Credit Lyonnais Bank Nederland NV v Burch [1996] EWCA Civ 1292 (20 June 1996)

Credit Lyonnais Bank Nederland NV v Burch [1996] EWCA Civ 1292 (20 June 1996)

The bank was on constructive notice of the relationship of trust and confidence between Miss Burch and Mr. Pelosi and of the manifest disadvantage to Miss Burch. The bank failed to ensure she received independent legal advice or was properly informed of the extent of her liability. The transaction was set aside for undue influence and could not stand in equity.

Citation
[1996] EWCA Civ 1292
Parties
Plaintiff (appellant): Credit Lyonnais Bank Nederland NV; Defendant (respondent): Helen Burch
Jurisdiction
England and Wales
Judgment Date
20 June 1996
Procedural Posture
Civil Appeal / Appeal From Willesden County Court Judgment
Outcome
Appeal dismissed
Legal Topics
Undue Influence, Unconscionable Bargain, Constructive Notice, Third Party Surety, Independent Legal Advice
Equity Banking Law Contract Law Undue Influence Unconscionable Bargain Constructive Notice Third Party Surety Independent Legal Advice

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Parties

Credit Lyonnais Bank Nederland NV

Plaintiff (appellant)

Helen Burch

Defendant (respondent)

Procedural Posture

Civil Appeal / Appeal From Willesden County Court Judgment

Legal Issues

  1. 1 Whether the mortgage/guarantee given by Miss Burch as security for her employer's debt should be set aside for undue influence and/or unconscionability, and whether the bank had constructive notice of such undue influence.

Ratio Decidendi

The bank was on constructive notice of the relationship of trust and confidence between Miss Burch and Mr. Pelosi and of the manifest disadvantage to Miss Burch. The bank failed to ensure she received independent legal advice or was properly informed of the extent of her liability. The transaction was set aside for undue influence and could not stand in equity.

Court Disposition

Appeal dismissed

Orders

  • Legal charge set aside
  • Bank's application for possession and payment dismissed