The claimant was the owner of a smallholding that comprised a barn known as Capri Lodge (Capri Lodge) and an adjoining three-acre paddock (paddock) and seven-acre piece of woodland (woodland) at Northgate Farm, Morpeth, Northumberland, where she carried on a goat husbandry business then called Dairy Goat Produce. In August 2001 she entered into partnership with the defendant, on terms that he would carry out development works to Capri Lodge to the value of half of its then valuation of £45,000, and that they would carry on as equal partners the business now known as Capri Lodge Products. In April 2003 the parties gave instructions to Wholley Goodings to draw up documentation, and, in July 2003, Mr Wholley of that firm produced a Form TR1 transferring the property into their joint names, a declaration of trust to the effect that the property was held on trust for the parties as beneficial joint tenants and a partnership deed relating to Capri Lodge Products. The Form TR1 and declaration of trust were completed on 30 July 2003; the partnership deed was completed on 25 November 2003. The defendant claimed that he carried out building works in excess of £54,000 to convert Capri Lodge into a four-bedroomed house that was separated at ground floor level and into which the parties eventually moved.
By October 2004, however, the claimant’s financial position had deteriorated to such an extent that the defendant, being concerned as to the possibility of her creditors seeking to enforce the debts against the property in which he had an interest, gave instructions to Wholley Goodings to prepare documentation whereby the claimant would retire from Capri Lodge Products. A notice of retirement signed by the claimant took effect on 21 January 2005. Wholley Goodings then prepared Forms TP1, transferring the paddock, and TR1, transferring the woodland, into the sole name of the defendant in consideration of his expenditure on Capri Lodge, and both documents, signed by the claimant, were completed on 3 May 2005. A proposal was put forward to vary the beneficial interests in Capri Lodge to 90% for the defendant and 10% for the claimant, but this did not proceed as the parties could not agree on further instructions.
Subsequently, feeling that she had been coerced into making the transfers, the claimant alleged that the notice of retirement was not intended to be acted on and that the Forms TP1 and TR1 were not intended to be registered but held ‘under the counter’. Attempts to resolve the differences between the parties came to nothing. The claimant made allegations of bullying and aggressive behaviour against the defendant and brought proceedings, seeking to set aside the transfers on the ground of undue influence.
Held (dismissing the claim)
It was clear from Lord Nicholls’ speech in Royal Bank of Scotland v Etridge  UKHL 44 that a presumption of undue influence would arise out of a relationship between two persons where one had acquired a measure of influence, or ascendancy, over another by which he took unfair advantage; such as, typically, when one person places trust in another to look after his affairs and interests, and the latter betrays this trust by preferring his own interests. Where a presumption arose, the inference of undue influence could be rebutted by a satisfactory explanation. In this case, on the basis of the contemporaneous documentation and Mr Wholley’s evidence, there was no doubt that the claimant had retired from Capri Lodge Products and the transfers effected by Forms TP1 and TR1 were to be registered and not kept ‘under the counter’. While the relationship between the parties was more strained at that time, the discussions did not amount to undue pressure on the part of the defendant to coerce or influence the claimant into executing those transfers. There was no presumption of undue influence and, even if there were, it was rebutted by the evidence of Mr Wholley, who had attended the claimant at the time when she executed those transfers. A fortiori there were no grounds upon which the earlier Form TR1 and declaration of trust should be set aside.JUDGMENT HHJ BEHRENS Introduction  This case concerns three pieces of land: 1. A piece of land now registered under title ND94369 containing the barn known as Capri Lodge, Northgate Farm, Morpeth, Northumberland NE61 3BX. This land has been referred to as ‘Capri Lodge’. 2. A three-acre paddock adjoining Capri Lodge. This land was formerly …