The problem of undue influence in property transactions involving married couples, and the proof necessary to establish such a claim, reared its head again in the Court of Appeal yesterday.
The case involves a challenge by the Bank of Scotland to a ruling in February last year by deputy Chancery Division judge, James Munby QC, that a legal charge of £150,000 on a house in Fulham should be removed.
The property was occupied by the couple and owned by the wife. The husband took out a charge on the property as a guarantee for business borrowings. Despite initial insistence by the wife that the home should not be used for loan guarantee purposes, she did eventually sign the guarantee agreement.
Mark Hapgood QC, for the bank, claimed that Deputy Judge Munby had not given sufficient weight to the fact that the wife had initially refused to sign the charge for a period of several weeks. He argued that this was not the conduct of someone vulnerable to coercion.
However, Nicholas Yell, counsel for the wife, claimed that the bank had failed to take reasonable steps to ensure that the wifes agreement to provide the guarantee and charge had been properly obtained.
The case continues.
Governor & Company of the Bank of Scotland v Bennett & another, Court of Appeal, December 7 1998
Mark Hapgood QC (instructed by Jenkin Evans of Reading) appeared for the appellant; Nicholas Yell (instructed by Underwood & Co) appeared for the respondent.
PLS News, 9/12/98
