Hubbard, Demerara Bauxite Company v
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1923 |
| Date | 1923 |
| Year | 1923 |
| Court | Privy Council |
Solicitor and Client - Confidential Relationship - Purchase of Option from Client - Failure to disclose Information.
A transaction, such as the purchase of property under an option, where the vendor and purchaser are client and solicitor (or where a similar confidential relationship exists) and the vendor has not had independent advice, cannot be upheld unless it is proved affirmatively that the purchaser disclosed, without reservation, all the information in his possession, and that the transaction was a fair one in all the circumstances. To fulfil those conditions it must be shown that the solicitor advised his client as diligently, and that the transaction was as advantageous, as if the client had been dealing with a stranger. This principle is of wide application, and should not be regarded as a technical rule of English law. Although the relationship of solicitor and client, in a strict sense, has terminated, the same principle applies so long as the confidence naturally arising from that relationship is proved, or may be presumed, to continue.
APPEAL (No. 68 of 1922) from a judgment of the West Indian Court of Appeal (December 1, 1922) affirming a judgment of Berkeley J., sitting in the Supreme Court of British Guiana.
The action was brought by the appellant company against the respondents, Mrs. Louisa Hubbard, H. C. Humphrys, and L. T. Emory. On January 31, 1919, the respondent Mrs. Hubbard for a consideration of $25 had granted to the respondent Humphrys an option to purchase certain land in the colony of British Guiana for $5500. By letters in February, 1919, the appellant company agreed to buy and the respondent Humphrys agreed to sell the land for $11,200; and Humphrys thereupon purported to exercise his option to purchase from Mrs. Hubbard. In or about May, 1919, Mrs. Hubbard, being advised that the sale to Humphrys was unenforceable, agreed to sell the property to the respondent Emory for $12,000. The appellant company claimed in the action to set aside the sale to Emory, and to enforce the sale to Humphrys and by him to themselves.
The main questions in the action were whether the relations of Humphrys and Mrs. Hubbard, and his conduct with regard to the transaction between them, rendered that transaction unenforceable on the principles applicable to the dealings of a solicitor with his client. Mrs. Hubbard's husband, to whom the land had belonged, died in 1915, and Humphrys had acted as her solicitor in obtaining probate of his will (of which one Burrowes was the sole executor) and in subsequent litigation; there were concurrent findings that the relationship of solicitor and client continued to exist at the date of the option. The extent to which Humphrys disclosed to Mrs. Hubbard the facts within his knowledge in reference to the option appears from the judgment of the Judicial Committee.
1923. April 13, 16. Sir John Simon K.C., de Freitas K.C. and Wylie for the appellant. The transaction between Humphrys and Mrs. Hubbard was a valid one. English law applies to the matter: Ordinance 15 of 1916 (British Guiana). The appellant does not dispute the general proposition in Dart's Vendors and Purchasers, 7th ed., p. 45; this case however falls within the exceptions there mentioned. The price named in the option was a fair one; the larger price obtained was the result of a purely speculative value. All the material facts known to Humphrys were disclosed by him. He was not acting as Mrs. Hubbard's solicitor in the matter, and it does not appear that she relied on his advice; she relied on that of Burrowes, the executor. [Reference was made to McPherson v. WattF1; Edwards v. MeyrickF2; Wright v. CarterF3; and Allison v. Clayhills.F4]
Upjohn K.C. and J. K. Young for the respondents were not called upon.
May 15. The judgment of their Lordships was delivered by
LORD PARMOOR. This is an appeal against a judgment and order of the West Indian Court of Appeal, whereby that Court dismissed the appeal of the appellants from a judgment of Berkeley J., sitting in the Supreme Court of British Guiana, which ordered that the action by the appellants should be dismissed with costs to the respondents Hubbard and Emory, and with no costs to the respondent Humphrys. It is not necessary to discuss the form of the action, nor was any difficulty raised on this point in the hearing before their Lordships. The questions at issue are (1.) whether at the material date the relationship between Humphrys and Mrs. Hubbard was of such a nature that it constituted the confidential relationship of solicitor and client, and (2.) whether, if such relationship existed, the conduct of Humphrys, and the nature of the bargain between him and Mrs. Hubbard, were such that the transaction is unenforceable, on the principles applicable to transactions between a solicitor and client.
The first issue may be dealt with shortly. There is a concurrent finding in both Courts that the relationship of solicitor and client did exist between Humphrys and Mrs. Hubbard on January 30, 1919, which is accepted by both parties as the material date. It is not suggested that, in either Court, a...
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O'Neil Creese (Representative of the Estate of Benjamin Morgan, deceased) Claimant v Kelvin Joslyn Defendant [ECSC]
...similar positions." Learned Counsel also referred the Court to the decision of the Privy Council inDemerara Bauxite Company Ltd v Hubbard [1923] A.C. 673 [1923] A.C. 673 at 681 – 682. The Demerara Bauxite case is distinguishable from the present case, in the Demerara Bauxite case the relati......
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Frankson (Barrington) v Monica Longmore
...influence may exist so as to set aside a transaction. As illustrative he referred to Demerara Bauxite Co. Ltd.v Louis Hubbard & Others (1923) A.C. 673 and McMaster v Byrne (1952) 1 All E.R. 1362. The law applicable argued Mr Macaulay is contained in section 21 of the Legal Profession Act. N......
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Bank of Credit and Commerce International SA v Aboody
...by Lord Parmoor, delivering the opinion of the Privy Counsel (Viscount Haldane, Lord Dunedin and Lord Parmoor) in Demerara Bauxite Co. Ltd. v. Hubbard [1923] A.C. 673. This case involved the purchase of property by a solicitor from his former client under an option. Lord Parmoor (at pp.681–......
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Bank of Credit and Commerce International SA v Aboody
...by Lord Parmoor, delivering the opinion of the Privy Counsel (Viscount Haldane, Lord Dunedin and Lord Parmoor) in Demerara Bauxite Co. Ltd. v. Hubbard [1923] A.C. 673. This case involved the purchase of property by a solicitor from his former client under an option. Lord Parmoor (at pp.681–......
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Subject Index
...39Daubert v Merrell DowPharmaceuticals, 509 US 579 (1993)....... 173, 176, 178, 179, 180, 181, 184Demerara Bauxite Co. Ltd v Hubbard[1923] AC 673 ................................ 235Domenco v Domenco and Ignat (1963)41 DLR (2d) 267 ............................ 225Doorson v The Netherlands (......
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Legal Profession
...see Mookka Pillai Rajagopal v Khushvinder Singh Chopra[1996] 3 SLR 457 and its reliance on Demerara Bauxite Co v Louisa Hubbard[1923] AC 673. Nor is there a shortage of authorities which propound that as a general rule, the rebuttable as opposed to the irrebuttable presumption of undue infl......
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Agency
...has not ceased having regard to the circumstances of each particular case - see Demerara Bauxite company Ltd. v. Hubbard & Ors. (1923) A.C. 673.”– Per Fakayode, J. in Ajani & Ors. v. Okusaga No. I/89/75; (1976) 1 F.N.R. 188 at 194 - 195. 1517. Control of servant/agent by the principal. “An ......
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Burden of Proof in Undue Influence: Common Law and Codes on Collision Course
...whomthey owe fiduciary duties to establish affirmatively that the transaction was a fair one: see e.g.Demerara Bauxite Co. Ltd v Hubbard [1923] AC 673; Moody v Cox [1917] 2 Ch 236 THE INTERNATIONAL JOURNAL OF EVIDENCE & PROOFBURDEN OF PROOF IN UNDUE INFLUENCE70 Above n. 65.intention that th......