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Turkey v Awadh [2005] EWCA Civ 382

Real property; test for presumed undue influence

(323 words)

Facts

A Saudi Arabian couple purchased a home in London with the help of a mortgage. They rented the house to the wife’s father who lived there with his wife. The young couple occasionally stayed there as well. At a later stage, the young couple agreed with the father that the house would be transferred to the father if he £93,000 immediately and discharged mortgage and other debts obligations for it. The father paid the requested sum and also discharged the mortgage and some debts. He demanded specific performance of the agreement – i.e. he wanted the house to be transferred to him.

Issue

The young couple argued that the father made several misrepresentations and that the deed should be void on the basis of his presumed undue influence on them.

Held

The Court of Appeal dismissed the young couple’s appeal. The first limb of presumed undue influence is to prove the existence of a relationship of trust and confidence between the parties. Once this is established, the second requirement is that the transaction should be of a nature that “calls for an explanation” – i.e. the transaction was such that a presumption of undue influence should be raised –, or that the transaction cannot be explained in any way other than undue influence. If the presumption is raised, it is for the person accused of exercising undue influence to prove that undue influence has not in fact been present. Showing that the agreement was entered into by the claimant at his/her own free will would usually discharge this burden. In this particular case, father and daughter clearly had a close enough relationship and the transaction was such that it “called for an explanation”. The father would have been unable to rebut a presumption of undue influence as the young couple had not had the benefit of independent legal advice. However, the transaction could be explained otherwise (in the given circumstances) so the father was entitled to the specific performance.


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