Louth v Diprose

The applicant, Louth, sought special leave to appeal to the High Court of Australia from a majority decision of the Full Court of the Supreme Court of South Australia. The Full Court had dismissed an appeal from a decision of the trial judge, Chief Justice King, who had set aside a transaction where the plaintiff had paid the purchase price for a house to be registered in the defendant's name.

The central legal issue was whether the Full Court had correctly applied the principles governing unconscionable conduct in equity. Specifically, the applicant argued that the Full Court had misapplied the rule established in *Commercial Bank of Australia Ltd v Amadio*, which concerns unconscientious advantage taken of a party suffering from a special disability or placed in a special situation of disadvantage. The applicant contended that the Full Court's finding of a "misunderstanding" of the principle, rather than a direct misapplication, was the core of the error.

The court was required to consider the nature of the "special disability" or "special situation of disadvantage" required to attract equitable relief for unconscionable conduct. The applicant argued that the Full Court had erred in its understanding of this requirement, suggesting that the principle applied by the trial judge and the Full Court was that the person seeking the benefit must be shown to have taken unconscientious advantage of a party under some special disability. This was contrasted with the applicant's submission that the relevant principle, as articulated in *Amadio* and *Blomley v Ryan*, required the party seeking relief to be suffering from a "special disability" or to be in a "special situation of disadvantage." The applicant's argument focused on the interpretation of these phrases and their application to the facts of the case, particularly concerning the plaintiff's alleged emotional dependence on the defendant.