Goodchild v Bradbury & Ors [2006] EWCA Civ 1868

A3/2006/1104, A3/2006/1104(a)[2006] EWCA Civ 1868
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(HIS HONOUR JUDGE ELLERAY QC)
Venue Royal Courts of JusticeDate Friday, 15 th December 2006
Strand
London, WC2
B E F O R E:
LORD JUSTICE CHADWICK
LORD JUSTICE MAY
LADY JUSTICE SMITH
Between
GOODCHILDAppellant- v -
Between
BRANBURY & ORSRespondent
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
MR P REED (instructed by Parrott & Coales) appeared for Appellant.MR J LEVINSON & MR M BEAUMONT (instructed by Bruce, Lance & co) appeared for Respondent.
J U D G M E N T

LORD JUSTICE CHADWICK:

[1]This is an appeal from an order made on 18 April 2006 by Mr Anthony Elleray QC, sitting as a deputy judge of the High Court in the Chancery Division, in proceedings brought by the appellant, Mr Leslie Goodchild, to set aside two transfers of property, known as the Orchard, Mill House, Bledlow in Buckinghamshire. The first of those transfers is dated 15 February 2001 and was made by the appellant by way of gift to his great nephew, the first respondent, Mr Shane Bradbury. The second transfer is dated 5 June 2001 and was made by Mr Shane Bradbury to the second respondent, Mr Stephen Hillier, for a consideration of £1,800.[2]The basis of the appellant’s claim was that the first transfer was procured by the exercise of undue influence and so should be set aside in equity; and that the subsequent transferee, Mr Hillier, took his transfer with notice that the first transfer was liable to be set aside because he knew all the facts.[3]The appellant was born on 5 May 1923, so he was some 77 years of age when he executed the first transfer in February 2001. He brings these proceedings by his litigation friend, a solicitor to whom he gave an enduring power of attorney in February 2003. In March 2003, that power was registered on the basis of the attorney’s belief that the appellant was then becoming incapable of managing his affairs.[4]The appellant was one of the four children of his parents. His brother was killed in the last war; one sister, Mrs Ivy Bradbury, died in 1988; and the other, Miss Doris Goodchild, died in 2002. Mrs Ivy Bradbury was the grandmother of Mr Shane Bradbury. There are two other grandchildren, Alicia and Tracey, the sisters of Shane. Alicia Bradbury is the co-attorney of the appellant.[5]The appellant inherited Mill House Farm from his father, who died in the late 1940’s. His sister Doris inherited a neighbouring farm, Pitch Green Farm. The appellant lived with his sister at Pitch Green Farm until the early 1970s, when he moved to Mill House, although he continued thereafter to take his meals at Pitch Green Farm. It was clear that there was a very close – although, it seems, often stormy -- relationship between the appellant and his sister. Miss Doris Goodchild moved to live with him in Mill House in the mid- 1980s. She remained there until 1998.[6]As I have said, Mrs Ivy Bradbury died in 1988. She was survived by her husband, Mr Arnold Bradbury. At or about the time of his grandmother’s death, Mr Shane Bradbury moved in to live with his grandfather at a house known as Hill View, which was also in the neighbourhood. Mr Shane Bradbury moved from Hill View to live with the appellant at Mill House soon after Miss Doris Goodchild had moved out. She went to a nursing home in 1998. The appellant and Mr Shane Bradbury then lived together at Mill House from 1998 until the beginning of 2003. The appellant then moved out of Mill House and went to live at Hill View, which had become vacant on the death of Mr Arnold Bradbury at the beginning of that February 2003.[7]The property, which was the subject of the two transfers dated respectively 15 February and 5 June 2001, is a plot of one acre or thereabouts adjacent to Mill House, which, at the time of the first transfer, was in the ownership of the appellant as part of Mill House Farm. The circumstances in which the first transfer was executed were described by the judge at paragraphs 66 to 69 and 72 to 75 of his judgment. After referring, at paragraph 62, to the fact that, in August 1999, Mr Shane Bradbury brought his future wife, now Mrs Vikki Bradbury, to live at Mill House and that, by the Autumn of 2000, they had decided to marry, the judge went on to say this:
“66. The planned wedding was the catalyst for the gift of the Orchard by Les to Shane as a wedding present. Mr Hiller became involved. As he has pleaded and asserted, Les in telling him of the gift said ‘The field was no good to me and I have got enough land, boy.”
Mr Hiller tells me he acted in effect for Les and Shane in arranging the transfer of the Orchard. As he saw it, Shane was no more able than Les, to arrange a legal matter such as a transfer of land. ”67. Following a phone call, on 30 October 2000, Mr Hiller wrote to Blaisers Mills Winter Taylors (‘Blaisers’), High Wycombe solicitors. He wrote, ‘Uncle Les wishes to transfer over one acre of land to my friend Shane as a wedding gift at the start of December latest’. He enclosed the deed which Les and Shane had given him. It is not obvious why Blaisers were chosen by Mr Hillier. They had not acted for him before. If they had acted for Les, that had been well in the past. ”68. At Blaisers, the file was handed to an assistant solicitor Mr Seager. On 6 November 2000 Mr Hillier visited him. Mr Hillier again said that the matter was a wedding gift. He told Mr Seager that Shane would probably try to build a house on the land. Mr Seager noted the need for a site meeting to decide matters such as access and covenants restrictive of building. He identified the need for a plan. ”69. The site meeting took place on 13 November 2000. Mr Seager’s unchallenged account of it is backed by his attendance note. He was met outside the farmhouse by Les, Shane and Mr Hillier. Mr Seager took Les into the sitting room by himself. He describes his having to fight for Les’s attention over the sound of the television, which was on. His meeting alone with Les he thinks took two minutes. He was satisfied that Les knew what he was doing from his own free will and that duress was not involved. Mr Seager then walked the Orchard with Shane and Mr Hiller. They returned to Les. Mr Seager repeated the need for a plan, which Mr Hillier was to arrange. Upon access, Les recalled some past discussions with the County Council concerning a possible separate access, a matter which Mr Hillier was to check: otherwise there would have to be shared access along the Mill House drive. Les was noted as saying that it would be possible to get two houses on the Orchard, subject to planning. Mr Seager noted the need for restrictive covenants against nuisance and annoyance and industrial use. … “72. On 5 December 2000, Mr Seager wrote a retainer letter to Les at Mill House, setting out his fees. He commented on the need for better plans dealing with the access. On 7 and 12 of December 2000, Mr Hillier made further telephone calls to Mr Seager. On 18 December 2000 Mr Hillier obtained better plans from surveyors which he had retained for the purpose and which he sent to Seager on 22 December 2000. The marriage in the meanwhile had taken place. ”73. On 1 January 2001, Les countersigned a copy of the retainer letter. On 8 January 2001, Mr Seager wrote to Les c/o Mr Hillier at Mr Hillier’s address enclosing a draft transfer. He drew attention to clause 13.5 which restricted residential development to two houses. On 12 January 2001, Mr Hillier reported that the restrictive covenant should increase the limit to six dwellings and informed Mr Seager of an approximate value of the Orchard of £1,800. On 17 January 2001, Mr Seager sent Les again c/o Mr Hillier an amended copy of the draft transfer. He sought specific confirmation that Les was happy that the restrictive covenant should be limited to six houses. He was to receive a letter signed by Les to that effect on 24 January 2001, the letter being written for Les by I think Mr Hillier. In fact Les had suffered a stroke at the Red Cross on 15 January 2001 and was in hospital. He presumably signed that confirmatory letter there. “74. On 25 January 2001, Mr Seager wrote again to Les, this time at Mill House, chasing a signed copy of the plan that was to be incorporated in the transfer. The letter observed that the covenant limiting residential use to six houses ‘could obviously have an impact on the value of Mill House Farm itself’. “75. On 9 January 2001, Les signed a cheque for Blaisers’ fees. On 19 February 2001, Mr Seager confirmed to Shane and Les that he had completed the transfer which he had dated 15 February 2001 saying he would complete the transfer for Shane.” The judge does not refer, in those paragraphs, to the occasion on which the appellant signed the transfer; but it is clear that he must have done so at some point between 17 January 2001, when the amended draft transfer was sent by Mr Seager, and 15 February 2001, the date which Mr Seager inserted in the transfer. As I have indicated, on 15 January 2001 the appellant had suffered a stroke and was in hospital.[8]It can be seen from the judge’s description of the circumstances in which the first transfer was executed by the appellant, that the second respondent, Mr Hillier, was closely involved in the process throughout. The judge described Mr Hillier as an intelligent and business-minded man. The judge found that the sale of the property from Mr Shane Bradbury to Mr Hillier had been agreed between them before the first transfer. The judge made^ the following findings at paragraphs 78 and 79:
“78. I have no doubt that in conversations over that Christmas, the question was raised between Mr Hillier and Shane as to the value of the Orchard, hence the £1,800 figure given by Mr Hillier to Mr Seager. Importantly where this trial is concerned, I have no doubt of the following. Shane had no money or the possibility himself of developing the Orchard. Both Shane and Mr Hillier knew that Shane wanted the gift to realise some cash, and always intended to sell the Orchard, Mr Hillier offering what Shane then thought was a fair value. ”79 … I have little doubt but that Mr Hillier was investing in what he hoped one day would prove a profitable plot of land. Further, I consider that throughout the arrangement of the transfer of the Orchard to Shane as a wedding gift, the understanding between Shane and Mr Hillier was that for cash Shane would sell on the Orchard to Mr Hillier.”
The judge found that, on 27 February 2001, Mr Hillier instructed solicitors to prepare a transfer of the property from Mr Shane Bradbury to himself at a consideration of £1,800, and that second transfer was registered on 14 June 2001.[9]As I have said, the appellant continued to live at Mill House until February 2003 when, after the death of his brother-in-law, Mr Arnold Bradbury, he moved to Hill View. On 19 February 2003 he appointed a solicitor and his great niece, Alicia, as his attorneys. These proceedings were commenced in August 2004. They came for trial before the deputy judge over four days in December 2005. The appellant did not give evidence at the trial - it being accepted that by then he was too frail to attend court. The judge admitted his written evidence contained in the statement signed and dated April 2004. The judge heard oral evidence from members of the family, and from Mr Shane Bradbury and Mr Hillier. He accepted that all witnesses were seeking to give an honest account of the facts as they saw them, and acquitted Mr Shane Bradbury and Mr Hillier of conscious wrongdoing.[10]After reminding himself of the principles to be applied in a case where a claimant seeks to set aside a transaction on the grounds of alleged wrongdoing, and having referred, in particular, to the decision of the House of Lords in Royal Bank of Scotland v Etridge [2001] UK HL 44, [2002] 2 AC 773, the judge made the following findings. First, that by 2001 the appellant reposed trust and confidence in his great nephew, Mr Shane Bradbury, such that Mr Shane Bradbury was in a dominant position. The judge’s findings are set out at paragraph 124 to 128. I need only read the last sentence of paragraph 128:
“128. …it does appear to me that the relationship between Les and Shane can properly be described as one of trust and confidence, and one in which Shane had an ascendancy, with potential for abuse.”
[11]Second, that the gift of the property known as the Orchard was not explicable by the relationship of great uncle and great nephew -- notwithstanding that the great nephew was providing some care -- and was not explicable by the marriage of Mr Shane Bradbury in December 2000. The judge’s reasons for that conclusion are set out at paragraphs 129 to 134 of his judgment. The judge observed that the transfer of the Orchard had the effect of substantially reducing the value of Mill House -- a reduction that went well beyond the value of the Orchard as agricultural land, which was the basis of the prise for which Mr Shane Bradbury was to sell it to Mr Hillier. The judge said this at paragraphs 133 and 134:
“133. But objectively, the transfer of the Orchard is not, in my judgment, readily explicable by the relationship of Les and Shane at Mill House. It substantially damaged the residual value of Mill House in that the drive was to be shared with a site, which appeared to have a potential, subject to planning permission, for up to six houses. It was not simply in the context of the disposal of a field for which Les no longer had a need, as he had indicated to Mr Hillier. Further and perhaps even more pertinently it was of no real benefit to Shane. It was fanciful to suppose that Shane would be in any financial position or have the nouse to develop a home for himself on the Orchard, or otherwise to ensure its successful development of residential profit. Les had no reason to suppose for example that Shane would even extract the value of the Orchard as accommodation land. I do not think that Les any more than Shane had any proper concept of the value of the Orchard. The objective reality was that subject to Shane winning the lottery, the Orchard would immediately be realised for cash.”
[12]Those conclusions led the judge to find, at paragraph 135, that the appellant had established sufficient to shift the evidential burden to Shane as the donee of the property. It was for Mr Shane Bradbury to support the gift by showing that it was made after full, free and informed thought, as the judge directed himself. That phrase, which, I think, originates in Zenick v Heinemann, was taken by the judge from the judgment of Sir Martin Nourse in Hammond v Osborne [2002] EWCA Civ 885, at paragraph 29; a decision in this court which post-dates the decision of the House of Lords in Etridge.[13]Third, Mr Hillier had notice of the relationship of trust and confidence which led to potential for abuse, and of the circumstances in which the gift was made. The judge explained why he reached that conclusion in paragraphs 136 to 138. He said this:
“137. I consider that Mr Hillier, whom I have noted to be an intelligent business minded man, would have realised that the selling of the Orchard would have an adverse financial effect on Mill House because of the sharing of the drive and the potential for neighbouring houses on the other side of the drive. Further, I have noted that Mr Hillier’s view that Shane was no more able than Les to arrange the transfer of the land and so he stepped in, as he told me, in effect as agent for both Les and Shane. ”138. In those circumstances I consider Mr Hillier had full notice of the matters from which undue influence can be presumed. Moreover on the particular facts of this case, and the involvement of Mr Hillier in arranging the gift to Shane I consider that he was privy to the facts material to the presumption of undue influence.”
[14]Fourth, that the appellant received no advice from Mr Seager, the solicitor, which would support a conclusion that the gift made by the first transfer was made after full and informed thought. At paragraph 143

the judge said this:

“143. … Although Mr Seager was an independent solicitor, I do not consider in the circumstances that his evidence shows that the gift was the result of full, free and informed thought. Brief reference almost as an afterthought in the letter of 25 January 2001 to the possible impact of the gift on the value of Mill House does not of itself suggest that Les had any such impact in mind or the need to seek independent financial advice relating to it.”
[15]Nevertheless, having made those findings, the judge came to the conclusion that the gift was not, in fact, the product of undue influence; and so refused to set aside the first or the second transfers. He reached that conclusion on the basis of two paragraphs in the appellant’s witness statement of April 2004. Those paragraphs -- paragraphs 19 and 22 --were in these terms:
“19. In late 2000, Shane announced he was going to marry Vikki and I thought it would be a nice idea to give him an acre of land as a wedding present. I don’t think Shane didn’t put me under any pressure at all to give him the land. I was conscious of the fact that he was my family and I wanted to give him a wedding present. … ”22. However I also understand that within two months of that on 5 June 2001, Shane sold the land to Stephen Hillier who was a Developer. Shane told me he sold the land although he didn’t say how much for. However I wasn’t concerned because it was up to him to do what he wanted with it once I had given it to him.”
In that context, the “two months of that” is two months from the completion of the first transfer.

The judge commented at paragraph 144 of this judgment that:

“144. Les as the Claimant says that he does not think that Shane put him under any pressure to make the gift.”

The judge then went on, at paragraph 145, to say this:

“145. I suspect that from the independence of life at Hill View, Les might now think, if questioned, that the gift was a mistake, particularly if directed to full and informed views as to the effect on the value of Mill House and the want of any real benefit beyond a modest sum of cash from Shane. But that is speculation. The claimant in a presumed undue influence case does not have to give evidence of actual pressure or as to what he would have done if fully informed. But in this case, and most unusually, the Claimant states that he was not put under any pressure at all. In those circumstances, I should not speculate as to what Les might have done if fully informed as to the objective problems with the gift. Further, I do not need evidence that the gift was the result of full and informed thought, when it is clear on the Claimant’s own evidence that it was the result of free thought, in the context of being unpressured, and thus that Mr Seager had been right in his assessment.”
[17]That paragraph represents a marked shift from the direction which the judge had given himself earlier in the judgment when -- after considering cases of Inche Noriah v Shaik Allie Bin Omar [1929] AC 129/155, Hammond v Osborne [2002] EWCA Civ 85(20) and (60) and Jennings v Cairns [2003] EWCA Civ 1935(35) -- he had said the evidential burden on the donee would be to show that the gift was not explicable only on the basis of the presumed undue influence; in particular, it was for Mr Shane Bradbury to show that the appellant had made the gift after full free and informed thought. When the judge came to address the matter at paragraph 145, he no longer thought that full or informed thought was a necessary ingredient for the purpose of rebutting the presumption. But he went on to say that, if he had been satisfied that the gift was the product of undue influence, he would have set the first transfer aside; and by reason of:
“My notice considerations as well against Mr Hillier as against Shane.”
[18]The appellant was granted permission to appeal by this court (Lloyd LJ), on 16 August 2006. The grounds of appeal are put succinctly under two heads. First, that the judge was wrong to find that the evidence of the claimant, contained in a draft witness statement, that he did not think that the first defendant put him under any pressure to make the gift was capable of rebutting the presumption of undue influence which he found had arisen; and second, in holding that the court did not need to find evidence that the gift was the result of full and informed thought when the claimant gave evidence that he did not think he was pressurised. The reference there to “a draft witness statement” is explained by the fact that the statement which the appellant signed in April 2004 had been sent to him in the form of a draft for approval. It was signed in the form of the draft with the various comments, incident to the draft, unanswered and unaddressed.[19]On analysis the two grounds which are set out in the appellant’s notice are, I think, really two sides of the same coin. The issue can be put in this form. In circumstances where the judge had held:(i) that the relationship between donor and donee was such that the donee was in position to dominate the will of the donor;(ii) that the gift was not explicable on the grounds of natural affection which the donor could be taken to have for the donee and;(iii) that the donor did not, in fact, receive the advice that he would have needed in order to give full and informed consideration to the consequences of the gift which he was making, is it sufficient to rebut the presumption that the gift was the result of undue influence bearing on the mind of the donor that the donor states that he was not put under any pressure by the donee?[20]In addressing that issue, it is important to have in mind these matters, which were the subject of findings by the judge:(1) The appellant was not able to look after himself in his own home. He had, as the judge found, no domestic skills at all. He needed someone to look after him on a day-to-day basis -- paragraph 53.(2) The appellant was very anxious not to be moved into a nursing home or care home where he could be looked after professionally. He had visited his sister Doris in a nursing home to which she had in moved in 1998 and had expressed a strong dislike of it -- paragraph 43.(3) Mr Shane Bradbury and his future wife Victoria were the only persons who were in a position to and were willing to look after the appellant in his own home, Mill House -- paragraph 55.(4) The appellant had strong motives for doing whatever he thought he needed to do in order to ensure, so far as he could, that Mr Shane Bradbury and his new wife remained at Mill House -- paragraph 61.(5) There was every reason why the appellant should give Mr Shane Bradbury a generous wedding gift, but;(6) Mr Shane Bradbury’s need was for cash and it was obvious that he would sell land given to him in order to raise cash -- paragraph 133; and(7) There was no reason why the appellant should wish to give Mr Shane Bradbury a generous wedding gift in a way which would cause him detriment by way of a devaluation of his property which was out of all proportion to the benefit which would be conferred on Mr Shane Bradbury.[21]In the context of that final point it is pertinent to have in mind the evidence of the valuer, Mr Conie, to which the judge refers at paragraphs 116 to 121 of his judgment. It was Mr Conie’s view that the effect of the transfer of the Orchard was to devalue the Mill House by some 10 per cent to 15 per cent. It is not difficult to see why he took that view. A glance at the site plan, annexed to the transfer shows that the Orchard would be extremely attractive as accommodation land to a prospective purchaser of Mill House. Further, loss of the Orchard without an adequate covenant restrictive of building would expose the occupier of Mill House to a serious loss of privacy if the Orchard was subsequently developed and the access to the Orchard, if developed, would have to be over the driveway to Mill House. It is also plain that the Orchard, which is in the centre of the village and surrounded by dwelling houses, is prima facie a site ripe for development -- it provides an obvious opportunity for in-filling.[22]The effect of the transfer, therefore, was not only seriously to devalue Mill House -- on Mr Coney’s figures, by at least £45,000 -- but also to hand to the donee (or to Mr Hillier as the person who had purchased the land from the donee for £1,800) a property ripe for development for which a speculative developer might, on Mr Conie’s evidence, have been prepared to pay as much as £100,000, although perhaps subject to some option arrangement. Further, even without planning consent, the Orchard would, on Mr Conie’s evidence, be worth not less than £10,000 as accommodation land to a purchaser in the village. No doubt there are circumstances in which an elderly man without children would wish to benefit the grandchild or grandchildren of his sister at the expense of his own estate by a transfer of value out of his estate, which would increase in value in the hands of the transferee; but that is not the explanation given for this transfer. It was to be a wedding present, valued at agricultural land value; and in any event there was no reason why the appellant should wish that only Mr Shane Bradbury should benefit out of his estate, rather than the three grandchildren of Mrs Bradbury.[23]This was a transaction which no one with proper regard for his own interests would enter into without careful and informed thought as to its wider effect. It is that feature which gives rise to the presumption which the judge correctly identified: that, when making the gift, the appellant was responding to some pressure or influence which caused him to act without proper regard to his own interests and in a manner that no-one who was not under pressure or influence would act.[24]The judge said, in paragraph 145, that the appellant had stated that he was not put under any pressure at all. That is not a fair reading of paragraph 19 of the witness statement. What the appellant actually said was:
“I do not think Shane did not put me under any pressure at all to give him the land”
. Accepting that there is an unintended double negative in that sentence, nevertheless, all that the appellant can be taken to be saying is that Shane did not, himself, put pressure on the appellant to make the transfer. That would be consistent with a finding that Mr Shane Bradbury did not ask for a transfer of the land. It has not been suggested that he did. But the fact that the donee has not asked for the gift is not a complete answer to an assertion that the gift was the product of undue influence; see Hammond v Orchard, particularly at paragraphs 25 and 32.[25]Hammond v Orchard was a case in which the donee, Mrs Osborne was given all of the deceased’s investments, an amount equivalent in value to some £395,000. She had not asked for the gift. In the course of his judgment, Sir Martin Nourse said this at paragraph 32:
“Even if it is correct to say that Mrs Osborne’s conduct was unimpeachable and that there was nothing sinister in it, that would be no answer to an application of the presumption. As Cotton LJ said in Allcard v Skinner, the court does not interfere on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy which requires it to be affirmatively established that the donor’s trust and confidence in the donee has not been betrayed or abused.”
[26]That passage was adopted by Arden LJ in Jennings v Cairns [2003] EWCA Civ 1935 (40). She said:
“The fact that the conduct of a person exercising influence is unimpeachable is not by itself an answer to a claim in undue influence, though the presumption of undue principle can be rebutted in many ways.”
[27]The circumstances that the donor is vulnerable -- in the sense that the relationship between the donor and the donee has potential for abuse -- and that the gift is one which is not to be explained by the ordinary considerations by which men act lead, as a matter of public policy, as Sir Martin Nourse pointed out in Hammond v Osborne, to the need for the donee to show that the donor really did understand and intend what he was doing. That is why it is necessary to show that the gift was made after full free and informed consideration. A gift which is made without informed consideration by a person vulnerable to influence, and which he could not have been expected to make if he had been acting in accordance with the ordinary motives which lead men’s actions, needs to be justified on the basis that the donor knew and understood what he was doing. In this case, that requirement was not met. It was no answer for the judge to say, as he did in paragraph 145 of his judgment, that full and informed consent had become irrelevant in the light of the appellant’s statement at paragraph 19 of his witness statement of April 2004.[28]For those reasons I would allow the appeal and set aside the first transfer. In those circumstances, like the judge, I would set aside the second transfer, that is to say the transfer to Mr Hillier also.[29]Mr Hillier, as second respondent, seeks to rely on a respondent’s notice, for which he needs permission to file out of time. The two grounds on which he seeks to uphold the judge’s decision are these. First that he, Mr Hillier, did not in law have constructive notice of any impropriety committed by the first defendant, whether presumed or otherwise; and, second, that the transaction was not explicable only on the basis that undue influence had been exercised to procure it -- it was explicable on the basis that the gift was made in contemplation of marriage.[30]In my view there is nothing in either of those points. They are so devoid of merit that I would not give permission to file the respondent’s notice out of time. The transaction was not explicable on the basis of a gift made in contemplation of marriage for the reasons which I have already explained. If the appellant wanted to give to his great nephew a sum of £2,000 or thereabouts as a wedding gift, the transfer of the Orchard was a quite remarkable, extraordinary and inappropriate way of seeking to do that. The marriage does not provide the explanation for the gift, in the form in which it was made. Secondly, the question is not whether the second defendant had notice of impropriety on the part of the first defendant; the question is whether Mr Hillier had notice of the facts which give rise to the vulnerability of the first transfer to being set aside on an application based on allegations of undue influence.[31]In the light of the judge’s findings at paragraphs 137 and 138 of his judgment, to which I have already referred -- and the facts on which those findings were made -- it is, to my mind, quite impossible to suggest that Mr Hillier did not have full notice of all the matters which lead to the conclusion that the first transfer was a transaction which was vulnerable for being set aside. He knew all the facts because he was instrumental in procuring the transaction in the form that it took.[32]For those reasons I would set aside both transfers.

LORD JUSTICE MAY: I agree that this appeal should be allowed for the reasons which Chadwick LJ has given.

[34]The deputy judge held that there was a relationship between Les and Shane where Les reposed trust and confidence in Shane. Les was therefore vulnerable to being exploited or, as the deputy judge put it, there was a potential for abuse. This is not challenged in this court.[35]The judge also found that the gift of the Orchard was not objectively readily explainable by the relationship between them, or as Lord Scott put in it Etridge, it could not be explained by reference to the ordinary motives by which people are accustomed to act. This was in my judgment a finding well open to the judge on the evidence and I would reject Mr Levinson’s and Mr Beaumont’s submissions to the contrary. It was to be a wedding gift certainly and its value in the hands of Shane was £1,800. But objectively that was not its value. Giving away the Orchard had the obvious effect of diminishing the value of Mill House substantially: The evidence suggested that this may have been in the order of £45,000. In addition the Orchard had an obvious development hope value: you only have to look at the plan attached to the transfer to see this. The same is an obvious inference from the terms of the restrictive covenant not to build more than six houses on it. Les himself seems to have had some idea that there was a developer around, see for instance paragraph 20 of his witness statement, but the deputy judge found and was entitled to find that neither Les nor Shane had any proper concept of the value of the Orchard. So this was a wedding present with a price tag prejudicial to Les well in excess of £50,000.[36]Thus there was a presumption of undue influence, the effect of which was that explained by their Lordships in Etridge. Did the evidence relied on by the defence sufficiently rebut the presumption so that the eventual finding should be that either there was no influence or, if there was, that it was not such that Les did not act of his own full, free and properly informed will?[37]The defendant’s case here was very simple. It was that Les’s own statement in paragraph 19 in particular of his witness statement by itself established that there was no influence. The judge agreed with this in a single paragraph of his judgment, paragraph 145, which reads as follows:
“I suspect that from the independence of life at Hill View, Les might now think if questioned that the gift was a mistake, particularly if directed to full and informed views as to the effect on the value of Mill House and the want of any real benefit beyond a modest sum of cash to Shane.”
[38]That is speculation. The claimant in a presumed undue influence case does not have to give evidence of actual pressure or as to what he would have done if fully informed. But in this case, and most unusually, the claimant states that he was not put under any pressure at all. In those circumstances, I would not speculate as to what Les might have done if he had been fully informed as to the objective problems with the gift.[39]The paragraph in the witness statement was not by any means the only evidence upon which the critical question had to judged. It is true that the deputy judge carefully and fully set out the facts in the earlier part of his judgment, but the terms of the short paragraph 145 of the judgment to my mind clearly show that the judge regarded paragraph 19 of the witness statement as by itself decisive without the need to evaluate that evidence together with other plainly relevant evidence. In my view, this was an error by the deputy judge such that this it is for this court to make its own evidential evaluation on this point.[40]The witness statement was made in the circumstances which Chadwick LJ has described, when Les was aged 80, and critically after the registration of his enduring power of attorney. He was regarded then as unable to manage his affairs. Les was unable to come to court to give evidence at the trial. The very circumstances in which the statement was made and put in evidence meant that its evidential reliability needed careful consideration in the light of other evidence. The fact that Les may have thought it would have been a nice idea to give Shane an acre of land as a wedding present and that he did not think that Shane put him under any pressure was of course to be taken into account. But on the evidence as a whole it was nothing like dispositive of the question whether Les was influenced to do so by Shane, with or without the help of Mr Hillier, and by facts and circumstances arising out of their relationship. Indeed the narrative facts given by the judge and summarised by Chadwick LJ lead me to the clear conclusion that, in giving Shane the Orchard, Les was plainly influenced to do so by Shane and by Mr Hillier on behalf of Shane and that the influence arose from Shane’s dominant position in their relationship.[41]In reaching that conclusion, I give full evidential weight to paragraph 19 of Les’s witness statement. But to take but one specific point, and there are others, Les was clearly influenced by Shane through Mr Hillier to agree to the restrictive covenant permitting the building of as many as six dwelling houses on the Orchard.[42]I have so far addressed the question of influence alone because this is the main way in which the first respondent at least seeks to uphold the judge’s decision. Once it is seen that the only proper finding on the evidence as a whole is that the gift was made under Shane’s influence, there is no difficulty on the facts of this case in finding that Les did not make the gift after full, free and informed thought. It is quite clear that Les had little or no idea of the value of what he was giving away, nor did he receive any proper advice in this respect.[43]I consider therefore that the only proper conclusion on the evidence was that the transfer of the Orchard to Shane was the product of undue influence. Put another way, there was a presumption of undue influence, which the evidence relied on by the defendant, including paragraph 19 of Les’s witness statement, did not displace.[44]I agree with Chadwick LJ for the reasons he has given, that we should not give leave to rely on the proposed respondent’s notice.

LADY JUSTICE SMITH: I agree with both judgments and have nothing to add.

Order

1) Refused. 2) Appeal allowed.