3PLR/1996/71 (PC)







LLOYDS BANK PLC – Plaintiff/Respondent


  1. RONALD GEORGE DOIDGE – First Defendant/Applicant
  2. GWENDOLINE ANN DOIDGE – Second Defendant



MR N WOOD (Instructed by Messrs Mayo & Perkins, East Sussex BN21 4RP) appeared on behalf of the Applicant.

The Respondent did not attend and was not represented.



BANKING AND FINANCE:- Banker-customer relations – Undue influence – Essentials of – Unfair advantage – Whether amounts to

BANKING AND FINANCE:- Banker-customer relations – Undue influence – Actual or presumed – How proved

BANKING AND FINANCE:- Banker-customer relations – Undue influence – Failure of bank to provide necessary advice or explanation – When will not amount to misrepresentation or undue influence

BANKING AND FINANCE:- Banker-customer relations – Liability to an order for possession under the terms of the mortgage – What customer must prove to avoid same

BANKING AND FINANCE – IMPLIED RELEASE:- Liability arising from default in payment of bank overdraft – Defence of implied release as distinguished from express release – When will not avail

DEBTOR AND CREDITOR:- Bank debt secured by way of mortgage – Order of possession – What debtor must show to justify the setting aside of the transaction – Proof of a set off and Counterclaim against the bank’s money claim, based on negligence or breach of duty by the bank – Whether adequate

COMMERCIAL LAW – CONTRACT:- Defence of non est factum – How proved – Fundamental mistake induced by misdescription or misrepresentation of another – What would not qualify

EDUCATION AND LAW:- Commercial transactions – Literate adult pleading non est factum – When defence not open

CHILDREN AND WOMEN LAW:- Women and Housing/Marriage/Justice Administration –  Woman with equitable interest in property mortgaged by husband for business related reasons – Order for possession of property for breach of mortgage terms – Effect of action by woman asserting her equitable interests in the property

ELDERS LAW:- Retiring business owner – Liability arising from execution of mortgage contracts – Defence of non est factum – When will not avail

PRACTICE AND PROCEDURE – ACTION:- Self-representation – When will not be ground for voiding of judgment





JUDGMENT (As approved by the Court)

LORD JUSTICE POTTER: Mr Doidge, the first defendant, renews his application for leave to appeal (previously refused by the single judge) against an order of His Honour Judge Kennedy QC, refusing to set aside an order dated 11 October 1995, made by the District Judge, granting the plaintiff bank possession of Mr Doidge’s home. That order for possession cannot be effective for the bank to obtain possession because the second defendant, Mrs Doidge, also lives there and is herself the second defendant to the action in circumstances which I will mention.


Mr Doidge is aged 68. He was a customer/borrower of the bank on a joint business account with his younger brother for a number of years. The action for possession was brought against him pursuant to a legal charge signed by him as security over his home where he lived with his wife and son. When the matter came before the District Judge, Mr Doidge, who had not filed a defence, appeared in person. He offered no defence, save to assert that he did not accept that the bank was entitled to possession and believed that he had paid all for which he was liable. In his second affidavit of 24 June 1996, he explains that he found the whole matter overwhelming.


The District Judge made an order for possession in 42 days with liberty to apply. He advised Mr Doidge to consult a solicitor, presumably having in mind application for suspension under Section 36 of the Administration of Justice Act. Mr Doidge took advice and obtained an emergency civil aid certificate. He sought to appeal the order asking for the District Judge’s order to be set aside and for grant of leave to defend and counterclaim. Meanwhile Mrs Doidge obtained by consent an order to be joined as a second defendant to dispute the order for possession on the grounds that she has an equitable interest in the home. The trial of that matter has yet to be heard.


On hearing the appeal, despite the fact that it was out of time, the judge rightly excused the delay in circumstances where Mr Doidge had been unrepresented. Mr Doidge apparently believed that he had up to 42 days in which to consult a lawyer and take action to protect his position. The defences sought to be raised by Mr Doidge were set out in two affidavits and a draft Defence and Counterclaim.


The full circumstances in which Mr Doidge’s liability to the bank arose, and which were disclosed in an affidavit and the pleading, need not be rehearsed in this judgment. They gave rise to a great sense of unease on the part of the judge as to the overall outcome. On the evidence available, the bank had dealt with the question of obtaining the security by way of mortgage in the first place without, according to Mr Doidge, ever explaining the matter fully to him or advising him to go elsewhere for advice. This was all in circumstances where Mr Doidge was retiring from the business, leaving his brother in charge at a time when the joint account overdraft was low, yet the security given would be continuing and unlimited in relation to the debts of the continuing business. Nonetheless, in order to avoid liability to an order for possession under the terms of the mortgage, it was necessary for Mr Doidge to show circumstances justifying the setting aside of the transaction, as opposed to simply showing that he had a set off and Counterclaim against the bank’s money claim, based on negligence or breach of duty by the bank.


Mr Doidge relied on two principal defences: non est factum, on the basis that he did not know what he was signing and was given no advice in relation to it, and undue influence. The judge did not deal at any length with either, save to make clear his view that on the facts advanced before him neither was sustainable. That was also the view of the single judge. In the event, it is also my view.


Mr Doidge has made clear in his affidavit that he signed the mortgage without reading it or having it explained to him. However, he did say that he had earlier been requested, and had agreed, to place the deeds to his house with the bank as security, and to pay off an earlier mortgage for £1,000 in order to obtain those deeds and place them with the bank. He signed the plaintiff’s mortgage at the same time as handing over the deeds and he said of the mortgage:

“It was put in front of me at his desk, and he [the manager] showed me where to sign. He did not unfold the document, and he did not go through it or explain it to me. He did not suggest that it was something I should read carefully or take legal advice about. I thought probably it was something to record the fact that I had handed in the deeds, with an agreement to enable the business to continue with the overdraft. I did not think it added to the `security` (as I understood it) of handing in the deeds. The word `mortgage` was not mentioned, and I had no idea that it might give the Bank actual power over my property. The manager did not say anything about any such power. He did not ask if anyone else lived at the property. He did not say that money owed was repayable on demand. The meeting was very short.”


We have been referred by Mr Wood, who appears for Mr Doidge, to the authority of Saunders v Anglia Building Society (Gallie v Lee) [1971] AC 1004 in relation to the defence of non est factum. In the light of the restrictive definitions and ambit of the defence of non est factum advanced in that case, like the judge, I can see no reasonable prospect of such a defence succeeding here.


Given that Mr Doidge was a literate adult and had been previously requested to provide security, and given that he believed he was being asked to sign a document in that connection (albeit he says that he thought the document itself was no more than a receipt for the documents he was lodging), far from being under a fundamental mistake induced by the misdescription or misrepresentation of another of the kind normally needed to establish a successful plea of non est factum, he seems to me to have been a person who in a broad sense was simply content to sign a document without seeking advice as to its contents, knowing that it had something to do with the security he had been asked to provide.


So far as undue influence is concerned, the affidavit seems to me devoid of any facts justifying a finding that the bank used undue influence on Mr Doidge. Whilst it is true on the evidence before us that the transaction was manifestly to his disadvantage, on a true reading of National Westminster Bank Plc v Morgan [1985] AC 686, the leading authority on the matter, that is not in itself sufficient. Lord Scarman, in connection with a case in which what might be called the “normal banker/customer relationship” existed, without any particular overtones of confidence or advice existing as between the representatives of the bank and the customer, stated at page 707:

The wrongfulness of the transaction must, therefore, be shown [by the party putting forward the plea]: it must be one in which an unfair advantage has been taken of another… A commercial relationship can become a relationship in which one party assumes a role of dominating influence over the other… Similarly a relationship of banker and customer may become one in which the banker acquires a dominating influence. If he does and a manifestly disadvantageous transaction is proved, there would then be room for the court to presume that it resulted from the exercise of undue influence.” (my emphasis).


No facts are disclosed which suggest a departure from the usual form of banker/customer relationship in this case. Indeed, while there had been a relationship of some years with the previous manager who had stated that security would be required, so far as the bank manager involved at the time of signature of the mortgage is concerned, it was the first time that Mr Doidge had ever met him and he enjoyed no previous personal relationship with him.


In Nat West Bank v Morgan, the bank manager made a positive though innocent misrepresentation about the effect of the charge in terms of the extent of its liability. In this case, there is no positive act of advice, let alone misadvice, relied upon, nor is there any evidence that the bank knew that Mr Doidge was not aware of the meaning of security as he now states in his affidavit, or that it was anything but such a security which he was being required to sign at the time. The highest the matter can be put for Mr Doidge is that the transaction was to his manifest disadvantage, that he was not so advised and was not told that he should seek separate advice.


The essence of undue influence is, as Lord Scarman stated at page 705, “victimisation of one party by another”. That victimisation is not demonstrated simply by showing that a bank is pursuing or protecting its own interests and bringing pressure to bear on a customer to that end, unless some special relationship of confidence over and above the normal is established. Undue influence does not depend simply on the idea of inequality or bargaining power; more must be shown, as the quotation from Lord Scarman demonstrates.


In this case the bank did not suggest to Mr Doidge that he should take advice. It may well be that it should have done so, in particular in relation to his position vis-a-vis his brother, because if Mr Doidge was retiring, the brother would effectively reap the benefit of the security whereas it was Mr Doidge who was mortgaging his home. In my view that alone does not enable Mr Doidge to mount a successful defence of undue influence against the bank. Since I must assume that his case has been put at its highest in his affidavits, I see no reasonable prospect of his establishing a defence of undue influence.


Two further grounds of appeal have been argued. The first relates to the quality of the trial before the District Judge. It has been argued that that trial was flawed and unfair in that Mr Doidge, who was in person, was given no proper chance to ventilate such grounds of defence as he relied upon. That may or may not be so. I am far from satisfied that it was so in the absence of stronger evidence to the contrary than is before us. In any event, however, it seems to me that His Honour Judge Kennedy dealt with the matter by way of a full re‑hearing on the basis of all the affidavit evidence and submissions of counsel in a manner which cannot be so criticised. Therefore, I see nothing in that point.


Finally, it has been argued that by reason of a particular interview in January 1993, in a discussion about the responsibility of himself and his brother in relation to the overdraft, there was an “express or implied release” of Mr Doidge from his obligations in respect of the debt, coupled with subsequent payment by Mr Doidge of half the level of the overdraft at that time. It is not contended that there was any express release and certainly none is disclosed by the evidence. It is said by Mr Wood that the matter hangs on what objectively can be inferred from what the parties said and did. He submitted that it is reasonably clear that there is at least a triable issue that an entirely different basis of dealing had been or was being set up, under which Mr Doidge was no longer to be a debtor of the bank, either alone or jointly with his brother.


I see no grounds on which to imply such a release even if it be that the evidence shows an equivocal situation in relation to the original interview. The subsequent conduct of the parties, the content of the correspondence, and the failure of Mr Doidge to advance any such case at earlier stages when he was being pressed for payment, all seem to me to militate against any such implied release. Realistically I see no chance of his establishing that defence either.


In all the circumstances, and with some reluctance, just as was expressed by His Honour Judge Kennedy, I would dismiss this application.




With one exception on a small point of fact, I am in full agreement with the judgment which has been delivered. My understanding from paragraphs 6 and 7 of Mr Doidge’s affidavit, sworn on 13 May 1996, is that when the manager of the Eastbourne branch of the bank put the mortgage document in front of Mr Doidge, Mr Doidge had in fact met that manager on one previous occasion, so that it was their second meeting rather than their first. However, that does not seem to me to make any difference to the conclusion that Mr Doidge has no arguable defence on the grounds of actual or presumed undue influence on the facts as disclosed in the evidence before us.


I accordingly agree that leave to appeal must be refused.


Order: Application refused. Legal Aid Taxation.


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