Avon Finance v Bridger

Avon Finance Co Ltd v Bridger [1985] 2 All ER 281

Deeds; meaning of plea; undue influence

(292 words)

Facts

The Bridgers were an elderly couple. They bought a house with their son’s help who was a chartered accountant. The son made arrangements for a building society mortgage as well as a loan from licensed moneylender Avon Finance to facilitate the payment of the purchase price. The son agreed to make sure that the couple would execute a second charge on the house to Avon Finance, which the couple did after consulting Avon Finance’s solicitors. The solicitors told the couple that further documents had to be signed that related to the building society mortgage. Subsequently, the couple’s son vanished and left his parents with the loan.

Issues

Avon Finance was unsuccessful in trying to obtain the sums and possession of the house from the Bridger couple. The judge held that despite Avon Finance’s and their solicitors’ good faith, the Bridgers established non est factum – i.e. they established that the agreement was fundamentally different from what they meant to sign – and could thus escape from the performance of the agreement. Avon Finance appealed.

Decision/Outcome

The Court rejected the lower court’s acceptance of non est factum, explaining that the Bridger couple had not acted with reasonable care. However, the couple left things to be arranged by their son which, based on three considerations, led to an equity that rendered the transaction voidable. First, it was Avon Finance that entrusted the son with the procurement of the transaction. Secondly, as Avon Finance was aware, there was a close, parent-child relationship involved. Thirdly, the Bridgers did not receive independent legal advice. Based on these considerations, the son exercised undue influence on his parents solely for his own and Avon Finance’s benefit. The parties’ bargaining power also lacked equality. So the appeal had to be dismissed.