Tulloch (deceased) v Braybon (No 2)

[2010] NSWSC 650

CITATION:	Tulloch (deceased) v Braybon & ors (No 2) [2010] NSWSC 650
HEARING DATE(S):	8-11, 30 March 2010
JUDGMENT DATE :	17 June 2010
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
DECISION:	Declare that estate of John Archibald Tulloch (deceased) and the defendant are beneficial owners of the horse as tenants in common in equal shares.
CATCHWORDS:	EQUITY – General Principles – undue influence and duress – other presumptions of undue influence – whether there was a special relationship of influence between the parties – whether presumption arose having regard to quantum and context of gift – whether presumption rebutted – EQUITY – General Principles – assignments in equity – whether donor’s intention perfected
LEGISLATION CITED:	(NSW) Uniform Civil Procedure Rules 2005 r 7.10(2)(b)
CATEGORY:	Principal judgment
CASES CITED:	Allcard v Skinner (1887) 36 Ch D 145 Bank of New South Wales v Rogers (1941) 65 CLR 42 Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30 Goldsworthy v Brickell [1987] Ch 378 In re Brocklehurst’s Estate [1978] Ch 14 Jenyns v Public Curator (1953) 90 CLR 113 Johnson v Buttress (1936) 56 CLR 113 National Westminster Bank plc v Morgan [1985] AC 686 Poosathurai v Kannappa Chettiar (1919) LR 47 IA 1 Quek v Beggs (1990) 5 BPR 11,761 Spong v Spong (1914) 18 CLR 544 Stivactas v Michaletos (No 2) (1993) NSW ConvR 55-683 Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573 Watkins v Combes (1922) 30 CLR 180 Whereat v Duff [1972] 2 NSWLR 147 Zamet v Hyman [1961] 1 WLR 1442; 3 All ER 933 (CA)
PARTIES:	John Archibald Tulloch (since deceased) Raymond Patrick Braybon (first defendant) Racing Information Services Australia Pty Ltd (second defendant) Racing Victoria Limited (third defendant)
FILE NUMBER(S):	SC 09/287768
COUNSEL:	I M Neil SC w LM Wilson (plaintiff) P T Taylor SC w S Blount (first defendants)
SOLICITORS:	Lumleys Solicitors (plaintiff) Taylor & Whitty (first defendant) Allens Arthur Robinson (second defendant) Minter Ellison (third defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

Brereton J

Thursday, 17 June 2010

2009/287768 John Archibold Tulloch (since deceased) v Raymond Patrick Braybon & Ors

JUDGMENT

1 HIS HONOUR: John Archibald Tulloch instituted these proceedings on 26 February 2009 but died before they came on for hearing; his daughter Jeanette Louise Black, who has been appointed pursuant to (NSW) Uniform Civil Procedure Rules 2005 r 7.10(2)(b) to represent his estate, now prosecutes them, claiming that a gift by Mr Tulloch to the first defendant Raymond Patrick Braybon of a half interest in the racehorse Excelltastic was not perfected by the deceased, or alternatively if perfected was voidable in equity for presumed undue influence, and thus that Mr Tulloch’s estate, of which Ms Black is relevantly the sole beneficiary, is wholly entitled to the horse, to the exclusion of Mr Braybon. Mr Braybon opposes the relief claimed. As against the second defendant Racing Information Services Australia Pty Limited (RISA), which acts as the Registrar of Racehorses in Australia, the proceedings were dismissed by consent, upon RISA proffering undertakings, in substance, to give effect to such orders as the court might make. The third defendant Racing Victoria Limited, which holds certain prize money won by Excelltastic, submitted to the orders of the court.

2 The main issues are:

(1) Was there a perfected gift to Mr Braybon of a half-interest in the horse?

(2) Was the relationship between Mr Tulloch and Mr Braybon, notwithstanding that it is not in the class of traditional presumed relationships of undue influence, proved to be such that the presumption of undue influence nonetheless arises?

(3) If so, was the transaction of such magnitude or improvidence as to be unexplained by friendship, relationship, charity, or other ordinary motives?

(4) If so, has the presumption of undue influence been rebutted?

Was there a perfected gift?

3 According to Mr Braybon, in about November 2006, Mr Tulloch, then aged 75, asked Mr Braybon to help him acquire a quality racehorse and find a trainer for it, offering to pay Mr Braybon for his time. Mr Braybon agreed to do so, and about a week later, provided a list of trainers to Mr Tulloch, recommending two for further consideration, one of them being Mr Peter Moody of Caulfield, Melbourne. Mr Tulloch instructed that he contact both, to “sound them out”, and Mr Braybon did so.

4 On 29 November 2006, Mr Braybon emailed Mr Moody, concluding: “The question for you is … are we in the ball park with our intended expenditure? … and (more importantly) … would you be interested in taking us on?”. Mr Moody soon after returned the call, and they had a conversation about the possibility of Mr Moody buying a racehorse for Mr Tulloch.

5 According to Mr Braybon, on or about 30 November 2006, Mr Tulloch authorised him to instruct Mr Moody to buy a horse for up to AUD$150,000. On the same day, Mr Braybon contacted Mr Moody and conveyed Mr Tulloch’s instructions.

6 Mr Moody unsuccessfully attempted to buy a horse at the Gold Coast Magic Millions sales. Thereafter, Mr Moody told Mr Braybon that he would attempt to buy a horse in New Zealand. In January 2007, Mr Moody attended yearling sales in New Zealand, where he purchased the horse that would later be called Excelltastic. In late January, Mr Moody informed Mr Braybon that he had bought a suitable yearling in New Zealand that was available for Mr Tulloch to buy.

7 In early February 2007, Mr Braybon researched the details of the yearling and discussed the horse with Mr Tulloch, and Mr Tulloch gave instructions to buy the horse. It was in the course of this conversation, according to Mr Braybon, that the prospect of his having an interest in the horse was first raised: Mr Tulloch said that he was not going to pay Mr Braybon for getting him the horse, but offered him a half share in the horse as a registered half-owner. Mr Braybon initially declined this offer because he did not think he could afford to contribute to the costs of upkeep of the horse, but Mr Tulloch pressed him, indicating that he would pay all the bills, that any prize money would be shared, and that the half share was in return for Mr Braybon doing the paperwork and accounts and talking to the trainer. Following this conversation, Mr Braybon informed Mr Moody that they would take the horse.

8 On 6 February 2007, Mr Braybon sent his friend Louise Strid an email, in seeking some capital gains tax advice on behalf of Mr Tulloch, but in which he also mentioned that Mr Tulloch had given him a half interest in the horse and the prize-money:

I told you about him asking for my help to buy him a racehorse with a top Melbourne trainer. After speaking to several I settled on a fellow called Peter Moody who is the number three trainer in Victoria and last week he bought Jack a yearling in NZ for $125,000 which Jack has now paid for. Much to my amazement he has registered me as a half share owner with no expense to me but I am to receive half of any prize money the horse may win … so here’s hoping it wins plenty!! It’s all very exciting.

9 According to Mr Braybon’s step-daughter Jade Camden, who resides in the United Kingdom, in early February 2007 Mr Braybon told her on the telephone that Jack Tulloch had given him a half share in a racehorse.

10 According to Mr Braybon, on 26 February 2007, he received the invoice for the horse, and over the next two days, he assisted Mr Tulloch to transfer money from his accounts with the Banksia Financial Group to the Bendigo Bank, so that an international bank draft could be prepared to pay for the horse in New Zealand Dollars. Ms McNaught, who handled Mr Tulloch’s affairs at the Banksia Group, sometimes received communications from Mr Braybon, but only ever acted on the express instructions of Mr Tulloch. On 27 February 2007, AU$116,900 was transferred from Banksia to Mr Tulloch’s Bendigo Bank account, to pay for the horse. Thereafter, NZ$130,645 was paid directly from Mr Tulloch’s Bendigo Bank account to New Zealand Bloodstock Limited.

11 According to Ms Black, in March 2007, Mr Tulloch mentioned to her his idea of giving a half share of the horse to Mr Braybon: “But I’m going to give half this horse to Fred. But it’s not to go in his name. The horse will have to pay its way first, and it may never be any good. But if the horse is good, I’ll share the prize money with Fred. It’ll be just a gentleman’s agreement”. He said nothing to suggest that the idea had emanated from Mr Braybon; it was presented as his own idea. Ms Black said nothing to attempt to dissuade Mr Tulloch from his proposal. According to Ms Black’s husband Noel, at about the same time – probably shortly after they were married on 3 March 2007 – Mr Tulloch told him: “I am going to give Fred half the horse after the horse has won its cost and training costs back”.

12 According to Ms Ros Kennedy, who worked at the Finley Bowling Club, of which Mr Tulloch was a patron, in March 2007 he told her that he had given a half share of the horse to Mr Braybon, in return for Mr Braybon’s work for him: “Fred has arranged to buy a racehorse. I have given Fred half the horse in return for all the work that Fred and Sharon are doing for me. Fred is good with books and figures and will manage the horse for both of us. I hope the horse can win some prize money, because Fred and Sharon are good people”. Ms Kennedy’s evidence was neither challenged nor contradicted.

13 Mr Tulloch’s final version is contained in his own affidavit sworn in these proceedings, on 24 September 2009, in which he deposed:

I remember that I had an idea to buy a better racehorse a few years back. I had had some racehorses over the years, but they did not do well. When I had a bit of money, and thought my time was getting short, I thought I would spend the money to buy a better horse.
I was friendly with Fred Braybon then. He treated me well, and I liked him and thought well of him. I thought he knew his way around bookkeeping and computers, and I thought he had to be clever to do that. I asked him to [make] the arrangements to buy the horse. I do not remember what he said, but I remember that I paid for the horse, and it turned out to be a good one. Of course, I paid a lot of money for it. I thought a lot of that horse.
After I bought the horse I began to think that I might one day give half of the horse to Fred. I had this idea because I liked him. I have a got a few friends, and I think I have been pretty generous to them, but I have never given them anything as valuable as half of this horse. I thought I should do this for Fred because back then I thought he was worth it to me. I thought a fair bit of him in those days. I lent on him as a crutch.
I remember that I told Fred about this idea. I said ‘you can have half this horse, but under my conditions’. I remember that I did not tell him what the conditions were, and he did not ask about them. I remember that Fred did not speak. The idea I was thinking about was that I would share half the horse with Fred and I would have the prize money. I would pay the expenses. I wanted to do it in a way that meant that I would have the controlling interest. That was important to me.

14 There is an obvious inconsistency between that version given by Mr Tulloch (that Mr Tulloch would retain any prize money) and what Jeanette and Noel Black attribute to him (that he would share the prize money with Fred). Moreover, in his oral evidence given to the Albury Local Court in criminal proceedings brought against Mr Braybon on a charge of “obtain financial benefit by deception”, Mr Tulloch said that the terms were to be made up by him as it went along, and that he had none in mind as at 18 May 2007.

15 According to Mr Braybon, on 2 April 2007, he received the registration papers for the horse, some items in which had been completed by Mr Moody’s secretary, Ms Kelly. At about this time, he told Ms Kelly that Mr Tulloch had made him a half-owner in return for managing the horse. Mr Braybon went to Mr Tulloch’s house to have the form completed. Before filling out the registration papers, Mr Braybon explained to Mr Tulloch that the first-named owner would be the contact person for the horse. Mr Tulloch said that he wanted Mr Braybon to be named first, because Mr Tulloch did not want anybody ringing him. Mr Tulloch also nominated the owners’ percentages, saying “Its 50% each”. Mr Braybon filled out his details as first owner and then completed the details for Mr Tulloch as the second owner. Then, Mr Tulloch read the form, made an inquiry about Hotmail, and signed the form. The “Application to Register Horse” was lodged with RISA on 18 May 2007, and the fee of $100 was paid, by Mr Moody, who claimed reimbursement of the fee in his May invoice.

16 Mr Tulloch has given several versions of how his signature came to be on the registration papers showing Mr Braybon as one of the owners. In a signed statement made by Mr Tulloch to police on 7 March 2008, he said, with reference to the registration papers, “It looks like my signature”. However, on 16 June 2008, in a further signed statement to the police, Mr Tulloch stated: “I don’t remember signing the registration papers for the horse. It was never my intention to give ownership of the horse to Fred Braybon. I would not have given ownership of the horse to Fred Braybon”. On 3 October 2008, at the opening of criminal proceedings against Mr Braybon on the charge of “obtain money by deception”, the prosecutor abandoned an allegation of forgery. In the ensuing cross-examination, Mr Tulloch, although agreeing that he had suggested to the police that his signature on the registration papers had been forged, said that he remembered signing the papers, but alleged that when he was asked to sign them, they had been folded over, obscuring the name of Mr Braybon as a joint owner. However, the folds in the original registration form very obviously did not conform to the folds in the copy folded by Mr Tulloch in court as a demonstration of how he alleged Mr Braybon had folded it. Under further cross-examination, Mr Tulloch then claimed that the original registration form had not been filled in when he signed it. However, Mr Tulloch then retracted this allegation, saying he was “pretty old mate, and I make a few mistakes”. Eventually, Mr Tulloch conceded that he had suggested to Mr Braybon that he (Mr Braybon) name the horse; implicit in “naming” the horse is completing the registration papers on which the name appears.

17 Ultimately, in his affidavit in the current proceedings, Mr Tulloch gave the following version:

I have been shown a two page document marked “Application to Register a Horse”. I see my signature on the second page. My memory is that Fred gave this document to me, and that when he did so he said, ‘You need to sign this’. I have no memory of reading the document before I signed it. If someone I trust gives me a document to sign, then I do not usually see the need to read it. That was my habit with Fred back then. I have been farming most of my life, and that is the way things have always been done in the bush as far as I am concerned. I also remember that I did not see any other handwriting on the second page of the document when I signed it. I certainly did not see Fred’s name on the document. If I had seen it, I would remember that for sure, because it was important to me that I was the named owner of the horse. That was the point of my buying it. I once thought that the document was folded when Fred gave it to me, but I know now that that is not right. I got this mixed up with bills for the horse’s expenses. I remember Fred showing me some bills that were folded. I now know that some of those bills had his name on them, but I did not see that at the time. That is something that I would certainly remember if it had happened.

18 According to Mr Braybon’s step-daughter Jade Cameron, on 24 October 2007, she, her husband Chris, and Mr Braybon’s son Ashley met Mr Tulloch at the Finley Bowling Club. Ashley and Jade both gave evidence of this event, which was unaffected by cross-examination. According to Ashley, after Mr Braybon had said to Mr Tulloch: “Peter Moody thinks this horse has promise”, Jade thanked Mr Tulloch: “Thank you so much for giving Fred and mum a half share in the horse”, to which Mr Tulloch responded: “Fred and your mother are doing a lot of work for me and hopefully they will bring us a lot of luck”. Jade’s version was that she said to Mr Tulloch: “Thank you for your generosity by giving Fred half the horse. This has brought our family a lot of enjoyment”, to which Mr Tulloch replied: “Fred and Sharon are good people and they help me a lot”.

19 According to Mr Braybon’s brother-in-law Rodney James Jukes – who had in March been told by Mr and Mrs Braybon that Mr Tulloch had given them a half share of a racehorse – on Christmas Eve 2007 at Finley Bowling Club, Mr Jukes said to Mr Tulloch: “You are very generous to be giving half the horse to Fred and Sharon”, to which Mr Tulloch replied: “I have given them a half share in the horse and we are going to have a lot of fun with it. The horse might not be any good, but hopefully Fred will bring me some good luck”.

20 On 29 January 2008, the horse, for the first time, showed promise, by running third in a trial at Cranbourne. Mr Tulloch’s good friend Jack O’Malley, who visited him weekly or so in 2007 and 2008 and was called to give evidence in the plaintiff’s case, gave oral evidence in chief – not contained in his affidavit – that he remembered a conversation with Mr Tulloch – he said, he thought not long after the horse “got going and won a couple”, but was uncertain as to the timing – in which Mr Tulloch had said, with reference to the horse, that once it “got square with the ledger”, he was going to “look after Fred”.

21 In early 2008, Mr Tulloch called Ms Kelly, and asked “What names is my horse registered in?”. Shortly afterwards, on 28 February 2008, Mr Tulloch, in the Finley Bowling Club, publicly accused Mr Braybon of stealing his horse, and announced that he was going to the Police. On the same day, he called Jeanette Black and told her “Fred’s stolen my horse”.

22 The criminal proceedings, to which reference has been made, ensued. On 14 November 2008, the magistrate acquitted Mr Braybon, without Mr Braybon having to go into evidence. On 7 January 2009, despite the acquittal, Mr Tulloch again publicly accused Mr Braybon of stealing the horse. On 26 February 2009, Mr Tulloch instituted the current proceedings, asserting that Mr Braybon had procured his signature on the registration papers by undue influence or unconscionable conduct. On 4 March 2009, Mr Tulloch personally removed the horse from the care of Mr Moody. Mr Moody called Mr Braybon and, on 5 March 2009, on the authority of Mr Braybon, Mr Moody recovered possession of the horse.

23 Excelltastic has continued to race, with success. By 31 October 2009, he had won $338,493 in prize money, which is held by the third defendant, Racing Victoria, pending determination of these proceedings.

24 The plaintiff does not dispute that by 6 February 2007 Mr Tulloch had formed some intention to give a half interest in the horse to Mr Braybon, and that they would share the prize money, but disputes that Mr Tulloch ever perfected that intention. In particular, it is contended (1) that the “conditions” to which the gift was subject were not established, so that it could not be said precisely what Mr Tulloch intended to give or on what conditions, and (2) that Mr Tulloch never intentionally gave effect to any such intention.

25 As to the first of those contentions, nothing in the evidence supports the contention that this was a “conditional gift” in the usual sense of that term: there was no condition that Mr Braybon had to satisfy before becoming entitled. Mr Tulloch’s evidence in the criminal proceedings was that he had no particular conditions in mind at the time. The “conditions” to which Mr Braybon referred as having been mentioned by Mr Tulloch (consistently with his 6 February email to Ms Strid) do not qualify the gift of the interest in the horse; if Mr Tulloch were to pay all expenses that was a benefit over and above the gift of a half-interest in the horse; a 50% share of the prize money reflected and accorded with, and did not add to or detract from, a gift of a half interest in the horse; and the nomination of Mr Braybon as managing owner does not affect the beneficial interest in the horse. If the gift was perfected without any relevant conditions having been stipulated, then conditions could not be retrospectively introduced.

26 As to the contention that Mr Tulloch never intentionally gave effect to any such intention, so that the gift remained imperfect, the inquiry turns on execution of the registration papers in April or May 2007. By executing the Application to Register, with Mr Braybon shown as a joint owner, and handing it to Mr Braybon to effect registration, Mr Tulloch did all things necessary on his part to cause Mr Braybon to become a registered half owner of the horse. The plaintiff accepts that on its face, the Application to Register evinced a perfected intention that Mr Braybon have a half interest in the horse and the prize money, but submits that Mr Tulloch did not know or appreciate that by executing it he was thereby perfecting such an intention. In my opinion, this submission is wrong in fact, and (absent a pleading of non est factum, and except in reply to a defence asserting that despite a presumption of undue influence, the gift was the pure voluntary and well-understood act of the donor [cf Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573, 577.46, 578.03-06]), irrelevant in law.

27 I do not accept that when he executed the registration papers, Mr Tulloch did not know and intend thereby to vest a half interest in the horse in Mr Braybon. I prefer Mr Braybon’s version, for the following reasons.

28 First, Mr Tulloch’s version cannot be regarded as reliable. He has given several factually inconsistent accounts of the circumstances surrounding the signing of the registration papers. At first, he alleged to the Police that his signature was forged. Next, he claimed that Mr Braybon folded over the registration form, so that he did not see Mr Braybon’s name as co-owner on the registration form when he signed it. This was exposed as improbable before the magistrate on 3 October 2008, where the folds in the original registration form were inconsistent with its having been folded in the manner described by Mr Tulloch. Then, he suggested that Mr Braybon filled in the details of the registration form after Mr Tulloch had signed it. But Mr Tulloch retracted this allegation under further cross-examination before the magistrate, as a “mistake”. The several different versions of the events surrounding his execution of the papers which he has from time to time advanced might be explained by the decline of his memory in the years following the signing of the registration papers; but there is no reason to suppose that his last version is any more reliable than his earlier versions, which he was later compelled to abandon. Indeed even in it, as set out in his affidavit in these proceedings, Mr Tulloch claims no memory of reading the document before [he] signed it. Yet, in the same paragraph, he claims to remember that [he] did not see any other handwriting on the second page of the document when [he] signed it. Mr Tulloch’s last version of the events remains inherently contradictory.

29 Although Mr Tulloch could not, of course, be cross-examined before me, he was cross-examined in the criminal proceedings, and I have had the benefit of a transcript of Mr Tulloch’s evidence before Magistrate Lerve in the Albury Local Court, and of listening to the recording of that evidence. His allegations and evidence vacillated widely. He was highly combative with the cross-examiner. It would have been most difficult to accept anything he said without firm corroboration. For the plaintiff, it was submitted that it all made sense once it was appreciated that Mr Tulloch did not understand that he had done anything to perfect his acknowledged intention to give half the horse to the plaintiff, so that he was under the belief that Mr Braybon had somehow obtained for himself one half interest, and upon perfection of the proposed gift would have the whole and own the horse outright. But such rationalisation does not explain his discrepant versions of the crucial event, the execution of the Application to Register; I regret that the better explanation for the many discrepancies in Mr Tulloch’s versions is not some underlying rationalisation, but a combination of unreliability of memory, and adaption when one version became unsustainable.

30 Secondly, I found no reason to doubt the veracity and reliability of Mr Braybon’s evidence. Mr Braybon gave his evidence carefully and precisely. He demonstrated restraint despite provocation, and he made appropriate concessions when called for; these are the marks of a witness who is able to remain objective despite the emotional overlay of the litigation. Admittedly, a number of attacks were made on his credit. It was suggested that the email sent by him on 29 November to Moody Racing was telling because, by using the terminology “we” and “us”, it betrayed an anticipation on Mr Braybon’s part that he would have an interest in the horse, months before it was suggested by Mr Tulloch. However, I see nothing curious in the use by Mr Braybon of the plural in that context, as embracing Mr Braybon’s principal Mr Tulloch and himself as agent. In that context, it does not convey any anticipation on Mr Braybon’s part that he would have an on-going role or interest.

31 Reference was also made to Mr Braybon’s email to Ms Strid on 6 February 2007, in particular to the statement in it that might convey that Mr Braybon was already registered as a half-owner, it being suggested that this was inconsistent with Mr Braybon’s version, because at that point he had not yet been registered as a half-owner. However, Mr Braybon’s affidavit version is that, in early February, Mr Tulloch said to him: “I am not going to pay you for getting me the horse. I’m going to give you half of the horse. You are to put your name on the registration papers as a half owner”, to which Mr Braybon responded: “I can’t afford to race a horse”, and Mr Tulloch replied “No, I will pay the bills, I’ve got plenty of money and I don’t need any more, I want a horse that can win a race in Melbourne and I would like to share any prize money with you as it may bring me a change of luck”. In circumstances where Mr Tulloch had said “You are to put your name on the registration papers as a half owner”, and had spoken of “sharing” any prize money, there is no sinister inconsistency in the email’s assertion that “he has registered me as a half share owner”, or to receiving “half of any prize money”. While there may be a literal distinction, it would be unduly hair-splitting to suppose that Mr Braybon was focussed on the distinction between a direction by Mr Tulloch that he effect registration in that way on the one hand, and its having been perfected on the other. Indeed, the 6 February email to Ms Strid tends far more to corroborate than to derogate from Mr Braybon’s version. Its tone and timing is consistent with his version, and with his being the surprised and grateful beneficiary of a generous gift from Mr Tulloch.

32 Mr Braybon was cross-examined, at some length, by reference to propositions put by his counsel in the criminal proceedings in the course of cross-examination of Mr Tulloch. At the best of times, it is usually a long bow to draw to conclude that what counsel puts in cross-examination to a witness necessarily reflects a client’s instructions. Clients do not usually leap to their feet to interrupt their counsel’s cross-examination, or correct them as they go. In this case, the danger would be all the greater, where the cross-examiner was confronted by a witness whose position shifted, and who gave various versions of the same event, so that the cross-examination often involved endeavouring to pin the witness down to one or other version, or to remind him of an earlier version, rather than to put to him the accused’s version.

33 Thirdly, there is a substantial body of evidence that shows that Mr Tulloch knew and understood that he had given a half interest in the horse to Mr Braybon: see the evidence of Ros Kennedy, Jade Cameron, Ashley Cameron and Rodney Jukes referred to above. Some attempt was made to exploit inconsistencies between them as to whether the gift was asserted to be to Mr and Mrs Braybon (jointly) or to Mr Braybon alone. In form, the registration papers plainly show that the donee was Mr Braybon. However, it would be unsurprising if it were sometimes perceived as a gift to both Fred and Sharon, by those who did not see the paper, but heard of the gift. It is very easy for participants in conversations to form different perceptions of the intended donee; the ambiguity of the word “you” in that setting contributes to that. Such perceptions can easily affect the recollections of witnesses. Such variations as there were in this respect seem to me of no moment; the Application to Register provides the answer.

34 Fourthly, and less significantly, while Ms Black maintains – and I am sure genuinely believes, to the point of total conviction – that her father would never have given a half interest in the horse to Mr Braybon, this is difficult to reconcile with her admission that he told her in March 2007 that he intended to do just that. Her absolute conviction – which seems to be based on his later denial that he had ever given a share in the horse to Mr Braybon – affected the plausibility of her evidence. She was somewhat combative with the cross-examiner in the witness box. She vacillated and gave inconsistent evidence as to the period over which she had been estranged from her father, her affidavit referring to “years” but her oral evidence to “a few months”. She was somewhat evasive in explaining why Mr Braybon and his wife had been invited to a luncheon on Christmas Eve in 2007. There were inconsistencies in her evidence as to the state of her father’s memory and capacity, which she tended to suggest were lacking when it suited the plaintiff’s case impugning the horse transaction, but otherwise not: she was the beneficiary of very substantial gifts made by her father before his death, the executor of his will and the sole beneficiary of the only asset dealt with by his will, namely the horse; and she maintained that her father was fully in command of his faculties until he died – including as late as August 2009 when, shortly before his death, he closed a number of term deposits and transferred the proceeds to her and her husband. Her evidence that when her father first alleged that Mr Braybon had stolen his horse, she told Mr Braybon that she thought it was a misunderstanding on her father’s part, and that she never believed her father had given a half interest to Mr Braybon, sat quite illogically in the context of conversations in which she attributed to Mr Braybon an offer to retransfer his half interest. In my view, her evidence was coloured by her unwavering conviction that her father would not have given Mr Braybon a half interest in the horse, and must be treated with caution. However, ultimately, except for the March 2007 conversation mentioned above – which favours Mr Braybon’s case – her evidence did not significantly illuminate Mr Tulloch’s intention at the time of the transaction, as distinct from what he maintained a year later when he repudiated it.

35 In any event, absent a plea of non est factum (which was not advanced), it would not matter if Mr Tulloch did not know the contents of the document he signed. It is no longer in dispute that Mr Tulloch signed the registration papers with the name of Mr Braybon on them as a joint owner. In his affidavit sworn in these proceedings on 24 September 2009, Mr Tulloch said that he signed the form at Mr Braybon’s request; that it was his practice to sign documents that he was asked to sign by others without reading them; that he has no memory of reading it at the time; and that he did not see Mr Braybon’s name on it. Even if it were accepted that Mr Tulloch signed the application form without reading it, in the absence of sufficient grounds to attract the doctrine of non est factum that would give no basis for concluding that there was not a perfected gift. Ordinarily, one who signs a document without reading the contents is nonetheless fixed with the contents. Every suggested circumstance that might have supported a plea of non est factum (forgery, and fraud by folding the document to obscure its true contents) has been disproved or retracted.

36 There was, therefore, a valid perfected gift at law, subject only to the equitable doctrine of undue influence.

Undue Influence

37 In the Amended Statement of Claim, the plaintiff alleges that Mr Tulloch formed his intention to give a half interest in the horse to Mr Braybon, and signed the registration papers, under Mr Braybon’s (presumed) undue influence. (The pleading also appeared to allege that Mr Tulloch signed the registration document as a consequence of unfair, unconscientious or unconscionable conduct on the part of Mr Braybon, but this was not pressed in submissions).

38 Equity avoids dispositions of property procured by the improper or unconscientious use of the influence of one person over another, that cannot be explained on the grounds of friendship, charity or other ordinary motives on which people ordinarily act [National Westminster Bank plc v Morgan [1985] AC 686, 708; Bank of New South Wales v Rogers (1941) 65 CLR 42, 54]. Undue influence may be established by proof that the disponor’s assent was in fact procured by undue influence (“actual undue influence”), or by an unrebutted presumption arising from the existence of a relationship of influence between the parties where the quantum or improvidence of the transaction is such that it cannot be explained on grounds of friendship, relationship, charity, or other ordinary motives (“presumed undue influence”) [Whereat v Duff [1972] 2 NSWLR 147, 168; Quek v Beggs (1990) 5 BPR 11,761; Allcard v Skinner (1887) 36 Ch D 145, 185; Goldsworthy v Brickell [1987] Ch 378, 400-1]. Some relationships – such as parent and child, guardian and ward, solicitor and client, doctor and patient, (probably) spiritual adviser and follower, and (arguably) fiancé and fiancée – are presumed to be relationships of influence. In addition, a relationship of influence can be established by showing that it is one which involves ascendancy and influence on the part of the dominant party, or dependence, reliance, trust and confidence on the part of the weaker party [Johnson v Buttress (1936) 56 CLR 113, 134-5; Stivactas v Michaletos (No 2) (1993) NSW ConvR 55-683, 59-908]. Here, the plaintiff relied upon presumed undue influence, arising from a proved (as distinct from presumed) relationship of influence between Mr Braybon and Mr Tulloch. It will be necessary to return in more detail to the essential characteristics of such a relationship of influence – which, in order to distinguish them from the traditional presumed relationships of influence, I will call a “special relationship of influence”.

39 A presumption of undue influence may be rebutted by showing that the disposition was the independent, well-understood act of a person exercising free judgment [Johnson v Buttress; Zamet v Hyman [1961] 1 WLR 1442; 3 All ER 933 (CA)]. In Whereat v Duff [1972] 2 NSWLR 147, Asprey JA explained (at 168) that whereas the onus was on the party seeking to set aside the gift to establish the facts from which the court would infer that a situation exists where undue influence may have been exerted, which situations would naturally vary from case to case, once those facts have been established, the presumption arises and the onus is then cast upon the donee to rebut it.

40 This requires establishing both that the disponor knew and understood what he or she was doing, and that he or she was acting independently of the influence of the dominant party [Watkins v Combes (1922) 30 CLR 180; Quek v Beggs; Whereat v Duff, 168, 169]. It does not necessarily suffice, to prove that a gift was made free of undue influence, that the proposal came from the donor [Spong v Spong (1914) 18 CLR 544, 549; Whereat v Duff, 169; Quek v Beggs, 11,765]. As Asprey JA put it in Whereat v Duff (at 169):

The question of intention is basic in the law of undue influence. The fact standing by itself that there is evidence that the donor stated that he intended to make the gift does not rebut the presumption. As Lindley LJ said in Allcard v Skinner (1887) 36 Ch D 145, at p 183: ‘The influence of one mind over another is very subtle’. The ability of the donor to understand and intend that he is making a gift will not by itself necessarily operate as a bar to equitable relief. In Huguenin v Baseley (1807) 14 Ves 273, at pp 299-300; 33 ER 526, at p 536, Lord Eldon LC, after remarking upon the evidence to the effect that the donor Mrs Huguenin had declared her delight in making the gift there in question, in a passage which has been frequently approved, observed: ‘Take it, that she intended to give it to him: it is by no means out of the reach of the principle. The question is, not, whether she knew what she was doing, had done, or proposed to do, but how the intention was produced’: see also Harris v Jenkins (1922) 31 CLR 341, at p368; Bank of New South Wales v Rogers (1941) 65 CLR 42, at pp54, 85. The fact that the proposal to make the gift appears to emanate from the donor himself where the intention to give is generated by feelings of trust and dependence in a situation of close relationship is not decisive in the donee's favour: Spong v Spong (1914) 18 CLR 544, at p549. The question must always be ‘how has that intention been produced?’: Turner v Collins (1871) 7 Ch App 329, at p 339, per Lord Hatherley LC. Matters relating to the capacity of the donor, such, for example, as his age, standard of intelligence, character, experience and the like and matters bearing upon the situation in which the donor is placed in relation to the donee are all relevant to the probabilities as to how the intention was produced and, given the appropriate setting, even a person of full capacity may form the intention to make an improvident gift under the undue influence of another: Hoghton v Hoghton (1852) 15 Beav 278 at p 299; 51 ER 545 at p 553; Johnson v Buttress (1936) 56 CLR 113, at p119.

41 However, that is in the context of rebutting a presumption of undue influence that arises from a presumed or special relationship of influence. In the present case, what is first in question is whether there was a special relationship of influence at all. Where it is sought to prove such a relationship from transactions in which the “donee” acted for the “donor”, whether the moving party was the donor or donee may well illuminate whether the donee was in a position of ascendancy or dominion – which, as will be seen, is a critical consideration.

42 What, then, characterises a special relationship of influence?

43 In Johnson v Buttress, Latham CJ referred to dominion by one party arising from trust and confidence reposed by the other (at 119):

Wherever the relation between donor and donee is such that the latter is in a position to exercise dominion over the former by reason of the trust and confidence reposed in the latter, the presumption of undue influence is raised — Dent v Bennett, 4 My. & Cr. 269; see also Smith v Kay, (1859) 7 H.L. Cas. 750.

44 His Honour explained that in that context “dependence” was a correlative term for “dominion”:

Where such a relation of what may be called, from one point of view, dominion, and from another point of view, dependence, exists, the age and condition of the donor are irrelevant so far as raising the presumption of undue influence is concerned. It must be affirmatively shown by the donee that the gift was (to use the words of Eldon, L.C, in the leading case of Huguenin v Baseley, (1807) 14 Ves. 273, 9 RR 276, White and Tudor's Leading Cases in Equity, 7th ed, Vol I. at 247), "the pure, voluntary, well-understood act of the mind" of the donor.

45 In the same case, Dixon J (as the later Chief Justice of Australia then was) referred to relationships involving ascendancy or influence over, or dependence or trust by, the weaker party. His Honour said (at 134):

The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter. The source of power to practise such a domination may be found in no antecedent relation, but in a particular situation, …

46 After referring to relationships such as solicitor and client and physician and patient, Dixon J continued:

But while in these, and perhaps one or two other relationships, their very nature imports influence, 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.

47 In Jenyns v Public Curator (1953) 90 CLR 113, the High Court referred to confidence such as to involve ascendancy and dependence (at 133):

We are not here dealing with any of the traditional relations of influence or confidence – solicitor and client, physician and patient, priest and penitent, guardian and ward, trustee and cestui que trust. It is a special relationship set up by the actual reposing of confidence. It is therefore necessary to see the extent and nature of the confidence reposed and whether it involved any ascendancy over the will of the person supposedly dependent on the confidence.

48 In Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30, Street J (as the later Chief Justice then was) referred to the existence of a degree of confidence comparable to that in the traditional relations of influence (there, the relationship was comparable to that of guardian and ward), and to the concepts of ascendancy and dependency (at 34):

The present relationship is very close to, if not indeed, within, the scope of the traditional relations. But whether within or without the traditional relations, the present facts involve a degree of confidence equivalent thereto. The limited extent of the plaintiff’s business and commercial understanding, if indeed she had any business or commercial understanding capable of being measured at the time she turned twenty-one, is a strong pre-disposing factor in her favour in connection with this issue of a relationship of influence. She was dependent upon the trustee company personified so far as she was concerned in Mr Hohnen, for her money, and, indeed, as she understood it, for the household expenses necessary to support the home in which she and her brother lived with the housekeeper after her father’s death. That Mr Hohnen, together with Mr John Jeremiah Cahill, occupied in relation to the plaintiff a relationship akin to that occupied by a parent towards a child or a guardian towards a ward, is in my view amply made out. Indeed, the very presence, in the circumstances surrounding this deed, of the paternal element that pervades the discussions between all concerned is consistent with, and corroborates, the existence of the special relationship of influence.

49 In Quek v Beggs, McLelland J (as the later Chief Judge in Equity then was), referred to reliance, dependence or trust on the part of one and a correlative ascendancy on the part of the other (at 11,765):

Whether in any particular case a relationship in a religious context will be sufficient to found the presumption will depend upon whether the evidence establishes a reliance, dependence or trust on the part of the donor leading to a correlative ascendancy on the part of the donee capable of influencing the making of the gift in question.

50 In Watkins v Combes, Isaacs J referred to the judgment of the Privy Council in Poosathurai v Kannappa Chettiar (1919) LR 47 IA 1, (at 3-4) – to the effect that it was a mistake to treat undue influence as established by proof of relations between parties having been such that one naturally relied upon the other for advice, and the other being in a position to dominate the will of the first – and said that more than a relationship of confidence and influence was required:

It is not the law ... that the mere fact that one party to a transaction who is of full age and apparent competency reposed confidence in, or was subject to the influence of, the other party is sufficient to cast upon the latter the onus of demonstrating the validity of the transaction. Observations which go to that extent are too broad.

51 In my opinion, these authorities show that more than mere confidence and reciprocal influence is required to establish a “special relationship of influence” from the existence of which undue influence will be presumed unless rebutted; for a relationship to be brought within the doctrine, it must go beyond one of mere confidence and influence, to one involving dominion or ascendancy by one over the will of the other, and correlatively dependence and subjection on the part of the other. It is true that some cases suggest that it is not necessary to establish a relationship of actual dominion by one party over another and that it is enough to show that the party in whom trust and confidence is reposed is in a position to exert influence over the party who reposes it [see Goldsworthy v Brickell [1987] 1 Ch 378, 403-404; Stivactas v Michaletos (No 2) (1993) NSW Conv R 55-683, 59,908 (Sheller JA). But more is required than the “influence” that any person might have on another by making an recommendation or giving advice. What is required, as a minimum, is that one have some element of authority or superiority (which may be moral or practical as distinct from legal) over the other. Thus, in the case of a solicitor, and perhaps a doctor, it arises from his or her professional status and expertise in a field in which the client will typically be ignorant, founding an expectation that professional advice would ordinarily be followed; in the case of a spiritual adviser, from the religious imperative to follow spiritual advice; in the case of a parent, from that authority which a parent naturally has over a child. A real estate agent, or a stock and station agent, no doubt has an opportunity to influence a principal, but these are not viewed as necessarily relationships of influence, because such agents do not have the same standing and authority in respect of a client as do those in the traditional categories. A husband and a wife obviously are vis-à-vis each other in positions of trust and confidence and influence, but one does not ordinarily have over the other such authority as to make such relationships a presumed relationship of influence, nor (without more) a special relationship of influence. It is where the relationship is such that one party is seen or supposed to be in some way beholden, obliged, or disadvantaged in relation to the other that such relationships are presumed or can be proved, and dominion or ascendancy is at least usually an important factor.

Was there a relevant relationship of influence?

52 For the purpose of considering the application of the doctrine of undue influence in this case, and whether a special relationship of influence – from which a presumption of undue influence would arise – has been established, the relevant time is that leading up to the execution of the registration documents in early 2007. The issue is whether at and about that time there was a special relationship of influence between them in which Mr Braybon was the dominant and Mr Tulloch the subservient party. This requires consideration of the relationship between Mr Tulloch and Mr Braybon up to and about the time of the impugned transaction (at the latest, about April 2007), in the light of Mr Tulloch’s character and personality [cf In re Brocklehurst’s Estate [1978] Ch 14, 31F-G, 39E-F]. Evidence of events after mid-2007 is of limited utility in this exercise, save insofar as it casts light on those matters at an earlier time. The evidence relevant to those matters is summarised below.

53 Mr Tulloch was born on 10 January 1931; thus in April 2007 he was 76 years of age. Having become widowed in 1999, he had remarried Pat Spicer in 2000, but they were subsequently divorced in 2003.

54 Mr Tulloch was a regular patron of the Finley Bowling Club, of which Mr Braybon was a manager. Mr Braybon (like Ros Kennedy, who was also one of the club’s staff) was assiduous in attending to Mr Tulloch when he came to the club: they took drinks to him where he sat (for which he then nonetheless paid), so that he did not have to go to the bar to order or collect his drinks.

55 Sometime in or about 2000, in response to a comment made by Mr Tulloch at the Finley Bowling Club to the effect that he was thinking about changing his investments from shares into real estate, but was concerned about the reliability of tenants, Mr Braybon said that he was looking to sell his house and rent it back, and that he and his wife would be quality tenants. Mr Tulloch mentioned this to his then wife Pat Spicer, adding that had not accepted the proposal. In due course, Mr Braybon sold his home to a third party and leased it back.

56 In December 2005, Mr Tulloch lent Mr Braybon $11,000, which Mr Braybon had requested to pay out a car loan which his daughter Jade had obtained and which had been called up. Mr Tulloch agreed to make the loan, and Mr Braybon repaid it before the end of 2006, apparently in about six instalments.

57 Mr Tulloch’s daughter, Helen Davey, lived in Albury from 2002 until early 2006 and visited her father almost every weekend during that period. She and her family then lived with him from January until mid-2006, and then until November 2006 nearby in other premises in Finley. She expressed the view that over the period from 2002 until 2006, Mr Tulloch and Mr Braybon were friends, and were becoming closer. She said that she first heard Mr Tulloch mention Fred Braybon soon after his former wife Pat Spicer left him (which was in about 2003). When asked what he said about Mr Braybon at that time, she answered:

Just that he was really happy when he went to the bowling club that Fred would bring him over a drink and dad didn’t have to go up to the bar to get a drink and that they had things in common. They spoke about the share market, politics. He was really happy, he was happy someone showed him an interest and he really liked him.

58 In cross-examination, she gave the following evidence:

Q. Ms Davey, when you say that Mr Braybon would bring him a drink, was it your understanding of what you observed that, rather than your father having to go to the bar and pay for a drink, he could remain where he was and a drink would be brought to him and then he would pay for it? A. Yes.
Q. And during this time that you observed Mr Braybon doing this for your father, Mr Braybon was the barman at the bowling club? A. Yes.
Q. Who was the other person at the bowling club who treated your father exceptionally well? A. Ros Kennedy.
Q. And did she work at the bowling club? A. Yes.
Q. And was it the position that she would also engage in that conduct of bringing him a drink, thereby relieving him of the need to go to the bar? A. Yes.
Q. And she would, on occasion, engage in conversation with your father as well? A. Yes.

59 Anne McNaught began managing Mr Tulloch’s accounts at Banksia Financial Group in 1995 or 1996. She noticed that faxes she received from Mr Tulloch were sent from the Finley Bowling Club. Ms McNaught effected many transactions on Mr Tulloch’s accounts, for some of which Mr Braybon gave the initial instructions, but she always received confirmatory instructions from Mr Tulloch and was always of the view that he was capable of freely and independently assessing whether the transfers should be made.

60 In November 2006, Mr Tulloch agreed to lend Mr Braybon $33,000. The loan was made on 29 November 2006, on the same day that Mr Tulloch approached Mr Braybon about acquiring a racehorse. Although Mr Braybon proposed that the loan be documented, Mr Tulloch resisted documentation. Mr Braybon, when pressed that this was some indication that Mr Tulloch trusted him, answered that he hoped he trusted him.

61 In January 2007, there was a thaw in the previously estranged relationship between Mr Tulloch and his daughter Jeanette Black. Ms Black then observed him to be “skinny, frail and stooped”, and apparently lonely and depressed.

62 Ms Black remarried on 3 March 2007. Subsequently, on 25 March, she visited Mr Tulloch, who had declined an invitation to attend the wedding. Mr Tulloch offered to purchase a home for Ms Black and her family, and in April 2007 he paid the purchase price of $260,000, and a further $10,000 for legal costs and stamp duty.

63 Also in April 2007, Mr Tulloch raised with Mr Braybon a proposal to give him power of attorney, but Mr Braybon declined, saying that that was a matter for Mr Tulloch’s family. Similarly, in August 2007, Mr Tulloch requested Mr Braybon to be the executor of his will, but Mr Braybon again declined, on the basis that it was a family matter.

64 In 2006 or early 2007, Mr Tulloch made a donation of $53,000 to the Finley Rugby Club. He came to regret this, apparently because he did not consider that the club afforded sufficient public recognition to his gift, and contemplated demanding its return. In November 2007, Mr Tulloch asked Mr Braybon to assist him to write a letter to the club, requesting that the club return his donation.

65 In July 2008, Mr Tulloch transferred his home in Finley to Ms Black. He also transferred to her a block of flats he owned in Finley. In September 2008, Mr Tulloch transferred $1 million of his share portfolio to Ms Black. In August 2009, Mr Tulloch closed many of his term deposit accounts and transferred the proceeds – about $333,000 – to Ms Black. In September 2009, Mr Tulloch transferred to Ms Black the remaining balance of his share portfolio, worth about $1.8 million.

66 The plaintiff’s case was summarised as being that, when Mr Tulloch formed an intention to make a gift of a half-interest in the horse to Mr Braybon, and subsequently when he gave effect to that intention by executing the registration papers, he was elderly, in failing health and physically infirm; that while he was not unintelligent and had successfully accumulated significant wealth, he was uneducated and unsophisticated, sometimes impetuous and irrational, dismissive of his own intellectual capability, and unusually impressed by others’ attainments; that he was conscious of his physical and mental decline, and worried about the prospect of being left alone in his last years; and that he was needy, and his habitual irascibility and rudeness had alienated family, friends and townsfolk, so that he was lonely and isolated. Mr Braybon, it is said, made himself useful to Mr Tulloch, became his close and confidential friend and support, was entrusted with the management of his business affairs, and was relied on to meet his every need. In his affidavit, Mr Tulloch said: “I thought a fair bit of him in those days. I leant on him as a crutch”. The plaintiff further contends that the quantum of the gift was such – both absolutely, and relatively to Mr Tulloch’s circumstances and characteristic miserliness – that it could not be accounted for by any ordinary motive.

67 In evaluating that case, it is important to remember that the case advanced for the plaintiff was one of undue influence, presumed to arise from a proved relationship of influence outside the traditional categories. (Although unconscionable dealing had been pleaded, it was not pressed in opening or closing submissions.) The significance of this is that the inquiry must be directed to whether the relationship was one of influence in the sense described above, as distinct from whether Mr Braybon took unconscionable advantage of some special disadvantage affecting Mr Tulloch.

68 Mr Tulloch was an unlikely candidate for the role of a subservient position in any relationship. He was neither unintelligent, nor impoverished: he had certainly successfully accumulated significant wealth. Nor was he any shrinking violet: he was forthright in his convictions, and robust in his dealings with others. His old friend Jack O’Malley described him as a man who did not like paperwork: “He wasn’t a paper man”; that he did not claim to be a literary expert whose word was his bond. It is true that he was sometimes impetuous and irascible: Mr Tulloch moved swiftly from strong affection to powerful dislikes; indeed Ms Black herself experienced this, describing the position as “One minute you’re in, the next you’re out”. But the case was not conducted on the footing that Mr Braybon had unconscionably taken advantage of a moment of impetuosity.

69 In later 2006 and early 2007, Mr Tulloch was 76 years of age. He required occasional oxygen treatment, apparently for emphysema, but he was not otherwise physically infirm. He thought he had not much longer to live, but this did not affect his mental competence: although he feared the prospect of mental as well as physical decline, he was not suffering from dementia, and he remained capable of dealing with his affairs. As has been recorded, in or about April 2007, he funded the purchase of a home for his daughter Ms Black and her husband and their family, to the cost of about $270,000. Subsequently, he transferred to her his home in Finley, and a block of flats that he owned there. He also transferred to them his share portfolio (worth about $2.8 million, in two tranches of about $1 million and $1.8 million), and eventually in about August 2009 closed his term deposits and transferred to them the proceeds (about $333,000).

70 Particularly during 2009, no-one was more involved in his care and supervision than Ms Black. As has already been mentioned, she thought her father was fully in command of his faculties until he died, including when, shortly before then in August 2009, he closed his term deposits and transferred the proceeds to her and her husband. There was no suggestion that he was not entirely free to make his own decision in respect of those transactions, nor that any of them was affected by undue influence. Ms McNaught, who always required confirmatory instructions from Mr Tulloch, was always of the view that he was capable of freely and independently assessing whether funds transfers should be made.

71 It is clear that, notwithstanding Mr Braybon’s assertion that he would not have described them as “friends” prior to November 2006, when Mr Tulloch approached him in connection with the racehorse proposal, there had been earlier contact between Mr Tulloch and Mr Braybon. Mr Braybon was cross-examined about his admission of the allegation in paragraph 10 of the Statement of Claim that they “became friends” from 2005, which was said to be contrary to his assertion that he would not describe them as friends until 2006 or 2007; I disagree: an allegation that they “became friends” is capable of describing a process beginning in 2005 and not coming to fruition until sometime later.

72 At the centre of the plaintiff’s case was the contention that Mr Braybon became Mr Tulloch’s “close and confidential” friend, trusted with the management of his financial affairs and, with his wife, relied on for help and support; it is said that their relationship had become a “confidential” one by late 2006 and certainly by April 2007.

73 However, the “close relationship” described by several witnesses – for example, Ms Davey – amounted, on examination, to little more than assiduous attention to Mr Tulloch’s needs at the bowling club, and social conversation. While this was no doubt much appreciated by Mr Tulloch, it does not establish a relationship of undue influence: provision of attentive service by a bar manager, albeit that it was no doubt considerably appreciated by Mr Tulloch, does not begin to establish influence, let alone dominion, over the patron. Nor does the fact that Mr Braybon permitted the facilities at the club to be used to transmit faxes from Mr Tulloch to his bank manager indicate a relationship of influence, let alone ascendancy. There is nothing in the proposal made by Mr Braybon in or about 2000 that he might sell his house to Mr Tulloch on a lease-back arrangement – and the rejection of that proposal by Mr Tulloch – to suggest any relationship of influence, let alone dominion. Nor is there anything in Mr Tulloch’s agreement to lend $11,000 to Mr Braybon in 2005, to refinance Jade’s car loan, to suggest a relationship of influence, let alone ascendancy. Preparedness to lend $11,000 undocumented and without security does not begin to show that the lender was under the influence, let alone the dominion, of the borrower. Similarly, that in November 2006 Mr Tulloch was prepared to lend Mr Braybon $33,000, without documentation, and trusted him to repay it, does not point to a relationship involving dominion and dependence. No doubt Mr Tulloch – as Mr Braybon agreed – “trusted” him to repay the loans; but that is not enough to make a special relationship of influence in the absence of dominion or ascendancy.

74 It is not in dispute that Mr Tulloch requested Mr Braybon assist him to buy a racehorse; that Mr Tulloch, independently of any influence by Mr Braybon, formed an intention to offer a half-share in the horse to Mr Braybon; that Mr Tulloch told his daughter Ms Black that he intended to share any prize money won by the horse with Mr Braybon; that Mr Tulloch told Mr Braybon of his intention to offer him a half-share in the horse; and that Mr Tulloch signed a registration form that reflected those intentions. From this, it was argued that Mr Tulloch “trusted” Mr Braybon to find an appropriate trainer and purchase the horse. Again, Mr Braybon’s response was, “I hoped so”. Although, as mentioned above, it is by no means determinative, it is not without significance that the initiative for this transaction came from Mr Tulloch, unprompted by Mr Braybon: especially as this is not a question of rebutting a presumption of undue influence, but of ascertaining whether there ever was a special relationship of influence.

75 I do not doubt that at the relevant time Mr Tulloch held Mr Braybon in high regard, considered him a good friend, trusted him to act in his interests as his agent in connection with acquisition of the horse, and had confidence in his judgment in that behalf. However, Mr Tulloch did not simply delegate the task to Mr Braybon: while it was Mr Braybon who did the research and liaised with Mr Moody, he did not make the decisions, but reported back to Mr Tulloch, providing recommendations which Mr Tulloch reviewed and was at liberty to accept or reject. Ultimately, Mr Tulloch remained the final decision-maker. Even many months later, for example, Mr Tulloch took objection to some items in Mr Moody’s bills, which Mr Braybon then raised with Mr Moody. The sole evidence of Mr Tulloch doing anything at Mr Braybon’s behest is that, on Mr Tulloch’s own version, he signed the registration document after Mr Braybon said: “You need to sign this”.

76 There is nothing to suggest that Mr Tulloch ever felt somehow obliged, bound or beholden to follow Mr Braybon’s request or advice, or that his will was affected, let alone overborne. The tenor of Mr Tulloch’s evidence in the Albury Local Court is entirely contrary to his being under the dominion of Mr Braybon; then, his complaint was that he had been tricked into signing the papers, not that he had made the gift because he felt somehow obliged to Mr Braybon.

77 A “confidential friendship” is not enough to establish a special relationship of influence. Many, even most, close friends would describe their relationship as trusting and confidential; typically they are equal relationships of mutual trust and confidence, in which neither has an ascendancy over the other, and neither is dependent. These are not relationships in which undue influence will be presumed; it is only where the trust and confidence reposed by one is such that there is also ascendancy or dominion by the other over the will of the first, that the presumption will arise. I accept that during 2007, Mr Braybon and his wife played an increasing role in caring for Mr Tulloch. While his later requests that Mr Braybon act as his power of attorney and executor certainly indicate a level of trust, men and women often ask close friends to act in those capacities, and that does not show that the relationship between them is a “special relationship of influence”.

78 The essence of the plaintiff’s case was fairly and firmly put to Mr Braybon, at the conclusion of his cross-examination, as follows:

Q. Your relationship with Mr Tulloch was more than one of mere acquaintance prior to November 2006, was it not? A. It was not.
Q. You had by then known him for years, would you agree? A. Yes.
Q. And from about 2005 you had become friends? A. I disagree.
Q. By the time Mr Tulloch told you that he was going to give you a half share in Excelltastic you were looking after him, do you agree? A. We had become, we were beginning to become friends, yeh, and we commenced looking after him from that point forward, yes.
Q. Your relationship with him at the time that he first told you that he was going to give you a half share in the horse was one in which he would have been justified in saying that you and your wife had been good to him, do you agree? A. I disagree at that time.
Q. Indeed, at that time, which is the time that Mr Tulloch first told you that he was going to give you a half share in Excelltastic, he would rightly have regarded you as a very special mate, would he not? A. I couldn’t comment on what Mr Tulloch thought of me.
Q. And as a special friend, do you agree? A. I can’t comment on what Mr Tulloch thought of me.
Q. And he trusted you, correct? A. I would hope so.
Q. That the rapport between you and him was first class? A. At what point?
Q. At the time he first responded to you that he was going to give you a half share in the horse? A. The rapport between us was pretty good.
Q. And that at that time he lent on you like a crutch? A. I disagree.

79 To my mind, the evidence establishes no special relationship of influence between Mr Braybon and Mr Tulloch. This is not a case of an innocent overawed by a professional man. Mr Tulloch was robust in his dealings. He may have been impetuous in that he would sometimes do things which he later regretted, but this was not because he was under anyone’s influence. He had formed the intention to divest himself of his assets before he died. He made a gift to the rugby club to improve his reputation and name in the town. He enjoyed Mr Braybon’s company and attentions, but the idea that he was in a relationship in which Mr Braybon had dominion over him approaches the absurd. It is no more credible than the idea that he was under Ms Black’s dominion when he made the various dispositions to her and her husband that followed.

80 A friendship – even a “special” friendship – does not import a relationship of dominion or influence. Most friends trust each other in a sense, but not in the sense that is the converse of dominion. The relationship between Mr Tulloch and Mr Braybon, antecedent to Mr Tulloch forming the intention to offer a half share in the horse to Mr Braybon, and antecedent to the execution of the registration papers, was not one in which Mr Braybon had any dominion or ascendancy over Mr Tulloch. It was not one from which undue influence would be presumed.

81 In the light of that conclusion, it is unnecessary to consider in detail the remaining issues, (1) whether the transaction was of such magnitude or improvidence as to be unexplained by friendship, relationship, charity, or other ordinary motives, and (2), if so, whether the presumption of undue influence has been rebutted.

82 As to the first, it suffices to record that while the transaction may have been large by Mr Braybon’s standards, the relevant standards are those of Mr Tulloch, the donor. Mr Tulloch was about to embark on the process of divesting himself of his assets – mainly to Ms Black – and a half-interest in a horse of unknown potential was not relatively large in the context of the other donations he was about to make. While the horse was no doubt special to Mr Tulloch, Mr Braybon was assisting Mr Tulloch to acquire and then manage the horse, and Mr Tulloch valued his friendship, advice and contribution. It must be remembered that the horse’s then future success and ultimate value was unknown at the time when the gift was made, when there was every probability that, like most racehorses, it would not prove to be a winner. It is unreasonable to use what can now retrospectively be ascertained as the size of the gift as some indication of its improvidence at the time when it was made. The gift was akin to one of a half-share in an expensive lottery ticket. I am unpersuaded that the transaction was, in those circumstances, of such magnitude or improvidence as to be inexplicable by ordinary motives. For that additional reason, even had a special relationship of influence been established, the presumption that the gift had been procured by undue influence would not have arisen.

83 As to the second, had a special relationship of influence been established, and were the transaction of such magnitude and improvidence as not to be explicable by ordinary motives, then the question would have arisen whether the presumption was, in the circumstances, rebutted. Having regard to my preference for Mr Braybon’s version of the relevant events, and to Mr Tulloch’s subsequent acknowledgments to third parties of the gift, I am affirmatively satisfied that Mr Tulloch knew of and understood the import of the transaction. Bearing in mind the considerations mentioned by Asprey JA in Whereat v Duff [see [39] above], including that the circumstance that the idea of the gift emanated from Mr Tulloch is of itself not decisive, nonetheless the cases do not say that that circumstance is irrelevant. Mr Tulloch’s own evidence shows that the intention to make the gift was not the product of his mind being subjected to or overborne by the will or influence of Mr Braybon:

After I bought the horse I began to think that I might one day give half of the horse to Fred. I had this idea because I liked him. I have a got a few friends, and I think I have been pretty generous to them, but I have never given them anything as valuable as half of this horse. I thought I should do this for Fred because back then I thought he was worth it to me. I thought a fair bit of him in those days. I lent on him as a crutch.
I remember that I told Fred about this idea. I said ‘you can have half this horse, but under my conditions’. I remember that I did not tell him what the conditions were, and he did not ask about them. I remember that Fred did not speak. The idea I was thinking about was that I would share half the horse with Fred and I would have the prize money. I would pay the expenses. I wanted to do it in a way that meant that I would have the controlling interest. That was important to me.

84 That passage demonstrates that, on Mr Tulloch’s own version, his intention to make the gift was formed independently of Mr Braybon’s undue influence. It was not because he felt overborne or influenced by or obliged to Mr Braybon, but because “I liked him” and “I thought he was worth it to me”.

85 Accordingly, had the presumption of undue influence arisen, it would have been rebutted.

Conclusion

86 There was a perfected gift by Mr Tulloch to Mr Braybon of a half-interest in the horse.

87 There was no special relationship of influence between Mr Tulloch and Mr Braybon, such as to attract the presumption of undue influence. Friendship, even close or confidential friendship, does not without an element of ascendancy or dominion, or at least some element of moral or practical authority or superiority, and correlative dependence or subjection, constitute a special relationship of influence for the purposes of presuming undue influence; there was no element of ascendancy or dominion on the part of Mr Braybon here.

88 In any event, given the then nature of the relationship, the function that Mr Braybon was performing in connection with the horse, the practical equivalence of the gift to one of a half-share in an expensive lottery ticket, the size of Mr Braybon’s estate and his contemporaneous decision to divest himself of assets, the transaction was not of such magnitude or improvidence as to be unexplained by friendship and other ordinary motives.

89 Had the presumption of undue influence arisen, it would have been rebutted: Mr Tulloch knew of and understood the import of the transaction, and his intention to embark on it was formed independently of Mr Braybon’s undue influence – it was not because he felt overborne or influenced by or obliged to Mr Braybon, but because “I liked him” and “I thought he was worth it to me”.

90 The proceedings should be dismissed with costs.

91 My orders are:

(1) Declare that the estate of John Archibald Tulloch (deceased) and the defendant Raymond Patrick Braybon are the beneficial owners of the horse Excelltastic as tenants in common in equal shares.

(2) Order that the proceedings be otherwise dismissed with costs.

(3) Direct that these orders not be entered before 25 June 2010.

(4) Reserve leave to each party to apply by arrangement with my associate in the meantime to vary these orders.

(5) Adjourn proceedings to Wednesday 23 June 2010 at 9.30am before me for argument as to costs.

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