Bridgewater & Ors v Leahy & Ors (B12098) App

[1998] HCATrans 246

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B12 of 1998

B e t w e e n -

DESLEY FAY BRIDGEWATER, JOAN MARGARET O’NEILL, JUNE LORRAINE ASHTON, SHIRLEY JOY LEAHY and STELLA YORK

Appellants

and

KEVIN LEAHY

First Respondent

NEIL WILLIAM YORK and BERYL ELIZABETH YORK

Second Respondents

GLEESON CJ
GAUDRON J
GUMMOW J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 24 JUNE 1998, AT 10.17 AM

(Continued from 23/6/98)

Copyright in the High Court of Australia

GLEESON CJ:   Yes, Mr Williams.

MR WILLIAMS:   Your Honours, yesterday Justice Callinan, at the conclusion of the day’s argument, asked for our submissions in relation to the fair, just and reasonable aspect of the defence.  We have prepared those in written forms to save your Honours the trouble of taking the points down and I hand six copies.

GAUDRON J:   What, the land is more important than children?

MR WILLIAMS:   Your Honour, we do not form any judgment in respect of that but that the evidence would indicate that the deceased held his land in high regard.

GAUDRON J:   Yes, but that really is not the question of what is fair, just and reasonable in these circumstances, is it, the question whether the overall transaction was fair, just and reasonable?

MR WILLIAMS:   That is so, your Honour.

GAUDRON J:   On one view this might simply be treated as taking advantage of his known, but perhaps misguided, desire to keep a property together which was not going to be secured by the steps he took anyway.

MR WILLIAMS:   Well, not absolutely secure, your Honour, but to the point that so far as he and the parties were able to determine, it would achieve an ambition in placing the property in secure and capable hands.

GAUDRON J:   But there were other means that could have been taken.

MR WILLIAMS:   Your Honour, our learned friends do raise some other means, for example, sale to a third party and so on.

GAUDRON J:   No.  Well, there could have been long‑term leases, could there not?

MR WILLIAMS:   Yes, that would be possible.

KIRBY J:   Or mortgages perhaps.

MR WILLIAMS:   There could have been mortgages, your Honour.

KIRBY J:   It would have secured perhaps his objective of keeping the farm but make sure that his obligations to his spouse and his children were protected as well.

MR WILLIAMS:   Your Honour, in terms of something in the nature of a life interest or a lease, as her Honour Justice Gaudron mentioned.  There could be then some provision in relation to income had one of those factors been considered.

GLEESON CJ:   Mr Williams, there is an aspect of the matter about which I am not clear and it does not seem to have occupied a great deal of attention below and that is the role of Sam in this 1988 transaction.  We seem to be discussing it as those it is a transaction between Neil and Bill and relevantly for the purpose of the way the proceedings are framed it is, but is Sam still alive?

MR WILLIAMS:   I believe so, your Honour.

GLEESON CJ:   We know from some of the evidence that at the same time as Bill entered into these contractual arrangements with Neil, Sam also took some steps.  Is there any evidence as to the extent to which Bill discussed with Sam this transaction and what his intentions were?

MR WILLIAMS:   Yes.  Your Honours have at page 569 of the record a statement by Samuel York which was tendered with an appropriate medical certificate establishing his incapacity to give evidence.  The passage which your Honour is directing his attention appears at page 572 of the record at about line 20.

GLEESON CJ:   Some of the land that was transferred to Neil was jointly owned by Bill and Sam, was it not?

MR WILLIAMS:   That is so, your Honour, and the structure of the transaction was, at the same time and in the same circumstances Sam transferred his interests in those jointly‑owned lands to Neil.

GLEESON CJ:   Does he deal with that in his statement?

MR WILLIAMS:   I do not believe so directly, your Honour, no.

CALLINAN J:   He says that he was medically examined, as was Bill.

MR WILLIAMS:   Yes, that is Dr Hatcher, your Honour.

CALLINAN J:   Yes.

MR WILLIAMS:   Yes, they were both examined, not together.  They were examined sequentially by Dr Hatcher.

CALLINAN J:   Mr Williams, there are two matters in that paper you gave us this morning, No 13, your last one, you refer to the finding that “Independent legal advice would have made no difference”.  That would be partly an inferential finding, would it not?

MR WILLIAMS:   Yes, your Honour.  It goes, in our submission, to two matters:  one is it is confirmation by the trial judge and by the members of the Court of Appeal in their concurrent findings that no relationship of special disability existed.  The second aspect, your Honour, would be that it goes to the point as to whether, had independent legal advice been proffered, there would have been any alteration in the circumstances, that is that if adequately advised by an independent solicitor, the deceased would nevertheless have done what he did.

CALLINAN J:   How would the trial judge be in a better position to decide that matter than, say, this Court?

MR WILLIAMS:   Your Honour, he would be in a far better position, having assessed all the evidence in relation to Bill, having seen the witnesses give evidence in terms of his strength of character, his determination and his will.

CALLINAN J:   It is a finding with respect to his intention, is it not?

MR WILLIAMS:   It is, your Honour, yes.

GLEESON CJ:   I am sorry to nag about this point.  It concerns Sam.  Mr Fraser said that although this was not in the forefront of his claim below, he wants at least as one alternative to set aside the entire transaction.

MR WILLIAMS:   Yes.

GLEESON CJ:   Sam was a party to the entire transaction.  Sam has never been a party to these proceedings.

MR WILLIAMS:   No, your Honour.

GLEESON CJ:   One of the contracts that would have to be set aside, if we were to set aside the entire transaction, is the contract that appears at page 481 of the appeal book, is it not?

MR WILLIAMS:   That is the contract relating to the freehold interest in Wonga Park, your Honour, the jewel in the crown.

GLEESON CJ:   How can we set aside that contract if Sam is not a party to the proceedings?

MR WILLIAMS:   In our submission, your Honours would not and, with respect, could not in the absence of Sam.

GLEESON CJ:   That is why I am so interested in the role that Sam played in this 1988 transaction because Sam is alive but not here.

MR WILLIAMS:   Yes, that is so.  Your Honour, the other point in relation to Sam’s involvement was that it furthered the common end, the grand plan, if you like, of ensuring all the lands were held together.  That necessarily involved Sam’s input in effectively gifting his lands which were held as tenant in common with Bill to Neil.

GLEESON CJ:   I may have misunderstood the facts but I got an impression from something I read overnight that at least a substantial part of these lands had, in effect, been inherited by Sam and Bill from their father.

MR WILLIAMS:   Some of the lands had, your Honour, and there is a reference to, I think it is Naseby Farm, which was land inherited by Sam and Bill jointly from their father.

GLEESON CJ:   And was that included in the land the subject of the 1988 transaction?

MR WILLIAMS:   Your Honour, it appears in that exhibit, Sam York’s statement and it ‑ ‑ ‑

CALLINAN J:   Page 569.

MR WILLIAMS:   Yes, at page 569, and I do not believe the evidence ever identified what Nasbey Park was, your Honour.  It is clear, though, that these two men had over their lifetime substantially increased their joint land‑holdings and their personal land‑holdings.

GLEESON CJ:   This objective, whether it be a worthy objective or not, of handing on this land to Neil was a joint objective of Sam and Bill, as I understand it.

MR WILLIAMS:   Yes, and effected at the same time and in very similar circumstances and with the same, albeit somewhat limited precautions, taken by the solicitor.  Your Honours, may we then pass on to some matters raised by our learned friend in oral argument upon which we wish to comment, lest it be thought that those matters go by default.

GUMMOW J:   Well, the matters that have just been pointed out to you by the Chief Justice may serve to emphasise that the appropriate remedy, the only appropriate remedy, if there is to be a remedy, is in the nature of equitable compensation or damages recovered by the estate.

MR WILLIAMS:   Yes.

GUMMOW J:   With some difficulty in assessment, of course.

MR WILLIAMS:   With very real difficulties in assessment we submit, your Honours.  Before we leave your Honour the Chief Justice’s point, may we take you to page 580 of the record where your Honour sees a bar chart which was prepared, in effect, in an attempt to trace Sam York’s land‑holdings, and this is Mr Sam York, the grandfather of Neil, the father of Bill and Sam.  Your Honours will see there, reading across the page from line 55 there were original lands owned by Neil’s grandfather, Sam York, which did form part of the option in the 1985 will.  Sam York did sell some land to buy Wonga Park, as shown on the chart, but Wonga Park was owned by Bill and Sam junior, if I may refer to a gentleman of his advanced years as Sam junior.

GAUDRON J:   Was it bought in the names of Sam junior and Bill or was it bought by Sam senior and passed to them by inheritance?

MR WILLIAMS:   Some was bought in joint names and another part was inherited, your Honour, from Sam senior.

GAUDRON J:   Thank you.

GLEESON CJ:   And as I understand part of the history, Neil’s two older brothers have been given grazing land by Sam and Bill some years earlier.

MR WILLIAMS:   Yes.  In the 1960s, the evidence is, that Sam and Bill bought for £20,000 a property, Halden Park, further west of Roma and gave that land, that property, to Phillip and Kenny, Neil York’s brothers, and they had followed a similar course in their life up to that point in time as Neil, in fact, followed much later.  On leaving school they had worked for the York Brothers partnership for very low wages, which Neil did on leaving school.  They had then been provided for by the York brothers partnership, Sam and Bill, in the purchase of that property.  Bill’s interest, of course, in that gift was approximately £10,000 or was £10,000 according to the evidence and that, of course, was a very, very large sum of money at the time the gift was made. 

Your Honours, our learned friends submitted that Bill passed the reins of the partnership to Neil York from his entry into the partnership in 1981.  We would draw your Honours’ attention to those pieces in the evidence which establish that that was not an immediate and total passing of control, that it occurred progressively from that day on.  It was limited to the day‑to‑day running of the business and subsequently, about 1983 is my recollection, Neil commenced to deal with the book work in the partnership.  Despite the passing of the reins, as our learned friend described it, Neil remained under the overall guidance of the senior partners.  He continued to consult them throughout the time the partnership subsisted, until Bill’s death.  He required throughout that time, by, it seems, common understanding rather than any specific direction, approval for any expenditure in excess of $5,000 or $6,000 and from time to time that approval was not forthcoming.

It is very relevant to note that on three occasions on which the bank manager was consulted in relation to the partnership financial affairs between 1985 and 1988, those consultations were by Bill and Sam, without Neil.  So that financial control, in our submission, effectively remained with the three partners and with no single partner. 

Our learned friend also commented yesterday in the course of outlining his clients’ causes of action, if I may use that term loosely in respect of the appeal, that there was a claim in respect of undue influence.  There certainly was before the trial judge and that claim failed.  There were two points raised on appeal:  one was unconscionability and the other undue influence and there was a failure on undue influence before the Court of Appeal.  There is no ground appeal identifying undue influence as a matter that our learned friends’ clients wish to bring to your Honours’ attention and consideration.  The notice of appeal is found at page 675 of the record and, of course, our learned friends’ submissions make no reference to any ground of undue influence.

Your Honours, another point raised yesterday, I think by your Honour the Chief Justice, was whether the Injune property which Neil purchased was used for partnership grazing.  It was, in fact, so used.  The evidence is at page 261 line 5 of the appeal book in the evidence of Neil York.  There was reference yesterday in a not dissimilar context to the tax returns of the partnership which showed an agistment fee.  Neil York explained an agistment fee in relation to the Injune property presumably paid by the partnership to Neil York, who was the owner of that property.

The matters in relation to the structure of the accounts was, in Neil York’s evidence, left entirely to the accountant and the accountant chose apparently to show that disposition which did not, in fact, occur.  The effect of it, of course, was to Neil’s disadvantage in increasing his taxable income and reducing the taxable income of each of the three partners, of whom he was one, but it occurred apparently without his knowledge, at least in the formulation stage. 

Your Honours, the evidence, in our submission, showed that beyond the partnership business and the affairs of the partnership Bill sought Neil’s assistance in respect of one matter of his private affairs.  The only evidence which we can recall in relation to seeking such assistance is outside the solicitor’s office on the footpath in which that phrase which has received so much dominance in this case, “I told mum you’d be bloody fair”, was used by Bill. 

Now, your Honours, it is important in that context to identify what Neil perceived to be his role at that time and the evidence is at page 297 of the appeal record and may we say before taking your Honours to the specific evidence that the fact that Neil was advising Bill assumed great significance in our learned friends’ argument and, indeed, it seems to have formed the primary basis upon which he contends there was a fiduciary relationship.  Your Honours will see that the witness was taken to this point at about line 20 on page 297 and at about line 32 he was asked:

And you thought you were advising Bill to give the girls half the value of the property?‑‑  No, I wasn’t advising Bill at all.

No, but the figure you were suggesting to him was a figure that you believed to be about half the value of the property; correct?‑‑  No.

You just told us that, didn’t you?‑‑  I did tell you that but it was a figure, wasn’t it?

Well, why - how did you pick up the figure 200,000.  Why did you pick that?‑‑  I don’t know why I did.

You picked it because you thought his property was worth about $400,000, didn’t you?‑‑  I didn’t.  At the time I never really thought about what it was worth.

And, of course, at this time he did not know the terms of the will and did not know the context in which Bill was formulating this disposition. 

Your Honours, we rely heavily on that answer at about line 32 for this reason, that in attempting to formulate a fiduciary relationship, our learned friend has to rely very heavily on that point.  We dispute the proposition that a unilateral fiduciary relationship may come into play.  Neil, whose evidence was accepted, did not believe that on that occasion, which assumed so much importance, he was advising Bill and there is, to our recollection, no evidence that he advised Bill on any other matter of private affairs, any matter beyond the limit of the partnership affairs during their long association.

GLEESON CJ:   One thing I am not clear about, Mr Williams, is this.  What do you say the correct inference is as to what Neil and Bill and Sam were respectively individually seeking to achieve by that 1988 transaction?  I realise you say they were trying to achieve land going to be kept intact, but I was looking for something a little more detailed than that.

MR WILLIAMS:   Your Honour, one may infer from Sam’s disposition to Bill that it was his intention that his lands go to Neil - I am sorry, Sam’s disposition to Neil that one may infer that it was always Sam’s intention that his lands go to Neil and that if they did not do so inter vivos, they would presumably have done so by his will.  It seems that that was thought to be an appropriate time at which to hand over the title to the heir apparent, if I can call it that.  At the same time, Bill was attempting to secure his ambition that the land stay in the York line and in sole ownership of one person who was a capable manger.  To do that it was necessary to align the two transactions.  It would be a pointless exercise, presumably in Bill’s eyes, to have lands held as joint tenant with Sam transferred to Neil if Sam did not transfer those lands also.

In terms of Neil’s motivation, Neil was aware at that time that he was to receive these lands, and more, under the option to the will.  He gave the explanation to the court that, in his view, land values had risen.  He was aware that the option was $200,000.  He had available $150,000.  He believed it would be more equitable to increase, in effect, by his action the amount of the option and thereby proffered the $150,000.  He thereby accelerated his receipt of what he would have otherwise received under the option.  Whether one can, at that point, infer that Neil was motivated to protect his position, as the President in the Court of Appeal was prepared to infer, in our submission, is very, very doubtful.  It was ‑ ‑ ‑

GLEESON CJ:   How old was Neil at the time of the 1988 transaction?

MR WILLIAMS:   He was certainly a mature man, your Honour, at least in his thirties.  I will have an age found, if I can; I do not recall it specifically.  He was at least in his thirties, probably his late thirties, your Honour.

GLEESON CJ:   Was he married?

MR WILLIAMS:   He was married to Beryl at that time and he has a son.  He was born on 11 June 1946, your Honour, which would put him at 42 at the time of the 1988, yes, just 42. 

GLEESON CJ:   At the time of the 1988 transaction, was he, in effect, the only person working the properties the subject of the transaction?

MR WILLIAMS:   That is the evidence, your Honour yes.

GAUDRON J:   Although the Leahys apparently lived on one of the properties, did they not?

MR WILLIAMS:   No, your Honour.  The Leahys lived on the house property at Wallumbilla, that is Stella lived in Wallumbilla in a house, Joan lived in Wallumbilla in another house.  Shirley Leahy lived on a property at Dulacca, some distance away, which the deceased had assisted, at least, she and her husband, Kevin, the executor, to purchase.  They did not live - no one other than Neil York lived on the properties.  Your Honours, in our written submission, to finish the point I was on, Neil York said - and the trial judge accepted him - that Bill did not discuss his affairs with Neil, his personal affairs.  Neil did not know the extent of Bill’s private resources in terms of cash or other investments, beyond the land. 

Beyond that one point mentioned, Bill could never be seen to have sought Neil’s advice - and we have already attempted to characterise that, not as a seeking advice but as seeking confirmation of what Bill had already concluded was fair, and that may be gleaned from Bill’s statement at the time.  Beyond the conduct of the partnership affairs, there was no evidence that at any time Bill was reliant on Neil in respect of his personal affairs; it is purely limited to the partnership affairs.  Indeed, in terms where partners have appointed, perhaps informally, a managing partner, that circumstance inevitably arises. 

Of major importance, at least to my learned junior, in this context is that in 1985, when Bill was framing his will, which did give Neil a very substantial benefit, we concede that, he appointed Kevin Leahy, his son-in-law, the executor.  If there was such a relationship of special disability - and we do accent the “special” for reasons we will come to - it is inconsistent with all notions the appellants seek to advance that Bill would appoint someone with whom, more than anyone, he did discuss his private affairs as his executor in his knowledge, which he stated at the time, that Kevin would do the right thing.  If there was a relationship of disability, one would expect that it would flow into the appointment of the person to manage the whole estate.

Your Honours, our learned friends suggest in the course of oral argument that Bill did not know the value of his properties in 1988.  The written argument advanced relies upon a passage in the evidence of Shirley Leahy.  In any event, your Honours, the evidence in that passage does not, on our several readings of it, support the proposition that Bill did not then know the value of his properties.  We prefer to rely upon the evidence from the testator’s own mouth, which appears in exhibit 71 at page 519 of the record.  These are Mr Pack’s handwritten notes, which are followed by a transcription - 518, I am sorry - and the transcription is at page 522.  In our submission, this exhibit and Mr Pack’s evidence explaining it - which your Honours will find from about 391 of volume 2 of the record - is important.

GLEESON CJ:   Would you give that number again, please.

MR WILLIAMS:   Sorry, at page 391 of volume 2 of the appeal book.

GLEESON CJ:   Thank you.

MR WILLIAMS:   One has Mr Pack’s evidence, which explains - or if I can - fills in the gaps between the cryptic notes that he took on this day. 

GLEESON CJ:   How did this meeting come about?

MR WILLIAMS:   Your Honour, there is some confusion in that respect.  The solicitor, Pack, understood the appointment was made to enable Bill to change his will.  Shirley Leahy approached the meeting - and she was present during the early part of the interview on the basis, it seems, that she wished Bill to execute a power of attorney in relation to his private affairs.  In any event, during the course of the meeting, at an early stage, Pack made it clear to all present, including Shirley and Kevin Leahy, the executor, that these transfers had been effected.  It appears that this was the first time that Shirley Leahy had become aware of those transfers.  Your Honours will see at page 392 of volume 2 of the record, from about line 45, how the interview progressed. 

GLEESON CJ:   Does the evidence show who made the appointment?

MR WILLIAMS:   No, I do not believe it does, your Honour.  The strong inference is that Shirley Leahy made the appointment, or Kevin Leahy made the appointment.  I do not believe it shows who made the appointment.  From 392, from about line 45 to the end of the page, your Honours will appreciate the atmosphere in the meeting and the atmosphere in which the notes were made.  I am sorry, I am corrected.  Mrs Shirley Leahy, I am sorry, made the appointment.  That appears at page 111 of the record at line 14. 

Your Honours, the notes of the solicitor, as transcribed at page 522 of appeal book 3, detail at that time what the deceased’s knowledge of the state of affairs was, and they are explained in Pack’s evidence in some further detail.  At that time, Bill was aware that Neil had gained Hemples or Wonga Park.  That was raised by Kevin Leahy.  Bill was asked to indicate his assets.  He estimated 200 cows.  He always regarded the herd as his, although it was a partnership asset, but he always described them as “my cows” and so on.  He then describes the family, his girls having worked for themselves.  This appears in further detail from page 394 onwards in Pack’s evidence, and perhaps rather than continually referring to the transcript it would be better to refer to Pack’s evidence.  It was never suggested, I do not think, at the trial that 200 cows was not an appropriate estimate of the herd at that time.  You will see at line 19 on 394 that:

Bill had always regarded the cattle as being his.

And:

“Family girls worked for themselves.”

is the next comment, at line 22, and the conversation after that proceeded rapidly.  In reference to Neil, at line 30, the deceased was asked:

“Do you think it reasonable to give the land to Neil.”

The response was:

He is capable.

In paragraph 5 of the transcript there is the notations they will be:

carrying the “swag”. 

That was interpreted by Pack as implying that the girls could not manage the properties and that they could not successfully work them and that they would, in effect, walk off the properties.  Your Honours will see, at about line 40:

You “can’t make it out of the land.”

At line 38:

“They couldn’t get the value out of the land.”

He went on, at line 40, to say:

that the land price is too dear.  You “can’t make it out of the land.”

At line 54:

“Neil is still working to keep me.”

was the testator’s comment.  At line 5:

“‘I wouldn’t be capable now’”?

That is Bill speaking in relation to his capacity to manage or to conduct the farming operation.  At that point the Leahys were asked to leave the room by the solicitor as the atmosphere had become quite thick.  An interview then proceeded in the presence of Mr Pack and the deceased and Mr Pack’s secretary, a Mrs Anderson.  That is detailed at page 395, from about line 45 - I am sorry, a little earlier, at about line 30.  Mr Pack initially went through the whole discussion again, for Mrs Anderson’s benefit, to bring her up to speed in relation to what occurred.  Then, in reference to the daughters, in line 48, the testator said:

“‘They don’t give me a tremendous lot of help.’”

At line 50, Pack confirmed that he was “careful” in relation to take the deceased’s exact words.  At line 58, the deceased said:

“‘I don’t think my son-in-laws would be capable.  One works for the PMG.’”

Apparently drawing on farming experience as a matter of some importance to him.  Then, as appears in the notes, there is reference to his daughters and what had been done for them in terms of inter vivos dispositions.  He said - this is the deceased:

“I have often helped my daughters.  I bought a hairdressing salon” in - “salon Chinchilla (June)”.....

“(b)  Another daughter, Delacca?”.....

“I bought land for”----?-- “For (Kevin in Delacca, Shirley).”

And that is the disposition I have already referred to in favour of Shirley and Kevin Leahy.

“Another daughter I don’t see much, Desley”?-- Desley, yes.

“Help buy a house”?-- That’s right.

She lived in Cairns.  She then went south to Townsville -

and so on.  There is a reference then in the note:

“(d) Your son-in-law Kevin land and cattle you bought for him.”?-- That’s right.

Pack’s interpretation:

He must have assisted in the purchase of land and cattle for Kevin at one time.

The next entry is:

“The reason why Neil” ----?-- “Was given the land.”  Bill says, “He has worked hard.  The job got too big for me.”

And then in relation to land prices, Bill said:

“Land prices have jumped.  The price has got out of all bounds.  Land is too dear.  I got too old for the work.  We bought it for three pound per acre.  I think he (Neil) is entitled to it.  Neil has stuck with me through thick and thin.”

In regard to the daughters he said:

“They.....”married blokes and they never helped me.  I think $50,000 each is enough for each daughter.

GAUDRON J:   I understand all of this in relation to the will, but we are actually concerned with the transactions inter vivos.

MR WILLIAMS:   Yes.

GAUDRON J:   There might be some significance in terms of the claim for unconscionability if all of this had happened at that stage, but what relevance has it got when it has happened well after that, well after the will was made, well after the gift inter vivos?  How does that bear on the position, the unconscionability, if you like, of the inter vivos transaction?

MR WILLIAMS:   As the trial judge found, this interview shows that Bill was determined to hold, in an informed way, to the dispositions he had made.

GAUDRON J:   So it is a two-way transaction.  We are talking about - the question you have to address is the unconscionability, if it be such, of Neil in participating in the transactions as he did.  I mean, Neil did not have to accept the deed of gift or deed of release.  He did not have to buy it for 150,000; he did not have to buy it all.  We have got to look to Neil.

MR WILLIAMS:   Yes, quite, your Honour, and we do in this sense; that not only does this show the matter raised by the trial judge, and found by the trial judge, but it also shows from the testator’s own lips whether there was a relationship of special disability.

GAUDRON J:   Yes, but that is not all that is involved in unconscionability, is it?

MR WILLIAMS:   No, your Honour, but it is the first limb.

GAUDRON J:   It really is taking advantage of a situation where the man is old, cannot work the property, the nephew knows that he wants to keep it intact.  The question is:  is Neil taking advantage of this elderly man’s rather idiosyncratic desire to keep his cattle and land together at the expense of anybody else, or to the - well, regardless of anybody else’s claims upon him, was Neil acting unconscientiously in taking advantage of it, in taking the gift, in seeking to hold on to it thereafter, including right up until the time, if you like, when he had the TFM application struck out?  It is Neil’s behaviour we have to look at, it seems to me.

MR WILLIAMS:   Yes.  Your Honour, certainly that is - - -

GAUDRON J:   I mean, all you are doing is painting a picture of a stubborn, determined old man, whose views about things are perhaps a little odd, even by the standards of western Queensland graziers.  Did Neil take advantage of that?  That is the question.

MR WILLIAMS:   Your Honour, we certainly concede that that is a relevant inquiry, but it becomes a relevant inquiry only once your Honours determine there was a relationship of special disability.

GAUDRON J:   Well, it seems to me that there is a relationship immediately you have this elderly man with his mind fixed, if you like, on keeping his properties together, and he could only keep the properties together, it seems to him, if Neil will take them on and work them.  Now, that seems to me to be the relationship of special disadvantage in itself.

MR WILLIAMS:   Yes.  Your Honour, in that context, the point of raising these factual matters, as they do fall from the testator’s own lips, is to establish that he was not at a serious disadvantage, which is Justice Mason’s explanation of the special nature of the disability.

GAUDRON J:   Well, I wonder do they establish precisely that he was.

GLEESON CJ:   I understand you, in addition, to be relying on this on a much narrow point; that is, simply to rebut the suggestion that he did not know the value of the land that he was transferring.

MR WILLIAMS:   Yes.

GLEESON CJ:   A possible point of view is that, apart from what is revealed by this evidence, it is likely that that would have been the thing he would have known best.

MR WILLIAMS:   Yes.

GAUDRON J:   But, again, what relevance does it make that he knew it in November 1988 after the transaction has been completed?  Well, you have to point to it.  I suppose you will ask us to infer that he knew it earlier.

MR WILLIAMS:   Yes, we do, your Honour - simple as that, I am afraid.

GLEESON CJ:   Well, if it be true, this is a subject about which he was not only knowledgeable, but about which he was actually obsessed.

MR WILLIAMS:   Yes.

GLEESON CJ:   It may well be that it would require fairly strong evidence to indicate that, as Mr Fraser suggested, he was unaware of the value of the land he was transferring in 1988.

MR WILLIAMS:   Yes.  We submit that is the proper inference, your Honour.  We do not contend, as our learned friend’s submissions seem to go this far, that Bill could state to a precise dollar value the value of his land at any time, any more than I could state to a precise dollar value what my house would bring on the market at any particular time.  But this evidence shows that in general terms Bill was aware of the value of the land and the substantial increases.

GUMMOW J:   Well, that was part of the obsession.

MR WILLIAMS:   It is part of the obsession.

GUMMOW J:   It helped feed his obsession.

MR WILLIAMS:   Yes.  Your Honours, I will not go on with the reading of this part of the transcript beyond page 397 in which the solicitor asked Bill a number of direct questions in relation to what he intended to do, and the relevant passage is from line 10 to line 30, and it occurred just before Bill signed these notes, and he did sign them:

“Do you want to change your will?”  Answer:  “No.”  Question:  “Do you agree I’ve explained to you twice while Mrs Anderson was here and twice while Kevin and Shirley were here the contents of your will?”  Answer:  “Yes.”  “Do you agree you asked both Kevin and Shirley in my presence what they thought of your will?”  Answer:  “Yes.”  “Do you agree Kevin said he thought you had given away too much to Neil and that you really didn’t realise the value of the land?”  Answer:  “Yes.”  “Do you agree Shirley said she was very disappointed in the will and that she thought you should be aware that all your daughters were unhappy about the will?”  Answer:  “Yes.”  Question:  “Irrespective of the above, you will not change your will?”  Answer:  “No.”  Question:  “Do you agree I’ve read out to you the three preceding pages?” -

and so on.  It is instructive to point to Shirley Leahy’s evidence in relation to one matter that occurred in this consultation, which appears at volume 1 at page 126 of the record.  There was some difference in recollection between Shirley and Mr Pack as to the precise details of the conversation, although the flavour was consistent throughout.  But at 126 of the record, at about line 1, I asked her whether, in the course of that conference, she:

spoke at some length in your father’s presence about the unfairness -

or what she thought was the unfairness, or what she thought of the dispositions in the will and she said:

All I said was that he had given land to Phillip and Ken as well as helping Neil and I said he hadn’t helped us much and at that stage Mr Pack ordered us out of the room.

So the dispositions to Ken and Phillip York, namely Heldon Park, appear to have been brought up at that time.

KIRBY J:   Can I ask you a general question?  I ask this for your assistance; it is not asked in any way critically:  in your written submissions, you quote a passage from Justice Mahoney’s decision in Stivactos and, of course, Justice Mahoney was very knowledgeable about this area of the law.  It is a helpful quote in which his Honour says that when equity is asking itself whether it will intervene in a case of this kind, it has regard to two things, he says: 

the circumstances of the case and what currently is seen as unacceptable.

Now, the circumstances of the case is what we spend all our time - and I realise that you very correctly have drawn attention to the cautionary remarks in this Court about the care with which we have to exercise our review of the facts when it has been gone through twice but, when one looks at that last criterion - what is currently unacceptable - perhaps 20 and more years ago it might not have been unacceptable.  Perhaps in Bill’s youth, it would have been perfectly acceptable, indeed considered desirable by Justices on this Court and by others, that a farming man should keep his property together, even if that meant to the disadvantage of his wife and his daughters.  But if we ask that question today, if we ask what is currently unacceptable, may it not, in considering the approach of a court to a question such as is now before us, be appropriate to, as it were, review the approach of the parties and say that in current terms of what ought to be the obligations of conscience, you are not looking just at what Bill was thinking or Neil was thinking; you were looking at what, in a sense, the court says is the conscientious behaviour of the community today.  Now, am I correct in that approach?  Is that what Justice Mahoney is saying, or is one focusing solely on the private subjective conscience of Neil?

MR WILLIAMS:   Your Honour, we submit that there are, based on Justice Mahoney’s analysis, both objective and subjective elements to the relevant test.  The objective elements is the court’s appreciation of what is acceptable; the subjective elements are the circumstances of the case, and whether the disposition is rational and justifiable by reference to those circumstances.  In other words, Bill’s subjective appreciation of his wishes and how they are best fulfilled is a relevant factor, but is certainly not determinative.

KIRBY J:   I felt bound to put that to you because, in so far as I can judge what is currently unacceptable - and, to some extent, it is reflected in TFM statutes and in TFM decisions - the notion that nowadays, even for the purpose of keeping a farming property or grazing property together, that you can, as it were, really significantly disadvantage female members of a family does not seem to be acceptable to me.  Now, I feel bound to put that before you so that you can deal with it if I ought to somehow expel that from my mind.

MR WILLIAMS:   Your Honour, we cannot expel that as a relevant consideration; we can only dispel it factually by - in the circumstances as indicated, particularly in exhibit 71, establishing the benefits that had been provided inter vivos to the daughters and the amount to be provided under the will option which, by the structure of the will, they would receive and which Bill was obviously well aware they would receive.  His approach was in relation to them somewhat parsimonious but, nevertheless, there is there a recognition of their interests but, in his eyes, a downgrading of them in preference to his major objective.  Your Honours, our learned friend referred to the making of the will by Neil York’s solicitor, Mr Pack ‑ ‑ ‑

GUMMOW J:   Now, what Justice Kirby was putting to you through that passage of Mr Justice Mahoney is, in a way, what was being said by Lord Selborne in a case referred to by Mr Justice McTiernan in Blomley v Ryan 99 CLR 386, that Justice Callinan referred to yesterday, which provoked what you handed up to us this morning. That is the line of territory Mr Justice Mahoney would have had in mind, I think.

MR WILLIAMS:   Yes.

GUMMOW J:   I do not think he was saying something as a one‑off idea; he was saying it against a background of the cases.

MR WILLIAMS:   Yes.  It certainly is that, your Honour.  It is not something that otherwise has not assumed some prominence in the cases but it is, in our submission, an analysis which enables a modern test to be applied, containing both objective and subjective elements.  Your Honours, in relation to the arrangements for the making of the will, these factors are relevant:  firstly, the deceased’s former solicitor, Mr Hurley, who had acted for him, it seems, for some years - - -

GUMMOW J:   He had retired or died?

MR WILLIAMS:   He had retired.  He was no longer in practice.  As a consequence, the arrangement made by Neil was with the firm of solicitors who acted for him - that is, Taylor and Pack - but the appointment was with Mr Taylor, not initially with Mr Pack, and it came to pass that Mr Pack became involved because Mr Taylor was busy at the time the gentleman turned up for the arrangement.  It is important in that context to note our written submissions at paragraph 2.16 on page 4 that Mr Taylor, with whom the appointment had been made, had previously acted for both Bill York and Sam York.

Your Honours, our learned friend’s submissions might be thought to go so far as to suggest that there was unconscionable conduct in 1985 or even earlier, and that the option in the will was a product of that.  That was, indeed, a line which the President in the Court of Appeal took.  We draw your Honours’ attention to paragraph 7 of the further amended statement of claim in which unconscionability was alleged in 1985.  That was not pursued at the trial and no attempt was made to make out that allegation.  That appears in the trial judge’s reasons at page 590, line 35.  We submit there was no basis upon which could say that unconscionability led to the beneficial option in the will.

Your Honours, there is in relation to the sale of the Injune property clear evidence that, after discharging the mortgage, Neil had available $150,000, and there is clear evidence that Bill knew that.  That appears at page 266, line 50, and at page 304, line 9, of the record.  In that context, your Honours, we must also refer to the evidence of Mr Seawright, Bill’s neighbour.  Now, this evidence assumes great importance because it is apparent from Mr Seawright’s evidence that, prior to any approach by Neil to purchase the properties for $150,000, Bill had had a conversation with Seawright.  It appears in Seawright’s evidence at page 365, lines 41 to 49.  The deceased said to him at about line 44:

Well, Bill just said he had never been out to see it -

that is, the Injune property -

and then later on he said - he told me he’d like, “Neil to sell Injune and buy me out.”

This is important to the question of whether or not Neil procured the transactions because it is apparent from this evidence that even prior to the sale of Injune Neil had already formed that wish, that Neil would buy him out on the sale of Injune, and there is no evidence that was ever communicated to Neil.  I do not believe it was even suggested that prior intention was communicated to Neil.

CALLINAN J:   I suppose one of the things you say, Mr Williams, is that these proceedings should not be used to supply a defect, as it were, in the Succession Act in Queensland in not making any provision for a notional estate; that if, in fact, people making inter vivos dispositions, leaving aside any question of special disability, then that is the consequence that the law contemplates in Queensland with equanimity, that you can defeat the Succession Act, in effect, by inter vivos transactions.

MR WILLIAMS:   Yes.  Your Honour, they can be defeated, subject to the reaction of those who would otherwise have commenced a TFM action.  There would be no difficulty, and there would have been no difficulty for these appellants in continuing the TFM action and - - -

CALLINAN J:   But they would not have got access to this property.  It had gone.

MR WILLIAMS:   Continue it in conjunction with this action.

CALLINAN J:   Yes, but leaving aside this action - - -

MR WILLIAMS:   Leaving aside this action, yes.

CALLINAN J:   I mean, this action should not be used as a cloak for a de facto claim to non‑existent notional property in Queensland.

MR WILLIAMS:   Yes, my recollection is the Chief Justice in the Court of Appeal ‑ ‑ ‑

GAUDRON J:   What if one takes the view, however, that the unconscionability extends to striking out, or moving successfully to strike out, the TFM proceedings.  You see, what if one were to take the view that there really was a relationship of special disability constituted by this old man’s desire, or obsession, to keep the farm going, to be perpetuated by stud cattle, if you like, which was known to Neil - clearly it was known to Neil.  He took advantage of it and was still taking advantage of it at the time when he moved to have the TFM application struck out.  Why then would you take the view put forward by Justice Callinan that it is somehow impermissible to use these proceedings as a de facto analysis of what might have occurred in the TFM proceedings?

MR WILLIAMS:   Your Honour, because the TFM application was struck out for want - - -

GAUDRON J:   On your client’s application, yes.

MR WILLIAMS:   It was, for want of prosecution, and there are very strict guidelines as to the circumstances in which such an application may succeed.

GAUDRON J:   But he could, for example, have stood back and said, “Well, look, you run all your actions and we’ll see what happens at the end of the day”.  But if one came to the view that he was at all stages unconscientiously insisting on the rights that came to him from the transaction inter vivos, you would not stop that holding at the door of the court on the strike‑out application, would you?

MR WILLIAMS:   Well, your Honour, that argument is, with respect, tenable, if the appellants were prosecuting the TFM application.

CALLINAN J:   And, Mr Williams, if they also raised as a discretionary ground to meet the strike‑out application, a contention that it was being brought unconscientiously and impermissibly as part of a train of unconscientious conduct.

MR WILLIAMS:   That is so.

CALLINAN J:   But I take it if any such ground had been raised, it would have been considered by the judge who struck out the succession application.

MR WILLIAMS:   Yes.

CALLINAN J:   We cannot rerun that now.

MR WILLIAMS:   No, and, indeed, your Honour, that it is what one might describe as a back door approach to a Testator’s Family Maintenance application appears evident from the date on which the striking out occurred, approximately five weeks before the issue of the writ in these proceedings.

GLEESON CJ:   When you commence an application under the Succession Act of the Testator’s Family Maintenance variety, does the applicant have to file an affidavit disclosing means?

CALLINAN J:   Is there not a fairly formal initiating process and then, invariably, there is an application for directions, and directions are given with respect to discovery and the provision of material by all parties.  But normally the executor has to come in and disclose what the estate is at an early stage, is that not right?

MR WILLIAMS:   That is so, your Honour.  There is an early application for directions as a matter of course, at the present at least, within a certain time of the commencement of the application.  I am instructed no supporting material was ever filed in relation to the application.

GLEESON CJ:   Apart from the information that we have on page 522 and following where the deceased attempted to defend himself against a charge that he had dealt unfairly with his daughters, do we know anything about the means of the daughters?

MR WILLIAMS:   No.  No, that is where the evidence is, your Honour.  There was some cross‑examination which led from that document as to whether or not, for example, there had been assistance as Bill had described.  But in terms of assessing the means of the daughters, no, the evidence was very imprecise.

CALLINAN J:   Mr Williams, I must say I have some problem with the notion that, falling in with another person’s obsession, is taking advantage of some special disability.  I mean, people hold a lot of obsessions about a lot of matters.

MR WILLIAMS:   Yes, I might leave that in the realm of a value judgment, your Honour.  In our submission, the obsession was not plainly apparent to Neil in terms of it being an obsession.

CALLINAN J:   But even if it were, the fact that he had the obsession might have made his course of conduct, in effect, as the trial judge found, utterly unalterable, because it was such a strong obsession.

MR WILLIAMS:   Yes, that is so, it gets to the independent advice point, your Honour.  Your Honours, may we then address some other matters raised.  A point, your Honour Justice Gummow raised yesterday in relation to our learned friend’s submissions, where, as we would encapsulate the position, our learned friend crosses the line between a fiduciary obligation and the doctrine of unconscienability virtually at will and re-crosses throughout the submission.  In our submission, the two concepts should be kept very distinct. 

We rely, in our written submission, upon those authorities which clearly define the existence of a fiduciary relationships, particularly your Honour’s analysis in Breen v Williams, which we submit is fully supported by authority both here and in England.  In our submission, the evidence just simply just does not ever reach, or approach, the satisfaction of the test as to whether a fiduciary relationship existed.  The one point upon which that case is reliant is the question as to whether or not Neil advised Bill generally, or on one specific occasion, in relation to Bill’s affairs beyond the partnership.  In our submission, earlier we said no unilateral relationship could arise.  Neil did not see himself, on that occasion, as advising Bill, and on no other occasion was it suggested he inter-meddled in Bill’s private affairs, such that a fiduciary relationship could be inferred from some other circumstance.  It just does not exist, on the evidence, in our submission.

GUMMOW J:   There are, however, judgments of Sir Owen Dixon in the cases in the 1930’s, in undue influence cases, which talk about fiduciary characteristics, are there not?

MR WILLIAMS:   Quite, your Honour, and those fiduciary characteristics are what are spelt out, we respectfully submit, in Hospital Products by his Honour Mr Justice Gibbs and in your Honours own analysis in Breen v Williams.  That is ‑ ‑ ‑

GUMMOW J:   Yes, but there was no undue influence in Breen v Williams.

MR WILLIAMS:   No, your Honour, no, and there is no undue influence in this case any more.

GUMMOW J:   No, it was not put that way.

MR WILLIAMS:   No.  Your Honour, the essential fiduciary characteristic is, if one likes to encapsulate it according to Justice Gibbs’ analysis, an undertaking to act in another’s interests and a further undertaking not to act in one’s own interests.  As the English cases describe it, a pledge of loyalty.  Your Honour, with respect, followed those authorities in reaching the same conclusion.  There must be that implied undertaking, by Neil, that he will act in Bill’s interests in all relevant matters, and that is beyond the partnership, and the further implied undertaking that he would not act in his own interests, contrary to Bill’s, in any of those matters.  That is simply not in the evidence and, in our submission, that disposes of the question of breach of fiduciary duty.  That being so, in our submission, the appellant’s written submissions must be carefully read, because they draw on cases from both sides of the line in support of broad propositions.

The question then is whether there was a relationship of special disability; if there was, is causation established?  And the final question, of course, has already been canvassed as a question of remedy or practical justice in the circumstances.  Your Honours, we make the point, and we do labour it somewhat in our written submissions, that other than in respect of the question of remedy, Stella’s evidence, that is, the wife’s evidence, would have been of major significance to every issue in this case.  It would have been directly relevant, in our submission, to all issues.  Was there a relationship of special disability?  Who best could say, as a fact, that such a relationship existed.  As we say in the written submissions, it is a matter of being able to transform the court’s exercise of drawing inferences from a few scattered lines, throughout many years of this man’s life, and a few scattered events, to actually placing before the court hard evidence from the person who knew him best, his wife of 53 years, that this man was, for the following reasons, plainly under a relationship of special disability.

It goes further, whether or not the causation element is established, whether any relationship which did exist was, in Stella’s view, the source of the dispositions in Neil’s favour, and so on, down the chain of issues relevant to this case.  In our submission, her absence was very significant.  The absence of any statement from her was very significant.  There is no evidence sufficient to satisfy the court that she could not give evidence.  There was, indeed, no attempt made to tender under the Evidence Act provisions a statement with medical evidence.  Even such a statement, although subject to weight considerations, would nevertheless have carried very substantial weight.  In our submission, the Jones v Dunkel inference loomed very large in this case.  In our submission, the failure to call Stella ‑and she was, after all, one of the appellants ‑ rationally gives rise to an inference which we submit is compelling, that her evidence on each of the relevant issues would not have assisted the appellants’ case.  His Honour, the primary judge, did not specifically refer to the Jones v Dunkel inference, but had he done so, in our submission, it would merely have added further support to the respondent’s case.

GAUDRON J:   Could she have said any more than, this is the way Bill wanted to do it?

MR WILLIAMS:   Yes, your Honour, much more.

GAUDRON J:   Well, anything more advantageous to your case than clearly, I always knew Bill wanted to do this and he was determined to do it.  Could she have said anything more than that?

MR WILLIAMS:   Yes, your Honour.  She could have said that Bill was his own man, that Neil had no influence over him at all, that he certainly did not labour under any disability in relation to Neil.

GAUDRON J:   Let all that be assumed.

MR WILLIAMS:   The case fails, your Honour.

GAUDRON J:   Well, for my part, I do not see that it does.  I see that the undue influence part of the case does, but I do not see that the unconscienability part of the case does.

MR WILLIAMS:   The premise on which we make that submission is that the court would not interfere with any transaction unless the preliminary requirement and the essential consideration, a relationship of special disability, is established.

GAUDRON J:   Yes, but that is not necessarily - I mean, what I have been trying to put to you is that there may well be a relationship of special disability in stubborn persistence in a course of action designed to maintain the herd and the farming properties in one.  That that stubborn persistence in that course of action was itself a position of special disability vis-a-vis Neil, when the achievement of that clear single objective of the deceased depended on Neil being prepared to work the farm and continue the business that had been set up.  What I am suggesting to you is that that is the position, that is the relationship of special disability, and it has got nothing to do with undue influence; it has got to do with taking advantage of this stubborn persistence in this plan.  The “idea fix” if you like.

MR WILLIAMS:   Your Honour, may I answer that firstly by analogy, with fiduciary obligations, that if indeed fiduciary obligations had been established in this case and there had been independent legal advice, which had met the most recent English tests of the lengths to which such advice must be taken, and the person, nevertheless, pursued this stubborn insistence, then, even equity, in relation to the high duties of a fiduciary ‑ ‑ ‑

GAUDRON J:   Well I am not too sure about that.  You keep looking at it from the point of view of the donor, if I can call the deceased as such.  You have also got to look at it from the point of view of the donee and if the donee knows this, then it may well be that regardless of independent advice in the face of what we will call the “idea fix”, you have got a situation of unconscienability, quite regardless of any question of independent legal advice.  I mean, in some respects it seems to be that the whole notion of independent legal advice would be irrelevant in that situation if you came to that view.

MR WILLIAMS:   Yes, and we respectfully answer your Honour’s point in this way, that we submit the facts do not reach that level of obsession, it was something the Bench raised today; it was a desire, a long-held ambition, as has been categorised in earlier hearings ‑ ‑ ‑

GAUDRON J:   It is raised to some extent; it came out of the evidence as to what happened at the solicitor’s office in November.

MR WILLIAMS:   Yes, it does come out to some extent in that, your Honour, in reflection of the long-held ambition.  Your Honour, I had another point, and it is escaping me at the present, in relation to your Honour’s question.  Factually, your Honour, I do not recall any evidence that Neil knew that there was any ambition approaching an obsession.

GAUDRON J:   Mr Seawright did.

MR WILLIAMS:   Well, Mr Seawright knew no more than that Bill thought that would be something he wanted.

GAUDRON J:   And there is no evidence that Neil took him aside and said, listen uncle, I know what you want to do, but you have really got to think of the position of your own family, you have got to think of the value.  No evidence that he said, look, I am getting this for a considerable under value ‑ ‑ ‑

MR WILLIAMS:   No.  On your Honour’s formulation of the facts, the gift in such circumstances of an obsession would be indefensible on any ground.  It could never be fai,r just and reasonable, independent legal advice could never be an answer.  It would simply be set aside as a matter of course.  Now, your Honour, in our submission the law does not go so far that even a person, a pig-headed person, who has misdirected himself on all relevant facts, but is absolutely insistent upon a particular course, can, if all the safeguards are implemented, nevertheless be defeated in his objective.  The law does not say that, even in relation to a fiduciary.

GLEESON CJ:   Was there any evidence as to whether Mr Seawright passed on to Neil this comment?

MR WILLIAMS:   No, your Honour, there was no evidence that Neil ever knew of that conversation.

GAUDRON J:   But certainly they all say, the evidence was,that he just lived for the farm and the cows, is that not right?

MR WILLIAMS:   That was his enjoyment in life, your Honour, yes; he liked to hop in his car and drive on the wrong side of the road ‑ ‑ ‑

KIRBY J:   Only to see the cows, not his daughters.

MR WILLIAMS:   Only to see the cows.

KIRBY J:   One cow is worth more than a daughter or a wife of 53 years.

MR WILLIAMS:   May I duck your Honour’s question, if it was a question?  I will not.  Your Honour, in that context there is no evidence that his relationship with his daughters suffered because of the cows; he, in fact, apparently was on good terms with every member of his family.  It was simply his life-long dream, he did have stud cattle, which may add some emphasis to involvement in those matters.

Your Honours, we do not wish to take undue time,.  We have exceeded what we thought was a reasonable estimate of our time today, but we submit that the opinion of the President in the Court of Appeal was affected by serious factual misapprehensions in relation to each stage of his analysis and perhaps if I will mention them, because they are fleshed out in some more detail in our written submission, but at page 653 the President made a finding that Bill was:

old, frail if not ill, and susceptible to requests from Neil -

That is specifically disputed.  Neil was challenged in cross-examination in relation to susceptibility.  He was asked, in effect, whether Bill would give him anything he wanted and he said no.  He was asked to identify instances of situations in which he had asked Bill for things and Bill had denied the request, and he gave one instance, and the cross-examination was then dropped.  This appears at page 14 of our written submission, and that is the only evidence on susceptibility, and Neil was accepted.

At the bottom of page 653 from about lines 45 to 60, it is our submission that the President plainly misdirected himself.  He described at line 54 the relationship between Neil and Bill as:

patently the dominant reason why the deceased agreed to the transaction of 19 July 1988 -

GUMMOW J:   What page is that?

MR WILLIAMS:   Page 653 about line 54.  That, with respect, flies in the face of the trial judge’s findings and, in our submission, in the face of the evidence.  At line 57 he goes on:

just as it had earlier caused the deceased to prefer Neil over the deceased’s wife and children in his will.

Again, the President’s extrapolation of fact at that point is that the unconscienability, pleaded in paragraph 7 of the statement of claim in 1985, but abandoned, not pursued at trial, was extant prior to the will.  In our submission there is no evidence to that effect and no evidence to support that conclusion.  Over the page at the bottom of page 654 line 59, his Honour goes on:

GUMMOW J:   No, but I do not know the status of the documents.

MR FRASER:   Your Honour, the first page just simply describes it as the Solicitors’ Handbook 1983.

GUMMOW J:   I realise that.

MR FRASER:   On the very first page of the material I handed to your Honours.

GUMMOW J:   Yes, but that does not tell me anything.

MR FRASER:   No, I am sorry, your Honour.  We will turn it up to see if there is any reference to any link with regulations.

GUMMOW J:   What does it purport to be?  Does it purport to be issued under some ‑ ‑ ‑

MR FRASER:   They are rulings of the Law Society Council, your Honour, which have been collected over the years.

GUMMOW J:   Yes.  That would be helpful to know.  It does not say so.

MR FRASER:   Your Honour, we have also included in the bundle pages 545, 547, 846 to 853 from Williams Mortimer & Sunnucks on Executors, Administrators and Probate.  Also, your Honours, a copy of the 24th chapter from the text Equity Doctrines and Remedies described by Meagher Gummow and Lehane.  That is, of course, your Honour Justice Gummow who is one of the authors of that text.  The relevance of providing that concerns the nature of the relief which would be given in the event that the transaction were to be set aside and a reconveyance order ordered.  In particular, the passages we refer to are at 2416, 2417 and 2418.  It would seem, certainly on the authority of these passages, that the jurisdiction would be described as the auxiliary jurisdiction of equity.  Accordingly, any declaration as to rescission would have to take into account the circumstances that existed as at that date.

GLEESON CJ:   Mr Fraser, what do you say as to the absence of Sam as a party to these proceedings?

MR FRASER:   Your Honour, we submit that it really does not matter for this reason.  An order can be made against Neil ordering him to reconvey to the estate the interest he received under the contract.  It does not matter that Sam’s interest may also have passed to Neil at the same time.  That perhaps means that the relief should be modified so far as the reference to the contract being set aside is concerned, but simply the contract so far as it affects the sale of Bill’s interest to Neil is concerned.

GLEESON CJ:   What you sought in the statement of claim was that certain transfers be set aside and Sam was one of the transferors.

MR FRASER:   We should then be limited to simply the transfer where there was a joint interest in so far as it is of Bill’s interest.  With respect, the issue would be whether the respondent could be compelled to reconvey a particular defined interest.  It would not matter, in our respectful submission, that others may also have been engaged in the transaction because the relief sought would not effect them.

GLEESON CJ:   Is it the case that apart from whatever possible relief you might have or might have had under the Succession Act, the setting aside of the transaction in its entirety is to the disadvantage of your client?

MR FRASER:   Your Honours, in our submission, and I realise in saying this that this is apart somewhat to what I said to your Honours yesterday.  I have certainly alerted my learned friend to this.  There is at least an argument that the exercise of the option applied only to the property that then remained.  Bear in mind, as has been established, that exercise proceeded well before any proceedings were issued to set aside the inter vivos transactions and, indeed, the trial judge made a specific finding that the exercise of the option was effective only to exercise the option so far as the balance of properties were concerned.

GLEESON CJ:   But this was a matter that entered substantially into the reasoning of the judges below.  As I recollect it, the majority in the Court of Appeal attached considerable importance to the consideration that setting aside this transaction would be to the advantage of Neil and the disadvantage of the estate.

MR FRASER:   Yes, that submission was not controverted at that stage of the proceedings, your Honour. 

GLEESON CJ:   The proceedings below were conducted on the basis that if the entire transaction was set aside the lands, the subject of the 1988 transaction, would have been caught up by the exercise of the option.

MR FRASER:   That was certainly accepted as the way matters proceeded if relief of that kind was sought but, having identified the issue, your Honour, it seemed appropriate to raise it before your Honours now.  It really, with respect, did not exercise the matter to any detriment of the respondents because no relief was, in fact, ordered, given the conclusions that were arrived at and it is simply a legal argument which arises from the documents that are before the Court.

GLEESON CJ:   Where is the notice of exercise of option?

MR FRASER:   Your Honours will find that - 551, your Honour, of the record.

GLEESON CJ:   Thank you.

GUMMOW J:   551?

MR FRASER:   Yes, your Honour.  Mr Pack exercised the option on behalf of the respondents.

GUMMOW J:   The second penultimate paragraph.

MR FRASER:   Yes, your Honour.

GLEESON CJ:   Well, he just says:

our client exercises the option to purchase contained -

in the will.

MR FRASER:   Yes, and goes on further:

He will purchase the balance of the deceased’s land referred to in the said Will for the sum of $200,000.00.

The contention that was advanced by the respondents at trial can be found at page 615 in the judgment of the trial judge. 

GUMMOW J:   This is all bound up with the redemption argument.

MR FRASER:   Yes, your Honour, but, with respect, it comes to the conclusion that the exercise of the option at that time was effective so far as the balance land was concerned.  The point that we make is that at that stage, whatever interests Bill had, or Bill’s estate had in the land, had been converted simply to a right to approach the court for a decree of rescission or for damages, whatever remedy may have been appropriate.  His Honour made findings, although did not make any declarations in consequence, at page 617:

It follows that the option survived the 1988 transfers, and could be exercised, but only with relation  to such of the specified properties as Bill still owned when he died.

And that is, with respect, consistent with the approach to construction of the will which appears at page 559.  In the last paragraph of that page, this probate engrossment, refers to:

the option to purchase.....all my interest in the partnership.....and my interest in the following lands ‑

then defining the interests in (a):

(held as tenant in common with my brother SAMUEL YORK)

(b)  .....(held as tenant in common with my said nephew NEIL WILLIAM YORK)

(c)  .....(held in my name alone)

Now, it could hardly be said, in our submission, that that phrase should be construed to include any rights that he may have had to seek the assistance of a court of equity to have a reconveyance to him of the property in consequence of some unconscionable conduct by the beneficiary referred to in the phrase, in the clause.  Your Honour, it is a result, in our submission, which is consistent with the way in which the construction of the will ought to proceed and also gives a proper and fair construction to the will consistently with his wishes and his Honour’s findings.

Now, no relief was ordered and there has been, of course, no appeal because there was no relief ordered but, in our submission, the respondents having contended below for that result have thereafter contended, it seems, for a different result and that is that the option exercised was efficacious to catch all of the land, all of the interests, no matter when it fell into the estate.  Now, your Honours, we do not seek that relief as our primary form of relief.  We seek relief so far as the deed of gift is concerned and that has advantages to the respondents because of the enormous increase in value of the property from the time when the options were exercised to the time of trial.  The properties went up by about I think it is 30 per cent in value over that period.  Your Honours, the precise figures are these.

CALLINAN J:   But all of this just points to further difficulties in unscrambling them all, does it not, and the court has to look at the appreciation in value and whether it is a real appreciation, whether the value of money is depreciated.  I do not see that we can do this exercise at all, frankly, Mr Fraser, and it was never claimed - you never claimed any partial form of relief throughout.  The claim for relief has been that the transaction be set aside in toto.

MR FRASER:   Your Honour, consistently claims for money or compensation have been made.

CALLINAN J:   It is not one of the orders sought here in this Court.

MR FRASER:   Yes, it is, your Honour, with respect.

CALLINAN J:   I do not think it is, is it?

MR FRASER:   We ask for a payment ‑ ‑ ‑

CALLINAN J:   Could you draw my attention to it in the notice of appeal.

MR FRASER:   There is an application for payment at page 678, your Honour, in paragraph 3(d).

CALLINAN J:   That is as a result of the simple arithmetical exercise, is it not?

MR FRASER:   Yes, your Honour.

GAUDRON J:   Nothing has been said at this stage about your leave to bring the action.  Is that an issue?  I take it it is not.

MR FRASER:   It has not been raised, your Honour, and each of the judges in the Court of Appeal thought it was appropriate that leave be given.  We have included that in the relief that we ask from this Court.

GUMMOW J:   Well, that relief at 678 is not the same relief as you are seeking in your notice of appeal to the Court of Appeal.

MR FRASER:   No, your Honour.  It is somewhat more limited.

GUMMOW J:   It is narrower.

MR FRASER:   Your Honour, yesterday I was asked by his Honour the Chief Justice what relief did we want if we could not achieve the relief set out and I provided a response.  Your Honour, we have prepared those - or formalised that response in a more appropriate form in the form of Proposed Amendments to Paragraph 3 of the notice of appeal.  It would be convenient to hand those to your Honours.  My learned friend has a copy.

GLEESON CJ:   Thank you.

MR FRASER:   In handing that to your Honours, your Honours will see that the words “undue influence or” were originally included.  That followed the form before the Court of Appeal.  My learned friend is quite right in saying that that ought not be there.  There is a finding by the trial judge that no actual undue influence was exercised and we have proceeded in this appeal and, indeed, on the special leave application, on the basis we would not seek to controvert those primary facts or that primary fact.  We do not seek to support the claim based on a claim of undue influence.

Your Honour, I should say, however, in my defence to not having clarified that entirely when your Honour the Chief Justice asked, that I had in mind that the nature of the relief in dealing with unconscionable conduct is, to a certain extent, referable to a notion that there is influence or influence able to be exercised, so the notion of presumed undue influence seems to enter into the fray in that respect at least. 

Your Honours, I have also handed your Honours copies of two cases dealing with the consequences of setting aside a transaction.  One relates to what accounts and inquiries should be taken if it is set aside for unconscionability.  The other concerns , clearly, a discussion of Alati v Kruger.  The first case is the decision of the New Zealand Supreme Court in Berridge v The Public Trustee (1914) 33 NZLR 865. The second is a decision Mr Justice Helsham in Kramer v McMahon (1971) 1 NSWR 194.

CALLINAN J:   Was Berridge a case of actual fraud as opposed ‑ ‑ ‑

MR FRASER:   Yes, your Honour.  There was moral turpitude involved and his Honour goes through and discusses the different approaches depending upon the extent of the - I do not know - the criminality involved, I suppose, of the participants and it contains a useful summary of the resources available in that respect. 

Your Honour, finally I should give your Honours a correction of a figure that appeared in our outlines and that, your Honour, is to be found at page 5 in paragraph 2.6.  In the third line I refer to the value of the land being $627,614.  In fact, the correct amount, as appears from the judgment, in $694,922.  The error has also been made in the supplementary outline at page 2 under the heading 2.18 and 2.19 at the bottom of the page.  Instead of “at least $578,837.00” the amount of $694,922 should be inserted there. 

Your Honours, I have just been provided with a reference which may assist in response to the question of whether Neil knew about the Leahys coming in and the family dissension.  I said in response that the evidence was somewhat equivocal.  The transcript references are at page 345 line 48.  Neil conceded that Mr Pack may have done, may have told him about it.

GLEESON CJ:   Told him when?

MR FRASER:  

some time between 24 and 28 November you made contact with Mr Pack when he raised with you that quite recently the Leahys and Bill York had been in to see him?‑‑  I can’t remember that, about that.

See, I suggest he rang you and would have said something like, “Shirley Leahy was really upset when I told her about the land south of the line being transferred to you.”  Did you hear about that?‑‑  He may have done, yes.

And, your Honour, there is some evidence from Mr Pack of having a telephone number for Brisbane, which is where Mr and Mrs York were at that time.  That appears at page 457 line 30 through to line 50.

CALLINAN J:   Mr Fraser, I have just been looking at Berridge’s Case at page 872.  It seems to be adopting a principle which is applicable, perhaps not to this case, because it speaks of “base and unconscionable conduct”, not merely unconscionable conduct, and it speaks of that conduct in a context of actual fraud.  It does not seem to be dealing necessarily with this case, which one would hardly describe as a case of base conduct, I would not have thought.  Unconscionable on your argument, but not base.

MR FRASER:   Your Honour, really the principle we seek to elicit from it is that courts of equity will impose terms upon the party if the circumstances of the case require it.  That is really a general proposition and perhaps we

did not cite the authority for your Honours, but it was a case that we found which collected the various source materials.

CALLINAN J:   You would not suggest that this was a case in which, if the Court were to grant relief, Neil should not be remunerated for all of his efforts and otherwise compensated for what he has done.

MR FRASER:   No, your Honour.  There would have to be a proper taking of accounts.  There is a finding by the trial judge that Neil acted bona fide in these matters and to the extent that he acted fairly by his own lights, that has to be considered.  It is unconscionable conduct objectively speaking, we say or we submit.  Your Honours, there was an attack made by our learned friends upon the quality of the evidence of what Neil thought the land was worth.  There is another reference we should give your Honours, at page 141 line 30 and also at 141 line 50.

Your Honour, a point yesterday, I was asked whether the land could still be reconveyed.  We have made some inquiries and I raised this morning with my learned friend whether he could obtain instruction about the matter.  I do not want to trespass beyond what is permissible in responding to your Honours’ inquiry as to that, but our inquiries indicate that the land the subject of the inter vivos disposition is still held by the respondents, but some of the land that was transferred under the will has since been sold.

GUMMOW J:   And what about mortgages?

MR FRASER:   There is a fresh mortgage on the property of Risby to the same financier who had the mortgage in place at the time of the transaction, that is Westpac, and that is part of the inter vivos land, your Honour.

GUMMOW J:   Well, they were not a party to this action either.

MR FRASER:   No, your Honour.

GLEESON CJ:   We will reserve our decision in this matter.

AT 12.27 PM THE MATTER WAS ADJOURNED