Latest Cases

Undueinfluence and mortgage borrowing

Posted: 12th May 2024

One Savings Bank Plc v Waller-Edwards [2024[ EWCA Civ 392 – undueinfluence and mortgage borrowing

In this case the appellant appealed against an order for possession made in favour of the bank in relation to a property owned by the Appellant and her former partner (a property developer). The property developer had suggested to the Appellant that she should exchange her home and £150,000 for a property that he was building which had an existing charge registered against it. The appellant was given a second charge. Later the bank was approached for a remortgage and advanced a sum of £384,000 which paid off the first charge and some of the property developer’s perosnal debts. The relationship between the appellant and the property developer ended and they feel into arrears on the remortgage payments. The bank began repossession proceedings in 2021. The appellant sought to set aside the remortgage as between herself and the bank on the grounds of undueinfluence from the property developer. At trial the Judge accepted that there had been undueinflunce, but held that the bank had not been put on enquiry so as to be fixed with constructive notice of the undueinfluence.

On appeal as a matter of fact and degree the Court of Appeal found that the bank was not put on inquiry of the undueinfluence exerted on the Appellant. The appeal was dismissed holding that the correct legal test was that in Royal Bank of Scotland Plc v Etridge ( No.2) [2001] UKHL 44, [2002] 2A.C. 773. Etridge required the court to look at the non commercial hybrid transaction as a whole and to decide as a matter of fact and degree, whether the loan was being made for the purposes of the borrower with the debts, as distinct from the borrower’s joint purposes. The judges below correctly decided that the loan was a joint loan made for joint purposes.

Exceptional circumstances in section 335A of the Insolvency Act 1986.

Posted: 12th May 2024

Maxine Reid Roberts and another (as Joint Trustees of the insolvent estate of Audun Mar Gudmudsson) v Mei-Lin [2024] EWHC 759 (Ch)

This case considered exceptional circumstances within the meaning of sections 335A and 336 of the Insolvency Act 1986 (IA 1986).  An immediate order for possession and sale of the former matrimonial home was sought by the Joint Trustees in Bankruptcy. Ms Lin, a former wife, who opposed the application on the basis that it was not just and reasonable under section 335(A) of the Insolvency Act 1986, cited the effect the behaviour of the Bankrupt had had on the mental health of herself and her son and whether it would be exacerbated by the making of an immediate order for possession of the former matromonial home. Further Ms Lin’s evidence cited that she suffered “quite significant levels of emotional and physical abuse from the bankrupt”, along with having to cope with the consequences of his methamphetamine and cocaine abuse. Ms Lin gave evidence that the bankrupt had left drug use paraphernalia in his flat which his children discovered on an access visit. Ms Lin gave evidence also that she felt very unsafe in the bankrupt’s company, particularly in relation to his violent and unpredictable outbursts. Further, that Ms Lin often worried for her and her children’s safety whilst in the bankrupt’s company. Evidence from the Islington Drug Abuse and Alcohol Service in the case stated that Ms Lin had profound and yet unresolved consequences of domestic abuse, and exhibited the primary symptoms of post traumatic stress disorder as a result. The court considered the question as to whether the medical evidence amounted to an exceptional circumstance within section 335A of the Insolvency Act 1986. The Judge found that when taken with the bankrupt’s misconduct the consequences of his behaviour must have had a significant effect on the mental health of his former wife and their son, and that they continued to trial prolonged unnecessarily by the misconduct of the Bankrupt.  The Judge found that the circumstances of the case were exceptional within the meaning of s.335A IA 1986, and were distinguishable from the circumstances Nourse LJ described in Re Citro. Further that the misconduct of the Bankrupt coupled with the delay in the conclusion of the Family Court represented exceptional circumstances under the terms of s 335A IA 1986. An immediate order for possession and sale was not made.

Judgement dated 10th April 2024.

May a law firm charge for a partner acting as an executor?

Posted: 12th May 2024

Brealey v Shepherd and Co Solicitors [2024] EWCA Civ 303

The Court of Appeal confirmed that a law firm was not entitled to be paid for a partner acting as an executor of an estate in the absence of a charging clause in the will. The Trustee Act 2000 Part V section 29(2) required the consent of all the current executors, which had not been given. The costs judge had been right to decline to exercise the court’s inherent jurisdiction to permit recovery of fees when the solicitors firm had failed to file any evidence in support of its application for fees to be paid.

Judgement dated 26th March 2024

G & A Gorrara Limited v Kenilworth Court Block E RTM Co [2024] UKUT 81(LC)

Posted: 12th May 2024

Judgement dated 8th April 2024.

Jurisdiction of the FTT. Services charges were challenged which had been paid over several years. The Upper Tribunal considered the meaning of section 27A(5) of the Landlord and Tenant Act 1985 which provided that a tenant was not to be taken to having agreed or admitted any matter by reason “only of having made any payment”. The appeal was allowed. The Upper Tribunal held that the First Tier Tribunal’s jurisdiction was not limited under section 27A to making determinations about service charges that had already been demanded, but included making a decision about services charges not yet demanded relating to expenses which had not yet been incurred under section 27A(3). In this case  a determination was sought under section 27A(1) about charges which were final not estimated but not yet demanded in respect of already incurred expenses. The Upper Tribunal concluded that the First Tier Tribunal had to decide what final service charges were payable from 2012 to 2020.

Kings Speech and land reform

Posted: 19th November 2023

The new Leasehold and Freehold bill is due to be placed before  the UK Parliament later in November 2023, and the annoucement of the same in the Kings Speech shows that the bill is planned to abolish the creation of new leasehold houses and that all new houses will be sold with freehold title except in exceptional circumstances. There are also plans to extend the term of lease extensions from 90 years to 990 years, and remove the requirement for leaseholders to have been registered for 2 years as the registered proprietor at the Land Registry. There are also other leasehold reforms in the bill too. It remains to be seen how many of these reforms survive their passage through Parliament.

Wright and Rowley (liquidators of BHS Group Ltd) and others -v- Dominic Chappell and others

Posted: 19th November 2023

The latest judgement is out in the case against the former directors of BHS Group Limited (In Liquidation). The trial of the claims against Mr Chappell have been adjourned for further directions until after the Court has handed down judgment following the present trial. The court directed that those claims should be dealt with as separate proceedings pursuant to CPR Part 3.1(2)(e) and that the claims against Mr Henningson and Mr Chandler should continue to be heard at the present trial. A link to the judgement can be found here .

Debt Respite Scheme (Breathing Space) Guidance for creditors

Posted: 19th November 2023

This guidance has been recently updated by the Insolvency Service, and can be found here. There are two types of breathing space namely a standard breathing space and a mental health crises breathing space. There are differences between them both.  A mental health crises breathing space is only available where the person is receiving mental health crisis treatment, and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts). So this means for a creditor that they may not be able to take enforcement action to collect their debt for a considerable period of time if mental health crises treatment is continued for a long period of time and a breathing space has been granted. The courts are still working out the meaning of various parts of the new regulations in case law. Reported cases include Kaye v Lees [2023] EWHC 758 which can be found here

Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Posted: 5th June 2021

Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill – The UK government has announced that it is to legislate, in this new bill introduced to Parliament,for new powers to tackle unfit directors who have dissolved their companies leaving staff or taxpayers out of pocket. The legislation will be retrospective and enable the directors of dissolved companies to be investigated where the dissolution process has been used by company directors to avoid repaying company bounce back loans and the dissolution process has been misused. The new powers of investigation include relevant sanctions such as disqualification from acting as a company director for a period of up to 15 years. Such powers to be exercised by the Insolvency Service on behalf of the Business Secretary. The measure will also prevent directors of dissolved companies setting up nearly identical businesses after the dissolution leaving company creditors unpaid. Also look at our pages on company insolvency by clicking here.

Debt Respite Scheme (Breathing space) – Guidance for creditors

Posted: 1st June 2021

The UK government has published guidance to creditors for the Debt Respite Scheme (Breathing Space) which can be found here. The guidance came into force on 4th May 2021 and the breathing space is intended to assist debtors by giving legal protections from their creditors under The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

There are two types of breathing space: a standard breathing space (available to anyone with a problem debt giving legal protection from creditor proceedings for up to 60 days) and a mental health crisis breathing space (only available to a person receiving mental health crises treatment and lasts as long as the treatment plus 30 days ( no matter how long the srises treatement last).

Company insolvency and statutory demands

Posted: 1st June 2021

The restriction on statutory demands and winding-up petitions to protect companies from creditor enforcement action due to debts related to coronavirus expires on 30th June 2021 and it remains to be seen whether the UK government will extend those restrictions beyond that date. A link to the UK government support page can be found here.

Statutory declarations and members voluntary liquidations.

Posted: 1st May 2020

Under the current temporary practice direction supporting the insolvency practice direction a statutory declaration in support of a solvent winding up may be sworn using a video link i.e. virtually and the fact that it is sworn using a video link shall not by itself be regarded as causing substantial injustice to invalidate the relevant insolvency proceedings (see paragraph 9 of the temporary practice direction which is in force until 1st October 2020).