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Recession – Undue Delay

An individual cannot be forced to enter a contract under the threat of being harmed coercion, or other
hostile influence

Circumstances where undue influence can be presumed in cases where the relationships are of trust and
confidence

1) Trustees  Beneficiary
a. Ellis v Barker
i. A testator wanted his trustees to give up his farm to this nephew, the plaintiff if
the landlord accepted him as a tenant. He gave him the farming stock, He also
gave some real property to the Plaintiff, and gave annuities to the Plaintiff’s
father, mother and sisters including the trustees. One of the trustees of the will
was steward to the landlord. If the plaintiff took the farming stock, there would
be hardly any assets to pay the legacies and annuities, which the trustees told
the Landlord who left it to the trustee’s decision whether the Plaintiff should be
accepted as a tenant. They refused, unless he executed a deed paying the
legacies and annuities.
ii. Held that it was a breach of trust on the part of the trustees to endeavor to
induce the landlord to refuse his consent to the plaintiff having the tenancy
which the testator expressed his will for him to have.
iii. Sir W.M. James “It was a breach of duty on the part of the trustees to endeavor
to induce the landlord to refuse his consent on any grounds to what the testator
shewed by his will that he wished and intended.” Deemed a clear breach of
trust.
2) Attorney  Client
a. Wright v Carter
i. The plaintiff claimed that there should be a declaration two indentures are not
binding upon him and ought to be set aside and cancelled. Wright gave
instructions to Mr. Carter he mentioned that there were two benefits that he
proposed to confer upon Mr. Carter. One benefit was a sum of 500 pounds. The
other benefit was for Mr. Carter should have two- twentieth of the sum under
the deed as he wanted to give a benefit for his services rendered. In essence the
children and the lawyer were parties to the deed. The draft had been prepared
in C’s office. The deed was executed by the plaintiffs on the advice of the
solicitor
ii. Held that the deed was void against C but not the children, since the benefits
was conferred upon them were not induced by undue influence on the part of
C. – Sterling J, the relationship persisted in every other transaction including the
completing of the deed which on the face of it appear to be services rendered
by solicitor to client.
3) Doctor  Patient
a. Mitchell v Homfray
i. P was the executors of G, to whom the defendant acted as a medical adviser. G
Made a gift od 800 pounds to the defendant. At the time of the gift no
independent advice was given to G and only the relation of physician and
patient existed them. After the relationship ended G continued to abide by the
git for the rest of her life. Question of whether the gift could be maid voidable
and the gift could not be impeached after her death.
ii. It was held that the gift from a lady to her medical adviser, even though the
former has no independent advice is only voidable. After the relationship had
ceases she intentionally abides by what she has done, he executors cannot
recover the gift from the medical advisors
iii. Lord Selborne LC “This being the state of facts, I do not think that any authority
goes the length of saying that her representatives after her death can do that,
which if she had lived she herself would not have done.”
iv. Turner J In Wright v Vanderpark said that he is of the opinion that a positive act
was necessary to shew that the donor had elected to abide by the gift, all that
was requires was a proof of a fixed, deliberate and unbiased determination that
the transaction should not be impeached.
4) Religious/ Leader/Pastor  Follower or Parishioner
a. Allcard v Skinner
i. Gifts made to the mother superior, Held that the Court of Appeal that there was
undue influence brought to bear upon the plaintiff through the training she has
received and any form of independent advice availed to her was from inside the
order of the sisterhood.
ii. Compares the two types of undue influence. First in cases where there has been
some unfair and imporper conduct, and some coercion from outside, some
overreaching, and some in the form of cheatinf, through some personal
advantange obtained by someone placed in a close and confidential relationship
with the donner. The second group consists of cases in which the position of the
donor to the done has been such that it has been the duty of the donee to
advise the donor, or even manage his property for him. “In such cases the Court
throws upon the donee the burden of proving that he has not abused his
position, and of proving that the gift made to him has not been brought about
by any undue influence on his part”. ( Burden of proof on the influencer.) -
Lindley LJ
5) Parent  Child
a. Wright v Vanderpark.
i. A daughter executed a deed of a gift of a life-estate to her father soon after she
turned 21, having no advice except from her father’s lawyer. A year ate she got
married and negotiations took place between her father and a solicitor who
acted for her husband and her who communicated that they were aware of her
Father’s deed gift and made no objection to it. She died ten years later after the
deed gift, and her husband then sought for it to be set aside.
ii. Turner LJ “A child may make a gift to a parent, and such a gift is good if it is not
tainted by parental influence. A child is presumed to be under the exercise of
parental influence as long as the dominion of the parent lasts. Whilst that
dominion lasts, it lies on the parent maintaining the gift to disprove the exercise
of parental influence, by shewing that the child had independent advice, or in
some other way.”
iii. Gift held not be tainted by undue influence.

Tate v Williamson. (Actual Influence)

 The defendant was the financial advisor to Oxford University undergraduate who sold him his
estate for half its value as her had extravagant spending habits and had incurred debts. The
advisor offered him 7,000 dollars for his moiety of an estate which had coal mines. The
undergraduate obtained an estimate from a mining engineer who values the estate 20,000. He
then accepted the advisor’s offer for 7,000. The defendant admitted to having had a previous
intention of purchasing the estate. The under grad, then drank himself to death at age 24. His
executors applied for the transaction to be set aside.
 Held that a fiduciary relationship existed that the suppression from the advisor of C’s valuation
rendered it impossible to sustain A’s purchase.
 The relationship between the claimant and the defendant was of fiduciary nature which meant
that the claimant had trust and confidence in the advice of the defendant which the defendant
misused
 “The jurisdiction exercised by courts of equity over the dealings of persons standing in certain
fiduciary relations has always been regarded as one of the most salutary description… The
courts have always been careful not to fetter this jurisdiction by defining the exact limits of its
exercise” Lord Clemsford.

Factors Considered

Barclays Bank v O’ Brien

 The husband was a shareholder in a company and arranged an overdraft facility of 135,000 for
the company. The husband’s liability to the bank was secured by a charge over his matrimonial
home, which was owned by both him and his wife. The husband persuaded the wife to sign the
home as a security for the loan saying that the security was short term and the charge was
limited to 60,000. However, when the company’s debts increased the bank brought proceedings
against the couple to enforce the guarantee.
 Held in the H of Lords that the wife who stood as a surety had been induced by undue influence,
misrepresentation and had the right to have the transaction set aside
 The principle of absence of special relationship but presence of coercion of mind. As long as a
person’s mind has been impliedly forced into acting accordingly then the claim of undue influence
can stand.

Portman Building Society v Dusangh

 The defendant sought to set aside an order for possession under a mortgage. Claimant was an
old, illiterate 72 year old, retire did not speak English properly. Mortgage was an advanced sum
30,000 and guaranteed by D son who acted as the building society.
 Held where a case was strong enough on its face in terms of conduct and terms, unconscionable
conduct could be inferred if there was no explanation offered to displace that inference.
 D was not at a serious disadvantage to the building society, having no existing indebtedness
towards it, his situation was not exploited by the building society and the society had not acted
in a morally reprehensible manner. The transaction was not overreaching and oppressive.
 Although D was elderly/ illiterate or basically poor and ignorant, the transaction was subject to
D son success in his supermarket venture. The building society not entitled to police the
transactions of this nature to insure that even the poor and ignorant were wise in seeking to
assist their own children. Building society did not follow their procedure, However the
procedure was implemented to safeguard the builders not the borrowers
 Fry V Lane stated, “the result of the decisions is that where a purchaser is made from a poor and
ignorant man at a considerable undervalue, the vendor having no independent advice, the court
of equity will set aside the transaction.” The circumstances of poverty and ignorance throws the
onus on the purchaser that the purchase was fair, just or reasonable