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1928 Supreme(SC) 62
Privy Council
Atkin, Viscount Sumner, Justice Chancellor, JJ.
Inche Noriah binte Mohamed Tahir -Appellant
Versus
Shaik Allie bin Omar bin Abdullah Bahashuan -Resopndent
Privy Council Appeal No. 64 of 1927
Decided On : 15-10-1928
Drew, Nisbet, Ryde, Ponsonby, Tamplin Jospeh, H.F.F. Greenland, W. Greene, N.L.C. Macaskie, Loughborough, C.E.E. Jenkins
A presumption of undue influence arises in relationships of trust and dependence. To rebut this, the donee must prove the gift was a spontaneous act of free will. Independent legal advice only rebuts the presumption if given with full knowledge of all relevant circumstances in the donor's sole interest.
Headnote:(A) Undue Influence - Presumption of Influence - Voluntary Gifts - Where the relationship between a donor and donee is such that it raises a presumption of influence, a voluntary gift may be set aside unless it is proved that the gift was the spontaneous act of the donor acting under circumstances which enabled the exercise of an independent will and which justifies the conclusion that the gift was the result of a free exercise of the donor's will.
(B) Rebutting Presumption - Independent Legal Advice - Independent legal advice is a primary means of rebutting the presumption of undue influence, but it is not the exclusive method. To be sufficient, such advice must be given with a knowledge of all relevant circumstances and must be such as a competent and honest adviser would give if acting solely in the interests of the donor.
(C) Sufficiency of Advice - Advice is insufficient to rebut the presumption if the adviser is unaware of material facts, such as the fact that the property being gifted constitutes practically the whole estate of the donor, or if the adviser fails to ensure the donor fully appreciates the consequences of the transaction or is not informed of more prudent alternatives to achieve the same result.
Facts of the case:
An elderly, illiterate woman, who was infirm and relied entirely on her nephew by marriage for her domestic needs and the management of her affairs, executed a deed of gift transferring nearly her entire estate to him. The donor lived in isolation and was completely dependent on the donee. A lawyer prepared the deed after receiving instructions primarily from the donee, read the document to the donor, and confirmed her voluntary signature, although the lawyer was unaware of the total value of the estate and did not advise the donor on the use of a will.
Findings of Court:
The relationship between the parties was sufficient to raise a presumption of undue influence. The evidence provided by the donee, including the legal advice received by the donor, was insufficient to rebut this presumption because the adviser lacked full knowledge of the material facts and did not ensure the donor fully appreciated the consequences of the gift.
Issues: Whether the relationship between the donor and donee raised a presumption of undue influence and, if so, whether the provision of legal advice was sufficient to rebut that presumption.
Ratio Decidendi: A presumption of undue influence arises when one party has gained complete ascendancy over another due to a relationship of trust and dependence. To rebut this, the donee must prove the gift resulted from the free exercise of an independent will. While independent legal advice is a key tool for rebuttal, it must be comprehensive, based on all relevant facts, and provided solely in the donor's interest to satisfy the court that the donor acted independently.
Result: Appeal allowed.
Legal Category Hierarchy
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equity
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undue influence
- presumption of undue influence
- rebuttal of presumption
-
undue influence
Lord Chancellor.:-
In this case the appellant brings an action against the respondent claiming that a deed of gift, dated 18th April 1922, and made between the appellant and respondent, should be set aside on the ground that the relationship between the parties at the time when the deed was executed was such as to raise a presumption of undue influence against the respondent, and that that presumption had not been rebutted. The respondent denies that the relationship between the parties was such as to raise any presumption, and alleges that if there were such a relationship, the presumption was rebutted. The trial Judge decided in favour of the appellant; but his judgment was reversed by the Court of Appeal which held, by a majority, that there was no such relationship as raised any presumption of undue influence, and that if there were such presumption, it had been rebutted by the facts proved by the respondent. The facts leading up to the present action are as follows:
The appellant is a Malay woman, wholly illiterate and of great age. The respondent is of Arab birth, and is the nephew by marriage of the appellant. The appellant's husband died before the year 1902, leaving her a considerable amount of landed property. This property consisted of:
(a) Two pieces of leasehold land of an area of some 4,097 sq. ft., situate at Minto Road, in Singapore, and held by him at a rental of $2 per annum for a term of 99 years from October 1858.
(b) A house known as 104, Southbridge Road, Singapore, held for a term of 999 years at a rent of $1 per annum.
(c) Certain leasehold premises known as 1, 2 and 3, Minto Road, together with a small piece of land in McPherson Road, Singapore.
Shortly after her husband died, the appellant conveyed the whole of this estate to her daughter, Seetee Mariam, who was herself a widow and the sole surviving child of the appellant; and the appellant and her daughter then lived together at No. 2, Minto Road. The respondent came to Singapore about the year 1905, being then some twenty-three years of age. He went to live with his aunt, the appellant, and his cousin, Seetee Mariam, at No. 2, Minto Road. The respondent married in 1908, and brought his wife to live with him at this house. The respondent was entirely without means when he reached Singapore, and the appellant started him in business. At a subsequent date the respondent divorced his wife and remarried, and then went to live at No. 3, Minto Road, which he rented from Seetee Mariam at $10 a month. The two houses Nos. 2 and 3 Minto Road, adjoined one another and there was a through communication between the two, and the respondent saw the appellant daily.
From 1918 onwards the respondent collected the rents of her properties for Seetee Mariam. On 25th August 1921 Seetee Mariam died, and the appellant became entitled to the properties as her next of kin. On 12th September 1921, the appellant executed a deed appointing the respondent her attorney for the purpose of obtaining letters of administration of the estate of Seetee Mariam, to be granted to him for her benefit; on 23rd September 1921, letters of administration were granted to the respondent accordingly. On 1st March 1922, the respondent conveyed to the appellant the whole of the properties as the legal personal representative of Seetee Mariam, but he continued to collect the rents. The respondent had employed Messrs. Drew and Napier, a well-known firm of solicitors in Singapore, to act for him in regard to the grant of letters of administration. On 18th April 1922, the appellant executed a deed of gift whereby she gave to the respondent absolutely the whole of the properties referred to under (a) and (b) above, and left herself with a total gross income of about $30 a year. The properties comprised in the deed of gift had been sworn by the respondent for probate at $23,600 and No. 104, Southbridge Road was then let at a rental of $100 a month, and was assessed for rates at $250 a month. At the time when t
