undue influence Flashcards
Biehler
where D gas caused P’s judgement to become clouded by domination resulting in P entering a disadvantageous transaction
Allcard v Skinner; Lindley MR
the purpose of the doctrine is not to protect person from their own frolly but to prevent them being victimised by others
Barclays Bank PLC V O’Brien (onus of proof)
onus of proving actual UI is on the party seeking to have the contract set aside
Carroll v Carroll
the transaction was not the result of the free exercise of the will of the donor
Smyth
Class 2B arises where there is no obvious imbalance of power but on further review of the facts there is
McGonigle v Black
elderly farmer relied on nephew (trust & confidence), later transferred farm to him (manifestly disadvantageous) w/o seeking independent legal advice
Biehler (IA)
IA will generally rebut the presumption but does not necessarily mean that P was exercising his own free will
Prendergast v Joyce
advice must be such that a competent advisor would give if acting solely in the interests of the donor, the advice must be tailored to ensure the party understands it
Wright v Hodgkinson
for IA to rebut presumption, it must be shown that it led to a decision based upon full and free informed thought
Carroll v Carroll
father transferred property to his son who died, daughters sought to have property returned from widow on the basis son executed UI over father, SC held presumption arose but not rebutted mainly because father and son used same solicitor so no IA
Barclays Bank v O’Brien (TP)
a bank is put on inquiry whenever a wife offers to stand surety for her husbands debt
Royal Bank of Scotland v Etridge
bank is put on inquiry in every case where the relationship is non-commercial
Biehler (Etridge)
Etridge imposes a lower threshold of proof in relation to the circumstances in which a bank will be put on inquiry
UB v de Kretser
well established that the fact parties are husband and wife does not give rise to a presumption of UI
UB v Fitzgerald
bank not automatically on inquiry where it was aware of facts showing there was a non-commercial element to the guarantee, only where bank has actual or constructive knowledge of UI are they put on inquiry
UB v Roche; Clarke J
not accepting Etridge, bank is on inquiry where it aware of facts which suggest, or ought to suggest, there may be a non-commercial element to the guarantee. Where bank is aware of no active involvement of the guarantor, the personal relationship between the parties emerges as a more significant factor
Clarke J on Fitzgerald
F, which placed no obligation on the banks to ascertain whether a party offering the guarantee was doing so freely and fully provided insufficient protection to vulnerable sureties
ACC Loan Management v Connolly
CA held since the guarantor could not raise the defence of UI, he could not argue the lender should have ensured he obtained independent legal advice or freely entered into the guarantee
UB v de Kretser
court rejected guarantors, borrower’s wife, claim that she provided guarantee under UI from husband, held 1% share in company, no evidence of UI to put bank on inquiry as she was a business woman in her own right
BOI v Curran
adopted de Kretser, guarantee provided by mother in relation to liabilities of her sons company, CA held no evidence that guarantor had been subject to UI therefore no req for bank to ensure she understood extent of the nature of the guarantee, signed statement saying she did not wish to obtain IA, also director and secretary of company for years
ACC Loan Management v Connolly (reasonable steps)
held declaration that surety obtained independent legal advice was sufficient
Barris v Ennis
held it is generally sufficient if a bank insisted influenced party get independent advice before executing agreement
Biehler
observes while a declaration from the surety that she has gotten independent legal advice seems to satisfy this criterion, questions whether something less such as a recommendation to get advice or signing a waiver is sufficient
Tynan v Co Register
Laffoy J followed Etridge stating it would lead to ‘utter chaos’ if a solicitor letter could not be relied upon however cautioned if solicitor does not provide the statement, then the bank cannot reasonably be satisfied the partner’s agreement has been properly obtained
