, that it approximates what was in the pleadings somehow. We are talking about a precise pleading that reflects how the case was run. I have no - I don't wish to cavil with your Honour's observations there, I adopt them and they are mine. And they would not, it would not be a problem to put the pleadings in order for that to happen.”

5. Tcpt, 8 October 2020, p 145(20)-(40).

26. His Honour then explained the position to Mr Ah Sam, in detail and with clarity, and sought Mr Ah Sam’s consent to the course proposed, which was not entirely forthcoming: ^[6]

“HIS HONOUR: Yep I understand that's what I have in mind. So Mr Ah Sam I don't need to hear from you unless you're against the proposition I'm advancing. If you don't oppose what I've suggested to Mr Tang and which he embraces then what I would do would be to adjourn today. We'll fix another day immediately if possible so that everyone knows precisely where we're going. I've got some dates from the Murwillumbah Court as to when they're next available. And I think I may just excuse myself in a moment but Mr Ah Sam do you oppose the course I'm suggesting or not?

DEFENDANT: Well I'm feeling confused to you judge because of what I'm hearing it sounds like the plaintiff does not really have a case--

HIS HONOUR: No, no, no that's not so Mr Ah Sam. Don't read anything into that sort. What I have pointed Mr Tang to is that the case conducted against you as a matter of fact is not precisely identified in the written pleading. What is important in these cases is the evidence if eventually at the end of the case. You are not hearing anything of the sort. I am not giving the plaintiff an opportunity to bring a case which they don't currently have. They've run the case against you. Mr Mortimer has given evidence, you have given evidence, and so on.

I have raised though some technical issues with Mr Tang and pointed out a couple of technical inconsistencies between the way in which the case was run and the pleading in this case. Now if you want to go on today we'll go on today on this pleading but as Mr Tang has asked to amend it I think in all fairness both to you and to his client the matter should be made more precise.”

6. Tcpt, 8 October 2020, p 148(12)-(37).

27. In due course, although formal directions do not appear to have been made, counsel for Mr Mortimer agreed to provide an amended pleading by 16 October 2020, and the judge asked Mr Ah Sam to provide any amended defence by 23 October 2020. His Honour made clear that there was to be no further evidence: ^[7]

    7. Tcpt, 8 October 2020, pp 150(25)-151(28).

HIS HONOUR: Well what about we make 2pm on the 26th gives you the morning to reflect and I think this will if I allow a couple of hours so what is happening at the moment Mr Ah Sam is that Mr Tang is going to make some changes to his what is called his amended statement of claim and there'll be some changes in terms of what he seeks by way of relief, and he will change some of the wording otherwise. Now they are the best dates, that is the best date for me and the best date for Murwillumbah. They've given me also the 29th and 30th but unfortunately I've got a two day case on the 29th and 30th which I can't presently move. So the 26th is the best day and if we say 2pm so Mr Tang when would you have your pleading ready for distribution? Sorry Mr Tang are you there?

TANG: Yes. Your Honour might I be able to propose 16 October? I know that sounds it's next Friday.

HIS HONOUR: No, no that's all right. If you're happy with 16 October, Mr Ah Sam if you need to amend your defence to any new words that you see that you want to respond, I don't want any more evidence from either side but if you want to say anything more in writing can you please give me that by the day of 22 October? Well let's say - no let's say morning of the 23rd. What about I give you till 10 am on 23 October if you want to say anything in writing by way of pleading or submission. Mr Tang I presume you're not going to put anything by way of submission you're just going to tweak the pleading. All right well on that--

TANG: All right may I say--

HIS HONOUR: On that basis if you want or need you think to amend your pleading Mr Ah Sam I don't want any more evidence from Mr Tang, I'm not letting him put on any more evidence. I'm not letting you do either wise. But I will then hear you both now for final submissions on the afternoon at 2pm on 26 October which is the Monday of that week.

DEFENDANT: Just a question your Honour, so by the 16th I will get Mr Tang's claim.

HIS HONOUR: Yes.

DEFENDANT: But then I can respond to that or I can put up something different?

HIS HONOUR: No you can respond to that by 23 October.

DEFENDANT: On what he's going to write or I can do it my own--

HIS HONOUR: Well you can respond to what he's going to write.

DEFENDANT: Okay.

HIS HONOUR: And because - but all I'm saying to you is there's no more evidence coming into the case because the case has been conducted but you can respond in two ways, you can respond by a pleading, a defence or amended defence of some sort if you want and that's what I have in mind.

DEFENDANT: Thank you, your Honour. I understand.”

28. The proceedings were then adjourned to 26 October 2020.

29. The draft Further Amended Statement of Claim sought a “declaration that [the agreement] be set aside for unconscionability; alternatively, a declaration that by reason of Mr Ah Sam’s breaches it was validly terminated, cancelled and of no effect, judgment for possession; and “damages for continuing trespass”. It inserted allegations that Mr Ah Sam knew and was aware of Mr Mortimer’s special disability by way of visual impairment, and of the disadvantaged status of Mr Mortimer’s personal life, financial status, and physical health, and “knowingly, dishonestly and unconscientiously” exploited that incapacity by procuring Mr Mortimer’s signature to the agreement.

30. Mr Ah Sam lodged an updated “Defense to Amended Statement of Claim” on 2 November 2020 which responded to and traversed the allegations in the Further Amended Statement of Claim.

31. In the substantive judgment, the primary judge recorded: ^[8]

“[5]    The case from the outset both in written outline (plaintiff’s submissions dated 11 September 2020 at [4]) and oral submissions (T.8/35-50) was primarily conducted on the basis of unconscionability on the part of the defendant. However it seemed to me that the plaintiff’s pleading did not make that clear. On the fourth day of the hearing, on 8 October, after the evidence had been taken on the first and second days and the third day was adjourned due to technical difficulties, I gave the plaintiff leave to bring in an amended pleading to reflect his case by 16 October and also an opportunity for the defendant to put on an amended defence by 23 October.

[6]    The hearing was to recommence on 26 October for closing submissions. However on that day the defendant advised that he had had difficulty printing the plaintiff’s amended statement of claim and was therefore not ready to proceed. Again I adjourned the proceedings, to 2 November, allowing the defendant further time, to put on his amended defence and finally heard the parties' closing submissions on 5 November.”

8. Primary judgment at [5]-[6].

32. In his Notice of Appeal, the appellant relevantly complains:

“3.    The trial judge's granting of leave during the hearing on 8 October 2020 [judgment paragraph 5] to the Respondent to amend his Amended Statement of Claim including to introduce grounds of claim as to unconscionability and unconscionable conduct by the Appellant was:

•   Unreasonable including as such amendments should have been sought by the Respondent in accordance with the Rules and at a much earlier time so as to not prejudice unfairly the Appellant;

•   Unfairly prejudicial to the Appellant including because a proper opportunity to object to the amendments was not given to the Appellant and no leave was granted to the Appellant to amend his Defence as to such amendment as was permitted nor introduce evidence in support thereof.

•   In denial of natural justice to the Appellant in that e.g. the Respondent's claim and issues were not clearly pleaded and no opportunity was given for the filing of evidence by the Appellant especially in the circumstances where he was a self represented litigant.”

33. It is most regrettable that the case presented at trial was not one which was reflected in the pleadings, and that it was not until after the evidence had closed that attention was given to this matter. However, there is also no doubt that the case was opened by the respondent and conducted on the basis that it was primarily a claim of unconscionability, and Mr Ah Sam’s “Defense Affidavit” of 27 September 2019, which served as his pleading, evidence, and cross-claim, addressed the factual circumstances which underlaid the claim of unconscionability, including in particular Mr Mortimer’s physical fitness, the inspection of the property, the negotiation of the terms, his “can’t see, couldn’t read excuse”, the alleged reading over of the agreement to him, and his alleged use of glasses to read it. The amendments essentially brought the respondent’s pleading into conformity with the evidence.

34. The critical question is whether allowing the late amendment occasioned unfair prejudice to Mr Ah Sam. Mr Ah Sam was invited to state his opposition, if any, to the course proposed; he did so, stating that he was “feeling confused … because … it sounds like the plaintiff does not really have a case”, and his Honour explained that that view was misconceived, making clear that the purpose of the amendment was not to raise a new case, but to bring the pleadings into conformity with the case that had been conducted. That is not of itself productive of substantive injustice. It is not correct that Mr Ah Sam was not permitted to respond; the arrangements made on 8 October 2020 envisaged that he would have that opportunity, which he availed himself of by his updated “Defense to Amended Statement of Claim” of 2 November 2020.

35. It is, however, correct that Mr Ah Sam was precluded from adducing further evidence in response to the amended claim. While it was entirely appropriate that the plaintiff, being permitted to amend only to bring the pleadings into conformity with the case conducted, should have been precluded from adducing further evidence, the same does not apply to the defendant: it is quite conceivable that in the light of the reformulated claim, based on unconscionability, he might have recognised a need to adduce additional evidence addressed to that issue. This might well have been a telling point, had he been able to identify any evidence not already adduced which he would have adduced given that opportunity. However, he did not seek to do so at first instance, and in this Court, when asked what further evidence he might have adduced given that opportunity, he referred only to further research of the law of unconscionability.

36. In those circumstances, the late further amendment of the Statement of Claim, to bring it into conformity with the case that had been conducted, occasioned Mr Ah Sam no material prejudice.

Bias

37. Mr Ah Sam complained that the primary judge was biased, his contentions including that his Honour made “constant objections and interruptions of the Appellant’s questioning of Dr Walker” (when the Respondent’s counsel did not raise a single objection), “was fighting the appellant all the way”, and “abused his power and authority”. It was not entirely clear whether the appellant was complaining of actual bias or of apprehended bias. Though many of his submissions are redolent of the former, his reference to the judgment of Deane J in Webb v The Queen ^[9] suggests the latter, and as it involves a lower threshold I shall proceed on that basis. In that context, the test is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to bear on the resolution of the proceedings. ^[10] Such an observer’s reasonable apprehension is to be evaluated on the basis of an appreciation of the standards of ordinary judicial practice. ^[11]

    9. (1994) 181 CLR 41 at 74 (Deane J); [1994] HCA 30.

    10. Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344 [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ), 363 [83] (Gaudron J); [2000] HCA 63; R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 256 (Barwick CJ, Gibbs, Stephen and Mason JJ); [1976] HCA 39.

    11. See most recently Charisteas v Charisteas; [2021] HCA 29; (2021) 95 ALJR 824 at 828 [12] (Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ).

38. Many of the matters relied on by Mr Ah Sam as evidence of bias were findings adverse to him in his Honour’s final judgment. These included “hostility towards the appellant”, said to be manifested by conclusions of dishonesty contained in the following passages of the judgment: ^[12]

“[138]   Although not pleaded there is scope in all the circumstances to conclude that the defendant never ever intended to make any payments other than the $100. He has acted in my view dishonourably and dishonestly in relation to the transaction. Again having observed him give his evidence I am satisfied he lied about not being at all interested in what the plaintiff was saying during their first meeting. He must in my view have summed up the plaintiff as foolish and gullible and susceptible to his charm and patter. The talk of overseas assets and a cash purchase with a man so obviously desperate as the plaintiff was a clear invitation to the plaintiff that he should feel sufficiently persuaded to accept without too much hesitation the offer over lunch. The defendant’s first offer as it were provided for a 33% discount on the asking price. Both offers were in any event to be subject to the same improvident terms from the plaintiff’s point of view so the defendant in a sense must have thought he could not lose either way. He clearly intended and clearly succeeded in having the plaintiff sign on the spot at lunch.

…

[156]   On the materials in the final submissions he claims a total of $196,131.19 as having been expended on the property. I am unable to accept that amount. As I have found there are no receipts, no corroborating materials but for the receipts for the $3000 odd. I regard the claim otherwise as fanciful in the extreme and contrived so as to create a set off that would enable him to avoid the payment of the purchase price. To that extent I regard the defendant as quite dishonest. I consider he told a deliberate untruth when he pretended not to be aware of the plaintiff’s infirmities and difficult financial situation. I have already expressed the view that I am satisfied he deliberately took advantage of them to advance his own interests.

[157]   My views are fortified by the so called disclosure of his so called assets. They amount to ‘digital assets’ which are said to be valuable with a ‘big future potential’. This only serves to expose the fantasy life led by the defendant. As I have said apart from his appraisal of their value there is no evidence of value from any independent source. They do not expose a person ready, willing or for that matter able to complete the contract. Relevantly he seemingly has no cash available and no ability to raise funds for the purposes of completing the purchase. He would therefore not be entitled to an order for specific performance (see, e.g, Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737 at 742 (Lord Radcliffe); Mehmet v Benson (1965) 113 CLR 295 at 307-309 (Barwick CJ)) and I would dismiss the defendant’s claim for such an order.”

12. Primary judgment at [138], [156]-[157].

39. Other complaints which are derived from the adverse findings in the judgment include that bias was exhibited by the judge “ignoring important facts, evidence and common sense”, by “discounting [the appellant’s] valuable costly digital assets as worthless”, and by ignoring that the respondent has (allegedly) a history of taking advantage of others.

40. The complaints to which I have so far referred do not rise above complaints that the primary judge rejected Mr Ah Sam’s evidence and made strong adverse findings about him, he says erroneously. However, the making of findings of fact or credit adverse to a party, or the rejection of a party’s case, does not demonstrate bias. The mere fact that parties or witnesses are the subject of criticism in a judgment, even harsh criticism, is without more, insufficient to establish apprehended bias. ^[13] Even the adoption of illogical, irrational or perverse reasoning does not of itself suffice to establish bias. ^[14] It may be otherwise if such findings serve to confirm apprehensions otherwise created during the proceedings. ^[15]

    13. Muriniti v Lawcover Insurance Pty Ltd (No 2) [2018] NSWCA 311 at [185] (Bathurst CJ, Beazley P and White JA); Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; (2016) 332 ALR 128 at 172 [233]-[234] (Ward JA; Basten JA and Emmett AJA agreeing); Knaggs v Director of Public Prosecutions [2007] NSWCA 83; (2007) 170 A Crim R 366 at 387 [95] (Campbell JA; Mason P and Tobias JA agreeing).

    14. Cf, in the administrative law context, Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 77 ALJR 1165 at 1182 [99] (Kirby J).

    15. See Vakauta v Kelly (1989) 167 CLR 568 at 573 (Brennan, Deane and Gaudron JJ), 579 (Dawson J), 588 (Toohey J); [1989] HCA 44; but cf Michael Wilson & Partners v Nicholls (2011) 244 CLR 427 at 446 [67] (Gummow ACJ, Hayne, Crennan and Bell JJ); [2011] HCA 48.

41. Mr Ah Sam’s submission “that the trial judge showed bias by lying” might be in a different category, because if it appears that a judge has included deliberate falsehoods in a judgment, that might be the “something more” necessary to establish bias. However, the allegation is entirely misconceived. Two particulars of it were provided. The first was:

“The trial judge lied that the granting of leave to the Respondent to Amend the Amended Statement of Claim was made during the hearings on the 4^th day. The hearing was only for 2 days as listed on 14 & 15 of September 2019. It was made after the hearings, and after final submissions in September 2019. It was made on 8 October the day the trial judge was supposed to make his final judgements.”

42. What his Honour in fact said has been set out above. ^[16] The actual course of events has also been described above. It was not at all inaccurate to describe 8 October 2020 as the fourth day, in the context in which his Honour explained it. Final submissions were not made until 5 November 2020. There was never any contemplation that judgment would be delivered on 8 October 2020. There is no inaccuracy in what the primary judge stated, let alone one that could remotely be considered deliberate. Mr Ah Sam’s submission is baseless, and unbecoming.

    16. At [31] (Primary judgment at [5]-[6]).

43. The second particular was:

“The trial judge lied that the Appellant took out an AVO against only the Respondent’s wife [judgement paragraph 35]. The AVO’s were against both the Respondent and his wife [CB 106-109]. They both threatened, intimidated, harassed and assaulted (physically and verbally) the Appellant.”

44. In this respect, what his Honour said was:^[17]

“The plaintiff consulted his solicitor on 24 April 2019 and the two have in effect been in conflict since March 2019. The defendant at one point took out an interim AVO against the plaintiff’s wife. According to the plaintiff the defendant has taunted him and his family and refuses to leave.”

17. Primary judgment at [35].

45. The judge did not state that Mr Ah Sam took out an AVO only against the plaintiff’s wife, and the statement in the judgment was not literally inaccurate. It is true that it did not mention that there was also an AVO against the plaintiff, but that was immaterial. There is absolutely no reason for a reasonable person to suppose that this was anything other than an inadvertent omission of an immaterial detail. Mr Ah Sam’s submission is, again, baseless and unbecoming.

46. Of matters that, having occurred during the hearing, might found an apprehension of bias, Mr Ah Sam pointed to the granting of leave to amend after the hearing was concluded, including the giving of advice to the plaintiff’s counsel as to how to amend, and the denial of a proper opportunity to object to it; unreasonable interference with the cross-examination of witnesses; and coaching the respondent’s barrister by pointing out issues for cross-examination.

47. The circumstances surrounding the grant of leave to amend on 8 October 2020 have been described above. It is necessary to bear in mind that, from the opening written submissions, it was plain that the case on behalf of Mr Mortimer was primarily one of unconscionability. The original Statement of Claim included a reference to “unconscionability”, ^[18] pleaded the circumstances of the plaintiff’s disadvantage (at [4]), and that he was unaware of the terms of the written agreement (at [12]), so that unconscionability was not an entirely novel notion. The judge recognised, after the evidence was completed, that the pleadings did not conform with the manner in which the case had been conducted. Civil Procedure Act 2005 (NSW) (“CPA”), s 64, relevantly provides that at any stage of the proceedings, the Court may order that any document in the proceedings be amended, or grant leave to any party to amend any such document, and that (subject to compliance with s 58, including the dictates of justice in ss 56-57), “all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings”. This power to amend is conferred primarily to ensure that the pleadings accurately reflect the substance of the matters that are really in dispute, including in circumstances where the real issues emerge from the conduct of the proceedings and from the evidence, though they are not explicit or even implicit in the extant pleading. ^[19] That is exactly what his Honour did by requiring the plaintiff to amend. A judge is not in those circumstances required to remain silent and allow a case to proceed on a false basis, with all the subsequent complications that might ensue. To the contrary, the dictates of CPA, ss 56-58 and 64 authorise, if not require, judicial intervention to ensure that the real issues are determined, and that the pleadings reflect them. While it is understandable that, as a self-represented litigant, Mr Ah Sam might have perceived the exchanges between his Honour and the plaintiff’s counsel as advice as to how to amend, his Honour was in reality pointing out that the pleading did not conform with the case that counsel was conducting. Armed with an appreciation of ordinary judicial practice in those circumstances, a fair-minded lay observer would not entertain a reasonable apprehension of bias.

    18. In the “Type of Claim” section on the cover page.

    19. Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 185 [14], 190-191 [27], 192 [30] (French CJ), 208 [81], 211 [93], 212-213 [96]-[97] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); [2009] HCA 27; Tildesley v Harper (1878) 10 Ch D 393 at 397 (Bramwell LJ; Baggallay LJ agreeing), 397 (Thesiger LJ; Baggallay LJ agreeing).

48. As to interference with his cross-examination of witnesses, Mr Ah Sam submitted that of 52 “objections” taken in the course of Dr Walker’s evidence, every one was taken by the judge; of sixteen during Mr Mortimer’s evidence, all but one were taken by the judge; and of fourteen during Mr Lay’s evidence, every one was taken by the judge. Thus, it was said, of a total of 82 objections, 81 were taken by the judge. Mr Ah Sam’s complaint, founded on the frequency of the trial judge’s interventions, reflects a complaint he made to the trial judge, that he understood it was for opposing counsel to object and the judge to rule, to which his Honour appropriately responded to the effect that the trial judge was in control of the proceedings and could disallow questions of his own motion. ^[20]

    20. Tcpt, 15 September 2020, pp 74(45)-75(2).

49. Mr Ah Sam’s count of the number of “objections” taken in the course of cross-examination appears to treat each time the words “HIS HONOUR:” appear in the transcript prior to a statement as a separate individual objection. As a result, it gives a misleading impression of the number and frequency of his Honour’s interventions, most of which involved multiple exchanges. In fact, Mr Ah Sam’s cross-examination of Mr Mortimer was largely uninterrupted, and such interventions as occurred were in response to plainly impermissible questions.

50. While his Honour did reject a number of “questions” in the course of Mr Ah Sam’s cross-examination of Dr Walker, that was because the cross-examiner was either not engaging with the real issues – in particular Dr Walker’s opinion, based on the material available to him, that Mr Mortimer’s vision would have been compromised on the day he signed the agreement – or not framing permissible questions, or engaging in commentary. Some illustrations are:

51. His Honour disallowed the following question: ^[21]

“Q. You know that the Gold Coast Hospital declined to make a report because to me they did not think it was a suitable thing to do and you took it on like that--"

21. Tcpt, 15 September 2020, p 74(37)-(38).

52. That question impermissibly asked the witness to speculate about another entity’s reasons, and involved the insertion of the questioner’s commentary.

53. His Honour disallowed the following question: ^[22]

“Q. The whole point I’m getting into with your commenting other areas, which I am coming to, is that you were not impartial, that you were tired and that you were approached by Mr Baxter many, many times. Not once, many times, okay? You did a report which the hospital would not have anything to do with and then you commented on very vital aspects of the case that you said that Mr Mortimer could not see properly. And you haven’t even treated him, you only saw him for 15 minutes and then you make another comment that you thought he is okay to comply. So all those to me, you know, getting at the defence for what I have put it as my defence. So to me that’s absolutely impartial (sic) and you have that duty. And that’s what I’m trying to get to judge. I do not believe his report. I do not believe [this witness] that he is impartial. It is ..(not transcribable).. it is definitely impartial (sic). So I’m pointing to--"

22. Tcpt, 15 September 2020, p 77(12)-(23).

54. As his Honour said, that was not a question, but a multitude of questions mixed with submissions, and it was rightly disallowed.

55. His Honour disallowed the following question: ^[23]

“Q. Let’s just start from the top there, your Honour. Now, paragraph 1, ‘We refer to the letter of 19 August’, apparently. In passing too, I have not got that 19 August letter. That conversation with Mr Baxter, including your office manager, and then the next paragraph is, ‘We were advised you could not do a report due to the fact that you had no notes’. Now, a report was done without notes initially of this, because that is in there.”

23. Tcpt, 15 September 2020, p 78(1)-(6).

56. As his Honour said, that was unhelpful and impermissible commentary, not a permissible question.

57. His Honour disallowed the following question: ^[24]

“Q. On page 126, and this is paragraphs 4 and 5 and 6, so we start with, you know, original. At the end of paragraph, you say that ‘at this level of vision, he could well be expected to have difficulty reading, although his reading vision was not measured explicitly’. Now to me, that is like telling somebody you’ve got Coronavirus and you haven’t tested them.”

24. Tcpt, 15 September 2020, p 80(1)-(5).

58. His Honour said that he would not allow that question, the analogy with Coronavirus being “silly” and “unhelpful”, but that he would not stop Mr Ah Sam asking questions about the doctor’s statement to which the question referred.

59. His Honour correctly disallowed, as irrelevant, questions about Mr Mortimer’s current vision (as at the date of trial), as distinct from his vision at the time of the transaction. Notably, however, the critical relevant questions were unimpeded: Mr Ah Sam was permitted, without interruption, to ask whether, in the doctor’s opinion, Mr Mortimer could have read the one page document on 21 February 2019; to put that he would have been able to do so; to ask whether it was possible that he could have done so; and to put that the witness could not really say because he was not there. ^[25]

    25. See, eg, Tcpt, 15 September 2020, pp 83(3)-84(43).

60. Thus, when seen in context, his Honour was not “fighting the appellant”, but appropriately controlling the trial, in the context of an expedited hearing, with a self-represented litigant who was having difficulty in formulating legally permissible questions.

61. The suggestion that his Honour engaged in “coaching the respondent’s barrister by pointing out issues for cross-examination (T45, 47 and 48)” is also baseless. His Honour simply pointed out to Mr Ah Sam that the course of a witness’ evidence would include cross-examination (at 45), ^[26] rejected a question asked by the plaintiff’s counsel as leading (at 47), ^[27] and another as impermissible in re-examination (at T47-8). ^[28]

    26. Tcpt, 14 September 2020, p 45(5)-(10).

    27. Tcpt, 14 September 2020, p 47(13)-(16).

    28. Tcpt, 14 September 2020, pp 47(46)-48(1).

62. Accordingly, the matters referred to by Mr Ah Sam are not such that a fair-minded lay observer might reasonably have apprehended that the primary judge might not bring an impartial mind to bear on the resolution of the proceedings. The complaints of bias fail.

Unconscionability

63. The central issue in the case, and in the appeal, is whether the agreement was procured by unconscionable conduct.

64. Equity intervenes to avoid a transaction which has been brought about by one party knowingly taking advantage of a special disadvantage to which the other party was subject which affected that party’s ability to safeguard his or her own interests. In Commercial Bank of Australia Ltd v Amadio,^[29] Mason J (as he then was) emphasised the distinction between the doctrines of unconscionable dealing and undue influence, and explained in particular that for the purpose of attracting the former – unlike the latter – it was not necessary that the plaintiff’s will have been overborne: ^[30]

“Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position.

… though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest.”

29. (1983) 151 CLR 447; [1983] HCA 14 (“Amadio”).

30. Amadio at 461 (Mason J).

65. The doctrine was summarised by Kitto J in Blomley v Ryan in the following terms (emphasis added):^[31]

“It applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.”

31. (1956) 99 CLR 362 at 415 (Kitto J); [1956] HCA 81.

66. In Amadio, Deane J, with whom Mason J and Wilson J agreed, described the elements that would attract relief as follows (emphasis added): ^[32]

“The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or ‘unconscientious’ that he procure, or accept, the weaker party’s assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: ‘the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract’ (see per Lord Hatherley, O’Rorke v Bolingbroke [(1877) 2 App Cas at p 283]; Fry v Lane [(1888) 40 Ch D 312 at p 322]; Blomley v Ryan [(1956) 99 CLR 362 at pp 428-429]).”

32. Amadio at 474 (Deane J; Mason J and Wilson J agreeing).

67. Thus, where a party impugns a transaction on the ground that it is an unconscionable dealing: (1) the plaintiff must establish that there was a relevant relationship of “special disadvantage”; (2) the plaintiff must establish that the defendant understood that the plaintiff was at a special disadvantage; and (3) the defendant then bears the onus of establishing that the transaction was “fair, just and reasonable”, ^[33] which involves showing either that the plaintiff received full value or was independently advised. ^[34]

    33. Amadio at 474 (Deane J; Mason J and Wilson J agreeing).

    34. M Cope, Duress, Undue Influence & Unconscientious Bargains (1985, Law Book Co) at [260].

68. In this context, “special disadvantage” is usually associated with conditions that make people vulnerable to exploitation and less able to conserve their own interests. In Amadio, Mason J explained the concept in the following terms (emphasis added): ^[35]

    35. Amadio at 461-462 (Mason J).

“It goes almost without saying that it is impossible to describe definitively all the situations in which relief will be granted on the ground of unconscionable conduct. As Fullagar J said in Blomley v Ryan [(1956) 99 CLR 362 at p 405]:

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

Likewise Kitto J [(1956) 99 CLR at p 415] spoke of it as ‘a well-known head of equity’ which–

‘... applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands’.

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.”

69. In Bridgewater v Leahy, Gaudron, Gummow and Kirby JJ said (citations omitted):^[36]

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

36. (1998) 194 CLR 457 at 479 [76] (Gaudron, Gummow and Kirby JJ); [1998] HCA 66.

70. In Thorne v Kennedy, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ confirmed (citations omitted):^[37]

“A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage ‘which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests’. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring ‘victimisation’, ‘unconscientious conduct’, or ‘exploitation’. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.”

37. (2017) 263 CLR 85 at 103 [38] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ); [2017] HCA 49.

71. Thus not every case of illness, impairment, or emotional dependence is a case of special disadvantage. It is insufficient to attract the doctrine merely that there be an inequality of bargaining power, or that the plaintiff be affected by one or more of the relevant conditions; it is critical that the condition be such as to impact on the plaintiff’s ability to conserve his or her own interests and render him or her vulnerable to exploitation. At the heart of the doctrine is the avoidance of unfair exploitation of a disadvantage or vulnerability.

Background

72. Mr Mortimer moved to Stokers Siding with his then wife and their three children in about 1990. They were divorced in about 2000. In about 2010 he remarried; his current wife is aged 44, and they have two children, aged nine and eight.

73. An electrician by trade, Mr Mortimer had been a company manager and chief engineer. He had been employed in Sydney as a Manager for Metro Environmental Services. When he first moved to the Northern Rivers, he worked for Holiday Inn at Surfers Paradise, and then for Dreamworld, before returning to sub-contracting electrical and air-conditioning work. He agreed, in cross-examination, that in the course of his career, he had been required to sign contracts, ^[38] although he said that he had only ever been involved in one real estate transaction, 30 years previously. ^[39]

    38. Tcpt, 14 September 2020, p 33(11)-(27).

    39. Tcpt, 14 September 2020, p 38(38)-(48).

74. By the time of the 2019 transaction with Mr Ah Sam, Mr Mortimer had retired. His wife was employed as a kitchen hand. He was not eligible for a pension, and was accessing his superannuation to meet expenses, including to service the mortgage on the property, which secured $230,000. He had a number of health issues: he is an insulin-dependent diabetic; he had suffered a heart attack in December 2017; and his eyesight was deteriorating. According to Mr Mortimer, he could not read; he had been told that he was blind in the right eye; if he shut his left eye, his vision was “totally blurry”; his left eye was better, but he could not read a newspaper; he could read a computer screen by enlarging the font, but not a laptop; and his glasses did not help.

75. Following his heart attack, Mr Mortimer became concerned and stressed about his financial situation, including the circumstances of his young family, but he did not want to sell the property. He conceived, as a solution, the proposal which he advertised on Gumtree, which would enable him to pay off the mortgage.  In response to the Gumtree advertisement, he had received 37 emails and twenty telephone enquiries. There had been a number of inspections, but only one offer, at a price of $250,000, which he said he rejected because he wanted $300,000. ^[40]

    40. Tcpt, 14 September 2020, p 14(4)-(35).

The inspection

76. Mr Ah Sam – who described himself as an investor, a successful businessman who had bought and sold properties internationally (in Australia, New Zealand, and the USA), ^[41] and a trained teacher (with both Bachelor’s and Master’s degrees in Science from the University of Auckland) ^[42] – saw the Gumtree advertisement and contacted Mr Mortimer by telephone in January 2019, asking a number of questions to ascertain whether an inspection was worthwhile. They arranged an inspection for 17 February 2019.

    41. Tcpt, 15 September 2020, pp 91(31)-92(25).

    42. Tcpt, 15 September 2020, pp 92(41)-93(2).

77. On 17 February 2019, Mr Ah Sam attended the property, and Mr Mortimer accompanied him on an inspection, which occupied some hours. According to Mr Ah Sam, he and Mr Mortimer, and possibly one of Mr Mortimer’s children, walked all over the property.

78. According to Mr Mortimer, in the course of the inspection, Mr Ah Sam asked, “Why are you doing this?”, and Mr Mortimer responded, “I’m running out of money and I can’t get the pension, I am getting desperate and need to do something to raise money, I still have a mortgage”. Mr Ah Sam asked, “How much is the mortgage?”, and Mr Mortimer replied, “$220,000”.

79. Also according to Mr Mortimer, he told Mr Ah Sam, “I’ve had some legal advice and I want to form a company with each owner having one share in the company and for the company to lease the land from the owners. I was told it would be a set-up fee of about $40,000”. This referred to advice which Mr Mortimer said he had received from a solicitor in Murwillumbah. He also told Mr Ah Sam that he was having eye surgery on 21 February 2019, and had had a heart attack the previous year. He said that the surgery was important because he could not really see properly, and could not read anything. Mr Ah Sam asked, “How bad is your eyesight”, and Mr Mortimer responded, “I can’t read and I have bleeding behind the eyes”. Mr Ah Sam asked if he could still drive, and Mr Mortimer told him he was concerned because he had to have a test in March to renew his licence.

80. Mr Ah Sam does not deny that these things might have been said, but says that he was not taking particular notice, as his focus was on the possibility of doing a deal, rather than on Mr Mortimer’s issues. ^[43] He agreed that at some time – possibly during the inspection on 17 February 2019 – Mr Mortimer said something to the effect that he was running out of money and had to do something. ^[44] He also agreed that Mr Mortimer mentioned something about his eyesight, although he maintained that he understood that the appointment on 21 February 2019 was for a check-up, not for a procedure. ^[45] And Mr Mortimer undoubtedly referred to transferring the property to a jointly held company, as Mr Ah Sam included such a provision in the agreement when he drafted it.

    43. Tcpt, 15 September 2020, pp 107(49)-108(27).

    44. Tcpt, 15 September 2020, p 107(29)-(49).

    45. Tcpt, 15 September 2020, pp 103(8)-104(24), 106(22)-(25), 108(29)-(39).

81. According to Mr Mortimer, in the course of the inspection Mr Ah Sam noticed the second house, and Mr Mortimer said he could not show him through it because there was a tenant, who was troublesome; he said he had received advice that he had to give the tenant a 90-day notice to eject her. Mr Ah Sam agrees that Mr Mortimer referred to having problems with the tenant. ^[46]

    46. Tcpt, 15 September 2020, p 98(18)-(24).

82. Also according to Mr Mortimer, he showed Mr Ah Sam an area where taro had been planted; Mr Ah Sam said he knew about that, as he had a farm in Hawaii where he grew taro, bananas, and mangoes. Mr Ah Sam also told Mr Mortimer that he had been a film producer and worked for the Gold Coast Council. Mr Mortimer gained the impression he was well off, observing that he drove a Mercedes Benz motor vehicle (according to Mr Ah Sam, a 1987 model). Mr Ah Sam said: “I’m an investor and a cash buyer and I want to talk to you further about some of your ideas and the property. What you must ensure you do is not take on a partner who has to borrow to become your business partner because they will need a mortgage and you will be back in the same position you are in now. I am a cash buyer. I would like to meet with you again to work out some details, do you get up the Coast?”. They arranged to meet for lunch at the casino at Broadbeach on 21 February 2019, before Mr Mortimer’s eye appointment that afternoon. ^[47]

    47. Tcpt, 15 September 2020, p 104(6)-(24).

The telephone calls

83. Between 17 and 20 February 2019, Mr Ah Sam prepared a written agreement. Indeed, Mr Ah Sam says that he prepared two versions which were identical, except that in one the price was $200,000 and in the other it was $250,000. In addition to the price, the agreement contained a number of other terms which were not mentioned in the Gumtree advertisement, and which were prima facie disadvantageous to Mr Mortimer – in particular that settlement was deferred for twelve months, and the price was payable as to $100 on the signing of the agreement, as to $12,400 within 30 days before settlement, and the balance on settlement, while Mr Ah Sam would be entitled to occupy the second house on the property from 1 October 2019.

84. According to Mr Ah Sam, these terms of the agreement (including that he would occupy the second [two-bedroom] house, that the property would be transferred to a company in which they had equal shareholdings, that settlement would be in cash without a mortgage in about a year to enable him to realise assets, and that the initial deposit would be $100) were “agreed to during our discussions over several days in person and by phone”. More specifically, he says that he read the agreement – omitting the price – over the phone to Mr Mortimer on 20 February 2019, and that Mr Mortimer approved it; ^[48] and that on the morning of 21 February 2019 he again rang Mr Mortimer to confirm that he was happy with the agreement. ^[49]

    48. Tcpt, 15 September 2020, p 105(5)-(11).

    49. Tcpt, 15 September 2020, p 115(27)-(33).

Resolution

108. The primary judge summarised Mr Mortimer’s case on the issue of unconscionability as follows: ^[87]

“[41]    The plaintiff submits the defendant took unconscientious advantage of his special disability, namely his ‘poor to very poor vision on 21 February 2019’ and ‘heightened sense of anxiety’ on the day. He submits the defendant knew of his weaknesses in health and financial status and gained an advantageous transaction as a result, having purported to read the agreement to the plaintiff but in terms that did not resemble the original Gumtree advertisement or the document the plaintiff actually signed (Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Blomley v Ryan (1956) 99 CLR 362; Bridgwater v Leahy (1998) 194 CLR 457).

[42]   The plaintiff submits the defendant attended the meeting on 21 February as a successful businessman driving to have the contract signed by the plaintiff for an interest in land, a business venture and a place to live rent free. He submits the defendant acted rapidly in finalising the deal, reflecting his rapaciousness and the fact he had been put on notice of the plaintiff’s procedure that day which would ameliorate the problems with his eyesight.

[43]   The plaintiff submits the court should accept Dr Walker’s evidence that the plaintiff’s eyesight was poor and his reading vision was correlatively so, although not measured on 21 February 2019 (citing Dasreef v Hawchar (2011) 243 CLR 588).

[44]   The plaintiff further submits the court should not accept the defendant’s evidence that he did not know about the plaintiff’s health and vision impairment because the plaintiff had told him about his eye impairments on 17 and 21 February 2019 and could not read their written agreement on the day it was signed.”

87. Primary judgment at [41]-[44].

109. His Honour summarised Mr Ah Sam’s case relevantly as follows: ^[88]

“[53]    The defendant submits that the 21 February 2019 agreement is binding and enforceable. He submits the parties have acted on the contract in that the plaintiff accepted the defendant’s $100 deposit and let him onto the property on 5 March 2019 and the defendant has made substantial improvements to the property.

[54]    He submits that the agreement was not the result of unconscionable conduct and that he did not take advantage of the plaintiff. He says he was not aware of the plaintiff’s poor eyesight and believed the plaintiff was strong, healthy, smart, well-educated and financially secure. He submits he and the plaintiff were in a similar position, for example being of similar ages and work backgrounds. He also submits that the agreement is a simple document.

[55]    The defendant denies that he guided the plaintiff’s hand to sign the agreement and submits the signature shows no evidence of being forced or guided by him. He also submits that Dr Walker’s evidence should be rejected for example because all the reports he considered (except for one concerning a meeting he had with the plaintiff on 15 February 2019) postdate 21 February 2019 and no eye test was undertaken on that date.

[56]    The defendant submits that the plaintiff is attempting to kick the defendant out and take advantage of the work he did on the property, as he was required to under Special Condition 3 of the agreement.”

88. Primary judgment at [53]-[56].

110. His Honour expressed himself to be satisfied that the agreement was procured by unconscionable conduct on the part of Mr Ah Sam. ^[89] His Honour elaborated (emphasis added): ^[90]

“[129]    But I am satisfied that the plaintiff foolishly entered so called negotiations with the defendant as a result of his Gumtree advertisement. He was ill-equipped to do so. He was unwell and had poor eyesight. I accept the plaintiff’s evidence that his eyesight was compromised on 21 February. Dr Walker’s views support that conclusion and I also accept the latter’s evidence on that point. The plaintiff was stressed about his health, his much younger wife and family and a mortgage which he had had on the property for some time. Indeed I do not consider it to be far fetched to describe him as desperate. One further corroboration of the plaintiff’s foolishness is his even driving to the medical appointment on 21 February given the condition of his eyes.

[130]    Further I accept the plaintiff’s evidence that on 17 February when he first met the defendant he told the defendant about his health and financial predicament. I am satisfied he told the defendant in effect that he was running out of money, could not get the pension and was getting desperate. He told the defendant he had had a heart attack the year before and was having eye surgery because he could not see properly or read anything and had bleeding behind the eyes (plaintiff’s affidavit of 30 August 2019 [11]-[13]). I reject the defendant’s denial that these things were said or that he was in effect not taking any interest.

[131]    In my view the defendant was taking a keen interest and in my view astutely assessed how vulnerable and indeed foolish the plaintiff was. He prepared two versions of the written contract in advance of their meeting on 21 February. He drafted the terms and I do not accept his evidence that he read it out over the phone at least twice to the plaintiff before the meeting. In that regard I accept the plaintiff’s denial that that occurred.

[132]    The terms of the agreement were commercially improvident from the plaintiff’s point of view and indeed farcical. For a deposit of a mere $100 the defendant had a year to pay the full purchase price. He was to have free accommodation which he had clearly observed during his lengthy inspection. He was under no express obligation to do anything except to undertake the entirely and one might think deliberately vague notion of doing things so that the full potential of the land could be realised.

…

[138]    Although not pleaded there is scope in all the circumstances to conclude that the defendant never ever intended to make any payments other than the $100. He has acted in my view dishonourably and dishonestly in relation to the transaction. Again having observed him give his evidence I am satisfied he lied about not being at all interested in what the plaintiff was saying during their first meeting. He must in my view have summed up the plaintiff as foolish and gullible and susceptible to his charm and patter. The talk of overseas assets and a cash purchase with a man so obviously desperate as the plaintiff was a clear invitation to the plaintiff that he should feel sufficiently persuaded to accept without too much hesitation the offer over lunch. The defendant’s first offer as it were provided for a 33% discount on the asking price. Both offers were in any event to be subject to the same improvident terms from the plaintiff’s point of view so the defendant in a sense must have thought he could not lose either way. He clearly intended and clearly succeeded in having the plaintiff sign on the spot at lunch.

[139]    The mere fact the plaintiff was as I find on the evidence prepared to sign a document he had never seen before is further confirmation of his gullibility and vulnerability. He was given no opportunity to consult a lawyer nor did he think to do so is also confirmation of his foolishness. But as the authorities point out foolishness alone is perhaps not enough. I am satisfied the defendant knowingly took advantage of the plaintiff.”

89. Primary judgment at [127].

90. Primary judgment at [129]-[132], [138]-[139].

111. As his Honour found,^[91] the terms of the agreement were improvident from Mr Mortimer’s perspective: in effect, for a deposit of only $100, Mr Ah Sam was allowed a year to pay the purchase price, and enjoyment of the property, including rent-free occupation of the second house, in the meantime. That improvidence must have been apparent to Mr Ah Sam, as a not inexperienced businessman. ^[92] This was of considerable significance in circumstances where it is common ground that Mr Mortimer’s purpose was to relieve financial pressure – a purpose which would hardly be achieved if he were not to be paid for another year. These disadvantageous (to Mr Mortimer) terms were not included in the Gumtree advertisement. The only evidence that they were ever discussed is Mr Ah Sam’s disputed account, and even his account does not attribute to Mr Mortimer any question of comment about them.

     91. Primary judgment at [132].

     92. See Primary judgment at [136].

112. However, while the improvidence of a transaction may operate as a red flag, it does not of itself make a case of unconscionability. In my view, the critical question is whether, to Mr Ah Sam’s knowledge on 21 February 2019, Mr Mortimer’s vision was materially impaired, with the consequence that he did not know that the price stated in the document he signed was not $300,000, that settlement was deferred for twelve months, that the deposit was merely nominal, but that Mr Ah Sam would be entitled to occupation in the meantime, free of any occupation fee or interest. Otherwise, I doubt that the combination of Mr Mortimer’s health and financial circumstances amounted to a sufficient “special disadvantage”. However, if by reason of impairment of vision, to Mr Ah Sam’s knowledge, Mr Mortimer could not ascertain that the price stated was not $300,000 as he believed, and was unaware of the other disadvantageous terms, then that would amply suffice to constitute a special disadvantage which affected his ability to safeguard his own interests.

113. His Honour’s findings, set out above, include findings that:

1. Mr Mortimer had poor eyesight, and his vision was compromised at the meeting at the casino on 21 February 2019. ^[93] This involved acceptance of Mr Mortimer’s evidence, supported by Dr Walker’s evidence;

2. Mr Ah Sam knew that Mr Mortimer was having eye surgery because he could not see properly or read anything and had bleeding behind the eyes. ^[94] This involved acceptance of Mr Mortimer’s account of their conversations during the inspection on 17 February 2019, and rejection of Mr Ah Sam’s evidence that if these things were said, he was not paying attention; and

3. The relevant terms of the agreement had not been discussed or negotiated before the meeting at the casino. ^[95]

   93. Primary judgment at [129].

   94. Primary judgment at [130].

   95. Primary judgment at [131].

114. His Honour did not expressly find that Mr Ah Sam represented that the price in the contract was $300,000. However, in light of his Honour’s reference to the plaintiff’s submission that “the defendant knew of his weaknesses in health and financial status and gained an advantageous transaction as a result, having purported to read the agreement to the plaintiff but in terms that did not resemble the original Gumtree advertisement or the document the plaintiff actually signed”, the general acceptance of Mr Mortimer’s evidence, the credit findings adverse to Mr Ah Sam, and most importantly the fact that impaired vision was relevant only if Mr Mortimer did not know what was in the agreement, it should be accepted that his Honour’s findings include that Mr Mortimer did not know that the document did not state the price to be $250,000 and contained the other disadvantageous terms.

115. On these questions the evidence was largely, though not entirely, the word of Mr Mortimer against that of Mr Ah Sam, and his Honour plainly preferred the former. His Honour’s rejection of Mr Ah Sam’s evidence was substantially based on demeanour: his Honour expressly referred, in this context, to “having observed him give his evidence”. ^[96] These are therefore findings of fact made by a trial judge after hearing and seeing the witnesses, and expressly based in part on the judge’s observations of Mr Ah Sam. In those circumstances, the task facing the appellant is a heavy one: it must appear that those findings are “glaringly improbable”, “contrary to compelling inferences”, or inconsistent with “incontrovertible facts or uncontested testimony”. The principles were summarised by the High Court in Queensland v Masson:^[97]

“For present purposes, it is enough to repeat the observations of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [Fox v Percy (2003) 214 CLR 118 at [26]-[29]; 77 ALJR 989] that, at least where the trial judge’s decision might be affected by his or her impression about the credibility of the witness, whom the trial judge sees and hears but the appellate court does not, the appellate court must respect the attendant advantages of the trial judge. If, making proper allowance for such advantages, the appellate court concludes that an error has been shown, it is authorised and obliged to discharge its appellate duties in accordance with the statute conferring appellate jurisdiction [Warren v Coombes (1979) 142 CLR 531 at 551; 53 ALJR 293 per Gibbs A-CJ, Jacobs and Murphy JJ]. In particular cases, it may be demonstrated that the trial judge’s conclusions are erroneous, despite being based upon or said to be based upon an assessment of credibility. That will be so where the trial judge’s findings of fact are contrary to ‘incontrovertible facts or uncontested testimony’ [Fox v Percy (2003) 214 CLR 118 at [28]; 77 ALJR 989 per Gleeson CJ, Gummow and Kirby JJ], “glaringly improbable” [Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844 per Gibbs CJ, Wilson, Brennan, Deane and Dawson JJ], or ‘contrary to compelling inferences’ [Chambers v Jobling (1986) 7 NSWLR 1 at 10 per Kirby P; at 20 per Samuels JA].”

96. Primary judgment at [138].

97. [2020] HCA 28; (2020) 94 ALJR 785 at 800 [78] (Kiefel CJ, Bell and Keane JJ), 812 [119] (Nettle and Gordon JJ). See most recently Prouten v Chapman [2021] NSWCA 207 at [105]-[106] (Brereton JA).

116. Mr Ah Sam submitted that the crucial findings were contradicted by:

1. the fact that Mr Mortimer was able to accompany him on an extensive physical inspection of the property on 17 February 2019;

2. the consistent and accurate positioning of Mr Mortimer’s signatures and dates on each copy of the agreement document;

3. the (asserted) fact that Mr Mortimer could read a menu at the restaurant on 21 February 2019; and

4. the fact that Mr Mortimer was able to drive himself from his home to the Gold Coast on the morning of 21 February 2019, and home the following day, and later obtain a renewal of his driving licence.

117. However, Mr Mortimer’s ability to walk around the property on an inspection and point out its features says little about his ability to read print on paper. As to the positioning of his signatures, Mr Mortimer’s evidence was that he was guided as to where to sign and date the two copies of the document. Examination of both copies reveals a slightly different position and slant of Mr Mortimer’s signature, but in both cases an apparently close relationship with the line on which he was supposed to sign. This is not glaringly improbable if, as he says, he was guided where to sign and date the documents, and he could see the appearance of black lines. Mr Ah Sam’s repeated submission that Mr Mortimer was able to read the menu at the restaurant was supported only by the assertion to that effect in his updated “Defense to Amended Statement of Claim” of 2 November 2020, to which Mr Mortimer had had no opportunity to respond, and which had not been put to him in cross-examination. And notwithstanding Dr Walker’s explanation that there is a relationship between distant vision and reading vision, it does not follow from the circumstance that he was able to drive (if imprudently), that he was also able to read up close. Dr Walker said that Mr Mortimer’s vision as at 21 February 2019 was below the criteria for a driving licence, though it improved subsequently with treatment. In those circumstances, Mr Mortimer’s reckless decision to drive himself is not inconsistent with his being unable to read the document with which he was presented on 21 February 2019; nor is the subsequent improvement in his vision following treatment.

118. His Honour’s findings derive some support from Dr Walker’s evidence, which while inconclusive, points to Mr Mortimer’s reading vision being compromised as at 21 February 2019. They also derive support from the undisputed fact that Mr Ah Sam knew, from the conversation in the course of the inspection on 17 February 2019, that Mr Mortimer’s eyesight was poor, and that he was that day coming to the Gold Coast for a medical appointment in connection with his eye; while Mr Ah Sam claimed that he understood it merely to be a check-up, that is contradicted by the hospital records, which show that it was for laser surgery. Further support is provided by Mr Ah Sam’s concession that at the casino, Mr Mortimer may well have asked him to read out the agreement. And they are supported also by the circumstance that Mr Mortimer did not point out or correct the erroneous descriptions in the agreement (including as to area), which he subsequently noticed once he was able to read it.

119. It might be said that, even accepting that Mr Ah Sam knew that Mr Mortimer’s vision was compromised, it was a large risk to prepare documentation on the assumption that he would be entirely unable to read it and discern the provisions that had been included in it. However, that may not have been his original plan, but an opportunity that presented when it became apparent, at the casino, just how defective Mr Mortimer’s vision was.

120. Moreover, it seems incredible that a vendor such as Mr Mortimer would express himself to be happy with an agreement when he did not know the price, as Mr Ah Sam suggests was the case when he allegedly read the agreement over to him on the telephone. And given that Mr Mortimer’s motive for the transaction was to provide funds which he could apply to relieve the financial pressure he was experiencing, it would be remarkable – if he was aware of the amount of the deposit and the timeframe for settlement – that he would not at least have questioned those terms; yet not even Mr Ah Sam suggests that he did so. It also seems extraordinary that of the two documents allegedly prepared in advance by Mr Ah Sam, neither of which reflected the advertised asking price, one happened to coincide with the price which Mr Mortimer allegedly said he would accept after rejecting the amount in the first.

121. For those reasons, in my view it cannot be said that his Honour’s essential findings were “glaringly improbable”, “contrary to compelling inferences”, or inconsistent with “incontrovertible facts or uncontested testimony”. Indeed, more glaring improbabilities were associated with Mr Ah Sam’s version, including that Mr Mortimer without question expressed himself to be happy with an agreement, when he did not know the price, and when settlement was to be deferred for a year, with a deposit of only $100.

122. It follows that in my opinion it has not been established that his Honour was in error in concluding that the agreement was procured by unconscionable conduct on the part of Mr Ah Sam, and was therefore voidable in equity.

Specific performance

123. Mr Mortimer’s alternative case was that if there was a binding agreement, then Mr Ah Sam was in breach of essential terms of the agreement because he had not paid the amounts due under it (being the “further deposit” of $12,400 payable within 30 days before settlement, and the balance purchase money payable on settlement), and had thereby repudiated the contract, which Mr Mortimer terminated by an email sent by his solicitor to Mr Ah Sam on 16 March 2020. Having concluded that the agreement was void for unconscionability, his Honour did not have to, and did not, resolve this issue. However, the status of the contract is relevant to Mr Ah Sam’s appeal from his Honour’s dismissal of his cross-claim for specific performance.

124. It is not in dispute that Mr Ah Sam did not pay the “further deposit” by 30 January 2020 or at all, nor the balance of the purchase price by 1 March 2020. The email sent to the defendant by the plaintiff’s solicitor on 16 March 2020 was relevantly as follows:

“In these proceedings you are relying on a one page agreement purporting to sell half the property at 177 Adcocks Rd Stokers Siding and form a company. This agreement had the following conditions being:

1.   Initial deposit of $100. We acknowledge that amount was paid by you.

2.   Further deposit of $12,400 within 30 days before settlement

3.   Cash on Settlement for the balance with the settlement date being listed as “on or before 1 March 2020”.

We are now 16 March 2020. You have not paid the additional deposit amount of $12,400. In NSW the payment of a deposit is a fundamental condition of a contract for the sale of real estate. We assert you have breached a fundamental term of the contract.

At 16 days past the 1 March 2020 settlement date, we believe you have breached a fundamental term of the contract by not endeavouring to arrange completion.

You will note our Statement of Claim alleges the one page document was entered into unconscionably. At the hearing we will also allege you have breached your own contract by the non-payment of the deposit and the failure to attempt to list for settlement.

It is our belief you have failed to pay the monies and list for settlement due to you being impecunious. If you disagree please advise where the funds for either the contract you are relying on are coming from or where the funds for your proposed offer are coming from.”

125. The plaintiff’s Amended Statement of Claim, of 12 June 2020 (filed 16 June 2020), relevantly inserted the following claims for relief:

“1.   Declaration that the instrument entitled Real Estate and Sale Agreement purportedly between the defendant and the plaintiff bearing dated 21 February 2019 is validly terminated pursuant to the notice of the defendant dated 16 March 2020.

2.   Declaration that by reason of the breaches of defendant under Real Estate and Sale Agreement dated 21 February 2020, is terminated, cancelled and of no effect.”

126. In the pleading, the following relevant paragraphs were inserted:

“16.    On 30 January 2020 in breach of the written agreement pleaded in paragraphs 6 and 7 above, the defendant did not pay the amount of $12,400 set out in the agreement by way of deposit or payment of the balance of the alleged sale price contained in the written agreement on 1 March 2020.

17.    The plaintiff by notice in email of 16 March 2020 confirmed the defendant’s repudiation of the written agreement.

18.    The written agreement was terminated on 16 March 2020 by the plaintiff.

Particulars

a.   Email dated 16 March 2020 from the Plaintiff’s solicitor to the Defendant noting termination of the Real Estate Sale Agreement (Notice).”

127. The email of 16 March 2020 was equivocal, and somewhat disingenuous. At that time, Mr Mortimer was disputing that there was a binding agreement, and was seeking to have it avoided for unconscionability. If, contrary to his position, there was a binding and enforceable agreement, then from the moment the Statement of Claim was filed on 26 June 2019, he was evincing an intention not to be bound by it. The institution of proceedings for its avoidance was, on that hypothesis, repudiatory conduct on his part.

128. The 16 March 2020 email did not call on Mr Ah Sam to perform. No Notice to Complete was given. Mr Mortimer had no intention of settling on 1 March 2020, and on the hypothesis that there was a binding contract, the purchaser’s obligation to pay the balance purchase price was interdependent with the vendor’s obligation to transfer title; in circumstances where Mr Mortimer was contending that he was not bound to do so, he could not insist upon payment of the balance purchase price and could not have therefore given a valid Notice to Complete. Even if, ordinarily, non-payment of a deposit entitles the vendor to rescind out of hand without notice,^[98] it is not self-evident that such a principle applies where, as here, an initial, albeit nominal, contractual deposit has been paid, time for payment of the “further deposit” was fixed by reference to the time for settlement, and the vendor was not prepared to settle.

     98. In Myton Ltd v Schwab-Morris [1974] 1 All ER 326 at 331-332 (Goulding J); (1974) 28 P & CR 1, it was held that a vendor incurs no liability under a contract until the deposit is paid, and that a vendor in that situation need not give any notice to the purchaser that he or she does not intend to perform the contract except to protect him or herself against a claim that he or she waived payment of the deposit, and may rescind without notice. However, in Payne v City Syndicate Management Pty Ltd (Supreme Court (NSW), Holland J, 3 May 1973, unrep) (“Payne”) it was held that the contract is on foot, although the deposit has not been paid, and the vendor is not entitled to rescind without first giving notice of intention to do so. In Babic v Williams (1974) 5 BPR 11,242 at 11,243, Holland J, after noting those divergent views, adhered to his earlier decision in Payne. However, in Brien v Dwyer (1978) 141 CLR 378; [1978] HCA 50, Barwick CJ (at 388-389) was of the view that, in so far as these and other decisions were authority that a vendor may not rescind out of hand for failure to pay the deposit, they ought to be overruled, and Gibbs J (at 393-394) and Aickin J (at 406-407) appear to have agreed.

129. In any event, the email did not even purport to terminate the contract. It alleged breach, but did not convey acceptance of a repudiation, let alone state that the plaintiff elected to terminate the contract. In my judgment, on the hypothesis that the agreement was not affected by unconscionability, it remained on foot following 16 March 2020. There being no evidence of any other purported termination or discharge, it remained on foot and unperformed at the time of the hearing before the primary judge.

130. The primary judge held that Mr Ah Sam was not, at the date of the trial, able to pay the $12,400, or the balance of the purchase money. His Honour relied on answers given by Mr Ah Sam to questions posed by his Honour during his cross-examination: ^[99]

“Q. … Do you have $12,400 or for that matter, $200,000 odd presently available to fully complete the sale if you’re ordered to do so?

A. Well, I have to sell some assets as I said.

Q. Is the answer no, is the answer no?

A. Well not today, but if I give it time, yes, sure.

…

Q. … As of today, at least, you are in no position if ordered to do so to pay the balance of any purchase price under this agreement; that’s the truth isn’t it?

A. Well not today, I could get the money if given me the time, sure, because you know, as I said, we’ve --"

99. Tcpt, 15 September 2020, p 123(9)-(33).

131. His Honour pointed out that there was no evidence to show what, if any, assets Mr Ah Sam owned or controlled. Subsequently, Mr Ah Sam forwarded material said to evidence his assets, of which his Honour said: ^[100]

“[134]   In his document entitled ‘Final Submissions for the Defendant’ the defendant sets out what he asserts are his assets after I had raised the question of whether it could be said that he was ready, willing and able to complete the contract (T.122/9-41).

[135]   His assets are described to consist of ‘real and intellectual properties’. The first thing to observe is that there is no real property disclosed as such. What is disclosed is a description of alleged assets for which there is no value attributed, let alone attributable. Apart from bare assertions there is no evidence of precisely what the assets are, although they appear to be intellectual property rights which may on one view have no tangible value at all.”

100. Primary judgment at [134]-[135].

132. Mr Ah Sam complained that his Honour disregarded evidence of his ownership of real property in Hawaii. Mr Ah Sam provided to this Court, by email, a number of images, which he described as “photos of Hawaii farm and some USA properties, I owned”. It is entirely unclear as to whether that is an assertion of current or past ownership, and of all or any of the properties. No document evidencing his title to any real property, let alone its value, was provided, nor does any appear to have been provided to the primary judge. It is not apparent that there was any material error in his Honour’s statement that “there is no real property disclosed as such”.

133. In any event, whether Mr Ah Sam has some interest in real property in Hawaii, Florida, or elsewhere is not material. What is clear is that on his own evidence, Mr Ah Sam was not, at the time of the hearing at first instance, ready, willing, and able to complete the contract. At the very least, he required a considerable period of time to realise assets if he were to be in a position to complete the purchase. In those circumstances, he was not entitled to a decree for specific performance.

134. On the relevant hypothesis – that the contract was not voidable for unconscionability – then, as at the hearing at first instance, it remained on foot. Mr Mortimer had not terminated it, but Mr Ah Sam was not entitled to specific performance. It remained open for Mr Mortimer to bring matters to a head, if he wished to do so, by giving a Notice to Complete – but for him to do so would have involved electing to affirm a contract which he was impugning in equity for unconscionability.

Compensation

135. The question of compensation arises only if Mr Ah Sam fails on unconscionability: if the agreement stands, then he was performing work on a property of which he was a purchaser, as the agreement contemplated he would, and no question of compensation would arise. If, however, the agreement is held void for unconscionability, as in my view it rightly was, then there is a question as to whether he is entitled to compensation for his time, labour, and expenditure on the property in the interim.

136. As the primary judge recognised, ^[101] referring to what had been said by Deane J in Amadio,^[102] an order setting aside a transaction on the ground of unconscionability will, in an appropriate case, be made conditional upon the party obtaining relief doing equity. In this case, Mr Ah Sam claimed that he had expended time, money, and labour on the property. As to this, his Honour said:

“[137]   The plaintiff [sic, defendant/cross-claimant] claims he has spent large sums of money on the property. I do not accept that evidence. There is no proof of such except for receipts totalling some $3000. The fact that he painted the house he lived in and renewed its iron roof is minor in the scheme of things given he was living there rent free.”

101. Primary judgment at [87]-[89].

102. At 480-481 (Deane J; Mason J and Wilson J agreeing).

137. I would be prepared to accept that, in principle, “doing equity” required Mr Mortimer, as a condition of relief, to compensate Mr Ah Sam for any benefit which Mr Mortimer had gained under the impugned transaction. That is not necessarily the same as compensating Mr Ah Sam for all his expenditure; in the context of an unconscionable transaction, equity does not require that the defendant be compensated for all expenditure referable to the transaction, though it might require compensation to the extent that the plaintiff has benefitted from it.

138. There was, as the primary judge said, scant evidence of Mr Ah Sam’s expenditure. Before us he referred to images, at least some of which he had provided to the primary judge, showing improvements he said he had made to the house which he occupies, the nursery, and the gardens, as well as the removal of farm rubbish. However, unexplained by further evidence, the images are of very limited evidentiary value. Moreover, there was no evidence of the critical matter, which was the extent to which his labour and expenditure had enhanced the value of the property, so as to confer a benefit on Mr Mortimer.

139. Further, as the primary judge observed, there is the offsetting factor that Mr Ah Sam has since March 2019 had, and continues to enjoy, use of the property and occupation of the second house on it, rent free. In a somewhat similar context in Beaton v McDivitt,^[103] Young J (as the later Chief Judge and Judge of Appeal then was) said, “In this case, of course, there would be a lot to be said for the proposition that rent and rate free occupation of this land for seven years has already satisfied any equity that the plaintiff may have had”.

     103. (1985) 13 NSWLR 134 at 158 (Young J); 3 BPR 9,576.

140. In my view there was no error in his Honour’s conclusion that Mr Ah Sam had not shown that any amount should be payable to him by way of compensation in the context of the agreement being avoided for unconscionability.

Conclusion

141. My conclusions may be summarised as follows:

142. The primary judge did not err in declining an adjournment and proceeding to take the evidence on 14 and 15 September 2020.

143. The primary judge did not err in requiring and permitting the plaintiff to further amend the Statement of Claim to bring it into conformity with the case that had been conducted, after the evidence had closed, and the amendment occasioned Mr Ah Sam no material prejudice.

144. Although the conduct of proceedings remotely, using imperfect technology, presented challenges for all parties, it is not apparent that it operated prejudicially to the appellant, nor that it resulted in any injustice to him.

145. The matters referred to by Mr Ah Sam that amount to complaints that in his Honour’s final judgment the primary judge rejected Mr Ah Sam’s evidence and made strong adverse findings about him do not suffice to demonstrate bias, while the complaints relating to matters that occurred during the hearing are not such that a fair-minded lay observer might reasonably have apprehended that the primary judge might not bring an impartial mind to bear on the resolution of the proceedings.

146. It has not been established that the primary judge was in error in concluding that the agreement was procured by unconscionable conduct on the part of Mr Ah Sam and was therefore voidable in equity. His Honour’s conclusions depended on findings of disputed facts, expressly based at least in part on demeanour, where the evidence was largely word against word, given by witnesses whom his Honour heard and saw.

147. There was no error in his Honour’s conclusion that Mr Ah Sam had not shown that any amount should be payable to him by way of compensation in the context of the agreement being avoided for unconscionability.

148. It follows that in my opinion the appeal should be dismissed, with costs. With that, the stay of execution of the writ for possession will lapse.

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Endnotes

Decision last updated: 17 December 2021