Harper v Harper

1. [1]

   The plaintiff, Ms Brenda Harper (Brenda) is the mother of the first defendant, Mr Troy Harper (Troy), and the second defendant is his wife, Mrs Donna Harper (Donna). These proceedings concern an unfortunate dispute between them regarding a transfer of a vacant parcel of land located at 14 Florence Close, Port Macquarie (the Land) made by Brenda in favour of Troy and Donna on 31 October 2022. On 23 October 2022, Brenda entered into a contract to sell the Land to Troy and Donna (the Contract) and the transfer in their favour was registered on 31 October 2022. The consideration stated in the Contract and the transfer was $130,000 which was paid prior to execution of the Contract. However, the market value of the Land at that time, based on a valuation prepared for stamp duty purposes, was $495,000.

2. [2]

   In this judgment I will refer to members of the Harper family by their given names, as the parties did at the hearing, without intending any overfamiliarity or disrespect.

3. [3]

   Brenda alleges that the parties had reached an agreement that the Land would be sold on terms that the total purchase price was $540,000 of which $130,000 would be paid to her by way of a deposit to enable her to purchase a retirement unit, with the balance payable on completion in April 2023 subject to Troy and Donna obtaining finance for that amount. If they did not obtain finance, the Land would be sold and Brenda entitled to the proceeds, less $130,000. Brenda claims an equitable lien to recover the balance of the purchase price which she says remains unpaid. Alternatively, she claims damages or equitable compensation of the same amount on the basis that Troy and Donna procured the transfer of the Land into their names by fraudulent misrepresentation, unconscionable conduct or undue influence.

4. [4]

   Troy and Donna, by their defence and through a cross-claim, allege that the Land was transferred into their names pursuant to an agreement between them and Brenda which differed from that set out above in two critical respects: (a) the total price was of $495,000 not $540,000; and (b) title would pass to the defendants prior to payment in full of the purchase price. However, their evidence does not fully explain how the stated consideration of $130,000 came to be included in the Contract and the transfer in circumstances where no other agreement recorded an obligation on them to pay the balance of the purchase price which, on their case, was $365,000. Nor does their evidence explain the discrepancy between the completion date stated in the Contract (42 days from the date of the Contract) and the date of registration of the transfer (31 October 2022).

5. [5]

   There is no dispute that the total purchase price payable by Troy and Donna to Brenda for the Land was not $130,000 and that any further amount payable by Troy and Donna over the initial payment of $130,000 would be subject to finance being obtained by them. Nor do Troy and Donna now seek to maintain an entitlement to retain the Land.

6. [6]

   Brenda obtained a freezing order over the Land on 23 February 2023, and commenced these proceedings on 27 February 2023.

Witnesses

1. [7]

   Brenda swore two affidavits and relied on two affidavits sworn by each of her daughters, Tracy Letfallah (Tracy) and Lisa Mackenzie (Lisa). Each was cross-examined.

2. [8]

   Troy and Donna each swore one affidavit and was cross-examined.

3. [9]

   I have approached the evidence of each of Brenda, Troy and Donna with caution because it was apparent from their cross-examination that they each bear a sense of grievance about the dispute and there was a degree of animosity between Brenda on the one hand and Troy and Donna on the other. In my view this is likely to affect the reliability of their recollection of key events and conversations.

4. [10]

   In contrast, Tracy and Lisa are not parties to the transaction and do not have anything to gain from the outcome of the proceedings. Each struck me as being an honest witness who tried to answer the questions they were asked to the best of their recollection. I generally accept their evidence.

5. [11]

   Where there was a contest between the evidence of Brenda, Troy and Donna I have placed greatest weight on the contemporaneous documents and other objective factual surrounding material, as well as the evidence of Tracy and Lisa in so far as it is relevant, consistently with the principles referred to in the next section.

Approach to evidence

1. [12]

   Much of the evidence in this case comprised the recollection of the plaintiff and other witnesses of conversations and dealings which occurred some time ago. I have borne in mind the well-known observations of McLelland CJ in Eq regarding the fallibility of human memory in Watson v Foxman (1995) 49 NSWLR 315 at 319:

2. [13]

   The fallibility of human memory and the risk of reconstruction rather than recollection of past conversations, is particularly acute in circumstances where the relevant witnesses have been in litigation on the matters about which they give evidence. In Crouch v Hooper (1852) 16 Beav 182 at 185; 51 ER 747 at 748, Sir John Romilly MR said:

3. [14]

   Black J referred to the need to bear in mind a witness’ motives and the overall probabilities in Re Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 at [7] as follows:

4. [15]

   The following observations of Hammerschlag J (as his Honour then was) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]-[95] are of particular relevance to the parties’ respective allegations as to when agreement was reached and its terms:

5. [16]

   I have also borne in mind that:

   1. (1)

      Reliable contemporaneous documents generally furnish the most reliable source of evidence as to what occurred or, at the very least, provide a generally reliable reference point from which to assess the reliability of witness testimony: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 at [15]-[16]; Et-China.com International Holdings Ltd v Cheung [2021] NSWCA 24; (2021) 388 ALR 128 at [25]-[29] (and cases there cited);

   2. (2)

      When the law requires the proof of any fact the Court must feel an actual persuasion of its occurrence or existence before it can be found, and ‘it cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality’: Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 per Dixon J at 361.

   3. (3)

      The rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 may play a role in the assessment of the probability of a witness being accepted. The Jones v Dunkel rule is a particular application of the general principle in the law of evidence that ‘all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted’: Blatch v Archer (1774) 1 Cowp 63 at [65]; (1774) 98 ER 969 at 970 per Lord Mansfield. The rule may be summarised as ‘unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may (not must) in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party’s case’: JD Heydon, Cross on Evidence (13th Aus Ed, 2021, LexisNexis) at [1215]. The rule can operate against a party who bears the onus of proof and against a party who does not: Ho v Powell (2001) 51 NSWLR 572; [2001] NSWCA 168 at [16] per Hodgson JA (with whom Beazley JA agreed).

6. [17]

   Having regard to these principles, I will give greatest weight to the contemporaneous documents, other objective factual surrounding material and the inherent probabilities and improbabilities.

Background

1. [18]

   In April 2021, Brenda moved from Dubbo to Port Macquarie and commenced living with Troy and Donna at the home they rented there. From that time until January 2022 she lived with Troy and Donna and then from January 2022 until November 2022 she lived with a friend, whose home was three houses from Troy and Donna’s home, and in that latter period would often visit Troy and Donna and regularly stay with them for a few days at a time. She stayed in a granny flat on the property. She was in receipt of the aged pension, and also performed occasional work as a cleaner, including for Troy and Donna. I infer that she had limited education and no business experience. Throughout this period, Brenda’s daughters lived elsewhere (Tracy in Dubbo and Lisa in Queensland) and she looked to Troy and Donna for familial support.

2. [19]

   On 21 May 2021, Brenda entered into a contract to purchase the Land for $350,000. Completion occurred on 11 June 2021. The solicitor who acted for her on the purchase was Mr Phillip Davidson who practised in Port Macquarie under the name ‘Seaside Conveyancing’. Brenda funded the purchase price with the proceeds of the sale of a property she had previously owned in Dubbo.

3. [20]

   In June 2021, Brenda engaged Hotondo Homes, a building company, to design and construct a house for her on the Land. However, in late June 2022 she decided that due to the escalating cost of the build, she could no longer afford to proceed with it. This resulted in Hotondo Homes issuing an invoice to Brenda on 20 June 2022 for $18,826 for the costs associated with the work they had undertaken, including preparation of plans and obtaining a development approval from the Council.

4. [21]

   On 22 June 2022, Brenda engaged Wiseberry, a local real estate agent, to sell the Land. She signed an exclusive agency agreement (with a term of three months, expiring on 22 October 2022) which stated the agent’s estimate of the current selling price of the Land to be between $500,000 to $550,000, and instructed the agent to market the Land at $560,000. The listing at $560,000 commenced on 6 July 2022. The agreement identified Mr Davidson as the conveyancer who would act for Brenda on any sale.

5. [22]

   On 4 July 2022, Brenda paid a holding deposit of $5,000 on the purchase of a unit in a retirement village in Port Macquarie (retirement unit), which she ultimately purchased on 18 October 2022. The total price was $520,000, which she paid in full on 18 October 2022. This amount was partly funded by the payment of $130,000 made by Troy and Donna to Brenda referred to below. Mr Davidson advised Brenda on the contract for the purchase of the retirement unit.

6. [23]

   In August 2022, Brenda gave $10,000 in cash to Troy for safekeeping, which the parties treated as a loan.

7. [24]

   From around 10 September 2022, Brenda authorised Wiseberry to talk to Troy about the Land and there are texts and emails from that time until early November 2022 from Wiseberry to Troy regarding enquiries made by third parties relating to the Land.

8. [25]

   On 20 September 2022, Wiseberry reduced the price range for the Land from $490,000 to $540,000.

9. [26]

   During the period from July to September 2022, Troy and Brenda had a number of discussions regarding how Brenda would fund the amount payable by her for the retirement unit, which was due to settle on 19 October 2022. Brenda was concerned that the Land would not be sold before that date, and that she would have a shortfall. There is no evidence (including in the records produced by Wiseberry in response to a subpoena) to suggest that any offers were received by Wiseberry for the purchase of the Land, other than an offer of $450,000, which Troy says was passed on to him by Wiseberry on 8 September 2022 and rejected by Brenda (which she denies).

10. [27]

    In late September 2022, Troy offered to lend Brenda $130,000, which was the amount which he and Donna had retained after the sale of an investment property at Warren, New South Wales. Around the same time, Troy suggested to Brenda that he and Donna could purchase the Land from Brenda using the amount of $130,000 as a deposit, rather than as a loan, and that Mr Davidson would be asked to act for both parties on the transaction. There is a dispute about what was said in these discussions, as discussed below. In particular, Brenda’s evidence is that Troy offered to pay $540,000 for the Land, whereas Troy says that he suggested that the price would be determined by a written valuation, with the amount of $130,000 being paid as a deposit and he and Donna would apply for a loan to pay the balance.

11. [28]

    On around 30 September 2022, Troy telephoned Mr Davidson and asked him to act for all three parties on the transaction. There is no evidence as to what was said in this conversation and Mr Davidson did not give evidence. However, on 30 September 2022, he sent a letter to Brenda and another letter to Troy and Donna advising each that he was acting for the other party, but would ‘undertake to ensure your interests are protected as prescribed by legislation’. The letter sets out the terms of Reg 12 of Schedule 3 of the Conveyancers Licensing Regulation 2006 (NSW), dealing with the situation where a licensed conveyancer acts for both parties to a transaction.

12. [29]

    On 5 October 2022, Troy contacted a mortgage broker, Mr Scott Lavender of Aussie Home Loans. Mr Lavender did not give evidence, but a document recording his notes regarding the application indicates that the applicants for the loan were Troy and Donna and the amount of the loan being applied for was $277,500 and states:

13. [30]

    Mr Lavender’s supporting notes set out the assets and liabilities of Troy and Donna (which they had supplied) which included ‘savings’ of $132,000. This was the amount which Troy and Donna held as the net proceeds of the sale of their property at Warren referred to earlier.

14. [31]

    On 10 October 2022, Mr Michael Reid of Opteon Solutions inspected the Land for the purposes of undertaking a valuation of the Land for stamp duty purposes. Mr Reid provided a written valuation report to Troy on 12 October 2022 which stated the market value of the Land for stamp duty purposes to be $495,000.

15. [32]

    In the meantime, on 11 October 2022 at 1:10pm, Mr Lavender, the mortgage broker with whom Troy was dealing, sent an email to Troy setting out details of a local court judgment in favour of the Gilgandra Shire Council for $6,375 which he said ‘appeared to be stopping the loan from going ahead’, which had been registered on 22 April 2021. As explained by Troy in cross-examination, a company which had previously been the trustee of his self-managed superannuation fund had an outstanding debt for Council rates in respect of a property held by the fund for which the Council obtained judgment. Mr Lavender told Troy in a telephone conversation on the same day that this problem would go away after 23 April 2023 because the credit report would only show defaults within a period of 24 months. These discussions between Troy and Mr Lavender were the basis for Troy to form the view that any financing by him and Donna to fund the purchase of the Land could not occur until April 2023.

16. [33]

    On either 11 or 12 October 2022, Troy and Brenda met at a café at Lake Innes Village, Port Macquarie called Ruins Café. Troy says the meeting was ‘on or around’ 12 October 2022 at around 12:30pm, whereas Brenda says it was on 11 October 2022. She expressed confidence in the date because that was the birthday of her former husband, Tom, and she recalled commenting to Troy to that effect at the meeting. Troy agreed that his father’s birthday was on 11 October, but it was not put to him that Brenda commented on this at the meeting. There is a dispute about what was said at this meeting, discussed below.

17. [34]

    On 12 October 2022 at 1:29pm, Mr Davidson sent an email to each of Brenda and Troy which stated simply ‘see attached front page’, which attached the front page of a contract for the sale of the Land. Brenda was named as vendor and Troy and Donna were named as purchasers. The date for completion was stated to be ‘42 days after the date of this contract’. The price was stated to be $130,000 comprising a deposit of $13,000 and a balance of $117,000. Shortly afterwards at 1:45pm, a response was sent from Brenda’s email which read ‘Received thanks Phil. Brenda.’ Although Brenda’s evidence was that she could not recall seeing Mr Davidson’s email or sending the reply, I am satisfied that she did.

18. [35]

    On 13 October 2022, Troy transferred $130,000 into the trust account of Seaside Conveyancing, which was subsequently transferred to Brenda’s bank account on 14 October 2022 to assist with the purchase of the retirement unit.

19. [36]

    On 14 October 2022, Brenda asked Troy to return the amount of $10,000 which he had been holding for her, saying that she was still $15,000 short of the funds necessary to complete the purchase of the retirement unit. Troy then rang Tracy and asked if she could help. She responded that she was driving and would call back shortly. There followed a text exchange between Troy and Tracy as follows:

20. [37]

    Shortly afterwards, Tracy rang Troy who was at home and had now been joined by Brenda and Donna and they had a conversation about the proposed transaction. There is a dispute about what was said, as discussed below.

21. [38]

    Later that day, Tracy transferred $10,000 to Brenda’s bank account by online transfer. On 27 October 2022, Troy transferred $10,200 to Tracy explaining in a text that the extra $200 was ‘towards the interest’. I infer that this was treated as a repayment by Troy of the amount which Brenda had previously provided to him by way of safekeeping.

22. [39]

    On 19 October 2022, Brenda completed the purchase of her retirement unit.

23. [40]

    On 20 October 2022 Mr Davidson sent a fee agreement to Brenda for his services in respect of the matter, described as ‘Sale of 14 Florence Close Port Macquarie, NSW 2444’. Brenda’s signature appears on this fee agreement under the statement ‘I understand and accept the above terms of engagement’.

24. [41]

    On 23 October 2022, Brenda received a text message from Troy which said ‘Can you come up this arvo if you are free. Got some paperwork to sign… I’m home about 4’. Later that day, which was a Sunday, Brenda went to Troy and Donna’s home and signed some documents relating to the sale of the Land including the Contract in the presence of Troy and Donna. There is a dispute as to what occurred at this meeting, as discussed below.

25. [42]

    On 27 October 2022 Seaside Conveyancing sent to Troy and Brenda a letter authorising their own office to pay the balance of the purchase money for settlement, and enclosing a PEXA deposit form, and another letter regarding payment of the rates (which Troy responded to by saying that he would take over the rates). On the same day Seaside Conveyancing paid stamp duty on the Contract in an amount based on a dutiable value of $495,000. Mr Davidson must have received a copy of Mr Reid’s valuation to achieve this outcome.

26. [43]

    On 30 October 2022 Brenda telephoned Lisa and told her that she owed Hotondo Homes $20,000 and was worried that she was ‘going to lose the house and the car’, and also that she had sold the Land to Donna and Troy and had signed some papers for the sale. This was the first time that Lisa had heard about the sale and, at Brenda’s suggestion, she rang her sister Tracy on the following day to ask about it. Lisa deposed that in this telephone conversation, Tracy said:

27. [44]

    Lisa was not challenged in cross-examination on this evidence and I accept it.

28. [45]

    On 31 October 2022, a transfer of title to the Land in favour of Troy and Donna was registered. Mr Davidson signed the transfer on behalf of both the transferor and the transferee. It is very difficult to understand, based on the evidence, how Mr Davidson came to sign the transfer on behalf of Brenda and lodge it for registration on 31 October 2022 when he was aware (a) of the discrepancy between the purchase price shown on the Contract and the market value of the Land, and (b) that the date for completion stated in the Contract was 42 days after the date of the Contract (ie 2 December 2022).

29. [46]

    On 1 November 2022, Mr Davidson sent an email to Brenda attaching a settlement adjustment sheet showing the purchase price as $130,000 and on the following day he sent a letter to Brenda confirming that settlement of the sale had taken place on 31 October 2022 setting out some standard information regarding the sale. A corresponding letter was sent by him on the next day to Troy and Donna in substantially the same terms.

30. [47]

    Over the period from 7 November 2022 to 27 January 2023, Troy and Brenda made seven payments of $400 to Brenda, which I infer related to the arrangement for them to pay Brenda’s strata fees on her retirement unit.

31. [48]

    On 16 November 2022, Brenda moved into the retirement unit. In the period since completion of the purchase Troy and some family members and friends assisted with refurbishment of the unit to enable her to move in.

32. [49]

    On 20 December 2022, the debt Brenda owed to Hotondo Homes was paid. It appears that Brenda obtained the funds to do so from a loan made to her by a friend which was ultimately repaid by a gift made to Brenda by her brother.

33. [50]

    Brenda spent Christmas with Tracy and Lisa and on 26 December 2022 all three of them sat down with Brenda to review her email and online banking accounts. In the course of this exercise, they came across the various emails from Seaside Conveyancing relating to the sale of the Land referred to above, which appeared in the deleted folder of Brenda’s email account. Brenda did not recognise any of the emails. They also discovered some deleted texts on Brenda’s smartphone. It was suggested that Troy had deleted these emails and texts, but I am not satisfied that this has been established by the evidence; rather, it is quite possible that Brenda did so inadvertently. They were not permanently deleted from her email account.

34. [51]

    On 4 January 2023, Tracy had separate telephone calls with Donna and Troy to discuss why title to the Land had been transferred to Troy and Donna before payment of the full purchase price. Tracy deposes that her conversation with Donna was as follows:

35. [52]

    Tracy also deposes to a separate conversation with Troy later on 4 January 2023 about the discrepancy between the Contract and what had been discussed on 14 October 2022. It is not necessary to set this out. It is sufficient to note that in Tracy’s recollection of each of her conversations with Donna and Troy on 4 January 2023, there was no mention of what had been agreed as the total amount of the purchase price (ie. $540,00 or $495,000).

36. [53]

    Tracy received a text from Donna on 12 January 2023 which stated ‘Hey hun can I have a quick chat to you please’. They had a conversation later that day, which Tracy sets out in her first affidavit. Donna accepts that they had a conversation but her affidavit does not deal with it. Tracy deposes that in this conversation Donna said ‘I admit I did the wrong thing. I should have spoken up. I knew that paperwork was being drawn up and that we didn’t bring it up during our talk on the 14th’ (which I infer was a reference to the conversation on 14 October 2022) and also (in response to Tracy saying ‘You should have followed our agreement’) that Donna said ‘You’re right’.

37. [54]

    Donna denied in cross-examination Tracy’s version of the conversation on 12 January 2023, but I infer that she did in the conversation accept that the Contract did not set out the full terms of the agreement reached on 14 October 2022 because on 14 January 2023, Donna sent a text to Brenda and Tracy which said:

38. [55]

    On 30 January 2023, Tracy and Donna had a further conversation about having a meeting with a solicitor (which was not Mr Davidson) but nothing came of it.

39. [56]

    On 10 February 2023, Brenda commenced proceedings in this Court before the duty judge and an order was made restraining the defendants from transferring, charging, encumbering or otherwise dealing with the Land up until Tuesday, 14 February 2023. The matter came back before the Court on 13 February 2023 when an order was made extending that freezing order until further order of the Court.

40. [57]

    On 23 February 2023 Brenda and Troy had a conversation regarding the court proceedings which became heated. They each depose to different versions of what was said. Relevantly for present purposes, Brenda deposes that in this conversation Troy said ‘I’ll just bloody give it back then’ and ‘I want my $130,000 and I want the expenses. You ruined us over a piece of dirt and found it necessary to bring in solicitors’, and that she responded ‘That had to happen because it was nothing as it was promised by you’. Troy’s version of this part of the conversation is broadly similar. In effect, Troy was prepared to return the Land to Brenda if the $130,000 (plus expenses) was repaid, whereas Brenda wanted to keep Troy and Donna to the bargain which she alleges was agreed. They have not spoken to each other since that time.

41. [58]

    On 27 February 2023, the Statement of Claim (SOC) was filed.

Disputed conversations

1. [59]

   While there are a number of disputed conversations regarding the transaction concerning the Land, there are only four of significance to the issues which the Court has to decide. These are (a) the conversation at Troy and Donna’s house at the end of September 2022, (b) the conversation at Ruins Café on 11 or 12 October 2022, (c) the telephone discussion on 14 October 2022 and (d) the meeting at Troy and Donna’s house on 23 October 2022 when the Contract was signed.

2. [60]

   Brenda deposed to a conversation between her and Troy at Troy and Donna’s house in late September 2022, in which Troy said to her ‘Donna and I have decided to buy your block of land, Mum. We're willing to pay you $540,000’ to which she responded ’That would be great’. In contrast, Troy deposes that in a conversation with his mother at the end of September 2022 he offered to ‘use’ the amount of $130,000, which he had previously proposed to lend to her, as a deposit towards the purchase of the Land and he would apply for a loan to see if he and Donna could purchase the Land outright, saying to her ‘It’ll have to be valued, so we will get a written value on what its worth’, and ‘I’ll go for a loan for the balance’. He denies that there was any discussion of a price of $540,000.

3. [61]

   The defendants admit in the Defence that this conversation with Brenda at the end of September 2022 involved an offer by them to purchase the Land for a price determined by an independent valuation, not $540,000, and say that Brenda accepted that offer.

4. [62]

   I am not satisfied that there was any agreement as to the purchase price at the end of September 2022. First, Troy's evidence that no price was mentioned is supported by Tracy. Tracy was staying with Troy and Donna between 29 September 2022 and 3 October 2022. She agreed in cross-examination that no sale price was ever mentioned by Brenda or Troy in any conversation she had at the time (T139:10-139:25). Had there been some understanding or agreement as to price, the probabilities are that it would have been said to Tracy, as she had a discussion with Brenda about the proposed sale in that period.

5. [63]

   Second, it is apparent from the loan application that Troy and Donna made to their mortgage broker, Mr Lavender, on 5 October 2022 that they did not have access to funds of $540,000 at the end of September 2022 without obtaining a loan and Brenda makes no mention in her evidence of the conversation at this time of the need for finance. It would have been unlikely for Troy to have offered any such amount without mentioning the need for finance (which was ultimately part of the oral agreement). When Brenda was confronted with the fact that finance was not mentioned and that she knew that Troy did not have access to $540,000, she replied ‘how would I know?’ (T77:16). Brenda later agreed that Troy never said that he had funds of $540,000 (T78:1-3).

6. [64]

   Third, Mr Lavender’s record of the loan application stated that the purchase price to be paid to Brenda for the Land was $370,000. This was an internal document created by Mr Lavender and not provided by him to Troy at the time. It is possible that he misunderstood what Troy said about the proposed purchase price. However, on any view, it is not consistent with Troy having told Mr Lavender at that time that the price was $540,000.

7. [65]

   Fourth, the sum of $540,000 was $190,000 in excess of the purchase price paid by Brenda in the previous year and at the top end of the range at which the Land was being marketed by Wiseberry at that time (see [25] above). Also, there is no evidence of any offer having been made to purchase the Land above $450,000. It would be surprising if Troy offered $540,000 at the end of September in those circumstances.

8. [66]

   In my view, the position is that the parties were at the early stage of their discussions regarding the proposed purchase at the end of September 2022, and had not agreed on the purchase price. At most, the evidence establishes that each party made a different offer to the other as to the price, and mistakenly thought that the other had accepted their offer. It is likely that Brenda has mistakenly remembered when the amount of $540,000 was first raised, or the parties were simply at cross purposes as to what the price would be at the end of September 2022, and I so find.

9. [67]

   Troy deposed that in the conversation at the Ruins Café he told Brenda that he and Donna had been knocked back on their application for a loan because they had ‘a default from [one of their] companies’ which was due to ‘drop off’ on 23 April 2023 so at the ‘end of April we’ll be right to go for the loan on the land and pay you out’, and also that he had received a valuation of the Land which ‘has come in at $495,000 and that’s what we would pay for the block‘. He deposed that Brenda agreed to the purchase price being $495,000.

10. [68]

    He also deposed that he put to Brenda two alternative ways of structuring the transaction. The first was the Brenda would ‘sign the property over to us now’, so that he and Donna ‘could use the block as collateral to get the house going at the same time so at the end of the house build we can refinance and pay you the whole lot’. The second was that ‘we can wait until the end of April and give you the money for the land at that time.’ He deposed that Brenda agreed to the first alternative and also to his proposal that ‘we just put the sale price at $130,000 and that’s it and we pay you out the rest later’.

11. [69]

    Troy deposed that he then telephoned Mr Davidson on speakerphone so that Brenda could hear and told Mr Davidson that he and Donna ‘would be buying the block off Brenda for $495,000. We’ve got to wait for our loan for another six months and we’re happy to put the block through at the contract price of $130,000 and do settlement. Can we get the contracts drawn up?’. Troy also deposed that he said to Mr Davidson that the contract should include a promise regarding the payment of the ‘balance on the $495,000’. There is no evidence from Mr Davidson regarding this conversation as he was not called to give evidence.

12. [70]

    Brenda has only a vague recollection of the conversation. She recalled that there was a discussion about the payment of $130,000 upfront, and that Troy and Donna would pay her strata fees on the retirement unit each month until their loan came through when the balance of the price would be paid, and that she had a brief discussion on the telephone with Mr Davidson in the car park of the café, and not on speakerphone. Her evidence is that the meeting occurred on 11 October 2022 and there was no mention of a valuation having been obtained or any agreement for the purchase price to be $495,000. She also denies that there was any mention of Troy and Donna’s loan not being approved until April 2023 and says that the first time this was mentioned to her was in the conversation on 14 October 2022 referred to below.

13. [71]

    The evidence regarding this meeting is unsatisfactory, not least because Mr Davidson was not called to give evidence. Obviously, a key question is whether the meeting occurred on 11 or 12 October because if it was the former that would make Troy’s version incorrect. If Mr Davidson had been called, it is likely that this would have clarified both the date of the meeting and what Troy and Brenda said to him about the transaction, which would clarify why the draft contract which he emailed to the parties on 12 October at 1:29pm stated the price to be $130,000 which no party puts forward as the correct price. Ultimately, it is not necessary for the Court to reach a concluded view on what was discussed at the meeting because it was overtaken by the telephone conversation a few days later referred to below.

14. [72]

    Tracy and Brenda give detailed evidence about what was said in the telephone conversation on 14 October 2022. Tracy deposed that the conversation was to the following effect:

15. [73]

    Brenda’s recollection of the conversation recorded in her affidavit also includes Tracy mentioning twice that a lawyer would need to be instructed to prepare a written agreement, and the second time involved Tracy saying ‘You’ll need to get a lawyer to prepare a document putting all of these terms into writing’.

16. [74]

    Brenda’s evidence as to the conversation is broadly the same, with one exception which concerns the time at which title to the Land would pass to the purchasers. In Tracy’s version, she said ‘Nothing to go ahead until the loan has come through’ and shortly afterwards ‘The land can’t go through until then’ with the ‘then’ being a reference to when the balance of the price would be paid. In Brenda’s version, the conversation on this aspect was:

17. [75]

    I consider that Tracy’s version of the conversation is more likely to be correct, rather than Brenda’s version given that the key words regarding the transfer of the Land were said by Tracy and her recollection is likely to be more accurate than Brenda’s.

18. [76]

    Troy’s evidence in his affidavit as to this conversation was limited to a discussion about Tracy transferring $10,000 to Brenda to assist her with the shortfall amount needed to purchase the retirement unit. He did not address the other elements of the conversation in his affidavit evidence. In cross-examination, Troy denied that there was agreement that there would be no transfer of the Land until the purchase price was paid in full or that he and Donna would pay $540,000 for the Land but he did accept some matters were agreed in the conversation, as follows:

19. [77]

    Donna gave no evidence in her affidavit of the conversation with Tracy on 14 October 2022, although she accepted in cross-examination that it did occur and that it included a statement by Tracy that she would lend Brenda $10,000 and that Tracy did say ‘You’ll need to get a lawyer to prepare a document putting all the terms into writing’. When asked by me what she could recall about the conversation, the following exchange occurred:

20. [78]

    I accept the evidence of Tracy and Brenda as to what was discussed in this conversation. In particular, that it was more than just a conversation about the loan of $10,000 by Tracy to Brenda is confirmed by Tracy’s text message which stated that the purpose of the call was ‘I need to know more about the deal and what’s going on?’. It is significant that Troy said nothing in his affidavit about the discussion regarding the ‘subject to finance’ term, which he accepted in cross-examination had been discussed. Given the matters which he did accept were discussed, it is highly likely that the discussion also extended to the total purchase price.

21. [79]

    I find that the key elements of the conversation were as follows: (1) Troy and Donna would purchase the Land for a total price of $540,000, and pay $130,000 as a deposit and the balance of $410,000 in April 2023 when their loan ‘came through’; (2) if the loan was not approved in April 2023, Troy and Donna would ‘return’ the Land to Brenda so she could put it back on the market and once the Land had been sold to a different purchaser, Brenda would repay the $130,000 deposit; (3) in the meantime, Troy and Donna would pay Brenda’s strata fees on her retirement unit; (4) a lawyer would be instructed to prepare a document to record all the terms of the agreement; and (5) Tracy would transfer $10,000 to Brenda to help with the shortfall on the purchase price of the retirement unit and Troy would repay this amount to Tracy as he owed Brenda $10,000.

22. [80]

    In relation to the timing of the transfer of title, I am not satisfied that there was a clear understanding between the parties that title to the Land would only pass when Troy and Donna had paid the balance of the purchase price with funds obtained by a loan, assuming that loan was approved in April 2023. On Tracy’s version, she did not specifically say that the transfer of the Land could not occur until the purchase price was paid in full, but she did say that if the loan was not approved in April 2023, ‘you will need to return the land to Mum so that she can sell it’. The reference to the ‘return of the land’ (corroborated by Brenda) is consistent with an initial transfer of title to the purchaser before payment of the balance of the purchase price. In cross-examination, Tracy accepted that she made a point of saying that Troy and Donna needed to ‘return’ the Land to Brenda if the loan was not approved because she knew that they needed to use the Land as security to obtain a loan to finance the balance of the price (T147.18-148.41).

23. [81]

    These statements she made in the conversation taken together leave an ambiguity as to when title would pass and leave open the possibility that title would pass before the loan was approved so that Troy and Donna could apply for a loan and give a mortgage to the lender before the loan was made, but that title would be transferred back to Brenda if the loan was not approved to enable a sale to a third party and the unwinding of the transaction.

24. [82]

    Bearing in mind that all parties to the conversation were unsophisticated in conveyancing matters of this kind, I am not satisfied that agreement had been reached on 14 October 2022 on this aspect. In particular, while Brenda had entered into two contracts for sale of land prior to this transaction (the sale of her Dubbo home and the purchase of the Land) they were quite straight forward conveyancing transactions – this one clearly was not. Importantly, on each version of the discussion accepted by all parties to it, it was agreed that the terms of the agreement would need to be reduced to writing by a solicitor. It is likely that had a proper engagement with Mr Davidson taken place after this conversation, the Contract would have dealt with this issue, but for reasons that are unexplained that engagement did not occur.

25. [83]

    Brenda went to Troy and Donna’s home late on Sunday, 23 October 2022. Troy and Brenda sat at the kitchen table while Donna prepared dinner. Troy and Donna deposed that Troy read out to Brenda the different clauses of the contract and following this they each signed it. While it is dated 21 October 2022, there appears to be no dispute that the document was signed on 23 October 2022 at the kitchen table before dinner.

26. [84]

    The only version of the Contract in evidence is the first two pages. The first page is dated 21 October 2022 written by hand, and bears the signatures of Brenda, Troy and Donna. The printed details on the document are the same as the unsigned version emailed by Mr Davidson on 12 October 2022.

27. [85]

    Brenda has no clear recollection of what she signed apart from the Contract, but it is likely that she also signed at this meeting a client authorisation form for the transaction prepared by Mr Davidson, and Mr Davidson’s engagement letter. The client authorisation form included the following:

28. [86]

    Brenda deposes that she had a conversation with Troy and Donna in the kitchen after Troy had handed the Contract to her to the following effect:

29. [87]

    Brenda also deposes that she trusted Troy and Donna when she signed the Contract without reading it, that she felt flustered and pressured into signing the document, was not given a proper opportunity to read and consider it before signing it, did not receive any independent legal or financial advice before signing it, and was not given a copy of the documents to take away with her. While she says she did not read the Contract before signing it, she accepted in cross-examination that she saw the figure of $130,000 for the purchase price appearing immediately above her signature before she signed it, and that she asked Troy ‘is this how it was discussed … that it was just the deposit’ and he said ‘Yes, Mum, it’s all how we discussed it’ (T111.10-113.7).

30. [88]

    The evidence does not include the full Contract. The evidence of Troy and Donna was that the version of the contract which was discussed around the kitchen table was much longer than just two pages, including special conditions and that Troy went through each of those pages with Brenda in the meeting. Brenda’s recollection is that Troy only pointed out some details in the Contract in a ‘rushed manner’. Having heard each of their evidence regarding this meeting, I prefer Brenda’s account of the meeting to that of Troy and Donna.

31. [89]

    Importantly, Brenda’s evidence regarding the conversation includes Troy saying that there would be ‘a letter drawn up by the solicitor’ for which he would pay the cost. Donna deposes that she did say in the course of the discussion that ‘the next thing we need to do is arrange for a solicitor to draw up the documents with what we discussed on the phone with Tracy’. I infer from all the evidence that there was a brief discussion of the need for a further document to be prepared to record other elements of the agreement reached on 14 October 2022, in particular concerning the payment of the balance of the purchase price and the return of the property if the loan for the balance of the purchase price was not obtained in April 2023.

32. [90]

    Troy deposed that he raised with Brenda on at least six occasions the need to get a lawyer ‘to write up this agreement’ but on each occasion Brenda said it could wait until after Christmas. Brenda cannot recall any conversations of that kind.

33. [91]

    Troy said in his oral evidence, in response to a question from me as to what the reason was why the Contract only referred to a price of $130,000, the following:

34. [92]

    Troy and Donna do not explain why there was any urgency for the parties to sign the Contract on a Sunday evening, and without meeting in person with Mr Davidson who is acting for all parties, to discuss the transaction and how it was being documented. It was certainly not brought about by Brenda. One possible explanation is that Troy was concerned that although Wiseberry’s exclusive agency agreement had expired, he wanted to have the Contract signed before a better offer was received by Wiseberry. On 4 October 2022, Troy had asked Wiseberry when the agency agreement would ‘run out’ and was told that the date was 22 October 2022 (the day before the Contract was signed).

35. [93]

    Another possible explanation open on the evidence is that Troy was seeking to secure a transfer of the Land to protect it from the enforcement action by Hotondo Homes of its debt claim against Brenda of approximately $20,000. This is consistent with Brenda’s evidence that Troy said to her that ‘If you don’t sign this now, you’ll lose your retirement village home as well’. Troy was aware at this time that Brenda’s only significant assets were her retirement unit, the Land and her motor vehicle. He was also aware that Hotondo Homes was pressing for payment of the debt (see below), and he accepted in cross-examination that he arranged for the transfer of the registration of Brenda’s motor vehicle into his name in order to ‘protect’ that asset from a claim by Hotondo Homes (T204.20).

36. [94]

    On 6 September 2022, Hotondo Homes served a statement of claim on Brenda which ultimately resulted in a default judgment being obtained against her for $19,170 on 25 October 2022.

37. [95]

    Troy was aware at the time the Contract was signed of the urgency with which Hotondo Homes was approaching the recovery of the debt. On 14 October 2022 at 10:44am he received a text from Dean Thompson of Hotondo Homes which stated: ‘Thanks for the chat on the weekend. How have you gone having a chat to your mum about the statement of claim? I checked just now with the court and it was served on Sept 6th and they haven’t had a response in the required 28 days’. Troy responded ‘Thanks mate’.

38. [96]

    Troy deposes that he told Brenda about this text from Mr Thompson on or around the date he received it, but she denies this.

39. [97]

    On 19 October 2022, the following exchange by text between Troy and Mr Thompson occurred:

40. [98]

    On 28 November 2022, the following exchange by text between Troy and Mr Thompson occurred:

41. [99]

    On 29 November 2022, Brenda’s application to pay the judgment debt by instalments was refused by the Local Court.

42. [100]

    Around the end of November 2022, Troy arranged for the registration of Brenda’s motor vehicle to be transferred into Troy’s name. It was ultimately transferred back into Brenda’s name around the middle of January 2023. Brenda deposes that Troy said to her ‘Mum you should sign the vehicle into my name. You owe Hotondo Homes almost $20,000. They won’t sell your house for just $20,000 but they could sell your car… You should do this to protect yourself Mum’. Troy accepted in cross-examination that he suggested this transfer for ‘asset protection’ reasons.

43. [101]

    I am satisfied, in light of the matters referred to in [93]-[100] above, that Troy did make the statement to Brenda about the risk of losing her retirement unit referred to at [93] above and that he did so to put pressure on Brenda to sign the Contract at the meeting.

Issues

1. [102]

   By the SOC, the plaintiff seeks an equitable lien over the Land for the amount of $407,200. This is said to be the balance of the purchase price of $540,000 owing by the defendants to the plaintiff under an oral agreement for the sale of the Land entered into at the end of September 2022 (the Agreement) after deducting the deposit of $130,000 and the total of the amounts paid by Troy and Donna for strata fees of $2,800. The plaintiff seeks the appointment of a receiver to undertake the sale of the Land and repay the plaintiff her unpaid purchase price, interest and costs.

2. [103]

   In the SOC, the plaintiff also claims in the alternative that:

   1. (1)

      The defendants made a fraudulent representation to Brenda that the terms of the Contract signed on 23 October 2022 reflected the terms of the Agreement for which the claimed loss is $407,200, or

   2. (2)

      That equity should intervene on the basis that the defendants obtained the benefit of the transaction effected by the Contract and the transfer through unconscionable conduct or undue influence.

3. [104]

   By their cross-claim, the defendants seek:

   1. (1)

      A declaration that the agreement between the defendants (as purchasers) and the plaintiff (as vendor) to purchase the Land was subject to a term that if the balance of the purchase price was not paid by April 2023, the Land was to be sold and the defendants would be repaid the monies expended by them on behalf of the plaintiff and the balance of the net proceeds of sale will be paid to the defendants;

   2. (2)

      Alternatively, a declaration that the parties entered into the agreement to purchase the Land under a mutual mistake as to the purchase price.

4. [105]

   Accordingly, the issues to be determined are:

   1. (1)

      Whether the plaintiff is entitled to an equitable lien over the Land in the amount of $407,600 or alternatively $362,200 based on the Agreement said to have been entered into at the end of September 2022;

   2. (2)

      Whether the defendants made a fraudulent misrepresentation that the terms of the Contract signed on 23 October 2022 reflected the terms of the Agreement;

   3. (3)

      Whether the Contract and the transfer were entered into as a result of the unconscionable conduct of the defendants;

   4. (4)

      Whether the Contract and the transfer were entered into as a result of the undue influence of the defendants;

   5. (5)

      Whether the defendants are entitled to the relief claimed in the cross claim.

First issue: Equitable lien

1. [106]

   The pleaded case on the equitable lien claim (set out in the SOC at [28]) is that:

2. [107]

   The ‘Agreement’ is defined in the SOC at [12] as the oral agreement referred to at [102] above.

3. [108]

   It is well established that an unpaid vendor of land who has parted with legal title to the land is generally entitled to an equitable lien over the land as security for the unpaid purchase price. In Hewett v Court (1983) 149 CLR 639; [1983] HCA 7, Gibbs CJ said at 645:

4. [109]

   Once a vendor’s equitable lien is created, absent waiver or abandonment, it continues until the full purchase price is paid: Wossidlo v Catt (1934) 52 CLR 301; [1934] HCA 52 at 307 per Rich J; Reliance Finance Corporation Pty Ltd v Heid [1982] 1 NSWLR 466 at 477-478 per Hope JA (Glass and Mahoney JJA agreeing).

5. [110]

   Although called a lien, it is a form of equitable charge over the subject property in that it does not depend upon possession and may, in general, be enforced as any other equitable charge, namely by sale in pursuance of a court order. In EI Sykes, Law of Securities (5th ed, 1993, Lawbook Co) at 199, the learned authors describe the nature of an equitable lien relevantly as follows:

6. [111]

   The authority cited for the last proposition regarding the vendor’s lien is Mackreth v Symmons (1808) 15 Ves 329; 33 ER 778, which was approved in Wossidlo v Catt.

7. [112]

   The plaintiff submitted that the evidence establishes the following: (a) on or around 6 July 2022 Brenda listed the Land for sale with Wiseberry Real Estate (approximately 3 months prior to the transfer of the Land to Troy and Donna) for the sale price of $560,000; (b) Brenda required the Land to be sold in order to bridge a shortfall of $130,000 in her funds so she could purchase and move into a unit in a retirement village; (c) in September 2022, Troy and Donna offered to loan Brenda the sum of $130,000 if the Land did not sell before 19 October 2022, and then Troy and Donna offered to purchase the Land from her with such an offer being accepted – the contest being how much was offered and agreed to between the parties; (d) on 23 October 2022, Brenda entered into a contract for sale, that had already been signed by Troy and Donna, with a contract price of $130,000; (e) the Land was transferred on 31 October 2022; (f) between 5 November 2022 and 27 January 2023, Troy made payments totalling $2,800; and (g) that Brenda, Troy and Donna agree that the sum of $130,000 was below the agreed sale price of the Land.

8. [113]

   The plaintiff submitted that these facts support a finding that Brenda has an equitable lien over the Land for a disputed amount – Brenda contends that the purchase price is $540,000 and therefore she is owed $407,200, when factoring in smaller amounts paid to Brenda for strata fees in the sum of $2,800. By contrast, Troy and Donna admit that at the time the Land was transferred, they owed Brenda an amount, they contend that is $365,000. There was accordingly a vendor’s lien for unpaid purchase monies or otherwise an equitable lien for Troy and Donna’s indebtedness to Brenda. The matter for determination is what was the quantum of the agreed sale price.

9. [114]

   The defendant submitted that the plaintiff has not established that Troy and Brenda agreed in the conversation at the end of September 2022 that he and Donna would purchase the property for a price of $540,000 and accordingly an equitable lien has not been established.

10. [115]

    The plaintiff’s pleaded case in support of the equitable lien relies on the contention that an oral agreement for sale of the Land by the plaintiff to the defendants for a purchase price of $540,000 was made at the end of September 2022 in a conversation between Troy and Brenda at Troy and Donna’s home referred to at [60] above.

11. [116]

    In my view, Brenda has not established that an agreement as to the purchase price was reached by the end of September 2022, for the reasons given at [62]-[66] above. Absent an agreement on price, there could be no binding contract at this time: JD Heydon, Heydon on Contract (Lawbook Co, 2019) at [3.60]. A further matter supporting this conclusion is that Mr Davidson was not called to give evidence. It can be expected that he would have given relevant evidence about any agreement as to the purchase price by 30 September 2022. Brenda has the onus of proof on this issue and could have called Mr Davidson, who acted for her on the transaction, to establish the nature of the discussions he had with Troy about the transaction on 30 September 2022. I draw the adverse inference under Jones v Dunkel that his evidence would not have assisted Brenda’s case on this issue. As the purchase price is an essential term for a contract the sale of land, Brenda has not discharged her onus of proof that there was an agreement for the sale of the Land at the end of September 2022.

12. [117]

    Accordingly, the claim for an equitable lien fails.

13. [118]

    The SOC does not plead that a binding agreement for the sale of the land was entered into between the parties on 14 October 2022. In my opinion, the plaintiff was correct in not doing so. That conversation falls within the third category of Masters v Cameron (1954) 91 CLR 353 at 360 which applies where the parties’ intention was not to make a concluded bargain unless and until they execute a formal contract.

14. [119]

    The question whether the parties had reached agreement in the telephone conversation on 14 October 2022 is to be decided objectively by reference to what the parties’ words and conduct would be reasonably understood to convey, not upon their actual beliefs and intentions, in light of the surrounding circumstances: Radovanovic v Stekovic [2024] NSWCA 129 at [22]-[25]. In my view, the statements made by Tracy in the conversation, and assented to by Brenda, Troy and Donna, clearly indicated that each of them contemplated that a binding agreement would come into existence only on the transaction they had discussed being recorded in a contract for sale prepared by a solicitor. It is also relevant that the conversation occurred by telephone and the terms of the transaction were not straightforward. In all the circumstances, a reasonable person in the position of the parties would, in my view, have taken them to intend that no binding contract would come into existence until they had approved and signed a contract of sale prepared by a solicitor retained for that purpose.

15. [120]

    In my view, the correct inference from the evidence of the conversation on 14 October 2022 is that Brenda, Troy and Donna each contemplated that the transaction would follow the usual practice in New South Wales which is for parties entering into a contract for the sale of land to exchange signed counterparts of a written contract. Where parties propose to enter into a contract of sale by the customary procedure of exchange, they do not contemplate the coming into existence of a binding contract before the exchange takes place: Sindel v Georgiou (1984) 154 CLR 661; [1984] HCA 58 at 663-664.

16. [121]

    This conclusion is consistent with the fact that the parties had already engaged a solicitor to document the transaction, and subsequently entered into a contract prepared by that solicitor. Regard may be had to subsequent conduct of the parties in determining whether a contract has been entered into: Heydon on Contract at [4.170]. The conversation on 14 October 2022 was a preliminary agreement which was not itself a binding contract: Allen v Carbone (1975) 132 CLR 528 at 533.

Second issue: fraudulent misrepresentation

1. [122]

   The representation said to be fraudulent is pleaded in the SOC at [16(d)] and [20]:

2. [123]

   The particulars to SOC [16] refer to the conversations between the parties at Troy and Donna’s house on 14 October 2022 and also ‘30 October 2022’ (the latter presumably being a reference to the meeting on 23 October 2022 when the Contract was signed). The ‘Agreement’ is defined in the SOC as the oral agreement referred to at [102] above.

3. [124]

   In Derry v Peek [1889] UKHL 1; (1889) 14 App Cas 337 at 374, Lord Herschell said:

4. [125]

   In Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 at [114], Gummow, Kirby and Crennan JJ said (footnotes omitted):

5. [126]

   Fraud always involves an element of dishonesty or moral turpitude: Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16 at 614; and should not lightly be made: see Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68 at 578-579, and Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39. In the latter case, the plurality said at [22]:

6. [127]

   In relation to the fifth element stated in Magill, essential to the cause of action is that the representee relied on the false representation and that damage was suffered by reliance on the false representation. Generally, the necessary causal connection requires a finding that a plaintiff would not have sustained loss ‘but for’ a defendant's conduct determined by applying a common sense approach: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13 at [3235].

7. [128]

   The plaintiff submitted that the evidence establishes that Troy said to Brenda at the meeting on 23 October 2022 that the contract for sale she was asked to sign reflected what was agreed between the parties during September 2022, namely a contract price of $540,000 (or, if the court accepts what Troy and Donna assert, an agreed price of $495,000) and reflected the terms as discussed on 14 October 2022, when it did not, adequately satisfy the elements of fraudulent misrepresentation. This is because (a) Troy and Donna knew it to be false, (b) Troy and Donna knew that Brenda had relied on the falsehood, and (c) Brenda’s reliance resulted in her suffering a loss of $407,200.

8. [129]

   The admission by Troy and Donna in their Amended Defence at [16(a)] that the agreed price was more than $130,000 is a concession by the defendants that they fraudulently misrepresented the contract price to Brenda. In addition, the court should accept Tracy’s evidence that Donna admitted to Tracy on 4 and 12 January 2023 in the conversations referred to earlier that Donna and Troy had breached the agreement reached with Brenda on 14 October 2022.

9. [130]

   The defendants submitted that the claim for fraudulent misrepresentation was hopeless and ought to be dismissed as none of the elements for deceit as stated in Magill set out above are established.

10. [131]

    As to whether a false representation was made, the false representation which is said to have been made is that the terms of the contract for sale reflected the terms of the Agreement as defined in the SOC at [12]: SOC at [16(d)]. If the ‘Agreement’ pleaded in the SOC is not established or the court accepts the defendants’ submission that the price of $540,000 was not agreed in the conversation on 14 October 2022, the first element is not met.

11. [132]

    In considering whether the representation pleaded was said requires a consideration of the conduct as a whole which must be examined to ascertain what truly was said and what was conveyed: Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd [2023] FCA 420 at [12], per Thawley J. It is conduct as a whole in light of the relevant surrounding facts and circumstances that is relevant (Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [109]).

12. [133]

    The defendants submitted that there are two glaring problems with the representation pleaded: First, Brenda, for the first time, conceded in cross-examination that she saw the front page of the contract and observed a sale price of $130,000 (T111:10-111:17 and 112:38-113:7). Second, this was Brenda's third contract for sale in the preceding 18 months: she admitted in cross-examination that she knew it was a contract for sale and that the Land was being conveyed to Troy and Donna (T 114:48-114:50 and 115:12-115:17). Brenda was never frank about either of these matters in her affidavits. In these circumstances and based on these admissions, it is submitted that the Court should not find that the representation pleaded and alleged was ever said.

13. [134]

    Separately, Troy and Donna proceeded on the basis of the transfer of the Land to them to be used as a mortgage to obtain finance. Tracy proceeded on the basis that the transfer could only occur in April 2023 when finance was approved. That has led Brenda to assert that the representation was made in the terms that it was false. Tracy's version of the conversation (set out earlier) and Brenda’s apparent reliance on it is premised on Tracy's misapprehension of the transaction and her belief the bank could not advance money to Troy and Brenda if the Land was transferred at $130,000.

14. [135]

    The characterisation of the representation is coloured by Tracy's continued insistence that Troy engaged in fraud (T157:31-157:40) even though on the facts there is no material difference between (a) a transfer in October 2022 and the Land being sold and Troy and Donna being reimbursed their expenditure and (b) the Land being sold in April 2023 if there was no finance and Troy and Donna being reimbursed in the same amount. Troy and Donna are not in a better position by taking position (a) over position (b): the Land has to be sold on both parties’ case. There can be no fraud or fraudulent representation (in light of the position Troy and Donna have always taken) where they have not financially benefited.

15. [136]

    It submitted that the Court has to be satisfied to a high level that the representation was made in the terms alleged and it was false: the evidence taken as a whole does not establish either, and the claim completely collapses in view of the admissions referred to at [133] above. In relation to the second element stated in Magill, there is no pleading (as is usual) that Troy and Donna were reckless or careless as to whether the representation pleaded was false or not. The pleading is limited to being made with knowledge that it was false. This had not been established. First, there has been no articulation of the dishonesty of Donna. It is not apparent on the evidence that she had read or appreciated what was in the contract prior to the discussion concerning it on 23 October 2022. On this basis, the knowledge of falsity as regards her cannot be established against her. Second, Troy and Donna were objectively operating on the basis they needed the Land to raise finance. The fact that they acknowledged that the Land had to be sold by them (or transferred) back if finance was not raised does not establish that the representation was made in the terms alleged and with knowledge that it was false (ie. there can be no trickery to get the Land in their name when it has always been their position that if no finance is obtained, the Land must be sold).

16. [137]

    In relation to the third and fourth elements stated in Magill, these were not made out in view of the admissions referred to at [133] above.

17. [138]

    Also, while reliance is pleaded, the SOC does not plead or identify material facts as to what steps Brenda took in purported reliance on the representation and that damage was thereby suffered as a consequence of that reliance. Normally, a no transaction case would be alleged - that is, but for the representation, Brenda would not have entered into the transaction. This is eschewed presumably because the no transaction case does not produce a cause of action given that Troy and Donna are not asserting an entitlement to the Land and Brenda acknowledges that the agreement was subject to finance: Brenda is not worse off and has not lost the Land. The question remains that unless Brenda can point to actual reliance on the representation to her detriment, there is no cause of action.

18. [139]

    In relation to the fifth element stated in Magill, the damage suffered by Brenda is framed in the SOC at [20] as being the difference between the alleged contract price of $540,000 and what was paid ($130,000), being $410,000. This is not the correct approach to damages. First, no damage has been suffered because Troy and Donna accept that the Land should be returned to Brenda. Second, the transfer of the Land has not caused any damage. Whether it was transferred or not, the parties are in the same position: it has to be sold and the outcome at paragraph [14(f)] in the SOC applies.

19. [140]

    Further, the usual (but not exclusive) manner of assessment of damages is that in Potts v Miller (1940) 64 CLR 282; [1940] HCA 43 at 300 which is the difference between the ‘price and [the] real, fair or intrinsic value or what the asset was truly worth’ (GJB Building Pty Ltd v Al&PB Property Pty Ltd [2023] VSC 782 at [418(d)]). The evidence served to date does not establish the value of the Land was $540,000. The Land was listed at $560,000 on 22 June 2022 (with the listing agent's opinion a reasonable selling value to be $500,000-$550,000). There was only one offer made for $450,000 (confirmed by Wiseberry’s records). Also in evidence are appraisals made by LJ Hooker which estimated the value of the Land at between $445,000-$475,000 in May 2023 and between $425,000-$465,00 in November 2023.

20. [141]

    There are three fundamental difficulties with the plaintiff’s fraudulent representation claim. First, the false representation pleaded is that the terms of the contract of sale which Brenda was asked to sign reflected the terms of the agreement reached at the end of September 2022. I have concluded for the reasons given above that no agreement was reached at the end of September 2022. Further, no representation was made at the meeting on 23 October 2022 that the contract for sale reflected the terms of what had been agreed at the end of September 2022 (no doubt because matters had moved on to the discussion of the terms of the sale in the telephone conversation with Tracy which occurred on 14 October 2022). That of itself leads to the conclusion that the false representation pleaded was not made.

21. [142]

    Second, no representation was made at the meeting on 23 October 2022 that the contract for sale which Brenda was asked to sign reflected all the terms of what had been agreed in the telephone conversation on 14 October 2022. Troy did, as Brenda accepts, say to Brenda at the meeting that a further document was required (being a letter to be prepared by a solicitor). The representation made at the meeting was that the contract for sale together with that further document would reflect the agreement reached earlier. I have found that what had been agreed at the meeting on 14 October 2022 was that a further amount of $410,000 would be payable, subject to finance being obtained, but there was ambiguity in the discussions about when title to the Land would pass. I am not satisfied on all the evidence that Troy or Donna knew that the agreement reached on 14 October 2022 included a requirement that title to the Land was not to pass until payment of the purchase price in full.

22. [143]

    Of course, that further document mentioned by Troy was not entered into. However, looking at the matter at the time of the meeting on 23 October 2022, Troy did not represent that the contract which Brenda was asked to sign reflected the entirety of the agreement reached previously (to the contrary, he acknowledged that a further document was needed) and while the contract provided for completion to occur 42 days after the date of the contract, he did not make a representation about the terms of the contract which he knew to be false.

23. [144]

    Third, Brenda knew that the contract she was asked to sign did not contain the entirety of the terms of their agreement, most significant of which was the further payment to be made by Troy and Donna in respect of the purchase price if finance was obtained. Accordingly, she has not established that she acted in reliance on a false representation about the conformity of the contract she was asked to sign with a prior agreement as to the purchase price.

24. [145]

    While Donna accepted in the conversations with Tracy in January 2023 referred to at [129] above that a solicitor had not prepared the further agreement required to document the payment of the balance of the purchase price which was a matter which was discussed on 14 October 2022, this does not lead to the conclusion that Troy or Donna made a false representation at the meeting on 23 October 2022. Rather, Donna confirmed what is clearly the case that the parties did not follow through with the recording in a further document of the additional terms of the sale of the Land to Troy and Donna which had been discussed in the telephone conversation on 14 October 2022.

25. [146]

    For these reasons, the plaintiff has not made out her fraudulent representation claim.

Third issue: unconscionable conduct

1. [147]

   The parties are not in dispute as to the principles to be applied in relation to unconscionable conduct. The essential elements which need to be established are: first, that one party (the ‘weaker’ party) to a transaction is placed at a special disadvantage, vis-à-vis the other (the ‘stronger’ party); second, that the weaker party has knowledge of that special disadvantage; and third, there is an unconscientious exploitation by the stronger party of the weaker party’s special disadvantage. These principles were summarised by Meagher and Payne JJA in Mentink v Olsen [2020] NSWCA 182 as follows:

2. [148]

   The formulation in Mentink at [2] above is supported by the following observations of Deane J in Louth v Diprose (1992) 175 CLR 621; [1992] HCA 61 at 637-638 (Dawson, Gaudron and McHugh JJ agreeing at 643) (footnotes omitted):

3. [149]

   In relation to the first element, what is necessary is that the weaker party to the transaction (here, Brenda) is under a ‘special disadvantage’ vis-à-vis the stronger party which seriously affects the ability of the weaker party to make a judgment as to his or her own best interests. Deane J in the above passage gave some examples (by reference to Fullagar J’s observations in Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81) of the types of situations which may give rise to a special disadvantage of the relevant kind.

4. [150]

   In relation to the second element concerning the stronger party’s knowledge of the special disadvantage, there is an unresolved issue as to the state of knowledge which the other party is required to have. This issue was discussed in Nitopi v Nitopi (2022) 109 NSWLR 390; [2022] NSWCA 162 at [4] and [9] and [112]-[114]. It is clear that if the other party has actual knowledge (or is wilfully ignorant) of the innocent party’s special disadvantage, that will be sufficient. The unresolved question is whether constructive knowledge (ie. knowledge of facts from which the other party ought to have known that the innocent party was suffering under the relevant special disadvantage) is sufficient. This arises from the apparent difference between what was said by the High Court in Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25 and subsequently by the High Court in the more recent decisions of Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 and Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6, which appear to support the view that constructive knowledge is sufficient. The decisions can be reconciled on the basis that Kakavas was concerned with negating the proposition that constructive notice (rather than constructive knowledge) is sufficient, as pointed out by Bell CJ in Nitopi at [9]. Ultimately, for the reasons I will explain, the uncertainty regarding the relevance of constructive knowledge is not material in the present case.

5. [151]

   In relation to the third element, which is that there has been an unconscientious exploitation of the known special disadvantage in order for equity to intervene, it is accepted that this unconscientious exploitation can involve conduct which is the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances or the unconscientious retention of a benefit: Nitopi at [26]-[31] and [101].

6. [152]

   What unconscientious exploitation involves in this context is the unconscientious taking advantage of the known special disadvantage of the weaker party to obtain or retain the benefit. In Kakavas the High Court said:

7. [153]

   In Thorne v Kennedy, the High Court (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ) said at [38] (footnotes omitted):

8. [154]

   The reference in Kakavas at [161] to the need for a finding of the presence of a ‘predatory state of mind’ is to be regarded as a reference to the need for an unconscientious exploitation of the innocent party’s special disadvantage with knowledge of it. As Ward P said in Nitopi at [181]:

9. [155]

   Consistently with these observations, it is not necessary to show that the stronger party has acted dishonestly: Johnson v Smith [2010] NSWCA 306 at [5] and [10]; Hanna v Raoul [2018] NSWCA 201 at [99].

10. [156]

    It has been recognised in a number of cases that where it is established that the weaker party was under a special disadvantage of the relevant kind, the stronger party had knowledge of that special disadvantage and that the transaction is improvident, the evidentiary onus shifts to the stronger party to show that the transaction was fair, just and reasonable: Blomley v Ryan at 386, 399 per McTiernan J and 428-9 per Kitto J; Turner v Windever [2003] NSWSC 1147 at [105]–[106] (and, on appeal, [2005] NSWCA 73 at [99]); Nitopi at [37]–[39] per Bell CJ and [147] per Ward P. An improvident transaction includes a sale at a substantial undervalue or a gift. The shifting of the evidentiary onus in this way is also referred to in the statements of the relevant principles in the passages set out at [147] and [148] above. In circumstances where there is a special disadvantage which is known to the stronger party and the transaction is improvident that will make it prima facie unconscionable for the stronger party to procure, accept or retain the benefit of the weaker party’s assent to the transaction.

11. [157]

    Where the evidentiary onus shifts to the stronger party, one of the ways in which the stronger party can show that the transaction was fair, just and reasonable is by showing that the weaker party received adequate independent advice: Aboody v Ryan [2012] NSWCA 395 at [67]; Hanna v Raoul at [110]-[119].

12. [158]

    In Stubbings v Jams 2 Pty Ltd, Kiefel CJ, Keane and Gleeson JJ made the following observations regarding the approach to be taken in a case involving an unconscionable conduct claim at [39] (footnotes omitted):

13. [159]

    Whilst there are similarities between the equitable principles underlying relief against unconscionable bargains and undue influence, those doctrines remain distinct and the success or failure of one does not affect the other. The essential difference between them was explained by Mason J in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14 at 461:

14. [160]

    It was submitted for the plaintiff that the conduct of Troy and Donna evidences a joint effort to retain a benefit obtained by them through the exploitation of a special disability that Brenda was under during the course of discussions in September and October 2022. That special disability was evidenced by a number of matters, including the following:

    1. (1)

       Brenda was around 67 years old when negotiations to purchase the Land took place;

    2. (2)

       Troy and Donna had access to Brenda’s emails and bank accounts;

    3. (3)

       Brenda was reliant upon Troy to assist her with her interactions with Hotondo Homes regarding the design of a proposed house on the Land, as well as her dealings with Hotondo Homes regarding the debt for $18,826 which arose when the project was not proceeded with;

    4. (4)

       Brenda was reliant upon Troy and Donna I relation to the sale of the Land given they both knew that Brenda wished to move into a retirement village unit but had limited personal funds, and due to the inability to sell the Land through Wiseberry had a shortfall of funds required to settle her purchase of her retirement unit on 19 October 2022;

    5. (5)

       Brenda relied on Troy to contact Mr Davidson in relation to the preparation of the contract of sale and that it would contain what was orally agreed on 14 October 2022;

    6. (6)

       Brenda relied on Troy and Donna when it came to signing the contract for sale that it reflected what had been agreed to orally;

    7. (7)

       Brenda did not receive any legal or financial advice in relation to the contract for sale;

    8. (8)

       Brenda feared that if she did not sign the contract for sale, she would ‘lose [her] retirement village home’ as a result of what Troy said to her at the meeting on 23 October 2022;

    9. (9)

       Brenda had a lack of understanding of the precise terms of the contract for sale, no real opportunity to read it and was placed under a feeling of pressure to sign it;

    10. (10)

        Brenda had a lack of knowledge of the improvident nature of the transaction in that she gave up any interest in the Land, without any document recording what had been agreed orally about the payment of the balance of the purchase price.

15. [161]

    It was submitted that Brenda was in a position of special disadvantage or disability at the time she was invited to execute the contract for sale, which disadvantage was unconscientiously taken advantage of by Troy and his wife. At the time, she was transitioning into retirement to her recently purchased retirement unit and her only asset was the Land, which she considered was being purchased by Troy and Donna for the sum of $540,000 and that the contract for sale reflected those terms. Brenda relied upon Troy for nearly all activities in her life demonstrating a dependence that placed her in a vulnerable position vis-à-vis Troy.

16. [162]

    In addition, the transfer of the Land was so substantial that it could only be regarded as improvident as it meant that Brenda was without any life savings. As at 23 October 2022, Brenda had a significant indebtedness to Hotondo Homes (leading to a judgment debt of $19,170), which Hotondo Homes was seeking to enforce and which Brenda had no means to pay. The evidence of Brenda at the time of executing the contract for sale demonstrates a recurring request for confirmation from her son and daughter-in-law that the contract for sale reflected what had been orally agreed, to which she was assured that it did. Although Brenda had spoken to Mr Davidson on the telephone prior to the execution of the contract of sale, the sole telephone call he had with Brenda could hardly be regarded as legal advice. Brenda was not afforded independent legal or financial advice in relation to the transfer of the Land.

17. [163]

    These obvious disadvantages seriously affected Brenda’s overall capacity to judge and satisfactorily protect her own interests. This is further supported by Brenda’s evidence that she felt flustered and pressured by Troy to sign the contract for sale during her visit to their house on the night of 23 October 2022.

18. [164]

    At the time of execution, it is submitted that Troy and Donna were both aware of the special disabilities that Brenda was labouring under and they both took advantage of this by:

    1. (1)

       requiring her to sign the contract for sale in circumstances where they knew that the transaction to transfer the Land was for a significant undervalue – something that Brenda was completely unaware of;

    2. (2)

       retaining for themselves the benefit of the transfer of the Land at an undervalue;

    3. (3)

       intentionally, recklessly and carelessly overlooking obvious errors in the contract of sale in relation to settlement date and the absence of a ‘subject to finance’ clause in the document;

    4. (4)

       falsely asserting that she would lose her retirement unit if she didn’t sign the contract for sale.

19. [165]

    In the circumstances, it then turns to Troy and Donna as the stronger parties to the transaction to demonstrate that the contract for sale was fair, just and reasonable. If that onus cannot be satisfied, the Court should not allow Troy and Donna to retain the benefit of the transaction.

20. [166]

    The defendants submitted that while Brenda attempted to portray herself as effectively unable to protect her interests, the evidence established otherwise. In particular: (a) she dealt with two standard contracts for sale of land and the retirement unit contract before October 2023; (b) she independently retained professionals to advise her as to those contracts and had an understanding of them; (c) she dealt with and entered into two agency agreements with real estate agents before October 2023; (d) she sent at least one email and used email.; (e) she spent the equivalent of a day in the witness box and was argumentative to the end; and (f) she also led her brother to believe that Troy treated her poorly and stole from her notwithstanding the concessions she made referred to at [133] above.

21. [167]

    Further, the fact that Brenda is pursuing this litigation with the sole intent of obtaining damages or equitable compensation based on a value of the Land of $540,000 (as distinct from seeking an order setting aside the transaction), informs the Court that she well able to discern her financial and legal interests.

22. [168]

    The defendants submitted that in all the circumstances, the claim based on unconscionability (or undue influence) could not stand, given that Tracy accepted in cross examination that at no time had Troy or Donna ever suggested that they were entitled to keep the Land for $130,000 and Troy had told Brenda on 23 February 2023 that he would ‘sign it back over’.

23. [169]

    Even if the unconscionable conduct or undue influence claims were made out, it would not be equitable to assess damages commencing at a price for the Land of $540,000 given it is common ground that the agreement was always subject to finance and the appraisals of value of the Land are well below $500,000. Setting aside the transfer would be sufficient.

24. [170]

    I accept the plaintiff’s submission summarised at [160] above that Brenda was under a special disadvantage at the time the Contract was signed. In particular, her age, relative poverty (reliant on the aged pension), lack of education, lack of business experience, and reliance on Troy, all placed her at a serious disadvantage vis-a-vis Troy and Donna which affected her ability to make a judgment as to what was in her best interests. Troy and Donna clearly knew that Brenda was under this serious disadvantage. The Contract was clearly an improvident transaction – it was a transfer of her most significant asset (apart from her retirement unit) for a price significantly less than market value, in circumstances where there was no agreement recording any obligation on Troy or Donna to pay her any further amount or at any particular time.

25. [171]

    In these circumstances, the evidentiary onus shifts to Troy and Brenda to establish that the Contract and transfer were fair, just and reasonable. Critical to the discharge of that evidentiary onus is whether Brenda was given independent advice. I am satisfied on the evidence that she was not.

26. [172]

    Based on a consideration of all the evidence, in my opinion the defendants unconscionably took advantage of the special disadvantage under which Brenda was operating to bring about the Contract and the transfer. Accordingly, the Contract and transfer were unconscionable transactions and should be set aside.

27. [173]

    The usual remedy where a transaction has been found to be tainted by undue influence or unconscionable conduct is rescission. The transaction is set aside, and the parties are put back in the position they would have been in had the transaction not occurred, on the basis that the party who seeks equity must do equity: Ah Sam v Mortimer [2021] NSWCA 327 at [137]. Nevertheless, the Court may fashion a remedy to do ‘practical justice’ between the parties as appropriate in the circumstances, but without allowing one party to obtain an unwarranted benefit at the expense of the other: Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102; [1995] HCA 14 at 113-114; Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66 at [124]-[127].

28. [174]

    The plaintiff seeks equitable compensation of $407,200 which represents what she alleges is the unpaid purchase price for the Land. Equitable compensation might be awarded to a plaintiff for any loss suffered by reason of a transaction vitiated by unconscionable conduct: see eg. McFarlane v McFarlane [2021] VSC 197 at [64]-[68] per Richards J. However, to do so in this case would confer an unwarranted benefit on the plaintiff. In this case, the transaction can be unwound, and the plaintiff has not demonstrated any loss which would not be adequately remedied by her regaining title to the Land. The Court can do practical justice by ordering the sale of the Land through a receiver appointed by the Court, thereby allowing the plaintiff to secure the market value of the Land, subject to repaying the amounts of $130,000 and $2,800 paid to her by the defendants. Equitable compensation would not be appropriate in these circumstances.

Fourth issue: undue influence

1. [175]

   Under the doctrine of undue influence, a court of equity will set aside an improvident or substantial transaction that was unconscientiously procured as a consequence of the relationship between the parties to that transaction. It is insufficient that there is mere inequality in bargaining power, rather the relationship must be one which gives rise ‘to such influence over the mind of the other that the act of the other is not a “free act”’: Thorne v Kennedy at [31].

2. [176]

   There are relationships which by themselves give rise to a presumption of undue influence. That is not the case here, but the presumption ‘can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust’: Thorne v Kennedy at [34] citing Johnson v Buttress (1936) 56 CLR 113; [1936] HCA 41 at 134–35 per Dixon J.

3. [177]

   The High Court in Thorne v Kennedy at [34] stated that (citations omitted):

4. [178]

   In relation to the latter condition, it must be proved that the transaction was ‘so improvident or the gift is so substantial as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act’: Brown v Barber [2020] WASC 84 at [316] quoting Sir Frederick Jordan, Chapters on Equity in New South Wales (6th ed, 1947). It is not the relationship alone that gives rise to the presumption but rather the specific transaction within the context of a relationship of ascendancy and corresponding dependency.

5. [179]

   As Emmett AJA set out in Tomanovic Multitown Pty Ltd v Interlux Projects Pty Ltd [2021] NSWSC 190 at [89] (footnotes omitted):

6. [180]

   In making this assessment the Court may have regard to considerations such as those identified by Gillard J in Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573 at [10(a)]:

7. [181]

   Once the presumption is raised it may be disproved by the other party proving, in the case of a transfer of property, that the weaker party knew what he or she was doing, when the transfer was made, in the sense that he or she understood its effect and significance to himself or herself, and also that the transfer was the result of his or her own free will: Johnson v Buttress at 123; and Thorne v Kennedy at [34].

8. [182]

   The plaintiff submitted that there was a sufficient relationship of dependency by Brenda upon Troy and Donna, or ascendancy exercised over Brenda to give rise to a presumption of undue influence. By the time that Brenda had decided to sell the Land in June 2022, she was in an increasing position of dependency on Troy. That was particularly so once Troy and Donna offered to purchase the Land from her – an offer which she duly accepted. The evidence of Brenda is replete with her subjective views and objective conduct that she had a clear relationship of dependence and trust reposed in Troy and Donna, which became more acute over time. That level of trust reached a crescendo at the execution of the contract on 23 October 2022 given the overwhelming financial vulnerability that that transaction placed Brenda in. There can be no doubt that Brenda assumed that the contract for sale reflected the entirety of the agreement reached with the respect to the Land. The matters referred to above in respect of the submissions as to unconscionability strongly inform the conclusion that Brenda’s entry into the contract for sale was caused by the undue influence of Troy and Donna.

9. [183]

   The defendants’ submissions regarding the undue influence claim were essentially the same as for the unconscionable conduct claim.

10. [184]

    In view of my conclusion on the unconscionable conduct issue, this issue does not arise. However, for essentially the same reasons, I consider that the plaintiff has established her case of undue influence on the part of the defendants. In my opinion the evidence establishes that in the period from around June 2021 to October 2022, Brenda placed trust and confidence in Troy, and to a lesser extent, Donna as members of her family with whom she resided for all or part of that time. Donna acknowledged in cross examination that Brenda relied on Troy (T287.37), and this is confirmed by the fact that she trusted him to deal with Hotondo Homes and Wiseberry in relation to the Land. This placed Troy in a position of being able to exert influence over Brenda. Troy did so by exerting pressure on Brenda to sign the Contract at the meeting on 23 October 2023: see [101] above. For the reasons already given, the transaction was improvident, conferring a very substantial benefit on Troy and Donna which cannot be explained by the relationship of the parties, and consequently the presumption that it resulted from undue influence arises. In my view, Troy and Donna have not discharged their evidentiary onus of establishing that Brenda knew what she was doing when she signed the Contract, and that the transaction was the result of her free will.

11. [185]

    The relief to which Brenda would be entitled for this claim is the same as for the unconscionable conduct claim.

Cross-claim

1. [186]

   In light of the conclusions reached above, the relief sought in the cross-claim does not arise and it should be dismissed.

Conclusion

1. [187]

   The plaintiff has not succeeded in her claim for an equitable lien or that the defendants made a fraudulent misrepresentation as pleaded. However, she has succeeded in her alternative claim that the Contract and transfer are vitiated by the unconscionable conduct of the defendants.

2. [188]

   The appropriate remedy is that the Contract and transfer are set aside, a receiver be appointed to sell the Land and the defendants are refunded the amounts of $130,000 and $2,800 which they paid to the plaintiff out of the proceeds of sale. The parties were agreed that the appropriate course is for the Court to appoint a receiver for the purpose of selling and disbursing the proceeds of sale of the Land. The consent of Mr Christopher Darin to act as receiver has been obtained with the estimate of his remuneration being in the vicinity of between $5,000-$7,000 plus GST but in any event capped at $7,000 plus GST. It is appropriate that he is appointed as the receiver to effect the sale of the Land.

3. [189]

   The cross-claim should be dismissed.

4. [190]

   I will hear the parties as to costs.

5. [191]

   I will give the parties seven days to bring in short minutes of order to give effect to these reasons, including a timetable for submissions on costs. If the parties cannot agree on the form of the orders, they are to provide their respective versions of the proposed orders to my Associate together with a short outline of submissions of no more than three pages in support of their proposed orders.