Halifax Plc v Omar: CA 20 Feb 2002

The respondent occupied a flat as a tenant. The landlord had acquired it by means of a fraud on the claimant lender. The lender had been given an equitable charge over the property, and now claimed possession as subrogated to the original fraudulent owner. The tenant claimed to have taken and paid for a lease from one of the later parties to the fraud. He claimed an equitable charge by subrogation in priority to the claimant. The lender had not taken steps to register any caution to protect its interests.
Held: There are three requirements for subrogation. The money must have been used to pay the purchase price, that it had been paid by them solely for this purpose, and that the transaction was always to be on the basis that they would achieve a charge. Tracing is neither a claim nor a remedy but a process, and subrogation is a remedy, not a cause of action. The respondent was an innocent third party purchaser without notice of the claimant’s interest. There is a distinction between subrogation to a security, which includes rights in rem, and subrogation merely to the indebtedness itself which operated only in personam. The doctrine of subrogation is that, where A’s money is used to pay off B, a secured creditor, A is entitled in equity to an assignment of B’s security rights. The appeal failed, and the interest of the lender had priority.
Lord Justice Simon Brown, Lord Justice Laws, And, Lord Justice Jonathan Parker
[2002] EWCA Civ 121
England and Wales
CitedBoscawen and Others v Bajwa and Others; Abbey National Plc v Boscawen and Others CA 10-Apr-1995
The defendant had charged his property to the Halifax. Abbey supplied funds to secure its discharge, but its own charge was not registered. It sought to take advantage of the Halifax’s charge which had still not been removed.
Held: A mortgagee . .
CitedBanque Financiere De La Cite v Parc (Battersea) Ltd and Others HL 16-Apr-1998
The making of an order for restitution after finding an unjust enrichment by subrogation, is not dependant upon having found any common or unilateral intention of the parties. The House distinguished between contractual subrogation of the kind most . .
ApprovedBurston Finance Ltd v Spierway Ltd ChD 1974
The lender took a charge over a property held by a company which subsequently became void because it was not registered within the required period at Companies House.
Held: A voidable charge is a valid charge unless and until set aside: . .

Cited by:
CitedCheltenham and Gloucester Plc v Appleyard and Another CA 15-Mar-2004
The owners had purchased their property with a loan from the BBBS. A charge was then given to BCCI, which charge said no further charge could be registered without BCCI ‘s consent. The C and G agreed to lend a sum to refinance the entire borrowings, . .

These lists may be incomplete.
Updated: 08 January 2021; Ref: scu.167634