swarb.co.uk - law index
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Undue Influence - From: 1960 To: 1969
This page lists 2 cases, and was prepared on 21 May 2019.
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 Zamet v Hyman; CA 1961 - [1961] 1 WLR 1442
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Cityland and Property (Holdings) Ltd v Dabrah [1968] Ch 166
1968
Banking, Undue Influence
The mortgage secured a debt of £2,900 owing by the mortgagor to the mortgagee. The mortgagor covenanted to pay the mortgagee £4,553 by monthly instalments over a six year period. The return to the mortgagee was in the form of a premium rather than a specified interest rate. The mortgage also provided that the full premium should become payable upon the mortgagor's default. The premium was effectively 57% of the amount of the loan, and had the effect of making the interest rate upon default an amount of 38%. Held: The court can talke into account such issues as the identity of the mortgagor when looking at any assertion of undue influence. A necessitous borrower may be overborne by a more powerful lender in circumstances giving rise to unconscionability on the part of the lender. Whilst there was no rule in equity precluding a lender from stipulating for a collateral advantage that was fair and reasonable, the charging of a premium of this order had the effect of destroying the borrower's equity in the security, and that such a collateral advantage was in the circumstances unconscionable.
1 Cites
1 Citers
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