Arora v Singh

An appellate court should not reverse findings of fact based merely on its own assessment of witness credibility or the probabilities. Reversal requires a demonstrated misuse of the trial judge’s advantages or a firm conclusion that the decision is wrong.

In undue influence cases, a relationship of trust and confidence and a disadvantageous transaction do not by themselves establish the presumption. The transaction must be one that is explicable only as having been procured by undue influence. A transaction is not so characterised where the evidence provides an independent and comprehensible explanation for it.

The claimant sought permission to appeal against the dismissal of her claim in the Central London County Court. She sought to set aside a legal charge over her home in favour of her daughter, said to secure £140,000.

The trial judge found that the daughter had provided earlier financial assistance, that the claimant understood the charge, and that she wished to protect the property from her son while acknowledging the debt to her daughter. The claimant challenged the factual findings and argued that undue influence should be presumed from the relationship of trust and confidence and the transaction’s alleged disadvantage.

The central issues were whether there was any realistic basis for interfering with the trial judge’s findings and whether the charge was liable to be set aside for undue influence.

The Court of Appeal unanimously dismissed the application for permission to appeal.

1. Findings of fact. The trial judge had heard six days of evidence, assessed the witnesses directly, and made clear findings accepting the daughter’s account. The appellate court could not reverse those findings merely because it might assess the evidence or probabilities differently. There was ample supporting evidence, and no misuse of the trial judge’s advantage. The principles stated in Owners of Steamship Singleton Abbey [1927] AC 16 were applicable.
2. Undue influence. Even assuming that trust and confidence had been reposed in the daughter, the transaction was not shown to be one that was explicable only on the basis that it had been procured by undue influence. The approach in Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449, replacing the former emphasis on a transaction being manifestly disadvantageous, was applied.
3. The evidence supplied an independent explanation for the charge. The claimant understood that it would secure money previously borrowed from her daughter and would place the property beyond her son’s reach. The absence of adequate independent legal advice did not compel a finding of undue influence where the trial judge was satisfied that the claimant understood and freely intended the transaction.
4. There was no realistic prospect of successfully challenging either the factual findings or the conclusion that the charge should not be set aside. Permission to appeal was therefore refused.

• Court of Appeal (Civil Division): application for permission to appeal against the order of the Central London County Court was dismissed.
• Central London County Court: His Honour Judge Dean QC dismissed the claimant’s application to declare the legal charge null and void.