Wilton v Farnworth

This case concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Western Australia. The appeal arose from a dispute between William Farnworth (the respondent) and Albert Wilton (the appellant) concerning a deed by which Farnworth purported to transfer his entire interest in his late wife's estate to Wilton. Farnworth, a man of dull intellect, defective hearing, and limited education, had married his late wife, Stella Ivy Wilton, shortly before her death. Following her death, and after being informed of the existence of her assets, Farnworth met with Wilton, his stepson, who presented him with several documents, including the deed in question. Farnworth signed these documents, including the deed, without fully understanding their contents or implications, and without receiving independent advice. The Supreme Court had previously ordered that the deed be set aside.

The central legal issues before the High Court were whether the deed constituted a valid voluntary alienation of property, and if not, on what grounds it should be set aside. Specifically, the court had to determine if the circumstances surrounding the execution of the deed were such that it would be unconscionable for Wilton to retain the benefit of the transaction. This involved considering Farnworth's intellectual capacity, his understanding of the transaction, the nature of the property transferred, and the conduct of Wilton in procuring the deed.

The High Court, affirming the decision of the Supreme Court, held that the transaction was unconscionable and therefore liable to be set aside. The court reasoned that while a voluntary gift is not automatically invalidated by the donor's lack of understanding or weak intellect, equity will intervene where a gift of substantial property is improvidently made by a donor who does not understand the transaction and lacks relevant information, especially when the donee is the moving spirit and possesses superior knowledge. The court found that Farnworth's dull intellect, defective hearing, lack of understanding of the deed's contents and implications, the haste with which the transaction was conducted, and the absence of independent advice, all contributed to a situation where it was unconscionable for Wilton to benefit from the deed. The principles applied included the equitable jurisdiction to set aside transactions based on unconscientious dealing, particularly in the context of improvident gifts made by vulnerable individuals.

The appeal was dismissed, and the order of the Supreme Court setting aside the indenture was affirmed.