‘Broadchalke is one of the most pleasing villages in England. Old Herbert Bundy, the defendant, was a farmer there. His home was at Yew Tree Farm. It went back for 300 years. His family had been there for generations. It was his only asset. But he did a very foolish thing. He mortgaged it to the bank.’ The defendant and his son were the banks customers over many years. He had been advised that he could not afford to give greater support to his son, but later did so by extending the guarantee, and charging his property. The Bank sought to rely on the guarantee given to a bank by a father to support his son’s existing borrowing. The lending bank was found to have exercised undue influence over the customer. It was inappropriate for the father to give the guarantee because the bank manager knew the father and that thefather would rely upon him.
Held: The court set out to create a general principle of relief against harsh bargains on the ground of inequality of bargaining power.
Judges:
Lord Justice Denning MR, Sir Erich Sachs, Cairns LJ
Citations:
[1975] QB 326, [1974] 3 All ER 757
Jurisdiction:
England and Wales
Cited by:
Cited – Portman Building Society v Dusangh and Others CA 19-Apr-2000
The defendant sought to set aside an order for possession under a mortgage.
Held: Where a case was strong enough on its face in terms of conduct and terms, unconscionable conduct could be inferred if there was no explanation offered to . .
Distinguished – Avon Finance Co Ltd v Bridger CA 1985
The son arranged finance for his parents to move near to him. He borrowed money to help finance it, secured by an expensive second loan. He deceived his parents into executing the loan. After the son defaulted, the plaintiff sought possession.
Cited – Eclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Banking, Undue Influence, Equity
Updated: 06 May 2022; Ref: scu.193356
