Facts
- A wife and joint tenant guaranteed her husband’s business debts
- The bank failed to separately advise the wife about the risks of the transaction in accordance with guidance set out in RBS v Etridge [2002]
Issues
- Was the transaction against the wife unenforceable as a result of undue influence?
- What were the implications of an affirmative decision?
Decision
- Presumed undue influence found, irrespective of proof of actual undue influence – preserving trusting relationships
Reasoning
- Not following the RBS v Etridge [2002] needs no reasoning
- Although found against the wife, the mortgage (charge) of the bank became an equitable mortgage over the husbands interest in the property, following severance of the husband and wife’s joint tenancy by virtue of s 63 of the Law of Property Act 1925
- The bank were entitled to have the property sold by order under s 14 of the Trusts of Land and Appointment of Trustees Act 1996
