McCulloch v. Fern and Anor [2001] NSWSC 406

New South Wales Supreme Court

CITATION : McCulloch v. Fern and Anor [2001] NSWSC 406 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2095/99 HEARING DATE(S) : 7-9 May, 2001 JUDGMENT DATE : 28 May 2001

Kevin Francis McCulloch (Plaintiff) PARTIES : Donald John Fern (First Defendant) Androula Fern (Second Defendant) JUDGMENT OF : Palmer J

COUNSEL : M.K. Minehan (Plaintiff) A.M. Gruzman (Defendants) SOLICITORS : Kennedy & Cooke (Plaintiff) A. Relf & Co (Defendants) CATCHWORDS : EQUITY -- UNDUE INFLUENCE -- GIFT -- CONSTRUCTIVE TRUST Substantial gift for benefit of leader of religious sect - presumption of undue influence not rebutted - actual undue influence proved - gift applied to discharge mortgage over land owned by sect leader and her husband - constructive trust imposed upon the land. UNCONSCIONABLE CONDUCT -- GIFT -- SPECIAL DISADVANTAGE -- CONSTRUCTIVE TRUST - Husband of sect leader aware of leader's undue influence over follower - aware that leader procured follower to request her husband to consent to gift of joint property - aware that follower's husband at special disadvantage - categories of special disadvantage not closed - sect leader's husband cannot conscientiously retain benefit of payment. LACHES ACQUIESCENCE AND DELAY -- UNDUE INFLUENCE -- UNCONSCIONABLE CONDUCT -- GIFT - Proceedings to set aside gift commenced eleven years after cause of action arose - plaintiff assured during that time that defendants recognised moral obligation to repay - defendants did not act to their detriment in reasonable belief that proceedings would not be brought - delay of plaintiff in commencing proceedings not unreasonable. JOINT TENANCY -- SEVERANCE -- GIFT -- STANDING TO SUE BY SURVIVORSHIP - Husband and wife jointly own money in bank account - wife seeks husband's consent to make gift of money to sect leader - wife acting under undue influence - husband consents to gift - husband's consent procured by unconscionable conduct - wife dies intestate - husband seeks to set aside gift - husband claims entitlement by survivorship in respect of whole amount of gift - joint tenancy not severed - fraud unravels everything - husband has standing to sue. Allcard v. Skinner (1887) 36 Ch D 145 Blomley v. Ryan (1956) 99 CLR 362 CASES CITED : Campbell v. Edwards [1976] 1 WLR 403 Commercial Bank of Australia Ltd v. Amadio (1983) 151 CLR 447 Garcia v. National Australia Bank (1998) 72 ALJR 1243 Louth v. Diprose (1992) 175 CLR 621 DECISION : Gift set aside; declaration that defendants hold proportionate part of their interest in the property upon a constructive trust for the plaintiff.