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PRESUMPTION OF UNDUE INFLUENCE THE DOCTRINE OF UNCONSCIONABLE PROCUREMENT

PRESUMPTION OF UNDUE INFLUENCE THE DOCTRINE OF UNCONSCIONABLE PROCUREMENT
Date: 17 Jan, 2022| Author: Fred Streiman

This is an old doctrine, but it resurfaced in the 2019 decision of Geffen v Gaertner.  In that decision, two children received greater gifts of wealth from their parents than their two siblings. The disappointed children started a lawsuit to set aside the gifts on the basis of unconscionable procurement.

Unlike various presumptions that we have talked about elsewhere, the onus is on the party attacking the transaction to prove on a balance of probabilities that the gift was unconscionably procured. To do so, the attacker must prove (1)  that a significant benefit was received (a no-brainer, no one would ever start an expensive lawsuit unless a lot of money was involved)  and (2), the active involvement on the part of the recipient in arranging the transfer.

Once one can prove that such an unconscionable procurement took place, then suddenly a presumption is triggered. What this does is it now puts the recipient on their back foot and it is up to them to now prove that the giver of the gift really did understand what he or she was doing in making a gift.

In the Geffen decision, the recipient in the view of Justice Kimmel felt that the hand of the gift recipient was far too visible in all actions that had been taken. The recipient had been involved in absolutely every aspect of the transfer, indeed had prepared the majority of the documents needed to make the transfers and gifts by his mother.  He was also the one who communicated with the lawyers on the work needed to give effect to the gift. In those circumstances, there was a presumption that the mother did not truly appreciate the nature, effect and consequences of the transactions so as to render them fair and reasonable.   Sorry, the money goes back.