What Becomes of the Broken-Hearted? Unconscionable Conduct, Emotional Dependence, and the 'Clouded Judgment' Cases

The High Court's decision in Louth v Diprose that emotional dependence significantly contributed to special disadvantage was a significant development within the doctrine of unconscionable conduct. The decision in Louth established a template of sorts that found useful application in the later cases of Williams v Maalouf, Xu v Lin and Mackintosh v Johnson. Though they are few, these cases form definable subset within the broader doctrine of unconscionable conduct that might broadly be termed 'clouded judgment' cases. These cases quite arguably blur the lines between the doctrines of unconscionable conduct and undue influence. There is a discernible pattern to these matters. In these cases, the donor has formed an attachment to the object of his or her affection. To put matters gently, the affection is misplaced. Nonetheless, the donor makes a gift to the object of his or her affection. Subsequent developments lead the donor to realise that the gift was both improvident and bestowed upon an undeserving party. This article argues that Louth v Diprose is a troublesome precedent. First, the primacy of deception, which was a key issue in Louth, is unduly reductive. It obscures the overall context of the defendant's conduct. Secondly, the High Court in Louth overlooked facts that might have undermined the finding that the plaintiff was at a special disadvantage. Thirdly, the case reflects a concept, known as the 'presumption of competency' that unhelpfully tilted the balance in favour of the plaintiff. This presumption appears to have been somewhat reversed in Mackintosh. Full text also available via Informit