- Banks should, then, take certain steps to ensure that the wife is fully in
the picture. They should not just advise her to obtain legal advice, but
either see her independently from her husband and advise her of the
situation, or ask her for a named solicitor and a written confirmation that
she has received advice. They should also co-operate with the solicitor
in passing on information. The aim of the law is to balance the protection
needed for a wife (or any other person in a surety position) with the
needs for banks to be able to lend money with security. This balance was
expressed by Lord Bingham as follows,
“It is important that lenders should feel able to advance money, in run-
of-the-mill cases with no abnormal features, on the security of the wife’s
interest in the matrimonial home in reasonable confidence that, if
appropriate procedures have been followed in obtaining the security, it
will be enforceable if the need for enforcement arises. The law must
afford both parties a measure of protection. It cannot prescribe a code
which will be proof against error, misunderstanding or mishap. But it
can indicate minimum requirements which, if met, will reduce the risk
of error, misunderstanding or mishap to an acceptable level. The
Duress and undue influence 161
signed by the wife were two mortgages in favour of the plaintiff bank.
They sought to enforce these, and the wife claimed that the bank had
constructive notice of undue influence or misrepresentation, following
O’Brien. The Court of Appeal rejected this claim, and found
unanimously for the bank. The House of Lords confirmed the Court of
Appeal decision, and found for the bank. In doing so they laid down
guidance. They confirmed the approach to these cases established in
O’Brien, in asking: Did the wife enter the transaction under the influence
of her husband? If so, was the lender put on enquiry? Did the lender take
reasonable steps to be satisfied that there was no undue influence? Of
course, the wife factually must have provided the security because of the
undue influence – which denies the existence of free will.
You must ask
your solicitor ...
