Johnson v Buttress (1936) is an Australian contract law case that throws light on the presumption of undue influence and its rebuttal. Under what circumstances does a situation of undue influence arise and who bears the burden of rebutting it? The case illustrates these questions.
|Case name:||Johnson v Buttress|
|Case citation:||Johnson v Buttress (1936) 56 CLR 113;  HCA 41|
|Court:||High Court of Australia|
|Date/year:||17 August 1936|
|The bench of judges:||Latham CJ, Starke, Dixon, Evatt and Mc Tiernan JJ|
|Area of law:||Undue influence|
Facts of the case (Johnson v Buttress)
The plaintiff initiated proceedings regarding the will of his late father, Buttress, and sought to repeal a document that his father had signed on 24 April 1931. This document indicated that Buttress had transferred to the defendant a piece of land located near Sydney, on which was built a cottage in which Buttress had resided for a number of years. The transfer was made in the solicitor’s office of the defendant, Mrs. Johnson. Mrs. Johnson was a distant relation of Buttress’s deceased wife. Buttress had a history of taking the advice of other people when it came to business.
He did this without first seeking any independent legal advice. Buttress was incapable of reading or writing (i.e., was illiterate) and lacked consistency in his interactions with other people. The rent from the cottage was his major source of income for living, and he had virtually no other assets besides a modest amount of furniture and personal effects and a life insurance policy that was worth approximately £50. The plaintiff argued that the decision to give away the house was made under undue influence, which resulted in an improper decision.
Proceedings were commenced in the Supreme Court of NSW. The trial judge determined that the transfer was a result of undue influence and thus set it aside. Mrs. Johnson filed an appeal with the High Court.
The issue that was raised
The Court looked into the question of undue influence and examined whether or not there was a presumption of undue influence based on the nature of the relationship between the parties involved and the circumstances surrounding the transfer of property.
Judgment of the Court in Johnson v Buttress
The judges and other members of the Court came to the conclusion that evidence demonstrated that there was, in fact, a relation of trust and confidence between Buttress and Johnson and that this led to the existence of a presumption of undue influence.
The Court stated that Mr. Buttress was illiterate, had no understanding of financial matters, and was a person of strange disposition. He was unaware that the property had been sold in such a way that it could no longer be reclaimed. Mrs. Johnson had known him for over 20 years and had provided assistance to his wife before she passed away.
Further, Mrs. Johnson, in the opinion of the judge, had the responsibility of disproving the presumption of undue influence, but she did not succeed in doing so. She was unable to produce evidence to support her claim that the transfer was the result of the donor freely exercising their own independent will.
It was necessary for the defendant to show, first, that the deceased knew what he was doing when he made the transfer, in the sense that he understood its effect and significance in relation to himself, and second, that the transfer was the result of his own will. The defendant had to show both of these things in order to be successful in their defense. But she failed.
Hence, the appeal was rejected, and the High Court upheld the decision made by the trial judge.
The principle of presumed undue influence applies whenever “one party occupies or assumes towards another a position naturally involving an ascendancy or influence over that other, or a dependence or trust on his part”.
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