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Undue Influence Requirements for Undue Influence Failure to protect from overt pressure (Actual undue influence)
Where C can prove that D's positive application of pressure induced his consent to the contract o Essentially it involves Relational Pressure
? E.g. Langton v Langton - Threats to abandon if contract not signed
? OR Morley v Loughlan - where X exerts exclusive control, secrecy and exclusion of others who might dilute X's influence on C (cults)
? OR Drew v Daniel - where X bullies, confronts or harasses C per.
Proof of this sort of overt pressure is sufficient to prove undue influence o Per CIBC Mortgages Plc v Pitt : There is no need to prove a relationship of influence or any manifest disadvantage Presumed undue influence
Royal Bank of Scotland v Etridge : o Lord Nicholls: C must prove two things
? 1. That C put trust and confidence in the other party in relation to the management of financial affairs
? 2. And a transaction that calls for explanation
This will lead to a rebuttable presumption of fact of undue influence o and shift the burden of proof to the party relying on the contract to prove that this inference should not be drawn o Chen Wishart: Is important to note that the court is not saying that D has exercised undue influence
? Merely that he has preferred his own interests and failed to safeguard the claimants
1. A relationships of trust and influence o Automatic Presumptions (legal irrebuttable presumptions)
? Royal Bank of Scotland v Etridge :
Lord Nicholls: o Which relationships will be recognised is undefined
? However, if you fall into some of the most common ones then this will be enough to show trust and confidence on its own
? Chen Wishart: Fairly obvious what these might be:
E.g. Doctor and patient
Solicitor and client
BUT NOT husband and wife o Royal Bank of Scotland v Etridge :
? Lord Nicholls: Husband and wife does not fall into this category, however,
as nothing unusual in a wife, with motives of affection, conferring financial benefits on her husband. o therefore must be proved that there was sufficient trust and confidence in the normal way.
Chen Wishart: before Etridge, there was a misconception that these designated relationships raised a presumption of undue influence
In fact, the designated relationships merely show a relationship of trust and influence o You also need to show a questionable transaction to get a presumption of undue influence. o Relationships that have to be proved first
? Must be expectation from C's side that D will give conscientious advice
? D must know of the relationship of trust and have participated in it
? Past dealings between C and D must show trust and confidence in D
But there need not be blind, unquestioning trust by C or a dominating influence by D o Cheese v Thomas :
? Nichols VC:
Case is one of joint venture agreed by the parties, not an aggressive one. o Burrows: also tells us that while the conduct of D is irrelevant to whether there is undue influence
? It may have an effect on the remedy given
Could also arise even in a one off dealing: o Tufton v Speroni: T, person with no business experience, wished to set up a Muslim culture centre. S (person with business experience) sold his house to T for double the price and with a number of onerous reservations to himself.
? Evershed MR: if a number of persons join together for the furthering of some objective,
Not unreasonable to conclude that in matters related to the objective, each person reposes confidence in the others o and therefore has influence which grows naturally out of confidence
? Unfairness of the transaction may provide evidence of a relationship of influence
Credit Lyonnais v Burch : A young employee gave a personal guarantee on her flat to secure her employer's existing debt. There was no real evidence of a relationship of influence. o Millet LJ: mere fact that transaction is manifestly disadvantageous to one party is insufficient alone to give rise to undue influence.
? But, where obtained in a relationship easily capable of developing into one of trust and confidence (e.g. young employee and employer)
nature of the transaction may suggest that such a development has taken place.
But not necessarily if there is an explanation for this o Re Brocklehurst's Estate : old aristocrat w/o independent advice, gave a garage proprietor a 99 year
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