Crossfield v Jackson

Presumed undue influence requires both a relationship of trust and confidence and a transaction calling for an explanation. Whether either requirement is met is highly fact-sensitive. A theoretical financial benefit may have little or no realisable value in the circumstances, particularly where the claimant lacks resources and has a weak bargaining position. An appellate court should rarely interfere with primary factual findings based on witness credibility. Limited assistance with solicitors or documents, and learning difficulties, do not necessarily establish trust, confidence or vulnerability. Where the trial judge’s findings support the transaction and the consideration is not commercially surprising, the deed need not be set aside.

Monica Crossfield appealed against an order made by Recorder G D Smith in the Manchester County Court on 31 January 2014. The dispute concerned a leasehold property acquired in Crossfield’s name with money provided by her brother, Franklin Roy Jackson, under a declaration of trust stating that Jackson owned the beneficial interest.

Jackson sought conveyance of the property. Crossfield alleged that the payments were an interest-free loan and sought to set aside the deed for undue influence, mistake or misrepresentation. The Recorder rejected those arguments, ordered conveyance to Jackson and dismissed the counterclaim. The appeal concerned whether the factual findings could support the conclusions that there was no relationship of trust and confidence and that the transaction did not call for an explanation.

The appeal was dismissed. The Recorder’s order requiring conveyance of the property to the respondent and dismissing the counterclaim was upheld.

1. For presumed undue influence, the party challenging the transaction must establish a relationship of trust and confidence and a transaction calling for an explanation. If both requirements are established, the burden shifts to the alleged influencer to rebut the presumption. This formulation followed Royal Bank of Scotland v Etridge [2002] 2 AC 773.
2. The existence of such a relationship is necessarily fact-sensitive and depends substantially on the trial judge’s assessment of the parties and their credibility. The Recorder was entitled to rely on Crossfield’s mistrust of Jackson, her independence and her ability to manage her affairs. Her learning difficulties and limited reliance on Jackson in dealings with solicitors did not establish the necessary relationship or vulnerability.
3. The transaction did not call for an explanation. Although the right-to-buy discount had a theoretical value, Crossfield lacked the resources to use it, faced rent arrears and intended to relocate to Florida. In practical terms the discount and associated housing rights had no realisable value unless a purchaser could be found. The payment of approximately £10,000 was therefore not so commercially surprising, given her weak bargaining position, as to require explanation.
4. An appellate court can hardly ever overturn primary findings of fact where the trial judge has seen the witnesses and credibility is in issue. The challenge in substance attacked the Recorder’s primary factual findings and credibility assessment. There was no justification for going behind them. The deed therefore was not set aside for undue influence, and the alternative loan, mistake and resulting-trust cases did not arise.

1. Court of Appeal (Civil Division): Appeal dismissed in [2014] EWCA Civ 1548.
2. Manchester County Court: Recorder G D Smith ordered conveyance of the property to the respondent and dismissed the counterclaim by order dated 31 January 2014.