Dear Colleagues;

Those interested in contract law and reasons to not enforce contracts will find much to ponder in the decision of the High Court of Australia today in Thorne v Kennedy [2017] HCA 49 (8 November 2017) http://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2017/49.html (thanks to Katy Barnett for bringing it to my attention on Twitter!) The case involved the question of the validity or otherwise of a pre-nuptial agreement entered into between a young bride and her older and richer husband. The “plurality” (if that is the word for the majority of the judges agreeing with the outcome who wrote a joint judgment) of KIEFEL CJ, BELL, GAGELER, KEANE AND EDELMAN JJ held that the case was one where the trial judge was correct to hold that there had been both undue influence and unconscionable conduct. The bride, who had come out from her European home to marry and had no other options if the marriage fell through, was presented with a clearly unfair contract shortly before the wedding and felt she had to sign it. A claim in duress was rejected, the plurality not giving it full consideration due to the decision of the NSW Court of Appeal in  Australia & New Zealand Banking Group v Karam [2005] NSWCA 344; (2005) 64 NSWLR 149 at 168  [66] that such a claim could not succeed unless there was a threat to do something unlawful. Since the case could be decided in favour of the wife on the other two grounds, Karam was not discussed.

Of the two other judges who agreed in the outcome, Nettle J said that he would have been inclined to find duress except for Karam but said the case had not properly been canvassed in argument and so he would not do so. But he found that there had been unconscionable conduct. So far as I can tell he did not comment on undue influence.

Gordon J, however, spent some time explaining why in her Honour’s view undue influence was not established (as the will of the wife had not been overborne), but agreed that there had been unconscionable conduct. So far as I can tell she did not discuss duress.

List members (or former list members) quoted whom I noticed include Edelman (though not quoted in his Honour’s own judgment!), Bant, Swadling, Mitchell, and Burrows.

Regards

Neil

 

NEIL FOSTER

Associate Professor

Newcastle Law School

Faculty of Business and Law

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