Aslanidis v Aslanidis

[2020] NSWSC 110

Supreme Court

New South Wales

Medium Neutral Citation:	Aslanidis v Aslanidis [2020] NSWSC 110
Hearing dates:	3, 4 and 5 September 2019
Decision date:	21 February 2020
Jurisdiction:	Equity - Family Provision List
Before:	Lindsay J
Decision:	Subject to a charge on the land for just allowances in favour of the defendant, he is obliged to reconvey to the plaintiff land which, by an exercise of undue influence, he induced the plaintiff to transfer to him.
Catchwords:	EQUITY — Undue influence — Actual undue influence EQUITY — Undue influence — Absence of independent advice
Legislation Cited:	Real Property Act 1900 NSW Succession Act 2006 NSW
Cases Cited:	A v N [2012] NSWSC 354 Blomley v Ryan (1956) 99 CLR 362 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Johnson v Buttress (1936) 56 CLR 113 Quek v Beggs (1990) BPR [97405] Petelin v Cullen (1975) 132 CLR 355 Whereat v Duff [1972] 2 NSWLR 147
Texts Cited:	-
Category:	Principal judgment
Parties:	Plaintiff: Savvas Aslanidis Defendant: Nikolaos Aslanidis
Representation:	Counsel: Plaintiff: AR Zahra and JR Anderson Defendant: C Hickey   Solicitors: Plaintiff: Sparke Helmore Lawyers Defendant: Michael E Bradstreet
File Number(s):	2018/00213603

Judgment

INTRODUCTION

1. The plaintiff, Savvas Aslanidis, is an elderly man who sues (by his present wife, Tsabika, as tutor) to recover title to his residence (a property located in Blacktown), transferred to his adult son (the defendant, “Nick”) on or about 26 August 2011.

2. The property is land registered under the Real Property Act 1900 NSW. The Memorandum of Transfer (which effected a transfer of the unencumbered fee simple in the property) was executed by the plaintiff and the defendant, in the presence of a solicitor (Mr VF Massey) who acted for both parties, on 26 August 2011. The Transfer, bearing that date, was registered (as dealing number AG 480407) on 7 September 2011.

3. In substance, the defendant contends that the transfer of the plaintiff’s residence to him should be characterised as a gift or, perhaps more accurately, a gift conditional upon the defendant agreeing, which he says he did (or a transfer in consideration for which the defendant says he agreed) with the plaintiff that, if and when he sold the property, he would pay $100,000 of the sale proceeds to his sister (Maria, known as “Mary”), the other of the plaintiff’s two children.

4. Tsabika is the wife of the plaintiff’s second marriage. Nick and Mary are (adult) children of his first marriage, which ended with the death of his first wife in 1994.

CONTEMPORANEOUS DOCUMENTS

5. Three documents (each prepared by Mr Massey, dated 26 August 2011 and executed on that date) invite critical attention: The Memorandum of Transfer; a written agreement; and a will.

6. The Memorandum of Transfer was expressed to be for a nominal ($1.00) consideration not, in fact, paid. This is consistent with characterisation of the Transfer as a gift.

7. The written agreement between the plaintiff and the defendant, in the terms for which the defendant contends, took the form of a document styled “Agreement” prepared by Mr Massey, signed by each of the plaintiff and the defendant on the same occasion that the Transfer was executed by them, and likewise dated 26 August 2011. Its provenance is open to doubt because it is grounded upon an erroneous statement of fact in its preamble.

8. The Will was also prepared by Mr Massey, and executed by the plaintiff on the same occasion and dated 26 August 2011.

9. The Will appointed the defendant as sole executor and, in substance, on its face, left the plaintiff’s entire estate to his two children as tenants in common in equal shares.

10. The practical purpose of the Will is something of a mystery. The plaintiff’s principal asset was at all material times his residence. Divested of that, his only assets of substance on 26 August 2011 were a car (to which the defendant, in cross examination, attributed an estimated value of about $10,000-$15,000) and a small bank account of indeterminate value. The plaintiff was, in 2011, a retiree, a pensioner.

11. The defendant’s evidence was that his father had long had little property other than the residence.

12. If, as the defendant contends, the plaintiff gave his residence to the defendant, he had nothing of substance (and he was never likely to have anything of substance) to leave to his daughter.

13. On the defendant’s case, the plaintiff made provision for his daughter via the defendant’s promise, in the written agreement, to pay the daughter $100,000 out of the proceeds of sale of the residence, if and when sold by him. That case, even if it be accepted, does not explain the will.

THE RECORDS AND EVIDENCE OF THE SOLICITOR WHO ACTED FOR BOTH PARTIES

14. Mr Massey’s records of his professional dealings with the parties are sparse. More’s the pity for that because he has no independent recollection of the detail of his dealings with the parties, forcing him to reconstruct events, drawing inferences from such records as are available and his recollection of usual practice. He has a copy of a “Domestic Relationship Agreement” dated 29 May 2006 executed by the plaintiff (for whom he acted) and the plaintiff’s then de facto partner, now his wife, Tsabika (who, before executing the Domestic Relationship Agreement, prepared by Mr Massey, had the benefit of independent advice); and a file (Exhibit “P5”) containing papers referable to an inchoate proposal in 2009, advanced by the defendant, purportedly on behalf of the plaintiff, for the plaintiff’s residence to be transferred to him and his sister, together with documents relating to the 2011 transaction. A file (Exhibit “P6”), ostensibly relating to the plaintiff’s 2011 will, contains no more than a letter dated 29 August 2011 reporting on the events of 26 August 2011 and enclosing a tax invoice (not produced).

15. The “2009 file” contains the substance of Mr Massey’s contemporaneous documentation relating to the business transacted by him in 2009 and 2011. As recorded on the cover of that file, and confirmed by Mr Massey in his evidence, that file was opened by Mr Massey on instructions from the defendant.

16. Mr Massey explained in his evidence that: (a) he had searched for, but could not find, his diaries for the years 2009 and 2011; (b) none of the work he did for the Aslanidis family involved a trust account transaction; and (c) his general ledger records had not been consulted by him, or sought by any party, in preparation for the evidence he gave in the proceedings. He produced no costs agreements or statements of account. He thinks he billed the defendant for preparation, stamping and registration of the Memorandum of Transfer, and the plaintiff for the Agreement and the Will, but he cannot say who paid his fees.

17. It is common ground that the defendant paid $17,090.00 stamp duty on the Memorandum of Transfer.

18. The Aslanidis family is not known to Mr Massey but for the business he conducted for one or more of them in 2006, 2009 and 2011. On a subsequent occasion he acted for the defendant, and the defendant’s wife, in their purchase of a property, but nobody suggests that that transaction has any materiality to the questions for determination in these proceedings.

THE PURPOSE OF THE BUSINESS TRANSACTED ON 26 AUGUST 2011

19. The defendant contends that the purpose of the transfer of the plaintiff’s residence to him in 2011 was to protect the plaintiff’s estate from a potential claim by his then partner (now his wife) should their relationship breakdown.

20. In his cross examination, Mr Massey volunteered speculation that that might have been so; but such contemporaneous records as he produced to the Court contain no explicit reference: (a) to such a purpose; (b) to the possibility of disharmony between the plaintiff and his partner, subsequently married; or (c) to advice given by Mr Massey on any such topic.

21. The defendant’s contention that the purpose of the Transfer was to protect the plaintiff’s estate from a potential claim by the plaintiff’s partner does not sit comfortably with this fact. Nor does it sit comfortably with: (a) the terms, and doubtful provenance, of the written agreement dated 26 August 2011; or (b) the terms of the Domestic Relationship Agreement dated 29 May 2006.

22. None of the documents signed by the plaintiff on 26 August 2011 refer to his partner or a desire to protect his estate against a potential claim by her. Nor do they refer to the Domestic Relationship Agreement of 2006, the terms of which included a disclaimer by the partner of any claim referable to the plaintiff’s residence beyond a right of residency for six months following the plaintiff’s death.

23. On the face of the written agreement dated 26 August 2011, the putative reason for the Transfer was said (in a preamble) to be that, about 20 years earlier, the plaintiff had given his daughter an unencumbered house said to be worth $400,000 at the time of execution of the written agreement in 2011.

24. Read as a whole, the written agreement plainly seeks to justify the Transfer (with an adjustment in favour of the plaintiff’s daughter) as a transaction designed to even things up between the plaintiff’s children in disposition of his estate, in advance of his death, without making any provision for ongoing occupancy of his residence by himself and/or his partner.

25. The rationale for the written agreement, as stated in its preamble, is inconsistent not only with the defendant’s characterisation of the purpose of the Transfer, and the practical prospective operation of the will executed by the plaintiff, but it is also inconsistent with the fact that the plaintiff did not give his daughter a house. She and her then husband bought a house from him for $70,000, financed by a bank mortgage paid out only upon their subsequent divorce. Her denial that the plaintiff had given her a house was not controverted in cross examination of her. The written agreement appears to have been grounded upon a fiction.

26. Notes in Mr Massey’s handwriting dated 19 August 2011, apparently recording instructions which found their way into the preamble of the written agreement dated 26 August 2011, state (without an unambiguous attribution of source): “Sister… gave daughter house 20 yr ago now worth $400,000”.

27. The defendant attributes those instructions to the plaintiff. Counsel for the plaintiff submits that the defendant gave Mr Massey a fictional story in order to justify a shift in his instructions to Mr Massey from the proposal, in 2009, that the plaintiff’s house be transferred to him and his sister in equal shares. I accept that submission as more probable than not.

28. Whether the plaintiff met Mr Massey on one occasion (26 August 2011) or two (19 and 26 August 2011) is not free from doubt. The plaintiff’s evidence rises no higher than a denial that he ever instructed Mr Massey to effect a transfer of his house to the defendant, implicitly accepting that he met Mr Massey at least once. The defendant’s evidence is to the effect that he and the plaintiff met with Mr Massey on two separate occasions (on indeterminate dates around the beginning of September 2011), at the first of which the plaintiff requested Mr Massey to prepare documentation to transfer the house to the defendant. Mr Massey had no unaided recollection of his meeting, or meetings, with the plaintiff. His evidence depended, essentially, upon his reconstruction of events based upon his reading (eight years after the event) of his file note dated 19 August 2011 and the documentation signed on 26 August 2011.

29. The larger question is: who was it who instructed Mr Massey? In my assessment, that question is to be answered: in substance, the defendant. The probability is that there were two meetings of the plaintiff (and the defendant) with Mr Massey, but (be that as it may) the defendant was, most likely, the primary source of Mr Massey’s instructions.

30. The instructions given to Mr Massey favoured the interests of the defendant. They were based upon a false premise more readily attributable to the defendant than to the plaintiff without attribution of a degree of mental instability to the plaintiff, who (unlike the defendant) had personal knowledge of the circumstances in which Mary acquired her house from him. It was in the defendant’s interests that Mr Massey be given instructions which might be thought to overcome Mr Massey’s 2009 objection to acting for both transferor and transferees on a transfer of the plaintiff’s property to his children. On his own evidence, it was the defendant who in 2006 arranged for the plaintiff to see Mr Massey to have the Domestic Relationship Agreement of that year prepared. On his own evidence, it was the defendant who in 2009 instructed Mr Massey with a view to arranging for the plaintiff’s property to be transferred to himself and Mary, a proposal which came to nothing because Mary declined to participate. On his own evidence, it was the defendant who made arrangements for the plaintiff (in his presence) to meet with that Mr Massey in August 2011.

31. A consistent theme (found in the defendant’s dealings with Mr Massey in each of 2006, 2009 and 2011) was that the defendant sought to secure for himself what he perceived to be an interest in a family property, and to deny the plaintiff’s partner (now wife) any interest in that property.

32. On reflection, Mr Massey gave evidence that, in casual discussion with the plaintiff at or about the time the parties executed the Memorandum of Transfer, he alluded faintly to the “notional estate” provisions of Chapter 3 of the Succession Act 2006 NSW by saying to the plaintiff that he would have to live for three years; but he was quite sure that he gave to the plaintiff no advice about the possibility of a family provision application being made (by either the plaintiff’s partner or his daughter) after his death, or about the inter-relationship, if any, between the Transfer and the Domestic Relationship Agreement of 2006.

33. The plaintiff contends that the defendant took advantage of him, imposing on him his (the defendant’s) determination – first manifested in 2009, if not in 2006, and further pursued in 2011 – to obtain a transfer of the property for his own personal benefit, not for the protection of the plaintiff.

34. For his part, the defendant contends that: (a) as a dutiful son, and with reluctance, he merely accepted a transfer of the property at the request of the plaintiff and liaised with Mr Massey, on behalf of the plaintiff, to get the job done; but (b) having accepted a transfer of the property he was, and he remains, entitled to ownership of it, subject only to an obligation to pay his sister $100,000 upon any sale of the property by him or his deceased estate.

35. The defendant explains his reluctance to take a transfer of the property by reference to the financial burden of having to pay for stamp duty on the Memorandum of Transfer and his liability for rates associated with his ownership of the property.

36. The plaintiff contends that the 2011 transfer:

1. was, on an allegation of non est factum (Petelin v Cullen (1975) 132 CLR 355), void; or

2. is liable to be set aside in equity, as an unconscientious dealing properly characterised as a “catching bargain” (Blomley v Ryan (1956) 99 CLR 362; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447) or as a transaction procured by an exercise of undue influence by the defendant (Johnson v Buttress (1936) 56 CLR 113; Whereat v Duff [1972] 2 NSWLR 147; Quek v Beggs (1990) BPR [97405]; A v N [2012] NSWSC 354).

37. The final hearing of the proceedings was conducted on the basis that, should the plaintiff make out one of these grounds for a grant of relief (the principles governing which are not in dispute), it would be open to the Court to make (and there are no good reasons not to make) orders designed to restore to the plaintiff the title to the property.

38. The plaintiff contends that the defendant’s registration of a “void” memorandum of transfer constituted a “fraud” within the meaning of the Real Property Act 1900, section 42(1) so as to disentitle the defendant to any indefeasibility of title. He contends, also, that, if the transaction were to be set aside in equity, the defendant would be bound, by a personal equity, to hold the property on a constructive trust for him, and to submit to orders for legal title to the property to be re-transferred to, or vested in, him. It is not necessary to explore these questions in detail because of the parties’ agreement about the availability of relief consequent upon findings of fact in favour of the plaintiff.

THE PLAINTIFF’S CAVEAT

39. The entitlement the plaintiff claims in the property is protected by a caveat (registered dealing number AN98946), the operation of which was at the commencement of the proceedings (by orders made on 11 and 17 July 2018) extended until further order of the Court, upon the plaintiff giving to the Court the usual undertaking as to damages.

40. The particulars of the “estate or interest” claimed by the plaintiff in the property are recorded in the caveat as follows:

“In the alternative –

1. an equitable interest in the land as beneficiary under a constructive trust arising out of the current registered proprietor’s undue influence or unconscionable conduct in obtaining the caveator’s signature on the transfer document dated 26 August 2011, and in circumstances where there was a relationship of trust and confidence between father and son taken advantage of by the current registered proprietor; or

(ii)   an interest in the land as registered proprietor under a vendor’s lien in circumstances where the purchase price under any alleged agreement for the sale of the land from the caveator to the current registered proprietor and entered into on or around 26 August 2011 remains unpaid in full”.

41. Of these alternative claims, only the first is pressed. The second claim is based upon a characterisation of the defendant’s case which the defendant denies. The defendant asserts that he acquired title to the property by way of a gift, not a purchase. The final hearing was conducted on the basis of that assertion of entitlement.

42. The caveat records, as “the facts” in support of the plaintiff’s claimed estate or interest, the following:

“The caveator (born ….. 1940) is the father of the registered proprietor. In or around 2011, the registered proprietor took the caveator to sign a document in the presence of a lawyer. The caveator signed a document in the presence of a lawyer, and the top half of the document was covered by the lawyer’s arm. The lawyer did not provide any legal advice to the caveator. The caveator did not know at the time that he was signing a document transferring the property into the registered proprietor’s name. The caveator signed the document because he trusted his son. The caveator speaks Greek and suffers from poor vision. The caveator only became aware that he had signed a transfer document in 2014 when his daughter made inquiries at LPI, following her discussions with the registered proprietor. The registered proprietor alleges that he entered into an oral agreement with the caveator for the transfer of the property for consideration of $400,000, which the caveator denies. The caveator has never received any payment from the registered proprietor in respect of the transfer of the property”.

43. This recitation of “facts” is not, without substantial qualification, borne out in detail by the evidence: Whether or not Mr Massey was negligent in performance of his retainer, the plaintiff’s counsel disavowed any suggestion that he acted dishonestly.

44. However, there nevertheless remain substantial questions to be tried relating to the title to the property. They include: (a) whether the evidence before the Court is capable of supporting a finding that the plaintiff signed the Memorandum of Transfer, the Agreement and the Will on 26 August 2011 without knowledge of what they were so as to ground a finding of non est factum; (b) whether, on and about 26 August 2011, the plaintiff was suffering from a special disadvantage in his dealings with the defendant, or the relationship between the plaintiff and the defendant was of such a nature that the plaintiff was so reliant or dependent upon, or so trusting of, the defendant that the defendant had a psychological ascendency over him; and (c) whether, with the benefit of Mr Massey’s legal services, the plaintiff can be found to have given his fully informed consent to the transactions documented in the office of Mr Massey on 26 August 2011.

THE COURSE OF THE PROCEEDINGS

45. These proceedings were commenced by a summons filed on 11 July 2018. Although no order for pleadings was made by the Court, when the plaintiff filed an amended summons on 27 August 2019 claiming a declaration that the defendant holds the subject property on constructive trust for him, he filed and served a document styled “Points of Claim”.

46. At the commencement of the final hearing the amended summons was, without objection on the part of the defendant, amended to record that the plaintiff’s wife (Tsabika) had been appointed to act as his tutor in the proceedings. The absence of objection can be taken as an acceptance that the plaintiff is not, without assistance, capable of managing his affairs so far as they concern these proceedings.

47. Although the parties acquiesced in the appointment of a tutor to represent the plaintiff in the proceedings, and it was common ground that the mental health of the plaintiff has deteriorated following a stroke he suffered in 2014, there is no suggestion, on either side of the record, that the plaintiff lacked the mental capacity required to transact the business transacted on 26 August 2011 or the mental capacity to swear affidavits (or to give sworn oral evidence) in these proceedings. The parties are in dispute about the plaintiff’s proficiency in English, and the extent to which (if at all) he suffered from poor eyesight on and about 26 August 2011, but there is no dispute about his mental capacity at that time.

48. In response to the plaintiff’s claims for relief the defendant filed neither a cross claim nor “Points of Defence”. A draft document bearing something of the character of “Points of Defence” was prepared on behalf of the defendant; but, when that document was brought to my attention, the parties agreed that the better course was, not to have that document filed, but formally to note (as was noted) that the defendant had joined issue with the plaintiff’s “Points of Claim”.

49. The parties’ respective written submissions filed in advance of the final hearing were, at the commencement of the hearing, formally marked for identification (as MFI “P1” and MFI “D2” respectively) as an aid to understanding the parameters of the parties’ dispute. Curiously, given the form of the plaintiff’s caveat, his opening written submissions did not expressly canvas the issue of “undue influence” as distinct from the oft-related issue of “unconscionable conduct”. Accordingly, during the course of the hearing I confirmed with counsel that they were in agreement (which they were) that one of the questions for the Court’s determination is whether or not the transaction of 26 August 2011 is liable to be set aside in equity as procured by undue influence. The parties’ respective closing submissions canvassed “undue influence” as well as “unconscionable conduct”.

50. The defendant has taken his stand upon a contention that the transaction was freely and voluntarily entered by the plaintiff, with the plaintiff’s fully informed consent. No reliance is placed upon a presumption of advancement, should such a presumption be available in support of a transaction by a father in favour of an adult son.

WITNESSES

51. Leaving aside formal affidavits, the plaintiff’s case was supported by affidavits sworn by himself and his daughter, Mary; the defendant’s case was supported by affidavits sworn by himself and his wife, and by oral evidence adduced from Mr Massey.

52. All five witnesses were cross examined, Mary via an audio-visual link.

53. The plaintiff’s oral evidence was given with the benefit of assistance via a Greek interpreter, as needed. Although the defendant accepts that the plaintiff’s mental acuity has deteriorated since he suffered his stroke in 2014, and that his management of these proceedings has warranted the appointment of a tutor, counsel for the defendant does not accept that his grasp of English is or (at any material time) ever was so poor as to require an interpreter for general conversation.

54. Evidence adduced from the defendant’s wife was directed most forcefully towards the plaintiff’s proficiency in English. She says, and I accept, that the plaintiff has always been able to converse with her and her children (non-Greek speakers) about a full range of topics in a family setting.

55. Mr Massey has no recollection of an inability to communicate with the plaintiff in August 2011, notwithstanding his lack of Greek. That said, on his evidence, he did not speak to the plaintiff in the absence of the defendant, a Greek-speaker.

56. The defendant maintains that, for at least part of the time Mr Massey met with the plaintiff, he (the defendant) was consigned to a corner – Mr Massey says, the other end of a table at which he and the plaintiff sat. Accepting Mr Massey’s evidence on this topic, I find that the defendant was at all material times close enough to contribute to any conversation between Mr Massey and the plaintiff, close enough to supplement any English language deficiency on the part of the plaintiff. As the person who arranged for the plaintiff to meet with Mr Massey, and who stood to benefit most from the business to be conducted in Mr Massey’s presence, the strong probability is that the defendant actively participated in the plaintiff’s engagement with Mr Massey and was the primary source of Mr Massey’s instructions.

57. In presentation as a witness, the plaintiff spoke broken English responsive to some questions put to him by the defendant’s counsel; but he took refuge in claims of a lack of English comprehension, and a need for the interpreter’s assistance, on other occasions. My impression is that he has, and is likely in August 2011 to have had, sufficient proficiency in English to conduct a conversation on topics familiar to him, but a want of confidence and proficiency in dealing with unfamiliar or complex topics.

58. In my assessment, the plaintiff is an unsophisticated man whose lack of confident proficiency in English, in combination with trust reposed by him in the defendant as his son, would have rendered him psychologically dependent upon the defendant in dealings with Mr Massey.

59. The plaintiff’s disclaimer of the documents which, I accept, were signed by him on 26 August 2011 in the presence of Mr Massey is consistent with: (a) an absence of any clear intention on his part to transfer his house to the defendant; (b) an imperfect understanding of the object and effect of those documents; (c) the defendant’s persistence in pressing him to secure the defendant’s perceived familial interest in the property; and (d) the absence of any coherent, independent legal advice about the nature and purpose of the documents signed. The defendant actively enlisted Mr Massey to effect a transfer of the plaintiff’s residence to himself, encouraging Mr Massey to let down his guard in the belief that he was doing no more than to give effect to a form of “estate planning” agreed within the Aslanidis family. Mr Massey cannot be said to have given the plaintiff independent legal advice, advised him to obtain such advice or brought home to him the significance of the documents he signed on 26 August 2011.

60. Both the plaintiff and the defendant were poor witnesses in some respects.

61. Concerns about the plaintiff’s present mental capacity compounded concerns about his English language proficiency. Each of those factors counsels caution against acceptance of his evidence in matters of detail. However, they do not stand in the way of acceptance of the veracity of his denial of an intention to give his property to the defendant, whether as an absolute or as a conditional gift.

62. The defendant was an unsatisfactory witness because his evidence tended to be presented in emphatic propositions not wholly consistent, coloured by a righteous belief in the propriety of his cause, a cause he tended to argue on his own account.

63. The evidence given by each of the plaintiff’s daughter and the defendant’s wife was more measured but it was comparatively peripheral. Neither of them was present when the business of 26 August 2011 or thereabouts was transacted. The main players in the conduct of that business were the plaintiff, the defendant and Mr Massey.

64. Counsel for the defendant submits, and I accept, that a Jones v Dunkel inference should be drawn in relation to any evidence that the plaintiff’s wife might possibly be expected to have been able to give. However, she too was comparatively peripheral.

65. The focus for attention is on dealings between the plaintiff, the defendant and Mr Massey on or about 26 August 2011, not intra-family conversations.

CONSIDERATION

66. The plaintiff bears the onus of proving his grounds of challenge to the Transfer of his residence in favour of the defendant, bearing in mind that the defendant has identified the essential question for determination as whether (as he contends) the plaintiff freely, voluntarily and with a fully informed consent effected the Transfer.

67. In circumstances in which his execution of the Memorandum of Transfer (and, contemporaneously, the written agreement and the will) was supervised by a solicitor; there is no allegation that he lacked capacity to understand the nature of the Transfer; he had a basic grasp of the English language; and his evidence falls short of an explanation of what he thought he was signing if not a Transfer, I am disinclined to find in his favour on his allegation of non est factum. The plaintiff’s evidence fell short of proof that he held a belief that the Transfer (and, if material, the written agreement and the will) were radically different from what they were in fact. This is an impediment to a finding of non est factum: Petelin v Cullen (1975) 132 CLR 355 at 359-360 and 361.

68. On the other hand, I am satisfied that the Transfer is liable to be set aside on the ground that its execution was procured by an exercise of undue influence on the part of the defendant, notwithstanding the intervention of Mr Massey as solicitor for both parties.

69. I adopt, and apply, the principles conveniently summarised by McClelland J in Quek v Beggs (1990) 5 BPR 11,761. Where a donor makes a gift as a result of “undue influence” of the donee, it is liable to be set aside in equity. In this context “influence “means a psychological ascendancy by the donee over the donor, and “undue influence” means the donee’s taking improper advantage of such ascendancy. In this case, the defendant had a psychological ascendancy over the plaintiff and, in inducing the plaintiff to sign the Transfer, he took advantage of that ascendancy to the detriment of the plaintiff and in service of his own personal interest. As an elderly, unsophisticated man with limited language skills the plaintiff was dependent upon the defendant, as his son, in dealing with his property and as a mediator between him and Mr Massey in any contact (arranged by the defendant) he had with Mr Massey. Even if the plaintiff knew and understood what he was doing in signing the Transfer (a debateable proposition in itself) he was not acting independently of any influence arising from the defendant’s ascendancy over him. A gift to the defendant of the plaintiff’s only substantial asset was so improvident as not to be reasonably accounted for on the ground of a familial relationship, particularly in circumstances in which the competing familial interests of the plaintiff’s partner and daughter were not brought home to him.

70. The fact that the defendant has permitted the plaintiff, and his partner, to remain in occupation of the property, and that he has paid rates levied against the property does not preclude a finding that the Transfer should be set aside, although it may provide a basis for making an order for the Transfer to be set aside conditional on some allowance being made by the plaintiff in favour of the defendant.

71. Counsel for the plaintiff accept that, in seeking equity, the plaintiff must do equity; and that, as a practical expression of that maxim in this case, the plaintiff should reimburse the defendant for any rates charged on the property (paid by the defendant from his own resources) after the time of transfer of the property to the defendant. Enjoying the benefit of occupation of the property, the plaintiff should bear the burden of his occupation.

72. Although the defendant tendered a mass of accounts (admitted into evidence as Exhibit D3), the parties have yet to agree upon, or to make submissions about, their significance, if any, as evidence of what “just allowances” should be made in favour of the defendant.

73. If (as I intend) the Transfer is set aside, in effect the property is to be re-transferred to the plaintiff or vested in him. The written agreement, if not the will, falls away. I have not been invited to consider the validity of the will as a separate issue; or the plaintiff’s present capacity to make a new will; or whether steps might be taken for the making of a statutory will.

CONCLUSION

74. Subject to allowing the parties an opportunity to be heard as to the form of orders to be made, and costs, I propose to make orders to the following effect:

1. ORDER that the defendant reconvey to the plaintiff the fee simple in the land (“the property”) being Lot 195 in Deposited Plan 27795, and being the whole of the land contained in Folio identifier 195/27795, at Blacktown in the State of New South Wales, subject only to a charge in favour of the defendant for just allowances to be agreed between the parties or, in default of agreement (within a specified time), determined by the Court.

2. ORDER that the defendant deliver up to the plaintiff:

1. the Certificate of Title for the property; and

2. a Memorandum of Transfer, in registrable form, executed by the defendant in favour of the plaintiff.

3. RESERVE to the parties liberty to apply for orders working out these orders, including an order that the property be vested in the plaintiff as the party beneficially entitled to it.

75. Prima facie, costs follow the event.

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Decision last updated: 21 February 2020