Bayne v Karaliamis
[2000] VSC 160
•2 May 2000
| THE SUPREME COURT OF VICTORIA | |
| COMMERCIAL AND EQUITY DIVISION | Not Restricted |
No. 6535 of 1999
| ROSINA MYRTLE BAYNE | Plaintiff |
| v. | |
| AGAPITOS KARALIAMIS AND OTHERS | Defendants |
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JUDGE: | HARPER, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 12-14, 17 AND 18 APRIL 2000 | |
DATE OF JUDGMENT: | 2 MAY 2000 | |
CASE MAY BE CITED AS: | BAYNE v. KARALIAMIS & ORS. | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 160 | |
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CATCHWORDS: Sale of Land – Claim by vendor of position of special disadvantage – Whether purchasers took unconscionable advantage of vendor's position – Whether transaction was unfair, unjust or unreasonable – Louth v. Diprose (1992) 175 CLR 621 applied.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr. C.R. Northrop | GSM Lawyers |
| For the First and Second Defendants | Mr. A. Rodbard-Bean | Panagiotidis & De Marco |
| For the Third Defendant | Mr. J.W. Kewley | I.P. Purbrick |
HIS HONOUR:
The law, it has been said, should not incur the reproach of being the destroyer of bargains.[1] Thus spoke Lord Tomlin (then a member of the House of Lords but formerly of the Chancery Division of the High Court of Justice) in a common law case concerning the construction of a contract. Lord Tomlin, however, as a Chancery Judge, would have been very much aware that sometimes bargains are induced by that species of unconscientious behaviour which equity designates as fraud and which may therefore attract its intervention in the form of (for example) an order for rescission of the agreement. It is this remedy which the plaintiff seeks to invoke.
[1]Hillas & Co. Ltd. v. Arcos Ltd. [1932] All ER Rep. 494 at 499 per Lord Tomlin
The defendants take the contrary position. The plaintiff, they argue, made a bargain. She should be required to keep it. Any other result would warrant the reproach to which Lord Tomlin referred.
So the battle lines are drawn. In reaching a decision, I must keep both the law and equity, and the principles for which each stands, in mind. Neither, of course, has a monopoly of virtue; each has its place. Sometimes, however, the proper allocation of territory is difficult, in practice if not in theory. What one side characterises as fraud, the other puts forwards as neither more nor less than the time honoured, and honourable, process of bargaining. In this case, the dispute is in part over the facts. It is also, however, partly over the proper inferences to be drawn from facts which each side accepts as true.
The plaintiff, Rosina Myrtle Bayne, was born on 27 November 1917. She is therefore now in her 83rd year. She was widowed in July 1998, some four months before her 81st birthday. She then lived – as she had for many years - at 53 O'Grady Street, Clifton Hill, in the matrimonial home of which she became the sole proprietor in fee simple following her husband's death. Living with her at that time was her grandson Darren. He suffered, and no doubt still suffers, from schizophrenia. He was, and perhaps remains, a drug addict. He now lives separately from his family.
Mrs. Bayne has a son (Keith) and a daughter (Janet). Keith, who is Darren's father, lives in Ramsden Street, Clifton Hill. His house is within walking distance of O'Grady Street, where he once lived with his parents and his sister.
George Karaliamis and his wife Komissa have lived at 55 O'Grady Street, and therefore next door to the Bayne family home, for some 20 years. They have a number of children. One of these is the first defendant, Agapitos Karaliamis, generally known for the purposes of this trial as "Peter". The second defendant, Maribel Karaliamis, is Peter's wife.
The plaintiff was on friendly terms with the Karaliamis family. She was often invited to, and did, join them or some of them for tea or coffee at their home at 55 O’Grady Street. There is some evidence, not particularly convincing, that an occasional meal may also have been shared; but the point is of no moment. Peter does not seem to have been a special favourite, but the plaintiff watched him grow from a baby to a young man, and therefore knew him well. She described him in her evidence as "good" and "polite". At a time which is not recorded she (as she herself told me) promised Peter that, should she decide to sell No. 53, "he could have first preference".
Peter, eventually, took advantage of this offer. The plaintiff asserts that he and Maribel also took advantage of her. She sold 53 O’Grady Street to them at what she alleges was a gross undervalue: the true worth of the property was, she claims, somewhere between $190,000 and $200,000; she was paid $125,000. Peter and Maribel knew the nature of the bargain which she allowed to fall into their lap. They knew, in addition, that she was old and a relatively recent widow. As an added handicap, she was (as they also knew) saddled with a difficult grandson whose position as an occupant might have provided her with a separate incentive to rid herself of the house. In short, the plaintiff claims, Peter and Maribel were aware that she (Mrs. Bayne) was a person in a position of special disadvantage. They were aware, in other words, of "an absence of any reasonable degree of equality" between her – the weaker party – and themselves.[2] As things happened, this resulted in their obtaining a special benefit. It was and is unconscionable that such a benefit be retained. Equity should intervene to put things right. Accordingly, the plaintiff seeks (among other things) an order setting the transaction aside.
[2]Louth v. Diprose (1992) 175 CLR 621 at 637 per Deane J.
If she is to succeed, the plaintiff must prove not only that, at the time of sale, she suffered from a special disadvantage and that the purchasers were aware of it, but also that they took an unconscionable advantage of her position. The burden of proof is on her, albeit that the standard of proof is of course the balance of probabilities; and where the fact of special disadvantage is (to quote again from the judgment of Deane, J. in Louth v. Diprose at 637) "sufficiently evident to the other party to make it prima facie unfair or 'unconscionable' that that other party procure, accept, or retain the benefit of, the disadvantaged party’s assent to the impugned transaction … an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable".
In my opinion, the plaintiff was not under a special disadvantage. Even if she was, the transaction was not unfair, unjust or unreasonable. Nor did any defendant seek to exploit her. No fraud is therefore shown. The grounds for the intervention of equity not having been made out, the claim must be dismissed. I will in what follows attempt to explain in more detail why this is so.
On 5 November last year, Beach, J. ordered that, subject to any order of the trial judge to the contrary, evidence at the trial of the proceeding be by the affidavits already filed supplemented by additional viva voce evidence as the parties may desire. Evidence was received accordingly. Among the affidavits used in this way were two sworn by the plaintiff on, respectively, 19 August 1999 and the following 10 September.
The first of these affidavits contains an account which at important points is substantially different to the weight of the evidence – and even the presentation of the plaintiff’s own case - at the trial. In her affidavit, Mrs. Bayne swears not only that she "didn’t want to sell" 53 O’Grady Street, but also that she did not understand that she was selling "until after it happened". She accepts that her signature appears on the relevant documents (although alterations to the instrument of transfer have not been initialled by her) but denies that she knew what she was signing. The issue of non est factum is therefore raised. As with the balance of her claim, however, the evidence fails to sustain it.
What is not in dispute is that, on the day of his father’s funeral, Mr. Keith Bayne offered his mother accommodation at his home in Ramsden Street. He was, he says, worried that, left on her own in O’Grady Street, or at best with only Darren to rely upon, his mother might fall – as she had done in the past – and be unable to get up. According to Keith, his mother was grateful for the offer and accepted it readily. In paragraph 4 of her affidavit, she puts it rather differently:
"My husband and I lived continuously at O'Grady Street until my husband's death on 14 July 1998. When he died my son Keith Ian told me I couldn't go back to my house because I kept falling over. He said I should move to his place in Ramsden Street, Clifton Hill to live with him and his second wife, Luz (sic). Although I didn't want to leave O'Grady Street, I was upset about my husband's death and went to stay with my son immediately after the funeral. Darren continued to live at O'Grady Street."
Despite her desire to remain in her own home, the plaintiff herself admits that, initially, she enjoyed living with her son and his wife. It is not clear when relations soured, but it is likely that they were still good when, on 17 August 1998, she and each of her two children paid a joint call on her solicitor, Mr. Peter Window. The primary purpose of the visit was to execute her will, as well as a power of attorney in favour of Keith and Janet; but, according to the evidence of Mr. Window, "there was general consensus between her and the two children that the property at O’Grady Street was to be sold." I accept this evidence.
Not a word about this visit appears in the plaintiff’s affidavit. It is the first of a number of significant omissions. Together, if not separately, they deprive her evidence of much of its credibility.
The point is illustrated by the events of, and surrounding, 12 January 1999. Mrs. Bayne's first affidavit avoids any mention of them. Her second affidavit is similarly silent. This is especially telling, because by the time it came to be made (on 10 September) the plaintiff had read an affidavit sworn by her son on 1 September. In this document, Keith refers to an exclusive sale authority, dated 12 January, which was granted by his mother to an estate agent operating in Clifton Hill.
Although Mrs. Bayne’s affidavits do not reveal it, the fact is that, on or about 10 January, Mrs. Bayne spoke to a friend of hers, Ann Baker, who is the wife of a local estate agent. Her husband, Brian Baker, gave evidence. He said that, having been told by his wife that the plaintiff "was interested in selling her house" and would for that purpose shortly be visiting the agency with her son, he conducted a kerbside valuation of the property. His purpose was to place himself in a position from which he could advise her when she kept the appointment made with his wife. In his opinion, based not only on his kerbside inspection but also on an examination of comparable sales over the past two years, it was then worth $140,000.
Mrs. Bayne was informed of this valuation when, by arrangement with her friend Mrs. Baker – who although not an estate agent herself, worked in the agency – she and Keith visited Mr. and Mrs. Baker in the offices of Marshall Baker Pty. Ltd., Estate Agents, of 3/24 Queen’s Parade Clifton Hill. The date was 12 January 1999. While there, the plaintiff signed an "Exclusive Sale Authority" in favour of the firm. It provided for the agent’s professional fees to be 2.25% of the purchase price, or $3375 on a selling price of $150,000. This, so Mr. Baker said (in effect) in his evidence, was the price he recommended to Mrs. Bayne as her asking price.
In his evidence at the trial, Mr. Baker said that he remembered not only Mrs. Bayne’s call, but also the signing of the Authority by her "without any encouragement from anyone." He added that she said that "she would get the tenant, who was a relative, to move somewhere else and clean the place up, which I gathered needed a lot of cleaning". I accept this evidence. That is not to say that I accept unreservedly the accuracy of Mr. Baker's estimate of value. I will return to this topic later in this judgment.
Like the visit to Mr. Window, neither Mrs. Bayne’s meeting with Mrs. Baker and her estate agent husband nor the signing while there of the Exclusive Sale Authority receives any acknowledgment in Mrs. Bayne’s affidavit. The most likely explanation, it seems to me, is that she did not want these parts of the story to be told. They are difficult, and in some respects almost impossible, to reconcile with the themes of the affidavits: these being that she did not wish to sell, that she did not know that she had signed the documents necessary to effect the sale, and that her house was in truth worth $190,000-$200,000. Yet, in evidence which I accept, Keith Bayne swore that it was his mother, not he, who initiated the visit to Marshall Baker Pty. Ltd. He added, in evidence which again I accept, (a) that while there she told the Bakers that she did not want an advertising board outside the property, (b) that Mr. Baker told her that she might receive $150,000 for it, and (c) that later that day she left the Ramsden Street home on what she said was a visit to tell Peter Karaliamis that she wanted to sell 53 O’Grady Street to him. On her return, she reported to her son that Peter was not present when she called, but that she had conveyed her wishes to Peter’s parents.
The existence of the Exclusive Sale Authority having been revealed by Keith Bayne in his affidavit of 1 September 1999, Mrs. Bayne could not, when she was called to give oral evidence at the trial, avoid reference either to it or to her visit to the office of Marshall Baker. That visit, she then swore, was intended by her to be a social call upon her friend Ann Baker. Keith Bayne happened to accompany her. If her oral evidence is to be believed, he nevertheless did most of the talking, which was about real estate sales in Clifton Hill. She admitted, however, that during the course of the meeting she heard Mr. Baker suggest, albeit to Keith, "that the property [at 53 O’Grady Street] may be worth around $150,000." As for the Exclusive Sale Authority, the plaintiff said that she had no recollection of signing it although when shown it in the witness box she identified her signature on it.
Both Peter's parents gave evidence, which I accept, that during January 1999 the plaintiff unexpectedly told them that she wished then and there to offer her house to their son. This evidence accords with that given by Keith when he recounted what his mother said to him about her intentions as she left his house after the visit to the estate agent.
In addition to Peter’s parents, his wife and Peter himself each gave evidence at the trial. Peter’s father, George Karaliamis, has a poor command of English and at times became artificially emotional, or created confusion by speaking across the interpreter. All this had the effect of damaging the flow which his evidence might otherwise have had. If in normal circumstances his English was and is as poor as the display given in the witness box, his friendship with the plaintiff - which each professed to share, and which I am satisfied was real, as it was between the plaintiff and Komissa Karaliamis, Peter’s mother – must have been based not so much on a deep commonality of interests as on a mutual extension of goodwill; they could not have understood each other well enough for anything more.
George Karaliamis asserted that he had, at the time the purchase by his son and daughter in law of 53 O’Grady Street became a serious possibility, no idea of its monetary value. I do not believe him. Each member of the Karaliamis family who gave evidence was unsatisfactory on this point. Each, I think, perceived that this was the weakest aspect of their case. I have already recorded that Peter and Maribel purchased the house for $125,000. I am satisfied that they, and Peter’s parents, had at least a rough idea of how much the property might fetch on the open market. They were and are of the view that theirs was a good – perhaps a very good – buyers’ price. Maribel said as much to the bank officer when applying for a loan, and her view was, I have no doubt, shared by her husband and parents in law. They know (and knew) that, in selling to them for that price, Mrs. Bayne did not drive a hard bargain. None of them, in giving evidence, was prepared to be entirely candid about this. I am nevertheless satisfied (a) that the price for which Peter and Maribel bought the property was a price at which an adequately informed Myrtle Bayne was willing to sell, and (b) that in any event it was not the result of unconscientious behaviour by or on behalf of the purchasers.
Certainly, the plaintiff had ample time in which to consider her position free of any input from the defendants. Mr. Window’s evidence establishes that she first contemplated the possible sale of her home in August 1998, at the latest. Her two children were aware then that she had this in mind. At the same time she bestowed a power of attorney on both her son and her daughter, and each of them continued in that capacity thereafter. Her son was involved, directly or indirectly, in all stages of the process. It is true that she subsequently had a falling out with him and now lives elsewhere; but there is no credible evidence that he was ever careless of her interests. Still less is there any evidence that Keith assisted the Karaliamis family to take advantage of his mother. Although he held her power of attorney, he was happy to leave his mother to make up her own mind. The decisions in question in this litigation are ones which, in spite of her age, she was perfectly capable of making for herself. As for Keith, he had no interest in her receiving less for the property than it was worth, and no incentive except to ensure that the deal was fair. In my opinion Keith throughout acted with a proper regard for his mother’s interests.
Having initiated the appointment with the estate agents which led to her being told that her house was worth about $140,000 but that an asking price might be $150,000, Mrs. Bayne (as I have already recorded) immediately called on George and Komissa Karaliamis to put an offer to sell to their son Peter for $150,000. This is another important event about which her affidavit of 19 August is significantly silent. Its occurrence is flatly denied in her second affidavit. For the reasons which I have already given, I am nevertheless satisfied that it took place and that it resulted in the first intimation to Peter’s family that the plaintiff had a firm proposal to sell to anyone, let alone to Peter. True, the possibility had been earlier mentioned by the plaintiff, and indeed also by Peter when he broached the subject with Mrs. Bayne shortly after her husband’s death; but it was then no more than a suggestion that Peter would be offered a right of first refusal should the decision to sell be made. When the proposal came, the family was caught by surprise.
It was necessary to ascertain whether Peter and Maribel could afford to take advantage of the opportunity thus presented. They had no savings to speak of. A loan was required. An approach to their own bank proved unavailing. Peter’s parents were prepared to assist by offering their home as security. George, accompanied by Peter and Maribel, accordingly visited the bank of which George and Komissa are customers. A loan of $150,000 was approved. But, after the deduction of bank and other costs and charges, this was some $6,000 short of the plaintiff’s initial asking price. The cost of cleaning and renovating also had to come from somewhere.
If the plaintiff’s desire to sell to Peter, and his and Maribel’s desire to take advantage of her offer, were to be realised, some accommodation to these financial realities had to be made. So it was that, shortly after the loan of $150,000 was approved, George Karaliamis together with Komissa, Peter and Maribel visited Keith, Luz and Mrs. Bayne. I am satisfied that Mrs. Bayne was then told that $150,000 was more than Peter and Maribel could afford, as indeed it was. The plaintiff was, I find, also told (in effect) that their best price was $130,000 and that if this was less than she wished to accept then she should feel free to withdraw; any perceived obligation she had to give Peter first right of refusal had been discharged. In other words, she was put under no pressure to accept Peter and Maribel’s terms: indeed she herself makes no such claim. She simply states that she did not know what she was doing. It must also be remembered that all the negotiations took place in Keith’s presence.
The terms of sale having been agreed at that meeting, the parties also then decided to place the matter in the hands of their respective solicitors. Mr. Window received instructions accordingly, although these came from Keith rather than directly from Mrs. Bayne. After Mr. Windows’ firm had prepared the contractual documents they were signed by the plaintiff before being presented to the purchasers for execution by them.
In paragraph 5 of her first affidavit, the plaintiff gives an account of a meeting which was probably that just described (paragraph 28, above) although her version is very different. According to her, while Peter and Keith were in the lounge room at Ramsden Street, "Keith came over to me with some paper and asked me to sign it". The affidavit continues:
"I asked why and he replied 'just sign it'. I did not know what it was but I signed anyway. Peter was in the room when this happened. My solicitor, George Spiliotis, has recently shown me a copy of a contract of sale and I believe it is the paper I signed. I recognise my signature on the front page and on the second page of the vendor's statement."
I do not accept this evidence. I am satisfied that the plaintiff understood the Karaliamis’ position, considered her own, and freely decided to accept their counter-offer. With her concurrence, Keith then instructed Mr. Window to draw the sale documents. She subsequently signed the contract of sale, fully aware that that was what she was doing. It was a decision which was not and is not difficult to justify unless the price was demonstrably and markedly below market value; and even then one would have to remember that Mrs. Bayne’s own estate agent had nominated $140,000 as representing that value. In doing so, Mr. Baker of course did not allow for a private sale. This nonetheless was the means of sale favoured, and ultimately adopted, by the plaintiff. She thereby avoided commission and other costs associated with a sale effected through an agent. Nor did Mr. Baker allow for what I find to be the very poor state of repair in which 53 O’Grady Street then was. It needed a new roof. It needed re-blocking and re-stumping. It required extensive repainting, and equally extensive repairs. It was dirty, smelly and full of rubbish. I accept that Peter and Maribel, together with friends and relatives, have spent tens if not hundreds of hours on restoration which has in addition cost in the vicinity of $20,000 for materials and outside contractors.
An account of what happened in the days and weeks following the execution of the documents of sale is given by Peter Karaliamis in paragraphs 13–15 of an affidavit sworn by him on 1 September 1999:
"13.After the contract had been signed I had further discussions with the plaintiff whereby she agreed to grant my wife and I access to the property prior to settlement. We agreed with the plaintiff that we would clean up the property on her behalf. The property was in an extremely run down and poor condition and contained a great deal of rubbish.
14.In the week before Easter of 1999 I was present at the property with my wife and parents cleaning it up. The plaintiff attended at the property where we had a discussion concerning the need for a great deal of expense to be paid out to repair the property and in particular in regard to the floor. After discussion with the plaintiff it was agreed that the price of the property would be reduced to $125,000 to take account of some of the extra costs we would have to expend in order to bring the property up to a state for my wife, myself and my child to reside in.
15.At a later stage in March or April of 1999 my wife had further discussions with the plaintiff concerning the cost of repair to the roof of the premises. My wife had received a quote from roof repairers for $20,000 to install a new roof. My wife had a telephone conversation with the plaintiff whereby the plaintiff suggested that she may be willing to bear half of this in the sum of $10,000. My wife then had discussions with the plaintiff's son who stated that his mother was not agreeable to reducing the price or giving us a $10,000 refund on the price. This was the end of the matter in relation to any suggestion that the plaintiff should pay to us the sum of $10,000."
The events which followed the execution of the contract of sale are important in assessing the credibility of the plaintiff’s case. It is for this reason that the version put forward by Keith Bayne in paragraphs 10 and 11 of his affidavit is also worthy of reproduction:
"10.My mother had a great deal of contact with the first and second defendants and their parents, who had been her neighbours for many years, after the signing of the contracts (sic). She allowed Agapitos Karaliamis and his wife access to the property in order for them to effect repairs upon it. There were discussions to the effect that because of the state of the property and the fact that the first and second defendants agreed to take a great deal of rubbish away from the property, the price would be reduced from $130,000 to $125,000. This arrangement was agreed to by my mother. The property was in particularly poor state of repair. The floor had a noticeable slope in it, the roof was in bad disrepair. The house needed to be restumped, the roof replaced and extensive repairs carried out before it could be brought up to a proper standard. My mother was fully aware of the intending purchase by the first and second defendants during this period up until the date of settlement of the property on 13 April 1999.
11.As to the allegation that my mother was to repay $10,000 to the first and second defendants … [t]here were discussions that my mother should bear half the cost of the replacement of the roof which was to be $20,000. However, in a telephone conversation with the second defendant, I refused on my mother's behalf, to agree to a payment of $10,000 on her behalf towards this cost. That was the end of the matter and my mother was under no obligation at any stage to repay the sum of $10,000 to the first and second defendants."
The plaintiff made some attempt at an answer in the latter portion of paragraph 3 of her second affidavit:
"I did not agree to grant Peter access to the house although I did attend the house to help clean up Darren's mess. I recall no discussions about any reduction in price. Peter said to me that the roof was leaking and asked for $10,000 … I did not have any discussions with Maribel Karaliamis about my home."
In her oral evidence, which I found persuasive, Maribel Karaliamis swore that the plaintiff was present at 53 O’Grady Street when Maribel was in the midst of discussions with a roofing contractor. It was, according to Maribel, in these circumstances that Mrs. Bayne, who was within earshot, "came up and said, 'Look, I would like to pay for the roof’." The offer surprised Maribel, who advised the plaintiff to speak to Keith about it before committing herself. Keith then became involved, with the results which have already been recounted.
I accept the affidavit evidence of Peter Karaliamis and Keith Bayne as set out above. It is supported in material respects by that of Peter’s parents and his wife, and by the fact that relevant documents were after consultation with the plaintiff’s solicitor amended to show the reduction in price from $130,000 to $125,000. The intervention by Keith to persuade his mother against any further reduction (in relation to the roof, after an offer initiated by her) and the acceptance of this by Peter and Maribel, supports the conclusions that Keith had his mother’s interests in mind, and that the purchasers were prepared to accede to the plaintiff’s change of heart. They arranged for another contractor to repair the roof.
The assertion by Mrs. Bayne that she "did not agree to grant Peter access to the house" is, I find, extraordinary. In fact, during or just before Easter she gave the keys of the property to George Karaliamis. Then, knowing that he and his family were expending much time energy and money on cleaning and restoration, she not only stood by and did nothing, but visited 53 O’Grady Street to collect her belongings and, as she herself says in her affidavit, helped "clean up Darren’s mess".
Mrs. Bayne undoubtedly now feels aggrieved that she sold her house for $125,000 when a valuer has told her that, in February 1999, its market value was $180,000 and in October, when the valuation was prepared, $210,000. The valuer in question is Robert Slater, an Associate of the Australian Property Institute and, between 1989 and 1997, a Director of Australian Property Valuers Pty. Ltd. He was called by the plaintiff to give evidence at the trial. According to a report prepared by him and dated 25 October 1999, he was instructed that in February "the dwelling was in poor condition with floors uneven, a concrete floor on the verandah, wallpaper and carpet existed, mantelpieces adorned the fireplaces, some poor outbuildings were erected at the rear and interior damage in the form of broken doors and windows existed." He prepared his valuation on this basis.
Another witness for the plaintiff was Alan Lyons, a real estate agent whose office is in Collingwood. In a letter dated 18 August 1999 written to Mrs. Bayne’s solicitors, he said that in his opinion "the realisable value of the property [at 53 O’Grady Street] is in the vicinity of $190,000 - $200,000."
It is not easy to reconcile the evidence of Messrs. Slater and Lyons on the one hand and Mr. Baker on the other. Mr. Lyons did concede in cross-examination that the estimate of Mr. Baker was "not necessarily inaccurate", but the weight of the evidence and of the expertise lies on the plaintiff’s side. Putting it at its lowest, it seems to me that the true value of 53 O’Grady Street was in February last year greater than $165,000. I base this conclusion in part on the fact that this figure was then given as its value for rating purposes; while 55 O’Grady Street, a comparable dwelling, was then similarly valued at $170,000.
In the end, however, the issue is not whether the transaction into which the plaintiff willingly entered in February last year was prudent or otherwise. The issue is whether the purchasers acted unconscionably. As was said nearly 80 years ago by a New Zealand judge:
"The mere fact that a transaction is based on an inadequate consideration or is otherwise improvident, unreasonable, or unjust is not in itself any ground on which this court can set it aside as invalid. Nor is such a circumstance in itself even a sufficient ground for a presumption that the transaction was the result of fraud, misrepresentation, mistake, or undue influence, so as to place the burden of supporting the transaction upon the person who profits by it. The law in general leaves every man at liberty to make such a bargain as he pleases, and to dispose of his own property as he chooses. However improvident, unreasonable, or unjust such bargains or dispositions may be, they are binding on every party to them unless he can prove affirmatively the existence of one of the recognised invalidating circumstances, such as fraud or undue influence."[3]
[3]Brusewitz v. Brown [1923] NZLR 1,106 at 1,109 per Salmond J.
Far from acting unconscionably, Peter Karaliamis and his wife and family did no more than gratefully receive a benefit willingly conferred upon them by Mrs. Bayne; a benefit carrying with it, nevertheless, a not inconsiderable overburden of financial responsibility and physical effort (in cleaning and renovating a house badly in need of both). In my opinion this, clearly, is not a case which calls for the intervention of the courts in their equitable (or any other) jurisdiction.
The third defendant, The Commonwealth Bank of Australia, is interested in this proceeding not only because it is named as a defendant, but also because it is at present a lender without security: the plaintiff has, I understand, lodged a caveat which has stood in the way of the registration of the several interests which the purchasers and the bank have or claim to have in 53 O’Grady Street. At trial, the bank was, in general, content to take the same line as Peter and Maribel. No separate examination of its case is therefor necessary in this judgment.
For the reasons set out above, the plaintiff is entitled to none of the relief which she claims in her amended originating motion of 17 November 1999. The first and second defendants are entitled to such orders as they require to register the interest which, as I find, they acquired from the plaintiff on execution of the documents of sale and transfer. There will otherwise be judgment for the defendants, with costs. The plaintiff’s claim will be dismissed.
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