Randall v Randall

In a claim to set aside lifetime gifts, a rebuttable evidential presumption of undue influence arises where the donor placed trust and confidence in the donee in relation to financial affairs and the transaction calls for explanation. The donee must then show that the gift was made after full, free and informed thought. That requires understanding both the nature and the effect of the transaction, including its value, what the donor will retain and relevant fiscal consequences. Independent legal advice is important but is not conclusive. Its effect depends on its quality and circumstances. A family relationship does not, without more, create an irrebuttable presumption of influence. Applying those principles, all four gifts were set aside.

The claimant, Geoffrey Randall, sought to set aside four gifts of land made by his aunt, Madeleine Taylor, to the defendant, Philip Randall, her other nephew. The gifts were made between 1995 and 2000. The claim was principally based on presumed undue influence. The claimant also advanced alternative claims concerning unconscionable bargain and an express trust.

The central issues were whether the relationship and circumstances raised the rebuttable evidential presumption of undue influence, whether the presumption was rebutted by independent advice and other evidence, and whether the gifts were subject to a trust.

1. Disposition. The claimant established the rebuttable evidential presumption of undue influence in respect of each gift. The defendant failed to rebut it. Each gift was set aside.
2. The aunt-and-nephew relationship did not fall within the category in which influence is irrebuttably presumed. The claimant therefore had to prove that the deceased placed trust and confidence in the defendant in relation to the management of her financial affairs, and that each transaction was not reasonably accounted for by ordinary motives such as relationship, friendship or charity.
3. The court adopted the approach in Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773. The issue was one of fact, determined by a balanced assessment of all the circumstances. The defendant’s conduct need not be independently wrongful, and the absence of actual pressure did not answer the claim.
4. Rebuttal required proof that each gift was made after full, free and informed thought. The donor had to understand not only the nature of the gift but also its effect. Relevant matters included the value of the property, what would remain for the donor, the consequences for dependants or intended beneficiaries, and potential tax consequences. Advice from a solicitor was not automatically sufficient. Here it was limited, failed to address the true nature and effect of the gifts, and did not have the necessary emancipating effect.
5. The first gift was sufficiently substantial and unexplained in the circumstances to raise the presumption, although it was the most difficult case. The second gift was plainly a transaction calling for explanation because of its value and its effect on the deceased’s remaining property and the land used for her donkeys. The third and fourth gifts were made when the defendant was acting under an enduring power of attorney, while the deceased was physically frail and dependent, and formed part of a scheme intended to divest her of substantially all her property.
6. The alternative unconscionable-bargain claim did not require determination. The court nevertheless stated that it saw no reason to question Langton v Langton [1995] 2 FLR 890, where it had been held that the doctrine did not extend to gifts. The trust claim failed because the evidence did not establish any intention to create an express trust.