UCB Group Ltd v Hedworth: CA 4 Dec 2003

The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled to invoke the right of subrogation in the same way, and to the same extent, as a lender who had received security which turned out to be void. The judge’s limited record of his findings made it difficult to handle the appeal. There is a clear distinction between a charge which is voidable from its inception and one which is valid and fully enforceable, when made but which may become void at some future date unless registered. The bank had obtained what it bargained for. The Butler -v- Rice principle applied in the instant case. If the Barclays charge was voidable at the instance of the defendant, Barclays must be taken to have intended to retain and keep alive any security rights to which it was entitled in the absence of an effective security, and, by parity of reasoning. UCB was in turn entitled to be subrogated to those rights.
Lord Justice Jonathan Parker Lord Justice Kennedy Lord Justice Longmore
[2003] EWCA Civ 1717, Times 09-Jan-2004, Gazette 29-Jan-2004
Bailii
England and Wales
Citing:
CitedRoyal 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 . .
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 (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 . .
CitedCapital Finance v Stokes 1969
A voidable charge remains valid until avoided. ‘It was argued for the vendor that what he contracted to get was a valid legal charge, and that he has not received because the company in default of its obligation under section 95 [of the Companies . .
CitedBurston 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: . .
CitedRhesa Shipping Co SA v Edmonds (The Popi M) HL 16-May-1985
The Popi M sank in calm seas and fair weather as a result of a large and sudden entry of water into her engine room through her shell plating. The vessel’s owners claimed against her hull and machinery underwriters, contending that the loss was . .
CitedCIBC Mortgages Plc v Pitt and Another HL 21-Oct-1993
Mrs Pitt resisted an order for possession of the house saying that she had signed the mortgage only after misrepresentations by and the undue infuence of her husband who was acting as the bank’s agent.
Held: A bank was not put on enquiry as to . .
CitedCastle Phillips Finance v Piddington CA 1995
The wife charged the matrimonial home to Lloyds to secure the husband’s indebtedness. The husband subsequently agreed with Barclays for the indebtedness to be refinanced. The husband and an accomplice forged her signature on a transfer of the . .
CitedScotlife Home Loans v Hedworth CA 1996
The lender claimed possession as chargee under a legal charge granted by the respondents who filed Defences contending that the claimant had agreed to replace the secured loan and to waive its remedies for default under the charge. The claimant said . .
CitedBarbara Ann Leggatt v National Westminster Bank Plc CA 19-Oct-2000
Where a wife executed a charge over a jointly owned property to secure her joint debts, and then seventeen years later executed a replacement charge to secure borrowings of the husband and she had received independent advice, she could not assert . .
CitedGhana Commercial Bank v Chandiram PC 1960
The bank made an advance to the owner of property in Accra which was used to pay off his indebtedness to Barclays (DC and O) Ltd, secured by an equitable mortgage. The owner executed a legal mortgage in favour of the Ghana Bank, but this was . .
CitedAbbey National Building Society v Cann HL 29-Mar-1990
Registered land was bought with an advance from the plaintiff. The transfer and charge were registered one month later, but in the meantime, the buyer’s parents moved in. When the buyer defaulted, his mother resisted possession proceedings, saying . .
CitedButler v Rice 1910
The wife owned a Bristol property and a Cardiff property subject to a andpound;450 charge in favour of a bank with whom the title deeds had been deposited. The husband asked the plaintiff to lend him andpound;450 to pay off the mortgage. The . .

Cited by:
CitedSerious Organised Crime Agency v Szepietowski and Others ChD 15-Oct-2010
The court was asked whether, as second mortgagee on the defendant’s properties, the claimant agency had the equitable power of marshalling of prior charges. The first chargee had charges over two properties, and sold the first, satisfying it debt, . .

These lists may be incomplete.
Updated: 10 January 2021; Ref: scu.188416