Beneficial title in sole name even though the legal title is in joint names

Abbey National Bank plc v Stringer ([2006] EWCA Civ 338, CA (Eng)) concerned property the title to which was in the joint names of a mother and a son. This was because the mother was 50 years old at the time of the purchase and the lender wanted someone younger to be jointly liable on the mortgage. The son was 19 at the time. He made no contributions to the purchase price or mortgage instalments. Years later, the son persuaded his mother to sign some documents. She was elderly and poorly educated. She was Italian and did not speak good English. She was not familiar with business matters. She signed the documents because she trusted her son. They were not explained to her in either Italian or English. The documents were a second mortgage over the home in respect of a loan facility for a business in which the son was a partner. The second mortgagee sought possession of the property. The English Court of Appeal decided that although the legal title was in joint names, the mother was the sole beneficial owner; the Court of Appeal thought that there must have been an agreement between them to that effect. Thus, the son himself had no property in the home. This is a striking exception to the presumption formulated soon after in the House of Lords decision in Stack that there is a presumption of equal beneficial ownership where the title is in joint names. The Court of Appeal went on to hold that the mortgage was not enforceable against the mother because she had signed it as a result of her son’s undue influence. The bank had taken none of the steps required to show that the mother knew what she was signing and the associated risks.

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