LAW 2502 Lecture Notes - Lecture 5: Owen Dixon, William Deane, Freemasonry
23 May 2018
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BACKGROUND
1. Equity may set a contract aside if it can be
shown that the relationship between the parties
is tainted by undue influence U/I
2. U/I acts to prevent the unconscientious effects
of inequality. focusses on the relationship
between the parties and asks whether the
nature of the relationship impaired the quality
of consent
3. purpose = “to protect people from being
forced, tricked or misled in any way by others
into parting with their property”
a. even when the proposal to enter a contract/
make gift came from the weaker party
PQ
Basis to activate doctrine of U/I is unsettled
1. Ascendancy- Dixon J in Johnson v Buttress
2. When the will of the innocent party is not
independent and free Mason CJ in Amadio
3. When there is an issue with the quality of
consent Deane J in Amadio
Categories of UI
CLASS 1 = ACTUAL OR EXPRESS UI
*no special relationship
1. ELEMENTS BCCI SA v Aboody
a. Person relying on the plea of actual UI
must show
i. other party to the transaction (or
someone who induced the transaction
for his own benefit) had the capacity to
influence the complainant; and
ii. that the influence was exercises; and
iii. that its exercise was undue; and
iv. that its exercise brought about the
transaction
2. indicia of UI
a. focus on nature and extent of influence
b. Necessary to show overt act by which
influence was exercised Evans v Lloyd
c. Particular situation, or deliberate
contrivance of stronger party
i. had actual influence over the mind of
the alienor (weaker party) - cannot be
considered his free act Johnson v
Buttress
d. unfair and improper conduct; coercion
from the outside, some overarching
cheating, generally some personal
advantage over weaker Allcard v Skinner
3. once established by P, onus is upon D to
rebut the presumption that the transaction
was entered into by the other party as a result
of influence
CLASS 2 = PRESUMED UI
* special relationship gives rise to rebuttable
presumption that the transaction was obtained as a
result of the stronger party unduly influencing the
weaker
*presumption arises upon proof of special
relationship
*effect = weaker party can seek equitable relief,
unless presumption is rebutted by stronger party
Certain established relationships (class 2A)
1. Traditional relationships giving rise to the
presumption that any transaction favouring the
stronger party was brought about by the undue
exercise of their influence
a. parent/ child
b. guardian/ ward
c. spiritual advisor/ follower
d. client/ solicitor
e. doctor/ patient
f. fiancé/ fiancé (not husband and wife- but
see below)
2. husband and wife
** use when family home is sued as security
for H’s debts
STEP 1: where W is a guarantor, the Yerkey v
Jones principle, affirmed by HCA in Garcia
applies.
STEP 2: W must be a volunteer- obtained no
financial benefit form the transaction/
performance guarantee obligations
STEP 3: strangers (creditors) who deal
through the H with the W in a transaction
operating to the Hs advantage may, be affected
by any equity which arise between H and W
from H’s conduct
• No presumption of UI. Differs from the
doctrine of unconscionable dealing
propounded in Amadio
• Relationship of H to W not one of UI, but
gives rise to opportunities for wife to be
unduly influenced to enter C*s of
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Buttress: unfair and improper conduct; coercion from the outside, some overarching rebut the presumption that the transaction was entered into by the other party as a result of influence. * special relationship gives rise to rebuttable presumption that the transaction was obtained as a result of the stronger party unduly influencing the weaker. *effect = weaker party can seek equitable relief, unless presumption is rebutted by stronger party. ** use when family home is sued as security for h"s debts. Step 1: where w is a guarantor, the yerkey v. Jones principle, affirmed by hca in garcia applies. Step 2: w must be a volunteer- obtained no financial benefit form the transaction/ performance guarantee obligations. Garcia held yerkey isn"t based on subservience/ economic inferiority of women; nor their vulnerability/ exploitation when emotionally involved. Relevant factor is undue influence in a relationship of trust and confidence: w has prima facie right to have it set aside because special equity protects her.
