Drew v Daniel
Court of Appeal
Citations: [2005] EWCA Civ 507.
Facts
The claimant was elderly woman who was trustee of the family trust. She claimed that her nephew had gotten her to resign from the family trust by undue influence. The claimant had been refusing to talk business matters with her nephew for a while. When the nephew finally secured a meeting with her he threatened to take her to court if she did not resign. He took steps to deter her from seeking legal advice or talking to others who might advise her. A neighbour who interrupted the meeting saw that the claimant was clearly in distress, but decided not to intervene. A doctor saw her two days after the event and described her as ‘confused’.
At trial, the judge concluded that the resignation was procured by undue influence. He relied on the fact that the claimant was confrontation-averse, naïve in business, eager to please and vulnerable, and the fact that the nephew had tried to avoid his aunt seeking legal advice. In the circumstances, it appeared as if the nephew had tried to take advantage of his aunt.
The nephew appealed. He argued that the judge had been incorrect to take into account her vulnerability because this confused actual and presumed undue influence. Instead, the judge could only find undue influence if there had overtly been acts of improper pressure or threats.
Issue(s)
- Had the judge confused the principles of actual and presumed undue influence?
Decision
The Court of Appeal upheld the finding of undue influence. The trial judge was correct to treat vulnerability as relevant to the question of actual undue influence in this case. This was because the claimant’s vulnerability had been actively exploited by the nephew and this was relevant to whether his positive conduct was unconscionable. There was sufficient evidence to find that the nephew had acted in an overtly coercive manner.
This Case is Authority For…
Ward LJ explored the distinction between actual and presumed undue influence:
‘In the broadest possible way, the difference between the two classes is that in the case of actual undue influence something has to be done to twist the mind of a donor whereas in cases of presumed undue influence it is more a case of what has not been done namely ensuring that independent advice is available to the donor…If there is no presumed undue influence then there is no need to inquire what prompted the relevant decision taken by the donor but if actual influence is under consideration the enquiry seems equally apposite.’
However, Ward LJ noted that for both kinds of undue influence, ‘the critical question is whether or not the persuasion or the advice, in other words the influence, has invaded the free volition of the donor to accept or reject the persuasion or advice or withstand the influence’
Other
Ward LJ stated that it is possible for a threat of litigation to ground undue influence or duress in some cases, though it would be rare and would normally need to be combined with other factors.
