Surety Wives (Guarantors) and Undue Influence

Surety Wives (Guarantors) and Undue Influence

Where one person is in a position of influence over another, equity will presume that any transfer from the subordinate to the dominant party has been brought about by the exercise of undue influence by the latter and will strike the transaction down unless the dominant party can show that it was a product of the free and independent will of the other.

There is no rule of law that where a relationship of influence exists the subordinate party should have independent advice. Obviously, however, if a person has been properly advised by someone independent and adequately qualified to give the necessary advice then the dealing will be difficult to impeach. While there is no rule requiring independent advice, its presence or absence will be an important factor. The mere fact that independent advice has been given will not, of itself, decide the issue. The nature and quality of that advice can be the crucial issue.

For further information please contact Trevor Rosenthal on telephone (03) 8680 5555 or email trosenthal@battensacks.com.au.

Please note that the advice in this communication is general advice only and you should not rely on this advice unless you obtain legal advice specific to your own requirements.