Avon Finance Company Ltd (Plaintiffs) v George William Bridger and Joan Bridger
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE BRANDON,LORD JUSTICE BRIGHTMAN |
| Judgment Date | 10 October 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J1010-4 |
| Docket Number | Plaint No. 7801134 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 October 1979 |
[1979] EWCA Civ J1010-4
The Master of the Rolls (Lord Denning)
Lord Justice Brandon and
Lord Justice Brightman
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the Weston-Super-Mare County Court
(His Honour Deputy Circuit Judge Lowry)
MR. A. PALMER (instructed by Messrs. Birkbeck, Montagu's & Co., London agents for Messrs. Burroughs, Day & Blackmore, Solicitors, Bristol) appeared on behalf of the Plaintiffs (Appellants).
THE FIRST DEFENDANT (RESPONDENT) appeared in person.
A few years ago we had a case about old Herbert Bundy, a father who was let down by his son. Now we have the case of George Bridger, a postman, who has also been let down by his son. All his working life was spent in London with his wife. They lived in a council flat there. Mr. Bridger retired at the age of 65. He and his wife decided to go to Weston-Super-Mare in the new county of Avon. They chose to go there because they wanted to be near their son Jack Bridger. Jack said that he would get a house for them there. He had done very well for himself. He had moved up in the social scale, far above his humble parents. He had qualified as a chartered accountant, and was in good practice. He found a house which was suitable for his parents. He made all the arrangements for them to buy it. It was at 12 Tawny Way, Worle, Weston-Super-Mare. It was a modern terraced house built in with three bedrooms. The price was £9,725. The parents did not know anything about house purchase. So their son did it all. The finance was arranged in this way: £5,000 was to be obtained from a building society - the Nationwide Building Society - on a mortgage. The father was to put up in all £1,775, using his gratuity for the purpose. The son was to put up £2,500. The son, in a letter to his parents, described it as an investment. He set out the figures and said: "I have provided £2,500 as my investment in your own house".
By describing it as an "investment", it is clear that it was not a mortgage. When a son puts up a sum of money to help buy a house for his parents, it is like a wife making a contribution to the purchase of a matrimonial home. On putting up £2,500 as an investment in a house, the son would, have a share in the house, but he would not have a mortgage on it.
Now the son Jack Bridger did not have any money of his own to make a contribution of £2,500. He borrowed money from a friend, Mr. Peter Lazarus, who was the headmaster of a boys' preparatory school near Bristol. Jack Bridger was the accountant to the school. But he did not borrow £2,500 only. He borrowed pound;1,000 more. He borrowed £3,500 from Mr. Lazarus. Jack Bridger told Mr. Lazarus that he was assisting his parents with the purchase of a house, and that he needed bridging finance in the sum of £3,500. Mr. Lazarus thought he wanted the whole of that sum for the purpose of buying the house. That was untrue. Jack only wanted £2,500 for the house. He was going to use the other £1,000 for purposes of his own. He told Mr. Lazarus that he would repay the £3,500 as soon as he could get finance for it.
The headmaster Mr. Lazarus had a friend called Mr. Nathan, who had a boy at the school. Mr. Lazarus introduced Jack Bridger to him. Mr. Nathan was a man who ran a finance company called Avon Finance Company Limited. They were licensed money-lenders. They intimated that they would lend the money. In anticipation of that promise, on the 7th June, 1976 the headmaster Mr. Lazarus wrote a cheque in favour of Jack Bridger for £3,500. With that money, a week later on the 11th June, 1976, the sale was completed. The house was conveyed to the parents in their joint names. They also executed a charge in favour of the Nationwide Building Society in the sum of £5,000. That was the only charge on the house. There it was. The parents had the house in their own names on the 14th June, 1976: and the only charge on it was £5,000 in favour of the Nationwide Building Society.
Ten days later, without telling his parents anything about it, Jack set about getting the £3,500 so as to repay Mr. Lazarus.He got it from the Avon Finance Company. He then did a most iniquitous thing. He put up the parents' house as security for the £3,500 without telling them what he was doing. That appears from a letter which he wrote to the finance company's solicitors on the 24th June, 1976. He said: "With reference to my call on you the other day, I am pleased to be able to tell you that the purchase of 12 Tawny Way, Weston-Super-Mare, has now been completed by my parents.
"I should therefore be very grateful if you would please go ahead with the arrangements for the loan of £3,500 to be made to me by Avon Finance Co. Limited., secured on my parents' property.
"My parents' purchase of 12 Tawny Way was dealt with by Mr. D. M. Rendell, of Messrs. Veale, Benson & Co. … I have asked Mr. Rendell to be good enough to let you have any information you may require in connection with the purchase.
"I should be grateful if you would kindly send any correspondence to me at the address above" - that is 28 Addiscombe Road - "as my parents are now making arrangements to vacate their council flat in London and-move to their new house".
So there it was. He himself was going to borrow that £3,500 from the finance company, and he said that it was to be secured on his parents' house.
Upon receiving that letter, the solicitors for the finance company got busy and prepared documents for signature. In two or three weeks they had prepared them. There were two document One was a memorandum of agreement for a loan of £3,500 made between the finance company and Jack Bridger with interest at the rate of £3 per centum per month - that comes to 36 per centa year. There was a provision in clause 4 of that agreement which I will read:
"To secure the payment of the Principal Sum and interest and any other monies hereby agreed to be paid by the Borrower to the Lender the Borrower shall procure that George William Bridger and Joan Bridger of 12 Tawny Way Worle Weston-Super-Mare aforesaid shall execute a Deed creating a second charge by way of legal mortgage on the freehold property known as 12 Tawny Way Worle Weston-Super-Mare a copy of tie form of which Deed is annexed hereto and the terms whereof shall be deemed to be incorporated herein and to form part thereof".
So there it was. The son said that he would procure the legal charge to be executed by his parents.
The second document which the solicitors prepared was the legal charge by which the parents were to charge their house by way of a second mortgage in favour of the finance company. It was a charge between George William Bridger and Joan Bridger in favour of the Avon Finance Company.
Those two documents having been prepared, Jack called on his parents. He took them to the offices of the solicitors of the finance company. He deceived his parents about the purpose of the visit, He told them that there were certain documents which they ought to have signed before in connection with the mortgage by the Nationwide Building Society. He did not tell them that it was a second mortgage by which he was charging their house for another £3,500 with interest at 36 per cent per annum. They believed that the documents to be signed were merely documents which should have-been signed at an earlier stage in connection with the £5,000 mortgage.
The documents were produced by a lady clerk and put beforethem for signature. I will now read what the judge said about. this important day: "(Mr. Bridger) says that on the 19th August 1976 … they received a telephone call from their son asking them to come and sign some papers which the son said they should have signed at an earlier date - 17 th June 1976 papers which he (Mr. Bridger) thought must have been in connection with the Nationwide mortgage because he thought there could be nothing else that they could have been connected with. He thought that some matter had been omitted which must be belatedly dealt with. Indeed the son picked them up and took them to the Plaintiffs' solicitors' office and there they signed what they thought were Nationwide mortgage documents. These documents he said they did not read. He said that he was invited by a lady clerk to sign first and then the wife signed. He says the two documents were together and folded. He says the son had signed the memorandum… and then he and his wife and son signed the foot of the reverse of the document". Those were the findings of the judge as to what happened on that occasion when those documents were signed. One of them was in fact a second mortgage whereby the parents were obligated in regard to their home to the finance company in the sum of £3,500 with 36 per cent interest.
The parents did not think any more about it. They did not hear any more about it for a long time. They were in the house. They were paying their own instalments to the Nationwide Building Society. They thought that was all they had to pay. The son, for a time, was paying the interest to the finance company. But the son was a bad lot. He did not keep up the payments to the fiance company. Eventually, because the payments were in arrear, the finance company wrote to Mr. and Mrs.Bridger on the 29th December, 1977, saying:
"We are instructed by our above named Client Company" - that is, the finance company - "that despite having written several letters to Mr. J. H. Bridger on the matter, he has not made since 21st July 1977 any monthly payments of interest due under the loan referred to in the Memorandum of Agreement for a loan dated 19th August 1976, which loan is secured by a Second Mortgage of 12 Tawny Way executed by you.
"Reluctantly,...
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