United Bank of Kuwait Plc v Sahib and Others: CA 2 Feb 1996

The bank appealed against a decision that the simple deposit of deeds with a bank did not take effect as an equitable charge.
Held: Depositing deeds with a bank is not sufficient to create a charge over them. The old law as to the creation of an equitable mortgage by deposit of deeds had been akin to part performance, and was therefore equally inconsistent with the philosophy of the 1989 Act. The rule was in essence that the deposit implied that contract had been created: ‘The deposit by way of security is treated both as prima facie evidence of a contract to mortgage, and as part performance of that contract.’ Phillips LJ said: ‘The clear intent of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 is to introduce certainty in relation to contracts for the disposition of interests in land where uncertainty existed before. Section 2(5) contains a list of contracts expressly excluded from the operation of the section. I can see no basis for implying a further exclusion in respect of contracts for the grant of a mortgage which are secured by a deposit of title deeds.’


Peter Gibson, Leggatt, Phillips LJJ


Times 13-Feb-1996, [1997] Ch 107, [1996] EWCA Civ 1308, [1996] 3 WLR 372, [1996] 3 All ER 215




Law of Property (Miscellaneous Provisions) Act 1989 2, Statute of Frauds 1677 4, Law of Property Act 1925 40


England and Wales


Appeal fromUnited Bank of Kuwait Plc v Sahib and Others ChD 24-Jun-1994
The customer had deposited title deeds with the bank as security for a loan, but no deed of charge had been executed.
Held: The mere deposit of title deeds does not create an equitable charge without more. The 1989 Act operated as a statutory . .
CitedDearle v Hall 1828
. .
CitedRussel v Russel 16-May-1783
. .
CitedRussel v Russel 16-May-1783
. .
CitedIn Re Wallis and Simmonds (Builders) Ltd ChD 1974
The deposit of title documents, without more, gives rise to an inference that the deposit was intended by the parties to operate as creating an equitable charge or mortgage over the property whose title document is deposited. In logic there could be . .
CitedSteadman v Steadman HL 1976
A mere payment of a sum of money might amount to an act of part performance, as might the act of a purchaser instructing solicitors to prepare and submit a draft conveyance or transfer, so as to leave asituation capable of enforcement in equity. . .
CitedIn Re Alton Corporation 1985
Sir Robert Megarry V-C, said in relation to a loan accompanied by the deposit of title deeds: ‘I have to remember that the basis of an equitable mortgage is the making of an agreement to create a mortgage, with the deposit of the land certificate . .
CitedMaddison v Alderson HL 1883
The requirement of the doctrine of part performance is that the acts of part performance relied upon must be ‘referable’ to the contract sued on. The principle underlying the doctrine of part performance was expressed by Lord Selborne: ‘In a suit . .
CitedIn Re Beetham, Ex parte Broderick QBD 1886
The Court considered whether certain facts were sufficient to establish an equitable mortgage by deposit of title deeds. Cave J said: ‘The law on the subject . . forms a branch of the equitable doctrine of the specific performance of oral contracts . .
CitedE R Ives Investments Ltd v High CA 14-Dec-1966
One exception to the requirement that an easement must be granted by a deed is that if permission to enjoy a right, capable of constituting an easement, is given by the landowner in terms likely to lead, and that do lead, the beneficiary of the . .
CitedHodgson v Marks CA 12-Mar-1971
The plaintiff had transferred her house to her lodger, expressing it to be for her love and affection for him. The judge at first instance had held that the true intention of the plaintiff had been that she would continue to live there as before and . .
CitedWhite and others v Vandervell Trustees Ltd. (No. 2), Re Vandervell’s Trusts (No 2) CA 3-Jul-1974
Lord Denning MR described the modern practice concerning pleadings: ‘It is sufficient for the pleader to state the material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has . .
CitedSpiro v Glencrown Properties Ltd and Another ChD 1991
The court considered the nature of an option to buy land. Hoffman J said: ‘The granting of the option imposes no obligation upon the purchaser and an obligation upon the vendor which is contingent upon the exercise of the option. When the option is . .
CitedAshburn Anstalt v Arnold (2) CA 25-Feb-1988
Various leases of properties had been granted. Legal and General occupied the property under an arrangement under which they paid no rent. The landlord sought possession, saying that the agreements were licences not tenancies because of the absence . .

Cited by:

CitedYaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
CitedJones and Another v Forest Fencing Limited CA 21-Nov-2001
The sellers of and disputed an order as to whether electrical equipment at the site hd been included in the contract.
Held: ‘the answer to the question ‘what meaning should be given to the words used in the memorandum’ cannot, I think, be a . .
Lists of cited by and citing cases may be incomplete.

Land, Banking

Updated: 20 May 2022; Ref: scu.90067