Allcard v Skinner [1877] 36 Ch. D. 145 is a cornerstone case for law students studying undue influence within the context of equity and trusts. This pivotal case delves into the complex dynamics of influence and consent when gifts or donations are made under spiritual or authoritative pressure, providing rich insights into the protective role of equity.

  • In the case of Allcard v Skinner [1877] 36 Ch. D. 145, it was held that where a donor is unduly influenced by a donee, the gift will be voidable. This requires that the relations between the donor and the donee before the gift’s execution must raise a presumption that the donee has influence over the donor, and the court is satisfied that the gift was the result of influence expressly used by the donee.

Facts of the Case

  • In 1868, C was introduced to D, lady superior of a sisterhood, and became an associate of the sisterhood.
  • In 1871, C became a professed member of the sisterhood and bound herself to observe the rules of poverty, chastity and obedience.
  • The rule of poverty required members to give up all property either to relatives, the poor or to the sisterhood itself, but the forms used were in favour of the sisterhood.
  • The rule of obedience required members to regard the voice of their superior as the voice of God. The rules also entailed that no sister should seek advice of anyone external to the sisterhood without the superior’s leave.
  • C made a will leaving all her property to D. In 1872 and 1874, C handed over to D large sums of money, considerable property, and railway stock.
  • In May 1879, C left the sisterhood and revoked her will. In 1885, C commenced action against D arguing the property should be returned due to undue influence.

Issues

  • Did the relationship between a mother superior and a sister give rise to the presumption of undue influence?

Held by the Court of Appeal

  • Finding for D, that the relationship between D and C gave rise to the presumption of undue influence. However, C was barred from restitution due to the time taken for C to bring action against D.

Lindley L.J.

  • The fetter placed on C was the result of her own free choice. Though infatuated with the life and the work, there is no evidence that C was in a state that would justify interference arguing she was unable to take care of herself.
  • The rule against obtaining advice from externs with the lady superior’s consent invites suspicion. It is evidently capable of being used in a tyrannical way.
  • Undue influence cases may be subdivided into two groups, which often overlap. First, there are the cases in which there has been some unfair and improper conduct and generally some personal advantage obtained by the donee, placed in some close and confidential relation to the donor.
  • Secondly, there are cases where the position of the donor to the donee imposes a duty on the donee to advise the donor or even manage their property. In these cases the donor carries the burden of providing they have not abused their position.
  • The doctrine of undue influence is founded on the principle of saving people from being forced, misled or tricked into giving up their property. It is not to allow the foolish or reckless to recover what they give away through their own folly.
  • “No Court has ever attempted to define undue influence, which includes one of its many varieties. The undue influence which Courts of Equity endeavour to defeat is the undue influence of one person over another; not the influence of enthusiasm on the enthusiast who is carried away by it, unless indeed such enthusiasm is itself the result of external undue influence. But the influence of one mind over another is very subtle, and of all influences religious influence is the most dangerous and the most powerful, and to counteract it Courts of Equity have gone very far. They have not shrunk from setting aside gifts made to persons in a position to exercise undue influence over the donors, although there has been no proof of the actual exercise of such influence; and the Courts have done this on the avowed ground of the necessity of going this length in order to protect persons from the exercise of such influence under circumstances which render proof of it impossible. The Courts have required proof of its non-exercise, and, failing that proof, have set aside gifts otherwise unimpeachable” [183].
  • While there is no proof of undue influence, C was absolutely in the power of D due to her deep religious views and the vows already made. The inevitable result of D’s position over C raises the presumption of undue influence. The rule against consulting externs is so damning due to the ease of abusing it.

Significance of the Case in Legal Development

Allcard v Skinner has had a profound impact on the understanding of undue influence in contractual and trust relationships:

  1. Williams v Bayley (1866): This case laid foundational principles regarding the vulnerability of individuals to undue influence, particularly within familial financial dealings.
  2. Etridge (No. 2) [2001]: A landmark case that revisited the principles of undue influence, particularly in the context of mortgage agreements and the responsibilities of banks.
  3. Royal Bank of Scotland v Etridge (No. 2) [2001]: Further developed the criteria and procedural expectations for lenders to prevent claims of undue influence in financial agreements.

Exam Questions and Answers

Below you will find answers to questions that are most commonly asked based on this case.

How does the Allcard v Skinner ruling apply to modern digital transactions involving gifts or donations?

In the context of modern digital transactions involving gifts or donations, the principles from Allcard v Skinner guide the scrutiny of online agreements to ensure that consent is free from undue influence. For example, digital platforms facilitating charitable donations must implement clear consent processes to ensure donors are not unduly pressured by the design of the platform or by aggressive marketing tactics.

What are the implications of this case for legal practitioners advising on the drafting of wills?

Allcard v Skinner holds significant implications for legal practitioners advising on will drafting, particularly regarding the influence exerted by potential beneficiaries. It emphasizes the need for transparency and independent advice, especially when large bequests are made to individuals who have a close personal or fiduciary relationship with the testator. This is crucial to prevent challenges based on undue influence, which could lead to costly and lengthy litigation.

How do courts today verify the independence of a donor’s consent in situations similar to Allcard v Skinner?

In current UK legal practice, verifying the independence of a donor’s consent involves ensuring that the donor had the opportunity to receive independent advice. In cases mirroring Allcard v Skinner, courts look for evidence that the donor was advised separately from the influence of the beneficiary, and that there was no coercion or manipulation involved. This often involves scrutiny of the circumstances surrounding the transaction and the relationship between the parties involved.

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