Requirements for enforcing lender's security- 17/10/01 The Times
Where it was proposed that a wife should charge her interest in her home in favour of a bank as security for the indebtedness of her husband or his business, specific clear and simple procedures should be operated in future, as minimum requirements, to protect the wife and to reduce to an acceptable level the risk that she had been misled or coerced by her husband so that the lender might make the advance in reasonable confidence that, if necessary, the security would be enforceable.
The House of Lords so stated when identifying appropriate protective procedures to be adopted in future cases and:
(i) allowing the appeals of Mrs Harris, by her personal representative Mr Harris, Mrs Wallace and Mrs Moore, and dismissing the appeals of Mrs Etridge and Mrs Gillfrom the Court of Appeal (The Times August 17, 1998; (1998) 4 All ER 705) which had ruled in favour of the respective lenders, Barclays Bank plc, Midland Bank plc, UCB Home Loans Corporation Ltd, Royal Bank of Scotland plc and National Westminster Bank plc;
(ii) dismissing the appeal of Mrs Coleman from the Court of Appeal (The Times January 5, 2000; (2001) QB 20) which had ruled in favour of Barclays Bank plc;
(iii) allowing the appeal of Mrs Bennett from the Court of Appeal ((1999) 1 FLR 1115) which had given judgment in favour of the Bank of Scotland; and
(iv) allowing the appeal of Desmond Banks & Co from the Court of Appeal ((2000 PNLR 266) which had ruled in favour of Mrs Kenyon-Brown's claim for damages for professional negligence.
The other cases concerned claims by lenders to enforce charges given over their homes by wives as security for the indebtedness of their husbands or their businesses.
LORD NICHOLLS, having discussed the general principles applicable to cases such as those of the wives on the present appeals and referred to Barclays Bank plc v O'Brien (The Times October 22, 1993; (1994) 1 AC 180), set out the guidance he proposed as the core minimum to the applied in
future to reduce the risk of error, misunderstanding or mishap to an appropriate level.
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