Yerkey v Jones (1939) 63 CLR 649

John Yerkey and his wife, Mary Yerkey brought an action in the Supreme Court of South Australia against Florence Jones and her husband, Estyn Jones.
The claim was for principal and interest secured by a memorandum of mortgage registered under the Real Property Act 1886 (SA).
Mrs. Jones alleged undue influence on the part of the plaintiffs and her husband acting together and also on the part of her husband separately.
Mrs Jones alleged various fraudulent misrepresentations and non-disclosures. She contended that the mortgage which she actually signed was of a different nature from that which it was represented to her to be and from that which she understood it to be.
Mrs Jones also alleged that the mortgage failed to carry out a preliminary agreement which had been made, particularly in that it created a personal liability on her part instead of merely charging her property with a liability which would become enforceable after three years and only after three years.

No, Mrs Jones could not rely on undue influence.
The High Court held that the relationship of husband and wife is not enough of itself to raise a presumption of undue influence.
The Court is not ignorant of the potential for a husband to obtain and unfairly use influence over a wife which the husband often possesses.
However, there is nothing unusual in a wife, due to affection or for other reasons, conferring substantial financial benefits on her husband.
The Court will note, as a matter of fact, the opportunities for abuse which flow from a wife’s confidence in her husband will take this into account with all the other evidence in the case.

The wife entered without understanding the contract; and
The wife entered without dealing with the other party personally.
- The rule also applies if:
  - the wife understood the transaction but her consent was obtained by the husband’s undue influence; or
  - if the wife guaranteed a company controlled by the husband, and if she does not have a significant interest in it.
- This rule does not apply if the wife stands to benefit from the contract.
- This rule, while somewhat outdated, has been subsequently applied in Garcia v National Australia Bank Ltd (1998) 194 CLR 395.

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