JUDGE:	Richards J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 March 2021 Further written submissions received 16 April 2021
DATE OF JUDGMENT:	23 April 2021
CASE MAY BE CITED AS:	McFarlane v McFarlane
MEDIUM NEUTRAL CITATION:	[2021] VSC 197

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EQUITY – Undue influence – Transfer of land by mother to son for ‘natural love and affection’ – Whether transfer vitiated by undue influence – Presumption of undue influence established on evidence – Presumption not rebutted.

EQUITY – Unconscionable conduct – Whether transfer vitiated by unconscionable conduct of son – Mother in a position of special disadvantage – Son took unfair advantage – Transfer not shown to be fair, just and reasonable.

EQUITY – Remedies – Transfer set aside – Orders to reinstate mother as registered proprietor of land – Equitable compensation – Transfer of Land Act 1958 (Vic), s 103.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr DJ Sanders	State Trustees Limited Legal Branch
For the Defendant	In person

HER HONOUR:

On 26 November 2015, Judith McFarlane signed a transfer of land, gifting her home at 139 Warby Range Road, Glenrowan (the Glenrowan property) to her son, Mark McFarlane. The consideration for the transfer was recorded as ‘natural love and affection’. At the time of the transfer, Mr McFarlane was living with his mother at the Glenrowan property. He became the registered proprietor of the property on 4 January 2016. In November that year, Mrs McFarlane moved from the house in Glenrowan to St John’s Village, an aged care home in Wangaratta.

In August 2017, the Victorian Civil and Administrative Tribunal appointed State Trustees Limited as Mrs McFarlane’s administrator, under Part 5 of the Guardianship and Administration Act 1986 (Vic). In its capacity as her administrator, State Trustees inquired into the circumstances surrounding the transfer of the Glenrowan property to Mr McFarlane. It commenced this proceeding on Mrs McFarlane’s behalf in November 2018, claiming that the transfer was procured by undue influence and was unconscionable. The relief sought includes an order that the transfer be set aside, or alternatively a declaration that Mr McFarlane holds the Glenrowan property on constructive trust for the benefit of Mrs McFarlane.

Mr McFarlane’s defence asserts that he and his mother have always had a ‘long term loving relationship’ and that his mother gifted the Glenrowan property to him ‘out of natural love and affection for all I was doing for her’. Mr McFarlane represented himself throughout the proceeding. Although he appeared at directions hearings on 29 March 2019, 19 July 2019, and 29 November 2019, he did not file any material in support of his defence, and did not appear at the directions hearing held on 15 May 2020.

He appeared briefly at the trial, to raise an objection…

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 McFarlane v McFarlane

Details

AGLC: McFarlane v McFarlane [2021] VSC 197
Case: [2021] VSC 197
Decision Date: 23 April 2021

CaseChat Overview and Summary

In the case of McFarlane v McFarlane, the High Court of Australia was called upon to determine the validity of a transfer of land from a mother to her son, who was alleged to have exerted undue influence over the transaction. The son had successfully applied for the transfer of the land, which was registered in his name, on the basis of "natural love and affection" from his mother. The mother subsequently sought to set aside the transfer, arguing that it was the result of undue influence and unconscionable conduct on the part of her son.

The primary legal issues before the court were whether the transfer of the land was vitiated by undue influence or unconscionable conduct, and if so, what remedies should be available to the mother. The court was required to determine whether the son had exerted undue influence over his mother, and if the transfer of the land was unconscionable given the mother's position of special disadvantage. Furthermore, the court had to consider the appropriate remedy to be granted in the circumstances.

The court found that a presumption of undue influence had been established, as the transfer of the land was from a parent to a child in circumstances where the child stood to benefit from the transaction. The court held that this presumption was not rebutted by the son, as he failed to provide evidence that the transfer was the result of the mother's free will. The court also found that the transfer was unconscionable, as the son had taken unfair advantage of his mother's position of special disadvantage. The court determined that the transfer was not fair, just, and reasonable, given the circumstances.

The court ordered that the transfer of the land be set aside, and that the mother be reinstated as the registered proprietor of the land. In addition, the court awarded equitable compensation to the mother, and made orders pursuant to section 103 of the Transfer of Land Act 1958 (Vic). This decision reinforces the importance of ensuring that transfers of land are not the result of undue influence or unconscionable conduct, and highlights the need for courts to protect vulnerable parties in such transactions.

Orders