When Undue Influence Undermines Consent: Key Insights from the Hewett Case
Introduction: Understanding Undue Influence in Mortgage Consent
What happens when one spouse signs a mortgage agreement without knowing the full truth behind the other’s actions or intentions? The landmark case First Plus Financial Group Plc v Hewett [2010] EWCA Civ 312 serves as a vital reminder of the significance of informed consent in mortgage and loan agreements, particularly when undue influence is involved.
This case is especially relevant for individuals entering into mortgage agreements or guarantee contracts, as it strengthens protections against undue influence and non-disclosure—issues that often arise in family and financial transactions.
Background: What Happened in the Hewett Case?
In the Hewett case, the facts were as follows:
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Mr. and Mrs. Hewett jointly owned their family home.
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Mr. Hewett asked Mrs. Hewett to sign a second mortgage on the family home, securing his personal debts with First Plus Financial Group.
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Mrs. Hewett, believing the mortgage was in the family’s best interest, agreed to sign the document.
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However, Mrs. Hewett was unaware that Mr. Hewett was having an affair, had moved out of the family home, and was not acting in good faith.
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Mrs. Hewett later argued that she would not have agreed to the mortgage had she known the full facts.
The Legal Issue: Was There Undue Influence?
The central legal question in First Plus v Hewett was:
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Did Mr. Hewett’s failure to disclose his affair and the truth about his financial situation amount to undue influence, thus invalidating Mrs. Hewett’s consent to the mortgage?
The Court of Appeal ruled that Mr. Hewett had abused the trust and confidence inherent in their marriage. His omission of material facts—such as his affair and the true nature of his financial dealings—constituted undue influence, which rendered Mrs. Hewett’s consent invalid.
Key Legal Principles from the Hewett Case
The First Plus v Hewett case clarified several key points in mortgage law:
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Undue influence doesn’t require coercion or threats: A failure to disclose material information can be enough to invalidate consent.
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Trust is crucial: When trust is a key factor in a transaction (as in the case of spouses), non-disclosure of material facts can vitiate the agreement and lead to it being set aside.
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Lenders must ensure valid consent: Particularly when one party is signing on behalf of a family member or spouse, lenders should take steps to ensure proper consent. This may include arranging for Independent Legal Advice (ILA) to confirm that all parties fully understand the agreement.
Why This Case Still Matters in Mortgage and Loan Transactions
The First Plus v Hewett case remains a critical ruling for understanding spousal consent in secured lending. It underscores how undue influence and non-disclosure can invalidate mortgage agreements, especially when one party is unaware of the other’s actions or intentions.
If you are:
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Being asked to sign a joint mortgage or guarantee agreement,
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Unsure whether the decision is truly in your best interest,
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Feeling pressured by a partner or family member,
You could be at risk of entering into an agreement that doesn’t reflect your true intentions. In such cases, Independent Legal Advice (ILA) is essential to safeguard your rights and prevent future disputes.
Conclusion: Protecting Your Rights in Mortgage Agreements
If you are about to sign a mortgage agreement or guarantee contract and have concerns about the full disclosure of facts or are feeling pressured by a family member, it’s crucial to consult a solicitor who can provide expert guidance. This ensures that your consent is valid and fully informed, protecting your interests.
Further Reading
Takeaway
First Plus v Hewett is a powerful reminder:
Your signature should always be informed, voluntary, and legally advised—especially in relationships of trust.
Gordon and Thompson Solicitors
— Independent Legal Advice You Can Trust.Here’s your redrafted content optimized for Yoast SEO:
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