Jozef Sleboda v Joseph Jan Sleboda [2007] NSWSC 361

New South Wales Supreme Court

CITATION : Jozef Sleboda v Joseph Jan Sleboda [2007] NSWSC 361

JUDGMENT DATE : 18 April 2007

JUDGMENT OF : Gzell J

DECISION : Declataion that property held on a constructive trust for father and son as tenants in common in equal shares. Son ordered to do all things necessary to transfer the property to father and son. Son ordered to pay father's costs.

CATCHWORDS : EQUITY - Undue influence and duress - Son instructed solicitor to transfer property from the father to him - Father said transfer was to be to both as tenants in common in equal shares - Father executed transfer documents - Solicitor said father advised to seek independent advice and documents read to him and explained - Father said son requested him to sign and he did so and solicitor did not speak to him - Son knew father placed trust in him and would do anything son asked in relation to the property - Father partially deaf, had difficulty reading English and 79 years old - Whether undue influence or unconscionable conduct established

Calverley v Green (1984) 155 CLR 242 CASES CITED : Commercial Bank of Australia Ltd v Amadio (1982-1983) 151 CLR 447 Johnson v Buttress (1936) 56 CLR 113 Union Bank of Australia Ltd v Whitelaw (1906) VLR 711 at 720

PARTIES : Jozef Sleboda (Plaintiff) Joseph Jan Sleboda (Defendant)

FILE NUMBER(S) : SC 1879/05

COUNSEL : Mr J E Armfield (Plaintiff) Mr L Ellison SC (Defendant)

SOLICITORS : Hills Solicitors (Plaintiff) Laliotis Lawyers (Defendant)

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

GZELL J

WEDNESDAY 18 APRIL 2007

1879/05 JOZEF SLEBODA V JOSEPH JAN SLEBODA JUDGMENT 1 Jozef Sleboda, the plaintiff, and his son Joseph Jan Sleboda, known as John, the defendant, bought a farm in Phoenix Park, New South Wales, as tenants in common in equal shares in 1979. In 1981, Mr John Sleboda faced the prospect of criminal charges and, on advice, his interest in the property was transferred to Mr Jozef Sleboda. In 2002, Mr Jozef Sleboda conveyed the entire interest in the property to Mr John Sleboda. He said he understood the documents he signed were to return the property to him and his son as tenants in common in equal shares. He seeks a declaration that Mr John Sleboda holds the property on a constructive trust for both as tenants in common in equal shares. Legal Principles 2 Mr Jozef Sleboda does not raise a case of non est factum. His case is put on two bases: undue influence and unconscionable conduct. 3 As to the former, reference was made to Johnson v Buttress (1936) 56 CLR 113. In that case, a 67 year old, who was wholly illiterate, of low intelligence and devoid of experience in business affairs, transferred his home by way of a gift to a relative of his wife. He was appreciative of the kindness shown to him after the death of his wife. The transfer was executed in the office of the donee's solicitor. The donor did not have independent advice. It was held that, because of the special relationship of influence that was shown by the circumstances to have arisen, the presumption of undue influence that arose from that relationship had not been rebutted. At 134, Dixon J explained the basis of the jurisdiction as the prevention of unconscientious use of a special capacity or opportunity: "The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor's will or freedom of judgment in reference to such a matter". 4 If, before a transaction, one party is in a position of ascendancy over the other, the onus falls upon the party benefited to establish that the gift was the exercise of free judgment on the part of the donor. His Honour went on to say: "But the parties may antecedently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee."