Louth v Diprose

Louth v Diprose,[1] is an Australian contract law and equity case, in which unconscionable conduct is considered.[2][3][4]

Louth v Diprose
CourtHigh Court of Australia
Citation(s)[1992] HCA 61, (1992) 175 CLR 621
Case history
Prior action(s)Diprose v Louth (No.1) (1990) 54 SASR 438, Supreme Court (SA);
Diprose v. Louth (No.2) (1990) 54 SASR 450, Supreme Court (Full Court) (SA)
Court membership
Judge(s) sittingMason CJ, Brennan, Deane, Dawson Toohey, Gaudron & McHugh JJ
Case opinions
The transaction is unconscionable, as emotional dependence or attachment is a special disability whereby taking advantage of the dependent constitutes unconscionable conduct. The conduct of defendant (appellant), knowing the plaintiff's infatuation and the defendant's manipulation of it so that he was "unable to make a worthwhile judgment as to what is in his best interest", affirming King CJ (Diprose v Louth (No. 1) (1990) 54 SASR 438, at p 448), was "dishonest and smacked of fraud" (6:1) (per Mason JJ, Brennan, Dean, Dawson, Gaudron, McHugh JJ; Toohey J dissenting).
Keywords
Unconscionable conduct, unconscientious dealing, undue influence, undue weakness

Facts

Solicitor Louis Donald Diprose (the plaintiff/respondent) was infatuated with Carol Mary Louth (the defendant/appellant), whom he had met in Launceston, Tasmania in 1981. He showered her with gifts and, at one time, proposed to her; she, however, refused. Subsequently in 1985 the defendant informed the plaintiff that she was depressed and was going to be evicted and, if this happened, she would commit suicide (this was largely untrue). In response, the plaintiff agreed to buy her a house and, at her insistence, put it in her name. In 1988 when their relationship deteriorated, the plaintiff asked the defendant to transfer the house into his name. She refused and he brought proceedings seeking to recover the house.

At the trial in the Supreme Court of South Australia, the court of first instance, the plaintiff won, with King CJ holding that for the defendant to retain the house and land would be unconscionable and thus the plaintiff was beneficially entitled to the land.[5] The defendant subsequently appealed to the Full Court of South Australia again, however, the defendant lost on appeal, with Jacobs ACJ and Legoe J forming the majority and Matheson J dissenting.[6] The defendant then filed special leave for an appeal to the High Court of Australia, which was granted.

Judgment

The appeal was dismissed. The property in Tranmere, South Australia, which was purchased by the plaintiff but placed in the name of the defendant, remained recovered from the defendant to the plaintiff.

Impact

Louth v Diprose remains an important case in Australian contract law and equity and extending the scope of unconscionable conduct, from Commercial Bank of Australia Ltd v Amadio.[7][8][9] Accordingly, it is taught in most, if not all, Australian law schools as part of introductory, substantive contracts, and substantive equity classes.

Furthermore, Louth v Diprose has been studied in academia. The purportedly limited presentation of the appellant's case has been noted.[10]

References
  1. Louth v Diprose [1992] HCA 61, (1992) 175 CLR 621 (2 December 1992), High Court (Australia).
  2. Clark, Julie. "Louth v Diprose: High Court of Australia (1992); 175 CLR 621; [1992] HCA 61". australiancontractlaw.com.
  3. Riordan, Jaani. "Part VI - Unconscionable Dealing" (PDF). Contracts.
  4. Student at Law (26 May 2007). "Topic 2 - The Conscience of Equity". Student at Law. Archived from the original on 30 July 2013. Retrieved 30 July 2013.
  5. Diprose v Louth (No.1) (1990) 54 SASR 438, Supreme Court (SA).
  6. Diprose v. Louth (No.2) (1990) 54 SASR 450, Supreme Court (Full Court) (SA).
  7. Commercial Bank of Australia Ltd v Amadio [1983] HCA 14, (1983) 151 CLR 447, High Court (Australia).
  8. O'Shea, G.N. (2010). The Extent to Which Unconscionability at General Law, the Special Equity in Garcia and Part IVA of the Trade Practices Act 1974 (Cth) Are Available to a Debtor or Guarantor When a Finance Provider Seeks to Enforce a Security [S.J.D. thesis] (Thesis). University of Technology, Sydney.
  9. Burrows A. A. S., MacKendrick E., Edelman J. (2007.) Cases and Materials on the Law of Restitution, Oxford University Press, p. 480.
  10. Moles R., Sangha B. (1995.) "Gendered Stereotypes and the "Facts"", Flinders Journal of Law Reform, 1(1).
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