Myranna Boult v Together Personal Finance Limited

The rule in Pigot’s Case applies where, after execution, one party deliberately alters a deed without the other party’s knowledge or consent and the alteration is material. An alteration made under a mistaken belief about the parties’ agreement may still be deliberate; confusion or error in instructions does not necessarily prevent the rule applying. Materiality is assessed when the alteration is made. Potential prejudice to the other party’s legal rights or obligations is sufficient, and later reversal of the alteration or absence of actual prejudice is irrelevant. A material alteration renders the instrument void, but does not necessarily extinguish the underlying obligation to repay money advanced.

The appeal arose from possession proceedings concerning a legal charge securing a bridging loan over the appellant’s house. After the appellant executed a charge over the house alone, the respondent’s solicitors added the title number of adjoining agricultural land in manuscript and registered the charge against both properties. The additional registration was later removed.

The County Court held that the alteration was an innocent mistake and was not material because it did not affect enforcement against the house and caused no actual or potential prejudice. It ordered possession and entered a money judgment. The appeal concerned whether the alteration was deliberate, whether it was material, and whether the rule in Pigot’s Case rendered the charge void.

1. Appeal allowed. The alteration rendered the legal charge void, so the respondent could not enforce it by obtaining possession of the house. The order for possession was set aside. The money judgment was left undisturbed.
2. The rule in Pigot’s Case, as explained in Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd, requires two conditions: the alteration must be deliberate rather than accidental or merely mistaken, and it must be material.
3. An alteration may be deliberate even though it results from a mistaken belief about the parties’ agreement. The solicitor intentionally inserted the additional title number after execution, intending to make the field subject to the security. Any confusion between the respondent and its solicitors did not displace the rule.
4. Materiality is assessed at the time of alteration. The relevant question is whether the alteration was potentially prejudicial to the affected party’s legal rights or obligations. Registration of the charge against the field created a risk of enforcement against that property and therefore constituted potential prejudice.
5. Subsequent events cannot retrospectively alter the position. The later removal of the charge, the respondent’s decision to enforce only against the house, and the absence of actual loss were irrelevant to materiality.
6. Once the two conditions were established, the charge was void from the time of alteration. The underlying loan and repayment obligation remained, and there had been no appeal against the money judgment. It would have been unjust to relieve the appellant both from the security and from repayment of the loan.

• High Court (Chancery Division): Appeal from the County Court at Cardiff allowed. The possession order was set aside, but the money judgment remained in force.