Louth v Diprose

[1992] HCA 61

HIGH COURT OF AUSTRALIA

Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ

LOUTH v. DIPROSE

(1992) 175 CLR 621

2 December 1992

Equity

Equity—Unconscionable conduct—Gift—Donor at special disadvantage—Donee's exploitation of disadvantage—Jurisdiction to set aside.

Decisions

MASON C.J. The facts of this case are set out in the reasons for judgment of Toohey J.

2. The case for the appellant seeks to challenge the findings of fact made by the primary judge (King C.J.), confirmed by the Full Court (Jacobs A.C.J. and Legoe J., Matheson J. dissenting), on the basis of which the Chief Justice concluded that the appellant had been guilty of unconscionable conduct in procuring and retaining the gift of $59,206.55 made to her by the respondent in connection with the purchase in her name from her brother-in-law, Mr Volkhardt, of the house at Tranmere, which she had previously occupied at a low rent.

3. My initial impression was that there was force in the appellant's contention that some of the findings of fact made by the Chief Justice were not warranted, when considered in the light of the evidence. In particular, the findings that the appellant manufactured an atmosphere of crisis with respect to the house where none really existed so as to influence the respondent to provide the money for the purchase of the house and that her conduct in that respect "was dishonest and smacked of fraud" ((1) Diprose v. Louth (No.1) (1990) 54 SASR 438, at p 448) seemed to me to be open to question. These findings, viewed in the totality of the continuing relationship between the appellant and the respondent, were crucial to the Chief Justice's conclusion that the appellant was guilty of unconscionable conduct.

4. However, in the ultimate analysis, the two findings to which I have referred rest on antecedent primary findings of fact which, in turn, depend on the Chief Justice's acceptance, in this area of factual dispute, of the evidence of the respondent in preference to that of the appellant. The Chief Justice described the appellant and her evidence in these terms ((2) ibid., at p 444.):

"I formed the impression that the (appellant) was a calculating witness who was prepared to tailor her evidence in order to advance her case. In particular I found her evidence as to the circumstances leading to the house transaction quite unimpressive."

By way of contrast, the Chief Justice referred to the evidence of the respondent in these terms ((3) ibid., at p 443):

"I found much of his evidence as to the general relationship of the parties and the circumstances in which the subject of the house transaction arose convincing, but his demeanour was not such as to persuade me to accept evidence which I consider to be improbable or which is in conflict with other convincing evidence."

5. The Chief Justice rejected the respondent's evidence that he paid for the Tranmere house on the basis that it was to be held in trust for him by the appellant.…