(i) Establishing Actual Undue Influence

To establish actual undue influence the claimant must show that a number of conditions have been satisfied. These conditions were identified by the Court of Appeal in Bank of Credit and Commerce International SA v Aboody^[1]

• (1) The defendant^[2] must have had the ability to influence the claimant. This will require evidence that the relationship between the parties was such that the claimant trusted and had confidence in the defendant. This is illustrated by Morley v Laughnan,⁴¹ where it was held that the deceased had become completely dependent on the defendant, who had converted the deceased to become a member of an exclusive and secluded religious sect, known as ‘The Exclusive Brethren’. The deceased was found to have been particularly susceptible to influence, being impressionable, physically weak, highly strung, and morbidly religious. The ability of the defendant to influence the deceased was so extreme that he became the deceased’s temporal and spiritual adviser and even regulated his diet and medicine.
• (2) The defendant must have exercised this influence over the claimant. This will require evidence that the defendant had actually dominated the claimant. This was described by Sir Eric Sachs in Lloyd’s Bank Ltd v Bundy^[3] as arising ‘when the will of one person has become so dominated by that of another that... “the person was the mere puppet of the dominator’”. It was, however, emphasized in Aboody that undue influence did not necessarily depend on proof of some positive act of coercion or pressure being exercised over the claimant; the influence can be more subtle.
• (3) The influence must have been exercised unduly,^[4] as will be the case where the defendant has victimized the claimant in some way, for example by forcing, tricking, or misleading the claimant into parting with assets or agreeing to part with assets,^[5] such as through the deliberate non-disclosure of relevant informa- tion.^[6] It is not necessary to prove that the defendant intended to injure the claimant. A wide variety of facts can be taken into account to determine whether influence has been exerted unduly, including the vulnerability of the claimant and the forcefulness of the defendant’s personality.^[7] In BCCI v Aboody^[8] it was recognized that the exploitation of another’s trust to procure them to enter transactions without proper consideration or explanation would involve the exercise of undue influence, because the influenced party’s mind was ‘a mere channel through which the will of [the other] operates’. The exertion of influence will also be undue where the defendant deliberately exploited his position of influence to gain an advantage at the expense of the claimant,^[9] such as the making of an excessive profit.
• (4) The undue influence must have caused the claimant to enter into the relevant transaction, and therefore it must have been operating at the time the transaction was entered into.^[10] Although it was once suggested that the test of causation is that the influence was a ‘but for’ cause of the claimant entering the transaction,^[11] it has since been recognized that it is sufficient that the undue influence was an operative cause of the claimant’s action, by analogy with the test of causation for fraudulent misrepresentation^[12] since undue influence can be considered to be a form of fraud.^[13] Consequently, a transaction can be avoided for undue influence even if the claimant would have entered into the contract had the undue influence not been exercised. It is not necessary to show that the defendant was aware that he or she had exerted undue influence on the claimant.^[14]

• [1] [1990] 1 QB 923, 967. The Court of Appeal characterized actual undue influence as ‘Class 1’, todistinguish it from presumed undue influence, which was characterized as ‘Class 2’. The House of Lords inRoyal Bank of Scotland plc v Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773 made no reference to thisnumerical characterization and the preferable view now that there is only one ground ofundue influence, albeitthat elements of the ground may be established with reference to presumptions. See p 257, above.
• [2] Or, where relevant, a third party who induced the claimant to transact with the defendant. See p 269, below. 41 [1893] 1 Ch 736.
• [3] [1975] QB 326, 342. 43 Dunbar Bank pic v Nadeem [1998] 3 All ER 876, 883 (Millett LJ).
• [4] 44 See Aiicard v Skinner (1887) 36 Ch D 145, 181 (Lindley LJ).
• [5] 45 Hewett v First Pius Financial pic [2010] EWCA Civ 312, [2010] 2 FLR 177 (non-disclosure of affair
• [6] to wife).
• [7] Daniel v Drew [2005] EWCA Civ 507; [2005] WTLR 807, [32] (Ward LJ).
• [8] [1990] 1 QB 923, 969.
• [9] Royal Bank of Scotland v Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773, [9], (Lord Nicholls).
• [10] Thompson v Foy [2009] EWHC 1076 (Ch), [2010] 1 P and CR 16, [100] (Lewison J).
• [11] BCCI v Aboody [1990] 1 QB 923, 971 (Slade LJ). 51 See p 187, above.
• [12] 52 CIBC Mortgagesplc v Pitt [1994] 1 AC 200, 209 (Lord Browne-Wilkinson); UCB Corporate Services Ltd v
• [13] Williams [2002] EWCA Civ 555, [2003] 1 P and CR 12, [86] and [91] (Jonathan Parker LJ); UCB Group Ltd vHedworth [2003] EWCA Civ 1717, [77] (Jonathan Parker LJ); Hewett v First Plus Financial Group pic [2010]EWCA Civ 312, [2010] 2 FLR 177, [34] (Briggs J).
• [14] Papous v Gibson-West [2004] EWHC 396. 2 See Hart v O’Connor [1985] AC 1000, 1018, PC.