Stivactas v Michaletos

This matter came before the High Court of Australia on an application for special leave to appeal. The applicant, Mr Stivactas, sought to appeal a decision concerning transactions where the respondent, Mr Michaletos, signed powers of attorney and property transfers in favour of the applicant. The respondent, aged 73 and recovering from a cerebral haemorrhage, transferred property to his 59-year-old nephew, the applicant, for nominal consideration.

The central legal issue before the High Court was whether the doctrine of undue influence could apply to a situation where the desire to enter into the impugned transaction originated with the donor, rather than the donee. This was contrasted with the doctrine of unconscionable bargains, and the applicant argued that the lower court judgments involved a misapprehension of the nature of undue influence, particularly in circumstances where the donor insisted upon the transaction.

The Court noted the applicant's concession that the facts might align more closely with unconscionable bargains, a point previously abandoned. However, the applicant contended that the case remained a suitable vehicle to elucidate principles regarding undue influence, citing Mason J's distinction in *Commercial Bank of Australia v Amadio*. This distinction highlights that undue influence involves an overborne will, whereas unconscionable conduct arises from a party's disadvantageous position, even if their will is otherwise independent and voluntary. The Court expressed some skepticism about the subtlety and potential weakness of the applicant's argument.