S – Subrogation
29/8/17
INSOL FUNDING COMPANY LTD v COWLAM [2017] EWHC 1822 (Ch)
The defendants initially intended each other to have equal shares in a property which they purchased in joint names but without any express declaration of trust. As a result of an agreement as to beneficial ownership of the property after its purchase, they were found to hold the property on a constructive trust as tenants in common, with the first defendant having an 80% share and the second defendant 20%. The first defendant’s claims to further rights over the second defendant's share by way of an equity of exoneration and subrogation were dismissed. The first defendant had not been in the position of a guarantor or surety for the liabilities of the second defendant nor had the second defendant been unjustly enriched at the first defendant’s expense.
4/11/15
MENELAOU v BANK OF CYPRUS UK LTD [2015] UKSC 66
A bank agreed to release charges on a property owned by the claimant’s parents if provided with a new charge on a property to be purchased in the name of the claimant. The new property was in fact purchased but a charge was never signed by the claimant. The claimant had been unjustly enriched because discharge of the bank’s charges on the old property had released the funds for the claimant to purchase the new one. That was sufficient to entitle the bank to an equitable charge on the new property by subrogation to the unpaid vendor’s lien.
30/9/14
DAY v TIUTA INTERNATIONAL LTD [2014] EWCA Civ 1246
The judge below had been entitled to find that even if the borrower had a claim to rescind a mortgage for fraud, the mortgagee had a claim to be subrogated to an earlier charge which the advance had refinanced. It made no difference that the mortgagee’s charge was only voidable and not void from inception. Either way the mortgagee had been entitled to appoint receivers. It made no difference that the mortgagee had purported to do so under its own charge rather than the charge to which it was entitled to be subrogated. Even if the borrower had claims to set-off unliquidated damages for having been induced to enter into the mortgage by the mortgagee’s fraudulent misrepresentation as to its financial status, that did not provide the borrower with an equitable defence to the mortgagee’s claim based on its rights of subrogation.
2/7/13
MENELAOU v BANK OF CYPRUS UK LTD [2013] EWCA Civ 1960
A bank agreed to release charges on a property owned by the claimant’s parents if provided with a new charge on a property to be purchased in the name of the claimant. The new property was in fact purchased but a charge was never signed by the claimant. The claimant had been unjustly enriched because discharge of the bank’s charges on the old property had released the funds for the claimant to purchase the new one. That was sufficient to entitle the bank to an equitable charge on the new property by subrogation to the unpaid vendor’s lien.
24/9/10
ANFIELD (UK) LTD v BANK OF SCOTLAND PLC [2010] EWHC 2374 (Ch)
A lender’s negligence in failing to register its charge was no bar to its claim to be subrogated to an earlier charge.
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