Liptak v Commonwealth Bank of Australia No. Scgrg-96-856 Judgment No. S6887

[1998] SASC 6887

LIPTAK  v  COMMONWEALTH BANK OF AUSTRALIA

[1998] SASC 6887

Full Court:  Doyle CJ, Prior and Lander JJ

DOYLE CJ

1 The Commonwealth Bank of Australia ("CBA") has brought proceedings against Mr and Mrs Liptak, claiming from them a judgment for moneys owed by them to CBA, and the possession of land the subject of a registered second mortgage, executed by Mr and Mrs Liptak, that secures the money owed to CBA by Mr and Mrs Liptak.
2 I gather that Mr Liptak did not deny liability.
3 Mrs Liptak defended the claim.  She says that the moneys in question were advanced by CBA to a company operated by Mr Liptak and a business partner, Mr Brayden.  She alleges that she executed the mortgage as a result of actual or presumed undue influence exercised upon her by Mr Liptak.  She claims that the mortgage should be set aside.  Although not pleaded, an alternative defence was advanced by Mrs Liptak.  It was that she had misunderstood the nature of the transaction into which she entered when she executed the mortgage.  That is claimed to be a result of Mr Liptak’s dealings with her.  It is claimed that in the circumstances she had an equity to have the mortgage set aside as against her.
4 The action was heard by a Master.  He rejected the case put forward by Mrs Liptak.  He entered judgment against her for $79,334.67 inclusive of interest.  An order for possession was not made.
5 Mrs Liptak now appeals.  It is submitted on her behalf that the Master erred and should have granted the relief that she sought.
Background facts

6 What follows is mainly taken from the Master’s judgment.
7 Mr and Mrs Liptak married in 1967.  The events in question took place in 1991.  For some time prior to that Mr Liptak had been working mainly in the field of building project management.
8 Mrs Liptak lived in Adelaide in a jointly owned house at Glenelg.  I will refer to this as "the family home".  Mrs Liptak was a partner in a firm that provided rehabilitation services to injured workers.  She had borrowed about $20,000 to acquire her interest in the firm.  A mortgage had been granted to secure that loan.  She had begun to study psychology in 1990.
9 Mr Liptak’s work was mainly in Victoria.  He was living and working there.  He returned to Adelaide about every two weeks.  He continued to provide financial support to Mrs Liptak and to their four children, then aged between seventeen and twenty-two years.  The marital relationship between Mr and Mrs Liptak had deteriorated somewhat, but to a casual observer it would have appeared a normal relationship.
10 In 1990 Mr Liptak’s business was performing quite well.  In that year he and Mr Brayden opened an office in Melbourne.  They also acquired control of Keith Thomas and Associates Proprietary Limited ("the company").  The company quarried, processed and supplied bluestone for building projects.
11 In April 1991 the company applied to CBA at a Branch in Melbourne for an advance of $100,000 to be used as "additional short-term working capital."  Apparently the company had plenty of work, but needed more funds to meet running costs, wages and to replace a saw that was essential to the production of bluestone.
12 CBA approved the application.  The Master found that Mr Liptak was told that CBA would require a registered second mortgage over the family home.
13 The mortgage documents were sent to a branch of CBA at Hutt Street in Adelaide.  Mrs Liptak worked close by.  The Master found that Mr and Mrs Liptak went to the branch on Friday 10 May.  Mr Liptak had returned to Adelaide for the weekend.  In so finding, the Master rejected evidence by Mrs Liptak that she knew nothing about the mortgage until Saturday 11 May.
14 The Master found that Mr and Mrs Liptak were each handed a letter which stated that the maximum liability under the mortgage was an amount of $100,000 plus interest and other items.  The letter also said:
"Prior to signing the document you should satisfy your self that you understand the full nature and effect of your liabilities to the Bank and obtain appropriate advice, legal or otherwise, if you are at all uncertain of your position."
The letter referred to the document to be signed as a mortgage.

15 The mortgage secured payment of all moneys owed by the company to CBA.
16 The Master found that Mr and Mrs Liptak took the mortgage documents with them.  They told the relevant employee of CBA that they would sign them in front of a legal practitioner, and that Mr Liptak would return the mortgage to the Melbourne Branch of CBA after the weekend.
17 Mrs Liptak executed the mortgage on Sunday 12 May.  Her signature was witnessed by her sister, Mrs Delmercato.  Mrs Delmercato lived in Melbourne.  She had come to Adelaide that weekend with Mr Liptak.  Mr Liptak returned to Melbourne late in the day on Sunday 12 May.  The mortgage indicates that he executed it in Melbourne on 13 May.  Apparently he then delivered it to CBA.
18 CBA was not satisfied that Mrs Liptak had duly executed the mortgage.  The mortgage was sent back to the Hutt Street Branch.  On 5 June Mrs Liptak re-executed the mortgage before a proclaimed Bank Manager.  The Master found that on that occasion no explanation or information was sought by or offered to Mrs Liptak.
19 In July 1991 CBA wrote to Mrs Liptak informing her that her liability under the mortgage was limited to $50,000.  It appears to have done so as a result of a discussion between Mr Liptak, Mr Brayden, and the Manager of the CBA Branch in Melbourne.  In that discussion Mr Liptak and Mr Brayden told CBA that they believed that each of them had provided security to the extent of $50,000.  Apparently CBA was content to accept that position.
20 Some time later the company failed.  The Master made no findings about when Mrs Liptak first became aware that a claim would be made under the mortgage, and when she first raised her ultimate defence.  It is not clear to me when these things did occur.  There is a letter to Mrs Liptak of 14 November 1994 making demand under the mortgage.  These proceedings were not instituted until 15 April 1996.  An affidavit sworn by Mrs Liptak on 13 January 1997 raises her defence.
Evidence and findings relevant to Mrs Liptak’s case

21 I have read Mrs Liptak’s evidence relating to the execution of the mortgage.  As I have already said, she said that she had no recollection of going to the Branch of CBA on the Friday.  But the Master rejected that evidence.  When asked to say what Mr Liptak said to her when he asked her to sign the mortgage, she said:
"George was very adamant that it was extremely important and it was very urgent, and that he would be ruined if I did not sign it."
Her belief, based on what her husband said, was that the Liptaks were borrowing $50,000 as were the Braydens.  She was aware that there was an existing mortgage on the house for $50,000.  As to the use of the money, she said her husband told her:

"The money was to be used for the bluestone business.  He had some contracts to fill, but the saw had broken down and it was very expensive, had to be brought in from overseas or something, and it was imperative that the saw be purchased for him to finish the work he’d been contracted to do."
Mr Liptak told her that with the borrowed money he would be able to fulfil his contracts and everything would be fine.  She did not know much about her husband’s business, but thought it was doing quite well.  She had attended the opening of the company’s Melbourne office, and that had been "a pretty glamorous sort of do".  She said that when her husband asked her to sign, she said that she didn’t want to.  His reaction was:

"Well, he said that he would be ruined.  He was, at times, near tears and it was as if I had - I, with the stroke of a pen, was either going to commit him to ruin or save him."
She was unable to recall the details of what happened that weekend.  She acknowledged that her sister, Mrs Delmercato, was staying with her, but had no memory of that.  The discussions with Mr Liptak took place at different times over the weekend.  When asked why she eventually signed the mortgage she said:

"Well, I guess the final crunch was this idea that he would be ruined and his real distress about that.  I mean, I certainly didn’t want any of that to happen.  And I was concerned about George’s health anyway.  He had a fibulation.  He had been taken to hospital in Warrnambool earlier in the year.  I think that was the crunch for me; this idea about ruin.  But I also think that I generally - I generally supported him in that way.  He had managed the money since we were married.  As I said, I had handed over all but one of these monies I had inherited.  It was just the way we ran and I didn’t think I could - I felt compelled to sign."
22 She said that she did not really change her mind.  Before he returned to Melbourne, he put the document on the table and asked her if she was going to sign or not, and presumably she then did.  She does not suggest, in this evidence, anything in the nature of an ultimatum or a confrontation.  She had only a vague memory of re-executing the mortgage.  Sometime later, in 1993, CBA asked her to agree to an increase in the amount secured by the mortgage, but she refused.
23 That is a summation of her evidence-in-chief.
24 In cross-examination she agreed that she understood the nature of a mortgage, and that by executing the mortgage she was giving security over the home for $50,000.  She knew that the money to be advanced was for her husband’s business, although she was unclear about the company, and she knew it was for a saw.  As to the role of the company, she said that she "... hadn’t thought it that far through".  Her affidavit had referred to her discussing whether she should sign the mortgage while walking with friends along the beach.  In her evidence she said that probably that happened between the Sunday when she signed the mortgage and the time when she signed it for a second time.  She said that she would have discussed her feelings about signing the mortgage with her sister.  That was on the weekend on which she signed the mortgage.  When she signed for the second time, she felt that she "... didn’t have an option to refuse", apparently meaning that she thought a decision had already been made.  The second signing was more like a formality.
25 I will not summarise the evidence given by Mr Liptak.  He gave quite a bit of evidence about his dealings with the CBA in Melbourne.  He did say that he told Mrs Liptak that he needed the money so that the company could keep working and that it was needed to repair or to replace a saw.  He said that he was not hospitalised because of heart problems until July of 1991, after the mortgage was signed.  He said that he told his wife that he was having heart palpitations.  As to the weekend in question, he said that there were many discussions with his wife.  At first she refused to sign, but
"I wore her down by Sunday evening."
He said that dealing with his wife he was "very curt".  He said "... I was sullen if my wife would not listen to my requests."

26 The Master was not favourably impressed by Mr Liptak or Mrs Liptak.  He did not find that they lied.  But he was satisfied
"... that Mr and Mrs Liptak endeavoured to give an account of the background circumstances of this matter, which suited their case.  In particular, I do not feel that I was told the whole truth about many matters.  When looked at against the overall background, the matters which were not said really give a feeling of dissatisfaction and uncertainty as to the reliability of what was said.  The manner in which Mr and Mrs Liptak gave their evidence was not convincing."
He also said:

"Mrs Liptak’s inability to recall events and details of that weekend do not have a convincing ring about them."
He referred to the conflict between her affidavit and her evidence about discussing the signing of the documents while walking on the beach with friends.  He commented adversely on her evidence that Mr Liptak had been hospitalised prior to the signing of the mortgage, whereas in fact that had happened after the signing of the mortgage.  He dealt in some detail with conflicts between the evidence of Mr Liptak and employees of CBA, about their respective dealings.  He found against Mr Liptak on these matters.  He said:

"Generally, I am not prepared to accept Mr Liptak’s evidence, where it is not supported by the documentary evidence of the plaintiff."
He accepted the evidence of the bank officers, in preference to that of Mr Liptak relating to dealings between them.  I have already referred to the fact that he rejected the evidence of Mrs Liptak that she first heard about the mortgage on the morning of Saturday 11 May.

27 Mrs Delmercato was not called to give evidence, despite the fact that she was staying with the Liptaks for the weekend, and was the witness to Mrs Liptak’s signature.  The Master accepted that shortly before the trial Mrs Delmercato had undergone a significant operation, and that at the time of the resumed hearing she was undergoing chemotherapy treatment.  However, he made the point that no application was made for her evidence to be taken in a manner that would have avoided the need for her to travel to Adelaide.  He seems to have used the failure to call evidence from her in an adverse fashion.  He said that he was "the more confident in making the findings which I do" on matters on which Mrs Delmercato might have been able to give assistance.  In my opinion that approach was open to him.  It appears to me that the Master was not satisfied that Mrs Delmercato’s evidence could not have been placed before him.
28 The Master found that Mrs Liptak "knew the nature and effect of the document which she signed."
29 The Master said that he was applying the law as stated by Dixon J in Yerkey v Jones (1939) 63 CLR 649. He then made what appears to be the crucial finding. He said:
"Mrs Liptak knew the nature of the documentation and what the effect of it would be.  In particular, the money being raised would enable the company operated by Mr Liptak to be more successful.  On the basis of his supporting of the family at that time, there would be a reasonable basis for Mrs Liptak to anticipate that there would be an increased benefit for her and her family.
I accept that there may have been some reluctance on Mrs Liptak’s part to further encumber the home.  I further accept that Mr Liptak may have pleaded with her and appealed to her sympathy to execute the document.  I do not, however, consider that this anywhere near approaches undue influence and there is certainly no evidence of misrepresentation."
30 Unfortunately, the Master made no specific findings about a number of the matters referred to by Mrs Liptak in giving her evidence.  Broadly, they are the suggestion of urgency, claims by Mr Liptak that he would be ruined if she did not sign, repeated requests that she sign, the fact that he was close to tears, and her own description of her attitude to the signing of the mortgage.
31 There was some substance in some of these matters.  There does appear to have been an element of urgency about the company getting the money.  There is no reason to doubt Mr Liptak’s evidence that he took the mortgage with him when he left late on the Sunday.  There is no reason to doubt that getting the loan was important for the future of the company.
Submissions on behalf of Mrs Liptak

32 Counsel for Mrs Liptak submitted that the Master must have accepted pretty well everything that Mrs Liptak said, unless he rejected it in terms.  It was submitted that the Master must have accepted that the mortgage had to be executed on the weekend to secure urgently needed finance; that the finance was needed to buy a saw; that Mrs Liptak refused to sign at first; that Mr Liptak became very emotional; and that Mrs Liptak signed this mortgage only because of her husband’s distress at the prospect of his financial ruin.  The submission was that, that being so, the Master should have found that Mrs Liptak signed the mortgage as a result of the exercise of undue influence.
33 I cannot agree with the submission about the factual basis upon which the Master proceeded.  The tenor of the judgment is one of considerable caution about the evidence given by Mr and Mrs Liptak.  On some issues on which her evidence was the subject of evidence by others, her evidence was rejected.  I agree that the lack of detailed findings by the Master gives rise to a difficulty.  However, it is another thing altogether to say that the Master must have accepted everything that he did not reject.
34 I have given this matter careful consideration.  Treating the judgment as a whole, I consider that the Master must have intended to reject the substance of what Mrs Liptak said.  I consider that the two central paragraphs that I have set out above are intended to reflect a rejection of the substance of what Mrs Liptak said about the events of the weekend.  I consider that the finding of "some reluctance" is intended as a rejection of her claim that she did not wish to sign, and signed only and against her own wishes, because Mr Liptak told her that he would be ruined, and because of his distress.  I consider that the Master’s finding can only mean that.  Likewise, the finding that Mr Liptak "may have pleaded with her and appealed to her sympathy" is, I consider, a rejection of claims that Mr Liptak went as far as he and Mrs Liptak claimed he went to get her to sign.  The denial of undue influence, while unsupported by distinct factual findings, points in the same direction.
35 I accept that, on the evidence, there was an element of urgency about the obtaining of the money.  I accept that the obtaining of the money was important for the company.  But I consider that the Master’s findings mean that what happened was that Mr Liptak persuaded a somewhat reluctant Mrs Liptak, over the space of a weekend, to sign a mortgage to secure advances to the company.  Again, it is to be noted that that was a company in which she had no interest, although as the Master found there was the prospect of increased financial benefits for Mrs Liptak if the company prospered.  I consider that the Master must have rejected Mrs Liptak’s evidence that she "felt compelled" to save her husband from ruin, that she did not have any option but to sign the mortgage.  I consider that he must have rejected her evidence about threats of impending ruin, and about Mr Liptak being really distressed.
36 In other words, while counsel for Mrs Liptak rightly pointed to the element of urgency, and the importance to the company of obtaining the moneys, I do not consider that he can properly add to the Master’s findings the findings sought on the efforts made by Mr Liptak to get Mrs Liptak to sign the mortgage and on Mrs Liptak’s attitude to signing the mortgage.
37 I add, although the Master made no reference to this, that I found no evidence that Mrs Liptak habitually relied upon Mr Liptak in matters pertaining to money and to finance, although she did say that he had "managed the money since we were married."  But, to put that in context, it is pertinent to bear in mind that at the time of the events in question Mrs Liptak was leading a fairly independent life.  She was a partner in her own business.  She was undertaking tertiary studies.  At the same time, it is necessary to bear in mind the trust and confidence that one would expect each spouse to have reposed in the other.  There is no indication in the evidence that the relationship had reached a stage at which that trust and confidence had evaporated.
38 Finally, it is important to bear in mind that in a case like this the impression that the witnesses make upon the trier of the facts is all-important.  The Master had to weigh up a number of facts about which there was no real doubt, to assess a description of events by two persons who had an obvious interest in those events, and had to make an assessment of the effect of those matters upon the mind of Mrs Liptak at the relevant time.  In this case, the Master’s assessment of Mrs Liptak was an important element in deciding whether the degree of persuasion exercised amounted to undue influence, as well as in deciding just what transpired on the weekend in question.  The Master was not satisfied that Mrs Liptak’s evidence was reliable.

39 The Master reached a clear conclusion.  Subject to the points that I have made above, I consider that his conclusion on the facts must stand.  By that I mean that I accept that one must also take into account the element of urgency, the need of the company for money, the obvious importance of that to Mr Liptak, and the confidence that Mrs Liptak continued to repose in Mr Liptak.  The issue is then, whether on that basis the Master’s decision that there was no undue influence can stand.
Legal principles

40 The substance of Mrs Liptak’s case was that on the weekend in question Mr Liptak exercised undue influence over her.  Her case was not conducted on the basis that this was one of a series of transactions in which undue influence had been exercised, and that that undue influence carried forward from earlier transactions.  It was not her case that she depended on Mr Liptak for all decision making in matters of money.
41 In Garcia v National Australia Bank Limited [1998] HCA 48 a majority of the High Court treated the principles discussed by Dixon J in Yerkey v Jones (1939) 63 CLR 649 as stating the law today. They referred specifically to his discussion of cases of actual undue influence by a husband over a wife: at [23]. They also referred to his discussion of cases in which there is no undue influence, but a failure to explain adequately and accurately the transaction which the husband seeks to have the wife enter for the benefit of the husband. Gaudron, McHugh, Gummow and Hayne JJ said at [23]:
"The former kind of case is one concerning what today is seen as an imbalance of power. In point of legal principle, however, it is actual undue influence in that the wife, lacking economic or other power, is overborne by her husband and goes surety for her husband's debts when she does not bring a free mind and will to that decision.  The latter case is not so much concerned with imbalances of power as with lack of proper information about the purport and effect of the transaction."  (footnote omitted)
Callinan J also accepted that the relevant principles were those stated by Dixon J: at [107].

42 In the present case the issue before the Master was whether Mrs Liptak was overborne by her husband, and did not bring "a free mind and will" to the decision to execute the mortgage.  The issue is what, at the factual level, amounts to the lack of a free mind and will when a complaint of undue influence is made?
43 In Johnson v Buttress (1936) 56 CLR 113 Dixon J, referring to what I take to be a case of actual undue influence, said (at 134):
"The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor’s will or freedom of judgment in reference to such a matter.  The source of power to practise such a domination may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party.  If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act."
44 I have already referred to Yerkey v Jones.  That was a case of a husband procuring his wife to become surety for his debt.  Although the judgment of Dixon J in that case has attracted most attention, it does not appear that the members of the High Court differed on issues of principle.  In relation to the question of undue influence, Latham CJ applied the test of whether Mrs Jones’ will was "overborne by her husband’s will": at 659.  That was a case in which there was pressure as well as persuasion, but the finding was that her will was not overborne.  The judgment of Dixon J in Yerkey v Jones traces the development of certain equitable principles relating to transactions between husband and wife, in particular transactions in which a wife becomes surety for the husband.  It was a case in which Mr Jones had committed himself to purchase a property, and then approached his wife for the necessary funds.  He had already bound himself to the contract.  Mrs Jones was presented with a fait accompli.  It is interesting to note, that after referring to the circumstances in which Mrs Jones entered into the transaction, Dixon J said (at 687):
"In placing his wife in this position, Estyn Jones no doubt did what he ought not to have done.  But he created a situation with which his wife had to deal as she thought best in the interests of all concerned.  She was not deluded, coerced or overborne.  She was placed in a dilemma, a dilemma unfair to a woman, but not in a situation rendering the course she chose to take one from which afterwards she was entitled to be relieved.  That which, according to the findings contained in the reasons given by Napier J., induced her to agree to the purchase and to take her part by giving a mortgage was her husband’s persuasion in which, to his optimism as to the success of the venture and its consequent "safety", he added the arguments, first, that he had agreed to purchase and was bound, secondly, that he would get into trouble if she refused to give the mortgage, thirdly, that the mortgage was a guarantee not falling due for three years and, fourthly, that if anything went wrong and she lost her house at Walkerville they would have the bungalow and poultry-farm at Payneham."
I do not make any attempt, an attempt which would be doomed to failure, to compare the facts of Yerkey v Jones with the present case.  I refer to this passage merely to make the point that the law relating to undue influence must also accommodate the practicalities of life.

45 In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Mason J (at 461) referred to the distinction between undue influence and unconscionable conduct. He referred to undue influence as a situation in which
"... the will of the innocent party is not independent and voluntary because it is overborne."
Deane J referred to the distinction between the two doctrines as well.  He said (at 474):

"Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party ... Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person ..."
46 In Bank of Credit and Commerce v Aboody [1990] 1 QB 923 the Court of Appeal considered what was involved in proof of undue influence. Their Lordships said (at 967) that this involved showing that the other party to the transaction had the capacity to influence the complainant, had exercised that influence, and that its exercise was "undue." In considering whether the exercise of influence was undue, they said that the essence of the principle was (at 969)
"... to provide a remedy in cases in which, by the exercise of influence, proved by evidence or presumed, unfair advantage has been taken by another."
It is apparent that their Lordships here were referring not so much to the merit of the transaction in question, as the circumstances under which assent to the transaction was obtained.  Negatively, they said (at 968) that it was a question of whether the complainant was deprived of the free use of an independent and informed judgment.

47 It has to be emphasised that the issue is not whether influence was exercised, but whether the exercise of influence was undue. I refer in passing also to the judgment of Starke J in Harris v Jenkins (1922) 31 CLR 341 at 367-368 and to the judgment of Hodges J in Union Bank of Australia Ltd v Whitelaw [1906] VLR 711 at 720 where he said:
" ‘Influence’, as I understand the term in this connection, is the ascendancy acquired by one person over another.  ‘Undue influence’ is the improper use by the ascendant person of such ascendancy for the benefit of himself or someone else, so that the acts of the person influenced are not, in the fullest sense of the word, his free voluntary acts."
I refer to these judgments for the guidance that they provide as to the meaning of undue influence, and for the approach to be taken to the facts of the case. But in the end one has to bear in mind what Lord Scarman said in National Westminster Bank Plc v Morgan [1985] AC 686 at 709:

"There is no precisely defined law setting limits to the equitable jurisdiction of a court to relieve against undue influence.  This is the world of doctrine, not of neat and tidy rules."
48 It is clear that the reference in the cases cited to free will, and to the mind being overborne, do not mean that Mrs Liptak had to establish something like duress.  The law of undue influence is not concerned with the exercise of compulsion but with influence and persuasion.  However, like duress, the law of undue influence does look to the "quality of the consent or assent of the weaker party".  It looks to the circumstances in which that assent was produced.  It is concerned not with the mere exercise of influence, but with the exercise of influence that can be regarded as undue.
49 My understanding of the principle is that at its heart is the issue of whether the relevant party was able to give proper consideration to his or her own interests, and whether the degree or nature of the influence exercised prevented the relevant party from giving proper consideration to the transaction in question.  In considering these matters one must be careful not to confuse the effect of a factor, such as a wish to save a spouse’s business, with the question of whether, in the presence of that factor, the spouse exercised undue influence.
50 The law of undue influence does not produce the result that a spouse who, without getting independent advice, mortgages property to save the business of the other spouse from ruin, can as a matter of course have the mortgage set aside, even if the mortgage was given at the request of the other spouse.  The issue is whether the influence exerted under all the circumstances was undue.  The law does not seek to isolate a spouse from influences that would naturally arise from the marital relationship, and from the trust, confidence and affection that exists in that setting.  It would be impracticable to do so.
Application of principles

51 In the present case the Master has made a definite finding about the absence of undue influence.  But, as I have said, he has done so without express reference to a number of the circumstances under which the mortgage was granted.
52 I have set out above my assessment of the basis upon which the Master must have reached his decision.  Applying the above principles to that basis, my conclusion is that a case of undue influence was not made out.
53 I return to the facts of the case.  There was an element of urgency. But Mrs Liptak was not pressed to sign the mortgage when she visited the Bank on the Friday.  She considered the matter for two days thereafter, admittedly with Mr Liptak close at hand.  There is no evidence of an ultimatum from Mr Liptak, other than a final request that she execute the mortgage before he returned to Melbourne.  Mrs Liptak knew what she was doing.  She believed that the company was prospering, but she did not suggest that she believed that the transaction was without risk.  Mrs Liptak was engaged in business in her own right, and undertaking tertiary education.  There is a finding that there was no misrepresentation to her about the purposes of the loan.  On the Master’s findings Mrs Liptak was reluctant, but no more than that.  The persuasion that Mr Liptak exercised was not undue.  In relation to that, the Master’s assessment of the witnesses was very important.
54 On the basis of the Master’s findings, I consider that it cannot be said that the Master erred in concluding that undue influence was not made out.  Of course, there was scope for what is these days called "emotional blackmail."  Getting the mortgage was important to Mr Liptak and to the company and Mrs Liptak was concerned about his financial welfare.  They were still husband and wife.  But I consider that the Master’s findings mean that he rejected claims by Mr and Mrs Liptak of conduct that might have amounted to emotional blackmail.
55 On the findings made by the Master, I consider that it cannot be said that he should have made a finding that undue influence was made out, and should have set the transaction aside.  I consider that he was simply not persuaded that the degree of influence exerted was undue, and that that conclusion was open to him.
56 But should the matter be remitted to the Master for further consideration, so that he can make specific findings about each of the matters adverted to by Mrs Liptak?  This was not really part of Mrs Liptak’s argument on appeal.  Her argument was that the decision of the Master should be reversed.  However, while the form of the Master’s finding leaves an element of uncertainty, I consider that it is reasonably clear that the Master was rejecting the basis upon which her case was put forward.
57 I therefore consider that the Master’s findings should stand.
Alternative case

58 The alternative submission was not developed at any great length.  It was based upon another part of the judgment of Dixon J in Yerkey v Jones.  His Honour there dealt with two different but related situations.  They were undue influence and what might be called misunderstanding.  As to the latter situation he said (at 685):
"In the second case, that where the wife agrees to become surety at the instance of her husband though she does not understand the effect of the document or the nature of the transaction, her failure to do so may be the result of the husband’s actually misleading her, but in any case it could hardly occur without some impropriety on his part even if that impropriety consisted only in his neglect to inform her of the exact nature of that to which she is willing blindly, ignorantly or mistakenly to assent.  But, where the substantial or only ground for impeaching the instrument is misunderstanding or want of understanding of its contents or effect, the amount of reliance placed by the creditor upon the husband for the purpose of informing his wife of what she was about must be of great importance."
The difficulty for Mrs Liptak is that, on the Master’s findings, she did understand the effect of the mortgage and the nature of the transaction. There was no misrepresentation by her husband. Her counsel pointed to two. The first was the statement that her liability was limited to $50,000. But that ceased to be an issue when CBA agreed that her liability was so limited. The Bank itself had not contributed to that belief. The letter that Mrs Liptak was given stated her liability at $100,000. There was no reason why CBA should have thought that she might believe otherwise. CBA did not leave it to Mr Liptak to explain to Mrs Liptak the extent of her liability. In any event, it seems to me that if relief were to be given on this ground the relief would be appropriately moulded to hold Mrs Liptak to what she was prepared to undertake independently of a misrepresentation: cf Vadasz v Pioneer Concrete (SA) Pty Limited (1995) 184 CLR 102. The other matter pointed to was Mrs Liptak’s belief that the purpose of the advance was to enable the company to replace the saw. But her evidence about that was not clear, and was not fully supported by the evidence of Mr Liptak. He said that he told her that the advance was required to meet operating costs and to repair or replace the saw. In any event, the Master did not find that there was a misrepresentation on this point.

59 The Master’s finding is that Mrs Liptak knew what she was doing and that there was no misrepresentation.  In my opinion this alternative basis must fail.
60 The case was not advanced as one of unconscionable conduct in the sense considered in Amadio.  There is no suggestion in this case that CBA was aware of any particular vulnerability on the part of Mrs Liptak in relation to Mr Liptak, nor was CBA aware of any misconduct on the part of Mr Liptak.
Conclusions

61 In my opinion the Master’s decision should stand.  The appeal should be dismissed.
PRIOR J

62 I agree with the Chief Justice’s analysis of the relevant principles and their application to the facts.  The Master’s findings must stand.  Those findings mean that the appellant was not the subject of undue influence.  Her evidence of feeling compelled was rejected.  Her will was not overborne  The influence upon her was not undue.  She was reluctant but that is not enough to avoid liability.
63 As for the alternative submission, the appellant knew what she was doing.  She understood the effect of the mortgage and the nature of the transaction.  There was no misrepresentation by her husband.
64 The appeal must therefore be dismissed.
LANDER J

65 I agree, for the reasons given by Doyle CJ, that this appeal should be dismissed.