Wilton v Farnworth [1948] HCA 20

High Court of Australia Latham C.J. Rich, Dixon and McTiernan JJ. Wilton v Farnworth [1948] HCA 20

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Sept. 14 Latham C.J.

My brother Rich states the facts of this case in all their relevant features. A court of equity can set aside a transaction and cancel a document on various grounds, such as fraud, undue influence, mistake, lunacy, duress, non-disclosure of material facts when there is a duty to disclose, abuse of confidential relationship, or, in some cases, failure to show that there has been no such abuse. The present case does not fall within any of these categories. All allegations of fraud were expressly withdrawn and there was no confidential relationship between the parties.

Where a man signs a document knowing that it is a legal document relating to an interest which he has in property, he is in general bound by the act of signature: see Yerkey v. Jones [1] . He may not trouble to inform himself of the contents of the document, but that fact does not deprive the party with whom he deals of the rights which the document gives to him. In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions.

1. (1939) 63 C.L.R. 649, at p. 662.

But different considerations apply in the case of transactions which are not business transactions. A gift is not a business transaction. More particularly a gift of all or most of a man's property is not a business transaction. Further, if a donee is the moving spirit in the transaction of gift, and the donor is of weak will or of poor mentality, a court of equity will set aside the gift unless it is shown that the donor understood the substance of what he was doing: Dutton v. Thompson [2] . In Clark v. Malpas [3] ; Baker v. Monk [4] and Fry v. Lane [5] there were sales by an ignorant person at an undervalue and the rule stated was applied: a case of gift is a fortiori.