Aib Group (UK) Plc v Mr Stuart Harold Turner and Others

JurisdictionEngland & Wales
CourtChancery Division
Judgment Date17 Dec 2015
Neutral Citation[2015] EWHC 3994 (Ch)
Docket NumberClaim No 2BM30370

[2015] EWHC 3994 (Ch)






Claim No 2BM30370

Aib Group (UK) Plc
(1) Mr Stuart Harold Turner
(2) Mrs Erica Turner
(3) Miss Maxine Hayley Turner-Hankinson
Miss Maxine Hayley Turner-Hankinson
Part 20 Claimant
(1) Aib Group (UK) Plc
(2) Mr Stuart Harold Turner
(3) Mrs Erica Turner
Part 20 Defendants

This has been the trial of a counterclaim by Mrs Turner-Hankinson ("Maxine Turner") for a declaration that Mr and Mrs Turner hold "The Cottage", 80 Main Street, Etwall, Derbyshire DE65 6LP on trust for her absolutely and free from a charge in favour of AIB Group (UK) plc ("the Bank"). The Cottage forms a part of the grounds of Etwall Lawn, a Listed Regency building. Mr and Mrs Turner were registered as proprietors of Etwall Lawn on 11 February 1974 under Title Number DY349659. Mr and Mrs Turner granted the Bank a First Charge over the property in that title on 11 October 2005.


In this claim the Bank obtained on 12 December 2013, by consent, an order for possession of Etwall Lawn and the property in the registered title. The Order was against Mr and Mrs Turner as mortgagors. They were then the only Defendants to the claim. The Order also included a money judgment against them for £1,500,339.14 and provided for the Bank's costs to be added to its security under the Charge.


The Order on 12 December 2013 provided for possession to be delivered up on or before 19 February 2014. Sadly, Mr Turner suffered strokes over that Christmas period and became disabled and further became and remains cared for in a nursing home.


Maxine Turner was added as a Defendant by Order dated 20 October 2014 and her Defence to the Counterclaim was served on 8 December 2014.


Maxine Turner has been represented at the trial of her counterclaim by Mr Price. The Bank has been the active Defendant to the counterclaim. It has been represented by Mr Cousins QC. Mrs Turner has appeared in person at the trial. She supports the counterclaim but has not added to Maxine Turner's arguments. Mr Turner has by interim order been excused attendance at trial because of his want of capacity.


Mr Price and Mr Cousins QC have helpfully identified these principal questions for trial:

(a) Does Maxine Turner have an actual interest in The Cottage ("the Equitable Interest Issue");

(b) If so, was it an overriding interest binding on the Bank ("the Occupation Issue");

(c) Is the Bank subrogated to the rights of Coutts Finance, a previous mortgagee ("the Subrogation Issue");

(d) Is the Defence and Counterclaim of Maxine Turner an abuse of the process of the Court ("the Abuse Issue").



Mr Turner was the majority shareholder in Plasplugs Limited ("the Company"). He was its Chairman and Managing Director. Mrs Turner was also a shareholder and officer. The Company began business in about 1970. It sold by wholesale from its factory premises in Burton-upon-Trent, wall fixings and DIY goods. It was to be successful for many years and Mr and Mrs Turner were able to draw substantial salaries from it and were well off.


The Turners acquired Etwall Lawn as their home in 1974 and it became the home of their sons, Neale and Alex. Neale and Alex also were to have minority shareholdings in the Company.


Alex married Maxine Turner in 1987. They acquired and lived at 21 Paskin Close, Fradley, Lichfield. Their son, Alistair, was born on 22 July 1988.


Alex Turner died in May 1991. His untimely death was a result of a brain tumour.


Following his death Maxine Turner and Alistair came to live with the Turners at Etwall Lawn. She was paid an income by the Company.


Maxine Turner was entitled to death in service benefits in relation to Alex. The benefit totalled £140,000. It was to be paid into the Turners' joint bank account then with RBS in Burton-on-Trent.


The Turners arranged for the restoration of The Cottage as a three-bedroomed home for Maxine Turner and Alistair. The latter were to move into it in 1993.


Following completion of the sale of 21 Paskin Close, the net proceeds totalling £127,000 were paid into a joint account of the Turners, this time with Midland Bank plc, on 16 February 1996.


In 1996 Maxine Turner married Mr Hankinson. They were to have a daughter, Megan, born in February 1997. They were to be divorced in 1998. Maxine filed with her divorce petition a statement of arrangements for her children which noted their home was the Cottage and that it was owned by the Turners. The latter were also recorded by Maxine as paying Alistair's school fees.


In December 2001 the Turners agreed to take a mortgage advance from Coutts Finance Limited to be secured on Etwall Lawn. The Turners instructed Mr Malcolm Kesterton to act as their solicitor. He was an old friend and Senior Partner in the firm of Samble Burton & Worth of Burton-on-Trent. On 19 December 2001 Coutts Finance also instructed Mr Kesterton to act in relation to obtaining a first legal mortgage. Coutts Finance supplied copies of the "Lender's Handbook" and "our separate instructions". The mortgage advance was in two parts. £550,000 was to redeem a charge with Halifax plc; £260,000 was equity release. The loans were for five years and interest only during that time.


The "separate instructions" required a written consent from Maxine Turner as an adult occupier of Etwall Lawn. She signed the Consent to Mortgage Deed on 1 May 2002 in the presence of Mr Kesterton. Mrs Turner had faxed him on that day to arrange an appointment for Maxine Turner. Mrs Turner asked Mr Kesterton for a copy of the Deeds before they were handed over to Coutts Finance. The mortgage was completed on 3 May 2002 and the advances then made.


In 2002 or 2003 Maxine Turner rented a home in Barbados into which she was to move with Megan. At some point she appears to have purchased a home at Gunsite Townhouse, Gunside Road, St Michael's, Barbados. Megan went to school (St Gabriel's) in Barbados. Alistair stayed in this country and continued to be educated here successively in prep and boarding schools in Repton. The Turners paid the school fees. Alistair went to Barbados when on holiday from school. Maxine Turner continued to receive payments from the Company.


In June 2003 the Turners arranged to borrow £179,000 from Coutts subject to a second charge on Etwall Lawn. Mr Kesterton was again instructed by the Turners and also by Coutts. Coutts sent out, as Coutts Finance had previously, the "Lender's Handbook" and "our separate instructions". On 3 rd June 2003 Mr Kesterton wrote to the Turners saying that the Mortgage Deed was ready for signature by them and that Maxine Turner would need to sign an Occupier's Consent Form. He was given a fax number for Maxine Turner's use when in Barbados. The second mortgage was completed on 5 June 2003 without such Consent Form. Mr Kesterton reported to Coutts that:

"The third party mentioned in the instructions, namely Mrs Maxine Turner, is not actually resident at the property (Etwall Lawn(s)) … We do not consider that it is necessary to have a third party consent form in the circumstances as they now exist."


In January 2005, the Company was introduced to the Bank as the Company through the Turners wished to move its banking arrangements from National Westminster Bank plc to the Bank. The Bank through employees, Mr Hunt and Miss Osborne, were to be involved in discussions with the Turners and were, subject to authority within the Bank, to arrange the relevant banking facilities. An application was made on 21 February 2005 and approved. A facility letter was issued on 22 March 2005 and signed by Mr Turner and Neale Turner. On 21 April 2005 the Company and its relevant subsidiaries or associated companies resolved to grant the Bank a mortgage debenture and a legal mortgage on the Burton-on-Trent factory and cross-guarantees. On 27 April 2005 the transfer of banking arrangements was completed as the Company moved from National Westminster Bank plc and repaid a separate facility it had with RBS.


The Company had substantial borrowings from and overdraft facilities with the Bank. There were soon Bank concerns that it was in breach of the facility letter covenants and losing money. Further, whilst the Company (or an associated company) was negotiating a sale of 2.3 acres for residential development next to its Burton-on-Trent factory which appeared to promise monies to improve its "gearing", there were delays the result of planning applications or potential purchaser uncertainties.


In September 2005 Mr Turner sought a re-mortgage facility from the Bank in relation to Etwall Lawn. The background was a perceived need of the Company to raise nearly £300,000 for a promotion of Company goods through B&Q and to bridge further investment of monies by Mr Turner in the Company (I infer from pension policies). A mortgage application was prepared for the Turners and as I infer, a temporary overdraft given to them as they were then on holiday in Spain.


On 22 September 2005 the Bank issued a letter of mortgage facilities for the Turners and instructed Mr Kesterton who was then also instructed by the Turners. Miss Osborne of the Bank went with the Turners to see Mr Kesterton on 28 September 2005. The mortgage was to be for the sum of £1.4 million plus £2,800 in fees. The Turners were happy with the mortgage and its terms and Mr Kesterton was happy to act. The Turners signed the mortgage offer and overdraft facility letter and a legal mortgage over Etwall Lawn. The Turners signed a declaration that no-one but them had a beneficial or equitable interest in the property and that they were the sole occupiers of the property together with Maxine Turner. The Bank...

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