Hearne & Anor v Street & Ors

The High Court of Australia considered an appeal concerning a dispute over the ownership of a property at 145 Macleay Street, Potts Point, Sydney. The appellants, Mr. and Mrs. Hearne, claimed ownership of the property, while the respondents, Mr. and Mrs. Street, asserted their entitlement to it. The core of the dispute revolved around the validity of a transfer of the property from the Streets to the Hearnes.

The central legal issue before the High Court was whether the transfer of the property was voidable due to undue influence or unconscionable conduct. Specifically, the court had to determine if Mrs. Street, who was elderly and in a vulnerable position, had been unduly influenced by Mr. Hearne when she agreed to transfer the property to the Hearnes. The court also considered whether the transaction was unconscionable, having regard to the circumstances in which it was entered into.

The High Court found that the evidence established that Mr. Hearne had exerted undue influence over Mrs. Street. The court applied the principles relating to undue influence, noting that where a relationship of influence exists and a transaction is shown to be disadvantageous to the party influenced, the burden of proof shifts to the party who benefited from the transaction to demonstrate that it was entered into freely and with full knowledge. The court concluded that the Hearnes had failed to discharge this burden. Consequently, the transfer of the property was voidable at the instance of the Streets.

The High Court ordered that the appeal be dismissed and that the judgment of the New South Wales Court of Appeal be affirmed. This meant that the transfer of the property from the Streets to the Hearnes was set aside, and the property was to be returned to the Streets.