Haskew v Equity Trustees Executors and Agency Company Limited

[1919] HCA 53

27 CLR 231

THE EQUITY TRUSTEES, EXECUTORS AND

AGENCY COMPANY LIMITED

ON APPEAL FROM THE SUPREME COURT OF Gift-Rescission-Undue influence-Independent advice.

Where it is sought to set aside a gift on the ground that it has been obtained by undue influence exerted by the donee, under whose control and dependent upon whom the donor was, there is no rule of law which absolutely requires that in order to support the gift the donor must have had independent advice.

So held by Isaacs and Rich JJ. Kali Bakhsh Singh v. Ram Gopal Singh, L.R. 41 Ind. App., 23; 30 T.L.R., 138; I.L.R., 36 All., 80, followed.

Spong v. Spong, 18 C.L.R., 544, explained. In an action seeking to set aside certain transactions in the nature of gifts on the ground of undue influence exerted upon the donor by the donee,

Held, upon the evidence, that undue influence had been established, and that the transactions were properly set aside.

Decision of the Supreme Court of Victoria (Cussen J.): Equity Trustees, Executors and Agency Co. Ltd. v. Haskew, (1918) V.L.R., 571; 40 A.L.T., 80, affirmed.

APPEAL from the Supreme Court of Victoria.

An action was brought by William Dutton against his daughter, Mary Elizabeth Haskew, in which the plaintiff alleged that the

27 CLR 232

defendant and her son, James Haskew, by undue influence, pro-

cured the plaintiff to execute certain documents and to transfer to the defendant a large amount of property and assets, and claimed EQUITY

a declaration that such documents were void, delivery up and TRUSTEES,

cancellation of such of the documents as were in the possession of

AGENCY the defendant, an order that the defendant do all necessary acts

and things to revest in the plaintiff the property or assets transferred or placed in the defendant's control, accounts of the proceeds of any of the said property or assets sold or disposed of by the defen- dant, all necessary accounts and inquiries, payment of the amount found due to the plaintiff on the taking of such accounts, and an injunction to restrain the defendant from dealing in any way with the said property or assets. The plaintiff also claimed as moneys had and received by the defendant to the use of the plaintiff certain specified sums of money. Shortly after the bringing of the action the plaintiff died, and the action was thereafter continued by his executor, the Equity Trustees, Executors and Agency Co. Ltd.

The action was heard by Cussen J., who found that the execution of the documents in question by Dutton was procured by undue influence exerted over him by the defendant, and he gave judgment for the plaintiff substantially as asked: Equity Trustees, Executors and Agency Co. Ltd. v. Haskew 1. In stating his reasons for judgment the learned Judge stated it to be a principle of law that " where a person weak through age or other causes is entirely under the control of and dependent upon another or others, no considerable gift of property in favour directly or indirectly of that other or of those others will be permitted to stand unless he is or they are prepared to show both entire freedom of will and also the intervention of an indifferent competent person," and he cited Spong v. Spong 2 as an authority supporting that proposition. He also held that the circumstances were such as brought the case within that prin- ciple, and that the defendant had failed to establish what was required by it. He further found that, even if the onus rested on the plaintiff of establishing that the transactions in question had been brought about by the undue influence of the defendant, it had done SO.

1(1918) V.L.R., 571; 40 A.L.T., 80. 218 C.L.R., 544. 27 CLR 233

From that decision the defendant now appealed to the High Court. Starke and Dixon, for the appellant. The relationship of father and child does not by itself throw upon a child the onus of estab- lishing that a gift to the child by the father was not procured by undue influence (Beanland v. Bradley 1 ). Cussen J. did not apply his mind to the question whether in fact a confidential relationship existed, but from the circumstances he presumed that it did exist. There is no rule of law that in order to support such a gift as this there must have been the intervention of an independent adviser. Spong v. Spong 2 is not an authority in support of such a rule.

[ISAACS J. referred to Linderstam v. Barnett 3. [RICH J. referred to Smith v. Kay 4; Parfitt v. Lawless 5.] Assuming that the onus of proving undue influence was upon the plaintiff, it has not been established. There is no proof of coercion of the will of Dutton to do that which he did not intend to do (Wingrove v. Wingrove (6); Baudains v. Richardson 7 ).

Bryant (with him Davis), for the respondent. There was ample evidence to support the finding of Cussen J. that there was as a fact undue influence, and that the relation between Dutton and the appellant was one of confidence.

BARTON J. In this appeal the result turns upon the question of evidence of undue influence, for we hold that the relation between the old man and his daughter, the appellant, was not of a kind from which undue influence would be presumed. But we think, apart from any such presumption, that the learned Judge who presided at the trial had good ground for his finding that the affirmative evidence of undue influence was such as to impel him to the decision which he gave, and we ourselves quite agree with that decision upon the facts before His Honor. It is not necessary now, under the circumstances which have arisen, to give a reserved judgment upon those facts.

12 Sm. &G., 339. 218 C.L.R., 544. 319 C.L.R., 528. 47 H.L.C., 750, at p. 779. 5L.R. 2 P. &M., 462, at p. 469. 7(1906) A.C., 169, at p. 184. 27 CLR 234

The result will be that the appeal will be dismissed without costs.

ISAACS J. I agree with what my learned brother has just said, that the appeal should be dismissed without costs. The learned TRUSTEES,

Judge from whom this appeal comes decided in favour of the respon- dent on two grounds. The first ground rested on the evidence of a fiduciary relation which imposed on the present appellant the onus of displacing the presumption of undue influence. His Honor held that that presumption could not be displaced unless she showed that the donor executed the documents which were in controversy of his own free will and with independent advice. His Honor thought that that was sufficient to dispose of the case. Then his Honor also held, and this is the second ground, that, if it were necessary to regard the onus as being thrown upon the present respondent, that onus had been discharged and that the respondent had affirma- tively shown that undue influence had been exerted. As I have said I agree with what my brother Barton has said, namely, that the facts affirmatively show undue influence.

In ordinary circumstances I would not think it necessary to say any more, but, having regard to the very great importance of the subject and to the view which has been taken in the judgment under appeal of a case decided by this Court (Spong v. Spong 1 ), which is supposed to decide that independent advice was necessary, I propose to say something about that case. It was decided by the learned Chief Justice, my brothers Gavan Duffy, Powers, Rich and myself. The head-note includes a statement that in the absence of independent advice the transaction should be set aside. But neither the decision nor the head-note must be understood as asserting a general rule of law that independent advice is requisite. There is a passage in the judgment of Griffith C.J., cited from Griffiths V. Robins 2, which would justify the opinion that in such a case the rule of law was that independent advice was necessary, but when the judgment in the case of Griffiths v. Robins is carefully examined and reference is made to the observations of the learned Judge who decided it in the later case of Pratt v. Barker 3, it

118 C.L.R., 544. 23 Madd., 191. 31 Sim. 1, at p. 4. 27 CLR 235

will be found that there is no such rule of law laid down in Griffiths V. Robins. In the case of Linderstam v. Barnett 1 I had occasion to consider the question of independent advice, and I there referred to the decision of the Privy Council in Kali Bakhsh Singh V. Ram Gopal Singh 2, where it was laid down that there is no rule of law absolutely requiring independent advice. A fuller AND report of that case is to be found in the Indian Law Reports in 1914 3, and I will do no more than refer to pp. 89, 91 and 92 of that report. Besides stating the law on that subject, Lord Shaw for the Judicial Committee referred to a previous judgment of the Privy Council in Mahomed Buksh Khan v. Hosseini Bibi 4. I refer to pp. 698, 699 and 700 of the Calcutta report without reading them. If those references are carefully read it will be found that the issue is, Was it really the act of the party comprehending what he did and the result of his or her own free will ? and that the question of indepen- dent advice is a subsidiary question the answer to which frequently comes in to help to determine the ultimate issue in the case. I mention that, in the first place, SO that no misconception may exist as to our decision in Spong v. Spong 5, and, secondly, for the benefit of those who hereafter may have to consider the question of undue influence.

RICH J. I agree with what my brother Barton has said with regard to this case. In Spong v. Spong (5) I did not subscribe to any state- ment that independent advice was necessary. I there cited Smith V. Kay 6, referred to in Kali Bakhsh Singh v. Ram Gopal Singh 7, just mentioned by my brother Isaacs.

In cases such as this the principle on which relief is given by Courts of Equity applies to every case where influence is acquired and abused, where confidence is reposed and betrayed. In certain well-known relationships influence is presumed; in all other cases where those relationships do not subsist, the confidence and the influence must be proved extrinsically; but when they are proved

119 C.L.R., 528. 230 T.L.R., 138. 3I.L.R. 36 All., 80. 4I.L.R. 15 Cale., 684 L.R. 15 518 C.L.R., 544. 67 H.L.C., at p. 779. 7I.L.R., 36 All., at p. 91. 27 CLR 236" text-full="27 CLR 236" text-short="27 CLR 236">27 CLR 236

A. extrinsically, the rules of reason and common sense, and the technical

rules of a Court of Equity, are just as applicable in the one case as in the other. EQUITY TRUSTEES,

Appeal dismissed. Order that all moneys and

securities held by the appellant or her solicitor be delivered to the respondent. Solicitors for the appellant, W. B. &O. McCutcheon. Solicitors for the respondent, Harwood &Pincott.

[HIGH COURT OF AUSTRALIA.]

THE CROWN

RESPONDENT,

THE WESTRALIAN POWELL WOOD PRO-

CESS LIMITED Patent-Application of Commonwealth Act to State patents-Licence to use patented

invention-Right acquired before commencement of Commonwealth Act-Licence granted after commencement" In the Commonwealth"-Right of licensee to MELBOURNE,

determine contract-Time for giving notice of intention to determine-Patents Oct. 16, 17,

Act 1903-1909 (No. 21 of 1903-No. 17 of 1909), secs. 4, 6, 87B (2). 24, 28, 29.

Practice-Costs-Payment into Court with denial of liability-Costs of issues on

which parties successful.

By sec. 4 of the Patents Act 1903