Facts: Miss Rogers was a 62 year old ‘spinster’ who had been living with her uncle as a member of his family for 40 years following the death of her parents – ‘She was an intelligent woman with a will of her own, not an aggressive woman, or one who yielded too easily, but in matters of business she relied upon her uncle’s advice without question’. When her uncle’s business was in difficulty, he took his niece to a meeting at the bank, where she put forward all her property as security for her uncle’s overdraft with the bank. The bank manager knew she lived with her uncle and the nature of their relationship. He explained the effect of the document, but no independent advice was given.
Held: The transaction was to be set aside. The relationship between niece and uncle fell within an established class of parent and child; the uncle was locus parentis i.e. in place of a parent (she lived with him, had no parents etc.) The bank had constructive notice (knew the nature of their relationship).