Hammond v Osborn
Court of Appeal
Citations: [2002] EWCA Civ 885; [2002] WTLR 1125.
Facts
Osborn became friends with a 72-year-old pensioner. When the pensioner became hospitalised, she visited him regularly and began delivering him meals at home. The pensioner signed a third-party mandate authorising Osborn to draw money from his account. She made the occasional, small withdrawal.
After the pensioner was hospitalised again, he offered to gift his investments to Osborn. The value of these investments was £297,005. Osborn accepted, not alerting the pensioner to the size of the gift or the fact that it would leave him with much smaller savings (around £30,000).
The pensioner died, leaving everything to his next of kin – Hammond. Hammond challenged the validity of the gifts, alleging undue influence.
Issue(s)
- Was the gift of the investments voidable for undue influence?
Decision
The Court of Appeal held that the gift was voidable for undue influence. The pensioner had a relationship of trust and confidence with Osborn. This raised the presumption of undue influence. There were several factors indicating that this presumption was not rebutted, including:
- The pensioner had never received independent advice in relation to the gift;
- The size of the gift was never brought to his attention;
- The pensioner did not seem to have given any consideration to his future needs and how the gift might affect this;
- Osborn had failed to disclose the gift to the pensioner’s family and wrongly told them she had no papers relating to his estate.
This Case is Authority For…
Once a presumption of undue influence is raised, the burden is on person exercising influence to prove that the influenced person entered into the transaction of their own free will.
