Duress
Duress is a common law remedy that relates to the particular type of pressure being applied to a person in relation to a transaction.[1] The concept does not require the person’s will to be overborne in order to succeed in setting aside the transaction.[2] It relates to a party being placed in a position of choosing the lesser or two evils, and making that choice is the hallmark of the doctrine.[3] Historically, only physical threats to the person’s life or body were sufficient, and in Thorne v Kennedy the High Court noted the significant uncertainty whether duress applied to illegitimate or improper, but lawful, threats or conduct.[4] The New South Wales Court of Appeal previously limited the doctrine to threatened or actual unlawful conduct, though in light of the High Court reasoning though that may yet be revisited.[5] There is no statutory concept of duress under in the Australian Consumer Law. Queensland statute refers to the common law doctrine of duress to clarify that it continues to apply in certain situations but does not seek to alter or clarify the doctrine.[6]
Undue Influence
Undue influence is similar to concepts of unconscionable conduct and narrower, being focused on one party misusing the power they have over another. The judgment of Pawley SJ in Dupont & Dupont (1980) FLC 90-881 (at 75,568) outlined the elements of undue influence:
There are two situations in which the doctrine of undue influence may arise. Firstly, out of the special relationship of the parties to the contract, for example solicitor and client, doctor and patient, parent and child, or secondly by reason of external circumstances which place one party in a position of power over another, where for instance there is some threat to the person influenced or to their property.
Each of Dupont (above) and O’Brien and O’Brien (1981) FLC 91-094 state categorically that the relationship of husband and wife is not a ‘special relationship’ in terms of undue influence, that is to say, it is not a relationship in which one party is recognised in equity to be under the influence of the other party. Baker J in O’Brien described the special relationships in equity as follows (at 76,653):
Certain relationships have been considered by the Courts to involve such an element of trust and confidence with the consequential likelihood of the exercise of influence or authority by one party over the other that any substantial gift or conferment of advantage had to be justified by the recipient. Such relationships are those of:
(a) religious and spiritual advisers;
(b) physicians and attendants on the sick;
(c) solicitor and client;
(d) parent and child, guardian and ward.
Where such a special relationship exists, all that must be proved is the existence of the relationship itself for undue influence to be presumed, unless rebutted. More than mere confidence and reciprocal influence is required to establish a “special relationship of influence” from the existence of which undue influence will be presumed unless rebutted; for a relationship to be brought within the doctrine, it must go beyond one of mere confidence and influence to one involving dominion or ascendancy by one over the will of the other, and correlatively dependence and subjection on the part of the other: Tulloch (deceased) v Braybon & Ors (No 2) [2010] NSWSC 650, at [37] – [51].
Where no such special relationship exists, undue influence must be proved as a fact. Facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the party so that it cannot be considered their free act: Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113, at 119 per Latham CJ.
Publication date: 1 April 2024. If referencing this page, please see our citation guide.
[1] Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85, [26]-[27] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).
[2] Ibid; Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 45 (McHugh JA, Samuels and Mahoney JJA agreeing).
[3] Thorne v Kennedy, n 16, [26], citing Union Pacific Railroad Co v Public Service Commission of Missouri [1918] USSC 181; 248 US 67 at 70 (1918)
[4] Thorne v Kennedy, n 16, [27].
[5] Australia & New Zealand Banking Group v Karam [2005] NSWCA 344; (2005) 64 NSWLR 149 at 168 [66].
[6] See, eg, Sale of Goods Act 1896 (Qld), s 61(2).