Louth v Diprose

[1992] HCATrans 104

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A8 of 1991

B e t w e e n -

CAROL MARY LOUTH

Appellant

and

LOUIS DONALD DIPROSE

Respondent

MASON CJ
BRENNAN J
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

Louth(2) 62 9/4/92

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 9 APRIL 1992, AT 10.22 AM

(Continued from 8/4/92)

Copyright in the High Court of Australia

MASON CJ:	Yes, Mr Bennett.
MR BENNETT:	If Your Honours please. Your Honour the

Chief Justice yesterday at page 38 asked me if

there were any cases about concurrent findings
since Introvigne. In a document which I have taken

the liberty of having placed in front of each of

Your Honours, on the first page there are listed 12

cases in which this Court has referred to
concurrent findings since Introvigne. All but two of those are very casual references. The only two

in which there was any detailed discussion are the

discussion by the Chief Justice Sir Harry Gibbs in

Muschinski v Dodds, the third of the cases on the

list, and a short discussion by Your Honour

Justice Deane in Waltons v Maher. None of those

cases add a great deal to Introvigne, but they are

the cases in which the matter has been referred to.

McHUGH J:  What is meant by the statement after Foran v

Wight, "page reference not found"?

MR BENNETT:  Your Honour, we have since found it. It is

page 394. What it meant was that I conducted an

info-one search by telephone and therefore was not

able to locate page references. We had to find

them manually in each case, having got the list of

cases, but we have found that now.

The second matter arising out of yesterday's

submissions is that Your Honour Justice Dawson, at

page 43, asked me about the question of value and

why it was that the small gifts were excluded and

the large gift was included in the principle.

Your Honour, there are five cases we have listed

here which refer to some others, and I will take

you to the passages very, very briefly, which all

make clear that there is a difference between a

large gift and a small gift and that the principle

applies to large gifts and does not apply to small

gifts. The cases discuss the reasons for that. In

Allcard v Skinner, 36 Ch D 145, at page 185,

Your Honours see a paragraph beginning in the middle of the page. About five lines into that

paragraph, His Lordship says:

The mere existence of such influence is not

enough in such a case; see the observations

of Lord Justice Turner in Rhodes v Bate. But

if the gift is so large as not to be
reasonably accounted for on the ground of
friendship, relationship, charity, or other
ordinary motives on which ordinary men act,

the burden is upon the donee to support the

gift. So, in a case like this, a distinction

might well be made between gifts of capital

and gifts of income, and between gifts of

Louth(2) 63 9/4/92

moderate amount and gifts of large sums, which

a person unfettered by vows and oppressive

rules would not be likely to wish to make. In

this case the Plaintiff gave away practically

all she could, although, having a life

interest in other property, she did not reduce

herself to a state of poverty.

This Court, in Spong v Spong, 18 CLR 544 at

page 550, referred to the matter in the judgment of

Justice Isaacs. In the concurring judgment of

Justice Isaacs in that case, the first long

paragraph of His Honour's judgment, he says:

This is a voluntary gift of a large

amount of property. The law on the subject is

well summarized in various cases -

and he refers to one case, and then he says in the

quotation -

That law is -

just after Allcard v Skinner -

that where large voluntary gifts are made and

accepted inter vivos, the recipient may be

called upon to show that the donor had
capacity and knowledge of what he was doing."

That is the first step. The rule does not

apply to small matters, as was pointed out in Allcard v Skinner, because in such a case the gift might very reasonably be accounted for on

ordinary grounds.

In Johnson v Buttress, 56 CLR 113, at page 120

point 3, there is a single line in the judgment of

Chief Justice Latham - - -

BRENNAN J:  Mr Bennett, the Spong v Spong citation relates

only to knowledge and capacity to know what he is

doing.

MR BENNETT:  Your Honour, the passage which I have cited is

setting out, in my submission, His Honour's general

summary of the legal principles involved. It is an

undue influence case, rather than an unconscionable

dealing case, but His Honour is not limiting it, we

would submit, in that way. He is simply saying

that where you have certain conditions the onus is

shifted to the donee to show that there was

capacity and knowledge. The cases where it shifts,

in other words, the cases where one gets to the

first step, are cases where it is large and cannot

be explained on the basis of being a normal gift of

a small amount. His Honour is not saying that in

determining the second question of capacity and

Louth(2) 64 9/4/92

knowledge one then looks at that, he is rather

saying that is the preliminary determination one

has to make before one gets to that question.

BRENNAN J: In this case is there any question about

capacity and knowledge?

MR BENNETT:  No, Your Honour, none at all, but that is

because this unconscionable dealing, not undue

influence.

Johnson v Buttress has a single sentence in

the judgment of the Chief Justice - this was an

undue influence case, again, where it is simply

said, at page 120 point 3, the third line into the

paragraph:

The burden will be still heavier upon the

donee where the donor has given him all or

practically all of his property.

It is referred to in Zamet v Hyman - I will not take Your Honours to that, or perhaps I will just

do it very briefly because there is another passage

I do want to refer Your Honours to. It is

(1961) 1 WLR 1439, and the passage is at page 1446.

About three-quarters of the way down the page

against the word "case" in the left-hand margin, in

the judgment of Lord Evershed, His Lordship says:

I would put it somewhat thus: that in any

transaction of the kind of a deed or

arrangement or settlement (and I make that

qualification bearing in mind what

Mr Stranders put to us of the case of a young

man who may be persuaded to give an

extravagant engagement ring to his fiancee)

made between an engaged couple -

et cetera, and he goes on to talk about a fiduciary

that obviously in the course of argument the same	relationship. But the importance of the passage is	sort of question was raised about gifts to
waitresses, or gifts of engagement rings, or the
like, and His Lordship decides it, not by talking
about size but by saying:

any transaction of the kind of a deed or

arrangement or settlement -

which, no doubt, would include a transfer of land.

While Your Honours have that page, although

this is on a different subject, Your Honours might

be interested to note that there is a reference

higher up on that page to the relationship of the

individual parties and in relation to the gender

Louth(2) 65 9/4/92

neutral nature of the principle. In the middle of the page, against the word "rate" in the left-hand

margin, Your Honours see His Lordship says:

I do not, of course, forget that this is 1961

and what might have been said of the position,

independence, and the like of women in 1848

would have to be seriously qualified to-day.

It may well be in some cases that the court

would rightly draw the inference of a

fiduciary relationship not existing in the man towards the woman but in the woman towards the

man.

He goes on to deal with other matters. The

principle of course is quite gender neutral. It

depends on particular facts. When one looks at

older cases about influence, one has to bear that

in mind.

Finally, in Bank of Credit & Commerce v

Aboody, (1989) 1 QB 923, at 958 and following - I

will not take Your Honours to the passage, but

there is a lengthy passage in which there is

reference to the question of value and the comment

is made that the court does not take the view in

gifts of a small amount but it does in large
amounts. There are quite a large number of
unreported cases in single judge decisions in

England which are then cited over the next few

pages in support of that proposition.

So we would submit it is well established that

there is in this area of law a distinction drawn

between the gift of the large and the gift of the

small. The explanation probably lies in the matter

I put to Your Honours yesterday.

The third and final loose end from yesterday

is that Your Honour Justice Brennan, at page 48,

asked me about the definition of "unconscionable".	I cannot really take it any further than I took it
yesterday. There is a definition given in Halsbury
which is pieced together from a number of cases.
Really the definition does not take it significantly further than the judgment of the
Chief Justice in Amadio. But I will just read
Your Honours the paragraphs. It is volume 18 of
the fourth edition of Halsbury's Laws of England,
paragraph 344. The learned authors say:

As part of the jurisdiction to grant relief against constructive fraud -

that phrase we discussed yesterday -

Louth(2) 66 9/4/92

courts of equity have acted to protect persons
in cases in which it was apparent, from the

intrinsic nature and subject of the bargain

itself, that it was one which no man in his

senses and not under delusion would make on

the one hand, and no honest and fair man would

accept on the other; in fact, an inequitable

and unconscionable bargain.

The principle has now been extended to

all cases in which the parties contracting do
not meet on equal terms, and is not limited to

expectant heirs but applies to all persons

under pressure without adequate protection,

and the onus of supporting the transaction is

thrown on the person benefiting. In

determining whether the bargain is a hard one,

the whole transaction has to be considered and

not only the price.

So one cannot really take it any further,

Your Honour. It is a category of indeterminate

reference, as Justice McHugh put to me, but like

the definitions of the other indeterminate words,

the Court has to apply some subjective and,

hopefully, some objective criteria which are laid

down from case to case.

DEANE J:  Mr Bennett, while you are dealing with cases, are

you aware of any case in which it has been said

that the circumstances might be such that there is

a mutual fiduciary duty? I mean, if, for example,

here the respondent had obtained a transfer of the

appellant's property while she was disturbed,

threatening suicide and so on, pretty obviously one

would have thought there would be a strong case of

undue influence. I was just wondering if in any of

the cases there had been a consideration of the

relationship where a duty existed by each party to

the other.

MR BENNETT:  I am not, Your Honour, but it would be

inevitable that such cases could exist from the

nature of the principle itself. The principle does

not depend on a fiduciary relationship in the

strict sense. It depends rather on the particular

relationship arising out of the particular

transaction.

May I give this example: suppose one has two

friends who are a solicitor and a priest; and

suppose there is one transaction in which the

solicitor is persuaded to make a huge religious

donation of the Allcard v Skinner type. One might

say the relationship is one way. If then the

solicitor acts in relation to a trust transaction

in such a way as to take advantage of a

Louth(2) 67 9/4/92

relationship and persuade the priest to sign

documents which give the solicitor too much power

or money, one would say it was the other way. One

has to look at the nature of the transaction. That

is discussed in Allcard v Skinner itself, and I
think I read the passage yesterday, where one of
the judges says, "Well, if my solicitor is a
trustee for me of some matter, clearly there is no

risk of him overbearing me in any way and the

fiduciary relationship is almost accidental to

dealings between us." That is why, of course, one

has even an undue influence the two categories.

I got yesterday on the outline to page 3

paragraph (c). Those are passages in the judgment.

I think most of those Your Honours have been taken

to. I will not repeat them. They are the very

strong findings the trial judge made in relation to

the conduct which occurred, and one has, in my

respectful submission, two substantial elements of

dishonesty which are placed one on top of the

other. One is the dishonesty in relation to the

immediacy of the problem with the house, perhaps an

intermediate one as to the atmosphere of crisis and
the effect that had on the appellant, and the

second one, the consequential one, of the threat of

suicide. And one has very clear findings that

these are done by a person who is aware of the

respondent's position to the extent that she is

aware that there is this mortgage money corning in.

She is aware that is going to be there, and she

takes the classic, we would submit, unconscientious

advantage of that knowing of his infatuation for

her to obtain it. I will make good some of those

individual submissions later on when I come to the

evidence, but at this stage I simply remind

Your Honours that the Chief Justice made very clear

and very firm findings, most of which Your Honours

have already been taken to.

We stress that the findings were based on more

than emotional dependence. That was one element.
It was the combination of the obsessive love and
the weakness and the misleading about the various
matters and I have already reminded Your Honours of

the passage in Allcard v Skinner and the passage in

Bank of Credit v Commerce International. I should

mention, paragraph e - and this relates to the

question Your Honour Justice Deane asked me - that

the fact that he was a solicitor is quite neutral.

In a case such as this independent advice is a reference to common sense advice from a prudent

person, rather than legal advice. The legal

aspects of the transaction were purely mechanical.

As was put yesterday, what would have happened if

he had gone to another solicitor? He would have

been told exactly what he already knew.

Louth(2) 68 9/4/92

That is not the sort of independent advice

that is being talked about. Indeed, independent

advice is somewhat irrelevant to this sort of

transaction because, no doubt, even someone who

gave him common sense advice, might well have not

got any particular response to it.

And there is a discussion by

Mr Justice Kekewich in Allcard v Skinner which -

and Your Honour will recall the appeal was

dismissed in that case, but this part of the

judgment was not referred to - it discusses it and

discusses the reference to the mere fact that there

is a technical fiduciary relationship not being a

matter of great significance in these cases.

Paragraph f, I simply mention two cases which

I have handed up to Your Honours and which

Your Honours have copies of: I will not take
Your Honours to them, I will merely describe what

they are. They are both cases which illustrate the

absence of need for a special category. Mutual

Finance is a case in the line of cases where a bank

which has been defrauded by a young person goes to

that person's father and says, "Give me a

guarantee", with an express or implied threat that

there will be a prosecution of the son in the event

that the mortgage is not given. And there is a

long line of cases in which that type of mortgage

is set aside.

The important thing about those cases is, first that there is no particular relationship and,

secondly, that there is no particular general

weakness. The father in these cases may be a very

sophisticated businessman, well able to look after

himself but, like the blackmail victim, he may have
no choice but to do what is asked of him. It is

close to duress although perhaps not all the way

there. And one can also compare the economic

duress cases in which, as Your Honours are aware,

there has been quite a development in the last few

years. North Ocean Shipping v Hyundai

Construction, (1979) QB 705, was the case referred

to, the case where it was held that a threat to

commit a breach of contract could amount to

economic duress in certain circumstances.

It would be surprising, we comment, that a

threat to commit a breach of contract may give rise

to rights of the nature of economic duress, yet a

threat to commit suicide to a person who has a

passionate love for the person making the threat is
not, and we submit, with respect, that all these

cases indicate the width of the equitable doctrines

and its application in related areas of law.

Louth(2) 69 9/4/92

It may be that there is a case for doing what

the court did to the law of negligence in

Papatonakis and in the other cases in that line

where it disposed of a lot of the former fine

distinctions and said, really there is one Donoghue

v Stevenson area which one can apply very widely.

That type of approach may well be useful in this area in relation to undue influence, unconscionable

conduct, economic duress, equitable fraud and so

on. But there are relationships and it is often

difficult to place the precise label on the

individual case.

MASON CJ: Are you advocating one overarching principle

which we could apply to govern all those situations formerly covered by undue influence, unconscionable conduct, breach of fiduciary relationship?

MR BENNETT:  Your Honour, what was said by Your Honour in

Amadio comes very close to that. One could really

take what Your Honour said in Amadio, apply it to

the bank manager and the father, apply it to the

economic duress, apply it to undue influence and

apply it to unconscionable conduct, and we have not

found a clearer, with respect, exposition of the

principle than that one, and we would submit that

is the appropriate rule to apply.

The fifth ground of appeal, I should just

refer to very briefly, appears in the appeal book

at page 398, line 10. I think the draftsman of the

notice intended to put it the other way round and

we are not quite sure what was intended by it, but

all we want to say about that ground of appeal is

that we really rely on the distinction between

undue influence and unconscionable conduct referred

to in Amadio. It is not a question of him having

any erroneous understanding, no one suggests for a

moment he did not know what he was doing, it was

his will that was overborne rather than his

understanding which was erroneous, except to the

extent that he was told false statements. In that

sense his understanding was erroneous but not in

the sense which it is used in the cases.

Now, those are the only matters I want to

mention from those submissions. All that remains

is to reply to my learned friend's verbal

submissions, and might I take Your Honours to the

document I handed up yesterday with the heading

Appellant's Submission and Respondent's Reply.

My friend's linchpin in relation to the facts,

before he comes to some detailed matters which I

will answer in detail, is that he says this is a

case where the plaintiff was not the weaker party;

this was a case where there was a reasonable degree

Louth(2) 70 9/4/92

of equality.	Your Honours, that, in my respectful
submission, focuses on the wrong question.	When

one is talking about the degree of equality, one is
not talking about an overall degree of equality,

one is talking about the specific transaction based

degree of equality. A man who is ignorant and

stupid may, nevertheless, exert undue influence

over a wealthy and powerful bank if he goes into

the bank manager, when the bank manager is
intoxicated, and persuades him to sign a document, there is nothing surprising about that. One would

not answer that case by saying, "Look at the
strength and power of the bank, look at the

weakness and lack of education of this defendant".

The doctrine looks at the transaction. It

does not necessarily - it may in some cases, but in
a case like this, it does not look to the parties

in a more general sense. The relevant matters in

this case are not that he was a solicitor or that

he had a bit more money than she did, or anything

like that; the relevant matters are that he was

passionately in love, she knew that, she did not

requite it, and she took advantage of it, told some

lies, and induced him because of his love for her

to transfer to him a very large - in proportion to

his assets - amount of property. That is the

relevant - in that sense he was the weaker party.

The trial judge, of course, saw them both. He

is able to form a view, we would submit, very much

more easily on that sort of question for the

reasons I put yesterday. We submit, therefore,

that to describe them as being equal, or describe

him as being superior because he is a solicitor,

simply misses the point.

The second matter on that page I have dealt

with. The third matter concerns the delivery of

the certificate of title some three months later,

and my friend submitted that that showed there was

no continuing atmosphere of crisis. The point, of course, is that the reason there was no crisis was

that he was transferring the property to her and,

therefore, there was not going to be any continuing

crisis. Obviously, assuming the implied

continuance of representations, if he failed to

proceed with the transaction the crisis would be

likely to revive. One must remember that his

concern, as he said in the evidence, was not merely
that she would commit suicide - he had some doubts
about her ability to do that - his concern was

that, as on a previous occasion, she might attempt

suicide, even in a half-hearted way, and

accidentally kill herself in the course of doing

that, and he described that as a real risk because

of the things that had occurred previously.

Louth(2) 71 9/4/92

My friend submitted that the children were

friends and that each was friends of the other's

children who had spent time at each other's homes.

Your Honours, that does not create any particular

mutuality or otherwise.	It has as much to do with
it as the fact that he was a solicitor.	We are

concerned with the transaction and with a feeling, one person to another. We are not concerned with other aspects of the relationship.

My friend took Your Honours to a number of

passages in the evidence. What I wanted to say

about those passages was that none of them, when

one looks at them closely, are inconsistent with

our case. If Your Honours go, for example, to

page 218, which is in the middle of one of the
passages my learned friend relied on, this is what

Mr Volkardt said to the respondent.	Mr Volkardt
said, at line 20:

Well, the main thing I said, other than still

being very surprised that he was going to do

such a thing, the other thing that I was very

concerned about and pursued again and again

was the fact that if he was going to give the house to Mary that I wasn't going to stand in

the way of something that was between two

adults, but provided that I was left in no

doubt that he wasn't going to use this as some

leverage against Mary in the future ...... Well,

he said basically that ..... he accepted the

fact that there was no relationship for them

in the future and that even though he still

loved her, he had accepted that they would

never be married.

Then, over the page, line 2, that:

That he wanted Mary to be happy.	He wanted
her to be secure.	She had been through a lot
of, as we are all aware, a lot of stress and
problems.	He wanted to help her and he
felt ..... he could afford to.	He could buy the

house for her, it would be hers. It was a

security. He put a lot of emphasis on the

fact that she would feel secure having her own

place -

All this is totally consistent with the

respondent's case as to what occurred. Nowhere

does he say that he revealed that he did not intend

to sell it; nowhere is that said. There is no

suggestion anywhere in that evidence that

Mr Volkardt disabused Mr Diprose.

DEANE J:  The respondent's case was that he was not

influenced sufficiently to make a gift of it.

Louth(2) 72 9/4/92

MR BENNETT:  But there was an alternative case, Your Honour.

The case was put in the alternative, it was opened

squarely in the alternative. The judge heard the

evidence, he did not accept one part and he

accepted the other.

DEANE J:  Mr Justice Matheson's comments about that read

very convincingly.

MR BENNETT: 

Your Honour, His Honour did not say, and did

not have to say, whether he regarded the other
statements as being self-delusion or dishonesty,

and it is consistent with both.  He may well have

subsequently talked himself into the position that
there was some agreement to give it back, that he
could not have done what he did for the - - -

DEANE J:  I see the force of what you say. I was just

querying whether one could get much assistance from

the respondent's evidence to support undue

influence leading to a gift when, in the forefront

of his evidence, is a denial that he ever made the

gift.

MR BENNETT:  His Honour then has to look at the whole of the

evidence. He knows the gift was given and he asks

why. He then sees that there was another aspect of the evidence that these statements were made, and

he draws an inference.

TOOHEY J: But it is a very difficult exercise in fact

finding, is it not, to dismiss the claim that there

was a gift and then to go on to make findings about

the circumstances in which the gift was made? I

mean, it is not like the sort of constructive trust case of a man and a woman living together where the

woman claims that there was an arrangement that the

property would belong to them both, and the court

finds there was no such arrangement, but it can go

on to find that by reason of contributions made by

her and the participation in the household and so

on, that a constructive trust can be found.

Those two elements can run together, but I

just have a lot of difficulty with the idea that

the court can say, "The plaintiff's contention that

this was not a gift fails, but if it was a gift, it

was a gift made in circumstances where a crisis was

manufactured and all those other elements that are

said to call for a retransfer of the property".

MR BENNETT: There are two matters I put in relation to

that, Your Honour. The first is that there are

cases where a person denies something. His denial

is disbelieved, and one then has to say, "Well,

what was his motive for action?" and that may still

result in a decision in the person's favour.

Louth(2) 73 9/4/92

May I give the example of the mother who kills

her infant child a few days after birth, and there

is evidence that the mother is suffering from

postnatal depression.	The mother's case is, "I did
not kill the child at all.	I deny that I killed

the child. " It would be open to a judge to say, "I

disbelieve your denial, but while I disbelieve that

I accept the other evidence I have heard that you

were suffering from postnatal depression of such a

degree that I find manslaughter on that basis, or

for some reason make a finding in your favour on a

secondary issue which was not your primary evidence

and which was inconsistent with your primary

evidence."

There are many cases where that can occur, and

obviously from counsel's point of view it is a very

difficult tactical exercise, and from the witness's

point of view it will normally result in the

opposite result. But it will not always, and the

court is entitled to say, having found against him
on the proposition that it was given with a
condition, it then has to say, "Well, why did he

give it without a condition?" The court almost has

to answer that question to get to the first stage.

It then could find quite consistently either (a)

because he was so embarrassed about making the case

he was really making he did not put it on that

basis but told a lie, or (b) that he has, because

he was so embarrassed about it, deluded himself

into thinking that was not the basis. But in

either case the court has to ask itself, "Well, why

did he give the gift?" Then it sees these poems.

It sees the conduct of the appellant, and it draws

inferences. And in my respectful submission, that

is a perfectly proper and perfectly legitimate

method of analysis. The result may, in one sense

in the particular case, appear paradoxical, but the

fact that it is surprising or paradoxical is not a

reason why it is wrong, and we would submit on the

facts of this case, it was clearly right.

The other answer to Your Honour's question on

a different level is this: that in all cases where

inducement is an element, whether one is talking of

fraud, damages in, I suppose, economic negligence

cases, undue influence cases, there are many cases

where one has to say, "But for the representation,

the statement, the conduct, would you have done X?"

There are different practices even in Australian

courts in relation to how that is dealt with. In

New South Wales the practice has always been to ask

the "but for" question. In Victoria the practice

is to attempt to ask the "but for" in a non-leading

way and to get the material that way.	In some
cases the question is not asked.

Louth(2) 9/4/92

There is a decision in Greasley v Cooke.

Might I hand it to Your Honours. It is a decision

of the English Court of Appeal, (1980) 1 WLR 1306.

That was a case involving - it was an elderly

housekeeper case. A lady worked as housekeeper for

an elderly and wealthy man for the final years of

his life on the basis, it was said, of a promise by

him that he would leave the house to her. The

trial judge rejected her claim because - partly
because something else had been her case - she had

never answered the "but for" question.

If Your Honours go to the bottom of page 1309,

there is a reference to the procedural steps at the

bottom of the page, and then, last line:

Doris Cooke said, according to the judge's note -

then there is a note of her evidence which does not

have the "but for" question in it. And the judge

then, in the middle of the page - this is the trial

judge - between E and F, propounded this

proposition of law:

If the defendant is to succeed she has to

prove that she acted to her detriment as a

result of her belief and that the

owners ..... stood by -

et cetera. And then, a bit lower down, about seven

lines from the bottom:

That means that long before any question as to the defendant's future arose she was doing all

those acts which she to prove were done
relying on her belief that she would be able

to remain in the house as long as she

wished .... There is no evidence which satisfied

me that the defendant acted in any way to her

and that means she is not entitled to call on detriment as a result of the belief induced -

equity. The judge decided the case on that point. And then Lord Denning goes on to say that one can draw the presumption of the "but for" evidence

without the person answering the "but for"

question, and he refers to a number of cases and

says at the very bottom of the page, just after H:

Applying those principles here it can be seen

that the assurances given by Kenneth and that she would be allowed to stay in the

house ..... raised an equity in her favour.

There was no need for her to prove that she

acted on the faith of those assurances. It is

Louth(2) 75 9/4/92

to be presumed that she did so. There is no

need for her to prove that she acted to her detriment ..... Suffice it that she stayed on the house -

What His Lordship is saying in the context is that one does not need to prove the "but for" statement

expressly, so long as one can draw it from the

evidence as a whole, and we would submit that is

what one can do here.

There was no need for him to say, although it

might have been desirable - it would have been

difficult bearing in mind his primary case, "I

transferred the house because of what was said to

me about X". The Court, on the other hand, can

look at the fact that the statements are made, the

relationship is what the relationship is and

immediately after the statements are made steps are
taken to transfer the house to her, following on

the conversations he described, and the Court, from

that, is perfectly entitled to say, "We have no

doubt why he did it. It is a different category to

all the other gifts".

McHUGH J: In the context of this case, you have got to link up his action with her unconscionable conduct, have

you not?

MR BENNETT:  I had to at the trial.

McHUGH J: And you have here, to - - -?

MR BENNETT:  Your Honour, my submission, I do not need to

because of the concurrent findings and because of

the strength of the findings of fact which have

been made.

McHUGH J: But one matter that does not seem to be dealt

with in the judgments is this, the time that	elapsed between what he actually did and her	conduct, and when you look at what Mr Volkardt
said, and when you look at other evidence, it is
very difficult to accept that your client thought
that there was any crisis, that she had to get
out. It seems to be totally inconsistent with Mr Volkardt's evidence and her sister.

MR BENNETT:  Your Honour, the word "crisis" is being used to

mean, and to mean nothing more, really, than this,

that, firstly, she would have had to leave within a

comparatively short period of time.	No one
suggests it was a day or a week.	It was not a

crisis in that sense, but within a comparatively

short period of time; certainly not the six years

it was going to take for her to go through the

queue in the housing trust. Secondly, that she was

Louth(2) 76 9/4/92

so concerned and so upset and so distressed by that

possibility in the near future that she was

contemplating suicide.

Now, in that context, clearly, there was no

difficulty in saying it takes some days or weeks.

Once he has made the promise to buy the house, and he then goes to Volkardt and discusses it with him and agrees to buy the house from him, the crisis is

over as far as she is concerned.

McHUGH J: But the crisis is over, is it not, because when

you read Volkardt's evidence you cannot help but

feel that your client could have been under no

illusion that she had to get out of the place.

MR BENNETT: Volkardt never says that, Your Honour, and

never hints at it.

McHUGH J: Well, he does not say it in terms, but it is the

most plausible inference from his evidence, and

the whole matter is complicated by the way your

client conducted his case. I mean, your client

went into the witness box and said that this was a

rational decision.	He was not influenced by this
woman in any shape or form.	She was just going to
hold it as trustee for him.

MR BENNETT:  Yes, Your Honour, and the Court is entitled to

read the poems and read the evidence as a whole and

form a different view about his conduct.

McHUGH J: But that is not inconsistent with what I was

putting. Obviously, because he was in love with

her he gave her the property, but you have got to

show that there was some unconscientious or

unconscionable conduct on her part which induced

the transfer. Love will not get you there.

MR BENNETT:  No, Your Honour, but that gap, firstly I do not

understand it to be a ground of appeal or a matter

which is raised against me, the absence of
inducement or causation, but let me nevertheless
deal with it as something which must be filled.

The evidence on the findings is that a statement is

made to him and he expresses his enormous concern

about the risk of suicide, and immediately

afterwards says, "Well, can we solve that?"

He discusses various ways of doing it, they are not acceptable, and he then says, "All right,

I'll buy the house and give it to you". There is

almost no other inference one would draw than that

it was the first part of that conversation which

induced him so to act. Once one has that, one then

adds up all the other elements and the result is

there.

Louth(2) 77 9/4/92

McHUGH J:  I have to concede that the finding of fact in

your favour from the trial judge that she made this

statement to him is very difficult to overcome.	I
must say it seems to me a surprising finding in
many ways, particularly when you read Volkardt's
evidence.	I find it very difficult to believe that

your client was under any illusion that she had to

get out of this place.

MR BENNETT:  Your Honour, what is important about Volkardt's

evidence is like the dog that did not bark in the

night; what is not there. One would have thought,

if he was going to be able to say that he told my

client that there was no urgency about selling the

house and the house was not going to be sold

quickly, that is the very first thing he would have

been asked, and yet - - -

McHUGH J: It is in a context - have you got to get an

estate agent? The house is not even up for sale.

MR BENNETT:  Your Honour, he has just separated from his

wife. What more natural than that the house is

going to have to be sold? It is one of the things

that sometimes happens when there is a divorce, and

the threat in that sense was one which was one of

some imminence. One can imagine this too,

Your Honour, that Mr Volkardt may not have been all

that anxious, one would have thought, to convey to

Mr Diprose his anxiety to sell quickly.	He is
asking for a price, he is a vendor.

Certainly he is dealing with the friend of his

sister-in-law, but there is no suggestion that is

not an arm's length transaction. One can

understand Mr Volkardt not being too keen to push

the proposition that there is no urgency about

sale.	So there is nothing surprising about that
absence.	The absence of any suggestion that

Volkardt did tell my client that, we would submit

is a gap in my friend's submission and a gap in

what Your Honour puts to me which cannot be

overcome.

My learned friend disputes that she

manufactured an atmosphere of crisis and so on.

The evidence that she knew of my client's feelings

for her and knew of the extent of them - there were

a very large number of passages, but there were

four in particular, and they are not listed in the

document. The first is page 142, line 35, where

she accepts that the plaintiff developed an intense

emotional attachment. She admits that readily. At

page 147, line 10:

Q. Did it come to your attention that he had an enormous weakness for you.

Louth(2) 78 9/4/92

A. He said he loved me.

Q. Did you come to the view that he had an enormous weakness for you due to his

attachment?

A. Yes.

So she knew of the word "weakness". At page 148,

line 21 - - -

DEANE J: But really, Mr Bennett, that is a meaningless

statement. What on earth does "enormous weakness

for somebody" mean other than like them very much.

MR BENNETT:  Your Honour, one takes the evidence as a whole.

But, again, I have to keep saying this, the judge

saw them, he saw what sort of person he was and he

saw what sort of person she was, and formed views

about what these two people felt and what they knew

about each other's feelings.

DEANE J:  What I was really suggesting was, that is the sort

of question that should not be asked in this type

of case, and I really do not think you get

any great - - -

MR BENNETT:  Your Honour, it was asked, it was not objected

to. At page 148, line 21:

Q. Was that when you realised that he had an enormous emotional attachment with you.

A. Yes.

Q, How did that affect you.

A. I felt sorry for him because I couldn't

return those affections.

And at 158, line 12:

Q. From the poems that you read was it obvious

to you that he had an enormous emotional

attachment for you.

A. Yes.

So she knew of that. At page 151, I will not take

Your Honours right through the page, but there is a description of the fact that, from time to time, he

endeavoured to buy groceries for her, and she tried

to discourage that but was not successful and he

would bring them round and leave them on the door and so on. It, again, is conduct which must have

brought to her attention the extreme extent of his

infatuation.

Now, it is clear, secondly, from the

evidence - and there are some long passages I will

not take Your Honours through, but they run roughly

Louth(2) 79 9/4/92

from 159 for about the next 10 pages - in which it

is very clear that she knew there was no actual

urgency. The fact was there was no actual urgency

and she knew there was no actual urgency. That

starts at page 159, line 9. She says:

A. I don't know what their reaction was to

that.	I would probably have to move out in
three or four years.	They never actually gave
me a date.	They said there was no hurry.

Q. Were you somewhat uneasy during that

period.

A. No.

Now, that is relevant to another matter which I am

coming to but I would mention now. It was

suggested to me yesterday that the threat of

suicide may not have been false. My learned friend

submitted, "She may genuinely have intended to

commit suicide", and he referred to a passage about

how there was, in fact, a subsequent suicide

attempt.	So he says, "How do we know it was lie,
maybe she did intend to commit suicide".	The

answer to that is that she says here, at 159 point

15, she was not even "uneasy". It was not, of

course, suicide simpliciter which was the threat,

it was suicide because of the accommodation crisis,

and she said she was not even "uneasy", so a threat

of suicide because of the accommodation crisis if

made must have been a lie.

Now, my learned friend submitted that the

passage at page 53 lines 6 to 13 showed that he

knew the true position about the sale and

Your Honour Justice McHugh asked me a question

about estate agents a moment ago, concerning that

passage. All that is said there is that he says:

I told her that Arch said he was prepared to

sell the house.

ie, sell the house to her.

There were other things that Arch said to me

that I didn't tell her and he - I told her

that Arch said he would get a real estate

agent to go and look at the place and look

inside -

that is, no doubt, for the purpose of advising him

on the price -

and that he could contact her, the agent would

contact her, to arrange a time. The next

time ..... I saw her she told me that someone

had been to look at the house.

Louth(2) 80 9/4/92

Now all that establishes is that he was told some

time shortly after the initial conversation and
before he had proceeded to go ahead with it, that

the degree of crisis was such that there was still

time to go to an estate agent and get details of a

price and then sell.	But that does not take away
from the crisis.	The crisis is that he wants to
sell.	The house is going to have to be sold.

If the steps involved in selling, as

Mr Volkardt intended them, as a sensible vendor, involved first going to an estate agent, getting him to look over the place, give an armchair

valuation, and then taking whatever steps necessary

to sell at that sort of price, that does not mean

it was not urgent. That is still going to take

place in the next few months; probably the next few

weeks. There is a crisis in that sense and it does

not dispel the crisis to say, "Well, there was a

period, at least, for him to go to an agent and get

an armchair valuation first". That does not take

away from it.	So we submit that does not assist my
learned friend.
The next matter is just a general matter. friend says the real motive was her unhappy life	My
and her need for security.	We say it is more than
that.	The need for security, of course, was part

of it, but that was woven, and we say in a

manipulative way woven, into what she said to him.

My friend submits that the finding at

page 319, line 25, is too harsh on the appellant.

That is the finding of a manufacturing an
atmosphere of crisis when none really existed.

There is a couple of passages in the transcript

which I should refer to in addition to what I have

taken Your Honours to. The first is page 173,

line 27, where she acknowledges:

Did the plaintiff say that he had some monies

invested in mortgage security and was due to

have them paid out to him shortly.

A. He said he had some money invested but not

on mortgages.

Q. He just said he had some money invested.
A. He said he was coming into some money.

So she did know that he was coming into some money. At page 174, 1 to 16, she knows this much about his

affairs, which acknowledges this much, line 5, she

"was aware he was living in rented accommodation";

"that he had three children"; "That he had the

custody of the children"; "that he was employed as

a solicitor"; "That he had an old aeroplane" and

"apart from that he didn't have any other assets:

Louth(2) 81 9/4/92

I didn't know his financial situation.	He had
assets in Tasmania, that's all I knew.

Q.What assets do you think he had in Tasmania.

A. I don't know, he never discussed them with

me ...... He told me he had assets in Tasmania -

and so on.

The trial judge found at page 320 line 9 in relation to this evidence:

I disbelieve the defendant's evidence that she thought the plaintiff was a wealthy man.

And on this subject, I just remind Your Honours

very briefly of the passages at 50 and 51. At

page 50 line 4 he says he told her about the

mortgage moneys he had, and at 51 line 6 that he

could -

probably lend her the money.

My friend's next submission is that he did not want

anything back and knew of her failure to return his love. Yes, he did know those things and he did not

want anything back, but that is what makes it

improvident and that is what indicates the truth of

the otherwise surprising findings about his state

of mind.

TOOHEY J: But does it not also bear upon the notion of

unconscionability? I mean, there is no suggestion

in this case that in any way the defendant used the

sort of language that seems to have bedevilled this

case, "trifle with his affections". At all times

she appears to have been quite honest with him as

to what he could hope to get from the relationship.

MR BENNETT: Yes, Your Honour, that is so. But

that, and she used it in relation to the particular	nevertheless, his passion for her continued despite
transaction. That is the relevant finding. The
fact that he did not want anything back with the
relationship is very much part of what makes it
improvident, that it was not a case of the type I
was talking about yesterday where someone who is in
love with someone else and who intends to spend his or her life with that other person says, "Here is
my house".

The next matter I have dealt with, Your Honour

Justice Toohey's question to me and Greasley v

Cooke. Finally, my friend submitted that her

rejection of the lesser alternatives, the renting

and so on, was well known to him as were her

reasons, but that is consistent with our case.

Louth(2) 82 9/4/92

That is part of the manipulation that she will not

accept something which, one would have thought,

might achieve very much the same objective but

leave his position intact.	She is not prepared to
do that.	She wants to use her power over him to

the maximum extent possible.

Next, may I take Your Honours to the document

I handed up this morning, to page 3. Your Honours

will recall the first document was prepared at

lunch-time so it only goes up to lunch-time, and
this takes it to my friend's submissions during the

afternoon.

The first matter I have dealt with, that is

the use of the word "special" in Amadio. The

second is, my friend submitted it was never put to

the appellant that she manufactured an atmosphere

of crisis. We say it was put in substance. At

page 168 - perhaps if I just go back to the last

question on 167. At line 37, she is asked:

Q. Why did you tell him that the house meant

so much to you.

A. Well, it did.

So, she acknowledges saying that.

Q.	And you were worried about leaving.
A.	I was worried about leaving in years to

come, not then.

Q. In six years time, in five years time, is

that what you are telling us.

A. Yes, because it was my home for the first

time in years.

Q. You say that you had a premature crisis

about leaving the house, is that what you are

telling us.
A.	No, I didn't have a crisis about leaving

the house.

Q.	Why discuss it madam.
A.	I don't recall discussing it was a crisis.

I just said I wouldn't like to leave the

place. It wasn't a crisis.

Q.	Why bother to say it.
A. Well, he was my friend.	I tell that to
any of my friends.
Q.	But why did it concern you at that time

that you might have to leave the house when

there was no imminent reason for you to do so.

A.	I didn't think anything wrong in saying
that.

Louth(2) 83 9/4/92

Q. Do you say it was just a casual

conversation.

A. Yes.

So, it is squarely put to her - it is not put to her in the exact words of the finding, but the inference in general terms is put to her, and the

passage over the previous seven pages, which I will

not read to Your Honours, show a general putting to

her of the subject-matter. Of course, the matter

about suicide was squarely put to her elsewhere,

and Your Honours have seen that.

The next matter, I have dealt with. My friend

submitted that because she subsequently attempted

suicide, that shows she might have been telling the

truth - I have dealt with that. My friend

submitted the threat to commit suicide was not a

serious one.	Your Honours, at pages 54 to 55, he
describes the effect it had on him.	The

conversation is at 54, and he refers to the

previous occasions when she had slashed her wrists,

how concerned he was about it, and that goes on

to 55, where at line 14, at the end of the long

answer he says this:

But it was the way in fact that she described

it, as if she was describing reading the

newspaper, that I thought to myself, I

thought, "this woman means business". So,

when she told me again that if she had to move

from the house and she didn't have the

security of it, that she would kill herself, I

was quite convinced that A. she would kill

herself, or, B. she may try and then perhaps

cut too deep and kill herself accidentally.

"She showed me her wrists", et cetera. So, the

finding that it was a serious threat is justified,

and finally my friend made his submission that we

are not in one of the categories, and I dealt with

that in the submissions about categorization.

The final matter I want to put to Your Honours

before I sit down is the matter which was raised in
argument with my learned friend yesterday by some

of Your Honours about the sufficiency of the

statement of claim. The suggested problem with the

statement of claim, as I understand it, is the

failure to allege falsity of the threat to commit

suicide. In relation to that, we say this: first,

paragraph 12 on page 9 of the appeal book raises

unconscionability, and it alleges in

subparagraph (2):

The defendant knew by reason of the

plaintiff's feelings and concern for her that

Louth(2) 84 9/4/92

the plaintiff would be influenced by the

defendant's threats and representations.

And the matters set out in 3, 5 and 6 are then

referred to.

If one goes back to 5(11) at the top of

page 6, it is alleged that she told him the house

was to be offered for sale - again we say not
inconsistent with not having seen the agent yet:

The defendant again told the plaintiff that she wanted to live in the house and could not

live anywhere else. She again threatened that

she would take her own life rather than move

from the house.

(13), he offered to lend her money, et cetera:

She said she was desperate and that if she had

to leave she would take her own life. The

defendant was very distressed and pleaded with

the plaintiff to assist her. She said to the

plaintiff that the house provided her with the

physical and emotional security she needed.

(14) suggested an alternative and so on, and then:

She told the plaintiff she could not live in the house as the plaintiff's tenant as she said he could get a Court order to have her

evicted from the house. She again told him

she requested the physical and emotional

security of living in the house. She said

that because it was not possible for her to

own the house she would take her own life.

So all those matters are then referred to. There

is no express pleading that the threat to commit

suicide was false, but in the overall context that

is clearly implicit. Those matters are denied in

paragraphs 16, 18 and 19 of the defence. At

page 28 it was opened by my predecessor, and

Mr Evans, at line 14:

we submit that that is voidable by reason of
the unconscionability of the defendant in
accepting the conveyance, or, alternatively,

again on the same principles that it was

procured by undue influence because of the

nature of the relationship between the

parties, the unequal bargaining power, and in

particular the threat by the defendant that

she would take her own life at that time. In the context, in my respectful submission, in so

far as the falsity of the threat is an element, it

Louth(2) 85 9/4/92

is certainly there as a matter of inference. The

trial was conducted on that basis because it was

substantially put to her at page 181 where it is

put to her that she said that and she denies it.	I
have already taken Your Honours to the passage at
159 where she says she was not uneasy, which is in
effect a denial, we would submit, of any intention
to commit suicide because of a problem about the
house.

TOOHEY J:  Mr Bennett, is there anything in the plaintiff's

opening to suggest that what it was alleged the

defendant had said regarding the possible sale of

the house was to her knowledge untrue? I cannot

see anything, and indeed the opening almost

proceeds on the basis that the crisis, which is the

language used by plaintiff's counsel, was a genuine

crisis. I do not seek to read too much into that,

but there does not appear to be anything there to

suggest that this was a manufactured crisis.

MR BENNETT:  Your Honour, one tests it this way. There may

be a small variance or a small omission in the

statement of claim which, had the matter been

raised at the trial, would have been appropriately

dealt with, but the point has never been taken. If

the trial was conducted on the basis, as
Your Honour sees, that clearly the falsity of it
was discussed, debated and put in
cross-examination, the suggested deficiency was not
raised at the trial, was not raised in the notice
of appeal to the Full Court, was not raised before

the Full Court, was not raised in the leave

application to this Court, was not raised in the

notice of appeal to this Court, was not raised in the written submissions to this Court, and is put

for the first time in argument when the Court

suggests it to my learned friend.

TOOHEY J:  I was not concerned it was a pleading point, I was rather intrigued by the impression that one

would get, reading the opening of counsel in the

light of the conclusion by the Chief Justice, that

this was a manufactured crisis.

MR BENNETT:  What we say, Your Honour, is that, ultimately,

unconscionability depends on a whole range of

factors and, obviously, one ought, as a matter of

affection, to plead all of those factors in a

statement of claim or in particulars given of it.

But it is not fatal to one's success that one has

not descended to that degree of particularity.

TOOHEY J:  You are taking me back to the pleading again. I

am trying to get away from the pleading point,

simply to get some impression of what the case was,

as outlined by plaintiff's counsel, and all I am

Louth(2) 86 9/4/92

saying about it, for what it is worth, is that on a

reading of that opening one does not get the

impression that the case was one of a manufactured

crisis.

MR BENNETT:  Your Honour, with respect, it does not need to

be. The element of manufactured is something

within the knowledge of the defendant, not the
knowledge of the plaintiff. The plaintiff puts the
case, puts it as unconscionable conduct. If in the
course of the evidence further elements of

unconscionability come out, particularly that one,

so be it. The plaintiff is entitled to say, "Well,

I pleaded unconscionable conduct, now look at the

evidence and see how unconscionable it really was".

TOOHEY J:  You mean, from the plaintiff's point of view it

is enough to present a case of conduct entered into
in the belief that there was a crisis, whether or

not there was?

MR BENNETT:  Yes, Your Honour, the plaintiff puts that case.

Let me put the extreme case against me. Let me

assume that this part of the statement of claim is
demurrable on the basis that an essential element

has not been pleaded. The plaintiff runs the case

on unconscionable conduct not having pleaded that

element; that element is successfully proved at

the trial; no one takes any pleading point; it is

an element within the knowledge of the other side

and the trial judge finds it. Why should one now

be concerned that it was not sufficiently

adumbrated in opening or in pleading? It is not as

if there is any suggestion that the defendant was

taken by surprise, mislead, or otherwise

prejudiced. If she had been, no doubt, something

would have been said at an appropriate time, or at

any time. And one cannot criticize the plaintiff

himself for failing to plead that or allege it in

within his knowledge. It is not as if his evidence	his counsel's opening because it is not something	is falsified by his failure to allege it, because it is something entirely within the knowledge of
the other party.

BRENNAN J:  Mr Bennett, had the statement been true, and had

the statement been made simply to communicate a

fact to a friend rather than to secure the making

of a gift, would there then have been any case for

relief claimed?

MR BENNETT: There would have been a case, Your Honour, but

a very much weaker case because the

unconscionability of her actions would be much

harder to support. One would have to show some

element along the lines, "Well, she appreciated

putting it that way", would necessarily have that

Louth(2) 87 9/4/92

result and was not averse to that happening.	One
can imagine ways of putting it within the

parameters Your Honour puts to me which would make

it unconscionable.

BRENNAN J:  Would you go as far as saying, "the mere

acceptance with appreciation of what had happened"

would be sufficient?

MR BENNETT:  No case suggests that, Your Honour, and I

cannot go that far except, I suppose, one could

take an analogy to the fraud cases where one makes

a statement not knowing it to be false and

discovers it is false before it is acted on and

does not correct the other party. I suppose one

can have a situation where one does something

innocently and then realizes when the offer is made

the effect it has had, and a failure to disabuse

may, in some circumstances then, amount to

unconscionable conduct. But it would be a very

difficult case to argue, and it would be a

significantly less powerful case than the one

Your Honours have.

DEANE J: But what equity acts on in most cases is not that

it was unconscientious to get it. It is that it is

unconscientious to keep it when the other party

wants it back in the circumstances in which you got

it.

MR BENNETT:  Yes. And the usual reason for it being

unconscientious to keep it in this type of case is

that one unconscientiously induced it. But I have

no reason to reject the proposition offered to me

by Justice Brennan. It is in a sense an attractive

proposition from my case, but all I am obliged to

say is that none of the cases seem to go quite that

far. As a matter of logic there is no reason why

one cannot go that far, and I would not eschew the

submission if Your Honours made findings of fact

which left out the question of knowledge of falsity

and deliberate manipulation, that my client still

ought to succeed. But probably in that situation

the matter would have to go back, because it would

be quite impossible on taking out some facts to

draw an inference as to what would occur.

So if Your Honours upheld what my friend has submitted on some facts, in other words, if

Your Honours said, "Well, this aspect of it was not

clearly made out", one would then really have to

send it back to see whether what was left still

constituted unconscionable conduct. One would

never be able, in a case of this nature, to look at

the overall position and say, "Well, absent this

element, without having seen the witnesses, we

think it is one side or the other of the line."

Louth(2) 88 9/4/92

And the reason Your Honours cannot do that is that

Your Honours would not then have an overall picture from which Your Honours could determine which side

of the line the case ultimately fell on. So that

would be the difficulty if Your Honours were

against me on any of those factual matters but, in my submission, the factual matters are all clearly

established.

For those reasons we submit the appeal should

be dismissed. May it please the Court.

MASON CJ:  Thank you, Mr Bennett. Yes, Mr Lawson.

MR LAWSON:  The first matter in reply, if the Court pleases,

relates to my learned friend's submission this

morning, concerning the relationship between
improvidence and value and he referred the Court to

Allcard v is so large as not to be reasonably accounted for on the ground of friendship, relationship",

the judgment of Lord Justice Lindley in

et cetera, "he burden is upon the donee to support

the gift". It is our submission that, in this

particular case, the friendship and relationship

between the parties, strange as it was, does
provide a reasonable account of why the gift was

made, generous as that gift was. This is not a

case where a substantial gift was made to a

stranger and, on the subject of improvidence, I

should refer the Court to a passage that I omitted

to refer to yesterday, at page 90, line 13 - I

think it is unnecessary for the Court to go to it -

where the plaintiff admitted that he did not need

another house, where he was asked, at line 10:

Did you say to her, at that time, that you

weren't going to buy another house and that

you wanted to buy a yacht and sail around the

world.
A. No, I didn't say that.	I said 'I don't
need another house for the time being'.	I
also made the comment, 'I've done up two
houses for ungrateful wives'.	I said I was

content with the flat I had at that stage and
that I did tell her that it had always been an

ambition of mine to eventually buy a yacht and

go off somewhere, but that wasn't certainly in

the near future.

So, on the subject of improvidence, here it appears that that was discussed between the parties and the

plaintiff accepts and he is saying, in effect,

"Well I do not want a house. I do not need one. I

have other ambitions". And her account of that

same conversation is at page 127 of the transcript.

Louth(2) 89 9/4/92

It is slightly different but, in my submission, not relevantly different. So, on the subject of

improvidence those passages suggest that firstly it

was discussed between the parties and that he

assured her that this was not an improvident gift

in the circumstances.

The second matter that I can put in reply

concerns my learned friend's submissions concerning

the concurrent findings of fact and, in his written
outline on the first page, he referred to the

substantial agreement of

Acting Chief Justice Jacobs and argued that that

should be construed as His Honour saying that he

had independently agreed with the conclusions. In my submission, it appears from the judgment of the

Acting Chief Justice, at page 332 point 6 and

at 333 line 20, that what His Honour did was look
at the judgment of the trial judge and simply

support them. At the top of 332:

It may seem at first sight quite

illogical - apart from any criticism in point

of legal principle - to hold that in such

circumstances it would be unconscionable to

allow the appellant to retain the benefit of

the transaction, but the learned trial judge,

in coming to a contrary conclusion in favour

of the -

appellant -

supported his decision by explicit and

unequivocal findings of fact. He found -

and- then His Honour outlines what the findings of

the trial judge were, and at the top of page 333,

about line 5:

These are findings which in my judgment

this Court ought not to disturb. It may well

be that they are inferences which the learned

trial Judge drew, upon his view of the proven

facts -

"but this is not a case where we should disturb

them".

So, in my submission, on the issue of

concurrent findings, whilst I accept that in

accordance with Introvigne and the cases there

cited we face a difficult task in this Court, the

findings were not unanimous findings and it would

appear certainly Justice Matheson did not agree

with the findings, inferences, or conclusions nor,

it seems, in my submission, did the

Acting Chief Justice independently arrive at the

Louth(2) 90 9/4/92

same conclusions by consideration of the evidence,

apart from the judgment of the Chief Justice.

BRENNAN J: Are you suggesting that unless there is an

independent assessment of the facts that a

confirmation of a finding by a trial judge does not

count as a concurrent finding?

MR LAWSON:  It does depend upon the nature of the finding,

in my submission. If it is a finding of a fact,

strictly so-called, then I could not make that

submission, but where, what is, in effect, a

confirmation of an acceptance of conclusions, I

think I can make the submission that this Court is

not - in accordance with the principles in

Introvigne and the cases cited will, as a matter of

practice, invariably accept those findings.

BRENNAN J: Are you suggesting some new test to be applied

by intermediate courts of appeal in reviewing

findings of fact?

MR LAWSON:  No.

BRENNAN J: If they perform their usual function of seeing

whether there are any grounds for disturbing the

finding of fact and they resolve it negatively, is

that a concurrent finding so far as this Court is

concerned?

MR LAWSON:  I am sorry, I missed Your Honour's - - -

BRENNAN J: If the intermediate court reviewing the findings

of fact by the court below concludes that there is
no ground for disturbing the finding of the court
below but go no further than that, are you
suggesting that that is not a concurrent finding

for the purposes of this Court?

MR LAWSON:  I am not suggesting that, if Your Honour

pleases. The Court will be aware that Acting

Chief Justice Jacobs did not draw precisely the

same inferences as the Chief Justice. He had a

different view in relation to emotional dependence

and its possible effect, but in the passage that I

have cited, it appears that His Honour did no more

than adopt the Chief Justice's findings, which he

described as findings of fact.

Your Honour Justice Toohey sought from me

yesterday further passages, if there were any,
concerning the plaintiff's state of knowledge from

Volkardt of his intentions concerning the sale of

the property. The only passage to which I have not

previously referred on that subject also appears in

Volkardt's evidence at page 230. It is a passage

that Justice McHugh probably had in mind this

Louth(2) 91 9/4/92

morning when he made his remarks to my learned

friend. I do not think it is necessary to take the

Court to the passage, because it is to like effect

to that at 217 to 219 of the transcript.

TOOHEY J:  The point is not Volkardt's own state of mind,

but the degree to which he communicated to the
plaintiff the absence of any urgency about the sale

of the house. I think Mr Bennett said this morning

that there was no evidence to that effect.

MR LAWSON:  No direct evidence, but the inference, as

Justice Matheson found, the conclusion must be that

in the context, this would have been discussed. It

was never put to Volkardt, as one might have

expected it to be put to him, if in fact this was

in issue. One would have expected the plaintiff's

counsel to put to Volkardt, after he said he had no

immediate intention of selling the property, one would have expected, "Did you tell the plaintiff

that?"

TOOHEY J: That might have been a very dangerous question to

ask in cross-examination. You might as well say

you would have expected the defendant's counsel to

have put to Volkardt in examination-in-chief.

MR LAWSON:  Or alternatively, the plaintiff could have put

it in-chief that he was never aware of the fact

that there was no crisis and that he was not told

that by Volkardt in circumstances where he might

reasonably expect to have been told that, when

there was a discussion about the sale of the house

and its availability for sale. Of course, as the

Court has put to my learned friend, the whole case

was really conducted on the case of: was there an

agreement for a gift, or was there some other
arrangement with a reservation? The plaintiff's

case was always that there was a reservation, and

it was largely fought on that basis.

There are no other matters that I would put in

reply, if the Court pleases.

MASON CJ:  Thank you, Mr Lawson. The Court will consider

its decision in this matter and will adjourn until

9.30 am tomorrow in Canberra and in Sydney.

AT 11.49 AM THE MATTER WAS ADJOURNED SINE DIE

Louth(2) 92 9/4/92