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In the past, actual and presumed undue influence used to be treated separately.
However, as was recently clarified, they are one and the same. The difference is simply evidential - if there is no actual evidence of undue influence, it can be presumed on the facts.
Royal Bank of Scotland v Etridge (No 2) at 93: "English law has identified certain relationships where the conclusion can prima facie be drawn so easily as to establish a presumption of undue influence. But this is simply a matter of evidence and proof."
Actual undue influence
In this rare category of cases, there is actual evidence of influence (usually in the form of bullying or pressurising), invariably in the context of a relationship, but there is no need to show that the transaction was suspicious.
The tactical advantage of showing actual undue influence is that the victim is entitled to rescission 'as of right' because there is no further need to show that the gift or transaction
'calls for explanation'.
CIBC Mortgages v Pitt (1993): where there is evidence of actual undue influence, there is no need to show that the transaction was suspicious.
Drew v Daniel: "[I]n the case of actual undue influence something has to be done to twist the mind of a [contracting party] whereas in cases of presumed undue influence [where a relationship has been abused] is more a case of what has not been done, namely ensuring that independent advice is available to the donor." Facts: D bullied his elderly aunt, C, into retiring as a trustee of the family trust and letting him take over, by taking advantage of her fragile and naïve personality. Later, C sued to get the contract rescinded. Verdict:
Successful. There was actual evidence of D's impropriety.
Presumed undue influence
In the absence of actual undue influence, the complainant must overcome three hurdles.
1. Existence of a relationship of trust and confidence 2. That the transaction calls for explanation
3. However, this presumption can be rebutted.
1) Relationship of trust and confidence
(i) Certain stereotypical relationships automatically give rise to presumption of influence
Royal Bank of Scotland v Etridge (No 2): "Examples of relationships within this special class are parent and child, guardian and ward, trustee and beneficiary, solicitor and client, and medical adviser and patient. In these cases the law presumes, irrebuttably, that one party had influence over the other. The complainant need not prove he actually reposed trust and confidence in the other party. It is sufficient for him to prove the existence of the type of relationship."
Solicitor and client: Wright v Carter. In Markham v Karsten, the presumption of influence arose even between a solicitor and client who had entered into a relationship. There was no reason to confine the presumption of influence to their legal relationship, it extended to their domestic relationship as well.
Doctor and patient: Mitchell v Homfray
Spiritual adviser and novice? Allcard v Skinner: mother superior and novice nun, who bound herself to obey the rules of the order. Presumption of influence arose. Roche v Sherrington: P
was a member of the 'Opus Dei', a Roman Catholic Institution. He transferred money to fellow members, C and D. Presumption between C and D, and P, arose.
NB. Marital relationships and 'banker and customer' relationships not in class of automatic presumptions
(ii) Even if not stereotypical relationship, can show that their particular relationship was one of trust and confidence, on the facts
Barclays Bank plc v O'Brien: "Even if there is no relationship falling within Class 2(A), if the complainant proves the de facto existence of a relationship under which the complainant generally reposed trust and confidence in the wrongdoer, the existence of such relationship raises the presumption of undue influence."
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