Paull v Paull

In a claim to set aside a gift for presumed undue influence, a parent-child relationship does not automatically establish the necessary relationship of trust and confidence where the alleged influencer is the child. The relationship must be proved from the evidence, including the transaction and surrounding circumstances.

The transaction must call for explanation. If it does, the beneficiary must show that it was the donor’s independent and fully understood decision. Solicitor involvement is not automatically sufficient. The court must be affirmatively satisfied that the advice emancipated the donor from the influence. The greater the trust reposed in the beneficiary, the clearer the explanation of the risks required.

The claimant sought to set aside an unconsidered transfer of his home to his son. The transfer was executed in 2010, when the claimant was 67, and left him without a secure legal right to occupy the property. The principal ground was presumed undue influence. Alternative claims in unconscionable bargain, non est factum and proprietary estoppel were not pursued, or were not permitted to be introduced by late amendment.

The central issues were whether the claimant reposed sufficient trust and confidence in his son, whether the transaction called for explanation, and whether the evidence, including advice from the solicitor who handled the transfer, rebutted the presumption.

1. The claim succeeded and the transfer was set aside.
2. The relationship of a child to a parent does not automatically give rise to a relationship of trust and confidence. The necessary relationship may nevertheless be established by the evidence, including evidence of vulnerability, domination or control, the parties’ historic relationship and the circumstances of the transaction. A relationship may also be inferred from post-transaction conduct where there is no conflicting evidence.
3. The transfer called for explanation. It gave away the claimant’s home and more than half his assets, left him without a secure right of occupation and was effected without an accurate valuation. No reasonable explanation based on ordinary motives was established. The presumption of undue influence therefore arose and the evidential burden shifted to the defendant.
4. The defendant had to establish that the transfer was the claimant’s own full and free decision, made independently of the presumed influence. Full understanding of the transaction was necessary but not sufficient.
5. There was no mechanistic rule that independent legal advice rebutted presumed undue influence. The question was whether, on all the facts, the advice had an emancipating effect. The solicitor’s advice was materially deficient because he had been misled into believing that the property was empty and did not explain clearly that the claimant was transferring his home and risking eviction. The advice given in the son’s presence, or while he remained nearby, was also insufficient in the circumstances.
6. The claimant’s willingness to proceed did not establish independence. His willingness was consistent with the trust and confidence reposed in his son. The presumption was not rebutted.