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Undue Influence Notes

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Undue Influence Revision

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UNDUE INFLUENCE

DURESS AND UNDUE INFLUENCE

1. Duress used to have a narrow definition, which meant undue influence used to include threats or pressure HOWEVER

2. Since the acceptance of economic duress it is argued (Birks, Lord Nicholls, Burrows) that in order to avoid overlap between undue influence and duress:

3. Illegitimate threats/pressure = just duress

4. Bigwood - Like duress, undue influence focuses on conduct of both the person exerting influence as well as the effect on C

UNDUE INFLUENCE

1. What is it?
I. It deals with where, as a result of the relationship between them, one party is in a position to exercise undue influence over the other So, where C enters into a particular transaction as a result of the undue

II.

influence of the other

2. 'Undue' I. Undue = unacceptable  ie. influencing party has taken unfair II.

advantage of his position of influence RBS v Etridge (No 2) (Lord Nicholls): 'The objective is to ensure that

III.

the influence of one person over another is not abused' ALTHOUGH Doesn't mean D acted in bad faith dishonestly knowing they were

IV.

taking advantage, AS DEMONSTRATED BY Cheese v Thomas (CA) - expressly recognised that D had not acted in

a morally reprehensible way

3. Third Party I. Undue Influence can be invoked against a third party who did not itself exert the influence

4. Result I. makes transaction voidable at the instance of influenced party

1

ACTUAL AND PRESUMED UNDUE INFLUENCE

1. Allcard v Skinner
- this case identified the two categories

2. RBS v Etridge (No 2) HL
- clarified that undue influence is a single concept.
- The presumption of undue influence is an evidential (not a legal presumption) SO
- The two categories refer to two different ways of proving undue influence

3. What's the difference I. Actual undue influence = person alleging undue influence relies on II.

direct proof and does not raise an evidential presumption Presumed undue influence = person alleging undue influence relies on

an evidential presumption

4. Burden of Proof I. Since RBS v Etridge (No 2), C is required to prove that a transaction was entered into as a result of undue influence and that in certain situations C is assisted by a rebuttable evidential presumption of undue influence which shifts the evidential burden of proof to the other party CAUSATION

1. UBC Corporate - the 'a reason' test was applied to a claim for undue influence

2. So less stringent test than economic duress (which relies on at least a 'but for' remember)

3. Burrows - suggests that the test should be the same for presumed undue influence

REMEDY

1. Rescission I. Usual restitutionary remedy for undue influence II. Usual 4 bars apply

2. Restitutio in integrum I. Best viewed as recognizing that D could successfully counterclaim for failure of consideration if restitution allowed

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