Mitchell v Gibbins

[2024] NSWSC 1524

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Mitchell v Gibbins [2024] NSWSC 1524

Hearing dates:

22 and 23 October 2024, 18 November 2024

Date of orders:

28 November 2024

Decision date:

28 November 2024

Jurisdiction:

Equity - Real Property List

Before:

Black J

Decision:

Proceedings dismissed with costs.

Catchwords:

CONTRACT – Formation – Whether Plaintiff and Defendant entered into an oral contract in respect of the transfer of the Plaintiff’s property to the Defendant – Whether there was an intention to enter legal relations – Where terms uncertain.

EQUITY – Unconscionable conduct – Whether unconscionable for daughter to retain property transferred to her by elderly father – Where transfer registered by father without daughter’s involvement, three years after earlier discussion – Where father sought to have the property reconveyed to him, nine years after the transfer was registered –Whether unconscionable for the daughter not to reconvey the property to the father without any compensation for the outgoings that she had paid in respect of the property in the nine years between the registration of the transfer and the demand for reconveyance.

EQUITY – Equitable estoppel – Whether pleaded representations were made.

EQUITY – Undue influence – Whether Plaintiff’s transfer of the property was due to undue influence – Where Plaintiff independently registered the transfer of the property – Where the Defendant asserted no pressure and had no involvement in the registration of the transfer.

EQUITY – Trusts and Trustees – Express Trust – Where the terms of the purported trust are uncertain – Where there is no intention to create a trust.

Legislation Cited:

Contracts Review Act 1980 (NSW), ss 7, 9

Cases Cited:

- Anning v Anning (1907) 4 CLR 1049; [1907] HCA 13

- Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81

- BP Refinery (Westemport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

- Bovaird v Frost [2009] NSWSC 337

- Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24

- Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

- Commercial N Pty Ltd v Huang & Ors [2024] NSWSC 23

- Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39

- Corin v Patton (1990) 169 CLR 540; [1990] HCA 12

- Crane Distribution Ltd v Yang [2016] NSWSC 620

- Dalton & Schaeffer as Executors of the Estate of the Late John Herman Schaeffer v Naegeli [2024] NSWCA 51

- Hightime Investments Pty Ltd v Adamus Resources Ltd [2012] WASC 295

- Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810

- John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

- Johnson v Buttress (1936) 56 CLR 113; [1936] HCA 41

- Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

- King v Adams [2016] NSWSC 1798

- Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343

- Leedman v Chahhoud [2024] NSWSC 1284

- LymInternational PtyLtdvMarcolongo [2011] NSWCA 303

- Mentink v Olsen [2020] NSWCA 182

- Moore v Aubusson [2020] NSWSC 1466

- MoutivNguyen [2015] NSWCA 93

- No1VictoriaDragonsPtyLtdvAEN Developments Pty Ltd [2022] NSWSC 134

- OrmwavePtyLtdvSmith [2007] NSWCA 210

- Pethybridge vStedikas HoldingsPtyLtd [2007] NSWCA 154

- ProvidentCapitalLtdvPapa (2013) 84 NSWLR 231; [2013] NSWCA 36

- ReAtlasAdvisorsAustraliaPtyLtd (2022) 162 ACSR 509; [2022] NSWSC 705

- ReBorderExpressPtyLtd [2023] VSC 769

- ReReserveHotelsPtyLtd [2021] NSWSC 376

- Re Tresdar Pty Ltd [2019] NSWSC 179

- Realestate.com.auPty Ltd v Hardingham (2022) 277 CLR 115; (2022) 406 ALR 678; [2022] HCA 39

- SilovivBarbaro (1988) 13 NSWLR 466

- SpinavPermanent Custodians Ltd [2009] NSWCA 206

- ThornevKennedy (2017) 263 CLR 85; [2017] HCA 49

- Torok v Becker [2020] NSWSC 1570

- TurnervO'Bryan-Turner [2021] NSWSC 5

- TurnervWindever [2003] NSWSC 1147

- Twigg v Twigg (No 4); Lambert v Twigg Investments PtyLtd(No3) (2020) 147 ACSR 389;

[2020] NSWSC 1159

- VarmavVarma [2010] NSWSC 786

- VentourisEnterprisesPtyLtdvDibGroupPtyLtd

[2010] NSWSC 963

- Walsh Bay DevelopmentsPty Ltd v Federal Commissionerof Taxation (1995) 130 ALR 415; [1994] FCA 703

- WaltonsStores(Interstate) LtdvMaher (1998) 164 CLR 387; [1988] HCA 7

- WatsonvFoxman (1995) 49 NSWLR 315

- WestvAGC(Advances)Ltd (1986) 5 NSWLR 610

- WhitevWills [2014] NSWSC 1160

Category:

Principal judgment

Parties:

Joseph Patrick Mitchell (Plaintiff)
Gabrielle Gibbins (Defendant)

Representation:

Counsel:
J Clifton (Plaintiff)
TO Bland (Defendant)

Solicitors:
Lion Legal (Plaintiff)
Evans & Wislang (Defendant)

File Number(s):

2021/363706

Judgment

Nature of the application and background facts

1. By Amended Statement of Claim ("ASOC") filed on 30 March 2024, the Plaintiff, Mr Mitchell, seeks a range of relief against his daughter, Ms Gibbins.

2. The background facts are largely not controversial. Mr Mitchell was born in 1936 and is now 88 years old (ASOC [1]). He has suffered (ASOC [2]-[3]) several life events that have caused him difficulty, including a sexual assault by a teacher at his school at around 13 years of age, subsequent depression and issues with his physical health including heart issues since his early middle age. A claim that he also suffered from post-traumatic stress was abandoned at the hearing. He left school at the age of 16 in year 9 and has no tertiary qualifications, taught himself to read in early adulthood and has since worked as a farmer, real estate agent, butcher, timber cutter and sugarcane cutter (ASOC [3]-[6]). Mr Mitchell has three surviving adult children. I will refer to his two older children as "J" and "A" respectively. The Defendant, Ms Gibbins, is the youngest of those children and is now about 49 years old (ASOC [7]). Sadly, another child died at the age of 9 years of a brain tumour (ASOC [8]). Mr Mitchell's marriage ended acrimoniously in 1995 and his former wife and J have been estranged from him since around that time (ASOC [10]). Although Mr Mitchell does not plead it, the evidence established that a substantial order for victim's compensation was made against Mr Mitchell in his former wife’s favour, which is relevant to the events that I address below. Mr Mitchell acquired a property in Hamilton in 2000 ("Hamilton property"), apparently from proceeds of a distribution of property following his divorce, and has lived and still lives in that property since that time (ASOC [12]-[13]).

3. Mr Mitchell claims (ASOC [11]) that his anxiety, depression and associated mental health issues became more severe following the end of his marriage; and he also pleads several matters which he claims led to a decline in his mental health (ASOC [14]ff). In mid-2009, Mr Mitchell was referred to a psychologist (Ex J2, CB 128ff) who recorded his distress and frustrations with his interactions with the Roman Catholic Church; noted his success at work and that he was supported by his sisters but lived alone; and noted that his friendships with friends from the Catholic Church were jeopardised from time to time because of his position on Church issues. It appears (ASOC [21]ff) that Mr Mitchell was also suffering angina in 2009, which was treated by surgery in late 2012. Mr Mitchell pleads that he was estranged from family members other than Ms Gibbins at that time, although I have referred to his continuing contact with his sisters. Mr Mitchell pleads that Ms Gibbins and her husband (to whom I will refer as "D") knew or ought to have known the pleaded matters, as a result of his communicating them to them or their observing him. It is apparent from Mr Mitchell’s cross-examination that Ms Gibbins likely did not know some of these matters, including the sexual assault in his childhood, which he did not disclose to her.

4. Mr Mitchell in turn pleads (ASOC [23]) that:

“In December 2009 [Mr Mitchell], as a result of all or some of the circumstances pleaded in [(ASOC [14]-[21])];

i   felt physically and emotionally low and exhausted;

ii   felt that his death was imminent;

iii   had a desire to arrange his affairs after his death;

iv   did not know what to do about his Will;

v   was concerned that if he did make a Will, [J] and the Plaintiff's former wife would challenge the Will;

vi   felt unable to deal with arranging his affairs after his death other than in the way pleaded in [(ASOC [24] and [26)-[28])].”

5. I accept that Mr Mitchell was likely depressed and physically unwell in 2009; the evidence does not establish that he believed his death was then imminent or that the transaction which did not take effect in 2009 was a direct substitute for a will; although I accept that his intention was that, had that transaction then taken effect, it would have preferred Ms Gibbins to Mr Mitchell's other children. It is not necessary to reach more detailed findings as to these matters where it is clear, first, that Mr Mitchell did suffer from significant stresses in 2009 and, second, that the proposed transfer (“Transfer”) of the Hamilton property to Ms Gibbins did not take effect in 2009 and was not registered until December 2012.

6. Mr Mitchell in turn pleads (ASOC [24]-[26]) a conversation with Ms Gibbins and D in late 2023 when, he says, he asked Ms Gibbins and D whether they would look after A and her two daughters if he transferred the Hamilton property to them and they said they would do so. That conversation is disputed and I do not accept Mr Mitchell’s evidence in respect of it for the reasons noted below.

7. It is common ground (ASOC [27]) that, after the disputed conversation with Ms Gibbins and D, Mr Mitchell, Ms Gibbins and D attended East Coast Conveyancing (“ECC”) in Newcastle to sign the Transfer of the Hamilton property to Ms Gibbins. It appears to be common ground (ASOC [28]) that, at that meeting or at least about that time, it was agreed that Mr Mitchell would be allowed to remain living in the Hamilton property until he died, and he has to date done so. Mr Mitchell pleads (ASOC [29]-[30]) that, immediately after that conversation, he and Ms Gibbins signed the Transfer and the Hamilton property was transferred into Ms Gibbins' name without any notation of his right to remain living in that property for life. A transfer of the property from Mr Mitchell to Ms Gibbins was executed on 23 December 2009 (Ex J2, CB 134) but that transfer was not registered until three years later, in the circumstances that I address below. Mr Mitchell also pleads (ASOC [31]-[32]) that no monetary consideration was agreed to be paid, and only $10,700 was paid by Ms Gibbins to Mr Mitchell for the transfer of the Hamilton property when the value of that property at the time of that transfer was around $300,000. No transfer took place at that time and the position as to any payment of $10,700 at that time is unclear from the evidence.

8. Mr Mitchell does not plead subsequent events that emerged from the evidence. The Transfer executed in 2009 was lodged for registration but not registered and apparently returned, likely to Mr Mitchell. It could not then be registered because of a charge ("VCT Charge") on the property which existed in favour of the Victims Compensation Tribunal, referable to an order that Mr Mitchell pay the amount of $35,000 on the basis that he had been convicted of an offence arising from an act of violence, implicitly against his former wife (Ex J2, CB 126-127).

9. Mr Mitchell executed a will dated 13 October 2012 (Ex J2, CB 136), apparently with D’s assistance, and D witnessed that will (Ex J2, CB 137). Without Ms Gibbins’ involvement, Mr Mitchell subsequently discharged the VCT Charge in late 2012, prior to undergoing heart surgery, and only then transferred the Hamilton property to Ms Gibbins. The Victims Compensation Tribunal executed a discharge of the VCT Charge over the Hamilton property on 7 December 2012 (Ex J2, CB 138) and that Discharge of Charge and the Transfer of the Hamilton property from Mr Mitchell to Ms Gibbins were both registered, apparently by Mr Mitchell, on 18 December 2012 (Ex J2, CB 139). I recognise that Mr Clifton, who appears for Mr Mitchell, points out that Mr Mitchell does not give evidence that he lodged the transfer for registration in December 2012 and it seemed to me that he was not forthcoming in this aspect of his evidence. There is no suggestion that Ms Gibbins did so or had the capacity to do so without expert assistance, and Mr Mitchell had the capacity to do so by reason of his previous experience as a real estate agent and his experience in conveyancing. I find, as Mr Clifton anticipated that I might, Mr Mitchell in fact lodged that transfer for registration in December 2012

10. Mr Mitchell pleads (ASOC [32]-[33]) that he at no time discussed with, or agreed to, Ms Gibbins mortgaging the Hamilton property to any person; and that she and D purchased two other properties and she mortgaged those properties and the Hamilton property to Westpac as security for a loan. It now appears that Ms Gibbins owns one property other than the Hamilton property and a single loan is secured on the Hamilton property; Ms Gibbins gave evidence as to the approximate amount of that loan, which is likely significantly less than the value of the Hamilton property but the latter was not established by the evidence.

11. Mr Mitchell took legal advice concerning the Transfer from the Seniors Rights Service in September 2018, which it provided by a thoughtful letter dated 4 December 2018 (Ex D2). Mr Mitchell waived legal professional privilege in that advice when he provided it to the medical practitioners who provided expert reports in the proceedings. That letter recorded that Mr Mitchell did not provide any information regarding any pressure applied by Ms Gibbins to the solicitor then advising him, who assumed that the transaction was undertaken voluntarily, albeit that his decision-making “was affected by the circumstances [he was] in at the time”; and notes the medical information provided to that solicitor did not indicate any impaired capacity. The solicitor then provided measured advice, which I will not set out in full, and expressed the view that the transfer of the Hamilton property to Ms Gibbins had been a voluntary transaction; that the merits of a claim for unconscionability were not strong; that Mr Mitchell may now regret the transfer but seemed to be content with it at the time and that “[t]he law does not support a mere change of mind in such circumstances”; and that “the delay you have made in seeking to recover the property will count against you in any action you may take at Court”. The solicitor also recorded that Mr Mitchell had obtained a valuation for the Hamilton property at the time of the transaction, although that valuation is not in evidence; and confirmed that “there is no evidence you have provided to us as to any pressure applied by your daughter at the time of the transaction to coerce your will”. The solicitor also referred to time limits in respect of a claim, but no limitation point was ultimately pressed in these proceedings.

12. Mr Mitchell did not lead evidence of any request that he made to Ms Gibbins to retransfer the Hamilton property to him prior to the commencement of these proceedings in December 2021, some nine years after the Transfer had occurred. I will address the relevance of the terms on which Mr Mitchell then sought the retransfer of the Property to his unconscionability claim below.

Lay affidavit evidence and cross-examination

13. I first address the affidavit evidence and cross-examination. Both parties led evidence of oral conversations, and Mr Mitchell particularly relies on those conversations for his estoppel case. I have regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Hoy Mobile Pty Ltd v Al/phones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424]-[425]. This is a significant matter here where there was a long delay before Mr Mitchell brought the proceedings and the conversations in issue took place up to fifteen years ago.

14. The principles applicable to assessing claims for representations in oral form were helpfully summarised by Slattery J in Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 at [87] as follows:

“The principal conduct of the defendants that [the plaintiff] alleges was misleading or deceptive was the speaking of words in the course of a series of conversations. Special considerations apply when assessing alleged misleading and deceptive conduct in such a context. It is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in proved circumstances: Watson v Foxman (1995) 49 NSWLR 315 at 318 per Mclelland CJ in Eq In assessing whether spoken words were misleading the Court may have to examine relatively subtle nuances flowing from the use of one word, a phrase or a grammatical construction rather than another or the presence or absence of some qualifying word, phrase or condition: Watson v Foxman (1995) 49 NSWLR 315 at 31. The fallibility of human memory and the overlaying of memory with perceptions of self interest leading to sub conscious reconstruction are all hazards of ordinary human experience to which a Court must be alert in assessing whether particular spoken words are misleading or deceptive: Watson v Foxman (1995) 49 NSWLR 315 at 319. Ultimately each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not obtained or established independently of the nature and consequences of the fact or facts to be proved", including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712.”

15. I also note the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J (as his Honour was then) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [95]:

“Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences; see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 721; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.”

16. I have here also drawn on my summary of the applicable principles in Re Atlas Advisors Australia Pty Ltd (2022) 162 ACSR 509; [2022] NSWSC 705 at [5] and No 1 Victoria Dragons Pty Ltd v AEN Developments Pty Ltd [2022] NSWSC 134 (“Victoria Dragons”). Ultimately, there was little contest here between the parties as to many factual matters, although I will need to reach a finding as to credit as to Mr Mitchell’s claim that the Transfer was intended to protect A’s position rather than to prevent her making a claim against the Hamilton property following his death.

16. Each party primarily relied on their own affidavits. Mr Mitchell read his affidavit dated 5 September 2024. He there set out his early life and education, his generally unhappy home life whilst young, and the fact of a sexual assault by a teacher in the Catholic School system when he was about 13 years of age, for which he received compensation from the Catholic Church in 2013. Mr Mitchell’s evidence is that he left school at the age of 16 in year 9 and had no tertiary qualifications; he was illiterate until he taught himself to read at about 21 years old; and he then set out his working history. He referred to having worked in real estate for about a year, and to his subsequent purchase of a farm in Nelson Bay where he lived until his marriage ended in 1995, and to his estrangement from his former wife and J. He did not there address circumstances associated with the end of his marriage, which resulted in a substantial victim’s compensation award in favour of his former wife, which has significance for these proceedings which I address below.

17. Mr Mitchell also addressed his medical history until 2009 and difficulties with physical health, including angina, from at least 2009. He addressed his relationship with Ms Gibbins and D in 2009, and his evidence is that he would sometimes visit Ms Gibbins and D and stay overnight at their farm between 2009 and 2011 and his visits to the farm used to make him feel “happier and less anxious and depressed” (Mitchell 5.9.22 [56]). His evidence was also that his social life was limited at that time, although he saw one or more of his sisters each week and Ms Gibbins would also generally drive down to visit him twice a week.

18. Mr Mitchell also addressed his estrangement from J and difficulties in his relationship with A and gave evidence of his outlook in late 2009 (Mitchell 5.9.22 [67]-[72]). I have noted above that the Transfer was here registered in 2012 rather than 2009, a matter which was not recognised in Mr Mitchell’s first affidavit. Mr Mitchell also set out a conversation which he claimed took place in Christmas 2009, when Ms Gibbins was bathing her son on the kitchen table, in which he said “[y]ou know how the family’s going. If I put the deeds of the house in your hands will you look after [A] and her 2 daughters” and either Ms Gibbins or D said yes. Mr Mitchell now accepts that he was wrong in recalling the circumstances of that conversation, since Ms Gibbins’ son had not then been born. It is plain that the question of a transfer of the Hamilton property to Ms Gibbins must have been raised about that time, given the meeting that took place at ECC in late 2009, although the executed Transfer was not registered until 2012. I do not accept Mr Mitchell’s evidence that he then or later sought Ms Gibbins’ confirmation that she would look after A or her two daughters and I find that his purpose in the proposed Transfer of the property to Ms Gibbins was to benefit her and D to the exclusion of A and her husband, as to whom he then had an adverse view.

19. Mr Mitchell also addressed the circumstances of his meeting with Ms Gibbins and D at ECC in December 2009 and his evidence is that Ms Gibbins again accepted that she would look after A and her two daughters upon his death (Mitchell 5.9.22 [80]-[81]). I also do not accept that evidence. Mr Mitchell claims that he did not then read a document relating to the transaction; little turns on that, where the Transfer to Ms Gibbins was not registered until December 2012, and was then registered by Mr Mitchell without Ms Gibbins’ advance knowledge or her involvement. Mr Mitchell’s evidence is, and I accept, that Ms Gibbins and D did not raise a possible mortgage of the property with him in 2009; of course, no mortgage over the property could be granted until after the Transfer was registered in late 2012. Mr Mitchell also addressed his financial circumstances in 2009; I will assume, without deciding, that his position likely remained substantially the same when he caused the Transfer to be registered in late 2012. His evidence is that he started to see less of Ms Gibbins and D around 2011 (Mitchell 5.9.22 [92]) which was prior to the registration of the Transfer of the property to Ms Gibbins in late 2012.

20. By his second affidavit dated 6 June 2023, Mr Mitchell recognises that the Transfer of the Hamilton property was not registered in December 2009, as he had previously thought, but only on 18 December 2012. His evidence is, importantly, to the best of his memory, that he did not have any conversations with anyone about the Transfer between 23 December 2009 and 18 December 2012 (Mitchell 6.6.23 [9]), and that evidence is inconsistent with any involvement of Ms Gibbins or D in bringing about the registration of the Transfer in December 2012. He acknowledges that he paid out the amount then owed to Victims Services and then lodged a discharge of the VCT Charge over the Hamilton property in December 2012. Mr Mitchell there refers to his continuing health difficulties between 2009 and 2012 and to his heart surgery which took place in December 2023, and to his feeling “much better physically and mentally” following the operation. He also refers to having felt anxiety and depression as to family issues between 2009 and 2012.

21. By a third affidavit in reply dated 6 September 2023, Mr Mitchell responded to aspects of Ms Gibbins’ affidavit. Mr Mitchell had plainly not carefully reviewed that affidavit which contained (at [25]) an unanswered question raised by his solicitor for his comment. He there first addressed the circumstances that lead to the victim’s compensation order in favour of his former wife. He also there addressed his attitude to A and her husband and his then approval of Ms Gibbins’ husband, D. He there claims that he “thought that the best way to provide for [A] and her daughters was to leave his home to [Ms Gibbins] instead of [A] so that [D] rather than [A’s husband] would have a say in how [A] and her daughters were provided for”. The apparent assumption that either D or A’s husband should have a “say” in the provision for A and her daughters may be a function of Mr Mitchell’s age. I do not accept Mr Mitchell’s evidence that this was the basis of the Transfer, which I have found above was directed to benefitting Ms Gibbins to the exclusion of A and her husband. Mr Mitchell there denies dissatisfaction or anger with A or her spending habits (Mitchell 6.9.23 [19]); whether or not Mr Mitchell was dissatisfied with A, he was plainly then dissatisfied with A’s husband. He goes on to deny that he did not want A to benefit from the home and I do not accept his evidence in that regard.

22. Mr Mitchell there denied that he knew until recently of the VCT Charge over his home and claimed that he wanted to settle his debts before he had heart surgery in December 2012 and contacted Victims Services to get a payout figure for what he owed; and did not do this to remove the VCT Charge or allow the Transfer to be registered; and he did not know there was a charge and thought his home was already in Ms Gibbins’ name (Mitchell 6.9.23 [35]). I do not accept that evidence; it seems to me plain from the timing of events that Mr Mitchell only paid the amount due to Victims Services, for the benefit of his former wife, so as to remove the VCT Charge and allow the registration of the Transfer in late 2012. Mr Mitchell plainly did not then think that the property was already in Ms Gibbins’ name, where he then took steps to register the Transfer and had the experience to do so as a result of his earlier work in real estate. Mr Mitchell also there refers to his trust in Ms Gibbins and D (Mitchell 6.9.23 [39]) and I accept that he trusted Ms Gibbins and D between 2009 and late 2012.

23. Mr Mitchell was cross-examined as some length. Mr Mitchell accepted in cross-examination that he had not told Ms Gibbins of the abuse he suffered while at school; and it appears that he did not disclose his mental health history to her, although I recognise that some aspects of his physical condition and state of mind would likely have been evident to her in a family context. He was cross-examined, among other things, about the circumstances in which he had changed his mind about the gift of the Hamilton property to Ms Gibbins, when D did not go ahead to purchase another property that Mr Mitchell considered would be a good investment; although he then reversed his position in cross-examination to claim that he had not changed his mind. I have had regard to the whole of that cross-examination, although I do not summarise it further where it is not necessary to reach findings as to most of the issues addressed to determine the proceedings. Mr Clifton accepted in closing submissions that Mr Mitchell’s cross-examination was protracted, as a result of his discursive approach to answering questions, but submitted that that discursiveness was an aspect of his personality. He submitted that Mr Mitchell was a witness of truth and made appropriate concessions, including his concession that he had not told Ms Gibbins about the abuse he suffered while a school boy. Mr Bland, who appears for Ms Gibbins, accepted in closing submissions that Mr Mitchell was “truthful in the witness box”, and submits that he at times contradicted his affidavit evidence in that respect, but pointed to his failure to answer several questions when put multiple times. He submits that Ms Gibbins’ evidence should be preferred to Mr Mitchell’s evidence, to the extent that any conflict of between their evidence arises. I do not find that Mr Mitchell was consciously untruthful; however I do find that he is wholly committed to the view which he now holds that the transaction in 2012 should be set aside, and that his evidence was consciously or unconsciously shaped by his commitment to that view.

24. Ms Gibbins read her affidavit dated 25 July 2023 which referred to Mr Mitchell’s request, in early 2009, that she and D buy the Hamilton property, which she and D could not afford to do. Ms Gibbins’ evidence, which I accept, is that Mr Mitchell eventually told her that “he was upset with [A] and [A’s husband] and wanted to make sure that they did not get any part of the property after his death” (Gibbins 25.7.23 [8]). Ms Gibbins refers to a later occasion, late in 2009, where Mr Mitchell threw a document on the table, apparently being a certificate of title for the Hamilton property and said that “it’s all yours” (Gibbins 25.7.23 [13]–[14]). Ms Gibbins outlines the matters which had given rise to Mr Mitchell’s unwillingness to leave the Hamilton property to A and she refers to a later conversation in which she claims that Mr Mitchell told her, when she was pregnant with her son, that he wanted the Hamilton property to be for her son’s benefit (Gibbins 25.7.23 [23]).

25. Ms Gibbins denies that a conversation took place in which Mr Mitchell asked her to look after A or her daughters, but accepts that he had sought a commitment, which she had given, that he could continue to live in the house (Gibbins 25.7.23 [28]). Her evidence is that there was no contemplation of a mortgage on the house at that time and it was not discussed, but she accepts that she and D later used the property for a financing in 2015. Her evidence ([33]) was that:

“While we never wrote anything down, we agreed to let [Mr Mitchell] live there rent free as long as he needed to. At no time did we discuss any limitation on what we could do with the property, as we agreed to let him live there for as long as he liked, we clearly were obliged not to sell it during his residency.”

27. Ms Gibbins also refers to the meeting with ECC although she does not have a particularly strong recollection of it; her evidence is that she was not aware of the VCT Charge over the Hamilton property and that her mother had not told her that she had been to Victims Services; and that Mr Mitchell had not told her, when she visited him in hospital following his operation in December 2012, of the VCT Charge or the fact that the Hamilton property had been transferred to her.

28. Ms Gibbins was also cross-examined. Mr Clifton submitted, and I accept, Ms Gibbins had a relatively poor, or at least somewhat imprecise, recollection of events. That is understandable given the long delay by Mr Mitchell in commencing the proceedings, which were not commenced until between nine and twelve years after the relevant events, although no limitation points were ultimately pressed by the parties. Ms Gibbins accepted, both in her affidavit evidence and in cross-examination, that she was uncomfortable with Mr Mitchell’s plan to transfer the Hamilton property to her; it does not follow that that reflected a perception that the transaction did not reflect Mr Mitchell’s wishes in 2009, when it did not proceed, or in December 2012, when Mr Mitchell registered the Transfer without her involvement. Ms Gibbins’ evidence in cross-examination was that, at the time of the discussions in December 2009, Mr Mitchell did not want A and her husband to have a claim against the Hamilton property after his death and that he did not seek a commitment from her to look after A and her two daughters as part of any transfer of the Hamilton property to her (T34). The latter position is, of course, consistent with an intent then to exclude A and her husband from a financial benefit from that property. Mr Clifton submits that the Court should be sceptical of Ms Gibbins’ evidence that Mr Mitchell did not seek her commitment to assist A and her daughters after he died, given her limited recollection of other matters. I accept her evidence in that respect, where it is consistent with the other evidence of Mr Mitchell’s attitude to A’s husband and his description of his purpose to the medical experts whose reports were led in evidence.

29. Mr Clifton notes the fact that Ms Gibbins gave limited evidence of what occurred in December 2012; that was hardly surprising, where Mr Mitchell gave no evidence in chief of events in December 2012, and his case as initially articulated was directed to challenge to a transfer that he wrongly thought had been registered in December 2009. I accept that Ms Gibbins likely realised in early 2013 that the transfer of the property to her had taken place, when she first received rate notices or correspondence from Newcastle City Council in respect of the property. I recognise that Ms Gibbins had difficulty in addressing some questions and I accept her evidence that she was finding the process distressful and hurtful (T37). Ms Gibbins had apparent difficulty dealing with a question whether she wanted to retain the Hamilton property (T39); it seems likely that that difficulty related to her having made “several offers” to which she referred, which were not in evidence and were presumably made on a “without prejudice” basis.

30. For completeness, Mr Mitchell also relies on a Jones v Dunkel ((1959) 101 CLR 298; [1959] HCA 8) inference arising from Ms Gibbins’ not calling D to give evidence in the proceedings. There is little dispute as to the matters as to which D could give evidence and, in particular, as to the execution of the Transfer at ECC in December 2009 and neither Ms Gibbins nor D were involved in or could have given useful evidence as to the Mr Mitchell’s causing the registration of the Transfer in December 2012. An inference that D’s evidence would not have assisted Ms Gibbins, or that the Court could more readily draw inferences in Mr Mitchell’s favour, would not assist Mr Mitchell with the aspects in which his case has failed below.

Medical evidence

31. The parties also led medical evidence. Mr Mitchell attended a capacity assessment undertaken by Dr Cocks reflected in his report dated 6 May 2022 (Ex P1), which included a detailed medical history. Based on that history, Dr Cocks expressed the view that Mr Mitchell had suffered from recurrent episodes of depression and anxiety and from post-traumatic stress in relation to sexual abuse suffered as a child, but also noted that those past difficulties were not currently impairing his current mental state and that he did not display any defects in cognition that would impair his capacity to instruct his solicitor or be actively involved in the proceedings.

32. Mr Mitchell also tendered a report of Associate Professor (Adjunct) Wijeratne dated 16 October 2023 (Ex P2), which noted Mr Mitchell’s then claim that he transferred the Hamilton property to Ms Gibbins in December 2009 (rather than December 2012) when he was at a “special disadvantage” in his dealings with her. Associate Professor Wijeratne again set out the history provided by Mr Mitchell, which recorded Mr Mitchell’s advice that “[h]e did not want to give the house to [A] as she was married to a “dole bludger”, consistent with the finding that I have reached above. Associate Professor Wijeratne also recorded Mr Mitchell’s advice that he was then worried that Ms Gibbins and D could sell the Hamilton property and that he would like that property returned to him. Associate Professor Wijeratne there reviewed the affidavit evidence on which Mr Mitchell relied in the proceedings; that course created an obvious difficulty, where the conclusions that he has reached depend in part on evidence of Mr Mitchell that I have not accepted. Associate Professor Wijeratne in turn expressed the view that several factors affected Mr Mitchell’s judgment when he transferred the Hamilton property to Ms Gibbins in December 2009 (rather than December 2012), which included Mr Mitchell’s chronic depression, his belief that his death was then imminent, his limited education and social isolation, his concern for A and his adverse view of A’s husband, his close relationship with Ms Gibbins and his respect for D. Associate Professor Wijeratne then expressed the view, which was outside his expertise, that the circumstances of the transfer gave rise to concerns that Mr Mitchell was “at risk of unconscionable conduct”. That evidence was directed to the position in December 2009, although I assume that aspects of it may well be applicable to the position in December 2012 when the Transfer was registered.

33. Mr Mitchell also tendered his detailed medical records (Ex P3). I have had regard to their content but do not address them in detail in order to preserve Mr Mitchell’s confidentiality, where it is not necessary to rely on them to determine the proceedings.

34. Ms Gibbins in turn relied on the report dated 22 January 2024 of Dr Matthew Jones, a forensic and general psychiatrist, who had examined Mr Mitchell (Ex D1). Dr Jones referred to difficulties in his following Mr Mitchell’s narrative of events, but Mr Mitchell then performed well in a cognitive test then administered by Dr Jones. Dr Jones also took a detailed medical history where Mr Mitchell again confirmed that he changed his mind about the transfer of the Hamilton property to Ms Gibbins when D failed to complete a property purchase that Mr Mitchell thought he should have completed in 2013 (Ex D1, CB 170). Mr Mitchell then told Dr Jones that he “wanted the property back from [Ms Gibbins] so that [D] would not access it”; that is much the same position as he previously took in seeking to avoid A obtaining an interest in the property after his death so that her husband also could not access it. Mr Mitchell then explained the then basis of the transfer of the property to Dr Jones as follows, consistent with the finding that I have reached above that the transfer was intended to exclude a claim by A or her husband against the property:

“He genuinely struggled to find a motivation, but ultimately said that he thought it would be in safe hands, away from the rest of his family and the Church and [A] ringing him up. He also reminded me that [A]’s husband, who was on the dole, was saying that he was going to teach his daughters to live on the dole.”

35. Mr Mitchell then advised Dr Jones that he decided he wanted the Hamilton property back in 2012, although it “took him years to find a lawyer”. That account is plainly incorrect, where Mr Mitchell did not cause the Transfer of the property to Ms Gibbins to be registered until December 2012, and is inconsistent with his earlier reference to his change of mind in 2013. Dr Jones also had regard to Mr Mitchell’s affidavit, which also has the difficulty that I have not accepted part of Mr Mitchell’s evidence, and also reviewed Associate Professor Wijeratne’s report and Mr Mitchell’s detailed medical records. Dr Jones referred to Mr Mitchell’s disordered thought processes, although he scored well on a basic cognitive screening test and observed that:

“A lack of logic to his narrative that supported the probability that there were indeed ongoing cognitive impairments, particularly with regard to high order functioning such as judgment and executive functioning.”

36. Dr Jones there accepted that it was likely that Mr Mitchell had some impairment in his capacity to understand the full ramifications of his decisions regarding the transaction in 2009, although the Transfer was not then registered; and noted that personality factors and any cognitive impairment would likely have remained present until 2012 and until today (Ex J2, CB 179).

37. By their joint report dated 18 July 2024, Associate Professor Wijeratne and Dr Jones indicated that there were no major points of disagreement between them and that they agreed that Mr Mitchell’s:

“… premorbid personality was that of a rigid and obsessional man whose relationship with both members of his immediate family and with outsiders, such as his general practitioner and members of the Church, have been dysfunctional over a long period of time. The personality traits are likely to have been exacerbated by cognitive impairment that began in later life.

His diagnoses are chronic anxiety and depression, and mild cognitive impairment. …

We agree that the factors outlined in A/Prof Wijeratne’s report as indicating Mr Mitchell’s vulnerability to ‘unconscionable conduct’ at the time he transferred ownership of the Hamilton Property to [Ms Gibbins] are pertinent.

We agree with the opinion expressed by Dr Jones that Mr Mitchell likely had some impairment in his capacity to understand the full ramifications of his decision regarding the transaction. More specifically, in determining his capacity to make the transaction we have considered that whilst he is likely to have retained an adequate understanding of his estate and its approximate value, more crucially he is likely to have lacked the capacity to weigh up the potential benefits verses the risks of completing the transaction.

In particular, he lacked the insight, ability for self-reflection and judgement to consider the potential for conflict or disfunction in his relationships with [Ms Gibbins] and her husband, despite this being a repeated pattern in other family relationships. He failed to consider that if he were to change his mind and request that title of the Hamilton Property be returned to him, such a request may not have been complied. Finally, he failed to seek legal advice about transferring title.”

38. I pause to note that these conclusions do not appear to have engaged with the fact that Mr Mitchell’s initial decision to transfer the Hamilton property to Ms Gibbins was made in late 2009, but the Transfer was not registered until December 2012, or with Ms Gibbins’ lack of involvement in the steps which brought about the registration of the Transfer in December 2012; and the last paragraph of the experts’ joint report extends beyond recognising the limits of Mr Mitchell’s reasoning skills to speculation as to his actual thought process in respect of the Transfer, although his failure to seek legal advice as to that Transfer is common ground.

Mr Mitchell’s contractual claim

39. Mr Mitchell pleads (ASOC [34]) that the conversation between him and Ms Gibbins at ECC’s offices and the execution of the Transfer formed a contract and pleads its terms (ASOC [35]) as follows:

“in exchange for the consideration of [Mr Mitchell] transferring the Hamilton property to [Ms Gibbins];

i   [Ms Gibbins] promised to provide for A and her daughters as they reasonably required after [Mr Matthew's death] ("provision for [A]") and/or allow [Mr Mitchell] to live in the Hamilton property for life ("life tenancy"), and/or;

ii   consideration flowed to [Mr Mitchell] in that by the transferring of the Hamilton property to [Ms Gibbins] he avoided, or obtained the opportunity to avoid, a Family Provision or other claims on the Hamilton property after he died.”

40. In support of the claim that a contract was established in December 2009, Mr Clifton refers to:

“a fundamental agreed quid-pro-quo between [Mr Mitchell] and [Ms Gibbins] to the effect that [Mr Mitchell] would transfer title to the Hamilton property to [Ms Gibbins if Ms Gibbins] allowed him to remain living in the Hamilton property for life, which quid-pro-quo is itself indicative of a contract.”

41. Mr Clifton also refers to, and I have regard to, case law as to when dealings between family members can give rise to enforceable contracts and acknowledges the potential relevance of post-contractual conduct determining whether an oral contract was formed: Bovaird v Frost [2009] NSWSC 337 at [49]ff; King v Adams [2016] NSWSC 1798 at [65]-[69]; Moore v Aubusson [2020] NSWSC 1466 [266]ff; [332]. Mr Clifton submits that:

“The Court can be satisfied that the requisite intention to create legal rights and contractual obligations was present in the agreement between Mr Mitchell and Ms Gibbins.”

42. Mr Bland, who appears for Ms Gibbins, in turn points to a lack of clarity in any term of the suggested contract that required Ms Gibbins to take care of A and her children after Mr Mitchell’s death.

43. I recognise that any contract here was formed from dealings within a family context and with a high degree of informality and that strict requirements for the identification of an offer and acceptance may not be applicable in this context: Ormwave Pty Ltd v Smith [2007] NSWCA 210 at [68]-[75]. I also recognise that subsequent communications can be looked at as an aid to deciding whether a contract has been entered into at all, that subsequent conduct must be assessed in its context and that one party's having acted inconsistently with a suggested contract will not necessarily displace that contract: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 per Campbell JA at [59] (with whom Beazley JA agreed, and Basten JA agreed with one qualification); Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [143]; Hightime Investments Pty Ltd v Adamus Resources Ltd [2012] WASC 295 at [98]-[99]; Mouti v Nguyen [2015] NSWCA 93 at [90] and [93]­[98].

"... the task in ascertaining what are the terms of a contract that is not wholly in writing ... is finding as a fact what the parties have agreed. A range of postcontractual conduct could be relevant to ascertaining what the parties have agreed. For example, their conduct in carrying out the contract could itself be objective evidence of what they had agreed, an admission of one of the parties could assist in ascertaining what they have agreed, and business records created to record or report on the contract rather than carry it out could also assist in that task.”

44. I am not persuaded that a contract, or at least the pleaded contract, was formed here. First, I do not accept Mr Mitchell's evidence that Ms Gibbins was asked to or did undertake an obligation to provide for A and her daughters after Mr Mitchell's death when he proposed to transfer the Hamilton property to her. Second, if Ms Gibbins were entering into such a contract, it is inconceivable that she would (as pleaded) undertake an obligation to provide for A and her daughters after Mr Mitchell's death in consideration of execution of a Transfer which could not then be registered and had no legal effect. Third, the terms of the pleaded contract are impossibly uncertain, arising from the absence of definition of what would be proper provision for A and her daughters and the language "and/or" which leaves open whether Ms Gibbins was obliged to perform both parts of the alleged term or only one of them. Fourth, an intention to enter legal relations is not established, where, in the three years between December 2009 when the suggested contract was formed and December 2012 Mr Mitchell when registered the Transfer, no-one suggested that he was under any contractual obligation to register the transfer of the property to Ms Gibbins or was in breach of any contract by not having done so.

45. Mr Mitchell also pleads (ASOC [36]) that:

“[t]he contract contained an implied term that [Ms Gibbins] would not transfer in whole or in part title to the Hamilton property to any third party or otherwise alienate the Hamilton property during [Mr Mitchell's] lifetime ("retention of title implied term") by reason of the following:

i   the retention of title implied term is reasonable and equitable in that the creation of the contract depended on the parties' family relationship;

ii   the retention of title implied term is necessary to give business efficacy to the contract in that the terms of the contact could not be satisfactorily performed by a third party;

iii   the retention of title implied term is so obvious that it goes without saying in the circumstances surrounding the contract including the parties' family relationship and the terms of the contract including the life tenancy;

iv   the retention of title implied term is capable of clear expression; and

v   the retention of title implied term does not contradict any express term of the contract.”

46. It is plain from the pleaded implied term that Mr Mitchell seeks to imply that term in accordance with the requirements for the implication of such a term set out by the majority of the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283 (“BP Refinery”), as approved by Mason J in Code/fa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24 at 347, namely, the specified term (1) must be reasonable and equitable; (2) must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) must be so obvious that “it goes without saying”; (4) must be capable of clear expression; and (5) must not contradict any express term of the contract.

47. I recognise that, in Hawkins v Clayton (1988) 164 CLR 539 at 571-573, Deane J observed that:

“[c]are must be taken to avoid an automatic or rigid application of the ordinary cumulative criteria for determining whether a term should be implied in a written contract to a case where the contract is oral or partly oral or where it is apparent that the parties have never attempted to reduce their agreement to complete written form ... The cases in which those criteria were laid down or accepted as the cumulative ingredients of an overall test were concerned with the question whether a term should be implied in a formal contract which was complete upon its face …

... there are sound reasons for resisting the temptation to attempt to formulate a precise mechanical test for determining what terms, if any, should be implied in a case where the parties have not sought to spell them out. Such a precise mechanical test would introduce an element of inflexibility which would be likely to lead to injustice in the circumstances of particular cases and would preclude proper observance of Lord Tomlin's sensible admonition "so to balance matters that without violation of essential principles the dealings of men may as far as possible be treated as effective and that the law may not incur the reproach of being the destroyer of bargains" (see Hi/las & Co, Ltd v Arcos, Ltd (1932) 43 Lloyd's LR 359 at 364). The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. …”

48. In Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; (2022) 406 ALR 678; [2022] HCA 39, the High Court considered the basis of implication of terms in a case where licence agreements were not in writing and where there was no express oral agreement for the grant of the relevant licences. Kiefel CJ and Gageler J (at [18]) summarised the BP Refinery factors, observing that:

“Apart from being reasonable and equitable, capable of clear expression and non-contradictory of the express terms of the contract, to be implied a term must be necessary to give business efficacy to the contract (which will not be satisfied if the contract is effective without it), and it must be so obvious that ‘it goes without saying’.”

49. Their Honours also noted later authority that a term may be implied if it is “necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case” and pointed to a reconciliation of any difference in the two approaches, that a term which fails to meet the obviousness criterion would likely not be necessary for the reasonable or effective operation of the contract. Gordon J took a possibly different approach (at [50]) observing that “there is now little, if any, distinction between the latter case of an ‘implied’ term by reference to the obvious presumed or imputed intention of the parties, and the identification of the ‘express’ terms of an agreement by reference to the objective intention of the parties”, and that the approach taken in earlier cases no longer applied. Edelman and Steward JJ there observed (at [114]-[116]) that the BP Refinery criteria are not applied in an over-rigid way in informal contracts. These principles were also recently summarised by Attiwill J in Re Border Express Pty Ltd [2023] VSC 769 at [97]ff.

50. Mr Clifton addresses the circumstances in which terms may be implied in contracts, by reference to some of the case law to which I have referred above, and submits that the suggested “retention of title” and “no mortgage” implied terms satisfy the requirements for implication of such a term. He submits Ms Gibbins has breached both terms, or at least the “no mortgage implied term” by mortgaging the Hamilton property to Westpac. He submits:

“While [Ms Gibbins] herself clearly cannot execute a Discharge of Mortgage on behalf of Westpac, [Ms Gibbins] can arrange to obtain a Discharge of Mortgage from Westpac in respect of the Hamilton property by either refinancing the Westpac loan on the basis that the refinance arrangement does not involve a mortgage or other security over the Hamilton property, or simply sell one or both of the properties that she owns as pleaded in paragraph 33(i) and (ii) of the ASOC to discharge the Westpac mortgage in its entirety and therefore release the Hamilton property from encumbrance.”

51. Mr Bland responds that the suggested implied terms are not so obvious that they go without saying.

52. I do not accept that such an implied terms is established, because I do not accept that a contract is established. I also do not accept that such a term is either necessary to give business efficacy to the alleged contract or so obvious that it goes without saying, where Mr Mitchell's interests would not be better protected by the implied term than by a promise, which it is common ground was made by Ms Gibbins although I have not held it to have contractual effect, that he could live in the Hamilton property for life.

53. Mr Mitchell alternatively pleads that:

“Further, or in the alternative, the contract contained an implied term that [Ms Gibbins] would not mortgage the Hamilton property (“no mortgage implied term”), which implied term arose by reason of the following facts:

i   the no mortgage implied term is reasonable and equitable in that the registration of a mortgage over the Hamilton property creates the real risk of action by the mortgagee in the event of breach of the mortgage, which action would make the life tenancy and/or provision for [A] impossible for [Ms Gibbins] to perform and thereby make substantial performance of the contract by [Ms Gibbins] impossible, and additionally could leave [Mr Mitchell] without a home and his only substantial asset;

ii   the no mortgage implied term is necessary to give business efficacy to the contract for the reason pleaded in (i);

iii   the no mortgage implied term is so obvious it goes without saying for the reason referred to in (i) and (ii), in the circumstances surrounding the contract including the relationship of the parties and the absence of any discussion or agreement in relation to mortgaging the Hamilton property, and considering the ongoing obligations of [Ms Gibbins] to fulfill provision for [A] and the life tenancy;

iv   the no mortgage implied term is capable of clear expression;

v   the no mortgage implied term does not contradict any express term of the contract.”

54. I do not accept that such an implied terms is established, because I do not accept that a contract is established. I also do not accept that the no mortgage implied term is either necessary to give business efficacy to the alleged contract or so obvious that it goes without saying, for the same reasons that I do not accept the retention of title implied term meets those requirements.

55. Mr Mitchell's claim (ASOC [381]) that Ms Gibbins breached the retention of title term and/or no mortgage implied term by mortgaging the Hamilton property to Westpac is not established, because neither the contract nor those terms is established. Mr Mitchell did not identify any relief sought on the basis of this claim.

Claim under the Contracts Review Act (“CRA”)

56. Perhaps oddly, having first sought to establish the existence of a contract between Mr Mitchell and Ms Gibbins, Mr Mitchell then seeks to set it aside under the CRA. He pleads (ASOC [39]) that “the contract was unjust in the circumstances relating to the contract at the time it was made within the meaning of the CRA by reason of” specified matters, two of which have general effect and many of which reflect matters specified in the CRA as relevant matters. I will address those matters below after first addressing the applicable principles. There is a degree of artificiality in the application of these principles here, where I have found that the pleaded contract is not established; Ms Gibbins did not have the level of involvement in the transfer of the property which the negotiation of a contract would have required, where Mr Mitchell determined the way in which the matter would proceed; and the Transfer was not registered by Mr Mitchell in 2012 pursuant to any contract formed in 2009. I have drawn on my judgment in Re Reserve Hotels Pty Ltd (2021) NSWSC 376 for this summary.

57. Section 7(1) of the CRA relevantly provides that:

“(1)   Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following:

(a)   it may decide to refuse to enforce any or all of the provisions of the contract,

(b)   it may make an order declaring the contract void, in whole or in part,

(c)   it may make an order varying, in whole or in part, any provision of the contract …”

The reference to “the circumstances relating to the contract at the time it was made” in s 7(1) of the CRA is not limited, in its terms, to those circumstances which were known to the party that seeks to rely on the contract at the relevant time, although a lack of knowledge of relevant matters may well be relevant to the exercise of the Court's discretion: Re Elsmore Resources Ltd (2016) 114 ACSR 297; [2016] NSWSC 856 at [65].

58. In West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 620 (“West v AGC (Advances)”), McHugh JA observed that a contract may be unjust, for the purposes of s 7(1) of the CRA, in the circumstances existing when it was made because of the way it operates in relation to the claimant or because of the way in which it was made or both. In Kowalczuk v Aecom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 at [86], Campbell JA (with whom Hodgson and McColl JJA agreed) similarly observed, by reference to authority, that a contract could be unjust by reason of substantive injustice, because its terms, consequences or effects were unjust, or because of procedural injustice, by reason of the unfairness of the methods used to make it. His Honour noted that two distinct steps are involved in applying the CRA, the first being to determine whether the contract was unjust in the circumstances in which it was made, having regard to the factors referred to in s 9 of the CRA, and involving a broadly based value judgment, and the second being whether any relief should be granted, and what that relief should be.

58. In Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [7], Allsop P (as his Honour then was) in turn summarised the evaluation involved in determining whether relief should be allowed under the CRA as follows:

“The broad evaluation of unjustness under the [CRA], s 4, s 7 and s 9 involves the normative evaluation of the totality of relevant circumstances. Inevitably minds may differ as to conclusions about such questions. Also, it is often not fruitful to compare other cases with the particular circumstances at hand, lest one be deflected from an appropriate overall assessment by focus on particular aspects relevant to any such comparison. Central to the normative evaluation is the recognition that there is a need for the protection of some people in some circumstances, who are not able fully to protect their own interests against factors that may cause injustice. That vulnerability may come from one or more of many circumstances, such as lack of education or of intelligence, from gullibility, from the predation of fraud and greed, and also sometimes from loyalty and love. The characterisation of a contract as unjust and the sheeting home to the other contracting party of the consequences of its unjustness may be a difficult evaluative exercise. At its heart, however, is the recognition of the inadequacy of one party to protect her or his interests in the circumstances.”

The applicable principles in respect of an application under s 7 of the CRA were also summarised by Sackar J in White v Wills [2014] NSWSC 1160 at [107]ff in similar terms, in a passage approved by Kunc J in Crane Distribution Ltd v Yang [2016] NSWSC 620. Mr Clifton also refers to and I have had regard to Henry J’s summary of the applicable principles in Commercial N Pty Ltd v Huang & Ors [2024] NSWSC 23 at [317]ff and to Stern JA’s summary of the principles in Dalton & Schaeffer as Executors of the Estate of the Late John Herman Schaeffer v Naegeli [2024] NSWCA 51 at [210].

60. Mr Clifton addresses the relevant provisions of the CRA and submits, relevantly, that Mr Mitchell has parted with ownership of his home which was his only significant asset without any security interest or other protection in circumstances of substantial and material inequality in bargaining power. Mr Mitchell also relies on two general matters to seek relief under the CRA, namely that:

“i   if the court does not find that the contract contains the retention of title term and/or the no mortgage term (including if the court finds that those claims are statute barred), the contract is unjust in that [Mr Mitchell] may lose his home (which is only substantial asset) without compensation if [Ms Gibbins] is insolvent; [and]

ii   even if the court finds the retention of title implied term and/or the no mortgage implied term, [Mr Mitchell] may lose his home (which is only substantial asset) without compensation if [Ms Gibbins] breaches one or both of those terms and is insolvent.”

61. I accept that these risks exist and, had there been a contract of the kind alleged rather than the unilateral Transfer of the Hamilton property by Mr Mitchell to Ms Gibbins in December 2012 followed by a change of mind by Mr Mitchell when D did not meet his expectations in acquiring other real estate, these matters may well have supported relief under the CRA.

62. Section 9(2) of the CRA directs the Court to have regard to specified matters to the extent they are relevant to the circumstances, without affecting the generality of s 9(1) of the CRA. In West v AGC (Advances) above, McHugh JA noted (at 621) that the provisions of s 9(2) of the CRA do not exhaustively indicate the criteria that may be taken into account in determining whether a contract or any of its provisions are unjust, and the Court is entitled to have regard to all the circumstances of the case, subject to s 9(4) of the CRA, and the public interest; and a similar view was expressed in Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [105].

63. The first matter specified in s 9(2)(a) of the CRA is whether or not there was any material inequality in bargaining power between the parties to the contract. Mr Mitchell pleads that, here:

“iii   there was material inequality of bargaining power between the parties to the contract in that [Ms Gibbins] was around 40 years old and in good physical and mental health at the time the contract was entered into and [Mr Mitchell] was 73 and affected by the circumstances pleaded in ASOC [14]-[21] and [23] above”

64. I accept that such inequality would have existed, had there been any real bargaining and had a contract been formed. Here, this factor is not applicable, because Mr Mitchell determined the nature of the transaction without any real input by Ms Gibbins and he implemented the Transfer without her involvement in December 2012, three years after she had executed it in accordance with his wishes in 2009.

65. The second and third matters specified in ss 9(2)(b)-(c) of the CRA are whether or not, prior to or at the time the contract was made, its provisions were the subject of negotiation, and whether or not it was reasonably practicable for the party seeking relief under the CRA to negotiate for the alteration of or to reject any of the provisions of the contract. Mr Mitchell here pleads that:

“iv   the contract was not the subject of negotiation concerning its terms or discussion as to it possible consequences, including but not limited to [Ms Gibbins] selling or otherwise alienating the Hamilton property;

v   it was not reasonably practical for [Mr Mitchell] to consider the contract and its possible consequences in the circumstances pleaded in paragraphs [14]­[21] and [23] above”

66. I accept that the registration of the Transfer here was not the subject of negotiation, but little turns on that where Mr Mitchell determined what was to occur without any significant involvement by Ms Gibbins.

67. The fourth matter specified in s 9(2)(d) of the CRA is whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract. In West v AGC (Advances), McHugh JA observed, referring to this paragraph that:

“A contractual provision may be unjust simply because it imposes an unreasonable burden on the claimant when it was not reasonably necessary for the protection of the legitimate interests of the party seeking to enforce the provision.”

68. Mr Mitchell relevantly pleads that:

“vi   to the extent, if any, [Ms Gibbins] is able to transfer title to, otherwise alienate or mortgage the Hamilton property under the contract, that ability is not reasonably necessary for [Ms Gibbins'] protection when she received the property for minimal monetary payment;”

69. I accept that would be the case if (contrary to my view) there was a contract, but it would have less weight here where Mr Mitchell rather than Ms Gibbins had determined the terms of such a contract.

70. The fifth and sixth matters specified in s 9(2)(e)-(f) of the CRA are, relevantly, whether or not any party to the contract (other than a corporation) was not reasonably able to protect his or her interests because of his or her age or the state of his or her physical or mental capacity; and the relative economic circumstances, educational background and literacy of the parties to the contract (other than a corporation). The seventh matter specified in s 9(2)(g) of the CRA is, where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed.

71. Mr Mitchell pleads that:

“vii   [Mr Mitchell] was not reasonably able to protect his interests because of the circumstances pleaded in [ASOC [14]-[21] and [23] above;

viii   [Ms Gibbins] and [D] were more educated, better off financially and more literate than [Mr Mitchell];”

72. I accept that these matters would likely be established if (contrary to my view) there was such a contract. The seventh matter specified in s 9(2)(h) of the CRA does not arise.

73. The eighth matter specified in s 9(2)(h) of the CRA is whether or not and when independent legal or other expert advice was obtained by the party seeking relief under the CRA. The ninth matter specified in s 9(2)(i) of the CRA is the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under the CRA, and whether or not that party understood the provisions and their effect. Mr Mitchell pleads that:

“ix   [Named employee] from [ECC] did not give any advice, signed in the presence of [Ms Gibbins] and [D];

x   the legal and practical effect of the contract, including the real possibility of [Ms Gibbins] transferring title to or otherwise alienating the Hamilton property including by mortgage, or of the Hamilton property being lost to [Ms Gibbins] by events beyond her control, was never explained to [Mr Mitchell];”

74. I accept that these matters would likely be established if (contrary to my view) there was such a contract.

75. The tenth matter specified in s 9(2)0) of the CRA is, relevantly, whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under the CRA by any other party to the contract. Mr Mitchell pleads that:

“there is a presumption of undue influence from [Ms Gibbins] and [D] over [Mr Mitchell] for the reasons pleaded below;

xi    the contra[c]t arose from the family relationship between [Mr Mitchell] and [Ms Gibbins], and its purpose was to provide for [Mr Mitchell], [A] and her daughters and then [Ms Gibbins], [D] and their family in that order of priority. The contract, at least without the implied terms pleaded above, is not suitable for that purpose in that [Mr Mitchell] has no ability to prevent [Ms Gibbins] transferring title to or otherwise alienating the Hamilton property including by mortgage, other than to the extent (if any) he could recover damages from [Ms Gibbins] after such an event. This is an unjust outcome for [Mr Mitchell] when the Hamilton property is his home and only significant asset.”

76. I will address Mr Mitchell's claim for undue influence, in the broader equitable sense, in respect of the proposal advanced, but not implemented, in late 2009 and the registration of the Transfer of the Hamilton property in December 2012 below. I do not accept that, for the purposes of this section, Ms Gibbins or D exercised any real influence on Mr Mitchell in respect of the arrangement reached in December 2009 or the Transfer registered by Mr Mitchell in December 2012. I also do not accept Mr Mitchell's claims as to the purpose of the transaction, which I have found was to exclude the property from A's and her husband’s reach by transferring it to Ms Gibbins, and I have not accepted his evidence as to the suggested condition that Ms Gibbins provide for A following that transfer. I accept that a contract, had it existed, would have had the deficiencies for which Mr Mitchell here contends.

77. Here, relief is not available under the CRA because no contract is established. Had I reached the contrary view, I would likely have found that the disadvantageous effects of the suggested contract, the lack of any attempt to bring them to Mr Mitchell's attention or identify the desirability of his seeking independent advice which would have disclosed those effects, and the circumstances in which it was prepared and executed, would have made it unjust in the circumstances at the time it was made. However, I could not have granted the relief sought by Mr Mitchell on that basis. He relevantly seeks an order under s 7(1)(b) of the CRA requiring Ms Gibbins to execute, or an officer of the Court to execute in her place, and provide to her a discharge of mortgage for the Westpac mortgage. An order plainly cannot be made in that form, since only Westpac could execute a discharge of that mortgage and it has not been joined as party to the proceedings to allow an order that it do so to be made against it. An order requiring Ms Gibbins to repay the Westpac loan, with the likely consequence that Westpac would discharge that mortgage, could not be made because I am not persuaded that a contract exists which is capable of review so as to support that order.

Unconscionable conduct

78. Mr Mitchell in turn brings a claim for unconscionability. I first address the applicable principles, again drawing partly on my decision in Reserve Hotels at [120]ff.

79. In Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81 (“Blomley v Ryan”), the High Court identified matters which may be relevant to a claim of unconscionability including any “special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands”.

80. In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461-462; [1983] HCA 14 (“Amadio”), Mason J observed that:

“It almost goes without saying that it is impossible to describe definitively all the situations in which relief will be granted on the ground of unconscionable conduct. As Fullagar J said in Blomley v Ryan:

‘The circumstances adversely affecting a party which may induce a court of equity either to refuse its aid or to set a transaction aside are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis a vis the other’

Likewise Kitto J spoke of it as ‘a well-known head of equity’ which -

‘...applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands’.

It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J, that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-a-vis another and unfair and unconscientious advantage is then taken of the opportunity thereby created.”

81. Deane J (at 474) also there noted the distinction between undue influence and unconscionability, observing that:

“The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party ... Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so.”

82. In Turner v Windever [2003] NSWSC 1147 at [105], Austin J summarised the elements of unconscionable dealing as that the weaker party must, at the time of entering into the transaction, suffer from a special disadvantage as against the stronger party; second, that the special disadvantage must seriously affect the weaker party's capacity to judge or protect his or her own interests; third, that the stronger party must know of the special disadvantage or know of facts which would raise that possibility in the mind of any reasonable person; fourth, that the stronger party must take advantage of the opportunity presented by the disadvantage; and, fifth, that the taking of that advantage must have been unconscientious. His Honour observed (at [1061]) that, once the first three of those elements is established and the improvidence of the transaction shown, the plaintiff's task is “made easier by an equitable presumption to the effect that the improvident transaction was a consequence of the special disadvantage, and that the defendant has unconscientiously taken advantage of the opportunity presented by the disadvantage”. That summary was cited with approval by Ward CJ in Eq in Turner v O'Bryan-Turner [2021] NSWSC 5 at [399].

83. In Thome v Kennedy (2017) 263 CLR 85; [2017] HCA 49 ("Thome v Kennedy') at [37]-[40], the High Court summarised the distinction between unconscionability and undue influence as follows (citations omitted):

“There was no controversy on this appeal concerning the principles of unconscionable conduct in equity. Those principles were recently restated by this Court in Kakavas v Crown Melbourne Ltd.

A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage ‘which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests’. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring ‘victimisation’, ‘unconscientious conduct’, or ‘exploitation’. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.

In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1), the trial judge, King CJ, observed that both doctrines were satisfied where the defendant ‘was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house’. Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct.

Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:

‘In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position’.

84. Mr Clifton also refers to the observations of Meagher and Payne JJA in Mentink v Olsen [2020] NSWCA 182 at [2]-[4] as follows:

“Where a party seeks to set aside a transaction on the basis of unconscionable conduct, it must be established (1) that one party to the transaction is placed at a “special disadvantage” vis-à-vis the other in the sense that the disabling condition or circumstance is one which seriously affects the ability of that party to make a judgment as to his or her own best interests; and (2) that the other party understood the plaintiff to be at a special disadvantage and its effect with respect to his or her not being in a position to look after his or her interests. Where those circumstances make it prima facie unfair or “unconscientious” that the “stronger party” procure or accept the weaker party’s assent to the impugned transaction, the onus is cast on the stronger party to show that it was fair, just and reasonable: Commercial Bank of Australia v Amadio.

107. Mr Clifton alternatively submits that Ms Gibbins should have become aware that the transaction had occurred when she began to receive rate notices for the Hamilton property in early 2013 and the improvidence of the transaction was obvious when Mr Mitchell was giving away his only significant asset. I accept that proposition, with the qualifications noted above, that that improvidence exposed Mr Mitchell to the risk that Ms Gibbins did not comply with her undertaking that he could remain in the property, although she has to date done so while also paying the outgoings on the property; and that the transfer of the property to Ms Gibbins allowed Mr Mitchell to avoid continuing liability for those outgoings over a nine year period and the risk of loss of the property if he could not have afforded to pay those outgoings.

108. Mr Bland responds, inter alia, that the evidence does not establish unconscionability on Ms Gibbins’ part; he emphasises that there is no allegation that Ms Gibbins has defaulted in respect of the mortgage taken out over the Hamilton property, so as to prejudice Mr Mitchell’s entitlement to occupy the property for life; and he submits that:

“Mr Mitchell has had the benefit of the life tenancy for 12 years since the actual transfer occurred, as well as payment of rates and insurances. There is no evidence of that tenancy being disturbed by [Ms Gibbins]. [Ms Gibbins] has also paid rates and insurances.”

109. In closing submissions, Mr Bland submits that:

“The clear effect of the expert evidence is that [Mr Mitchell] was possibly at a special disadvantage in terms of ability to look after his own interests in the period 2009 – 2012 and there is nothing to suggest that [Ms Gibbins] was aware of this or did anything to facilitate the transfer.”

110. There are several circumstances in which a finding of unconscionability would be straightforward in this case. I would readily have found Ms Gibbins' conduct to be unconscionable if she had accepted the transfer of the Hamilton property in 2009 and if Mr Mitchell had then promptly indicated a change of mind and requested a retransfer of the Hamilton property to him and she had declined to retransfer it to him. Of course, that did not occur, where Mr Mitchell did not cause the VCT Charge to be removed or transfer the property to Ms Gibbins until three years later, in December 2012. I would likely also have found Ms Gibbins' conduct to be unconscionable where, without her further involvement, Mr Mitchell had registered the Transfer of the Hamilton property to her in December 2012, if he had then promptly requested a retransfer of the property to him and she had then declined to retransfer it to him. That also did not occur, where Mr Mitchell did not change his mind as to the transaction until some time in 2013 when D failed to undertake the different real estate transaction which Mr Mitchell thought he should undertake, and there is no evidence that he requested a retransfer of the Hamilton property to him (which would likely have exposed him to the liability to pay the rates and outgoings on it) until he commenced these proceedings in December 2021. I would readily have found Ms Gibbins’ conduct to be unconscionable had she resiled from her undertaking to permit Mr Mitchell to remain in the property for life but she has not done so.

111. This is a much more difficult case than any of those situations. I recognise that unconscionability could potentially be established, although Mr Mitchell's decision to register the Transfer was voluntary and he had capacity, where it may have been the result of his disadvantageous health and mental position. Here, it seems to me that Ms Gibbins should have recognised the risk that, given the character of the transaction, its potential adverse implications for Mr Mitchell and the coincidence of timing with his surgery in December 2012, he may well not have been making an adequately informed choice in registering the Transfer at that time, and he plainly did not have independent legal advice at that time. At the same time, I recognise that, while Ms Gibbins continued to own the Hamilton property, she honoured her promise that Mr Mitchell could live there rent-free, and there was a benefit to him in the transaction which avoided his liability for outgoings which, on his evidence, he likely did not have the capacity to pay.

112. Recognising these matters, it seems to me that it has not been established that Ms Gibbins acted unconscionably. Before Mr Mitchell registered the Transfer of the Hamilton property to Ms Gibbins, which occurred not in December 2009 but without her involvement in December 2012, she did not own it and the question of retransferring it to Mr Mitchell could not arise. (I note, for completeness, that the parties did not suggest that there was any significance in any question whether Ms Gibbins acquired any equitable interest in the Hamilton property from the executed but unregistered transfer in December 2009, under the principles noted in, for example, Anning v Anning (1907) 4 CLR 1049; [1907] HCA 13 and Corin v Patton (1990) 169 CLR 540; [1990] HCA 12). After Mr Mitchell registered the Transfer of the property to Ms Gibbins in December 2012, without her involvement, there is no evidence that he requested Ms Gibbins to retransfer the property to him prior to his commencement of this claim in December 2021, nine years after the Transfer had occurred. Until Mr Mitchell demanded the reconveyance of the Hamilton property, by commencing these proceedings, it does not seem to me to have been unconscionable for Ms Gibbins to accede to his apparent wishes, pay the outgoings on that property (as she did) and respect the arrangement discussed in December 2009 that he would continue to occupy the property so long as he was able to do so (as she also did).

113. When Mr Mitchell then sought the reconveyance of the property to him, by commencing these proceedings in December 2021, the relief that he sought did not provide for any compensation to Ms Gibbins for the outgoings including council rates that she had incurred in respect of the Hamilton property for those nine years that she had then owned it and Mr Mitchell had lived in it rent free, in accordance with the arrangement discussed in December 2009, or payment of interest for the period in which she had lost the use of that money. I appreciate that, as Mr Clifton pointed out, Mr Mitchell would likely not have known the quantum of those outgoings; but that would not have prevented an offer to repay those outgoings, as properly quantified, with interest.

114. It may be that, even nine years later in December 2021, if Mr Mitchell had then offered to reimburse Ms Gibbins’ outgoings on the Hamilton property over those nine years with interest, Ms Gibbins would have acted unconscionably in not retransferring the property to him on request and that, where she had mortgaged the property, she would have needed to discharge that mortgage so as to do so. However, that did not arise because Mr Mitchell did not then make such an offer. I also appreciate that Mr Gibbins likely could not afford to repay those outgoings; but that emphasises the benefit to him of the arrangement by which he had lived in the property for many years without paying the costs of occupancy that he likely could not afford, which Ms Gibbins had paid; and also emphasises the detriment to Ms Gibbins in his seeking a retransfer of the property nine years later without any real prospect of reimbursement of those outgoings and interest.

115. I am not persuaded that there was any unconscionability in Ms Gibbins not then retransferring the Hamilton property to Mr Mitchell on a basis that would have left her unreimbursed for the nine years of outgoings that she had paid on the property and the interest on those outgoings, and would have put Mr Mitchell in a better position than if the Transfer had not occurred, by restoring his ownership of the property but leaving Ms Gibbins to bear nine years of the costs of that ownership. I recognise that Mr Clifton addressed the question whether the Court could impose terms on relief granted to Mr Mitchell in supplementary closing submissions, although resisting such terms; but that question does not arise, at least in respect of the unconscionability claim, where a basis for relief on that ground is not first established. Second, even if a basis for relief had been established, it would not have been appropriate for me to impose a condition as to payment that Mr Mitchell did not offer and likely could not meet, at least without selling the property and losing his present occupancy of it.

116. For these reasons, Mr Mitchell’s claim in unconscionability also fails. Even if unconscionability had been established, the primary orders sought by Mr Mitchell on this basis could not have been made, at least for the reasons noted above in respect of Mr Mitchell’s claim under the CRA. Mr Mitchell alternatively seeks equitable damages or compensation in the amount of the unencumbered market value of the Hamilton property on this basis. I cannot make that order both because the claim in unconscionability is not established and because the evidence that Mr Mitchell led to establish the value of that property was not admissible and was not admitted.

Equitable estoppel

117. Mr Mitchell pleads a claim in equitable estoppel, apparently in the nature of a promissory or representational estoppel of the kind considered in Waltons Stores (Interstate) Ltd v Maher (1998) 164 CLR 387; [1988] HCA 7 (“Waltons v Maher”) and Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 (“Verwayen”).

118. The applicable principles in respect of a claim for a promissory or representational estoppel were summarised in Waltons v Maher where Brennan J observed (at 428) that, to establish an equitable estoppel, the plaintiff must first prove that:

“… the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship.”

119. In Silovi v Barbaro (1988) 13 NSWLR 466 at 472, Priestley JA (with whom Hope and McHugh JJA agreed) summarised the principle arising from Waltons v Maher as requiring, relevantly:

“the creation or encouragement by the defendant in the plaintiff of an assumption that ... a promise be performed, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable.”

120. In Verwayen, Deane J observed (at 444) that the law does not permit an unconscientious departure by one party:

“from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation.”

121. I also bear in mind Ball J's summary of those principles and the differences between the relevant forms of estoppel in Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) (2020) 147 ACSR 389; [2020] NSWSC 1159 at [147]-[149], as follows:

“In order to make out a promissory estoppel, [a party] must establish (to apply the principles as summarised by Brennan J in Walton Stores (Interstate) Ltd v Maher(1988) 164 CLR 387 at (428-9) that (1) he assumed [a relevant matter]; (2) the [other party] induced him to adopt that assumption; (3) he acted in reliance on that assumption; (4) the [other party] knew he intended to do so; (5) his conduct will occasion detriment if the assumption is not fulfilled; and (6) the [other party] has failed to act to avoid that detriment.

In order to make out a conventional estoppel, [a party] must prove (to apply the principles as summarised by Brereton J in Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [32] and approved by the Court of Appeal in Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [2001) that (1) [the party] adopted an assumption as to the terms of [its] legal relationship with [the other party]; (2) [the other party] adopted the same assumption; (3) both parties conducted their relationship on the basis of that mutual assumption; (4) each party knew or intended that the other act on that basis; and (5) departure from the assumption will occasion [the first party] detriment.

The principal difference between the two forms of estoppel is that in the case of promissory estoppel, the party estopped must have induced the other party to adopt a particular assumption but need not have held that assumption themselves whereas, in the case of conventional estoppel, no inducement is required but both parties must have acted on the basis of the assumption and known or intended that the other would as well.”

122. I have drawn on my decision in Victoria Dragons at [215]ff for this summary.

123. Mr Mitchell pleads (ASOC [49]) that:

“By expressing agreeing to [Mr Mitchell's] statements as pleaded in paragraphs 25, 26 and 28 and signing the Transfer as pleaded in paragraph 29 in the context of having expressed such agreement, [Ms Gibbins] promised or represented to [Mr Mitchell] that if he transferred the Hamilton property to her she would;

i   look after [A] and her daughters;

ii   allow [Mr Mitchell] to live in the Hamilton property until he died;

iii   allow [Mr Mitchell] to register his interest in the Hamilton property, including by lodgement of a caveat over the title to the Hamilton property;

iv   not deliberately act in a way, such as mortgaging the property to a third party, that would potentially prevent her being able to fulfill promises or representations (i) and (ii).”

124. As I noted above, the events pleaded in ASOC [25]-[28] comprise Mr Mitchell's allegation as to the exchange prior to and at the meeting at ECC in December 2009. Paragraph 29 pleads that, immediately after the conversation in December 2009 where Ms Gibbins and D confirmed that he could continue to live in the Hamilton property, he signed the Transfer. However, the Transfer was not lodged for registration until three years later, when Mr Mitchell took that course without any involvement of Ms Gibbins. As I have indicated above, I do not accept Mr Mitchell's evidence that the first of the alleged promises or representations was made. It is common ground the second representation was made. The third matter was not discussed and no such representation was made expressly or impliedly; in any event, the question whether a caveat can properly be lodged is a matter of law and land titles office practice and not a matter for Ms Gibbins. The fourth matter was not discussed and no such representation was made expressly or impliedly.

125. Mr Mitchell then pleads (ASOC [50]-[52]) that:

“[Ms Gibbins'] representation induced or encouraged [Mr Mitchell] to reasonably expect that if he transferred the Hamilton property to [Ms Gibbins] he would be able to live in the Hamilton property until he died and that [A] and her daughters would be looked after following his death ("[Mr Mitchell]'s expectation").

[Ms Gibbins] knew, or should reasonably have known, that her representation would create [Mr Mitchell]'s expectation and did nothing to contradict [Mr Mitchell]'s expectation.

[Mr Mitchell] reasonably relied on his expectation in transferring the Hamilton property to [Ms Gibbins] ("[Mr Mitchell]'s reliance”).”

126. I accept these matters are established in respect of the only representation that was made, that Mr Mitchell would be able to live in the Hamilton property until his death.

127. Mr Mitchell then pleads (ASOC [53]-[54]) that:

“[Mr Mitchell] will suffer detriment, being the potential loss of the Hamilton property so that he is without his home and only substantial asset and has no means to provide for [A] and her daughters, if [Ms Gibbins] departs from her representation by not causing the Hamilton property to become mortgage free and so maintaining the Hamilton property and/or taking objection to [Mr Mitchell] lodging a caveat on the title to the Hamilton property noting his life interest.

In the circumstances pleaded in [ASOC] paragraphs 48-52, it would be unconscionable for [Ms Gibbins] to depart from her representation and [Ms Gibbins] is estopped in equity from resisting the relief sought below.”

128. I accept that Mr Mitchell would suffer detriment if Ms Gibbins departed from the only representation that was made, that Mr Mitchell would be able to live in the Hamilton property until his death, but she has not done so. The claim for estoppel is not established.

Undue influence

129. Mr Michell also pleads a claim in undue influence. In Johnson v Buttress (1936) 56 CLR 113 at 134-135; [1936] HCA 41 (“Johnson v Buttress”), after Dixon J referred to certain relationships in which undue influence was presumed, he observed that:

“... the doctrine which throws upon the recipient the burden of justifying the transaction is confined to no fixed category. It rests upon a principle. It applies whenever one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part. One occupying such a position falls under a duty in which fiduciary characteristics may be seen. It is his duty to use his position of influence in the interest of no one but the man who is governed by his judgment, gives him his dependence, and entrusts him with his welfare. When he takes from that man a substantial gift of property, it is incumbent upon him to show that it cannot be ascribed to the inequality between them which must arise from his special position. He may be taken to possess a peculiar knowledge, not only of the disposition itself, but of the circumstances which should affect its validity; he has chosen to accept a benefit which may well proceed from an abuse of the authority conceded to him, or the confidence reposed in him; and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction.

These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour. But, except in the well-recognized relations of influence, the circumstances relied upon to establish an antecedent relation between the parties of such a nature as to necessitate a justification of the transaction will be almost certain to cast upon it at least some measure of suspicion that active circumvention has been practised. This often will be so even when the case falls within the list of established relations of influence. Because of the presence of circumstances which might be regarded as presumptive proof of express influence, cases outside the list, but nevertheless importing a special relationship of influence sometimes are treated as if they were not governed by the presumption, but depended on an inference of fact.”

130. In Thome v Kennedy at [30]ff, the High Court observed (citations omitted):

“In AlIcard v Skinner, Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.

In 1836, in a passage which was copied verbatim by Snell thirty years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person "has no free will, but stands in vinculis [in chains]". He explained that "the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him". In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of "free agency". In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a "free agent". In Johnson v Buttress, Dixon J described how undue influence could arise from the "deliberate contrivance" of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a "free act". And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a "free and well-understood act" and Williams J referred to "the free exercise of the respondent's will".

The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.

An example which illustrates the characterisation by a court of a lack of free will sufficient to amount to undue influence is the decision of this Court in Johnson v Buttress. In that case, Mr Buttress was a 67 year old man, who was "wholly illiterate, not very intelligent, and of little or no experience or capacity in business". He made a voluntary transfer of land to a relative of his wife. The land was his only property and his only means of livelihood. When he made the transfer he did not understand that he had parted with the land irrevocably. After Mr Buttress died, the administrator of his estate brought an application to set aside the transfer. The trial judge set aside the transfer on the basis of undue influence. This decision was upheld in this Court. Although other members of the Court relied upon a presumption of undue influence, which is considered below, one member of the Court, Starke J, concluded that it was open to the trial judge to find that undue influence arose without any presumption. His Honour upheld the conclusion of the trial judge that the circumstances of the transfer invited the inference that it was "not the result of the free and deliberate judgment of the deceased.”

131. The High Court also there observed (at [43]) that:

“... in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person's will has been subordinated to another's is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Qld) which emphasised how the application of these equitable principles:

‘calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: "A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case.’”

132. I have noted above that, although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required, and that, in an undue influence case, the will of the innocent party is typically not independent and voluntary because it is overborne.

133. Mr Mitchell pleads (ASOC [55]-[57]) that:

“... the relationship between [Mr Mitchell], [Ms Gibbins] and [D] in the lead up to and at the time of the events pleaded in paragraphs 25, 26, 28 and 29 was that:

i   [D], and [Ms Gibbins] as [D's] wife, were in a position of ascendency over [Mr Mitchell];

ii   [Mr Mitchell] trusted [D] and [Ms Gibbins];

iii   [Mr Mitchell] was reliant on [D] and Ms Gibbins for emotional and related support

for the reasons pleaded in paragraph 21 above.

The facts in paragraph 55 give rise to a presumption that the transfer of the Hamilton property to [Ms Gibbins] was the result of [Ms Gibbins'] undue influence over [Mr Mitchell].

If [Ms Gibbins] does not rebut that presumption, [Mr Mitchell] claims the relief pleaded below.”

134. As I noted above, the events pleaded in ASOC [25]-[29] comprise Mr Mitchell's allegation as to the exchange prior to and at the meeting at ECC in December 2009 and his allegation that, immediately after the conversation in December 2009 where Ms Gibbins and D confirmed that he could continue to live in the Hamilton property, he signed the Transfer. In fact, the Transfer was not lodged for registration until three years later, when Mr Mitchell took that course without any involvement of Ms Gibbins.

135. Mr Clifton in turn refers to Amadio at [13] and to Torok v Becker [2020] NSWSC 1570 at [206], where Ward CJ in Eq (as the President then was) referred to Johnson v Buttress. He points to Mr Mitchell’s claim that Ms Gibbins and D were in a position to exercise dominion over him and are presumed to have had undue influence over him. It seems to me that any such presumption is here rebutted, where it is common ground that the transfer was registered unilaterally by Mr Mitchell in 2012, without any involvement of either Ms Gibbins or D, rather than in 2009 where they had involvement. In closing submissions, Mr Clifton also submits that D was a source of the undue influence that affected Ms Gibbins’ acquisition of the Hamilton property, but also submits that it was not necessary to join D to the proceedings. I do not accept the premise of that submission, where there is no suggestion that either Ms Gibbins or D exercised any influence upon Mr Mitchell at the time he registered the Transfer in 2012.

136. I do not wholly accept the matters pleaded in support of this claim. First, it seems to me that Mr Mitchell pressed for the execution of the Transfer in December 2009 despite Ms Gibbins' misgivings as to that course, although the Transfer was not registered until December 2012 and Ms Gibbins was not involved in its registration. I accept that Mr Mitchell “trusted” Ms Gibbins in the sense that she was the daughter to which he was closest; he spent time with her and her family; and he at least trusted her to honour her promise that he could live in the Hamilton property until his death, as she has to date done. I accept that Mr Mitchell plainly welcomed contact with her and D as the members of his family with which he had a continuing relationship.

137. However, even if a presumption of undue influence arose, Ms Gibbins has rebutted it, where Mr Mitchell did not discharge the VCT Charge or register the Transfer until three years after December 2009, he then did so without Ms Gibbins’ knowledge and without any apparent persuasion on her part that he should do so; there was then no assertion of pressure by Ms Gibbins which might amount to victimisation or exploitation of Mr Mitchell, and Mr Mitchel's decision to register the Transfer was independent and voluntary, and his will was not overborne. Undue influence is also not established.

Express trust

138. Alternatively, Mr Mitchell pleads that these matters give rise to an express trust. The requirements in order to establish a trust were considered, inter alia, in Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415; [1994] FCA 703 and in Ashton v Pratt (2015) 318 ALR 260; [2015] NSWCA 12, where Bathurst CJ there sets out, in general terms, the requirements for an intention to establish a trust. Mr Clifton also refers to the observations of Rees J in Re Tresdar Pty Ltd [2019] NSWSC 179 at [147]-[150] as to the elements of an express trust, where her Honour noted that:

“The parties agreed that, to establish an express trust, the plaintiff must prove that the parties intended that Mr Keefe would hold the share on trust. However, Mr Keefe submitted that intention can only be established by reference to the words used by the settlor, and as there is no evidence of any words spoken or written at the time, the plaintiff fails: Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 per Mason CJ and Wilson J at 121; Byrnes v Kendle (2011) 243 CLR 253 per Heydon and Crennan JJ at [105] and [114]; Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 per French CJ at [3] and [11].

Intention, in trusts as in contract, crime, tort and other fields of human endeavour, may be established by reference to words or conduct. Perhaps this is most succinctly explained in Jacobs’ Law of Trusts in Australia (Heydon and Leeming, LexisNexis Butterworths, 8th ed, 2016) at [5–02]: (emphasis added)

‘A court cannot hold that an express trust exists unless it is satisfied that there was an intention to create such a trust. The question will be whether there is language or conduct which shows a sufficiently clear intention to create such a trust. No formal or technical words are required; any apt expression of intention will do. The conclusion that the intention existed may be drawn as an inference from the available evidence. In order to infer intention, the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties and known to them, including commercial necessity.’ …

As earlier canvassed, subsequent conduct can be just as much an indicator of the coming into existence of a trust as it may be of the existence of a contract: Cummins v Cummins; Reitano v Reitano [2012] NSWSC 1127 at [25].

Once there is certainty of intention to create a trust, then the consequence is explained in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 618–619 per Mason CJ and Dawson J:

‘If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason in a given case an intention to create a trust should not be inferred. The present is just such a case. The trust is an express, not a constructive, trust.’

See also Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 at 525, [118] per Bell, Gageler and Keane JJ.”

139. Mr Clifton in turn submits that Mr Mitchell is both the settlor and the beneficiary of the relevant trust (although the pleaded claim identifies several beneficiaries of the trust) and that Ms Gibbins breached the trust by creating the Westpac mortgage.

140. Mr Mitchell here pleads:

“... the conversations in [ASOC] paragraphs 25, 26 and 28 and the conduct pleaded in [ASOC] paragraphs 28 and 29 give rise to an inference that [Mr Mitchell] and [Ms Gibbins] intended to create and protect after transfer of the Hamilton property to [Ms Gibbins];

i   the right of [Mr Mitchell] to remain living in the Hamilton property until he died;

ii   [A's] and her daughters' interest in being provided for from the Hamilton property after [Mr Mitchell] died.”

141. As I have noted above, the events pleaded in ASOC [25]-[29] comprise Mr Mitchell's allegation as to the exchange prior to and at the meeting at ECC in December 2009 and his allegation that, immediately after the conversation in December 2009 where Ms Gibbins and D confirmed that he could continue to live in the Hamilton property, he signed the Transfer. In fact, the Transfer was not lodged for registration until three years later, when Mr Mitchell took that course without any involvement of Ms Gibbins. I accept that Mr Mitchell and Ms Gibbins had agreed that he was to be able to live in the Hamilton property for his life, as is common ground. I have not accepted that Mr Mitchell had sought or Ms Gibbins had agreed to protect any interest of A or her daughters to the effect pleaded.

142. Mr Mitchell then pleads (ASOC [59]) that, from the facts pleaded in ASOC paragraph 58 the intention to create an express trust with the following characteristics can be inferred, namely that Ms Gibbins is the trustee; the subject of the trust is the Hamilton property; the beneficiaries of the trust are Mr Mitchell, A and her daughters; the terms of the trust “include” those terms pleaded in ASOC paragraphs 57(i) and (ii); an implied term of the trust is that Ms Gibbins will not transfer, alienate or mortgage the Hamilton property. Ido not accept that the intention to create a trust in these terms was established. The proposition that the beneficiaries of the Trust are Mr Mitchell, A and her daughters is inconsistent with my finding that the Transfer was intended to exclude a claim by A against the property; the identification of the beneficiaries is uncertain, where it does not identify their respective interests in the trust property or how they are to be reconciled; and the inclusive definition of the terms of the trust points to the lack of definition of any other terms of the suggested trust. Mr Mitchell in turn pleads (ASOC [60]-[61]) that Ms Gibbins breached the trust by mortgaging the Hamilton property to Westpac and he seeks, in the alternative, a declaration that a trust exists with the pleaded terms and an order that Ms Gibbins discharge the Westpac mortgage. That order cannot be made where the alleged trust is not established.

Orders and costs

143. For these reasons, Mr Mitchell has failed in the proceedings which are dismissed with costs. I recognise that it is plainly unlikely that he has the financial capacity to pay those costs. It is regrettable that the parties were not able to settle the proceedings in a way that would have avoided this result, even after closing submissions were deferred to allow them a further opportunity to do so.

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Amendments

02 December 2024 - Catchwords added.

Decision last updated: 02 December 2024