Cheese v Thomas [1994] 1 All ER 35

Plaintiff agreed to contribute £40k towards his nephew, Defendant, buying a house that Plaintiff would be allowed to live in for life.

Later learning that Defendant had missed several payments, Plaintiff sued to void the agreement and regain his money due to undue influence.

CA set aside the transaction between them and ordered the sale of the house, with the two getting the proceeds in the proportions to which they had contributed.

• The arrangement was manifestly disadvantageous to Plaintiff (it only gave him a right to inhabit, took all his capital and he would lose this right if the house were repossessed).

• Defendant had conceded that the presumptive undue influence therefore applied here.

Apportioning the loss in this way (sale of the house with proceeds based on contributions) ensured practical justice was done.