Aged parent and son joint owners of house – Parent executing deed giving his share to son – No independent legal advice – Claim to set gift aside for undue influence – Whether parties in confidential relationship at material time
The plaintiff was born in 1905 and at all material times until 1991 owned two houses in Littlehampton. In the 1980s, during protracted divorce proceedings with his second wife, the plaintiff grew much closer to the defendant who was his son by his first wife. In order to meet a lump sum award in his wife’s favour, the plaintiff borrowed £50,000 in 1987 from the defendant, who took a charge over one of the houses. In 1990 the defendant arranged for his bank to lend the plaintiff £20,000 so that he could satisfy a claim made by the children of his second marriage. In November 1991 both parties, using a solicitor well known to the defendant, acted together in selling both houses and applying £65,000 of the proceeds towards the purchase of another house, Andrews Close, which was conveyed into their joint names. On December 10 1991 the parties signed a letter prepared by the same solicitor declaring that they held Andrews Close as beneficial joint tenants. On July 21 1992 the plaintiff executed a deed, again drawn by that solicitor, which purported to make a gift of his share of Andrews Close to the defendant. On January 24 1994 the plaintiff, having switched his affections to the children of his second marriage, brought an action to set aside the gift on the grounds that a confidential relationship had existed between the parties at all material times, thus raising a presumption that the defendant had exercised undue influence. The judge accepted that the plaintiff had looked to the defendant for support over a very stressful period and had been content to dispense with independent legal advice. Note was also taken of medical examinations in 1993 and 1995 disclosing instances of memory failure attributable to old age. The action was nevertheless dismissed, the judge having found that, while the defendant was of a gentle disposition, the plaintiff had not ceased to display a strong-willed and obstinate approach towards his handling of financial affairs. The plaintiff appealed.
Held The appeal was dismissed.
1. It was well-established that an appellate court would not interfere with a finding of fact unless it was plainly wrong, especially in cases of family discord. The personalities of the parties was an important factor in deciding whether the relationship was one of confidence and the judge, having seen and heard the witnesses, could not be criticised for the emphasis placed on that factor.
2. While the relationship of aged parent and child did not of itself give rise to a relationship of confidence, it nevertheless raised a serious possibility of undue influence, thus calling for a meticulous examination of the facts: see Avon Finance Co Ltd v Bridger [1985] 2 All ER 281; Langton v Langton [1995] 2 FLR 890. The judge had not failed to perform that exercise.
3. The judge had correctly observed that if such a relationship had been established then, given the lack of independent advice, the respondent would have failed to discharge the burden of showing that no undue influence was exercised.
Matthew Scott (instructed by Warner Goodman & Street, of Southampton) appeared for the appellant; Timothy Sisley (instructed by Marsh Ferryman & Cheale, of Worthing) appeared for the respondent.
