Norwich and Peterborough Building Society v Steed [1993] Ch 116

Defendant had a house with a mortgage, which he left his mother, B, and sister, C, living in and later gave his mother power of attorney. C fraudulently got B to sign a document allowing C to buy the house and, having paid off the first mortgage, took out a second, bigger one from Plaintiff.

She fell into arrears and Plaintiff sued Defendant for possession.

It was claimed that B knew nothing of the sale, her power of attorney or the mortgage. Defendant therefore claimed non est factum for Defendant, so that C’s action had been a fraud and he was entitled to rectification of the register against both C and Plaintiff.

CA found for Plaintiff:

1. There was no non est factum on the facts

2. C’s failure to pay Defendant/B for the validly sold house merely made the transaction between C and Defendant/B voidable not void, so that it was valid by time she had entered transaction with Plaintiff.

Therefore no rectification would be permitted.