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Mortgages.

The editor of this section of the site is Nigel Clayton of Kings Chambers, Leeds and Manchester. Nigel also maintains the specialist website dealing with mortgages at www.legalmortgage.co.uk





There are two cases this month:
  • A borrower who had obtained a loan could not rely on an alleged oral representation that the bank would also provide development finance.
  • Where a bank made a mistake in discharging a registered charge, the register would be altered to restore it.


Terms of loan

Oral representation

Ulster Bank Ltd v Esmaili
[2017] NICh 14
(Note this is a decision of the High Court of Justice in Northern Ireland and is therefore of persuasive authority only)

Summary

On the facts, a borrower who had obtained finance to purchase commercial premises could not rely on an alleged oral representation that the bank would also provide development finance.

Facts

E obtained loan facilities to purchase commercial premises which he proposed to develop, secured by a number of legal charges. Subsequently, E defaulted and the bank commenced proceedings for possession of the commercial premises. E defended the claim on the basis that the bank had agreed to provide further commercial development finance and asserted breach of contract, misrepresentation and estoppel. He also alleged an unfair relationship under s 140A Consumer Credit Act 1974.

The bank also commenced separate proceedings for possession of one of the other secured properties, in which E’s sister claimed to be beneficially interested.

Main issue

Whether an oral representation was capable of giving rise to binding legal consequences between the parties.

Decision

The Court found for the bank. Applying Carlyle v Bank of Scotland [2015] UKSC 13, the court held that an oral representation was capable of giving rise to binding legal consequences.

However, following a detailed review of the evidence, the Court concluded that the bank had not made any representation about providing development finance, certainly not in sufficie ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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