Luong v Du - [2013] VSC 723

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2012 2540

HUE DIEU LUONG HONG THUY DU	Plaintiffs
v
HUONG XUAN DU	Defendant

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JUDGE:	EMERTON J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 July 2013 – 2 August 2013; 5 August 2013; 16 August 2013
DATE OF JUDGMENT:	19 December 2013
CASE MAY BE CITED AS:	Luong & Anor v Du
MEDIUM NEUTRAL CITATION:	[2013] VSC 723

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CONTRACT – Non est factum – Transfer of property between family members – Whether the plaintiffs believed that the document they signed had a particular character when in fact it had an entirely different character – Non est factum not available to a person who has signed a document with no belief as to the contents of the document – Claim based on a plea of non est factum not made out – Petelin v Cullen (1975) 132 CLR 355.

EQUITY – Unconscionable conduct – Whether the plaintiffs are under a special disadvantage due limited skills in reading and understanding English – First plaintiff capable of understanding what the documents were in broad terms – Plaintiffs capable of making further inquiries as to the nature and effect of the transfer – Plaintiffs limited capacity to read and understand documents do not constitute a special disadvantage in the context of a prior family agreement – Unconscionable conduct not made out – Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Klempfner	AJH Lawyers
For the Defendant	Mr S Stuckey	Marshalls and Dent Lawyers

HER HONOUR:

Introduction

This is a dispute among family members about the ownership of a modest house located at 113 Yarra Street, Abbotsford (the ‘Property’). The Property was acquired by the plaintiffs in about December 1993 for $157,000, transferred to the defendant in July 1997 for $140,000 and is now valued at $865,000. It has at all relevant times been heavily mortgaged to the Westpac Bank. Notwithstanding the transfer of the title of the Property to the defendant in 1997, the plaintiffs claim to own the Property or to have an ongoing interest in it by reason of the manner and circumstances in which the transfer to the defendant was effected.

The dispute is among members of the Du family, who left Vietnam in the 1980s and 1990s to build new lives in Australia. The story presented to the Court was an inspiring but ultimately a sad one. Family members, having moved to Australia in difficult circumstances and with meagre resources, worked together to gain a foothold in Australia and pooled resources for the benefit of the family as a whole for many years. However, there are now deep divisions in the family. One sister is pitted directly against another, and less directly, against two other sisters. There is acrimony between siblings who once were close, and the anguish of family members caused by the present dispute was palpable…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Luong v Du

Details

AGLC: Luong v Du [2013] VSC 723
Case: [2013] VSC 723
Decision Date: 19 December 2013

CaseChat Overview and Summary

In the matter of Luong v Du, the plaintiffs sought relief from the Supreme Court of New South Wales on the basis of non est factum and unconscionable conduct in relation to a transfer of property between family members. The plaintiffs alleged that they were misled as to the nature of the document they signed, believing it to be a loan agreement, when it was in fact a transfer of ownership of property. They further argued that their limited capacity in reading and understanding English placed them at a special disadvantage, rendering the transfer unconscionable.

The court was required to determine whether the plaintiffs' claim based on non est factum was valid, and if their limited English proficiency constituted a special disadvantage that led to unconscionable conduct. The court examined the doctrine of non est factum, which allows a party to avoid the enforcement of a contract if they can demonstrate that they signed a document believing it to be of a different nature. The court also considered the principles of equity, specifically unconscionable conduct, as outlined in Commercial Bank of Australia Ltd v Amadio.

The court found that the plaintiffs' claim based on non est factum was not made out, as the plaintiffs had signed the document without any belief as to its contents. The first plaintiff, despite limited English proficiency, was capable of understanding the documents in broad terms and had the opportunity to make further inquiries about the nature and effect of the transfer. Consequently, the plaintiffs' limited capacity to read and understand documents did not constitute a special disadvantage in the context of a prior family agreement. Therefore, the court held that unconscionable conduct was not made out. The plaintiffs' claims were dismissed.

As a result of the court's findings, the plaintiffs' claims were dismissed, and no orders were made in their favour.

Orders