Pursuing Inconsistent Cases

First National Bank plc v Walker (LSG 7 December CA)

The claimant bank made a joint loan to a husband and wife which was secured by a charge over the matrimonial home. In ancillary relief proceedings the wife did not suggest that the bank did not have a valid charge over her share of the equity in the matrimonial home, in fact the conveyance expressly referred to the bank’s charge and provided that nothing affected or prejudiced the continuing nature of those charges. When the bank commenced possession proceedings to enforce its charge, the wife was not allowed to defend the proceedings based on the principle set out in Barclays Bank v O’Brien [1994] AC 180 that when she executed the charge over the matrimonial home she was acting under her husband’s undue influence. Her rights against her husband were inextricably linked to her rights against the bank. Her rights against the bank were parasitic on her claim against her husband. In the matrimonial proceedings she had not suggested to her husband that he would have to repay the whole of the loan without a right to a contribution or indemnity for her for half of any amounts paid by him. Once the wife ceased to have rights against her husband to challenge the validity of the charge, she also ceased to have such rights against the bank.