Court: Court of Appeal
Citation: 36 Ch D 145
Area of Law: Undue Influence under English Contract and Equity Law
Allcard v Skinner (1887) is a landmark case in English law, renowned for its exposition on the doctrine of undue influence. The Court of Appeal’s decision laid down the distinction between actual and presumed undue influence and clarified the burden of proof in such cases. The judgement continues to serve as a guiding authority for issues involving voluntary transactions made under spiritual or relational pressure. This case is especially significant as it underscores the equitable principles protecting individuals from exploitation, while simultaneously recognising the need for timely action in seeking remedies.
Facts of Allcard v Skinner
- Parties Involved:
- Miss Allcard (Claimant): A woman of considerable wealth who joined a Protestant religious sisterhood.
- Miss Skinner (Defendant): The lady superior of the sisterhood known as the “Sisters of the Poor.”
- Background:
- In 1871, Miss Allcard became a professed member of the sisterhood. Upon joining, she pledged adherence to the rules of poverty, chastity, and obedience formulated by the founder, Revd Mr Nihill. These rules dictated that members relinquish their property for the benefit of the sisterhood and refrain from seeking external advice.
- Shortly after joining, Miss Allcard made a will bequeathing her entire estate to Miss Skinner.
- In 1872 and 1874, Miss Allcard transferred significant railway stock and other assets to Miss Skinner.
- Subsequent Events:
- Miss Allcard left the sisterhood in May 1879 and revoked her will. However, she did not take immediate steps to recover the transferred property.
- In 1885, six years after leaving the sisterhood, Miss Allcard initiated legal proceedings, alleging that the gifts were procured under undue influence and sought restitution of the transferred assets.
Legal Issues
The central issue in Allcard v Skinner was whether Miss Allcard’s gifts to Miss Skinner were the result of undue influence and, if so, whether her delay in reclaiming the property barred her from obtaining relief.
Allcard v Skinner Judgement
Decision
- The Court of Appeal held that while undue influence was presumed in this case, Miss Allcard’s claim was barred due to laches (unreasonable delay) and acquiescence (acceptance of the situation).
- Miss Allcard could only recover the portion of the property still in Miss Skinner’s possession; she could not reclaim assets already spent by the sisterhood.
Judicial Reasoning
- Cotton LJ: Dissented on the point of laches, suggesting that the delay should not have barred Miss Allcard’s claim.
- Lindley LJ and Bowen LJ: Agreed with the overall judgement, emphasising the importance of equity’s doctrines regarding undue influence and delay.
Key Legal Principles in Allcard v Skinner
Allcard v Skinner case established foundational principles in the doctrine of undue influence:
Types of Undue Influence
Cotton LJ and Lindley LJ identified two categories of undue influence:
Actual Undue Influence:
- Requires evidence of explicit coercion, unfair conduct, or improper pressure exerted by the donee.
- In such cases, the donor must prove that the donee actively influenced them to make the gift.
Presumed Undue Influence:
- Arises from the existence of a confidential or fiduciary relationship between the donor and the donee.
- The law presumes undue influence in such relationships unless the donee can demonstrate that the donor acted voluntarily and independently.
- Examples include relationships between spiritual advisers and followers, solicitors and clients, or trustees and beneficiaries.
Burden of Proof
In actual undue influence cases, the burden lies on the donor to prove that undue influence was exercised.
In presumed undue influence cases, the burden shifts to the donee to disprove undue influence. This can be done by showing that:
- The donor had access to independent advice; or
- The donor acted with genuine free will.
Laches and Acquiescence
- Laches: Equity aids the vigilant, not those who delay in asserting their rights. Miss Allcard’s six-year delay in seeking restitution barred her claim.
- Acquiescence: Miss Allcard’s acceptance of the situation after leaving the sisterhood was interpreted as her consenting to the transfers.
Distinction Between Large and Small Gifts
- If a gift is substantial and beyond ordinary motives of friendship or charity, the burden of proof lies heavily on the donee.
- If a gift is small, the donor must provide evidence that undue influence was actually exercised.
Conclusion
Allcard v Skinner remains a cornerstone case in English law, shaping the doctrine of undue influence in contracts and equity. It underscores the need for vigilance in relationships involving trust and confidence, especially when substantial gifts or transfers are involved. The case also serves as a cautionary tale about the importance of timely legal action and the role of independent advice in safeguarding one’s interests. By balancing equitable protection with personal responsibility, the judgement continues to influence the application of undue influence in modern jurisprudence.