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Natwest v Beaton [1997] EWCA Civ 1391  Court of Appeal

Mr Beaton was an architect and was a partner in the business. Mrs Beaton had no interest in the business. The partnership had a debt of £20,000 secured on the Beaton's family home. The Beatons then wished to move house. The bank agreed to transfer the charge to the new property. The bank instructed a solicitor to execute the charge and to advise the wife explaining that she had no interest in the business and was putting up her interest in the home as security. The solicitor executed the charge and witnessed the wife's signature. The solicitor wrote to the bank and confirmed that they had executed the charge and advised Mrs Beaton accordingly. The new charge was not limited to £20,000. The document did state the limit of £20,000 but this was deleted. The wife claimed that neither her husband nor the solicitor had explained the change to her and she believed it to be limited to £20,000. She argued the failure to disclose the information amounted to a misrepresentation as they were both under an obligation to disclose the true nature of the charge. She also the bank would have constructive notice of the inadequate advice of the solicitor either under s.199 Law of Property Act 1925 or because the solicitor was the agent of the bank.


When the solicitor was advising the wife he was not acting as an agent for the bank his duty was to the wife alone. The bank were entitled to assume the solicitor had advised the wife appropriately and were thus not fixed with constructive notice.

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