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Answer in the absence of a specialfiduciary

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Answer: In the absence of a special/fiduciary relationship, the onus of proof is on the party alleging the undue influence; Mutual Finance v John Wetton & Sons 6) What are the factors that the court considers in determining whether a contract should be set aside due to undue influence? Answer: In cases of presumed undue influence, in determining whether the defendant has rebutted the presumption, the courts consider: The condition of the party who was allegedly influenced, i.e., how vulnerable/frail/dependant on the dominant party they are. The amount or proportion of their estate/property that they have donated/transferred. In general, the courts will consider factors such as:
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The relative bargaining power of the parties, e.g., consider whether the weaker party has experience negotiating business agreements Whether there was any impropriety on the part of the dominant party; see Westmelton (Vic) Pty Ltd v Archer and Schulman [1982] Whether the party allegedly influenced received independent professional advice; see Garcia v NAB Exercise 11.3 Issue: Whether Paul unduly influenced Maria in regards to the transfer of her property to the retirement home. Rules: Undue influence entails improper or unconscionable use of an ascendency acquired by one person over another for the benefit of him/herself or another person. The effect is that the acts of the person influenced are not truly voluntary. The remedy is that the victim of the undue influence may rescind the contract. There are 2 types of undue influence: presumed undue influence; e.g., Lloyd s Bank Ltd v Bundy [1974] and actual undue influence; Mutual Finance v John Wetton and Sons [1937]. Presumed undue influence occurs where there is a special/fiduciary relationship between the parties, actual undue influence occurs in the absence of such a relationship between the parties. In scenarios involving presumed undue influence, there is a presumption triggered that it occurred. The defendant bears the onus of rebutting the presumption. The presumption will be more difficult to rebut where the weaker party is particularly vulnerable or dependent and more so where they have donated/transferred most/all of their property; Johnson v Buttress The court will consider factors such as whether the parties had relatively equal bargaining power and whether there was any impropriety on the part of the dominant party; Westmelton (Vic) P/L v Archer & Schulman .
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In the absence of a special/fiduciary relationship, the plaintiff bears the onus of proof to establish that the undue influence actually occurred; Mutual Finance v John Wetton and Sons If a plaintiff has obtained independent professional advice there is a strong defence against the allegation of undue influence; see Garcia v NAB .
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