(Court of Appeal; Jacob and Leveson LJJ and Briggs J; 24 March 2010)
The husband persuaded his wife to join with him in a charge against their matrimonial home as security for his separate debts. At the time the husband was having an affair, which led in due course to his separation and divorce from his wife.
The issue for the lower court was whether the charge should be enforced against the wife or whether the husband's failure to disclose the affair amounted to an abuse of trust and confidence reposed in him by his wife. The judge rejected the wife's argument, in part on the basis that she had exercised her own free will in the financial decision-making.
Held that the concealment of the affair did amount to the exercise of undue influence sufficient to vitiate the re-mortgage transaction. The affair was a material fact calling for disclosure. The wife's conscious exercise of will could be vitiated by undue influence by the husband who she had reposed sufficient trust and confidence in. Charge should not be enforced against wife.