BIRMINGHAM DISTRICT REGISTRY
Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
| Mrs MARION MARY THOMPSON
|- and -
|Mrs JULIE ANN FOY
|-And between -
|THE MORTGAGE BUSINESS
|- and -
|(1) Mrs JULIE ANN FOY
(2) Mrs MARION THOMPSON
Mr Benjamin Wood (instructed by Drydens) for the Second Claimant.
Mrs Julie Anne Foy the First Defendant appeared in person.
Hearing dates: 23, 24, 25, 26, 27 March and 22, 23 April 2009
Crown Copyright ©
Mr Justice Lewison:
|Mr Thompson's death||14|
|A move to Spain?||19|
|Waiting for the mortgage||65|
|The mortgage comes through||70|
|The Spanish purchase||82|
|Mrs Foy's interest in Valley View||90|
|Does a presumption arise?||102|
|Was there actual undue influence?||110|
|Estoppel and consent||139|
|A charge over Mrs Foy's beneficial interest||144|
|The loan of £20,000||146|
i) Mrs Thompson was frequently belligerent and hostile. She was sometimes reluctant to answer straightforward questions. At times she became very angry in her answers. But equally she was at times overcome with emotion, particularly when speaking about her late husband. There were also occasions (such as the episode relating to the alteration of her diaries) when she adamantly refused to accept the obvious. She did not strike me as a person who would have been bullied or easy to dominate.
ii) Mrs Foy was an unimpressive witness. Her evidence was frequently contradicted by contemporaneous documents, and where that happened she was quick to accuse others of having misunderstood the reality of the situation. She too became very emotional at times.
iii) Mrs Swanborough's witness statement was relatively brief. She was willing to accept that there were inaccuracies in it. She gave her evidence well, although it is clear that she has taken her mother's side in this family dispute and has a very poor opinion of her sister.
Mr Thompson's death
A move to Spain?
"You must not release the mortgage advance:
- If the purchase price for the property is less than the amount set out in these instructions, unless the difference between the amount set out in these instructions and the actual purchase price is 5% or less of the amount set out in the instructions."
"Would you please let us know your understanding of the arrangements between our respective clients as we understood that your clients had to spend approximately £80,000.00 extending the property in 2000 and that the price should be £225,000.00 of which £50,000.00 is represented by the increase in value by your clients, the balance of £200,000.00 being paid in cash."
"Our client is actually living in the property at the moment but is obviously buying from her mother
I am a bit unsure about this file as the mortgage from TMB is for £400,000.00 and the purchase price is shown as £500,000.00. However, Mrs Foy is actually [only] paying 200,000.00 to her mother as she has paid for a big extension and pays for the maintenance and has done so for years."
"Went to Diane's had dinner. Got a bit upset about things. Diane [brought] me home. Got together with Julie & Steve to sort things out. Diane & Julie met half way. Good."
"Julie explained that this was necessary to get the mortgage on the property, that it was all going to be done legally and I got the impression that she would get the solicitor to put it in writing to my mum that she was going to get £200,000 for her interest in the property and the £20,000 from the insurance policy. Julie reassured me that the money would go to mum."
"Got at the solicitors on time, were there 2 hours, got rather upset, be glad when things get sorted. Julie not very good, Steve took her to doctors. I asked Diane to come over, they both talked. Seems much better between them."
"Mrs Thompson didn't seem to have a lot of self confidence and is very distressed at the prospect of having to make decisions and having talk with lawyers."
"Julie and her husband have contributed to the value of the property and Mrs Thompson wants to give them that value."
"It was explained to me that they wanted to do the following:
Give the property to Julie. Julie would then re-mortgage the property on a buy to let basis.
Previously they had talked of selling the property to Julie and her husband however that does not release sufficient money. It now has to be a gift of the whole so that Julie can raise 90% of the value on a buy to let mortgage.
The next step would be that Julie would purchase the property in Spain and Mrs Thompson would either continue to live with them in Spain or with Diane Julie's sister. They said that she would not continue to live at the property or if she did it would be for a short period of time.
Another alternative was that Mrs Thompson would buy a bungalow with money that would come from the property. About £200,000 could be made available in this way."
"There was some opposition from both Julie and her husband to my questions. None of them could see why I was asking the questions that I was. I did explain that it was necessary to understand precisely what everybody had in mind to advise correctly.
Mrs Thompson seemed to resent what I was doing because she couldn't understand that why she couldn't just do as she wanted and to her it seemed very simple. In essence I was being asked why was I stopping her doing what she wanted."
i) Whether Mrs Thompson had capacity. It was difficult to speak to her alone and she did not want to see him alone. She was clearly distressed, but Mr Bilton saw that as frustration with the legal process. In his oral evidence he explained that Mrs Foy did much of the talking; that it was difficult to separate her and Mrs Thompson; and that it was Mrs Thompson herself who said that she did not want to see him alone.
ii) He was not being given a lot of information freely and he had to extract it. He felt that Mrs Thompson was not pleased that he was asking so many questions about the family.
iii) Mrs Thompson did not show a willingness to understand the complexities of the situation. Mr Bilton said that his issue was how much she understood, and he was concerned that she did not want to see him alone.
i) His initial instructions were to sell Valley View to Mrs Foy for £255,000 of which Mrs Thompson was to receive £200,000.
ii) One suggestion made before Christmas was that Mrs Thompson would receive the purchase money and stay in the house paying rent; or that she would not receive the money and would stay in the house rent free.
iii) The instructions he was given were that the property was worth £400,000 and that the extension was worth £200,000, but he had seen no valuations. He pointed out that "in law the whole of the property is yours including "Julie's property" but you seem to acknowledge a moral duty to account to your daughter for the £200,000 that represents the value of … the property that has been built by her and her husband".
iv) He noted that the Thompsons were a close family and said that Mrs Thompson had lived closely with Mrs Foy and her family for twenty years "and have built up a very close relationship and even reliance upon them".
v) It was self-evident that Mrs Thompson was "still deeply distressed" about losing her husband and was "deeply unhappy" about living at Valley View. He continued "You wish to live somewhere other than Valley View Farm but you have not come to a conclusion as to where you wish to live". The options were: to live with Diane; to live in a house to be purchased; and to go to live with Julie and her husband in Spain. But Mrs Thompson had "not been able to decide what to do as yet".
vi) Mrs Foy needed to raise £200,000 from the sale of Valley View to complete on a property in Spain.
vii) Mr Bilton then set out his understanding of what he called the "original plan". The details of this were a little garbled, but in essence Mrs Thompson was to sell the house to Mrs Foy for a sum of money. Mrs Foy was to mortgage the house for 90 per cent of its value and then rent out the property to cover the mortgage. Mrs Thompson was to receive £200,000 and Mrs Foy would use the excess to complete the property in Spain. Mrs Thompson would then make a will leaving one half of her estate to each of her two daughters.
viii) Mr Bilton's understanding of this was that:
"Effectively Julie would get the value of the house that was built and the remainder of the estate was to be divided equally between her and Diane on your death."
ix) He then said that at the last meeting the plan had changed. Mr Bilton recorded:
"I was told by you that you wish to give the whole of your property to Julie."
x) He pointed out a number of disadvantages in proceeding in that way. These were mainly taxation aspects. But he went on to point out that although there was a great deal of trust between family members there were dangers in making a gift. These included the irrevocable nature of a gift; possible inheritance tax implications; an inability to leave the property by will; the possibility that the house could be awarded to a spouse in matrimonial proceedings; and the impact of the gift on the availability of means tested benefits or local authority residential care. He continued:
"We have discussed all these matters with you already but you do have to give serious consideration to all of these points."
xi) He added:
"We have also been led to believe that following the gift of the whole of the value of Valley View Farm Julie may give you back a sum of money to purchase a house or bungalow in the locality if you wish to live by yourself in this area. It has been suggested that this is a possibility but there will be no legal obligation to do this and Julie could change her mind and there would be no legal comebacks."
xii) Mr Bilton then raised the question of undue influence. He said that he had a duty to see that Mrs Thompson was not under any undue influence and that the only way of doing that was to see her alone. He needed to satisfy himself that she understood the nature, effect, risks and foreseeable consequences of making the gift. He suggested that Mrs Thompson could be accompanied by Mrs Swanborough whom he understood "had been fully informed of the position".
xiii) Finally he set out Mrs Thompson's choices. He said:
"If you choose to proceed with the gift of this property you can choose to proceed in two ways
1. You can transfer the property from your husband's estate to your sole name. We can register this and then you can gift it to Julie. Your estate will have a risk to [a] large Inheritance Act charge as stated before if you die within 7 years.
2. We can prepare a deed of variation to your husband's will which will for tax purposes be read as if he made that gift and you can then transfer … the property out of the estate to yourself and Julie. When the deeds are registered you can then give your share to Julie. In this case if you die within 7 years the amount which will be credited back to your estate will be no more than one half of the property and you will then have reduced the risk to a charge for Inheritance Tax.
I will have prepared documents both ways so that if you do wish to proceed you can execute the documents. I would have thought that the registration process would be the same in each case."
i) Mrs Thompson's need for money to buy a property if that is what she wanted to do and
ii) Mrs Foy's need to extract money to honour her contract in Spain.
"To solicitor Bilton & Hammond. Told him I did not want him to do any more for me. Paid him. Went to another solicitor."
"When I went downstairs Mrs Thompson was there with her daughter … and son in law. They insisted that we [speak] together and said that Mrs Thompson didn't wish to see me alone at all.
The meeting in general was very cordial and well mannered we were told that Mrs Thompson wasn't happy that the fact that we were continually questioning the transaction and that she didn't wish to proceed.
Mrs Thompson had a copy of the letter of the 11th January with her. I read it over as they said there was a page missing.
Mrs Thompson felt that I was quite an honest person personally but didn't know the family sufficient and should be questioning the position with her daughter.
I said immediately that I would accept the situation if those were her instructions. Mrs Thompson did quite vocally express her opinions and it was the first time I had actually see her express opinions quite strongly herself. They asked us to work out the bill and as to when they could have the deeds.
Julie and her husband still seemed to do most of the talking. Mrs Thompson does seem to have capacity but finds making [decisions] very difficult. She still said it was difficult for her to make decisions that she constantly worries about things and that it is still clear as there is no fixed idea as to where Mrs Thompson will live. Julie was saying that they are looking at her spending 6 months with one of them and six months with the other.
Mrs T got quite cross with me at one stage and criticised me for not letting her do what she wanted. I congratulated her because for the [first] time she was coming out of herself and was giving clear instructions and opinions. I told her that that was what I had been looking for.
My personal opinion is that Julie and her Husband are trying to look after Mrs Thompson in what they believe are her best interests… Mrs Thompson however is still having difficulty in making decisions and in understanding advice.
My opinion is that if I had seen her alone I might not have been happy that she necessarily understood what she actually needed to do.
"I've had enough, I'm up to here with it. I want it settled one way or the other. Surely I can say what I want with my own money."
"Basically, it became apparent from the very beginning of the meeting that Mrs Thompson was finding things extremely difficult to deal with. Mrs Thompson had never dealt with matters herself as everything had been dealt with by her late husband. It was also apparent that Mrs Thompson was incredibly grief stricken by the death of her husband despite the fact that this was some 15 months earlier. She was extremely distraught. It was clear that Mrs Thompson was not wanting to be bothered with issues and she felt that she should be able to do what she wanted without receiving any advice from [Mr Bilton].
[Mr Bilton] explained to Mrs Thompson that of course she was the client and it was extremely important that he had advised her fully in connection with her proposals and more importantly that she fully understood all of the implications of such proposals. Mrs Thompson said that she felt [Mr Bilton] was questioning her family relations and he informed her that by no means had any doubts her relationship with her children and nor was he suggesting that she should not do as she wished. [Mr Bilton] made it extremely clear to Mrs Thompson that in actual fact all he was trying to do was to ensure that they looked at all of the options available to her and that having received comprehensive advice, Mrs Thompson made the correct decision in connection with her property. Mrs Thompson stated that she had enough and she no longer wanted us to act in relation to this matter. [Mr Bilton] confirmed that of course this was entirely her decision and that he was more than happy to [release] the title deeds to them in order that they may make alternative arrangements. It did however become clear that in actual fact they are unsure as to what arrangements they do want to make and hence obtaining any form of instructions from them was extremely difficult.
It was also apparent that the instructions of the client had changed from one moment to the next and basically she had got herself into a situation whereby she did not know what she wanted to do. [Mr Bilton] clearly explained to the client the reason for his advice in that there are certain guidelines to which he must adhere if she was intending to make a significant gift to her daughter. Mrs Thompson had not wanted for example to attend [Mr Bilton] without her daughter present even though it was explained to her that this was merely a formality in order to comply with the guidelines in connection with gifts of property. It was extremely clear that Mrs Thompson was grief stricken, struggling to comprehend with the situation and give clear instructions and furthermore listen to any advice that was being given to her, as she did not want to be bothered with it all. Under the circumstances an agreement was reached that the most sensible option was to leave things as they were for the time being and for our files to be closed."
"Mrs Foy told me that their intention now was to take the deeds away and put them in the safe and tell mother not to worry about them for the moment and not to do anything."
"As far as we could say we thought Mrs Thompson had capacity but we did not believe that Mrs Thompson actually understood sufficiently the consequences of the advice that was being given."
"Attending Mrs Thompson showing me the title deeds Re: her husband's estate discussing letters from Bilton Hammond without daughter and she confirmed that a Deed of Family of Arrangement and Transfer to daughter for inheritance tax purposes, must be prepared and arranging to do so. Then attending Mrs Thompson her daughter and son in law and discussing arrangements."
"Attending Mrs Thompson and Mrs Foy see Mrs Thompson on her own again going through advice received from Bilton Hammond and she insisted that the papers be signed as Julie would sort everything out."
Waiting for the mortgage
"Client was asked where her mother has gone? Client confirmed that her mother was no longer residing at the property as she had moved to live with Mrs Foy's sister (Mrs Thompsons other daughter). Informed SAG. On this basis typing up the mortgage terms and conditions …"
The mortgage comes through
"Diane and Dawn (a friend of Diane's) came over with me to the houses to collect some of my belongings. I felt really sick going over and I did not want to go there. I could not stand much more of the pressure. When we got there we packed a lot of my things from the bedroom and anything that was valuable. I emptied my safe with the little money that I had in the house. Nobody was at the property."
"Q: You had to get away on 8 April – that was when you moved out of the Property? A. Yes and Julie knew I'd moved out.
Q: You knew that you weren't going back? A: Yes.
Q: You have not been back to the Property, other than to collect things, since 8 April 2007? A: Yes."
The Spanish purchase
i) Half the value of Valley View already belonged to Mr and Mrs Foy; and Mrs Foy gave the remainder of the cash to Mr Foy as a gift in recognition of his many improvements to the property. This explanation makes no sense. First, the very fact that half the value of Valley View was attributed to Mr and Mrs Foy was itself the recognition of Mr and Mrs Foy's improvements to the property. To give him the remainder of the cash would have been double counting. Second, however much Mr Foy had improved the property, the fact remains that there was still the original dwelling on the land and the land itself which unquestionably belonged to Mrs Thompson.
ii) The money raised on mortgage was to be used to buy a property in Spain for the whole family to live in. Mr Foy was to be repaid for his improvements to Valley View. He was due about £200,000. This explanation suffers from the same defect as the first, namely that Mr and Mrs Foy were being paid twice over for the improvements. It also fails to account for all the cash. £400,000 was raised on mortgage. £100,000 was spent on the Spanish property. Even if Mr Foy was repaid £200,000 for the improvements to Valley View, that still leaves £100,000.
iii) She gave the money to her husband but he would not give it back. This explanation was untrue, because the money was in a joint account to which Mrs Foy had access. Mrs Foy then said that her husband "would not let" her draw on the joint account; but why he had this power over her was never explained.
iv) She did not give Mrs Thompson the money because she did not think that it was Mrs Thompson's own decision not to go to Spain. She "continued the journey I had decided to do" in the hope that her mother would come and join her. This explanation makes little sense. First, Mrs Thompson has been clear since April 2007 that she does not want to go to Spain and that she wants her £200,000. Second, as I have pointed out, even on Mrs Foy's best case there was still £100,000 in surplus cash.
v) She did not pay Mrs Thompson the £200,000 because she was concerned about her mother's health. She was waiting for her mother to return "to her old self". This explanation is not true either. If it were, Mrs Foy would have put the £200,000 aside to wait for her mother's return to health. But she did not.
"I am very upset with what is going on. You know you made me a promise you would not let me down, it was all to do with trust.
Also you said you had promised your Dad you would always look after me and take care of me.
He would not believe what you are putting me through.
You have taken everything your Dad and me have worked for all these years.
I hope you will give me the £200,000 you promised, and also the £20,000 you borrowed from me.
I can't understand why? I am full of nerves and you have left me penniless and homeless.
What have I done to deserve being treated like this.
I thought I had always been a good mother to you all these years."
i) Was Mrs Foy entitled to any beneficial interest in Valley View as a result of the improvements that she and her husband carried out?
ii) If so, what is the extent of that beneficial interest?
iii) Is Mrs Thompson entitled to set aside (a) the deed of family arrangement and (b) the deed of gift to Mrs Foy on the ground of undue influence?
iv) If Mrs Thompson is entitled to set aside either or both these transactions, is her right to set aside either or both these transactions binding on TMB?
v) If (a) Mrs Thompson is entitled to set aside either or both these transactions (b) her right to do so binds TMB, but (c) Mrs Foy is entitled to a beneficial interest in Valley View, is TMB nevertheless entitled to a charge over Mrs Foy's beneficial interest in Valley View?
vi) Did Mrs Foy repay Mrs Thompson the sum of £20,000 that Mrs Thompson had lent her to pay for the deposit on the Spanish property?
Mrs Foy's interest in Valley View
"I would prefer to say (while conscious that it is a thoroughly question-begging formulation) that to establish a proprietary estoppel the relevant assurance must be clear enough. What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context."
"Once it has been established that promises were made, and that there has been conduct by the plaintiff of such a nature that inducement may be inferred then the burden of proof shifts to the defendants to establish that he did not rely on the promises."
"It is for the court to say in what way the equity can be satisfied. I am quite clear in this case it can be satisfied by holding that the defendant can remain there as long as he desires to as his home."
i) The fact that old Mr Baker paid for half the cost of the materials to build the bungalow and supplied the land;
ii) The fact that Jack Baker had enjoyed over thirty years rent free occupation of the cottage, including 12 years after his father's death;
iii) The fact that Jack Baker was left £400 in his father's will, which was over double what he had spent in building the bungalow;
iv) The fact that the issue arose only in the context of a claim for possession; and Jack Baker did not, it seems, argue for any greater right.
i) The objective of the doctrine of undue influence is to ensure that the influence of one person ("the donee") over another ("the donor") is not abused (§ 6);
ii) If the donor intends to enter into a transaction, but the intention was produced by means which lead to the conclusion that the intention thus procured ought not fairly to be treated as the expression of the donor's free will, the law will not permit the transaction to stand (§ 7);
iii) Broadly, there are two forms of unacceptable conduct. The first comprises overt acts of improper pressure or coercion such as unlawful threats. The second form arises out of a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage. (§ 8);
iv) The principle is not confined to abuse of trust or confidence. It also extends to the exploitation of the vulnerable (§ 11);
v) Disadvantage to the donor is not a necessary ingredient of undue influence (§ 12). However, it may have an evidential value, because it is relevant to the questions whether any allegation of abuse of confidence can properly be made, and whether any abuse actually occurred (§ 104);
vi) Whether a transaction has been brought about by undue influence is a question of fact (§ 13);
vii) The legal burden of proving undue influence rests on the person alleging it. The evidence required to discharge the burden of proof depends on the nature of the alleged undue influence, the personality of the parties, their relationship, the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship, and all the circumstances of the case (§ 13);
viii) If the claimant proves (a) that the donor placed trust and confidence in the donee or that the donee acquired ascendancy over the donor, and (b) that the transaction calls out for explanation, the claimant has discharged an evidential burden, which will also enable an inference of undue influence to be drawn, and thus satisfy the legal burden, unless the donee produces evidence to counter the inference which would otherwise be drawn (§§ 14, 21 and 156);
ix) This is simply a question of evidence and proof. At the end of the day, after trial, there will either be proof of undue influence or that proof will fail and it will be found that there is no undue influence. In the former case, whatever the relationship between the parties and however the influence was exerted, there will have been found to have been an actual case of undue influence. In the latter there will be none (§ 93).
x) Proof that the donor received advice from a third party before entering into the impugned transaction is one of the matters a court takes into account when weighing all the evidence. The weight, or importance, to be attached to such advice depends on all the circumstances. In the normal course, advice from a solicitor or other outside adviser can be expected to bring home to a donor a proper understanding of what he or she is about to do. But a person may understand fully the implications of a proposed transaction, for instance, a substantial gift, and yet still be acting under the undue influence of another. Proof of outside advice does not, of itself, necessarily show that the subsequent completion of the transaction was free from the exercise of undue influence. Whether it will be proper to infer that outside advice had an emancipating effect, so that the transaction was not brought about by the exercise of undue influence, is a question of fact to be decided having regard to all the evidence in the case (§ 20);
xi) The nature of the advice required is that someone free from the taint of undue influence should put before the donor the nature and consequences of the proposed transaction. It is not necessary for the adviser to recommend the transaction. An adult of competent mind is entitled to enter into a financially unwise transaction if he or she wants to (§§ 60 and 61).
"If on the evidence the transaction cannot so be explained — that is to say, the transaction calls for an explanation and that explanation is not forthcoming—the burden then shifts to the claimant to show that in fact, and despite the terms and nature of the agreement, he did not in truth abuse the position that he held. He would normally discharge that burden—as, for instance, now at least occurs in husband and wife cases—by showing that the defendant entered into the matter with his will fully unconstrained, usually with the benefit of independent legal advice." (Emphasis added)
Does a presumption arise?
"We have also been led to believe that following the gift of the whole of the value of Valley View Farm Julie may give you back a sum of money to purchase a house or bungalow in the locality if you wish to live by yourself in this area. It has been suggested that this is a possibility but there will be no legal obligation to do this and Julie could change her mind and there would be no legal comebacks." (Emphasis added)
i) The discussions between Mrs Thompson and Mrs Swanborough in the late spring or early summer of 2006 (§ 20 above);
ii) The understanding that Mr Hammond had in September 2006 having seen Mrs Thompson and Mr and Mrs Foy (§ 22 above);
iii) Mr Hammond's letter of 30 October 2006 (§ 28 above);
iv) Elliot Mather's internal briefing note (§ 31 above);
v) The price actually paid for the Spanish property (§ 34 above);
vi) Mrs Thompson's and Mrs Swanborough's evidence about the family meeting on 2 January (§§ 37 and 38 above);
vii) Mr Bilton's instructions about the will that Mrs Thompson intended to make (§ 44 above);
viii) Mr Bilton's raising of the question about a promissory note (§ 45 above);
ix) Mr Bilton's understanding that the property was worth £400,000 and that Mrs Thompson only wanted to account to Mrs Foy for half (§ 48 iii) above);
x) Mr Bellwood's evidence about the incident on 20 April 2007 (§ 77 above).
i) Legal title to Valley View would be transferred by Mrs Thompson to Mrs Foy;
ii) Mrs Foy would become entitled to £200,000 by way of variation of her father's will;
iii) Mrs Foy would raise £400,000 on mortgage;
iv) Mrs Foy would pay £200,000 to Mrs Thompson;
v) Valley View would be rented out to cover the mortgage payments;
vi) Mrs Foy would use her £200,000 to buy a property in Spain which would be big enough to accommodate Mrs Thompson.
Was there actual undue influence?
i) Mr Bilton pointed out to her the disadvantages of the proposed gift and, as he said in his letter of 11 January, he had previously discussed those disadvantages with her. Not only did he give or send Mrs Thompson three copies of his letter, he read it aloud and in full on 12 January;
ii) Mr Bilton's impression was that Mrs Foy was supportive of her mother and that she was trying to look after her in what she believed to be her best interests;
iii) Both Mr and Mrs Swanborough warned her of the dangers of the transaction;
iv) The impetus to leave Valley View sprang from Mrs Thompson's own will, and she wanted to leave as soon as possible;
v) She understood that in order for her to be able to leave Valley View it would be necessary for money to be raised on mortgage;
vi) She was willing to do whatever was necessary in order to enable enough money to be raised;
vii) At the meeting with Mr King on 18 January he went through Mr Bilton's advice, but Mrs Thompson "insisted" (to use Mr King's word) that the papers be signed.
"The undisputable facts, namely that Mrs Foy mortgaged the property, failed to make all but two repayments on the mortgage, moved the mortgage monies abroad into (on her case) the hands of her husband and left her mother with nothing call out for an explanation. There is no explanation other than the obvious exercise of (in the eyes of equity) Undue Influence."
"If a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met." (Section 27 (1))
"(1) If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration.
(2) For the purposes of subsection (1), the priority of an interest is protected—
(a) in any case, if the interest—
(ii) falls within any of the paragraphs of Schedule 3, or
"An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for—
(b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so;
(c) an interest—
(i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and
(ii) of which the person to whom the disposition is made does not have actual knowledge at that time;
i) The interest must affect the estate immediately before the disposition and
ii) The interest must be protected at the time of registration.
"An interest belonging at the time of the disposition to a person in actual occupation".
"An interest belonging to a person in actual occupation at the time of the disposition".
i) The words "actual occupation" are ordinary words of plain English and should be interpreted as such. The word "actual" emphasises that physical presence is required: Williams & Glyn's Bank v. Boland  AC 487 per Lord Wilberforce at 504;
ii) It does not necessarily involve the personal presence of the person claiming to occupy. A caretaker or the representative of a company can occupy on behalf of his employer: Abbey National BS v. Cann  1 AC 56 per Lord Oliver at 93;
iii) However, actual occupation by a licensee (who is not a representative occupier) does not count as actual occupation by the licensor: Strand Securities Ltd. v Caswell  Ch 958 per Lord Denning MR at 981;
iv) The mere presence of some of the claimant's furniture will not usually count as actual occupation: Strand Securities Ltd. v Caswell  Ch 958 per Russell LJ at 984;
v) If the person said to be in actual occupation at any particular time is not physically present on the land at that time, it will usually be necessary to show that his occupation was manifested and accompanied by a continuing intention to occupy: compare Hoggett v. Hoggett (1980) 39 P&CR 121, per Sir David Cairns at 127.
i) Mrs Thompson had packed some of her pictures and ornaments some months before;
ii) She been away from Valley View for four days;
iii) She had collected personal possessions from her bedroom, taken away from the cottage anything of value and had emptied her safe;
iv) She had decided that she would not go back to Valley View to live there; but
v) Most of her furniture, bedding etc. remained at Valley View and would not be collected for another few days.
"Mummery L.J. relied upon the analogy of the defence of purchaser in good faith for value without notice which may be relied upon by a purchaser of a legal estate to defeat a prior equitable interest or estate. In such a case, it is well established that the burden of proving all the elements of the defence is upon the purchaser: see In re Nisbet and Potts' Contract  1 Ch 391, 398. But that rule depends upon the fact that the land is burdened with an equitable proprietary interest. Prima facie, a purchaser cannot obtain a better title than his vendor was able to convey. The defence of purchaser in good faith for value without notice enables the purchaser to defeat a prior interest which burdened the title. It is therefore for him to establish that defence.
In the present case, however, the bank took a charge directly from Mrs. Boulter. She had the necessary title to grant it. There was no prior interest which the bank needed to defeat. Likewise, the legal charge was an agreement under seal between Mrs. Boulter and the bank. She covenanted directly with the bank. What she claims is that the bank cannot rely upon the charge and the covenant because they were vitiated by the undue influence and misrepresentations of her husband. But in my opinion it is for her to show why these acts of a third party should make the charge and covenant invalid as against the bank."
"In particular, it must be recognised that in the "bank v surety wife" cases the constructive notice that is sought to be attributed to the bank is not constructive notice of any pre-existing prior right or prior equity of the wife. The husband's impropriety, whether undue influence or misrepresentation, in procuring his wife to enter into a suretyship transaction with the bank would not entitle her to set it aside unless the bank had had notice of the impropriety. It is notice of the husband's impropriety that the bank must have, not notice of any prior rights of the wife. It is the notice that the bank has of the impropriety that creates the wife's right to set aside the transaction. The wife does not have any prior right or prior equity."
Estoppel and consent
"Since the mother knew and intended that the mortgage was to be granted to the society and that without the mortgage the flat in which she claims a beneficial interest could not have been acquired, the only possible intention to impute to the parties is an intention that the mother's rights were to be subject to the rights of the society. Therefore, if the land were unregistered land, in my judgment the mother's equitable interest in the flat would have been subject to the society's rights and would provide no defence to the society's claim to possession."
"There is no doubt therefore that the registered land is subject to the rights of such person. But the essential question remains to be answered, "What are the rights of the person in actual occupation?" If the rights of the person in actual occupation are not under the general law such as to give any priority over the holder of the registered estate, there is nothing in section 70 which changes such rights into different and bigger rights."
"If that is right, it follows that George Cann was permitted by her to raise money on the security of the property without any limitation on his authority being communicated to the society. She is not, therefore, in a position to complain, as against the lender, that too much was raised and even if, contrary to the view which I have formed, she had been able to establish an interest in the property which would otherwise prevail against the society, the circumstances to which I have alluded would preclude her from relying upon it as prevailing over the society's interest for the reasons given in the judgment of Dillon L.J. in the Court of Appeal."
"the owner is found to have given the vendor or borrower the means of representing himself as the beneficial owner, the case forms one of actual authority apparently equivalent to absolute ownership, and involving the right to deal with the property as owner, and any limitations on this generality must be proved to have been brought to the knowledge of the purchaser or mortgagee."
A charge over Mrs Foy's beneficial interest
"Every conveyance is effectual to pass all the estate, right, title, interest, claim, and demand which the conveying parties respectively have, in, to, or on the property conveyed, or expressed or intended so to be, or which they respectively have power to convey in, to, or on the same."
The loan of £20,000