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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bank Of Scotland v Hill & Anor  EWCA Civ 1081 (11 July 2002)
Cite as:  EWCA Civ 1081
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ON APPEAL FROM REDDITCH COUNTY COURT
(His Honour Judge Geddes)
Thursday 11 July 2002
B e f o r e :
LORD JUSTICE ROBERT WALKER
SIR MARTIN NOURSE
|THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND||Claimant/Respondent|
|ROGER FREDERICK HILL||1st Defendant|
|LINDA CAROL TUDOR||2nd Defendant/Appellant|
MR W BOJCZUK (instructed by Eversheds, PO Box 473, Fitzalan House, Fitzalan Road, Cardiff ) appeared on behalf of the Respondent
Crown Copyright ©
Thursday 11 July 2002
"Attended Mr RF Hill and Mrs LC Hill, who were accompanied by their daughter, when I again went through in great detail all aspects of the re-mortgage of Hillfields Farm, Greenhill, Blackwell and the purchase of Aston Fields Service Station.
I explained in detail what was to happen with regard to the discharge of the NFU mortgage and to the discharge of a second secured loan to National Westminster Bank, and Mr Hill told me that the figure to National Westminster would be approximately £16,500.
I then explained the mortgage deed to the Bank of Scotland and I handed copies of the Mortgage Conditions to both Mr and Mrs Hill, and I emphasised to Mrs Hill that if she felt there was any conflict of interest she should seek separate advice. She, however, indicated that she was perfectly happy for me to deal with matters.
I also explained the transfer of Aston Fields Service Station to Mr and Mrs Hill, pointing out that the property would be vested in their joint names but would be free of mortgage, and I urged Mr Hill to make the necessary arrangements to insure the Station with effect from the completion date.
Both parties then signed the documents and I witnessed them."
"We confirm that, where necessary, in accordance with the Instructions to Solicitors provided to us by the Bank, all joint borrowers, joint owners and occupiers aged 18 or over have received legal advice independent from the Bank and from any other person who signed the Legal Charge. We hold a letter in the form prescribed by the Bank signed by an independent solicitor confirming that such advice has been given."
"In my judgment, the Bank were entitled to rely on that paragraph -- as, indeed, they intended they should be able to rely -- to allay any suspicions that they may have had in relation to the undue influence that the husband may have had on the wife. It seems to me that it was not for the Bank to go behind that paragraph and to enquire what advice was given or, indeed, to ask to look at the letter which is referred to. They were entitled to take that paragraph at face value that the solicitors, who were advising the borrowers, had indeed given advice -- legal advice -- independent from the Bank and from any other person who signed the legal charge."
"Kindly note that these instructions are not intended to be exhaustive. The Bank would expect you to deal with any other matters, relevant to the transaction but not specifically provided for herein, in the manner in which good conveyancing practice and your professional judgment would dictate [then the following words are heavily emphasised] bearing in mind the Bank's overriding requirement to obtain a readily realisable security over the Property.
In considering your advice to the Bank you should not attribute to the Bank's staff handling the matter any particular knowledge of the law."
"Although these issues raise questions of fact, the structure of the underlying transaction is so commonplace and the efficient funding of small busineses is so dependent on its validity, that the parties, and in particular the lending institutions, must be entitled to proceed in accordance with a settled practice which is effective to secure the validity of the transaction while at the same time affording the wife the protection of proper legal advice. It is highly undesirable that the validity of such transactions should depend on fine distinctions, particularly on distinctions in the wording of the instructions to the solicitors or the certificates they give."
"These steps will be applicable to future transactions. In respect of past transactions, the bank will ordinarily be regarded as having discharged its obligations if a solicitor who was acting for the wife in the transaction gave the bank confirmation to the effect that he had brought home to the wife the risks she was running by standing as surety."
"The furthest a bank can be expected to go is to take reasonable steps to satisfy itself that the wife has had brought home to her, in a meaningful way, the practical implications of the proposed transaction."
"Ordinarily it will be reasonable that a bank should be able to rely upon confirmation from a solicitor, acting for the wife, that he has advised the wife appropriately."
"In respect of past transactions, the bank will ordinarily be regarded as having discharged its obligations if a solicitor who was acting for the wife in the transaction gave the bank confirmation to the effect that he had brought home to the wife the risks she was running by standing as surety."
"Unless the case has some special feature, the bank's knowledge that a solicitor is acting for the wife and has advised her about the nature and effect of the transaction will provide a good reason for [believing that she understands the nature and effect of the transaction]. That will also be so if the bank has a reasonable belief that a solicitor is acting for her and has so advised her. Written confirmation by a solicitor acting for the wife that he has so advised her will entitle the bank to hold that reasonable belief."