Pryse v Castleman
[2021] VSC 833
•14 December 2021 (revised)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 04203
| RAYMOND LESLIE PRYSE | Plaintiff |
| - and - | |
| COLLEEN GWENETH CASTLEMAN | First Defendant |
| - and - | |
| THE REGISTRAR OF TITLES | Second Defendant |
---
JUDGE: | Ierodiaconou AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 December 2021 |
DATE OF JUDGMENT: | 14 December 2021 (revised) |
CASE MAY BE CITED AS: | Pryse v Castleman & Anor |
MEDIUM NEUTRAL CITATION: | [2021] VSC 833 |
---
PROPERTY – Caveat – Application to remove caveat – Application to remove caveat allowed – s 90 (3) Transfer of Land Act 1958 – Re Mahoney [2015] VSC 600 – Chan v Liu [2020] VSCA 28 – Lee v Yap [2021] VSCA 297.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T R Messer, with Mr T Greenway | Maloney Anderson Legal |
| For the First Defendant | Ms C H Sparke QC, with Mr J F Perry | J. N. Zigouras & Co. Lawyers |
| No appearance for the Second Defendant |
TABLE OF CONTENTS
The land............................................................................................................................................... 1
Family members................................................................................................................................. 1
Background......................................................................................................................................... 1
Evidence............................................................................................................................................... 5
Applicable principles........................................................................................................................ 5
Is there a serious question to be tried?.......................................................................................... 8
Analysis........................................................................................................................................ 11
Does the balance of convenience favour maintenance of the caveat?................................... 16
Analysis........................................................................................................................................ 17
HER HONOUR:
This is a dispute between brother and sister regarding the transfer of farming land from their late mother to the brother. On 7 October 2021, the brother entered into a contract to sell the land to relatives. About two weeks later, his sister caused a caveat to be registered on the land. Settlement is tomorrow, 15 December 2021. The brother seeks to remove the caveat. I will make orders removing the caveat. Reasons follow.
The land
The land in dispute is contiguous farming land in Walpeup, Victoria. It is more particularly described in Certificates of Title Volume 08761 Folio 834 (‘Lot 52’) and Volume 08761 Folio 930 (‘Lot 53’). A caveat is registered on both titles.[1] For convenience, I shall refer to the properties together as the ‘caveat properties’.
[1]Caveat AU933994A on both Lot 52 and Lot 53.
To complete the picture, reference must also be made to other land that was previously part of the family farm. It is more particularly described in Certificates of Title Volume 08454 Folio 622 (‘Lot 57’) and Volume 09011 Folio 973 (‘Lot 20’). This land is not the subject of these proceedings. However, the parties made reference to it, as will be discussed below.
Family members
The plaintiff, Raymond Pryse, is one of three siblings. His sisters are Lorna Wolfe and the first defendant, Colleen Castleman. Their parents are Gweneth and Harold Pryse, both deceased. Their maternal grandparents are the late Selena and Richard Mead. To avoid confusion, I shall refer to the family members by their first names.
Background
All three generations lived together on the family farm in two houses.
Colleen left the family farm around 1970, shortly after she finished school. She married Geoff Castleman.
Raymond began working on the family farm from the time he left school, aged 15 years old. He farmed with his father, Harold, and grandfather Richard. Grandmother Selena, and mother Gweneth, ran the households.
After Richard died in 1975, Raymond and Harold inherited the land and were registered as proprietors of Lot 20, as tenants in common, on 27 June 1975. Raymond and Harold farmed the land together.
Selena was registered as the proprietor of Lot 57 on 17 June 1993. On 21 January 1994, Selena gifted ownership of Lot 57 to Raymond, and he became the registered proprietor.
Selena died in 1994. From then on, Gweneth and Lorna ran the family household on the farm.
Selena had owned the caveat properties: Lots 52 and 53. Gweneth inherited the properties from her. Gweneth was registered as the proprietor of the caveat properties on 13 December 1994.
Harold became ill in about 2000. Gweneth and Lorna took care of him. Raymond did most of the work on the farm. Harold died on 6 October 2009.
In 2009, Raymond met his life partner.
Following Harold’s death, Raymond was registered as the sole proprietor of Lot 20, on 24 March 2010.
In 2012, Raymond purchased a property approximately 4km from the caveat properties and moved in with his partner. He deposes that he continued to farm the caveat properties on ‘most days’.[2]
[2]Affidavit of Raymond Pryse sworn on 6 December 2021 (‘Second Pryse affidavit’), [36].
Raymond purchased a house in Walpeup. Gweneth and Lorna moved into the house in 2013. By this time, Gweneth was physically frail, and required assistance from Lorna to complete personal care tasks.
Lorna married late in life, and her husband, John Wolfe, later lived with her and Gweneth.
In 2013, there was a discussion between Gweneth and Raymond about her gifting the caveat properties to him. On about 12 September 2013, Raymond and his brother‑in‑law, Geoff, had an argument about this.
In October 2013, Gweneth met twice with a solicitor, Mr Paul Avery, for the purpose of obtaining independent legal advice regarding the transfer of the caveat properties to Raymond. Mr Avery provided letters of advice dated 2 and 18 October 2013.
Gweneth transferred the caveat properties to Raymond, and he was registered as the sole proprietor on 27 November 2013. They executed a deed of agreement regarding the transfer of the land. Raymond was 61 years old and Gweneth was 85 years old at the time of the transfer.
Following the transfer of the caveat properties to Raymond, in January 2014 Colleen applied to the Victorian Civil Administrative Tribunal (‘VCAT’) to have an administrator and guardian appointed for Gweneth. All parties, including Gweneth, were legally represented throughout those proceedings.
During the course of the VCAT proceedings, three medical reports were produced. The first was from Gweneth’s regular general practitioner, Dr Obatoki, dated 9 January 2014 (the ‘Obatoki report’). The second was from Dr Vowels, neuropsychologist, dated 28 March 2014 (the ‘Vowels report’). And the final report was by Dr Wardill, neuropsychologist, dated 22 July 2014 (the ‘Wardill report’). Dr Wardill met with Gweneth at her home in Walpeup.
On 4 August 2014, Colleen sought leave to withdraw the application in VCAT, however, leave was initially refused by VCAT. The order stated that:
The Tribunal refuses leave to withdraw the application for the reason that the Tribunal is not satisfied that it would be in the best interests of the proposed represented person for the application to be withdrawn. The hearing will proceed on 13 August 2014 at 2pm.[3]
[3]Order of VCAT dated 8 August 2014, contained in Exhibit RP-2 to the second Pryse affidavit, 45.
The hearing proceeded on 13 August 2014. Gweneth was represented separately at the hearing. At the conclusion of the hearing, leave to withdraw the application was granted.[4] The order stated:
The Tribunal records that:
Colleen Gweneth Castleman has requested that the application made on 14 January 2014 be withdrawn.
With the leave of the Tribunal the application is withdrawn.
The Tribunal directs the principal registrar to notify the parties.
[4]Order of VCAT dated 22 August 2014, contained in Exhibit RP-2 to the second Pryse affidavit, 46.
Raymond sold Lot 20. On 2 May 2014, the purchasers were registered on the title as proprietors.
Raymond sold Lot 57. On 28 June 2014, the purchasers were registered on the title as proprietors.
Raymond deposes that he continued to farm the caveat properties until he felt that he could no longer manage the work.[5] He leased the caveat properties from 2017.
[5]Second Pryse affidavit, [69]-[74].
Gweneth died on 8 July 2021. It appears to be common ground between the parties, although the will is not in evidence, that she divided her estate equally between Raymond, Colleen, and Lorna, and that all three are named as executors and as yet there has been no grant of probate or letters of administration.
On 7 October 2021, Raymond executed a contract to sell the caveat properties to relatives.
On 20 October 2021, Colleen lodged a caveat over the properties.
Evidence
Raymond relies on the following affidavits, in support of his application:
(a) First affidavit of Raymond Pryse sworn on 10 November 2021;
(b) Second affidavit of Raymond Pryse sworn on 6 December 2021;
(c) Affidavit of Paul John Avery sworn on 6 December 2021;
(d) Affidavit of Lorna Eleanor Wolfe sworn on 6 December 2021; and
(e) Affidavit of Tyler John Stewart Wolfe sworn on 7 December 2021.
Colleen relies upon the following affidavits:
(a) Affidavit of Geoffrey Harold Castleman sworn on 30 November 2021;
(b) Affidavit of Colleen Gweneth Castleman sworn on 30 November 2021; and
(c) Affidavit of Stella Frances Hareklea Zigouras affirmed on 8 December 2021.
Colleen was also given leave to rely on the Obatoki and Vowels reports.
Applicable principles
The applicable principles are not in dispute. I refer to the recent summary by the Court of Appeal in Lee v Yap[6]:
Section 90(3) of the Transfer of Land Act permits any person adversely affected by a caveat to ‘bring proceedings in a court against the caveator for the removal of the caveat’ and empowers the court dealing with such an application to ‘make such order as the court sees fit’…
In Carbon Black, this Court held that when a court is considering an application under s 90(3), the court applies the two-stage test used for determining an application for an interlocutory injunction. The Court approved the following passage from Warren CJ’s judgment in Piroshenko:
Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. In so far as their registration is an administrative act, it is when application is made for their removal that the onus falls on the caveator to satisfy the two-stage test used by the court when deciding whether to exercise its discretion to grant interlocutory injunctive relief. … This two-stage approach requires the caveator to establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question, and having done so, to establish that the balance of convenience favours the maintenance of the caveat on the Register of Titles until trial.
As to the second proposition contained in ground 1, in our view it proceeds on a mistaken understanding of the matters that can permissibly be considered by a court when dealing with an application to remove a caveat under s 90(3) of the Transfer of Land Act. The authorities make clear that, although the courts have adopted the two stage test, s 90(3) is drafted broadly, and enjoins the court to make such orders as it thinks fit. Thus the two-stage test can only inform the court in considering whether to exercise the discretion conferred on it in any particular case and, if it chooses to do so, what form that exercise should take. The two-stage test does not subsume or restrict the power conferred by the statute. Nor, in our view, when a court is considering the balance of convenience on an application for removal of a caveat, is the court confined as to the matters it may consider as going to the balance of convenience...[7]
[6][2021] VSCA 297.
[7]Ibid, [78]-[79], [85]-[86] (citations omitted).
In consideration of the balance of convenience, the Court of Appeal held:
In contrast, there is no real evidence that the caveators will suffer prejudice if the caveats are removed. While it is true that the beneficiaries of the resulting trusts will lose their beneficial interest in the Glen Iris property, they will obtain a beneficial interest in the net proceeds of sale. There was nothing to suggest that the property had any value other than monetary value to the caveators. They adduced no evidence that the property had any sentimental value, or that any of them wished to retain the property so as to live in it, for example. At its highest, they submitted that the removal of the caveats deprived them of the option that they (if they were found to be beneficiaries of a resulting trust over the property) would have to retain the property rather than selling it. However, while it cannot be said that they had always sought orders in the substantive proceeding that involved the sale of the property, we accept that the orders sought in the most recent statement of claim are predicated on the sale of the property, should it be found to be trust property. Counsel for the first and second respondents accepted as much before the judge, even though he also referred to the possibility that the beneficiaries might resolve to keep the property. That submission is inconsistent with the attitude of the caveators reflected in the correspondence between the parties, in which the caveators stated that they were willing to permit the Glen Iris property to be sold, so long as the proceeds of sale were protected.
In so far as it was said that the property will likely be worth more at the time of the resolution of the substantive proceeding, no evidence was adduced to support that claim. It would be speculative to conclude that that is so. As Ms Lee pointed out, it is possible that the property could be worth less at that time. In so far as the caveators say they should not have to be put in the position of seeking equitable compensation if the property would have been more valuable at the time of judgment in the substantive proceeding than at the time of the impugned sale, we do not consider that to be a significant prejudice. It is true that, if this scenario eventuates, it may involve some inconvenience in perhaps needing again to resort to litigation. But in truth their right to compensation, should events transpire in that manner, is protective of their interests; and, as Ms Lee submitted, the costs of such litigation as might be required could be dealt with by appropriate costs orders, which would fall to be made in light of the various proceedings already instituted.
While we do not agree with Ms Lee that the balance of convenience is ‘all one way’, we accept that the balance of convenience favours the removal of the caveats, so long as appropriate steps are taken to preserve the proceeds of sale to be dealt with in accordance with the resolution of the substantive proceeding. In that regard, Ms Lee’s counsel proffered an undertaking that the proceeds of sale, net of usual sale expenses (which we understand to mean the selling agent’s commission and the legal fees and other expenses associated with the sale), will be preserved in a solicitor’s trust account, or if need be paid into court. We would order that the caveats be removed upon the giving of such an undertaking. We note that counsel made no mention of any deduction of moneys for the discharge of the mortgage, but that was plainly an aspect of the undertaking offered by Ms Lee in the correspondence between the parties; and while there was some debate about that, ultimately it seems that the caveators previously accepted that the mortgage could be discharged from the proceeds of sale. That was reflected in the facts agreed between the parties for the appeal. We can see no reason why such a deduction should not be allowed for. If the parties cannot agree that the net proceeds of sale be paid into a particular solicitor’s trust account, they can be paid into court.[8]
[8]Ibid, [107]-[109] (citations omitted).
In Chan v Liu, the Court of Appeal referred to the nature of an application to remove a caveat and the function of a caveat:[9]
Ordinarily, an application for the removal of a caveat, being in the nature of an application for an interlocutory injunction, is not an occasion for the final determination of disputed factual issues, or of the substantive claims which the caveat seeks to protect…
As a starting point, it is important to bear in mind the function of a caveat. Section 89(1) of the Transfer of Land Act provides (inter alia) that any person ‘claiming an estate or interest in land’ under any unregistered instrument or dealing (or otherwise) may lodge with the Registrar a caveat forbidding the registration of any instrument ‘affecting such estate or interest’. Thus, essentially, the purpose of the lodgement of the second caveat, in this case, was to protect the right of the respondent to specific performance of the contract of sale of the property. So long as the caveat remained on the title, it prevented the applicants supervening that right, by selling the property to a third party.[10]
[9][2020] VSCA 28.
[10]Ibid, [63]-[64] (citations omitted).
Is there a serious question to be tried?
Raymond’s key submissions follow.
(a) Independent legal advice provided by Mr Avery shows clearly that the case of undue influence is not made out, and does not rise to the level of a serious issue to be tried;
(b) Dr Wardill travelled to Gweneth’s home to assess her. Colleen’s submission that Gweneth was acting under undue influence flies in the face of Dr Wardill’s comprehensive report;
(c) independent legal advice by Mr Avery, an experienced and independent solicitor, is against Colleen’s submission that there was conduct against conscience. There is no serious issue to be tried on the grounds of unconscionable conduct;
(d) if Colleen agitates this as an executor of the estate, then she would need a limited grant to bring the proceeding. She is one of three executors and there has been no application for a grant of letters of administration. The affidavits relied upon by Colleen are just assertion upon assertion, and replete with hearsay; and
(e) the doctrine of laches is applicable. Colleen withdrew her VCAT application. She had the benefit of her own legal advice when she made the decision. That was the time to challenge the transaction, when Gweneth was alive. There are now witnesses who are deceased, and others who do not have a clear memory, such as Gweneth’s barrister. Colleen made a conscious and informed decision not to pursue the application at VCAT. Her delay has consequences.
In reply to Colleen’s submissions, Raymond says that she reads too much into the Vowels report. The reference to Gweneth being agitated could be a reference to the VCAT proceeding. Dr Vowels’ report was before VCAT. As to the reference to Re Mahoney,[11] it is completely distinguishable: in that case, the solicitor acted for all parties and there was no independent legal advice.
[11][2015] VSC 600.
Colleen’s key submissions follow.
(a) Gweneth had marginal capacity. This is evidenced by the Vowels report. There were clear difficulties with her mental capacity. Dr Vowels refers to Gweneth’s confusion and stated that she was agitated. Dr Vowels found her executive functioning moderately compromised, diagnosed dementia, and referred to the issue of having a fixed idea which cannot be shifted, as well as poor planning and organisation. Unconscionable conduct arises where there is a special disadvantage and susceptibility to influence. Gweneth was susceptible to Raymond by her age, infirmity, and dependence. Gweneth was not worldly, had lived on the farm her entire life, and inherited it from her family. She was dependent on Raymond and Lorna. She relied on Raymond to manage the farm and make money from it. Some months after transferring the caveat properties to Raymond, she moved from the farm to the house in town. She could no longer live on the farm, because Raymond and Lorna had moved away. The question of whether Gweneth was willing or reluctant to move would be tested at trial. She moved into a house owned by Raymond. This creates a special disability because of her relationship with him. He took unconscionable advantage of her. The transfer of the caveat properties to him was unconscionable. It was an improvident transaction transferring 1000 acres of farmland to one child in the family, leaving Gweneth with no source of income. The suite of factors that puts Gweneth at a special disadvantage are also relied upon to submit there was undue influence on Gweneth. It is conceded there is no direct evidence of undue influence. However, the circumstances give rise to a presumption of influence. Raymond was in a situation of ascendancy over Gweneth because she was unable to live her own life;
(b) Dr Vowels’ diagnosis plays into the Avery letters of advice. In the first letter, Mr Avery records that Gweneth was unable to tell him financial information (but she does in her second meeting with him) and more troubling, tells him two contradictory things, one, that she wishes her assets to be divided equally and fairly between her three children in her will, and the other, to transfer the caveat properties to Raymond. Mr Avery tells her that the transfer will not be equal and fair, and recommends she discuss this with her family. She does not. Nor does Gweneth appear to reconcile that on the one hand she wants an equal and fair distribution, and on the other, she wishes to transfer to Raymond. This inability to think the matters through, or to be flexible in her thinking, raises the concerns identified by Dr Vowels. Colleen relies upon Re Mahoney.[12] In that case, it was held there was both undue influence and unconscionability, despite legal advice being given. The proper questions to be tried on the questions of undue influence and unconscionable conduct are not obviated by the legal advice given;
(c) the caveat has the effect of preserving the interest of the deceased estate in the land. Colleen is one of the executors. The assets of the estate will be preserved until there is a grant of representation made so Colleen can bring proceedings;
(d) the doctrine of laches is not applicable. The role of VCAT is to appoint an administrator. VCAT considered the question of Gweneth’s capacity. That is not the primary claim here. The trigger for Colleen’s action was the transfer of the caveat properties. Faced with two medical opinions that varied, she decided to withdraw. It was not a concession that the transfer was good. It was a matter for Gweneth to bring the proceeding if she wished. It was not until Gweneth died that Colleen obtained rights to do something about the caveat properties.
[12][2015] VSC 600.
Analysis
I am not satisfied that there is a serious question to be tried.
Turning first to the question of unconscionability. McMillan J summarised the applicable principles in Re Mahoney:
Unconscionability
In Christodoulou v Christodoulou, Kaye J noted that:
...unconscionable dealing is concerned with the conduct of the donee or recipient 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.
The doctrine is expressed succinctly by Mason J in the seminal case Commercial Bank of Australia v Amadio:
...if A having actual knowledge that B occupies a situation of special disadvantage in relation to an intended transaction, so that B cannot make a judgment as to what is in his own interest, takes unfair advantage of his (A’s) superior bargaining power or position by entering into that transaction, his conduct in doing so is unconscionable. And if, instead of having actual knowledge of that situation, A is aware of the possibility that the situation may exist or is aware of facts that would raise that possibility in the mind of any reasonable person, the result will be the same.
Central to the doctrine of unconscionability is the concept of ‘special disability’, the nature of which is dependent on the factual matrix at hand. Characteristics that have been found to constitute a special disability are varied, as noted in Bromley v Ryan:
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-à-vis another. It does not appear to be essential in all cases that the party at a disadvantage should suffer loss or detriment by the bargain.
...
[The doctrine of unconscionability] applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired facilities, 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.
In Louth v Diprose, Brennan J has also found that emotional dependence can, in the right circumstances, constitute a special disability for the purposes of the doctrine. The Court of Appeal has held that an antecedent relationship can exist between an adult child and an elderly parent in certain circumstances.
In relation to the donee’s knowledge of the special disability, there is no requirement that he or she possessed actual knowledge but, rather, that he or she had ‘knowledge of the facts which would raise the possibility [that the donor was under a special disability] in the mind of a reasonable person’.
The doctrine of unconscionability will intervene to prevent a donee from retaining the benefit of a gift where a person under a special disability has transferred it to them in circumstances where it would not be in good conscience to do so. A special disability is an attribute of the donor, which renders them incapable of making a judgment as to his or her own interests. Equity will intervene where the donee has actual knowledge or knowledge of the facts that would raise a question in the mind of a reasonable person that the donor suffers from a special disability and takes advantage of it.
In order for the plaintiff to establish his claim for unconscionability, he must prove:
(a)the deceased suffered from a special disability vis-à-vis the defendant at the time she transferred the farm to him in June 2006, at the time she changed the disposition of the farm, livestock and chattels in her 2006 will and at the time she transferred her livestock and chattels to the defendant in 2007;
(b)the special disability affected her judgment as to what constituted her best interests;
(c)the defendant was cognisant of her special disability; and
(d)the defendant took unfair advantage of her special disability in entering into the transactions.
…
A reasonable person in the defendant’s position would have done several things to ensure that the deceased was not taken advantage of, including the following:
(a)speaking with his siblings, especially the plaintiff, and urging that they too speak with their mother about the transaction, especially in light of the long held common understanding;
(b)engaging independent lawyers and ensuring that his mother had independent and impartial legal advice; and
(c)refusing to sign the transfer unless and until the above had been satisfied.
In my view, the defendant took unfair advantage of the deceased’s special disability when she transferred the farm, livestock and chattels to him.[13]
[13]Ibid, [180]-[186], [207]-[208] (citations omitted) (bold added).
The factual matrix here is different to Re Mahoney. The circumstances here are that Gweneth received independent legal advice from Mr Avery. His letters are forthright and frank. Mr Avery was not the family solicitor. He was requested by the family solicitor, Leigh Anderson, in September 2013, to provide advice. Fortunately, Mr Avery has been able to assist the Court by provision of an affidavit. His affidavit records that he has a “clear recollection” of advising Gweneth. Mr Avery deposes that he had two meetings with Gweneth and provided two letters of advice. Mr Avery deposes:
I conferred with Gweneth for over an hour and I had no doubts at all about Gweneth's capacity to understand my advice and give instructions. We talked about raising her family on the farm with her late husband. I was concerned for Gweneth to make sure that she thought about the gift after speaking with me and knowing the effect of the gift upon her assets and future care and family relationships. I was not concerned about whether or not she understood the matters I raised. I recommended, and she agreed, that she would go away from the meeting and think about the matters I had raised with her.
Gweneth had travelled from Walpeup to see me. She signed the documents during that conference so that if she did wish to go ahead she did not have to come all the way back to my office to sign them. She could call me and instruct me to destroy the documents or forward them to Mr. Anderson depending on whether she still wished the transfer to occur or not.
We agreed that I would send her a letter with the things we talked about for her to read at home and think about and discuss with whoever she wished. I would wait for her further instructions.
…
During that second meeting it was apparent to me that Gweneth had understood and considered the matters I had raised with her during our first meeting. In particular she made a point of telling me the amount of money she had in savings and assets and that she was comfortable with that amount to see to her future expenses.
She was adamant that she wished to transfer the land to her son Ray. She specifically stated that she wanted the farm to go to her son who had worked it all of his life. She had a desire to keep the farm together and in the family. I had no doubts that she understood the implications of gifting the land to her son and nothing suggested to me that she was in any way reluctant to do so.[14]
[14]Affidvait of John Avery sworn on 6 December 2021, [12]-[14],[17]-[18].
Given the independent legal advice, there is no serious question to be tried on the ground of unconscionability. I should add that it appears the proposed transfer of the caveat properties was discussed amongst family members, as Geoff and Raymond argued about it. Lorna was aware of it too. She deposes that she recalls Raymond and Gweneth going out to lunch in 2013, and afterwards, Gweneth saying she would give the land to Raymond.[15] Also, she took Gweneth to see Mr Avery and waited outside the room while he advised her.
[15]Affdiavit of Lorna Wolfe sworn on 6 December 2021 (Wolfe affidavit), [13].
Turning next to the question of undue influence. McMillan J summarised applicable principles in Re Mahoney:[16]
[16][2015] VSC 600.
Undue influence
… The doctrine of undue influence has similarities with the doctrine of unconscionability. However, the underlying rationale of the two doctrines is fundamentally different. Whereas unconscionability is concerned with the conduct of the recipient in retaining a benefit gifted to him or her by a person under a special disability where it would not be in good conscience to retain such a benefit, the doctrine of undue influence focuses on the nature of the consent of the donor in conferring the benefit. In Johnson v Buttress, the principles in relation to undue influence were stated by Dixon J as follows:
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 interests 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 ... But, except in the well recognised 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 are not governed by the presumption but dependent on some inference of fact.
These principles are summarised by Kaye J in Christodoulou v Christodoulou as follows:
The basic principles relating to the concept of undue influence are uncontroversial. In equity, a transaction, whereby a donor transfers property to a donee (or recipient), is voidable, if it is shown to be the result of undue influence exercised by the recipient over the mind of the donor. There are two categories of cases of undue influence. The first category of cases arises where it has been positively proven that the transaction in question was produced by actual influence exercised by the recipient over the donor. ... The second category of case is where there has been shown to be an antecedent relationship between the donor and the donee, which is such as to raise a presumption that the donee has relevant influence over the donor. In such a case, the court will set aside a voluntary gift, unless it is proven by the donee that the gift was a spontaneous act of the donor in exercise of an independent and informed will. In this category of case, the law has recognised particular relationships which automatically raise a presumption of influence, including the relationship of doctor and patient, solicitor and client, guardian and ward, and parent and child (where the gift is by the child to the parent). However, the classes of relationships, in which the presumption arises, are not fixed and inflexible. In essence, where there is found to be an antecedent relationship between the parties, which gives the recipient of the gift “authority or influence over the donor from the absence of which it is proper that he [or she] should be protected”, the law will presume that any gift by the donor to the donee was the result of undue influence exercised by the latter.
His Honour then considered the circumstances in which the presumption of undue influence is rebuttable:
Where an issue of undue influence arises, the critical question is, ultimately, whether the decision of the donor was the result of the exercise by her of an independent judgment, free from any undue influence of the donee, and based on sufficient information so that the donor understands the nature and consequences of her act. In each case, that question involves an examination of all the relevant factors which bear on the nature of the relationship between the donor and donee, and in particular which relate to the effect of that relationship on the mind and will of the donor in the transaction in question.
Where a presumption of undue influence arises, one relevant circumstance is whether the intention, to make the gift, originated with the donor. However, by the same token, the fact that the proposal to make the gift originated with the donor would not preclude application of the principles of undue influence.
An important factor in determining whether the presumption of undue influence has been rebutted, is whether the donor, before making the gift, had independent legal advice.[17]
[17]Re Mahoney, [210]-[212].
I am not satisfied that there is a serious question to be tried on the ground of undue influence. The following weighs against the suggestion that Gweneth was not exercising her own free will.
Mr Avery provided Gweneth with independent legal advice. Secondly, the Wardill report indicates Gweneth had capacity. I acknowledge the Vowels report. As properly conceded, there is no suggestion that Gweneth completely lacked capacity. At the highest, Colleen says she had marginal capacity. However, this is not consistent with the Wardill report. Nor is it consistent with Lorna’s evidence. Lorna lived with her mother and deposes that she was “sharp as a tack until the day she died”.[18]
[18]Wolfe affidavit, [10].
As a matter of completeness, I should add that no final factual findings may be made about unconscionability or undue influence given the nature of this application.
Finally, I agree with Raymond’s submissions that the doctrine of laches may be applicable in light of the matters agitated before VCAT. However, given the analysis above, it is unnecessary to further consider the issue here.
Does the balance of convenience favour maintenance of the caveat?
Raymond’s key submissions follow.
(a) the caveat properties have been sold. (In accordance with Gweneth’s wishes, the purchasers are relatives.) The caveat should be removed so the properties can settle;
(b) no-one has any interest in preserving the caveat properties in specie. The estate is split three ways (between Raymond, Colleen and Lorna). Even if the caveat properties were to come into the deceased estate, they would need to be sold and the sale proceeds distributed three ways. Colleen’s interest, at most, is one‑third;
(c) there is no evidence that the caveat properties have been sold under value;
(d) Colleen moved away from the caveat properties some 50 years ago. There is no utility in preventing the sale; and
(e) Colleen has properly conceded that the balance of convenience is in favour of removing the caveat. The sale proceeds should not be paid into trust. It would be akin to making a freezing order. There is no question of dissipation of assets. There has been no basis to articulate a claim by Colleen. The removal of the caveat should not be on terms. Caveats are not to be used as bargaining chips.
Colleen’s key submissions follow.
(a) if the sale is completed, and the sale proceeds are held in trust pending proceedings, she would be content with that outcome. Colleen does not say the caveat properties need to be preserved because of her attachment. The rights of the estate can be preserved with sale proceeds; and
(b) it is acknowledged that further steps would need to be taken to arm her with a grant of representation. This has not been done because, until recently, there was an application on foot seeking probate and then this application brought things to a head. If she is successful in this application, it is expected a time limit would be placed on those steps.
Analysis
The balance of convenience weighs in favour of removing the caveat to enable the sale of land to proceed. Colleen has not establish any prejudice to her if the caveat is removed. I accept Raymond’s submission that there should be no order made regarding preservation of the sale proceeds. There is no evidence before me to suggest dissipation is an issue. Nor should such an order be made in circumstances where I have concluded that there is no serious question to be tried.
0