Governor and Company of Bank of Scotland v Bennett and Another: CA 21 Dec 1998

The bank appealed an order setting aside a deed of guarantee and mortgage and denying the possession order sought. The guarantee had been given to support borrowings of the defendant’s company. The defendant was the wife of the director and had been reluctant to sign, and claimed she had not been given independent advice. The bank appealed saying that notwithstanding the defeat of the guarantee, the charge remained binding. The judge found the husband’s undue influence on the wife in respect of both the charge and the guarantee.
Held: The bank could not be fixed with notice of the wife’s reluctance to execute the charge, since independent solicitors were instructed. The bank were not put on enquiry by the circumstances to suggest that she may have been acting under her husband’s undue influence. The bank’s appeal was upheld.
Lord Justice Auld, Lord Justice Chadwick, Sir Christopher Staughton
[1998] EWCA Civ 1965, [1999] 1 FLR 1115
England and Wales
Citing:
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.
CitedRoyal Bank of Scotland v Etridge, Loftus and Another v Etridge and Another, Etridge v Pritchard Englefield (Merged With Robert Gore and Co ) Midland Bank Plc v Wallace and Another (No 2) CA 31-Jul-1998
Detailed guidance was given on the quality of independent legal advice, which would be required to be given to wives signing charges to secure their husbands’ business etc accounts on the matrimonial home. The interaction of legal advice and . .
CitedBank 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 . .
Appeal fromGovernor and Company of Bank of Scotland v Bennett and Another ChD 1997
Mrs Bennett defended the bank’s claim for possession of the matrimonial home charged to the bank to secure her husband’s borrowings. She said that her signature, both to the guarantee and to the legal charge, had been procured by her husband’s undue . .

Cited by:
Appeal fromRoyal 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 . .

These lists may be incomplete.
Updated: 14 May 2021; Ref: scu.145444

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