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Property: Limiting the Scope of undue influence

Birmingham City Council v (1) Janet Beech (sued as Janet Howell) (2) Michael Beech [2014] EWCA Civ 830 (14 June 2014)

There is no presumption of undue influence between a landlord’s agent and a tenant under a periodic tenancy.  It is not inherently a relationship of trust and confidence such that the presumption could arise. 

This is the outcome of Birmingham City Council v (1) Janet Beech (sued as Janet Howell) (2) Michael Beech [2014] EWCA Civ 830 (14 June 2014).

JH and MB appealed against a decision granting the claimant local authority’s (LA) claim for possession of a rented property.  JH’s mother (M) was the sole tenant of the 3-bedroomed property following the death of her husband.  JH and MB were on LA’s housing waiting list.  In 2007 they moved into M’s property.  JH then asked LA to be added as a joint tenant, but local policy required that the request come from M.  In the meantime, M had moved into a residential care home and was visited by LA’s housing officer (HO).  M signed a notice to quit (N2Q) ending her periodic tenancy from March 2010.  JH was informed she would have to vacate by then.  M died in June 2010.

Being a successor tenant herself, a further succession beyond M was not permissible.  Moreover, M had given up the tenancy before she died.  At first instance ([2013] EWHC 518 (QB)), the court ordered possession against JH and MB.  They both appealed contending (1) that a presumption of undue influence arose from the nature of the relationship between HO and M and the nature of the transaction; and (2) local policy required that, before asking M to sign the N2Q, LA should consider whether she had an impairment affecting her mental capacity.

The Court of Appeal held that a presumption of undue influence would only arise if there was (a) a relationship of trust and confidence in the management of the subservient party’s affairs; and (b) a transaction which, by its nature, called for explanation.  Neither was present.  The relationship when the N2Q was signed was a contractual and property one.  Each party had separate and distinct rights in relation to each other.  Giving a N2Q was not an unusual transaction calling for explanation.  Once served, it was predictable that C would seek possession.  The mental capacity argument was hopeless, there being no evidence that M lacked capacity.

Derek Kerr / 1st Aug 2014


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