Alfred and Doris

Case Summary (I)

Alfred, a wealthy retired businessman with a reputation for toughness and independence, dies at the age of 85 after a brief but crippling illness. Serene, Alfred's executor, discovers that in the year before his death, Alfred had become friendly with Doris, aged 36, a senior stewardess with Johore International Airlines whom Alfred met when she looked after him very nicely in Business Class on a trip. In fact Alfred invited Doris to move into his house. He later sold her his two-year old Mercedes S-Class car for $50,000, as his illness made him unfit to drive it, as well as his golf club membership (for around the market rate). Alfred also guaranteed a $700,000 loan to Doris from ACDC Bank for an unlimited duration. When ACDC Bank advised Alfred to get independent advice, Alfred refused saying 'Lawyers – what a waste of money, I trust Doris totally. Anyway, it's only for six months, what?' On ACDC Bank’s insistence Alfred saw Jaya, a solicitor, who stressed the disadvantageous nature of the guarantee, but Alfred was quite obviously dozing off during the meeting.

Doris encountered cash-flow problems with her spa business and it goes into receivership. She defaults on the bank loan, following which ACDC Bank seeks to enforce Alfred's guarantee. In addition, Serene (Alfred’s executor) has threatened legal proceedings against Doris.

Does Serene Have A Case Against Doris?

Is Alfred Liable For Doris’s Loan?

In order for Alfred to not be liable for the $700,000 loan, Serene (Alfred’s executor) must prove that undue influence had been exercised by Doris on Alfred. Serene must prove that Doris had used her power or authority to coerce Alfred to guarantee the $700,000 loan from ACDC.

Was There Presence Of Undue Influence

Undue influence is the unconscientious use of one's power or authority over another to acquire a benefit or to achieve a purpose. There are 2 things to prove before we can conclude the presence of undue influence; a special...