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CIBC Mortgages plc v Pitt

[1994] AC 200

Case summary last updated at 04/01/2020 18:35 by the Oxbridge Notes in-house law team.

Judgement for the case CIBC Mortgages plc v Pitt

X had pressurised his wife, D, into letting him take out a loan on the house to invest in shares and he allowed a charge to be put against the house by the creditor, P. When the shares crashed and X defaulted on payments, the bank sought to repossess the house and the wife resisted on the grounds that X had unduly influenced her. HL found that she had suffered “actual” undue influence and that this would allow her to set aside any agreements with X, but not with TPs, so that P’s claim would succeed. The only way D’s defence would have stood would have been if P had been her agent, but he was not. 

Lord Browne-Wilkinson: Although in class 2 (presumed undue influence) there is a need to show “manifest disadvantage”, this is not the case with class 1 (actual undue influence), since it is a species of fraud and fraud does not require such an element. 

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