Mumby v Hardingham

Permission to appeal requires a realistic prospect of success, rather than a fanciful possibility. Where the proposed appeal depends on findings of fact based substantially on the trial judge’s assessment of the parties and witnesses, permission will rarely be appropriate unless there is a proper basis for challenging those findings. In a husband-and-wife transaction, the fact that a wife guarantees or secures borrowing for her husband does not, without more, establish undue influence. The court must examine the evidence of impropriety, misuse of influence and the circumstances in which the transaction was entered.

Mr Mumby lent £60,000 to Mr and Mrs Hardingham. After the loan and subsequent agreements remained unpaid, he obtained judgment against Mrs Hardingham in the Taunton County Court. She admitted signing the agreements but alleged that her signature had been obtained through her husband’s undue influence.

His Honour Judge Darlow rejected that defence after a two-day hearing. Mrs Hardingham applied to the Court of Appeal for permission to appeal, alleging an unfair hearing after the withdrawal of public funding, errors concerning undue influence, and difficulties in calling witnesses. The central issues were whether there was a realistic prospect of success on any ground and whether the trial judge’s factual findings disclosed an arguable error.

1. Permission threshold. The application was refused because none of the proposed grounds had a realistic prospect of success at a full hearing. The relevant prospect had to be realistic, not fanciful.
2. Fair hearing. The withdrawal of public funding was regrettable, but it was not a matter for the Court of Appeal to investigate. Mrs Hardingham had been offered the opportunity to seek an adjournment and had not done so. The county court judge allowed the parties to present their cases, protected her to some extent during cross-examination, and allowed overnight preparation of final submissions. No specific procedural failing had been shown.
3. Undue influence. The judge’s approach was consistent with Royal Bank of Scotland v Etridge [2001] 3 WLR 1021, which was binding. A transaction entered into by a wife in support of her husband’s borrowing was not, without proof to the contrary, prima facie evidence of undue influence. The circumstances had to establish impropriety or misuse of a position of influence.
4. The trial judge had made a series of factual findings rejecting Mrs Hardingham’s account that she had been hurried or pressured into signing. Those findings depended substantially on his assessment of the parties and the critical meeting. There was no realistic prospect that they would be overturned on appeal.
5. The suggestion that the loan might have involved an unlawful proposal concerning interest and tax did not relieve the borrowers from repayment where the loan itself was lawful.

Application for permission to appeal refused.

• Taunton County Court: His Honour Judge Darlow entered judgment against Mrs Hardingham after rejecting her defence of undue influence.
• Court of Appeal (Civil Division): Permission to appeal was refused by Mr Justice Sumner on 15 April 2002.