Suggested Answer to Exercise 7.3 (Part 2)
Planning Your Answer
Can Sharks Ltd enforce the mortgage against Emily?
- If not, what are the consequences of Sharks Ltd enforcing their security against Clayton alone?
- If Sharks Ltd can enforce the mortgage against Emily, what options are available to it and is Emily entitled to any relief?
- Relief is available to a mortgagor who has been the subject of a misrepresentation or undue influence by a joint borrower.
- Is Emily the victim of misrepresentation or undue influence?
- If so, did Sharks Ltd comply with the requirements set out in Royal Bank of Scotland Plc v Etridge (No. 2)  2 AC 773?
- If Emily is entitled to relief against Sharks Ltd, is her interest in the land secure? This raises issues about her rights as a co-owner of the land (and Trusts of Land and Appointment of Trustees Act 1996).See generally Land Law, Chapters 10 and 11.
See generally Land Law, Chapters 10 and 11.
- If the mortgage is enforceable against Emily, what remedies are available to Sharks Ltd? Can Emily (through Clayton) seek any relief? See Land Law, Section 7.5.
[If this question featured in an assessment you would need to assess how much weight to give to this aspect of the question. There is a strong possibility that Emily will succeed under (a) above. Do you have sufficient time (or a sufficiently large word limit) to address this issue comprehensively?]
- Introduce the issues, the key concepts and why they are important.
- Misrepresentation or undue influence?
- Was Sharks Ltd ‘on inquiry’?
- Has Sharks Ltd done enough to avoid being fixed with notice of the wrong?
- Sharks Ltd’s rights against Clayton and their consequences for Emily.
- Sharks Ltd’s rights against Emily if the legal mortgage is enforceable.
- Make sure that you have stated your conclusions and that these conclusions follow logically from your reasoning.
Before you go to the next page, prepare a more detailed answer plan, including references to relevant cases and statutes.