The appellant had transferred his property with the intention that it should be subject to a right on his part to repurchase it. He now said the sale was in practice merely a charge.
Held: The appeal failed. The legal nature of the transaction was in accordance with the form of the transaction and did not involve the grant of a security interest which could be redeemed. ‘Courts of equity have traditionally been careful to endeavour to ensure that something which is in reality a transaction by way of loan upon security, with a conveyance to a lender by way of security for the repayment of money, is not wrongly characterised as an absolute conveyance. Historically a mortgage of a freehold estate was effected by a conveyance, subject to a legal right of redemption, which might well be expressed in limited form; equity attached to that or imposed upon it an equitable right of redemption which was much more general. ‘
Judges:
Chadwick LJ, Thomas LJ, Lloyd LJ
Citations:
[2006] EWCA Civ 694
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Re Curtain Dream plc 1990
The company sought to finance its stock. It first sold it to a finance company, then repurchased it on terms including a retention of title clause.
Held: The whole transaction was, in its nature, a charge on the company’s assets, and as such . .
Cited – Lloyds and Scottish Finance Ltd v Cyril Lord Carpet Sales Limited HL 1992
The appellants were a Northern Irish company, which had entered liquidation, and the liquidator of that company. The respondent was a finance house. The company entered into a ‘block discounting’ agreement, which involved assigning customer credit . .
Cited – Welsh Development Agency v Export Finance Co Ltd CA 1992
The court was asked whether a transaction relating to goods between an exporter and the defendant, as a financier, associated with sales by the exporter to third-party purchasers, amounted to a true sale by the exporter to the defendant or was . .
Cited by:
Cited – Brighton and Hove City Council v Audus ChD 26-Feb-2009
The claimant was the proprietor of a fourth legal charge on a title. It sought a declaration that a second charge in favour of the defendant was void as a clog on the proprietor’s equity of redemption. An advance secured by a first charge, also in . .
Lists of cited by and citing cases may be incomplete.
Land, Equity
Updated: 06 July 2022; Ref: scu.242277