- Mortgages—validity—mortgage broker receiving payment from both lender and borrower (Wood v Commercial First Business Ltd (in Liquidation))
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Commercial analysis: A mortgage broker was retained by Mrs Wood to find her suitable sources of lending. Mrs Wood owned two farms, and following her introduction to a lender (Commercial First Business Ltd) she borrowed substantial sums of money secured by separate mortgages in 2006 and 2007 over the farms. She later borrowed further sums against one of the securities. She fell into financial difficulty and in 2008 possession orders were made in respect of each farm. In due course she commenced proceedings alleging that the mortgages were invalid or unenforceable for all or any of the following reasons—(i) her signature had been forged on the second mortgage, (ii) her signature had not been properly attested on the first mortgage, (iii) she was subject to undue influence or abuse of confidence by the broker, and the lender was fixed with the consequences, (iv) the lender owed her a duty of care and was in breach of it, (v) the broker had received a commission in respect of each loan from the lender without her knowledge, (vi) her relationship with the lender was an unfair relationship within the scope of the Consumer Credit Act 1974 (CCA 1974). The court held that although her claims failed on the first four issues Mrs Wood succeeded on the fifth and sixth issues. Written by Charles Joseph, barrister, at Tanfield Chambers.
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