Gunn v Meiners
[2022] WASCA 95
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: GUNN -v- MEINERS [2022] WASCA 95
CORAM: MITCHELL JA
BEECH JA
VAUGHAN JA
HEARD: 3 FEBRUARY 2022
DELIVERED : 29 JULY 2022
FILE NO/S: CACV 11 of 2020
BETWEEN: DEBRA GUNN
Appellant
AND
HILDEGARD INGE MEINERS
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: STRK AJ
Citation: MEINERS -v- GUNN [2020] WASC 18
File Number : CIV 1228 of 2018
Catchwords:
Appeal - Practice and procedure - Pleadings - Whether appellant denied procedural fairness by primary judge deciding case on basis that was not pleaded - Whether action should be dismissed or a new trial ordered - Turns on own facts
Appeal - Equity - Unconscionable dealing - Whether primary judge applied incorrect legal test in finding that special disadvantage or disability of respondent was sufficiently evident to appellant - Turns on own facts
Notice of contention - Equity - Whether judgment should be upheld on basis of undue influence - Whether primary judge applied incorrect legal test as to ad hoc presumption of undue influence - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B
Supreme Court Act 1935 (WA), s 59(3)
Result:
Appeal allowed
Notice of contention dismissed
Matter remitted to Supreme Court for new trial on particular matters in controversy
Category: A
Representation:
Counsel:
| Appellant | : | M Curwood SC, F A Robertson & B Dalitz |
| Respondent | : | T M Clavey |
Solicitors:
| Appellant | : | Palmos Legal |
| Respondent | : | Douglas Cheveralls Lawyers |
Case(s) referred to in decision(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457
Brown v Churchill [2006] WASCA 17; (2006) 31 WAR 246
Commercial Bank of Australia v Amadio [1983] HCA 44; (1983) 151 CLR 447
Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658
Defendi v Szigligeti [2019] WASCA 115
Dewar v Ollier [2020] WASCA 25
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23
Fabrizi v Grasso [No 2] [2022] WASCA 27
Goldsworthy v Brickell [1987] Ch 378
Gould v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490
HT v The Queen [2019] HCA 40; (2019) 269 CLR 403
Jenyns v Public Curator (Qld) [1953] HCA 2; (1953) 90 CLR 113
Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113
London Passenger Transport Board v Moscrop [1942] AC 332
Lopwell Pty Ltd v Clarke [2009] NSWCA 165
Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621
Meiners v Gunn [2020] WASC 18
Mercanti v Mercanti [2016] WASCA 206; (2016) 50 WAR 495
Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149
Minister for Immigration and Border Protection v WZARH [2015] HCA 40; (2015) 256 CLR
Morcos v Advantage Credit Union [2003] WASCA 15
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
Narain v Euroasia (Pacific) Pty Ltd [2009] VSCA 290
Nobarani v Mariconte [2018] HCA 36; (2018) 265 CLR 236
Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255
Owen v Homan (1853) 4 HLC 997, 1035; 10 ER 752
Permanent Mortgages Pty Ltd v Vandenberg [2010] WASC 10; (2010) 41 WAR 353
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1
Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82
Serventy v Commonwealth Bank of Australia [No 2] [2016] WASCA 223
Smith v Leveraged Equities Ltd [2020] WASCA 122
Sri Mahant Govind Rao v Sita Ram Kesho (1898) 25 Ind App 195
Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141
Stone v Braun [2015] WASCA 103
Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 96 ALJR 271
Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85
Tranchita v Retravision (WA) Pty Ltd [2001] WASCA 265
Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40
JUDGMENT OF THE COURT:
Overview
The appellant (Ms Gunn) is the respondent's (Ms Meiners') eldest daughter. At the time of trial Ms Meiners was 82 years of age; she was between 78 and 79 years of age at the time of the events the subject of the litigation. Ms Gunn was one of Ms Meiners' four children to her first husband. Ms Meiners did not have a close relationship with any of her children, including Ms Gunn, prior to the death of Ms Meiners' second husband in September 2014.
Following the death of her second husband, and the sale of an Armadale property that had been held by Ms Meiners and her late husband as their matrimonial home, Ms Meiners transferred $372,717.43 to Ms Gunn. This constituted the majority of Ms Meiners' personal wealth. About $320,000 of the money so transferred was applied by Ms Gunn to the purchase of a property in Yokine. Ms Gunn asserted that the money transferred to her was a gift. Ms Gunn denied that Ms Meiners had any legal or equitable interest in the Yokine property or in the money transferred to Ms Gunn.
Ms Meiners brought proceedings. The primary judge, Strk AJ (as her Honour then was), said that there were three issues at trial:[1]
1.Whether the transfers of money by Ms Meiners to Ms Gunn constituted unconscionable dealings as a consequence of Ms Gunn's unconscionable conduct.
2.Whether the transfers of money were a product of Ms Gunn's undue influence over Ms Meiners.
3.Whether the money was transferred pursuant to a loan agreement and was now due and payable by Ms Meiners.
[1] Meiners v Gunn [2020] WASC 18 (Primary reasons) [9].
Ms Gunn ceased being represented during the course of the proceedings. She was self-represented throughout the trial.[2]
[2] Primary reasons [34].
The primary judge found that the transactions constituted unconscionable dealings.[3] However, her Honour rejected the other causes of action relied on by Ms Meiners against Ms Gunn (ie the claims alleging undue influence and a loan). On appeal, Ms Gunn says that unconscionable dealings case, as found by the primary judge, was never pleaded; and that, in the alternative, the primary judge erred by applying the wrong test for knowledge of Ms Meiners' special disadvantage. Ms Meiners seeks to uphold the judgment based on the primary judge's finding that there were unconscionable dealings. In the alternative, should one or both grounds of appeal succeed, Ms Meiners seeks to uphold the judgment in her favour on two other bases. First, based on the failure of the parties' joint endeavour applying the principle in Muschinski v Dodds. Second, based on undue influence. The alternative loan claim is no longer pursued.
[3] Primary reasons [10], [336] - [395], [405], [421].
For the reasons that follow the appeal should be allowed. The primary judge failed to accord procedural fairness to Ms Gunn in finding against her on the basis of unconscionable conduct when that claim was not pleaded. Moreover, the primary judge did not apply the correct test in assessing whether Ms Gunn had the requisite degree of knowledge such that her conduct in accepting and retaining the $372,717.43 was unconscientious. The matters raised by Ms Meiners in an attempt to uphold the judgment at trial on an alternate basis do not succeed. The judgment below should be set aside and the matter should be remitted to the General Division for a retrial.
Background facts
There is no challenge to any of the intermediate facts as found by the primary judge. Accordingly, what follows is drawn from her Honour's reasons.
Ms Meiners is an aged pensioner.
From about 1992 Ms Meiners lived with her second husband at Amethyst Crescent, Mount Richon (Armadale property). They held the Armadale property as joint tenants. Ms Meiners was widowed on 4 September 2014. Before her husband's death Ms Meiners had limited social engagement and connectivity outside the home and apart from her husband. On Mr Meiners' death Ms Meiners was lonely and socially isolated. Ms Meiners was estranged from two of her children. Another of Ms Meiners' children, a son, had some contact with Ms Meiners. However, he lived in Hillarys and worked away on a fly in - fly out basis.
Ms Gunn herself described her relationship with Ms Meiners as dysfunctional. Ms Gunn lived in Sydney from 1999 to 2011. For 10 of those years her relationship with Ms Meiners was not close. On her return to Western Australia, Ms Gunn purchased and lived in a property at Cookernup.
Ms Meiners' evidence, which the primary judge accepted, was that after Mr Meiners' death she did not sleep or eat well and lost a lot of weight. Ms Meiners continued to grieve the loss of her husband. Shortly after Mr Meiners' death, Ms Gunn began to stay with Ms Meiners at the Armadale property. Ms Gunn worked in Osborne Park - some 130 km from Cookernup. Before Mr Meiners' death, Ms Gunn had stayed with her daughter (Briana) during the week and at the Cookernup property on the weekend. Following Mr Meiners' death, Ms Gunn instead stayed with Ms Meiners at the Armadale property three nights a week. In doing so, Ms Gunn became Ms Meiners' primary companion. However, the primary judge found that the relationship between Ms Meiners and Ms Gunn could not be categorised as a close and loving relationship between a mother and a daughter before or after Mr Meiners' death.
After Mr Meiners died, Ms Meiners spent more time with Briana and her children (Ms Meiners' great grandchildren). Briana had a home in Yokine.
The Armadale property was Ms Meiners' main asset. Otherwise she had a deposit account; as at 19 November 2015 this had a $22,380.32 closing balance. In terms of income Ms Meiners received the aged pension. In February 2015 Ms Meiners had knee replacement surgery. At about that time Ms Meiners had conversations with Ms Gunn and Briana about selling the Armadale property and moving closer to where Briana lived in Yokine. Ms Gunn encouraged Ms Meiners to sell the Armadale property. But this was only one factor which informed Ms Meiners' decision to sell the Armadale property. Ms Meiners was also motivated to sell the Armadale property by reason of her loneliness following Mr Meiners' death, her social isolation and her desire to be closer to her family.
In late 2014 or early 2015 Ms Meiners approached Legacy for assistance in becoming registered as sole owner of the Armadale property. Ms Meiners was referred to a solicitor, Mr Vincent, who also prepared an enduring power of attorney and a will for Ms Meiners. On 17 February 2015 Ms Meiners executed an enduring power of attorney by which Ms Gunn was appointed as Ms Meiners' attorney; Ms Meiners also executed an enduring power of guardianship by which Ms Gunn was appointed as Ms Meiners' sole guardian. This did not occur at the request or prompt of Ms Gunn. However, the fact of the appointments demonstrated that, by February 2015, Ms Meiners had placed her trust and confidence in Ms Gunn.
In mid-February 2015 Ms Meiners made an offer to purchase a property in Dianella for $410,000. The offer was subject to the sale of the Armadale property. The offer to purchase fell away as the Armadale property had not sold. On 3 June 2015, after reducing the sale price for the Armadale property, Ms Meiners accepted an offer to purchase for $400,000 with a proposed settlement date of 15 July 2015.
Briana introduced Ms Meiners to the option of moving to a one-bedroom unit in the Masonic Village on Alexander Drive in Dianella. Ms Meiners signed a reservation form on 10 June 2015. She signed a formal offer to lease on 8 July 2015. There was, however, a conflict in the evidence as to what was discussed between Ms Meiners and Ms Gunn about what would happen when the Armadale property sold. The primary judge resolved that conflict by accepting Ms Meiners' evidence.
The primary judge found that:
1.Ms Gunn said to Ms Meiners words to the effect that, if Ms Meiners sold the Armadale property and bought a unit in the Masonic Village, Ms Meiners would have money left over that would affect her pension. However, if the money was given to Ms Gunn to buy a property in Ms Gunn's name, then it would not be taken into account for Ms Meiners' pension.
2.Ms Gunn said that she would use the funds as a deposit for the purchase of a two bedroom unit that Ms Meiners could live in if Ms Meiners did not like the Masonic Village unit. Ms Gunn would pay out the balance with a loan. If Ms Meiners decided to move out of the Masonic Village unit, and move in with Ms Gunn, the money from the sale of the Masonic Village unit could be applied in paying out the loan.
3.In short, Ms Gunn represented to Ms Meiners that if Ms Meiners did not like living in the Masonic Village unit, the money from the sale of the Armadale property as transferred to Ms Gunn would be used by Ms Gunn to acquire a property to be enjoyed by Ms Meiners.
4.It was on this basis that Ms Meiners transferred $130,000 (the excess cash from the sale of the Armadale property) to Ms Gunn and moved into the Masonic Village unit.
5.The transfer of the $130,000 was made without Ms Meiners having obtained independent advice.
The evidence included a statutory declaration, made by Ms Meiners in June 2015, in which Ms Meiners declared:
That I give to my daughter Debra Gunn, the sum of $130,000. This gift is unconditional, nonrepayable and nonrefundable.
Ms Meiners had no recollection of the statutory declaration. She denied signing it. However, based on evidence of the pharmacist who had witnessed the statutory declaration, the primary judge found that Ms Meiners signed it before the pharmacist. Nevertheless, her Honour was not satisfied that the wording of the statutory declaration reflected the intention of Ms Meiners when she transferred the $130,000 to Ms Gunn. The primary judge accepted Ms Meiners' account of how the $130,000 came to be transferred to Ms Gunn.
On 14 June 2015 Ms Gunn made an offer to purchase a property on Spencer Avenue in Yokine (Yokine property) for $390,000.
The settlement of the sale of the Armadale property occurred on 14 July 2015. The net proceeds of sale were $384,524.99. On settlement, $239,000 was transferred to Masonic Care WA (for the Masonic Village unit) and $130,000 was transferred to Ms Gunn. The remaining balance was transferred to Ms Meiners. On around 24 August 2015, Ms Gunn completed the purchase of the Yokine property. To do so Ms Gunn applied $104,863.23 from the $130,000 transferred to her by Ms Meiners. The remainder was financed by a loan of $295,625 borrowed from Commonwealth Bank of Australia (CBA).
Ms Meiners moved into the Masonic Village unit in July 2015. Ms Meiners was not happy there. Within a short period Ms Meiners formed the view that she did not want to remain at the Masonic Village unit. Ms Meiners moved out of the Masonic Village unit into a two-bedroom unit at Regis in Nedlands on or about 2 October 2015.
Ms Meiners held the expectation that she would eventually move into a unit or property of her own because of the assurances that had been given to her by Ms Gunn prior to the settlement of the Armadale property.
In late September or early October 2015 Ms Meiners consulted with James Ford. Mr Ford was a financial adviser to whom Ms Meiners was referred by Legacy. Ms Meiners was unhappy with the exit fees that the Masonic Village wanted to charge her. Mr Ford helped Ms Meiners negotiate a reduction in the exit fees. Mr Ford was not formally engaged by Ms Meiners to provide financial advice. However, Mr Ford gave evidence that Ms Meiners had told him that she had sold her marital home in Armadale and that she was going to use the money to help her daughter purchase a property. Mr Ford said that Ms Meiners said that she would live in a granny flat on the property. Mr Ford said that he informed Ms Meiners that, generally, you would want both people on the title and it would be good for Ms Meiners to get something in writing. Ms Meiners said words to the effect: 'I don't need anything in writing. I trust my daughter'.
On 9 December 2015 Ms Meiners received the proceeds from settlement following her departure from the Masonic Village unit. Some $242,717.43 was transferred to Ms Gunn. The primary judge was satisfied that Ms Meiners transferred the $242,717.43 in continued reliance on the statements made by Ms Gunn prior to the sale of the Armadale property as to what would happen if Ms Meiners did not like living in the Masonic Village unit. Ms Meiners believed that the money from the sale of the Armadale property, as transferred to Ms Gunn, would be used by Ms Gunn to purchase a property to be enjoyed by Ms Meiners.
The transfer of the $242,717.43 was made by Ms Meiners to Ms Gunn without Ms Meiners having obtained independent legal advice or formal financial advice. At the most Ms Meiners received the benefit of Mr Ford's informal caution in relation to proceeding with an arrangement with Ms Gunn without documentation.
Ms Gunn applied $216,000 of the second tranche received from Ms Meiners against Ms Gunn's home loan with CBA.
Again there was a dispute in Ms Meiners' and Ms Gunn's evidence as to how the $242,717.43 came to be transferred to Ms Gunn. The primary judge found that Ms Meiners' account was the more probable. That said, the primary judge considered that Ms Meiners did not have a reliable recollection of when she was informed that Ms Gunn had made an offer to purchase the Yokine property. Nor did Ms Meiners have a reliable recollection of when or how she discovered that the sale of the Yokine property had settled and that Ms Gunn was living in the Yokine property. However, Ms Meiners did receive a reassurance from Ms Gunn that the Cookernup property was to be sold; and, when sold, Ms Gunn would have sufficient funds to buy Ms Meiners a second unit nearby. That would occur by March 2016 by the very latest. Ms Gunn also told Ms Meiners that Ms Meiners should pay the money from the settlement of the Masonic Village unit lease to Ms Gunn so that Ms Gunn could put the money towards a unit for Ms Meiners.
Ms Gunn accepted an offer to sell the Cookernup property on 18 January 2016, with settlement taking place on 26 February 2016.
Ms Meiners left the Regis unit in Nedlands in mid-2016. No alternative accommodation was purchased for Ms Meiners by Ms Gunn. The primary judge found that no benefit had flowed to Ms Meiners as a result of her transferring the two tranches of money to Ms Gunn.
The pleaded case
At trial, Ms Meiners' pleaded case was found in a re-amended substituted statement of claim filed 19 November 2018 (SOC). The SOC in that amended form had been filed some two weeks before the commencement of the trial.
The factual narrative pleaded in the SOC was broadly similar to the facts as found by the primary judge as recounted immediately above. Relevantly, in support of an undue influence claim, Ms Meiners pleaded, among other things, that:
1.At all material times Ms Meiners was vulnerable and emotionally dependent on Ms Gunn (SOC par 8).
2.By February 2015 Ms Meiners relied on Ms Gunn for advice concerning the management of Ms Meiners' assets and reposed trust and confidence in Ms Gunn (SOC par 9).
3.Ms Gunn advised and encouraged Ms Meiners to sell the Armadale property and to deal with the net proceeds of sale so as to protect Ms Meiners' pension entitlements (SOC pars 10 - 12).
Ms Meiners alleged that, by reason of what was said by Ms Gunn to Ms Meiners, the parties held a common intention (and Ms Meiners had an expectation) that 'money from the sale of the Armadale property would be used by [Ms Gunn] to acquire a property to be enjoyed by [Ms Meiners] during [Ms Meiners'] lifetime, if [Ms Meiners] no longer wished to live in the Masonic Village unit, and to provide [Ms Gunn] with a home after [Ms Meiners'] death' (SOC par 13).
Ms Meiners pleaded that she transferred the $130,000 in reliance on the common intention, her expectation and Ms Gunn's advice and encouragement (SOC pars 14, 25). Moreover, so far as Ms Meiners caused the $242,717.43 from the proceeds of the Masonic Village unit to be transferred to Ms Gunn, Ms Meiners pleaded that this was in reliance of continued representations that Ms Gunn would give effect to the common intention and satisfy Ms Meiners' expectation (SOC pars 22 -23, 25). However, Ms Gunn failed to give effect to the common intention or satisfy the expectation insofar as she applied the money transferred to her benefit and denied that Ms Meiners had any legal or equitable interest in the Yokine property (SOC pars 26 - 29).
Based on the whole of the facts as pleaded, Ms Meiners alleged that it was unconscionable for Ms Gunn to retain the $372,717.43 received from Ms Meiners (SOC par 33). Two identifiable causes of action were pleaded.
First, that there was a common intention trust (SOC pars 30 - 31):
30.In the circumstances pleaded above, it is unconscionable for [Ms Gunn] to retain the benefits conferred on [Ms Gunn] by the use of [Ms Meiners'] money and to maintain the denials and assertions [that Ms Meiners had any legal or equitable interest in the Yokine property and that the money was a gift from Ms Meiners to Ms Gunn].
31.[Ms Meiners] claims an equitable interest in the Yokine property as a joint tenant in equity, and that [Ms Gunn] holds on trust for [Ms Meiners] [Ms Gunn's] interest in the Yokine property [sic - and] any other property and or chattels of [Ms Gunn] to which [Ms Meiners'] money have [sic] been applied.
Second, that the transfers were vitiated by undue influence on the part of Ms Gunn (SOC par 32):
Further and in the alternative to paragraphs 1 to 31 above, [Ms Meiners] says that [Ms Meiners'] money was paid to [Ms Gunn] as a consequence of [Ms Gunn's] undue influence over [Ms Meiners].
Particulars
[Ms Gunn's] undue influence over [Ms Meiners] is to be presumed by reason of the matters pleaded in paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 17, 20, 21 22, 23 and 24 above, and [Ms Meiners] relies on the presumption of undue influence.
In the further alternative, Ms Meiners alleged that she and Ms Gunn entered into an agreement by conduct by which Ms Meiners loaned the $372,717.43 to Ms Gunn (SOC par 34).
The primary judge's decision
The structure of the primary reasons
The primary judge summarised the case as propounded and presented by Ms Meiners as one where Ms Meiners primarily prosecuted her claim on the basis of unconscionable dealings and undue influence. Her Honour observed that Ms Meiners did not seek relief on the basis that the transfers gave rise to resulting trusts.[4]
[4] Primary reasons [71].
The primary judge arranged her reasons for decision into eight discrete sections:
1.The cases advanced by Ms Meiners and Ms Gunn (comprising both the respective pleaded cases and the parties' submissions at trial).
2.The applicable legal principles.
3.The evidence and credibility findings in relation to the witnesses. Relevantly, the primary judge held that:
(a)Ms Meiners was an honest witness - on balance her evidence was truthful and, in the main, reliable (although there were gaps in her recollection and, on occasions, a lack of precision in her recollection). Considered as a whole, in the context of all the evidence led, Ms Meiners' evidence provided a logical and more probable explanation for the events that took place than the evidence of Ms Gunn.[5]
(b)Parts of Ms Gunn's evidence were credible. However, her Honour did not accept all of Ms Gunn's evidence as being truthful or reliable. Where Ms Gunn's evidence concerned conversations with Ms Meiners, and it contradicted Ms Meiners' evidence, the primary judge preferred Ms Meiners' evidence.[6]
4.The factual findings.
5.Whether the transactions constituted unconscionable dealings.
6.Whether the transactions were the product of Ms Gunn's undue influence over Ms Meiners.
7.The loan claim.
8.Conclusion and orders.
[5] Primary reasons [103] - [105].
[6] Primary reasons [130] - [131].
We have already dealt with the relevant part of Ms Meiners' pleaded case. To the extent that her Honour's recitation of the applicable legal principles is relevant to the issues on appeal, we will address that when dealing with the grounds of appeal, the notice of contention and the grounds of cross-appeal. There is, on appeal, no challenge to the primary judge's intermediate fact finding. The background facts (see [8] - [30] above) sufficiently address her Honour's key factual findings. For the purposes of the appeal it is only necessary to identify how the primary judge reasoned in allowing Ms Meiners' claim and dismissing the undue influence claim.
The unconscionable dealings case
The primary judge found that Ms Meiners and Ms Gunn held a common intention to acquire property with the money transferred from Ms Meiners to Ms Gunn for their mutual benefit and on the basis of their continuing relationship.[7]
[7] Primary reasons [333].
Her Honour dealt first with the question of whether the transactions constituted unconscionable dealings.[8] Based, apparently, on Ms Meiners' written opening submissions, the primary judge identified two bases on which the unconscionable dealings case was advanced:
That at all material times, Ms Meiners was vulnerable by reason of special disadvantage. In circumstances where Ms Gunn was aware of that special disadvantage, Ms Gunn unconscionably received Ms Meiners' money and applied it for her own purposes.
That Ms Meiners paid her money to Ms Gunn based on an understanding that the money would be enjoyed by Ms Meiners during her lifetime if she no longer wished to live in a retirement village, and to provide a property for Ms Gunn after Ms Meiners' death. The understanding was that Ms Meiners would live with Ms Gunn to be close to her family and for Ms Gunn to take care of her as she grew old. The understanding and relationship upon which the payment of money was based has been removed and it is unconscionable for Ms Gunn to retain the financial benefits conferred upon her in circumstances in which it is not specifically intended or specially provided that she should enjoy those benefits.[9]
[8] Primary reasons [336] - [405].
[9] Primary reasons [50(b), (c)]. See also [396].
The primary judge analysed the latter aspect of the unconscionable dealings claim by reference to the principle enunciated by Deane J in Muschinski v Dodds[10] - ie the circumstance that equity will not permit a party to assert or retain the benefit of property to the extent it would be unconscionable for him or her to do so where the substratum of a joint relationship or endeavour is removed without attributable blame.[11]
Unconscionable dealings due to special disadvantage or disability
[10] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 619 - 620.
[11] Primary reasons [396] - [398], [403] - [404].
The primary judge concluded that Ms Meiners was in a position of special disadvantage or disability in her dealings with Ms Gunn.[12]
[12] Primary reasons [343], [373].
Her Honour said that Ms Meiners' special disadvantage or disability vis-à-vis Ms Gunn was established on the evidence as a whole with no one matter being determinative. The primary judge relied on: Ms Meiners' age;[13] Ms Meiners' grief - which made her susceptible to influence by Ms Gunn;[14] Ms Meiners' need insofar as she was widowed, elderly, lonely and socially isolated - all of which contributed to Ms Meiners' vulnerability in her dealings with Ms Gunn and seriously affected Ms Meiners' ability to make a judgment as to her best interests;[15] Ms Meiners' emotional dependence on Ms Gunn - a matter which diminished Ms Meiners' capacity to apply a degree of independent judgment as to her best interests when dealing with Ms Gunn;[16] and the absence of independent advice.[17] Her Honour gave no weight to professed sickness or ill health on the part of Ms Meiners.[18]
[13] Primary reasons [344] - [346].
[14] Primary reasons [347] - [348].
[15] Primary reasons [349] - [355].
[16] Primary reasons [356] - [360].
[17] Primary reasons [361] - [366].
[18] Primary reasons [370] - [371].
The primary judge said, with respect correctly, that it was also necessary for Ms Meiners to establish that her special disadvantage or disability was sufficiently evident to Ms Gunn to make it prima facie unfair or unconscionable for Ms Gunn to have accepted or retained the benefit of the transactions.[19] There were a number of matters that weighed against such a finding.[20] However, her Honour ultimately concluded to the contrary, saying:
[19] Primary reasons [375].
[20] Primary reasons [376] - [380].
I was persuaded, having regard to all of the circumstances, that knowledge of the following matters would raise the possibility of the special disadvantage in the mind of a reasonable person.
First, Ms Gunn knew that Ms Meiners was elderly and by reason of her social isolation, had very limited options to ensure her own care going forward.
Secondly, Ms Gunn knew that Ms Meiners' second husband and close companion of 22 years had died in September 2014. Ms Gunn knew that Ms Meiners would likely be grieving his loss, although it was Ms Gunn's evidence that she did not observe signs of grief.
Thirdly, Ms Gunn knew that Ms Meiners had attended to, cared for and nursed Mr Meiners for many years prior to his death. She knew that Ms Meiners no longer had the company of her husband, nor the task of caring for him to fill her time.
Fourthly, Ms Gunn knew that after the death of Ms Meiners [sic - Mr], her mother was socially isolated. Ms Gunn knew that Ms Meiners was estranged from and had no contact with two of her four children, and only limited contact with [her other son]. She knew that Ms Meiners had few if any friends, and that after her husband's death, Ms Meiners had distanced herself from [Mr Meiners' daughter]. She knew that Ms Meiners lived in Armadale, without any friends. She knew that neither she, Briana nor [Ms Meiners' son] lived nearby. She also knew that Ms Meiners was not a confident driver.
Such knowledge is supported by Ms Gunn's evidence that '…the only person regularly in [Ms Meiners'] life from the time of [Mr Meiners'] death in September 2014 to the date my mother stopped taking my calls in [February] 2016, was me.'
Fifthly, she [sic] that Ms Meiners sought social interaction and connectivity and that she was keen to not remain at home alone in the Armadale property.
Sixthly, Ms Gunn knew that by reason of Ms Meiners' contact with Ms Gunn, Ms Meiners saw more of Briana and her children.
I am persuaded that Ms Meiners' special disadvantage was sufficiently evident to Ms Gunn to make it prima facie unfair or unconscionable for Ms Gunn to have accepted the benefit of the transactions, and to have retained the benefit.[21] (emphasis added)
[21] Primary reasons [381] - [389].
We have reproduced this passage in full because the first paragraph of the passage is the subject of ground 2 of the appeal.
Having concluded that Ms Meiners was under a special disability or disadvantage in dealing with Ms Gunn, and that this was sufficiently evident to Ms Gunn to make it prima facie unfair or unconscionable for Ms Gunn to have accepted or retained the benefit of the transactions, the primary judge considered whether Ms Gunn had established that the transactions were fair, just and reasonable. The primary judge concluded that the transfers were not fair, just and reasonable. Moreover, her Honour was satisfied that the transfers were the product of Ms Gunn's exploitive conduct. Ms Gunn's failure to apply the money as transferred in accordance with the parties' common intention, thus enjoying the benefit of the money to the exclusion of Ms Meiners, constituted unconscionable conduct.[22]
[22] Primary reasons [390] - [395].
The primary judge concluded that, for these reasons, equity had cause to intervene and judgment should be entered for Ms Meiners. Accordingly, this aspect of the unconscionable dealings case succeeded.
Unconscionable retention following failure of joint endeavour
As mentioned, the primary judge analysed what she referred to as being the second basis of the unconscionable dealings case by reference to the principle enunciated by Deane J in Muschinski v Dodds. Her Honour reproduced the following passage from Deane J's reasons:
Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.[23]
[23] Primary reasons [398] (referring to Muschinski v Dodds (620)).
The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him or her to do so.[24]
[24] Muschinski v Dodds (620).
The primary judge accepted that it would be unconscionable for Ms Gunn to retain the financial benefits conferred on her in circumstances where it was not specifically intended or specially provided that she should enjoy those benefits.[25] Ms Meiners made the transfers on the understanding that the money would be available to be used for Ms Meiners' benefit.[26] The primary judge also accepted that the substratum of the planned joint endeavour on which the transfers of the money were based had been removed.[27] However, her Honour concluded that 'in the circumstances of this case, it cannot be said that the substratum of the planned joint endeavour was removed without attributable blame.'[28] For this reason the primary judge rejected this aspect of the unconscionable dealings case.
[25] Primary reasons [403].
[26] Primary reasons [404].
[27] Primary reasons [404].
[28] Primary reasons [404].
The primary judge considered that, on the facts, Ms Meiners' claim properly fell within the rubric of unconscionable dealings due to special disadvantage or disability rather than unconscionable retention due to failure of a joint endeavour.
The undue influence claim
The primary judge identified that Ms Meiners relied on the presumption of undue influence.[29] Her Honour observed that, while a presumption of undue influence will arise when a substantial gift is made in certain recognised relationships, the relationship of mother and adult daughter is not such a relationship.[30] Accordingly, in determining whether a presumption of undue influence arose, her Honour considered, among other things, whether at the time of the transfers there existed between Ms Meiners (as donor) and Ms Gunn (as donee) a relationship of such a nature as to involve reliance, dependence or trust on the donor's part which created an ascendency on the donee's part.[31]
[29] Primary reasons [407].
[30] Primary reasons [408].
[31] Primary reasons [409(a)].
The primary judge held that:
1.The evidence did not establish that the nature of the relationship between Ms Meiners and Ms Gunn created a psychological ascendency on Ms Gunn's part (although the relationship did involve reliance, dependence and trust on Ms Meiners' part).[32]
2.Ms Meiners had not subjugated her will to that of Ms Gunn (although Ms Meiners was vulnerable and susceptible to the influence of Ms Gunn).[33]
3.It was not established on the evidence that Ms Meiners' will was not independent and voluntary because it was overborne (although Ms Meiners' will, while independent and voluntary, was the result of the disadvantageous position in which she was placed - a position which Ms Gunn unconscientiously took advantage of).[34]
[32] Primary reasons [415].
[33] Primary reasons [416].
[34] Primary reasons [417].
As a consequence, the undue influence claim failed.
The loan claim
The primary judge observed that the alternative loan claim was not formally abandoned. However, it had not been particularised and had not been developed; nor was it addressed in Ms Meiners' written closing submissions. In the circumstances the primary judge made no findings in relation to the loan claim.[35]
Conclusion and orders
[35] Primary reasons [420].
The primary judge delivered reasons for decision on 24 January 2020. Her Honour informed the parties that she would hear them on the form of orders to give effect to the reasons. After doing so final orders were made on 31 January 2020.
The final orders provided for:
1.An award of equitable compensation in favour of Ms Meiners against Ms Gunn in the amount of $372,717.43 and interest.
2.A declaration that Ms Meiners held an equitable lien over the Yokine property and the balance of any available funds in Ms Gunn's CBA home loan account.
3.An order that Ms Gunn transfer the balance of the available funds in Ms Gunn's CBA home loan account to Ms Meiners' benefit.
4.An order for the sale of the Yokine property in the event that the judgment debt was not paid in full by 28 February 2020.
The equitable lien, although not expressly so stated in the declaration, was presumably to secure the payment of the judgment debt by providing identified property for the payment of the judgment debt.
The primary judge’s additional reasons to support the declaration of the equitable lien were not made available to this court.
The grounds of appeal, the notice of contention and the cross-appeal
There are two grounds of appeal:
1.The trial judge erred in law by not according the appellant procedural fairness by allowing the respondent to advance a case of unconscionable dealing, arising from a special disadvantage, when such a claim had not been pleaded by the respondent.
2.The trial judge:
(a)erred in law … by finding liability for unconscionable dealing could be established if:
i.the respondent was under a special disadvantage or disability in dealing with the appellant; and
ii.the respondent's special disadvantage or disability was sufficiently evident to the respondent; and
(b)should have found that such liability could only be established if the respondent proved the appellant had actual knowledge of, or was wilfully blind to, the respondent’s special disadvantage.
Ms Gunn accepted that, if she succeeded only on ground 2, there would need to be retrial.[36] However, it was contended that the judgment should be set aside, and the action dismissed without retrial, if Ms Gunn succeeded on ground 1 (assuming that neither the notice of contention nor the cross-appeal were successful).[37] Counsel for Ms Meiners contended that if the appeal succeeded on ground 1 the proper order in the interests of justice would be a retrial.[38]
[36] Appeal ts 57.
[37] Appeal ts 21.
[38] Appeal ts 36.
Ms Meiners relied on a notice of contention. In substance, the notice of contention emphasised various of the primary judge's findings including her Honour's reasoning for upholding Ms Meiners' claim based on the doctrine of unconscionable dealings rather than the failure of a joint endeavour applying the principle enunciated in Muschinski v Dodds. Ms Meiners contended that if the appeal succeeded because the court set aside the finding that Ms Gunn engaged in unconscionable dealings due to Ms Meiners' special disadvantage or disability:
the court would, on the unchallenged facts, uphold the primary decision based on the failure of the parties' joint endeavour applying the principle in Muschinski v Dodds.[39]
[39] Notice of contention par 5 WAB 43.
Ms Meiners also cross-appealed against the dismissal of her undue influence case. The cross-appeal relied on four grounds:
1.The learned trial judge erred in law by applying the wrong legal rule, namely that to establish that the cross respondent (Ms Gunn) was in a position of psychological ascendancy in relation to the cross appellant (Ms Meiners), it was necessary for the latter to have subjugated her will to the former, when the correct legal rule required an assessment as to whether Ms Meiners' judgmental capacity was at least markedly substandard on the found facts.
2.The trial judge erred in law by drawing the wrong inference of fact from the primary facts, that at the time of the transfers of money from Ms Meiners to Ms Gunn the former's will was independent and voluntary.
3.The learned trial judge erred in law by:
3.1failing to apply the correct legal rule namely that the presumption of undue influence will apply whenever one party occupies or assumes towards another a position naturally involving an ascendency or influence over that other, or a dependence of trust on his part;
3.2imposing an evidential burden upon Ms Meiners to affirmatively prove that her will was not independent and voluntary and was overborne by reason of Ms Gunn’s ascendency before applying the presumption of undue influence; or
3.3alternatively, wrongly applying the presumption of undue influence and imposing on Ms Meiners a burden to prove that her will was not independent and voluntary and was overborne by reason of ascendency on Ms Gunn’s part, rather than shifting the evidential burden to Ms Gunn to rebut the presumption of undue influence.
4.The learned trial judge erred in law by failing to decide, alternatively failing to give any reasons to decide, the material issue raised by Ms Meiners in her case based on factual undue influence.
Ground 4 of the cross-appeal was abandoned in the course of the appeal hearing.[40]
[40] Appeal ts 50.
Although styled as a cross-appeal, counsel for Ms Meiners clarified that the notice of cross-appeal should be treated as a further notice of contention.[41]
[41] Appeal ts 40, 55.
Disposition: Ground 1 - the alleged failure to accord Ms Gunn procedural fairness
Ground 1 of the appeal complains of a departure from the pleaded case by the primary judge.
Counsel for Ms Meiners accepted that the unconscionable dealings case arising from Ms Meiners being under a special disadvantage or disability was not pleaded.[42] That concession was properly made and should be accepted. While, based on the whole of the facts as pleaded, Ms Meiners alleged that it was unconscionable for Ms Gunn to retain the money she had received, the SOC relied on causes of action substantially different to an unconscionable dealings case as found by the primary judge (see [31] - [38] above). The SOC did not plead a cause of action based on Ms Gunn unconscientiously taking advantage of a special disadvantage or disability on the part of Ms Meiners in dealing with Ms Gunn. Accordingly, the primary judge's departure from the pleaded case in determining the action adversely to Ms Gunn is established.
[42] Appeal ts 22 - 23.
Ms Gunn contended that it was, in all of the circumstances, impermissible to allow Ms Meiners to depart from her pleaded case. Ms Gunn submitted that the departure from the pleaded case denied her procedural fairness. It was said that Ms Gunn's status as a self-represented litigant only reinforced the primary judge's error in allowing the departure. Ms Gunn contended that the error was not merely an error on the part of the primary judge - it was one caused by and urged on her Honour by Ms Meiners' approach to the conduct of the trial.[43]
[43] Appellant's submissions par 43 WAB 14.
Senior counsel for Ms Gunn focussed in particular on whether Ms Gunn was given adequate notice of the allegation Ms Gunn knew of the circumstances of Ms Meiners' special disadvantage or disability in dealing with Ms Meiners.[44]
[44] Appeal ts 9 - 10, 12, 16.
In seeking to answer ground 1, Ms Meiners contended that: (1) Ms Gunn was accorded procedural fairness; and (2) Ms Gunn did not suffer any practical injustice by reason of the procedural processes adopted by the court.[45] According to Ms Meiners, the court's normal procedure was adapted to give Ms Gunn fair notice of the issues that the court would be asked to determine and to assist Ms Gunn in preparing her case for trial.[46] Indeed, in written submissions counsel for Ms Meiners went as far as to contend that the 'feel' of the proceedings (whatever that may mean) was that the matter would proceed without the technicalities of pleadings.[47]
[45] Respondent's submissions par 1 WAB 21.
[46] Respondent's submissions par 4 WAB 21.
[47] Respondent's submissions par 38 WAB 28. See also par 70 WAB 38.
Ms Meiners argued that the course of the proceedings demonstrated that Ms Gunn was accorded procedural fairness - Ms Gunn being given adequate opportunity to prepare and present her response to Ms Meiners' case alleging unconscionable dealings by special disadvantage.[48] Ms Meiners relied on:
1.A statement of issues filed before trial.[49]
2.Ms Gunn having been given a reasonable opportunity to present her case having received all of Ms Meiners' evidence and documents (including Ms Meiners' written opening submissions).[50]
[48] Appeal ts 23, 29 - 32; Respondent's submissions par 66 WAB 36 - 37.
[49] Appeal ts 27; Respondent's submissions par 68 WAB 37.
[50] Appeal ts 28; Respondent's submissions par 69 WAB 37 - 38.
Ms Meiners also relied on the SOC as having pleaded all material facts sought to be impugned as constituting unconscionable conduct.[51] This contention is without merit. It cannot stand with Ms Meiners' concession, by counsel, that the unconscionable dealings case was not pleaded. For example, there was no plea to the effect that Ms Gunn knew of the circumstances relied on to constitute Ms Meiners' alleged special disadvantage or disability in dealing with Ms Gunn.
[51] Respondent's submissions par 67 WAB 37.
Ms Meiners contended that Ms Gunn's conduct of her defence demonstrated that Ms Gunn knew the case she had to meet at trial and engaged with it. It was suggested that this was an example of a case where the parties had disregarded the pleadings and fought the case on the issues at trial. Ms Meiners submitted that, Ms Gunn lacking skill and knowledge in relation to the role and function of pleadings, the usual procedures were adapted to suit her circumstances as a self-represented litigant.[52]
[52] Appeal ts 32; Respondent's submissions pars 70 - 73 WAB 38.
In any case, according to Ms Meiners, Ms Gunn had not demonstrated that she suffered any practical injustice. It was said that Ms Gunn was not deprived of the possibility of a different outcome in her favour insofar as it was not contended that she could or would have adduced any additional evidence or made any additional submissions in the presentation of her defence.[53]
The course of the trial
Why it is necessary to consider these matters
[53] Respondent's submissions par 74 WAB 38 - 39.
On appeal, Ms Gunn alleges that the primary judge departed from the pleaded case in finding against her based on the transfers constituting unconscionable dealings, and thereby erred in law by not according her procedural fairness.
In assessing that contention it is necessary to examine the course of the trial. Two aspects are important. First, there were a number of statements made to Ms Gunn which reinforced the importance of the pleaded case. Those were relied on by Ms Gunn on appeal. Second, there were various other documents and matters relied on by Ms Meiners in support of the proposition that the parties chose to disregard the pleadings and fight the case on identified issues that included whether there had been unconscionable dealings as found by the primary judge. Ms Meiners said that in the circumstances there was no lack of procedural fairness and ground 1 should be dismissed.
The various matters arose in a context where, at all material times, Ms Gunn was a self-represented litigant.
In seeking to answer the procedural fairness complaint, Ms Meiners argued that Ms Gunn was a self-represented litigant as a matter of choice.[54] Ms Meiners, by counsel, said that the disadvantages Ms Gunn suffered by reason of a lack of legal training and experience were self-created and arose from her choice not to secure legal advice.[55] This is not a proper answer to the issue of procedural fairness that is agitated on appeal. A natural person litigant is entitled to appear for himself or herself before the court. Whether he or she chooses to appear in person, or does so out of necessity, is neither here nor there. Nor, if it be the case that a natural person litigant chooses to appear in person, does that affect the scope or content of the court's obligation to accord procedural fairness. There are general principles that apply as to what should be done by a trial judge to ensure a fair and just trial where one of the parties is a self-represented litigant.[56] These are, however, specific applications of a more general principle that applies throughout judicial proceedings. It is a fundamental principle that all courts are obliged to accord procedural fairness to parties to a proceeding.[57]
[54] Respondent's submissions pars 2 - 3 WAB 21.
[55] Respondent's submissions pars 2, 68 WAB 21, 37.
[56] See eg Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 [74] - [76].
[57] HT v The Queen [2019] HCA 40; (2019) 269 CLR 403 [17].
It is, however, necessary and appropriate to consider what follows in the context in which it arose - that being that Ms Gunn was appearing for herself at trial. Much of what happened and is now relied on only occurred because of Ms Gunn's status as a self-represented litigant.
Judicial statements made to Ms Gunn as to the function of the pleadings
On a number of occasions the primary judge provided Ms Gunn with an explanation as to the function of the pleadings. So too, at an earlier stage, did a judicial case manager (Archer J) who preceded the primary judge in managing the action.
On 11 October 2018, in the course of explaining the forthcoming trial process for Ms Gunn's benefit, Archer J informed Ms Gunn that the trial would be about the matters set out in the pleadings - in particular the allegations in the statement of claim.[58]
[58] ts 170.
The primary judge went further at a directions hearing on 28 November 2018. On that occasion, about a week before the trial was to commence, the primary judge informed Ms Gunn that she was going to go through a number of matters which had been raised by Archer J on 11 October 2018. One of those matters was the trial procedure. Relevantly, as to the parties' pleadings her Honour stated:
You have pleadings and they have two functions; they're to inform me of the nature of the dispute and to set limits as to what can be argued at trial. In other words, the dispute at trial is limited to the dispute as defined in the pleadings. The pleadings can be amended at trial but only with the leave of the judge.[59] (emphasis added)
[59] ts 300.
A very similar statement was made by the primary judge on 3 December 2018 on the commencement of the trial:
The parties have exchanged pleadings and in the papers for the judge filed on 23 November there are - those papers for the judge constitute the pleadings of the parties. Those are the re-amended substituted statement of claim filed on behalf of the plaintiff on 19 November 2018 and your affidavit titled Statement of Defence (Substituted Defence), dated 26 September 2018, and that affidavit was taken to stand as your defence in the proceeding.
The pleadings have two functions. They're to inform me, as the decision-maker, of the nature of the dispute, and secondly, they are to set limits as to what could be argued at trial. In other words, the dispute at trial is limited to the dispute as defined in the proceedings [sic - pleadings]. The pleadings can be amended, but only with leave of the court.[60] (emphasis added)
[60] ts 322 - 323.
All three statements were made in the presence of counsel for Ms Meiners. Counsel said nothing to qualify the generality of the statements made by Archer J or the primary judge. In particular, at no time did counsel for Ms Meiners inform Ms Gunn or the court that - despite what Ms Gunn had been informed as to the pleadings limiting the dispute at trial - Ms Meiners was in fact pursuing a case that departed from the pleaded case in material respects.
The primary judge's statements to Ms Gunn necessitate rejection of Ms Meiners' submission that the matter would proceed without regard to the 'technicalities of pleadings'.[61] To the contrary, on two occasions the primary judge informed Ms Gunn in unequivocal terms that the pleadings confined the matters for determination by the court. Those statements were made in the presence of counsel for Ms Meiners. Counsel for Ms Meiners stood by and did nothing to disabuse Ms Gunn of the only conclusion that was reasonably open having regard to what had been said by the primary judge - that being that the case Ms Gunn had to answer was the claim as put in the SOC.
The written materials relied on by Ms Meiners
[61] Compare Respondent's submissions par 38 WAB 28. See also par 70 WAB 38.
Ms Meiners pointed to a number of materials by which it was contended that Ms Gunn was fairly put on notice of the case she had to meet.
First, on 9 November 2018 Ms Meiners filed a statement of issues. This posed a series of questions under the heading 'Substantive Questions of Fact'. Relevant to an unconscionable dealings case were the following:
6.At material times, did [Ms Meiners] suffer a special disadvantage or disability by reason of: age; isolation; grief; poor health; [Ms Meiners'] trust in, or reliance and dependence on, [Ms Gunn]; or a combination of such factors?
…
8.Did [Ms Meiners'] special disadvantage or disability, if any, affect her ability to make a judgment in her own best interests when causing her money to be paid to [Ms Gunn]?
9.If [Ms Meiners] suffered a special disadvantage or disability, was that sufficiently evident to [Ms Gunn] to make it unfair or unconscionable for [Ms Gunn] to accept the benefit of [Ms Meiners'] payments of money to [Ms Gunn]?
10.Did [Ms Gunn] take advantage of [Ms Meiners'] special disadvantage or disability by her passive receipt, and use for her sole benefit, of the money paid by [Ms Meiners] to [Ms Gunn]?[62]
[62] BAB 125.
As an issue of law, the statement of issues asked whether, in the circumstances, Ms Gunn's receipt or application of Ms Meiners' money was unconscientious conduct such that the transactions should be set aside.[63]
[63] BAB 126 (par 13).
The primary judge requested the statement of issues at a directions hearing on 7 November 2018. Her Honour thought it would be of benefit to the parties and may assist Ms Gunn in the preparation of her written submissions. It was suggested that the parties might direct their written submissions in a framework so that they responded to the questions that the court needed to determine.[64]
[64] ts 196 - 197.
The statement of issues preceded the main witness statements (Ms Meiners' initial witness statement was filed on 14 November 2018; Ms Gunn's witness statement was filed on 12 November 2018) and the parties' written opening submissions (Ms Meiners' submissions were filed on 28 November 2018; Ms Gunn's submissions were filed on 30 November 2018). It is apparent that Ms Gunn had regard to the statement of issues in preparing her written opening submissions and her witness statement. Ms Gunn's written opening submissions are referred to below (see [99] below). While struck-out, as being inadmissible in form, Ms Gunn's witness statement directly responded to pars 6, 8 - 10 and 13 of the statement of issues.[65] The witness statement also referred to Ms Meiners' access to legal, financial and other advice[66] and Ms Gunn's professed belief that Ms Meiners was capable of making decisions and understood what she was doing.[67]
[65] GAB 114 - 115 (pars 158, 160).
[66] GAB 99 (pars 6, 11), 100 (par 12), 102 (pars 39, 40), 103 (par 55), 107 (par 91), 108 (par 101), 109 (par 114).
[67] GAB 100 (par 18), 107 (pars 91, 92), 109 - 110 (pars 114 - 116).
The statement of issues was referred to in the course of the trial. On 19 December 2018, in discussing the parties' closing submissions, counsel for Ms Meiners suggested that the statement of issues could potentially assist Ms Gunn in structuring her contentions.[68] That provoked this exchange:
STRK AJ: Ms Gunn, do you recall that document?
GUNN, MS: I do, and I've read it several times, and it makes no sense to me at all.
…
GUNN, MS: Because it's not based on any truth that I know of the circumstances. It's based on your [ie counsel for Ms Meiners'] legal argument, not on the actual truth of the occurrences …[69]
[68] ts 784.
[69] ts 784.
Later in the trial, on 21 December 2018, but again when discussing the parties' closing submissions, the primary judge suggested that the statement of issues would provide a 'very sound framework' for Ms Gunn's closing submissions. The primary judge identified the statement of issues as identifying the matters of fact and law that needed to be determined.[70]
[70] ts 995.
As it happened, Ms Gunn - at least in part - took up the suggestion made by counsel for Ms Meiners and the primary judge. Ms Gunn filed comprehensive written closing submissions.[71] These included detailed submissions under headings that included the following:
At material times, did [Ms Meiners] suffer a special disadvantage or disability by reason of age, isolation, grief, poor health, [Ms Meiners'] trust in, or reliance and dependence on, [Ms Gunn], or a combination of such factors.[72]
Did [Ms Meiners'] special disadvantage if any, affect her ability to make a judgement in her own best interests when causing her money to be paid to [Ms Gunn].[73]
Did [Ms Meiners] receive adequate, or any, independent legal and or financial advice prior to paying money to [Ms Gunn].[74]
In the circumstances, was [Ms Gunn's] receipt and or application of [Ms Meiners'] money unconscientious conduct on the part of [Ms Gunn] such that the transactions or payments made should be set aside.[75]
[71] BAB 194 - 238.
[72] BAB 223. Compare statement of issues par 6 (BAB 125).
[73] BAB 227. Compare statement of issues par 8 (BAB 125).
[74] BAB 228.
[75] BAB 231. Compare statement of issues par 13 (BAB 126).
However, Ms Gunn did not address all of the questions in the statement of issues in that way. For example, there was no heading in Ms Gunn's submissions that equated to par 9 of the statement of issues, ie the question posed as to whether any special disadvantage or disability on the part of Ms Meiners was 'sufficiently evident' to Ms Meiners to make it unfair or unconscionable for Ms Gunn to accept the benefit of the money as transferred by Ms Meiners.
Second, Ms Meiners relied on her written opening submissions dated 28 November 2018.[76] By this document:
1.Ms Meiners recited a detailed account of the facts she intended to establish.[77]
2.Ms Meiners said that she was entitled to relief on three bases. The second of these was that:
[A]t all material times, [Ms Meiners] was vulnerable by reason of special disadvantage. In the circumstances [Ms Gunn] was aware of that special disadvantage and unconscionably received Ms Meiners' money and applied it for her own purposes.[78]
3.Ms Meiners developed the legal principles as to the doctrine of unconscionable conduct by the unconscientious taking advantage of a special disability or disadvantage.[79]
4.Ms Meiners asserted that she was in a position of special disadvantage in identified respects.[80] Moreover, Ms Meiners asserted that: '[Ms Gunn] was aware of these matters and knew that Mr Meiners [sic] did not secure any legal or financial advice' (emphasis added).[81] Finally, in apparent reference to a claim by way of unconscionable dealings, Ms Meiners submitted that the transfers of money were improvident and neither fair nor reasonable unless Ms Gunn adhered to the parties' common intention and satisfied Ms Meiners' expectation.[82]
[76] BAB 127 - 148.
[77] BAB 127 - 137 (pars 1 - 93).
[78] BAB 138 (par 94.2).
[79] BAB 138 - 139, 142 - 144 (pars 95 - 97, 115 - 125).
[80] BAB 145 - 147 (par 129). See also BAB 147 (pars 130 - 133).
[81] BAB 147 (par 134).
[82] BAB 147 (par 136).
Ms Gunn's written opening submissions were, in part, responsive to Ms Meiners' written opening submissions. Ms Gunn stated that she was 'seeking orders that dismiss [Ms Meiners'] claim of undue influence, unconscionable conduct, special disadvantage and equity claim'.[83] Ms Gunn also said that there was 'an absence of special disadvantage' insofar as Ms Meiners had access to legal, financial and physical support from providers of those services.[84]
The other matters relied on by Ms Meiners
[83] BAB 158 (par 111).
[84] BAB 159 (par 129).
Ms Meiners relied on a number of other matters arising in the course of the proceedings and the trial. Some of them are misconceived. For example, there was reference to an original statement of claim, dated 13 February 2018, which pleaded that Ms Meiners was in a position of special disadvantage and that Ms Gunn knew or ought to have known that Ms Meiners was in such a position.[85] That is irrelevant when the plea fell away before the trial. Nor, in our view, is there any force in Ms Meiners' reliance on various fleeting asides that can be found in the transcript.[86] And it is not to the point that Ms Gunn was represented by solicitors at various stages of the proceedings.[87]
[85] Respondent's submissions par 31 WAB 26.
[86] See eg Respondent's submissions pars 46, 52, 55 WAB 30 - 33.
[87] See eg Respondent's submissions pars 32, 33, 35 WAB 27.
Ms Meiners' respondent's answer contained a detailed analysis of the evidence at trial - apparently with a view to contending that this constituted notice of Ms Meiners' unconscionable dealings case and Ms Gunn's appreciation of and response to that case.[88]
[88] See eg Respondent's submissions pars 40 - 44, 51, 54, 56 - 60 WAB 28 - 35.
We do not accept that these evidentiary references have the significance ascribed to them by Ms Meiners. Ms Meiners' reliance on these aspects of the trial overlooks the circumstance that there was a considerable overlap in the evidence between Ms Meiners' unconscionable dealings case and Ms Meiners' undue influence case. In substance, despite the different legal character of the two causes of action, Ms Meiners relied on a similar body of evidence for both contentions. So understood, the mere fact that the evidence adduced by Ms Meiners covered the matters which she relied on for the unconscionable dealings case goes nowhere. Nor is it material that, in general terms, Ms Gunn responded to and sought to answer Ms Meiners' evidence by cross-examination of Ms Meiners' witnesses and in Ms Gunn's own evidence - Ms Gunn had to do so in answering the undue influence case.
Ms Meiners also sought to rely on Ms Gunn's oral opening. A feature of Ms Gunn's opening address was her contention that Ms Meiners had made gifts to her - independently of Ms Gunn - after seeking and being provided with legal and financial advice (something Ms Gunn was aware of); Ms Gunn contended that Ms Meiners had a complete understanding of what she was doing and also how to go about doing it.[89] Ms Gunn summarised the issues in these terms:
[T]he dispute, as I see it now, is that [Ms Meiners] is now accusing her daughter of non-compliance with the agreements that she says existed between herself and her daughter. She is further accusing her daughter of unconscionable behaviour, undue influence and generally criminal behaviour against her. [Ms Meiners is] claiming that she's in a position of disadvantage and that she has been taken advantage of.
[Ms Meiners] is claiming that the transactions were not fair and that she was not fully informed of the implications of her decisions. [Ms Meiners is] claiming that her state of mind and her perception at the time she made her decisions were a result of emotional dependence and influenced by [Ms Gunn] …[90] (emphasis added)
Pleadings and the requirement of procedural fairness
[89] ts 586. See also ts 594.
[90] ts 591.
One aspect of procedural fairness is that a person against whom a claim is made must be given a 'reasonable opportunity' of being heard, ie of appearing and presenting his or her case.[91] In HT v The Queen Kiefel CJ, Bell and Keane JJ explained that as a corollary:
In an adversarial system it is assumed, as a general rule, that opposing parties will know what case an opposite party seeks to make and how that party seeks to make it. A party can only be in a position to put his or her case if the party is able to test and respond to the evidence on which an order is sought to be made.[92] (citations omitted)
[91] HT v The Queen [17].
[92] HT v The Queen [17].
Closely related is the rule that:
[A] decision-maker should not make an adverse finding relevant to a person's rights, interests or legitimate expectations unless the decision-maker has warned that person of the risk of that finding being made or unless the risk necessarily inheres in the issues to be decided.[93]
[93] Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 [101]. While, in that case, McHugh J was in dissent, his Honour differed in the ultimate outcome based on discretionary grounds. His Honour's statement of principle should not be doubted.
Thus, at the heart of the requirement to afford procedural fairness is that the party whose interests are liable to be affected by a decision must be put on notice of the case against him or her, and given an opportunity to respond.[94] Relevantly for present purposes, procedural fairness required that Ms Gunn be put on notice of what was to be determined by the primary judge at the trial, and then to be given a reasonable opportunity to be heard, by presenting her case by evidence, information and submissions.[95]
[94] Fabrizi v Grasso [No 2] [2022] WASCA 27 [91].
[95] Fabrizi v Grasso [91].
However, the rules of procedural fairness do not have immutably fixed content; the content of procedural fairness may vary according to the circumstances of the particular case. Procedural fairness is essentially practical; it is not an abstract concept. The concern of the law is the avoidance of practical injustice.[96]
[96] Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 [37]; HT v The Queen [18]; Fabrizi v Grasso [92].
The application of the requirements of procedural fairness to a court requires analysis of the procedures of the court and the legislation and rules which govern them.[97]
[97] Fabrizi v Grasso [92].
In a civil case, the procedural fairness requirement that a party be adequately informed of the case against him or her is satisfied, ordinarily, by pleadings.[98]
[98] Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279, 286.
Pleadings have two main functions.[99] First, to define the issues for decision so that the court can control the preparation of the case and the conduct of the trial. Second, to ensure a fair trial by putting the other party on notice of the case to be met. In the latter respect, the function of a pleading is to state the case that must be met with 'sufficient clarity'.[100]
[99] EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 [124].
[100] Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (286) (referring to Gould v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490, 517).
It follows from the procedural fairness aspect that attends the function of the parties' pleadings that, as a general rule, relief is confined to that available on the pleadings.[101] Thus it is an error for a trial judge to decide a case relying on reasons or grounds that were not raised on the pleadings or otherwise go beyond the issues joined between the parties at trial.[102] However, as is implicit in what we have just said, a case may be litigated at trial in a manner that is materially different from the issues as defined by the pleadings. The parties may disregard the pleadings - either confining or enlarging the issues - and fight the case on issues chosen at the trial. It is well established that where this occurs the parties cannot return to the pleadings as governing the area of contest[103] (although there should be an appropriate amendment so that the cause of action alleged forms part of the court record).[104]
[101] Gould v Mount Oxide Mines Ltd (in liq) (518) (referring to Sri Mahant Govind Rao v Sita Ram Kesho (1898) 25 Ind App 195, 207); Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, 664; Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (286), (288), (302 - 303).
[102] See eg EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [137] - [138].
[103] Gould v Mount Oxide Mines Ltd (in liq) (517).
[104] London Passenger Transport Board v Moscrop [1942] AC 332, 347; Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (296 - 297); Smith v Leveraged Equities Ltd [2020] WASCA 122 [73].
The position is summarised by Mason CJ and Gaudron J in Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd in a passage that should be repeated:
[P]leadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities.[105]
[105] Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (286 - 287).
Their Honours go on to explain that, ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted.[106]
Consideration
[106] Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (287).
This was a case where the primary judge went to substantial lengths to assist Ms Gunn in the preparation and presentation of her case due to her status as a self-represented litigant.
There was, for example, two separate overviews in an attempt to give guidance to Ms Gunn as to the trial process and the procedure that would be followed by the court. Witnesses were called out of turn to give Ms Gunn more time to prepare to cross-examine Ms Meiners (Ms Gunn not being adequately prepared for the cross-examination). Ms Gunn was given direction in her cross-examination of witnesses; and the primary judge also assisted Ms Gunn in identifying areas to be addressed in her oral evidence-in-chief so far as parts of Ms Gunn's witness statement were struck-out as being inadmissible in form. Ms Meiners was recalled for further cross-examination because Ms Gunn gave evidence of matters that were not put to Ms Meiners in cross-examination. It was agreed that Ms Meiners would put on her written closing submissions before Ms Gunn's written closing submissions so that Ms Gunn could respond. Also, as mentioned, both the primary judge and counsel for Ms Meiners suggested that Ms Gunn might use the questions identified in the statement of issues as a guide to frame her written closing submissions. The primary judge was assiduous in her attempts to ensure that the trial was conducted in a manner that was just and fair.
We are, however, satisfied that the primary judge failed to accord procedural fairness to Ms Gunn in finding against Ms Gunn on a basis that was not open on Ms Meiners' pleaded case. We have reached that conclusion for the following reasons.
First, Ms Gunn was informed on three occasions (including twice by the primary judge as the intended decision-maker) that the pleadings limited the matters for determination by the court insofar as 'the dispute at trial is limited to the dispute as defined in the pleadings'. The primary judge's statements to that effect only admitted of one qualification, namely, where the pleadings were amended at trial with the leave of the court. There was, however, no application to amend the SOC. Accordingly, Ms Gunn was, objectively, justified in defending Ms Meiners' case at trial based on the primary judge's statements carrying an implicit assurance that the basis on which liability might be found against her was confined to the kind of claim pleaded in Ms Meiners's SOC.
In this respect, what occurred in this case provides an illustration of the caution expressed by this court in Stone v Braun:
In communicating with a self-represented litigant, the court must be careful to ensure that things said by the court do not inadvertently mislead the self-represented litigant, including by reinforcing a misapprehension, about the applicable substantive or procedural law, or about the way in which the case is to be conducted.[107]
[107] Stone v Braun [2015] WASCA 103 [68].
It was appropriate for Ms Gunn to rely on what she was told by the primary judge as to the pleadings limiting the matters to be argued at trial. Based on what was said to her by two presiding judicial officers - not merely once but rather three times - Ms Gunn might have expected that she faced a potential adverse finding as to liability based on Ms Meiners' pleaded case. But Ms Gunn would also have expected that her potential liability was confined by Ms Meiners' pleaded case. If the primary judge intended to determine that Ms Gunn was liable on some other basis - or there was a real risk that she might do so - as a matter of procedural fairness her Honour was obliged to inform Ms Gunn of that possibility in accordance with the principle recited at [105] above. The primary judge did not do so. To the contrary, by repeating at the commencement of the trial that which had been said in unequivocal terms on 28 November 2018, the primary judge conveyed that absent amendment Ms Gunn's potential liability was confined by the dispute as defined in the pleadings.
In referring, as we have, to the statements made to Ms Gunn by Archer J and the primary judge, we have been conscious that those statements must not be considered in isolation. In particular, the primary judge's statements as to the limiting effect of the pleadings must be examined in the context of the trial as a whole. We have done so. After that wider consideration we are satisfied that the statements are of material and continuing effect in delineating the case Ms Gunn had to meet despite the conduct of the case as a whole. That was the primary judge's intention in informing Ms Gunn of the procedure that would be adopted by the court and was to be followed by the parties at trial. In addition, appropriate regard must be had to the circumstance that the statements were made by the court. Any litigant - but especially a self-represented litigant - ought to be able to rely unequivocally on what is stated by the court as to how the litigation is to be approached and determined.
Second, and very significantly, although present when the statements were made by Archer J and the primary judge to Ms Gunn, counsel for Ms Meiners did nothing to inform Ms Gunn (or the court) that Ms Meiners sought to advance a case that went beyond Ms Meiners' pleaded case. The failure to do so on 28 November 2018 is conspicuous. That directions hearing occurred the same day as, and apparently shortly after,[108] Ms Meiners filed her written opening submissions. Insofar as counsel for Ms Meiners did nothing to qualify the generality of what was said by the primary judge - or to inform Ms Gunn and the court that in fact Ms Meiners was seeking to advance a claim that went beyond the pleaded case - the force of what had been said by Archer J and the primary judge as to the function of the pleadings continued unabated.
[108] ts 296.
Third, adherence to what the primary judge said as to the limiting function of the pleadings was particularly important in a case of the kind that Ms Meiners sought to advance. The doctrine of unconscionable dealings is concerned with a species of equitable fraud.[109] Any case involving allegations of fraud should be pleaded specifically and with particularity.[110] The predecessor to this court has made it plain that if, at a late stage in proceedings, a party wishes - for the first time - to mount a case involving impropriety, the way to do so is to apply to make appropriate amendments to the pleadings.[111] That context again supports the force of what had been said by Archer J and the primary judge to Ms Gunn. Both by reason of what had been said by the court, and the general principles applying to a case of the type that Ms Meiners sought to prosecute, fair notice of the unconscionable dealings claim required that it be pleaded.
[109] Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 (Kakavas) [17].
[110] Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 [26].
[111] Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255 [40] (see also at [35] - [38], [41], [43]).
Fourth, we do not accept that this is a case where the parties disregarded the pleadings and fought the case on issues joined at trial.
Ms Meiners, by her legal representatives, might have believed that - although unpleaded - the unconscionable dealings case had been introduced by Ms Meiners' statement of issues and Ms Meiners' written opening submissions. However, issues are not 'joined' in proceedings simply because one party seeks to introduce them informally without leave and a supporting amended pleading. For the reasons already given it was not enough that Ms Meiners purported to give notice of a different case that Ms Meiners sought to make.[112] Moreover, Ms Meiners' statement of issues (a document filed 9 November 2018) and Ms Meiners' written opening submissions (a document filed 28 November 2018) preceded, and were thus superseded by, the primary judge's statements on 28 November 2018 and 3 December 2018. What might otherwise have been the effect of these documents is, in our view, nullified by the primary judge's statements and the authority that is to be accorded to those statements as considered utterances of the court.
[112] Compare Respondent's submissions par 64 WAB 36.
There is, in any case, a qualitative and significant difference between something being designated as an issue - which is what was done by Ms Meiners' statement of issues - and something being itself an independent basis for liability. The statement of issues did not inform Ms Gunn that Ms Meiners was seeking to hold Ms Gunn liable on an unpleaded cause of action which was separate and distinct from the causes of action found in Ms Meiners' SOC and which could constitute a stand-alone basis for liability. To state the obvious, the manner in which and extent to which a party responds to a given issue is liable to be informed by its overall significance for the resolution of the proceedings. By way of example, nothing in the statement of issues made clear that the question of the extent of Ms Gunn's knowledge of matters said in combination to constitute Ms Meiners' special disadvantage was potentially of decisive significance.
For the reasons already given (see [101] - [102] above) we are not satisfied that the evidentiary materials relied on by Ms Meiners and Ms Gunn suffice to demonstrate that the parties disregarded the pleadings and litigated the unconscionable dealings case.
There are, however, various ways in which Ms Gunn responded to the charge of unconscionable conduct. Ms Meiners relied on four matters in particular: (1) Ms Gunn's witness statement (see [93] above); (2) Ms Gunn's written opening submissions (see [99] above); (3) Ms Gunn's opening address (see [103] above); and (4) Ms Gunn's written closing submissions (see [96] above). It is apparent from these materials that Ms Gunn referred to 'unconscionable conduct' and 'unconscionable behaviour', as well as making use of other language traditionally associated with an unconscionable dealings claim, and generally had regard to the issues described in pars 6, 8, 9, 10 and 13 of Ms Meiners' statement of issues.
The notice of contention fails.
Disposition: the cross-appeal
Ms Meiners' cross-appeal (which was really a further notice of contention) sought to uphold the judgment entered by the primary judge on the basis of the undue influence claim which her Honour rejected. In essence Ms Meiners submits that on the primary facts found by her Honour, applying the correct legal principles as to undue influence, the primary judge should have found that Ms Meiners' acts in transferring the money to Ms Gunn were the product of Ms Gunn's undue influence.[199]
[199] Appeal ts 42; Respondent's submissions on cross-appeal pars 18, 41 WAB 61, 67.
In Thorne v Kennedy Gordon J provided the following summary of the difference between the doctrine of undue influence and the doctrine of unconscionable conduct by special disadvantage or disability:
The doctrine of undue influence is concerned with 'the quality of the consent or assent of the weaker party'. Although it is natural to speak of a person 'exercising' undue influence over another, and although the conduct of the stronger party may fall for consideration as part of the fact-specific inquiry that the doctrine requires, the 'critical element in the grant of relief' is the impairment of the will of the weaker party. In that respect, undue influence is distinct from the doctrine of unconscionable conduct, which is concerned with the conduct of the stronger party in unconscientiously taking advantage of some special disability or disadvantage of the weaker party. That distinction, though not always clearly drawn, may now be taken to be accepted in Australia. Of course, that is not to deny that the two doctrines may be engaged by the same set of facts; the point, rather, is that the focus of the inquiry is different.[200] (citations omitted)
[200] Thorne v Kennedy [86]. See also Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457 [75] where Gaudron, Gummow and Kirby JJ adopt an extra-judicial explanation by Sir Anthony Mason contrasting the two doctrines.
In a case of undue influence, the will of the weaker party is not independent and voluntary because it is overborne. The doctrine looks to the quality of the consent or assent of the weaker party. In a case of unconscionable conduct by special disadvantage or disability the will of the weaker party, even if independent and voluntary, is the result of the disadvantageous position in which he or she is placed and of the other party unconscientiously taking advantage of that position. The doctrine of unconscionable dealings looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability or disadvantage in circumstances where it is not consistent with equity or good conscience that the stronger party should do so.[201]
[201] Amadio (461), (474).
The critical element in the grant of relief on the ground of undue influence is the actual or presumed impairment of the judgment of the weaker party. Undue influence denotes an ascendancy by the stronger party over the weaker party such that the relevant transaction is not the free, voluntary and independent act of the weaker party.[202] A person may understand and intend what he or she is doing but still be subject to the undue influence of the other person. The question is not whether the person knew what he or she was doing; instead it is concerned with how the intention was produced. The person's willingness may be the result of the undue influence.[203]
[202] Bridgewater v Leahy [75].
[203] Bridgewater v Leahy [118].
The primary judge developed the principles that applied to the doctrine of undue influence[204] by reference to what was said by Buss P in Mercanti v Mercanti[205] and Murphy J in Permanent Mortgages Pty Ltd v Vandenberg.[206] For present purposes it suffices to refer to the following propositions drawn from the reasons of the plurality in Thorne v Kennedy:[207]
[204] Primary reasons [60] - [64].
[205] Mercanti v Mercanti [2016] WASCA 206; (2016) 50 WAR 495 [282] - [290].
[206] Permanent Mortgages Pty Ltd v Vandenberg [166] - [168], [176]. This statement of the applicable principles was approved by Murphy and Newnes JJA in Mercanti v Mercanti [381].
[207] Thorne v Kennedy [30] - [34].
1.A person is subjected to undue influence where the effect of various factors (which may arise from widely different sources and include pressure) is that the person has 'no free will', ie the person is 'not a free agent' and is not equal to protecting himself or herself.
2.The question is whether the relevant act is not a 'free act'.
3.There is no undue influence where the relevant act is a 'free and well-understood act' or there has been a 'free exercise' of the person's will.
4.Questions of degree are involved. It is not necessary for the person to be reduced to an automaton. A person is deprived of free choice in the relevant sense where factors cause the person 'substantially to subordinate' his or her will. The judgmental capacity of the person must be 'markedly sub-standard' as a result of the effect on the person's mind of the will of another.
5.The existence of undue influence may be proved by direct evidence (ie 'actual' undue influence) or by presumption (ie 'presumed' undue influence). A presumption, in this sense, arises where common experience is that the existence of one fact means that another fact also exists.
6.Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will where:
(a)the person is proved to be in a particular relationship (as to which see sub-pars 7 and 8 below); and
(b)the transaction is one which cannot be explained by ordinary motives or is not readily explicable by the relationship of the parties (commonly involving a substantial benefit to another).
7.There are certain relationships that are accepted to give rise to the presumption. The relevant relationships giving rise to the presumption of undue influence are not closed. They include parent and child, guardian and ward, trustee and beneficiary, solicitor and client, and physician and patient.
8.Outside of the recognised categories of relationship attracting a presumption of undue influence, the presumption can also be raised by proof that 'the history of the particular relationship involved one party occupying a similar position of ascendancy or influence, and the other a corresponding position of dependency or trust' (emphasis added). (The similar ascendancy or influence and corresponding dependency or trust referring to that found in the relationships recognised as giving rise to the presumption.)
9.The presumption is rebuttable (both in the recognised categories of relationship attracting the presumption and in a particular relationship where an ad hoc presumption of undue influence arises).
10.To rebut the presumption the stronger party must prove that the particular transaction, in its particular circumstances, was the result of the weaker party's free will.
Before turning to the grounds of the cross-appeal, it is necessary to refer to the case advanced by Ms Meiners at trial. Ms Meiners relied on a presumption of undue influence by reason of specific pleaded facts and circumstances giving rise to a relationship between Ms Meiners and Ms Gunn which created an ascendancy on Ms Gunn's part.[208] That is how the primary judge understood the claim.[209] In addressing the claim her Honour specifically recognised, as a matter of law, that outside of recognised relationships giving rise to a presumption of undue influence:
the presumption of undue influence will also arise when it is proved that:
(a)at the time of the transaction or gift there existed a relationship between the donor and the donee of such a nature as to involve reliance, dependence or trust on the donor's part which created an ascendancy on the donee's part; and
(b)the transaction is so improvident or the gift is so substantial as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act.[210]
[208] SOC par 32 BAB 95. See also: Ms Meiners' statement of issues filed 9 November 2018 pars 14 - 15 BAB 126; Ms Meiners' written closing submissions dated 29 January 2019 pars 15(ii), 100 - 108, 120 - 129 BAB 164, 177 - 178, 181 - 182.
[209] Primary reasons [407], [411].
[210] Primary reasons [409]
It will be appreciated that her Honour's recitation of the applicable principle in those terms repeated, in substance, what was stated by Buss P in Mercanti v Mercanti.[211] Buss P's statement was also referred to and relied on by Ms Meiners in her written opening submissions.[212] Accordingly, the primary judge adopted the principle of law as contended for by Ms Meiners at trial.
[211] Mercanti v Mercanti [285]. Indeed the relevant passage of the primary reasons provided a footnote referring to this passage from Mercanti v Mercanti.
[212] Ms Meiners' written opening submissions dated 28 November 2018 par 104.1 BAB 140.
The primary judge proceeded to deal with the undue influence case in the terms in which it was advanced by Ms Meiners at trial. In particular, while acknowledging that if the presumption arose a burden would fall on Ms Gunn to rebut the presumption,[213] the primary judge first considered the question:
At the time of the transactions, did there exist a relationship between Ms Meiners and Ms Gunn of such a nature as to involve reliance, dependence or trust on Ms Meiners' part which created an ascendancy on Ms Gunn's part?[214]
[213] Primary reasons [410].
[214] See heading above Primary reasons [411].
The primary judge resolved that question in the negative, ie adversely to Ms Meiners.[215] Accordingly, it was not necessary for her Honour to consider whether Ms Gunn had rebutted a presumption of undue influence. The presumption did not arise. The undue influence claim failed at the point of Ms Meiners failing to establish the contended for presumption of undue influence.
Cross-appeal ground 1
[215] Primary reasons [415]. See also Primary reasons [416] - [418].
Cross-appeal ground 1 asserted that the primary judge had applied the wrong legal test in considering whether Ms Gunn was in a position of psychological ascendancy vis-à-vis Ms Meiners; it asserted that, while the primary judge considered whether Ms Meiners had subjugated her will to Ms Gunn, the correct legal rule simply required an assessment as to whether Ms Meiners's judgmental capacity was 'markedly sub-standard'.
In this respect the primary judge held that the evidence did not establish that the nature of the relationship between Ms Meiners and Ms Gunn created a psychological ascendancy on Ms Gunn's part.[216]
[216] Primary reasons [415].
Counsel for Ms Meiners said that, in substance, cross-appeal ground 1 raised an issue as to the extent that a person's will must be reduced or effected such that it is not free. Counsel relied on what was said by the plurality in Thorne v Kennedy:[217]
The question whether a person's act is 'free' requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a 'mere channel through which the will of the defendant operated'. Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be 'markedly sub-standard' as a result of the effect upon the person's mind of the will of another.[218] (emphasis added) (citations omitted)
[217] Appeal ts 42; Respondent's submissions on cross-appeal par 13 WAB 59 - 60.
[218] Thorne v Kennedy [32].
Counsel for Ms Meiners submitted that the primary judge identified the wrong test in the passage reproduced at [217] above. It was said to be unnecessary for Ms Meiners to prove that she had subjugated her will to Ms Gunn. All that was necessary, on Ms Meiners' case, was that Ms Gunn was in a position to influence Ms Meiners' will. In making that submission counsel for Ms Meiners relied on Dixon J's reasons in Johnson v Buttress[219] (where his Honour referred to one party occupying or assuming a position 'naturally involving an ascendency or influence' over the other or a 'dependence or trust' on his or her part) and the passage from Thorne v Kennedy immediately above. Ms Meiners argued that the primary judge did not consider whether Ms Meiners' judgmental capacity was markedly sub-standard but instead applied a more stringent test.[220]
[219] Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113, 134 - 135 (see also at 136).
[220] Appeal ts 43 - 44; Respondent's submissions on cross-appeal pars 15 - 17 WAB 60 - 61 (see also par 23 WAB 62).
It would be regrettable if the primary judge was found to be in error in the manner alleged in cross-appeal ground 1. As has been seen, the primary judge applied the relevant principle of law as contended for on behalf of Ms Meiners at trial. Any error in terms of cross-appeal ground 1 would be one that the primary judge was led into by a misconceived submission on behalf of Ms Meiners. There is, however, no relevant error as alleged. Rather, Ms Meiners' recast submissions on appeal are misconceived.
The primary judge was considering whether the relationship between Ms Meiners and Ms Gunn gave rise to an ad hoc presumption of undue influence. Her Honour correctly stated and applied the relevant test. The test as formulated and applied by the primary judge was that stated by Buss P in Mercanti v Mercanti.[221] Buss P in turn relied on Dixon J in Johnson v Buttress and the Court of Appeal of England and Wales in Goldsworthy v Brickell.[222] The test that counsel for Ms Meiners now contends should have been applied - whether Ms Meiners' judgmental capacity was 'markedly sub-standard' - was not enunciated by the plurality in Thorne v Kennedy when addressing the requirement for an ad hoc presumption of undue influence. Rather, at that point in their Honours' reasons the plurality was explaining the general concept of undue influence. The plurality's reference to whether the judgmental capacity of a person is markedly sub-standard (or a person is relevantly deprived of free choice because factors cause the person substantially to subordinate his or her will) is concerned with actual undue influence rather than a presumption of undue influence (see [216.3] above). The plurality went on to describe - in different terms to the test of 'markedly sub-standard' - when an ad hoc presumption of undue influence would arise, doing so in terms that relied on Dixon J's reasons in Johnson v Buttress (see [216.8] above).[223]
[221] Mercanti v Mercanti [285].
[222] Goldsworthy v Brickell [1987] Ch 378, 400 - 401.
[223] The plurality included a footnote citing the relevant passage from Dixon J's reasons in Johnson v Buttress as being the authority for the proposition summarised at [216.6] above: Thorne v Kennedy fn 68.
In Thorne v Kennedy the plurality used two additional adjectives when adopting Dixon J's test.
In Johnson v Buttress Dixon J referred to some of the recognised relationships in which a presumption of undue influence arises (ie solicitor and client, physician and patient, parent and child, guardian and ward). His Honour went on:
The facts which must be proved in order to satisfy the court that the donor was freed from influence are, perhaps, not always the same in these different relationships, for the influence which grows out of them varies in kind and degree. But while in these and perhaps one or two other relationships their very nature imports influence, the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position.[224] (emphasis added)
[224] Johnson v Buttress (134 - 135).
Counsel for Ms Meiners fastened on the words 'position naturally involving an … influence' and 'position of influence'. Counsel pointed to the primary judge's finding that Ms Meiners was vulnerable and susceptible to the influence of Ms Gunn[225] and said that Ms Gunn was thus in a position of influence.[226]
[225] Primary reasons [416]. See also [348], [355], [359], [393].
[226] Respondent's submissions on cross-appeal pars 25 - 26 WAB 63.
In Thorne v Kennedy (relying, as we have noted, on the passage from Dixon J's reasons in Johnson v Buttress reproduced at [228] above), Kiefel CJ, Bell, Gagler, Keane and Edelman JJ stated:
Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust.[227] (emphasis added)
[227] Thorne v Kennedy [34].
Accordingly, as explained by the plurality in Thorne v Kennedy, Dixon J was not suggesting that a presumption of undue influence arose simply because one party was in a position to influence another's will - for, as should be obvious, often one party will be able to influence another party without affecting the quality of the latter party's consent or assent. For example, as between friends or colleagues of like experience, capabilities and resources, there may be mutual respect such that one person's opinion may influence another's. But such a position of influence will not ordinarily suffice for an ad hoc presumption of undue influence. Rather, the history of the relationship must involve, as between stronger and weaker parties, a similar position of ascendancy or influence by the stronger party and a corresponding position of dependency or trust by the weaker party as exists in the recognised categories of relationships that give rise to the presumption of undue influence.
Cross-appeal ground 1 is based on a false premise. Whether a presumption of undue influence arose was not to be tested by whether, on the found facts, Ms Meiners' judgmental capacity was markedly sub-standard (something that Ms Meiners appears to recognise in her submissions in support of ground 3).[228] Nor was it sufficient that Ms Meiners was vulnerable and susceptible to the influence of Ms Gunn - there is a difference between a party being in a position of ascendancy or influence akin to that which exists in the recognised categories of relationship giving rise to the presumption of undue influence and one party merely being susceptible to influence. The primary judge approached the question of whether the relationship between Ms Meiners and Ms Gunn gave rise to a presumption of undue influence in a manner that was consistent with authority. Her Honour did not err in adopting and applying the test stated by Buss P in Mercanti v Mercanti. Insofar as her Honour was satisfied that Ms Meiners' will was independent and voluntary it could not be said that the history of the relationship involved Ms Gunn occupying a similar position of ascendancy or influence and Ms Meiners occupying a corresponding position of dependency or trust as with the recognised categories of relationships giving rise to a presumption of undue influence.
[228] Respondent's submissions on cross-appeal par 23 WAB 62.
Cross-appeal ground 1 fails.
Cross-appeal grounds 2 and 3
Cross-appeal ground 2 complains about the primary judge having made a factual finding that Ms Meiners' will was independent and voluntary at the times of the transfers of money from Ms Meiners to Ms Gunn. The ground alleged that in doing so the primary judge erred in law by drawing the wrong inference of fact from the primary facts - in doing so the submissions in support of ground 2 relied on various intermediate factual findings made by the primary judge.[229] Accordingly, at least in form, cross-appeal ground 2 appears to allege an error in fact finding. However, in explaining what was intended by the ground, counsel for Ms Meiners abjured the contention that the only inference open on the facts was that at the time of the transfers Ms Meiners' will was not independent and voluntary.[230] Rather, cross-appeal ground 2 was related to cross-appeal ground 3.[231] Considered together the argument was that the primary judge had applied the wrong test in deciding whether the presumption of undue influence arose and, when the correct test was correctly applied to the facts as found, the presumption applied and it had not been rebutted.[232]
[229] Respondent's submissions on cross-appeal pars 4 - 6, 25 - 26, 29 - 33, 37, 40 - 41 WAB 57, 58, 63 - 67.
[230] Appeal ts 48 - 50.
[231] Appeal ts 46.
[232] Appeal ts 47 - 50.
Counsel for Ms Meiners accepted that, as so advanced, cross-appeal ground 2 was simply an element of cross-appeal ground 3.[233] Insofar as ground 2 is subsumed within ground 3 these two cross-appeal grounds may be addressed together through the rubric of ground 3.
[233] Appeal ts 49.
Cross-appeal ground 3 was in three closely related sub-parts:
1.The primary judge was said to have failed to apply the correct legal rule as to when an ad hoc presumption of undue influence will apply (that being that one party occupies or assumes a position naturally involving an ascendancy or influence over another) (sub-ground 3.1).[234] In oral submissions counsel for Ms Meiners acknowledged the apparent overlap between sub-ground 3.1 and cross-appeal ground 1.[235]
2.The primary judge was said to have wrongly imposed an evidential burden on Ms Meiners to prove that her will was not independent and voluntary and was overborne before finding that the presumption of undue influence arose (sub-ground 3.2).[236]
3.The primary judge was said to have wrongly applied the presumption of undue influence by imposing on Ms Meiners a burden to prove that her will was not independent and voluntary, being overborne by ascendancy on Ms Gunn's part, rather than shifting the evidential burden to Ms Gunn to rebut the presumption of undue influence (sub-ground 3.3).[237]
[234] See also Respondent's submissions on cross-appeal par 23 WAB 62.
[235] Appeal ts 46.
[236] See also Respondent's submissions on cross-appeal par 39 WAB 66 - 67.
[237] Respondent's submissions on cross-appeal pars 34 - 36, 39 WAB 65 - 67.
So understood, the thrust of cross-appeal grounds 2 and 3 is that, based on the facts found by the primary judge and the proper inferences to be drawn from them, the primary judge should have decided that the presumption of undue influence applied and that Ms Gunn had not rebutted the presumption.[238]
[238] Respondent's submissions on cross-appeal par 40 WAB 67. See also Appeal ts 47 - 48.
Sub-ground 3.1 fails conformably with cross-appeal ground 1. It is not the case that the primary judge failed to apply the correct legal test as to when an ad hoc presumption of undue influence arises. For the reasons given in rejecting ground 1, in considering whether a presumption of undue influence arose, the primary judge correctly stated and applied a test of whether there existed a relationship between Ms Meiners and Ms Gunn of such a nature as to involve reliance, dependence or trust on Ms Meiners' part which created an ascendancy on Ms Gunn's part.
Sub-grounds 3.2 and 3.3 are concerned with whether a presumption of undue influence arose (sub-ground 3.2) and, if so, whether the primary judge wrongly applied the presumption of undue influence (sub-ground 3.3).
In terms of sub-ground 3.2, the primary judge did not defer applying the presumption of undue influence until after having imposed an evidential burden on Ms Meiners to prove that her will was not independent and voluntary (being overborne by reason of Ms Gunn's ascendancy). Rather, consistently with the way in which Ms Meiners advanced her case at trial, the primary judge considered whether the relationship between Ms Meiners and Ms Gunn gave rise to a presumption of undue influence. In doing so her Honour did not impose an evidential burden on Ms Meiners to prove that her will was not independent and voluntary being overborne by reason of Ms Gunn's ascendency. Rather, on a fair reading of the primary reasons, the primary judge considered whether on the evidence as a whole Ms Meiners had satisfied the test that her Honour identified from the authorities as to when an ad hoc presumption of undue influence would arise.[239] In applying that test it was relevant that Ms Meiners had not subjugated her will to that of Ms Gunn. The primary judge's finding that Ms Meiners' will was in fact independent of Ms Gunn and voluntary was something that told against Ms Meiners' contention that the nature of the relationship between Ms Meiners and Ms Gunn created an ascendancy on Ms Gunn's part rather than an initial evidential pre-condition for Ms Meiners to satisfy.
[239] Primary reasons [415] - [417].
Sub-ground 3.2 fails. There was no error on the part of the primary judge as alleged by sub-ground 3.2.
Sub-ground 3.3 falls away with the dismissal of sub-ground 3.2 - the presumption of undue influence not arising, there could be no error in 'wrongly applying the presumption' as asserted by sub-ground 3.3. There is, in this respect, a plain misconception in Ms Meiners' written submissions in support of sub-ground 3.3. Ms Meiners complained that the primary reasons were unclear as to whether the primary judge gave consideration to Ms Meiners' judgmental capacities when considering whether the presumption of undue influence was to be applied or, having decided to apply the presumption, considered Ms Meiners' judgmental capacities in determining that the presumption was rebutted.[240] The primary judge never considered whether a presumption of undue influence was rebutted. Her Honour did not need to do so having found that, on the evidence, the relationship between Ms Meiners and Ms Gunn was not such as to give rise to an ad hoc presumption of undue influence. Insofar as sub-ground 3.3 alleges error on the part of the primary judge it is without merit as the primary judge never applied the presumption of undue influence. Insofar as sub-ground 3.3 is raised as a matter that the primary judge should have found it fails because no error has been shown in the primary judge's finding that the presumption of undue influence did not arise.
[240] Respondent's submissions on cross-appeal par 38 WAB 66.
Cross-appeal grounds 2 and 3 fail.
Conclusion and orders
Ms Gunn has established her two grounds of appeal. Ms Meiners' notice of contention fails. Ms Meiners' cross-appeal (which is really a further notice of contention) also fails. It follows that the appeal must be allowed. As a first step the judgment entered against Ms Gunn in favour of Ms Meiners must be set aside.
It will be recalled that the parties differed on the orders that the court should make if the appeal was allowed on ground 1 of the appeal (see [64]). Ms Gunn sought dismissal of the action; Ms Meiners sought a retrial. Implicit in Ms Meiners' contention that there should be a retrial was that the retrial would be confined to Ms Meiners' unconscionable dealings claim. Any retrial could not include the allegations of undue influence. Ms Meiners failed on the undue influence claim before the primary judge. On appeal Ms Meiners' complaints as to the primary judge's reasoning have not succeeded. The undue influence claim has been finally determined adversely to Ms Meiners. So too the loan claim has been finally determined and ought not be revisited.
There were limited submissions on the question of whether there should be a dismissal or a retrial. Senior counsel for Ms Gunn submitted that as the unconscionable conduct claim was not pleaded it should not have been allowed. Thus, on appeal, this court should simply enter judgment for Ms Gunn.[241] In answering that submission, and seeking orders for a retrial if ground 1 was upheld, counsel for Ms Meiners said that entry of judgment dismissing Ms Meiners' claim would be contrary to the interests of justice given the evidence and the nature of the matter.[242]
[241] Appeal ts 21.
[242] Appeal ts 36.
An order for a new trial is, in all cases, a deplorable result; and one in which an appellate court should properly turn its attention to how, within the powers conferred on it, the result might properly be palliated.[243]
[243] Brown v Churchill [2006] WASCA 17; (2006) 31 WAR 246 [39].
There is some force in Ms Gunn's contention that the proper order, given Ms Gunn's success on ground 1, is dismissal of the action rather than a new trial. The trial before the primary judge miscarried because Ms Meiners pursued - and the primary judge upheld - an unconscionable dealings case despite no such case being pleaded. While, self-evidently, the omission to seek leave to amend the SOC to include the kind of case that was being advanced at trial rests primarily on the shoulders of Ms Meiners' legal representatives, Ms Meiners is, generally speaking, bound by her conduct of the case below. The public and private interest in the finality of litigation, case management principles and the goal and objects in O 1 rr 4A and 4B of the Rules of the Supreme Court 1971 (WA) militate against remitting the matter for a new trial and thereby providing Ms Meiners with another opportunity to do what should have been done before the primary judge. It is well established that what justice requires is sufficient opportunity not unlimited opportunity.[244]
[244] See by analogy Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [94], [98], [102], [112].
There are, however, a number of factors supporting Ms Meiners' contention that the interests of justice require a retrial:
1.A successful complaint of denial of procedural fairness will ordinarily lead to a new trial (excepting those instances where a properly conducted hearing could not possibly have produced a different result).
2.It is not the law that a trial judge must, in all cases, confine his or her decision to the parties' respective pleaded cases. The parties may disregard the pleadings and fight the case on issues chosen at trial. In the circumstances of this case Ms Meiners' legal representatives evidently considered or assumed that this is what had occurred. Ms Meiners relied on her legal representatives - she does not bear any personal responsibility for the breach of procedural fairness. In those circumstances it would be unjust to shut Ms Meiners out from ever litigating the unconscionable dealings case because procedural fairness was not accorded to Ms Gunn. That is particularly so where, by a new trial on the unconscionable dealings claim, Ms Gunn may be accorded procedural fairness and the claim may be determined according to law.
3.In the present case the lack of procedural fairness as found is in large part bound up in the unqualified statements of the primary judge and the real likelihood that those statements (and the absence of a properly pleaded statement of claim raising the unconscionable dealings case) disadvantaged Ms Gunn and may possibly have affected the outcome of the trial.
4.In concluding that, contrary to Ms Meiners' backstop submission in answer to ground 1, the denial of procedural fairness deprived Ms Gunn of the possibility of a successful outcome, it was significant that Ms Gunn succeeded on ground 2 (see [138] - [140] above). But, as has been seen, senior counsel for Ms Gunn accepted that if Ms Gunn was successful on ground 2 it would lead to a retrial. In those circumstances it would be incongruous if - so far as the upholding of ground 1 relies on ground 2 - ground 1 resulted in dismissal of Ms Meiners' action rather than a retrial. This would be to give determinative effect to the inability to find that a properly conducted trial could not possibly have produced a different result - a circumstance that arises because of the primary judge's error the subject of ground 2.
5.The evidence at trial demonstrated a prima facie case of unconscionable dealings of the kind advanced by Ms Meiners (using 'prima facie case' in the sense that there is sufficient proof taking Ms Meiners' evidence at its highest and without regard to any competing evidence such that it would be open to accept the claim).
When the competing factors are weighed we are satisfied that the interests of justice in this particular case are best served by ordering that there be a new trial, before a different judge, on the unconscionable dealings claim. The denial of procedural fairness accorded to Ms Gunn does not demand that she should never have to deal with the unconscionable dealings claim. The appropriate order on appeal is to set aside the judgment that ensued from the trial, so far as the trial miscarried, and to provide for a new trial so that the claim may be determined on its merits according to law.
This conclusion may be tested by assuming that at the end of the trial or in the process of preparing reasons for decision the primary judge had recognised the procedural fairness issue. Would it have been appropriate for the primary judge to simply ignore the unconscionable dealings claim on the basis that it was not pleaded in the SOC? No - the manner in which the trial had been conducted would have required the primary judge to draw the anomaly to the parties' attention. To proceed in any other way could only be justified if there was no real possibility that Ms Meiners could obtain leave to amend to plead the unconscionable dealings claim. The manner in which the trial was conducted meant that there was such a possibility of leave to amend, at least on terms. The primary judge would probably have considered it necessary to give Ms Gunn an opportunity to address the amended pleaded case by allowing Ms Gunn to reopen and potentially requiring Ms Meiners to recall witnesses for further cross-examination if so requested by Ms Gunn. But, in the context of the trial that occurred, it cannot be said, in our opinion, that there was no real possibility of Ms Meiners obtaining leave to amend.
While, for these reasons, there should be a new trial, that new trial should be confined to the unconscionable dealings case. There is ample power in s 59(3) of the Supreme Court Act 1935 (WA) to restrict a new trial to only part of a matter in controversy without disturbing any finding or decision as to any other part of the controversy. The primary judge's rejection of the undue influence claim and the claim based on a loan agreement should stand. We have considered whether there are any other measures that might be adopted to alleviate the burden on the parties and the court inherent in a new trial. For example, we have considered whether the trial should be conducted based on the evidence before the primary judge together with any further evidence that is adduced on the new trial. We are concerned, however, that something imposed by this court may ultimately prove more inefficient and less effective than what might proposed by the parties and adopted by a trial judge in the General Division on remission for the new trial.
Accordingly, subject to hearing from the parties as to the precise terms of the formal orders of the court, orders should be made to the effect that:
1.The appeal is allowed.
2.The judgment of the Supreme Court of Western Australia dated and entered 31 January 2020 in action CIV/1228/2018 is set aside. In substitution thereof the following order is made, namely:
'The action is dismissed so far as the plaintiff claims against the defendant in respect of the $372,717.43 transferred by the plaintiff to the defendant on or about 15 July 2015 and 9 December 2015 based on:
(a)the money being paid to the defendant as a consequence of the defendant's undue influence over the plaintiff; and
(b)the money being paid to the defendant pursuant to a loan agreement in respect of which the defendant has failed to make repayment despite demand.'
3.Action CIV/1228/2018 is remitted to the General Division of the Supreme Court of Western Australia (to a judge other than Strk J) for a new trial on the following matters that remain in controversy between the parties (without disturbing the decision as to other parts of the controversy as finalised by par 2 above), namely, whether it was unconscionable for the appellant to accept and retain the benefits conferred on the appellant by the use of the $372,717.43 transferred by the respondent to the appellant on or about 15 July 2015 and 9 December 2015 in that:
(a)the respondent was placed at a special disadvantage or disability in her dealings with the appellant of which the appellant took unfair and unconscientious advantage; or
(b)the money so transferred was contributed by the respondent for the purpose of a joint endeavour between the respondent and the appellant which has failed in circumstances where the money has been applied solely for the benefit of the appellant when it was not intended nor specifically provided that the appellant should have the sole benefit of the respondent's contributions.
The parties should be heard on the costs of the trial before the primary judge and the costs of the appeal.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AT
Associate to the Honourable Justice Vaughan
29 JULY 2022
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