Jurisdiction(s):
United Kingdom

Santander v Fletcher: Mortgage set aside for undue influence, but equitable charge over son’s 50% under TR1 upheld; no constructive notice of mistake; sale ordered (England and Wales)

Published on: 30 October 2018

Published by a LexisNexis Property expert

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Article summary

Santander UK Plc v Fletcher & Anor [2018] EWHC 2778 (Ch)

Ashley Fletcher was found guilty of fraud, the target being his mother, Mrs Paula Fletcher. Because of his deception, Mrs Fletcher’s property was charged to Santander for a loan far greater than he had led her to expect. He told her the borrowing would be in the region of £32,000, whereas the facility actually approached £120,000. Nothing had been repaid; by May 2017 the outstanding balance was around £160,000 and still climbing. Santander therefore issued possession proceedings under the mortgage. At trial, the judge upheld Mrs Fletcher’s contention that the mortgage should be rescinded for undue influence, of which Santander had sufficient notice to put it on enquiry (see Royal Bank of Scotland v Etridge (No 2) [2001] All ER (D) 156 (Oct)). He decided that, provided she returned to the bank the amount she had believed she was borrowing (ie £31,250), Santander could not enforce the mortgage as against her. Nonetheless, she remained at risk of losing the home because, before she signed the application for the mortgage, she had already made Ashley a joint proprietor of the property at that point in time and still risked losing it...

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