Facts
- After signing an increased (re-mortgage) mortgage deal securing both her and her husband’s house against the debts of her husband’s business, the claimant claimed undue influence when the bank tried to repossess her house: she had not obtained legal advice despite having been asked to and was not aware of the effects of the contract
Issue
- Could undue influence be claimed, could recovery be allowed?
Decision
- No undue buy xanax now influence, but repossession not allowed due to misrepresentarion
Reasoning
- There are 2 categories of undue influence:
- Actual undue influence, where the claimant must prove the the wrongdoer exerted undue influence directly
- Presumed undue influence, where there must be shown to have been a relationship of trust and confidence. The defendant must then rebut such a presumption that undue influence was exerted. For presumed undue influence, the relationship may be a given type, such as between a solicitor and a client, but not a husband and wife, or it may be proved on the facts.
- In a suretyship transaction, a bank is put on notice whenever a wife is a surety for her husband and when the bank believes undue influence could exist
- Once on notice, a bank should bring home the risks to the surety
- In this case, there was no undue influence, but the bank had misrepresented the contract such that it could be set aside and repossession not allowed
- The misrepresentation made the liability for the re-mortgage loan amount of £43,000 voidable, such that the claimant was only bound by the original mortgage loan amount of £30,000
