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Lessons to be learned concerning presumed undue influence

by Adam Draper

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Undue influence doesn’t just apply when challenging a will, but to any legally binding arrangement entered into by multiple parties. The recent High Court decision by Master Bowles in Paull v Paull [2018] EWHC 2520 (Ch) to set aside a property transfer from an elderly father to his son for presumed undue influence is one such example.

The facts behind the case

In this case, Neville Paull (the claimant) was 67 years old at the time of the transaction and he was thought to be frail and vulnerable. The defendant was his son, Bradley Paull. In 2010 Neville transferred his home to Bradley. Neville maintained that he only transferred the property on the basis that his son Bradley agreed he would ‘look after the property’ for him and allow his father and partner Linda to remain in the property for their lifetimes.

Bradley argued that his father had agreed to transfer the property because he wanted to ensure that no part of his property went to Linda's children from an earlier relationship and he wanted to avoid the property being sold by the local authority to pay care home fees.

However, when faced with the prospect of having no home, Neville subsequently sought to have the transaction set aside on the grounds that his son had unduly influenced him to make the transfer.

The basis for presumed undue influence

The principles regarding claims for undue influence can be traced back to 1887 and the case of Allcard v Skinner (1887) 36 Ch D 145. That judgment outlined two requirements to be satisfied in order to prove a claim of presumed undue influence:

  1. 'A reposes trust and confidence in B and is therefore predisposed to follow B’s direction
  2. The transaction calls for explanation in that it cannot be reasonably accounted for by reference to the nature of the relationship between A and B’

If the presumption of undue influence is established, the defendant must then rebut that, otherwise the transaction is declared void.

Evidence for an informed, free and independent decision

In Paull v Paull, the High Court found that both requirements were satisfied and it could be presumed that Neville had been unduly influenced in making the transfer. Evidence showed that following the transaction, Neville had apparently delegated significant control over his documentation to Bradley. There was nothing to suggest this had been the case before the transaction. 

Neville stated in oral evidence that idea for the transfer had been Bradley’s, not his. The transaction also undoubtedly called for explanation, given that its result was to deprive Neville and his partner of their sole residence and leave them with less than half of their capital assets.

The quality of independent legal advice

The burden of proof consequently fell to Bradley to establish that the transaction was entered into as a result of a free and independent decision by Neville. Bradley relied on the fact that the solicitor acting in the transaction had advised Neville on the consequences of the transfer.

However, Master Bowles, on the authority of Pesticcio v Huet [2004] EWCA Civ 372 and Thompson v Foy [2010] P&CR 16, found that the solicitor’s involvement was insufficient to dissipate or negate the effects of Bradley’s undue influence and therefore the transaction ought to be set aside.

The basis of the Court’s ruling

The Court’s reasoning in reaching this conclusion was based on the fact that the solicitor had failed to ensure Neville truly understood the nature of the transaction and the fact that it was irrevocable (i.e. that if agreed it could not be changed or reversed). In an interview with Neville, the solicitor merely read the law firm’s note on the subject – a document full of impenetrable legalese jargon inaccessible to laypeople - and certainly did not explain with any clarity that the transfer was irrevocable.

Neville could barely understand what he was being told by his lawyer, let alone take pause and reconsider his decision. Furthermore, the solicitor had not taken steps to ensure that Bradley was not in proximity to Neville when that advice was given. The court was clear that a solicitor in these circumstances is under a significant obligation to ensure that the claimant was making the decision freely and independently.

Vital to get and give clear and cogent legal advice

It was the solicitor’s failure in this case to take reasonable steps to ensure that Neville was independently advised that clinched the decision to set aside the transfer. Just how crucial is the requirement for cogent, clear, independent legal advice can be seen in the similar case of Brindley v Brindley [2018] EWHC 157 (Ch), where the outcome was very different.

In Brindley, the transaction was not voidable for undue influence because the court found that the solicitor had indeed ensured that the claimant received independent advice before the transaction was entered into, and therefore his decision was freely and independently made.

Adam Draper, a partner at Shoosmiths and expert in challenging a will and undue influence claims, comments:

‘There are clear lessons here for all parties. It’s essential that the client isn’t afraid to question any legal advice they receive and insist upon clarification if they don’t fully understand what has been said. Equally, solicitors should be mindful that, in a case where the claimant is particularly susceptible to influence and appears to have reposed a lot of trust in the defendant, it is crucial that the advice they give is clear, comprehensive and, significantly, independent from the defendant’s input.’

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