Aylesford v Morris [1873] LR 8 Ch App 484

• Defendant, a young man in much debt, owed X money and borrowed money off Plaintiff to pay X. Plaintiff advanced Defendant money a rate of 60% interest.

• Plaintiff had no advice on the loan and the CA stayed Plaintiff’s claims for repayment, instead ordering that the money be repaid at a rate of 5%.

• It said that Plaintiff took advantage of Defendant’s vulnerable position and the burden was put on Plaintiff for proving that the loan was fair.

Lord Selbourne

• There is equitable release and fraud is presumed/inferred where Defendant is weak and Plaintiff has undertaken extortion, usury or taken advantage of the weakness.

• In this context fraud means an “unconscientious use of the power arising out of these circumstances and conditions.”

  • Where these circumstances exist, there is a prima facie presumption that the contract was fraudulent, which can only be overturned if Defendant show that the contract was “fair, just and reasonable”.

  • This “fraud” often occurs when heirs to property (as here) are “snared” by money lenders. 

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