Banco Exterior Internacional SA v Thomas and Another
| Jurisdiction | UK Non-devolved |
| Court | Value Added Tax Tribunal |
| Judgment Date | 29 June 1995 |
| Date | 29 June 1995 |
Court of Appeal
Before Lord Justice Glidewell, Lord Justice Simon Brown and Lord Justice Peter Gibson
Restitution - unjust enrichment - mortgage obtained fraudulently - wrongdoer benefiting from wrong
Where a borrower fraudulently induced a building society to grant him a mortgage and subsequently fell into arrears, the building society, exercising its power of sale as mortgagee, was not entitled to the surplus proceeds of sale after discharging the mortgage.
In consequence, after the borrower was convicted of a criminal offence arising out of the deception and a confiscation order had been made by the crown court in respect of the surplus and accrued interest, a charging order made by the High Court in favour of the Crown Prosecution Service in respect of the borrower's interest in the surplus held by the building society was effective.
The Court of Appeal so held in a reserved judgment dismissing an appeal by the plaintiffs, the Halifax Building Society, against the order made on October 28, 1993 by Judge Maddocks, sitting as a judge in the Chancery Division, whereby he dismissed the plaintiffs' claim to the surplus as against the first defendant, Junior Thomas, and the second defendants, the Crown Prosecution Service.
Mr Malcolm Waters for the building society; Mr Geoffrey Zelin for the CPS; Mr Thomas took no part in the proceedings
LORD JUSTICE PETER GIBSON said that Mr Thomas had obtained a 100 per cent mortgage advance from the society to finance the purchase of a flat. The purchase had been completed on February 17, 1986 at a price of £23,950. To obtain that advance Mr Thomas had made fraudulent misrepresentations to the society as to his identity and creditworthiness.
In 1986 he had made some payments of interest under the mortgage, but had then defaulted. The society had commenced proceedings against him in his assumed name and had obtained an order for possession.
Having learnt from the police his true identity the society had nevertheless proceeded with the sale of the mortgaged property. On April 12, 1989 the society as mortgagee had sold the flat and had recouped what was due to it under the mortgage. It had placed the surplus, £10,504.90, into a suspense account.
The society had subsequently commenced the instant proceedings, seeking a declaration that it was entitled to retain the surplus for its own use and benefit.
In criminal proceedings against Mr Thomas he had been charged with, and had...
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Royal Bank of Scotland Plc v Etridge (No 2); Kenyon-Brown v Desmond Banks & Company (Undue Influence) (No 2); Bank of Scotland v Bennett; UCB Home Loans Corporation Ltd v Moore; National Westminster Bank Plc v Gill; Midland Bank Plc v Wallace; Barclays Bank Plc v Harris; Barclays Bank Plc v Coleman
... ... Barclays Bank plc and Coleman and Another Before Lord Justice Nourse, Lord Justice Pill and Lord ... in the course of his dissenting judgment in Banco Exterior Internacional v Mann [1995] 1 All ER 936 at p ... (supra) CA; Banco Exterior Internacional SA v Thomas [1997] 1 WLR 221 ; Barclays Bank plc v Thomson ... ...
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Royal Bank of Scotland Plc v Etridge (No 2); Kenyon-Brown v Desmond Banks & Company (Undue Influence) (No 2); Bank of Scotland v Bennett; UCB Home Loans Corporation Ltd v Moore; National Westminster Bank Plc v Gill; Midland Bank Plc v Wallace; Barclays Bank Plc v Harris; Barclays Bank Plc v Coleman
... ... (Respondents) and Wallace and Another (AP) (Appellant) Royal Bank of ... This occurred in Banco Exterior Internacional v Mann [1995] 1 All ER 936 : see ... 259 , 277-280 and Banco Exterior Internacional SA v Thomas [1997] 1 WLR 221 , 229). But what if there had been no ... ...
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