After substantial period of default, banks sells sold property at auction for $150000. After deduction of sale, Bank seeks payment of the guarantor Ms Clayton claim guarantee not enforceable on her because of misunderstanding Ms Clayton alleges the advisor misled her to its contents At time of meeting, Mr Parker did not enquire on her financial position Ms Clayton was 88 years old, and unemployed and had limited funds to live.
English was second language to her and was illiterate as she asked Mr Parker to read to her and explain the contents to her Mr Parker refused and said it was all straight forward and nothing to worry about Prior to signing, Ms Clayton mentioned she had $60000 in her superannuation which would cover 20% of owing Mr Parker did not explore whether she understood that she would be liable for more Mr Wayne is a business man who runs several corporations He met Kyle in May last year and was infatuated with her.
Few months in their relationship, Ms Kyle asked Mr Wayne if he was interested in investing in her new business specialling in cat food products He refused as he did not want her to owe him money Ms Kyle became upset angry and told him he did not have faith in her Ms Kyle disregarded all his phone calls and refused to see him Mr Wayne then sends her $250000 which was recorded as gifts. He told her she could have much money as she needed Ms Kyle understood the transaction made was just as gifts.
A few months later, Mr Wayne discovered Ms Kyle was having an affair with one of his employees, Mr Robin Mr Peters is a retired cattle farmer He sold his cattle station six years ago and has been living with his sale proceeds ever since Mr Taylor, his son in law, runs a cattle farm on the boarder of New South Wales The farm in My Taylor’s hand experienced financial difficulty In October 2010, Mr Taylor sought financial assistance from Mr Peters Evidence on trial suggest Mr Taylor has physically assaulted Mr Peters on numerous occasions when Mr Taylor was intoxicated Mr Peters was 88 years old and was ill.
One day of questioning, Mr Taylor visited Mr Peters and requested for $100000 to be transferred on telephone banking straight to his account Mr Peters laughed as he thought it was a joke This provoked Mr Taylor as he led Mr Peters to the phone Mr Taylor clenched his fist under Mr Peters’ chin demanding him to transfer the money Seeing no escape, Mr Peters voluntarily did as he was told. Issues Is the guarantee enforceable against Ms Clayton? Can Mr Wayne recover his money back as transaction was based on undue influence?
Can Mr Peters recover his money back as transaction was based on coercion? Decision Appeal dismissed (going for the authoritative decision) Judgment for the Plaintiff Appeal Dismissed Ratio The conduct of Bundaberg Bank in this case is unconscionable. In effect, it knowingly took advantage of Mrs Clayton’s poor understanding of the document, which detailed her obligations as a guarantor. Although he clearly understood the nature of the gift, Mr Wayne’s reaction to the situation demonstrates the influence these circumstances had on his mind at the time he made the gift.
The effect of this false atmosphere of crisis on his mind and free will is sufficient to render the gift void. The physical intimidation was undue and caused Mr Peters to transfer money to Mr Taylor. Obiter The starting point with such cases is that regardless of whether a person has read a document, that person is bound by its content upon signing the document. Ordinarily, a gift of money becomes the property of the recipient where there is intention to make the gift, coupled with receipt of the sums. Majority Judgement.
It was held by the two judges with authoritative power the Bundaberg Bank’s knowledge of Mrs Clayton’s poor understanding of the transaction and document goes to the heart of the guarantor agreement between Mrs Clayton and Bundaberg Bank. For these reasons, the guarantee is not enforceable against Mrs Clayton. It was held by Justice Smith that The effect of this false atmosphere of crisis on his mind and free will is sufficient to render the gift void. There is in this case no doubt that Mr Taylor was exercising undue influence at the time Mr Peters transferred the money.
In these circumstances, the transaction should be set aside and the money returned to Mr Peters Minority Judgement It was held by the other two judges that person who signs a document without reading it is still bound by its terms. Therefore, this basic knowledge and understanding prevents her from claiming that it would be unconscionable for Bundaberg Bank to enforce the guarantee. Are any of the cases from a superior court in the same hierarchy? Bundaberg Bank v Clayton is a split decision from the Full High Court from Chief Justice Perth and Justice Mackay and Justices Bendigo and Sydney.
Here it is a decision made based on differences of opinion. According to Section 23 of the Judiciary Act 1903 (b), it sates in any other case the opinion of Chief Justice, or if he or she is absent the opinion of the senior Justice present, shall prevail. 1 Because it is a decision coming from the Full High Court, this means the decision it carries will be binding on lower courts in Australia. This means Full High Courts are at top of hierarchies of territories and states and their decision bind all those courts regardless of where the decision originated.
Therefore, the decision of the Full High Court is binding on the District Court in Queensland. Wayne v Kyle is a decision of the District Court in Queensland. As proceedings will be commenced in the District Court in Queensland, this case will however not be binding. According to Valentine v Eid (1992) 27 NSWLR 615, Doctrine of State Decisis will not apply between two inferior courts2, partly because a court is bound to follow decisions from courts higher than itself if facts are sufficiently in same hierarchy of courts within the particular jurisdiction.
Taylor v Peters is a decision from the New South Wales Court of Appeal. As proceedings will be commenced at the District Court in Queensland, this case will be binding. According to R v Rowland  SASR 392, when exercising its appellate jurisdiction, hearing appeals from state/territory, Supreme Courts, the High Court is a court within the hierarchy of all states and territories- it is a Court of Common Apex3. Are any of the cases distinguishable? The Court may distinguish Bundaberg Bank v Clayton, on the fact that its facts are materially different.
In this case, they considered that the act of conduct by the Bundaberg Bank was unconscionable. In effect, it knowingly took advantage of Mrs Clayton’s poor understanding of the document, which detailed her obligations as a guarantor. The present case concerns the use or the practise of force to another party to act in a voluntary manner. Although Mr Marsh understood the nature of the document presented to him by Frank, it was through the use of force by threat, intimidation and grievous bodily harm that restricted Mr Marsh free will as an individual to induce a desired response.
However, both cases are also similar solely to the fact that there was unconscionable conduct present. Unconscionable conduct is where one party by reason of some condition or circumstance is placed at a special disadvantage regarding another and unfair or unconscientious advantage is taken of the opportunity created.
In Ms Clayton’s case- her age, English, provided as it was her second language and her poor literacy skills and in Mr Marsh’s case- his age, were some of their conditions or weakness present during at that time. In effect, there were some form of pressure or force administered by Mr Parker and Frank which as a result has violated their (Mr Marsh and Ms Clayton) free will for a desired response. However, it not clear whether this case will be distinguished because apparently both cases are quite similar in that it can be argued in both sides. If distinguished, it will not be binding on present case but remains as persuasive.
As Thornton v Shoe Lane Parking demonstrates, if a case is distinguished it will not be binding but remains persuasive4. In the case of Wayne v Kyle, the court may consider or find facts similar to the extent where unconscionable conduct was present at the time.
Ms Kyle had manufactured a false atmosphere of crisis in which Mr Wayne believed he would lose Ms Kyle if he didn’t provide her with the money she needed. The relation was based in a position of emotional dependence. The improvident transaction of the$250,000 by Mr Wayne was explicable only on the footing that he was emotionally dependent upon, and influenced by, the appellant as to disregard entirely his own interests. In effect, Ms Kyle used Mr Wayne’s special disability (his infatuation) to her advantage to gain a benefit from him.
Therefore, this case will not be distinguished or disregarded as it will be binding on present case. The court may distinguish Taylor v Peters on the fact that its facts are materially different. Here, Mr Taylor runs a cattle farm as he was in severe financial difficulty seeking financial assistance from Mr Peters. In our present case, Frank was a surgeon and his property which was given voluntarily by Mr Marsh (his dad), he intends to sell it and evict Mr Marsh from the premises. Also, Mr Taylor had previous records of physically assaulting Mr Peters on various occasions.
However the facts present at hand are sufficiently similar in both cases. Both cases considers the fact that the transactions made was due to coercion where force, threat, intimidation and bodily harm was used to supress a free will judgement or response which brought about the transaction of the amount demanded. However because facts appear to be sufficiently similar, it will be binding on present case. Are any of the decisions per incuriam? In 2010 when hearing Wayne v Kyle, the District Court of Queensland would have been bound by previous decision of the Full High Court in Bundaberg Bank v Clayton.
Failing to consider binding authority may mean a decision is per incuriam. However in both cases, it focuses on the fact that transaction of the amount was based on an act of persuasion or some amount of force used to overcome the free will and judgement of another. In Bundaberg Bank v Clayton, the case according to Chief Justice Perth and Justice Mackay was based on unconscionable conduct where it knowingly took advantage of Ms Clayton’s poor understanding of the document which detailed her obligations as a guarantor.
In Wayne v Kyle, according to Justice Smith, the gift was made in unconscionable circumstances where Ms Kyle deliberately created a false atmosphere of crisis in which Mr Wayne believed he would lose Ms Kyle if he did not provide her with the money she needed. The effect of this false atmosphere of crisis on his mind and free will is sufficient to render the gift void. If decision was distinguished, the District Court of Queensland’s decision would not be per incuriam. In 2011, when hearing Taylor v Peters, the New South Wales Court of Appeal would have been bound by previous decision of the Full High Court in Bundaberg Bank v Clayton.
Per incuriam occurs when a court would fail to consider binding authority. In Taylor v Peter’s case concerns undue influence where there was force, threat, intimidation and bodily harm which in effect caused Mr Peters to comply with Mr Taylor’s demand that eventually brought about the transaction of the amount ordered. However, both cases would also appear to have unconscionable conduct where one was taking advantage of another’s disability or weakness. If decision was not distinguished, the New South Wales Court of Appeal decision would be per incuriam.
In 2010, when hearing Wayne v Kyle, the decision of the District Court in Queensland would have been bound by the previous decision of the New South Wales Court of Appeal in Taylor v Peters. As mentioned above, Wayne v Kyle focuses on the fact that the transaction perused was based on the act of persuasion used to violate and overcome the free will and the judgement of another. In Taylor v Peters, it concerns undue influence where there was force, threat, intimidation and bodily harm which restricted his free will of a desired response which in effect brought about the transaction.
However in contrast both cases also deal with unconscionable conduct where one was knowingly and directly taking advantage of another’s disability. In Wayne v Kyle, Kyle was taking advantage of Mr Wayne’s infatuation and position in his business and in Taylor v Peters, it was Mr Peter’s age and illness which Provoked Mr Taylor to behave in such a manner. However it is not mentioned in the decision but the specific words of Mr Taylor (he would knock out the reaming years he has left) suggest there was a fair deal of unconscionable conduct.
If decision was distinguished, the District Court of Queensland would not be per incuriam. Are any of the cases binding? For reasons set out above, it seems likely that the Bundaberg Bank v Clayton will be distinguished due to its materially different facts. However taking into consideration as to both cases also discuss a fair deal of unconscionable conduct, this case will remain as persuasive and also can be adopted because the decision comes from a superior court. Wayne v Kyle would also be distinguished due to the materially different facts.
However in contrast, both cases also discuss unconscionable conduct where in Frank’s case it is not certain or raised in court. But it is clear when he said when he pointed the scalpel to Mr Marsh and said ‘sign it now, old man. ’ This clearly indicates there was unconscionable conduct present. However because facts remain different, also coming from both District Courts in Queensland which is in the same hierarchy, it will not be binding on the District Court in Queensland.
In Taylor v Peters case, it seems very likely that the case will not be distinguishable or disregard as facts appear to be sufficiently similar. Both these case deals with coercion where force, threat, intimidation and bodily harm was used to restrict a free will of response. Therefore, this case will be binding as facts remain similar, coming from New South Wales Court of Appeal (through the Court of Common Apex) which remains superior. Conclusion In conclusion, generally, the Full High Court decision of Bundaberg v Clayton would be binding on the District Court of Queensland.
It would still be binding even if the District Court thought it was per incuriam as the position of the district court in the hierarchy means it is not in a position to correct such errors. Wayne v Kyle in the District Court of Queensland will not be binding as both are from same position in the same hierarchy. A judge can have a total different opinion of the subject but could however still adopt some legal reasoning from this case. However, it would still be disregarded and therefore, it will not bind.
Taylor v Peters decision of the New South Wales Court of Appeal will be binding as both facts are sufficiently similar, coming from a superior court from another state which will still be binding though through the Court of Common Apex. The court may consider that the transaction made was due to coercion where force, threat, intimidation and bodily harm was used to supress a free will judgement or response which brought about the transaction. If applied to facts in this manner, Mr Marsh has good prospects in succeeding in his action against Mr Frank.