Safina Bi Azam v Mohammed Molazam

Vulnerability and a seriously disadvantageous transaction do not, without more, establish presumed undue influence. The claimant must show a relationship of influence, ascendancy or dependency, together with a transaction calling for explanation. Any presumption is evidential and rebuttable. After a full trial, the court must decide on the totality of the evidence whether the transaction was brought about by undue influence.

An unconscionable bargain requires more than vulnerability, undervalue and knowledge of those matters. The defendant must have engaged in conduct which the court regards as unconscionable. Appellate interference with factual findings is justified where a critical finding lacks evidential support, or where the decision was one no reasonable judge could reach.

The respondent transferred his house to the appellant after she paid approximately £41,000 owed to a local authority. The transfer followed negotiations in which the respondent, who was financially vulnerable and had health difficulties, first sought a loan and later proposed transferring the property. The trial judge set aside both transfers for presumed undue influence.

The appellant challenged the factual findings, the procedural fairness of findings not put in cross-examination, and the judge’s approach to undue influence. The appeal concerned whether the facts established a relationship of influence and whether the transaction had been procured by undue influence.

1. Appeal allowed. Permission to appeal was granted on the material factual challenges, and the order setting aside the transfers was reversed.
2. The trial judge was entitled to find that the respondent was financially vulnerable and affected by health difficulties. However, findings that the appellant possessed substantial influence in her community and knew of the respondent’s heart condition were unsupported or procedurally unfair. Findings based on an alleged degree of negotiation had to be read in the limited way supported by the evidence.
3. For presumed undue influence, vulnerability coupled with a disadvantageous transaction is insufficient. The claimant must establish a relationship of influence, ascendancy or dependency, as well as a transaction calling for explanation. The evidence did not show that the appellant manipulated, persuaded or exercised influence over the respondent. She refused his request for a loan, and he then proposed the transfer himself.
4. Under Royal Bank of Scotland plc v Etridge (No. 2), any presumption is evidential. Where both parties have given evidence, the ultimate question is whether, considering all the evidence, the transaction was brought about by undue influence. The trial judge had not properly addressed that question. In any event, the evidence could not support a finding of actual undue influence.
5. The transaction was not an unconscionable bargain. Vulnerability, substantial undervalue and knowledge did not establish the further unconscionable conduct required by the authorities. The court declined to extend either doctrine merely because the transaction was markedly one-sided.

1. High Court, Chancery Appeals: The appeal from the Central London County Court order dated 10 January 2023 was allowed. The order setting aside the property transfers was reversed.
2. Central London County Court: HHJ Gerald held that the first transfer was voidable for presumed undue influence and ordered that the later gift also be set aside.