CIBC Mortgages Plc v Pitt and Another: HL 21 Oct 1993

Mrs Pitt resisted an order for possession of the house saying that she had signed the mortgage only after misrepresentations by and the undue infuence of her husband who was acting as the bank’s agent.
Held: A bank was not put on enquiry as to the existence of undue influence only because a loan was to be made in joint names. It must have some actual notice of that undue influence. In cases of undue influence disadvantage is not a necessary ingredient of the cause of action. It is not essential that the transaction should be disadvantageous to the pressurised or influenced person in any way. A balance is to be found between the protection of a wife from improper pressure, and the need for banks to have predictable consequences of making secured loans. ‘What, then, was known to the plaintiff that could put it on inquiry so as to fix it with constructive notice? So far as the plaintiff was aware, the transaction consisted of a loan to husband and wife to finance the discharge of an existing mortgage on [the matrimonial home], and as to the balance to be applied in buying a holiday home. The loan was advanced to husband and wife jointly. There was nothing to indicate to the plaintiff that this was anything other than a normal advance to husband and wife for their joint benefit.’
Lord Browne-Wilkinson
Gazette 17-Dec-1993, Independent 22-Oct-1993, Times 22-Oct-1993, [1994] 1 AC 200, [1993] 3 WLR 802, [1993] 4 All ER 433, [1993] UKHL 7
Bailii
Citing:
CitedNational Westminster Bank plc v Morgan HL 7-Mar-1985
Undue influence was alleged.
Held: Equity avoids dispositions of property procured by the improper or unconscientious use of the influence of one person over another, that cannot be explained on the grounds of friendship, charity or other . .
[1985] AC 686, [1985] UKHL 2, [1985] 1 All ER 821, [1985] ANZ Conv R 251, [1985] 2 WLR 588
CitedBarclays Bank Plc v O’Brien and Another CA 22-May-1992
A bank leaving a husband to explain a proposed charge over the matrimonial home to his wife to secure his business debts, could not enforce that charge against her. There was a presumption of undue influence in the husband which made the charge . .
Gazette 15-Jul-92, [1992] 4 All ER 983, [1993] QB 109
CitedAllcard v Skinner CA 1887
allcard_skinnerCA1887
The donor had parted with almost all her property. She now sought to have the transaction set aside for undue influence.
Held: Where a wife has entered into a gratuitous transaction with her husband, the burden was on the husband as donee to . .
(1887) 36 Ch D 145
CitedPoosathurai v Kannappa Chettiar PC 1919
. .
[1919] LR 47 1A
DisapprovedBank of Credit and Commerce International SA v Aboody CA 1989
In a case where the defendant said that a mortgage had been signed from undue pressure the court may find actual undue influence as opposed to presumed undue influence. Slade LJ said: ‘Ever since the judgments of this court in Allcard v Skinner a . .
[1992] 4 All ER 955, [1989] 2 WLR 759, [1990] 1 QB 923

Cited by:
CitedUCB Corporate Services Limited v Williams CA 2-May-2002
The wife of a borrower sought to defend a claim for possession of the property by the chargor. She claimed that he signature had been obtained by an equitable fraud.
Held: Undue influence occurred when improper means of persuasion were used to . .
Times 27-May-02, Gazette 13-Jun-02, [2002] EWCA Civ 555
CitedBarclays Bank Plc v O’Brien and Another HL 21-Oct-1993
The wife joined in a charge on the family home to secure her husband’s business borrowings. The husband was found to have misrepresented to her the effect of the deed, and the bank had been aware that she might be reluctant to sign the deed.
Gazette 17-Dec-93, Times 22-Oct-93, Independent 22-Oct-93, [1993] 3 WLR 786, [1994] 1 AC 180, [1993] 4 All ER 417, [1993] UKHL 6
CitedUCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
[2003] EWCA Civ 1717, Times 09-Jan-04, Gazette 29-Jan-04
CitedSandra Estelle Fielding v The Royal Bank of Scotland Plc CA 11-Feb-2004
The husband and wife had signed a bank mandate allowing the bank to act upon the authorisation of either of them. The wife complained that the bank should not be able to recover from her any sums expended by the husband.
Held: The mandate . .
[2004] EWCA Civ 64, Times 26-Feb-04
CitedVale v Armstrong, Armstrong ChD 21-May-2004
The claimant sought to set aside a transfer of his house to the defendants made at an undervalue and under an enduring power of attorney, who had charged it to raise money for their business. He had received independent advice.
Held: The . .
[2004] EWHC 1160 (Ch)
CitedBarclays Bank Plc v Boulter and Another HL 26-Oct-1999
The question of whether notice of certain facts amounted to constructive notice of other facts is a question of law. Where it was claimed that a party should be exempt from liability under a document which it was claimed was signed because of . .
Times 26-Oct-99, Gazette 03-Nov-99, [1999] UKHL 39, [1999] 4 All ER 513, [1999] 3 EGLR 88, (2000) 32 HLR 170, [2000] Fam Law 25, (2000) 79 P and CR D1, [2000] CP Rep 16, [1999] 49 EG 97, [1999] 2 FLR 986, [2000] Lloyd’s Rep Bank 29, [1999] 3 FCR 529, [1999] 1 WLR 1919, [1999] EG 121, [1999] NPC 124
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
Times 17-Oct-01, [2001] UKHL 44, [2001] 3 WLR 1021, [2002] 2 AC 773, [2002] HLR 4, [2002] 1 Lloyd’s Rep 343, [2001] NPC 147, [2001] Fam Law 880, [2001] 43 EGCS 184, [2001] 2 All ER (Comm) 1061, [2001] 4 All ER 449, [2001] 2 FLR 1364, [2002] 1 P and CR DG14, [2001] 3 FCR 481

These lists may be incomplete.
Updated: 17 December 2020; Ref: scu.79133