Hart and another v Burbidge and others; Samways and others v Burbidge and others

Will – Gift of land – Undue influence – Sons and siblings of deceased bringing separate proceedings against first defendant daughter of deceased and her husband alleging undue influence by defendants on deceased for sale of deceased’s properties and purchase of home for defendants – Whether first defendant rebutting presumption of undue influence – Whether second defendant husband liable for any undue influence exercised by first defendant – Claims allowedThe deceased died in November 2008, having made a will in April 2007 leaving gifts of two properties to her two sons and three surviving siblings (the claimants). Following the deceased’s death, the claimants brought two sets of proceedings against the defendants (the deceased’s daughter and her husband) on the ground that their actions had caused them to lose their gifts under the 2007 will and reduced the residue. They relied on both actual and presumed undue influence.The claimants complained that the first defendant daughter had exerted undue influence on the deceased in connection with a series of transactions carried out in 2008, by which the deceased had transferred monies to the defendants to enable them to purchase in their joint names a property called “Little Manor”, in which they were to live with the deceased. The deceased had lived at Little Manor briefly but had died suddenly and unexpectedly shortly after moving in.The claimants contended that the effect of that undue influence was to adeem the properties in the deceased’s will and to diminish the size of the residue. The second defendant was sued as a knowing recipient of the benefit of the transactions in that he became, with the first defendant, an equal co-owner of Little Manor. The claimants alleged that the second defendant, in his capacity as the first defendant’s husband, had had knowledge of her undue influence and was liable to account as a constructive trustee for the benefits he had received in relation the estate.Held: The claims were allowed. (1) The distinction between actual and presumed undue influence lay merely in the manner of its proof. In both cases, it had to be shown that the influence in question led to the making of the impugned transaction (frequently a gift) and that it was undue in the sense that the transaction was not the result of the free exercise of an independent will on the part of the person at whose expense the transaction was made. It was for the person complaining of actual undue influence to prove affirmatively that the transaction in question was caused by the influence alleged. In the case of presumed undue influence the court’s willingness to intervene to reverse its effect was triggered by proof on a balance of probabilities of essentially two matters, the burden of proof again lying on the person complaining of the undue influence. The first was that the person at whose expense the impugned transaction was made reposed trust and confidence in the recipient of the benefit conferred by the transaction or that the latter acquired ascendancy or control over the former. The second was that the transaction was of such a size or nature as to call for an explanation as being not readily explicable by the relationship of the parties. Once that stage had been reached the burden of proof shifted to the person seeking to uphold the transaction to demonstrate on a balance of probabilities that the transaction was the result of the free exercise by the transferor of an independent will: Royal Bank of Scotland plc v Etridge (No 2) [2001] UKHL 44; [2001] PLSCS 216; [2001] 43 EG 184 (CS) applied; Daniel v Drew [2005] EWCA Civ 507 considered.(2) Actual undue influence comprised overt acts of improper pressure or coercion such as unlawful threats and there was much overlap with the principle of duress as that principle had subsequently developed. The inquiry in the case of presumed undue influence was more subtle and the evidence bearing on the influence and its effect was likely to be more indirect. The transaction had not simply to be one that called for an explanation but one where the explanation was not forthcoming. Only then did the burden shift. Once the burden of proof had shifted to the person seeking to uphold the transaction, that person had to show that the transaction was a result of the free exercise by the transferor of an independent will. The extent of that task was likely to depend on the strength of the matters which had caused the shift in the burden of proof: Pesticcio v Huet [2004] EWCA Civ 372; [2004] PLSCS 83 and Turkey v Awadh [2005] EWCA Civ 382; [2005] PLSCS 49 applied.(3) At the end of the day it was for the first defendant to persuade the court that her mother was acting fully independently of undue influence when she entered into the impugned transactions. The court was not persuaded that she had done so and was not willing to give the first defendant the benefit of any doubts by accepting her protestation that the way the matter was structured had resulted from the exercise by the deceased of an independent will in the full knowledge of what she was doing and why. Accordingly, the first defendant had failed to rebut the presumption of the exertion by her of undue influence over her mother in respect of the impugned transactions. (4) Furthermore, the second defendant had shared equally with the first defendant in the benefits which resulted from her undue influence over her mother with full knowledge of the fact that the two of them were in a relationship of influence. Therefore he was obliged, to the same extent as the first defendant, to restore the deceased’s estate to the position it would have been in if the impugned transactions had not occurred.Charles Auld (instructed by Withy King LLP) appeared for the claimants in the first case; Rosanna Foskett (instructed by Wilsons Solicitors LLP) appeared for the claimants in the second case; Paul Emerson (instructed by Blanchards Bailey LLP) appeared for the defendants.Eileen O’Grady, barrister