Husband and wife joint owners of house charged to secure husband’s indebtedness – Wife opposing possession action on ground that husband had misrepresented scope of charge – Whether wife’s pleading defective for failure to allege constructive notice on part of chargee bank
In 1979 a husband and wife executed a charge over their jointly owned house, the charge being expressed to secure the present and future indebtedness of the husband to the chargee bank. In March 1993, following the failure by the husband to comply with a demand for £122,881, the bank brought an action for possession. In her defence and in her counterclaim that she held her half share free of the charge the wife, relying upon Barclays Bank plc v O’Brien [1994] 1 AC 180, pleaded that her husband, whom she trusted to deal with all financial matters, had induced her to execute the charge by falsely representing that it related solely to £36,000 which they had borrowed to purchase the house. The trial judge upheld a preliminary objection by the bank that the wife’s pleading was defective in that it failed to allege that the bank had constructive notice of the matters complained of. The wife, who was unwilling to amend for reasons pertaining to costs, appealed.
Held The appeal was allowed.
