Santander UK Plc v Ashley Shaun Fletcher

JurisdictionEngland & Wales
JudgeMr Justice Birss
Judgment Date23 October 2018
Neutral Citation[2018] EWHC 2778 (Ch)
Date23 October 2018
CourtChancery Division
Docket NumberCase No: 7BS0086C

[2018] EWHC 2778 (Ch)




Order of Mr Recorder Gardner QC dated 6th November 2017

Bristol Civil Justice Centre

2 Redcliff Street

Bristol BS1 6GR


Mr Justice Birss

Case No: 7BS0086C

Santander UK Plc
Claimant and Respondent
(1) Ashley Shaun Fletcher
(2) Paula Denise Fletcher
Defendant and Appellant

Daniel Gatty (instructed by Eversheds Sutherland) for the Respondent

Guy Adams (instructed by Fursdon Knapper) for the Appellant

Hearing dates: 25th September 2018

Mr Justice Birss

Ashley Fletcher was convicted of fraud. His victim was his mother, the appellant, Mrs Paula Fletcher. As a result of the fraud Mrs Fletcher's home was mortgaged to the bank (Santander, the respondent) for a much larger loan than Ashley had led his mother to believe. He represented to his mother than the loan was for a sum in the region of £32,000 whereas in fact it was for about £120,000. The loan has not been repaid. The debt stood at about £160,000 in May 2017 and has continued to increase. The bank brought a mortgage possession claim. At trial the judge accepted Mrs Fletcher's case that the mortgage should be set aside for undue influence of which the bank had sufficient notice to be on inquiry (see RBS v Etridge [2002] 2 AC 773). He held that provided she paid back to the bank the sum she had thought the mortgage was for (i.e. £31,250), the bank could not enforce the mortgage against her. However she still stands to lose her home as a result of a further point which I shall explain. The judge Mr Recorder Gardner QC felt he was constrained to decide the point against Mrs Fletcher. Nevertheless he gave permission to appeal because he was troubled by it.


On appeal Mrs Fletcher changed counsel. Mr Adams now argues the case on her behalf. He abandoned the point on which the judge gave permission to appeal, recognising that the judge was right to decide the particular point he did decide in the way he did. However Mr Adams argued that the ultimate conclusion was wrong for a different reason. That argument was first raised in Mr Adams skeleton argument served (late) less than a week before the appeal hearing. When the appeal was called on the first question to decide was what to do about the new argument. Mr Gatty for the respondent argued that it was a new point, not taken before the judge, was raised far too late and that Mrs Fletcher needed permission to amend the grounds of appeal to argue it, which should be refused. Mr Adams argued that the new point was simply a different reason why the way the judge decided the case was wrong. The original grounds of appeal already challenged that way of deciding the case and so the new argument was within the grounds of appeal. He denied that it raised new facts and contended that even if it did need permission, that permission should be given in the circumstances of this case. In a judgment given during the hearing I decided that an amendment to the grounds of appeal was required but that in the circumstances the best approach in the interests of justice was to allow the amendment and hear the new argument, on the footing that if the facts and evidence were sufficient then assuming the new argument was well founded it would succeed but if not, or if the evidence was not sufficient to support it, then it would fail. The case was not one to be remitted.


Mrs Fletcher's problem arises from the fact that before she signed the mortgage application, she made her son a joint owner of her home. In the relevant standard form (a TR1) which conveyed the house from Mrs Fletcher's sole name into the joint names of Mrs Fletcher and her son, Mrs Fletcher ticked the first box in section 10. That section is entitled “Declaration of trust” and by ticking the first box the relevant words were “The transferee is more than one person and they are to hold the property on trust for themselves as joint tenants”. There is not (now) any dispute that as an express declaration of trust this would take effect in such a way that in the relevant circumstances of this case (which involve a severance of the joint tenancy) Ashley Fletcher and Mrs Fletcher each hold 50% of the beneficial title. Accordingly the bank argued that although the mortgage was not enforceable against Mrs Fletcher, subject to her paying £31,250, the bank separately had an equitable charge over Ashley Fletcher's beneficial interest in the house which arises even if the legal charge under the mortgage is ineffective. The judge held that the declaration of trust was conclusive (citing Stack v Dowden [2007] AC 432, Goodman v Gallant [1986] Fam 106 and Pankhania v Chandegra [2012] EWCA Civ 1438). Thus Ashley did indeed have a 50% beneficial interest. There was no dispute that if Ashley did have a beneficial interest then the bank had an equitable charge over it. Accordingly the house has to be sold and half the proceeds used to pay off Ashley's indebtedness to the bank. That is why Mrs Fletcher stands to lose her home.


The argument on which the judge gave permission to appeal was whether the declaration of trust would convey to a layman that the property would be held in equal shares since it does not use those words (unlike the second box in section 10). If it was right that the conveyance could be found to be insufficiently clear to reach a conclusion of 50/50 beneficial ownership then one could look at other evidence of Mrs Fletcher's actual intentions. It is said on Mrs Fletcher's behalf that the other evidence showed clearly that Mrs Fletcher did not intend her son to have any beneficial interest at all. The argument about construction of the words on the TR1 is the one which was not pursued by Mr Adams on appeal.


The new argument is set out below. Before doing so there is a preliminary point to get out of the way. This is whether the TR1 is to be regarded as a voluntary settlement or a declaration of trust. The significance of the difference between the two is about whose intention matters. If the property is regarded as being conveyed to Mrs Fletcher and her son in law and then they both, as legal owners, declared a trust then the relevant intentions are of the two people. If the trust is regarded as being created by the voluntary settlement of the original owner Mrs Fletcher then only her intention matters. Mr Adams submitted it was a voluntary settlement and Mr Gatty was content to argue this point on the same basis. Therefore I do not need to get into that question any further. Nevertheless I will refer to the relevant part of the TR1 as a “declaration of trust” for the rest of the judgment, simply because that is the terminology both sides used in argument.


The steps in the appellant's new argument are as follows:

i) A court of equity will admit other evidence of the settlor's intentions, including their subjective intentions, when considering whether or not to grant equitable relief to relieve against a mistake. For this counsel relies on Day v Day [2014] Ch 114 and Pitt v Holt [2013] 2 AC 108.

ii) If one examines what Mrs Fletcher's intentions actually were, the judge either made findings of fact about that or made findings sufficient that on appeal the appeal court could reach the same result. The conclusion is said to be that Mrs Fletcher never intended her son to have a beneficial interest and that when the loan (for about £32,000) was paid off, the property would revert back to her as sole owner. Therefore the declaration of trust in the TR1 is vitiated by a mistake.

iii) While written declarations of a party's intentions are generally conclusive, a court of equity is concerned to inquire as to a party's true intentions as regards ownership of property, which may not reflect the legal ownership.

iv) The judge found as a fact that execution of the TR1 in this case by Mrs Fletcher was procured by fraud. The requirements of s53(1)(b) of the Law of Property Act 1925 cannot prevent proof of fraud ( Rochefoucald v Boustead [1897] 1 Ch 196).

v) The authorities (such as Pankhania v Chandegra [2012] EWCA Civ 1438) did not compel the judge to treat the written document as conclusive in this case because of the evidence of fraud or mistake.

vi) The respondent bank cannot rely on the declaration of trust in the TR1 as evidence of Mrs Fletcher's intentions for a number of reasons. The judge found the bank was on notice. It would be unconscionable in these circumstances to allow the bank to rely on it. The bank's claim is through Ashley Fletcher and, since he could not conscionably enforce those rights against his mother, neither can the bank.


Mr Adams submits that as a result of these points, the only relief Mrs Fletcher needs is a declaration, which she is entitled to, that Ashley does not hold any beneficial interest in the property. On that basis the bank has no right to seek possession and sale of the property. If necessary Mrs Fletcher has a good claim for an order setting aside or rectifying the TR1 to reflect her true intentions. The reason counsel puts this as “if necessary” is because no claim to set aside, rescind or rectify the TR1 was pleaded on behalf of Mrs Fletcher before the judge. The submission is that the fact no such claim was pleaded is not a bar to relief. What matters is whether she has a good claim.


Mr Gatty for the bank argues to the contrary. He starts by submitting that one must take care to look at what actually happened and to distinguish between the conveyance from Mrs Fletcher to the joint names and the later mortgage. The judgment was focussed (rightly) on whether the mortgage was tainted by undue influence, whether the bank was on notice of that and consequential issues. It does not follow from the fact that the legal mortgage was set aside as a result of the undue influence that the bank had...

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2 cases
  • Wanda Ann Pedro v Rosemarie Gail Pedro
    • Bermuda
    • Supreme Court (Bermuda)
    • 23 August 2019 to the impact on him of signing the 2009 mortgage which was clearly only for Rosemarie's advantage. (See Santander v. Fletcher (2018) EWHC 2778 (Ch); First National Bank v. Achampong (2003) EWCA Civ 487; Edwards v. Lloyds TSB Bank (2004) EWHC 1745 (Ch). These cases were not referred t......
  • Pedro v Pedro; HSBC Bank Bermuda Ltd v Pedro
    • Bermuda
    • Supreme Court (Bermuda)
    • 23 August 2019 to the impact on him of signing the 2009 mortgage which was clearly only for Rosemarie's advantage. (See Santander v. Fletcher[2018] EWHC 2778 (Ch); First National Bank v Achampong[2003] EWCA Civ 487; Edwards v Lloyds TSB Bank[2004] EWHC 1745 (Ch). These cases were not referred to by cou......
2 firm's commentaries
1 books & journal articles
  • Trust Parties’ Uniquely Easy Access to Rescission: Analysis, Critique and Reform
    • United Kingdom
    • The Modern Law Review No. 82-5, September 2019
    • 1 September 2019
    ...rescission in equity beingmore forthcoming in trust cases than in others. The trust rescission cases are Santander UK Plc vFletcher [2018] EWHC 2778 (Ch) (rescission refused); South Downs Trustees Limited vGH, IJ, KL[2018] EWHC 1064 (Ch) (rescission granted); Bainbridge vBainbridge [2016] E......

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