(ii) The Rationale of Undue Influence as a Ground of Restitution
Undue influence constitutes a ground of restitution because the effect of the abuse of the defendant’s relationship of influence with the claimant is that the claimant’s decision to transact with the defendant cannot be regarded as freely exercised.[1] This was well expressed by Eldon LC in Huguenin v Baseley, [2] who said that the ‘question is not whether [the claimant] knew what she was doing, had done, or proposed to do, but how the intention was produced’. Consequently, where the claimant has been induced to transact with the defendant by undue influence, the claimant’s intention to enter into the transaction can be regarded as vitiated. The policy behind undue influence as a ground of restitution is to protect the vulnerable from exploitation by those who are in a stronger position than themselves,[3] rather than a policy to set aside transactions on the ground of the claimant’s folly, imprudence or lack of foresight.[4] The essence of undue influence was elegantly summarized by Ward LJ in Daniel v Drew:[5]
in all cases of undue influence the critical question is whether or not the persuasion or the advice, in other words the influence, has invaded the free volition of the donor to accept or reject the persuasion or advice or withstand the influence. The donor may be led but she must not be driven and her will must be the offspring of her own volition, not a record of someone else’s. There is no undue influence unless the donor if she were free and informed could say ‘This is not my wish but I must do it’.
- [1] Lindley LJ in Allcard v Skinner (1887) 36 Ch D 145, 182. See also Royal Bank ofScotland plc v Etridge (No 2)
- [2] [2002] 2 AC 773, 795 (Lord Nicholls); Hammond v Osborn [2002] EWCA Civ 885, [2002] WTLR 1125, [60](Ward LJ); Hurley v Darjan Estate Co plc [2012] EWHC 189 (Ch), [2012] 1 WLR 1782, [40] (Miss GeraldineAndrews QC). 24 (1807) 14 Ves Jun 273, 300; 33 ER 526, 536.
- [3] Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773, 795 (Lord Nicholls).
- [4] Allcard v Skinner (1887) 36 Ch D 145, 183 (Lindley LJ).
- [5] [2005] EWCA Civ 507, [2005] WTLR 807, [36].
