Daniel v Drew [2005] EWCA Civ 507
Trustee; undue influence; resignation
Facts
A Hampshire farm was left in trust to sisters Mss Drew and Daniel. The sisters gave away their interest to their respective sons. Thus Ms Drew’s son had half share, whereas Ms Daniel’s sons had one-quarter beneficial interest each. Ms Drew’s son acted as de facto trustee on his mother’s behalf. The farm was let to Ms Daniel’s elder son on terms that included an initial rent-free period. However, at some stage, Mr Drew wanted rent from his cousin and was prepared to go to arbitration. Mr Daniel claimed repairs in turn. As a compromise, the Daniel brothers would have bought out Mr Drew’s interest and Ms Drew would have retired as trustee. However, Mr Drew changed his mind at the last minute. The elder Daniel brother then threatened his aunt with court proceedings. Mrs Drew told her nephew that she thought she had already resigned. He pressed her to sign a written statement and later obtained her signature on a deed of retirement.
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Issues
Mrs Drew alleged that her nephew procured her resignation from the family trust by undue influence. The first instance judge nullified the resignation. Mr Daniel appealed on the basis that his aunt did not wish to continue in her position as trustee as it was against her interests.
Decision/Outcome
The Court of Appeal dismissed Mr Daniel’s appeal. Both the written memorandum and the deed of retirement were set aside. The court disagreed with him and held that Ms Drew would clearly have wanted to settle the identity of her successor before resigning and obviously wanted her son to replace her. However, Ms Drew was vulnerable and wanted to avoid legal confrontation at all costs. Mr Daniel, a forceful person, took advantage of this and obtained her signature in an unacceptable way. The key question in undue influence cases is whether the persuasion resulted in the invasion of the claimant’s free will. Leading is acceptable but the claimant must not be driven. Here, Ms Drew clearly was not acting of her own free will – as vulnerable as she was, she just wanted to avoid confrontation.
Source: Full judgment
