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The whole area of undue influence has twice in the last 20 years been given a thorough examination by the House of Lords – in 1993, in Barclays Bank plc v O’Brien,14 and in 2001, in Royal Bank of Scotland v Etridge (No 2).15 Between these two decisions there were many Court of Appeal decisions, mainly concerned with the situation where a bank is infected by the undue influence of a husband who has persuaded his wife to use the matrimonial home as security for a business loan. She had taken no independent advice, though the bank’s solicitor had at one meeting attempted to encourage her to take legal advice. This inequity in power between the parties can vitiate one party's consent as they are unable to freely exercise their independent will. [79]         She argues that, while her mother may have been influenced by her in various aspects of her life, there is nothing improper in that. The plaintiffs say that there are two classes of transactions that may be set aside on grounds of undue influence. He had provided a guarantee and a charge over his house to support the debts of his son’s business. 119, aff’d 2011 BCCA 501, as rebutting the presumption of undue influence have been made out. The approach is similar to that taken in relation to a totally innocent misrepresentation, where a party is allowed to rescind without showing that the misrepresentation has caused any loss.63. If it were, every mortgage agreement would have to be so regarded. Adrienne testified that, even before Arthur died, Gloria was a dominant personality, people did what Gloria wanted. …[F]actors to be taken into account in considering whether or not evidence of legal advice given to the granting party is sufficient to rebut the presumption. The charge ‘meant for her the rescue of her home on the terms sought by her: a short term loan at a commercial rate of interest’.56 Thus, although any transaction which puts a person’s home at risk must in one sense be regarded as ‘disadvantageous’, this could not be sufficient on its own to render a contract voidable. 11.7  SUMMARY OF CURRENT POSITION ON PRESUMED UNDUE INFLUENCE. Probably the majority of the reported cases that have been regarded as falling under this category of undue influence based on an established relationship of trust and confidence concern a dominant husband and a subservient wife. )], Green, J. identified factors which may affect the character of legal advice to be as follows: [Emphasis in the original, citations omitted.]. There the court said: What then must a plaintiff establish in order to trigger a presumption of undue influence? Where a debtor has persuaded a person to act as surety or guarantor, the creditor will be put on notice whenever the relationship between debtor and surety is non-commercial (for example, husband persuading wife to use the family home as security for business debts). Personality Disorders in Estate Litigation, no actual influence was used in the particular transaction or the lack of opportunity to influence the donor (, the donor had independent advice or the opportunity to obtain independent advice (, the donor had the ability to resist any such influence (, the donor knew and appreciated what she was doing (, undue delay in prosecuting the claim, acquiescence or confirmation by the deceased (. She was also influenced by Ms. Iverson and the relationship between herself and her daughter as well as her relationship with her sons. Undue influence can be very difficult to prove, and the mere appearance of undue influence is inadequate to challenge the validity of a will. [82]         She argues that she has demonstrated that at least three of the five factors set out in Stewart v. McLean, 2010 BCSC 64 at para. At present, there are authorities which are treated as being concerned with undue influence, largely because of the limited scope given to duress at the time they were decided. [81]         She argues “that at the end of the day, the court may be unhappy with the effect of what has happened.” However, she says that the court should focus on the timeframe of June 2001 and not October 2014. How, then, do the courts decide when influence has overstepped the limits of acceptability and become ‘undue’? Even where a relationship does not fall into one of the categories listed in the previous section, it may in fact have developed in a way which indicates that one person is in a ‘dominant’ position over the other. The main focus in the rest of this chapter will, however, be on the views of the House of Lords as expressed in O’Brien and Etridge. She says that her evidence that she had no understanding of the meaning or memory of the execution of the Declaration of Trust is corroborated by her behaviour. They are relationships ‘where one party is legally presumed to repose trust and confidence in the other’.24 As Lord Nicholls put it:25. Effects. If undue influence is proved in a contract, the innocent party is entitled to set aside the contract against the defendant, and the remedy is rescission. I am not satisfied that they were. No such requirement existed in relation to actual undue influence. [72]         The plaintiffs say that there are number of facts relevant to the question of whether the potential for domination existed in the relationship between Gloria and Elizabeth: (a)      While Arthur was alive, Elizabeth relied on him to manage their financial affairs; (b)      After Arthur’s death, Gloria began assisting her mother with the same sort of things, looking after investments, doing her tax returns; (c)      After Arthur’s death, Elizabeth relied on Gloria for advice and information; (d)      In the spring of 2001, Elizabeth was spending a significant amount of time with Gloria; (e)      Elizabeth told Ms. Iverson that Gloria was always there to help her; (f)       Ms. Chelle observed that Elizabeth admired her daughter and relied on her daughter’s judgment and opinion; (g)      Elizabeth brought letters she had written to Max and Nathan to Gloria to see how she felt about them; (h)      Nathan testified that when Elizabeth returned from visiting Gloria she was upset about things between herself and Nathan; (i)       Gloria says that in the spring of 2001 she was concerned about her mother and her mother’s best interests. [73]         The plaintiffs submit that these factors show a relationship between Gloria and Elizabeth that gives rise to a presumption of undue influence. In the absence of evidence that the elderly farmer had exercised an independent and informed judgment, the relevant transaction was set aside. At this time, Gloria became: (i)       Initially the primary (and possibly only) beneficiary under her mother’s February 9, 2001 will; (ii)      Later, a joint owner of her mother’s home, with the home being gifted to her on her mother’s death; and. Undue influence most commonly occurs when a more powerful party exerts its influence over a less powerful party in order to achieve its desired … If such influence is established, then the court should set the agreement aside irrespective of whether it was to the actual or potential benefit of the claimant. Facts: Mr Bundy was an elderly farmer. The presumption need only be rebutted on a balance of probabilities. If it was clear, as it seemed to be in Morgan, that the risks involved were, as far as the claimant was concerned, worth running in order to obtain the potential benefits of the transaction, and there was no other indication of unfairness, then the courts should be quite prepared to enforce it. It operates largely through the application of presumptions. This does not imply any necessary impropriety on the part of the influencer. [92]         What constitutes undue influence? It can operate for the first time in connection with the transaction which is disputed. Actual undue influence. She had been visited at home by the bank manager and had thereupon signed the charge. In my view, the relationship was one in which there was a potential for domination. There was a presumption that the wife only transferred her interest to the husband because of undue influence and evidence proved that the transfer resulted from actual undue influence. [35], In probate law, undue influence is generally defined as a testator's loss of free agency regarding property disposition through contemporaneous psychological domination by an advisor, resulting in an excessive benefit to the advisor. In that situation: the creditor will be affected by any undue influence used by the debtor; the transaction may be voidable on that basis; the creditor can protect itself by insisting that the surety receives legal advice before entering into the transaction. Where actual undue influence is proved it is not necessary for the claimant to prove that the transaction would not have been entered into but for the improper influence. Although the visit when the charge was increased was the first occasion on which this particular assistant manager had met Mr Bundy, he was, as Sir Eric Sachs put it ‘the last of a relevant chain of those who over the years had earned or inherited’ Mr Bundy’s trust and confidence.47 The charge over the house was obviously risky given the precarious state of the son’s business. It will then be up to the alleged influencer to show that the other party acted without being affected by such influence. Even where a relationship does not fall into one of the categories listed in the previous section, it may in fact have developed in a way which indicates that one person is in a ‘dominant’ position over the other. It includes . English courts, however, have tended to emphasise the wrongdoing of the stronger party in undue influence cases, though it cannot be said that their approach is consistent, and there are undue influence cases which indicate that such wrongdoing is not an essential element.4 The issue is whether the concept is ‘claimant-focused’ or ‘defendant-focused’.5 If it is claimant-focused, then what matters is whether the claimant acted autonomously in entering into the contract; if it is defendant-focused, then what matters is whether the defendant has deliberately taken advantage of the claimant’s weaker position. [71] The plaintiffs say that to trigger a presumption of undue influence, the court must first consider whether the potential for domination is inherent in the nature of the relationship itself. This requires the dominant party to establish that the second party "knew and understood what he or she was doing, and that he or she was acting independently of the influence of the dominant party". She argues, however, that the evidence of Ms. Iverson reveals that the merits were understood by Elizabeth. The second is where the relations between the donor and donee have at the time of or shortly before the execution of the gift been such as to raise a presumption that the donee had influence over the donor. Assuming the time lapse had not occurred in this case, was there anything that the religious order could have done to prevent any gift being recoverable on the basis of undue influence? Alongside it must be placed the equitable doctrine of ‘undue influence’. [29] Deane J in Commercial Bank of Australia Ltd v Amadio said 'Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party'. The fact that the claimant placed trust and confidence in the defendant in relation to the management of the claimant’s financial affairs will have to be proved by evidence.42 If that is done, then any disadvantageous transaction entered into at the instigation of the dominant party will constitute prima facie evidence that the trust and confidence of the claimant has been abused.

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