First National Bank plc v Achampong [2003] EWCA Civ 487

A married couple gave security over their jointly owned home to support a loan benefiting family members. The wife challenged the charge on the basis of undue influence exerted by her husband. The bank relied on the involvement of solicitors and argued that it had been entitled to proceed without notice of the defect. Alternatively, it maintained that the husband's own beneficial interest remained subject to an equitable charge capable of enforcement. The appeal concerned both the effect of the influence on the wife's position and the surviving security over the husband's share, including the possibility of an order for sale.

Did undue influence defeat the bank’s security against the wife while leaving an equitable charge over the husband’s share enforceable by sale?

The Court of Appeal upheld the wife's protection from the legal charge because the bank had not taken sufficient steps concerning the risk of undue influence. Merely knowing that a solicitor was involved did not necessarily establish that she had received the required independent explanation of the transaction.

However, the husband's beneficial interest remained capable of being charged. The bank therefore held an equitable security over his share, notwithstanding the failure of its attempted security against the wife's interest. An order for sale was justified after considering the trust's purposes, the occupants and the creditor's position. The decision did not establish that creditors always defeat family interests: the matrimonial purpose had effectively ended and the evidence did not justify indefinite postponement.

Failure of a mortgage against one co-owner through undue influence does not necessarily invalidate security over the other co-owner's beneficial share. Enforcement and sale require separate analysis of that surviving equitable charge and the statutory factors governing a trust of land. Solicitor involvement alone may not answer a bank's notice problem.

Achampong combines lender notice of undue influence with enforcement against a co-owner's share. It is useful because setting aside one person's security did not end the entire dispute: the bank could still rely on the husband's beneficial interest. The sale decision was sensitive to the trust's existing purposes and the evidence of hardship. Read it alongside the modern Etridge safeguards and the statutory trust-of-land framework, rather than treating a failed joint charge as either wholly enforceable or wholly worthless.