Myranna Boult v Together Personal Finance Limited

This appeal raises the interesting issue as to the proper application in modern times of the 400-year-old rule in Pigot’s Case (1614) 11 Co.Rep. 26 (“Pigot’s Case”). The rule provides that a material alteration to a deed or other instrument after execution by one party without the knowledge or consent of the other renders it void. The rule is discussed in Chitty on Contracts (36th Ed.), Emmett & Farrand on Title and various recent authorities. However, the ambit of the rule has not been clearly delineated.

The appeal is against the Order of His Honour Judge Porter-Bryant (the “Judge”) dated 31 January 2025 sitting in the County Court at Cardiff. He decided that, in the circumstances of the case, the rule in Pigot’s Case did not apply and the deed in question, though altered after execution by one party only, remained valid and enforceable as to the terms in the executed deed prior to the alteration.

The Claimant below, the Respondent to this appeal, Together Personal Finance Limited, is a finance company that had lent money to the Defendant below, the Appellant, Ms Myranna Boult on the security of her home, a property called Cefncethin Mansion, Ffairfach, Llandeilo, SA19 6PY, with title no. WA898248 (the “House”). The Respondent began possession proceedings in relation to the House. The Appellant defended the proceedings on the basis of the rule in Pigot’s Case, because the Legal Charge which the Respondent was seeking to enforce, had been altered in manuscript after execution to include within its scope another property owned by the Appellant, 15 acres of agricultural land to the west side of the House with a separate title no. WA539855 (the “Field”).

The Judge found in the Respondent’s favour, concluding that the rule in Pigot’s Case was not engaged, both because the alteration was an accident or mistake and because it was not material. The Judge ordered the Appellant to give possession of the House by 4pm on 14 March 2025 and a money judgment in the amount of £738,783.89 plus the Respondent’s costs of the claim.

The Appellant’s Notice was filed on 18 February 2025, and the Appellant was putting forward 10 Grounds of Appeal, although in reality, some of the Grounds were saying the same thing. On 20 June 2025, Butcher J granted permission to appeal, save in respect of three of those Grounds of Appeal. There was also an application to rely on fresh evidence on the appeal, but as was recognised by Mr Cawsey on behalf of the Appellant, that falls away as a result of the rejected Grounds of Appeal and it was not pursued.

Before turning to the issues on this appeal, I will set out a short factual background, which was not really contentious both below and on appeal, and is largely derived from the Judgment below.

In early 2018, the Appellant wished to repay the existing borrowing secured against the House, which was in the total sum of around £362,000. There were two mortgagees: North Yorkshire Mortgages Ltd in the sum of approx. £291,000; and Blemain Finance Ltd in the sum of approx. £70,000. The latter had a Legal Charge over both the House and the Field, although the Appellant has always maintained that the Field had been charged without her consent. Blemain Finance are part of the same group as the Respondent.

The Appellant, who is an elderly lady in extremely poor health, used an independent mortgage broker for the refinancing. The House, not including the Field, because it was not being offered as security, was valued at £625,000 and the Appellant was told that the Respondent was willing to lend her £380,000 for 12 months with interest set at 9% pa. The fees for this lending were £8,595 and that would be added to the loan. The loan plus interest would be repayable by way of a single payment at the end of the 12-month term, that sum being £425,197.88. This was essentially a bridging loan, so that the Appellant could repay her existing borrowings, and then repay the new loan from the proceeds of sale of the House which she intended to sell within the year.

The Appellant agreed only to charge the House by way of security. However, when she attended her solicitors on 22 March 2018 to sign the documentation, she discovered that the Field had been included in the Legal Charge. She therefore declined to sign those documents. She was told that the Field had been included in error and that new documentation would be prepared with only the House being secured to the Respondent. The next day, 23 March 2018, the Appellant attended again at her solicitors’ office and this time she executed the documentation including the Legal Charge that was only over the House. As a result, the funds were released to her and she was able to repay the existing borrowing.

Priority Law were the Respondent’s solicitors in this matter. They dated the Legal Charge on 28 March 2018. On that day, according to their evidence, somebody from Priority Law added in manuscript into the Deed of Legal Charge that had already been signed by the Appellant, the title number of the Field, in the belief that the Field was included with the House as security for the loan. Then on 16 April 2018, that amended Legal Charge was registered at HM Land Registry, on the titles of both the House and the Field.

The Appellant had no idea that this had happened. She said in evidence that she had asked her solicitors to obtain copies of the title deeds to both the House and the Field. On 11 September 2018, she received from her solicitor the office copy entries from HM Land Registry showing that both the House and the Field had been charged in favour of the Respondent, contrary to her express instructions and the agreement of the parties. When this was queried with HM Land Registry, the Appellant was told that this was not a mistake and the Legal Charge covered both properties.

Because the Appellant believed that the previous loan from Blemain Finance had wrongly included the Field in the security, and that Blemain Finance was related to the Respondent, the Appellant suspected that this was a fraudulent act by the Respondent and she contacted the police. After investigating the matter and it being referred to the Crown Prosecution Service, the decision was taken not to prosecute.

In the meantime, the Respondent found out about what had happened as a result of the police investigation. In October 2018, the Respondent managed to remove the charge and restriction from the Field’s title number. Once it was removed, the Appellant sold the Field to her daughter for the nominal sum of £10,000. The Respondent sought to make something of this sale, which it said was at a serious undervalue, but it does not seem to me to be relevant to the issues that arise on this appeal.

Over the years since, the Respondent has given the Appellant plenty of time to sell the House and repay the loan. Whilst it has been on the market from time to time, the House has still not been sold, and the loan has not been repaid. It was due to be repaid by 28 March 2019.

Eventually on 4 May 2023, the Respondent issued possession proceedings against the Appellant in relation to the House. The trial took place on 30 and 31 January 2025. The Appellant relied on Pigot’s Case to say that the Legal Charge was void and of no effect because of the unauthorised amendment made to the Deed. But the Judge found in the Respondent’s favour, as stated above, and ordered the Appellant to give vacant possession of the House by 4pm on 14 March 2025 and ordered her to pay the money judgment of £738,783.89, the loan having accrued substantial interest over the previous 7 years. He also refused permission to appeal.

The Judge decided that the manuscript amendment to the Legal Charge was an “innocent mistake” or “administrative error” that was not in the event material. He rejected the suggestion that this was an intended fraud by the Respondent. Accordingly, it was outside the rule in Pigot’s Case. The relevant paragraphs of the Judgment are as follows:

The Grounds of Appeal in respect of which Butcher J granted permission to appeal are a little convoluted. They are as follows:

It seems to me that this really boils down to the following issues that I should consider:

The general rule in relation to alterations to a written instrument by one party without the consent of another is based on the defence of non est factum. It was set out in Pigot’s Case thus:

The rule has been explained in a number of later cases, but it is clear that the Court of Appeal considers that the rule is so well-established as part of English law, that only the Supreme Court could overturn or radically change it – see Potter LJ’s comment in [29] of Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd [2000] 1 WLR 1135 (“Raiffeisen”).

The rationale and scope of the rule is explained in Chitty on Contracts (36th Ed.):

It is important to note that Pigot’s Case and later authorities state that a material alteration made without the knowledge or consent of the party who had already executed the instrument renders it void. That is because it is treated as not having been executed by the party who did not know about or consent to the alteration – hence its derivation from the non est factum doctrine. In other words, if the promisor can establish the two conditions, namely that the alteration was deliberately made and that it was material, the instrument is void and the promisor discharged. There seems to be no question of the instrument being voidable in those circumstances.

The first issue therefore is whether the alteration was made deliberately and not by accident or mistake. As Males J, as he then was, said in Grove Park Properties Ltd v The Royal Bank of Scotland PLC [2018] EWHC 3521 (Comm) at [14]: “It is important to note that the rule in Pigot’s Case and the policy rational described by Lord Kenyon are concerned with fraud. The rule does not apply to alterations which are accidental or merely mistaken” and he referred to Chitty.

It was accepted by Ms Carter on behalf of the Respondent that, as it was admitted that the Legal Charge was altered, the burden of proof was on the Respondent to show that the alteration was made in circumstances which were insufficient to discharge the Appellant from liability under the Legal Charge. In other words, the Respondent must show that the alteration was made by accident or mistake and/or that the alteration was not material (see Chitty [29-028]).

Mr Cawsey on behalf of the Appellant cited various authorities as to what would amount to an alteration by accident or mistake. In Hong Kong and Shanghai Banking Corporation v Lo Lee Shi [1928] AC 181, a decision of the Privy Council, the accidental destruction of a banknote issued by the Bank by being left in clothes that were washed, was held not to be a material alteration that would discharge the Bank from liability (so long as the note could be reconstructed and the missing parts supplied by oral evidence). The Bank would only be discharged if the other party had altered the terms of the instrument in a manner that could have been assented to by all parties.

In Henfree v Bromley (1805) 6 East 309, an umpire altered his arbitration award after it was ready for delivery to the parties, but before it was actually delivered. The alteration was as to the amount of the award. The umpire had increased the award from the original amount because he had been told that the defendant had refused to pay his share of the costs of the arbitration. The umpire put a line through the original amount (though it was still legible), inserted the new amount and resigned the award. Lord Ellenborough CJ held that, under the terms of the reference, once the umpire had signed the original award he was functus officio and had no authority to alter the award. Therefore, the alteration to the amount was as though it was done by a stranger or “mere spoliator” and had no effect. Furthermore, the original award was still binding on the parties and took effect.

In Wilkinson v Johnson (1824) 3 B.& C. 428, a claim was brought to recover sums paid out by mistake on a forged bill of exchange. The plaintiff had struck out the names of the other indorsers in the mistaken belief that the bill was genuine. The court upheld the plaintiff’s claim. Abbott CJ said: “…the act of drawing a pen through a name on such an instrument is not considered among mercantile men to be an act so absolute in itself as not to be recalled and annulled, if done by mistake”.

As to materiality, Raiffeisen is the lead authority and was referred to extensively by the Judge. The case concerned a guarantee signed by the fourth defendant to the plaintiff bank in the sum of US$5m. The clause providing for the appointment of an agent of the guarantor to accept service of legal process in England had been left blank when the guarantor had signed. But the details were filled in later by an employee of the plaintiff without the guarantor’s knowledge. He then claimed that this was a material alteration that rendered the guarantee unenforceable. The Court of Appeal upheld the trial judge’s judgment that the guarantee was enforceable because the alteration was not material, in that it did not potentially prejudice the guarantor’s rights and obligations under the guarantee.

Potter LJ analysed the rule in Pigot’s Case and subsequent authorities in which it had been considered. In [21] he said that “the touchstone of materiality has been whether or not there has been some alteration in the legal effect of the contract or instrument concerned simply in the sense of some alteration in the rights and obligations of the parties.” Then at [27] he held as follows:

Potter LJ then referred to the Canadian case in the British Colombia Court of Appeal of Canadian Imperial Bank of Commerce v Skender [1986] 1 W.W.R. 284. Potter LJ considered that Lambert JA had strayed outside the rule as applicable in England and seemed to adopt a flexible approach to the question of materiality requiring the alteration to have made a “significant difference, in favour of the promisee, in the fundamental character of the obligations under the agreement” such that it could only have come about by a “fraudulent or mischievous purpose”. At [29] of Raiffeisen, Potter LJ said in response to this as follows:

As correctly pointed out by Ms Carter, and this was accepted by the Judge, the above passages from Raiffeisen make clear that it is unnecessary to consider the motives of the party making the alteration. Nor is it necessary to prove fraud or dishonesty. But it seems to me that what Potter LJ was saying was that there is a strict rule in place with severe consequences for a party making material alterations to a deed without the knowledge of the other party, so as to prevent fraud. It is “potential prejudice” that matters, not actual prejudice. That is because if something is changed in an instrument that could potentially affect the other party’s rights and obligations under the instrument, the alteration could be fraudulent if done in that way, and that is why the instrument is rendered void immediately, as a disincentive to engage in such a practice. That is why Lord Kenyon’s statement in Master v Miller that “no man shall be permitted to take the chance of committing a fraud” (emphasis added) is quoted in Chitty.

This is also the reason why I believe that the materiality of the alteration has to be judged at the time it is made. The authorities do not really deal with this point. But it follows the rationale of the rule being to prevent fraud, that the instrument in question is rendered void immediately upon the making of a material alteration after its execution and without the knowledge or consent of the party affected. That means that anything happening after the alteration cannot affect its materiality; the instrument is void, if the conditions are met, from that time on.

The Judge held that for the rule in Pigot’s Case to apply, the alteration had to be intentional and not an accident or mistake. In the event, the Judge appears to have found that the alteration was both intentional or deliberate but also as a result of a mistake. The mistake was found to be a mistaken belief by the Respondent’s solicitors that the parties had agreed that the Legal Charge would be over both the House and the Field – see [74] and [75] of the Judgment.

As I have said above, I consider that the authorities distinguish between alterations made deliberately, and those which were made accidentally or by mistake. It is difficult to see how an alteration can be both deliberate and by mistake.

More importantly perhaps, the evidence showed that the alteration was made by an unidentified solicitor at Priority Law intentionally so as to ensure that the Legal Charge covered the Field as well as the House. The solicitor had the signed Legal Charge in front of them and, according to the witness statement of Mr Stirzaker, a solicitor at Priority Law but who did not have conduct of this matter, because they thought they had been instructed by the Respondent that the Legal Charge was to cover both the House and the Field, the title number of the Field “was inserted into the legal charge based on the instructions, i.e. the charge was to be registered on both titles, given the previous Blemain charge was registered over both titles”. After this had been done, they procured the registration of the Legal Charge against both titles.

I do find it somewhat extraordinary that a solicitor would just amend a signed Legal Charge in that way, without going back to the Appellant, the chargor, and making sure that this was what had been agreed. I would imagine that such an alteration would normally be initialled by the parties at least. One can well see that if instruments like this can be altered in such a way, without going back to the other party, that it would be ripe for fraudulent conduct of the type that the rule in Pigot’s Case is designed to prevent.

The Judge considered that this was an innocent mistake by the Respondent’s solicitor and there could be no suggestion of any fraudulent intent on the Respondent’s part. Furthermore, because of the valuations, the Respondent did not need security over the Field as well as the House. Ms Carter submitted that, in practical terms, there was never a point before the alteration was reversed when the valuation of the House was not sufficient to cover the outstanding loan plus interest.

But that is not the issue. The simple fact of the matter is that, whether or not the solicitor was acting under a mistaken belief as to what the Legal Charge was to cover, they deliberately added a new property to the Legal Charge after it had been signed by the Appellant and without checking with her (or seemingly their client) that this was what was agreed. They then made it potentially enforceable against the Field by registering it against the Field’s title number. This was therefore a deliberate alteration, on behalf of the Respondent, designed to affect the rights and obligations under the Legal Charge, in that another property was made subject to the security.

I therefore think that the Judge was wrong to hold that the alteration was both deliberate and an innocent mistake. There may have been some confusion as between the Respondent and its solicitors in relation to their instructions, but I do not consider that that is, in the circumstances, a relevant mistake that would displace the rule in Pigot’s Case.

Even if I am wrong about mistake, I also think that the Judge erred in his conclusion on materiality. He seemed to be influenced by the fact that the Respondent reversed the alteration when it knew about it and had only ever sought to enforce against the House. He considered that that meant that the alteration had not caused the Appellant “actual or potential prejudice” – see [82] and [84] of the Judgment.

The Judge also seemed to regard the alteration as not materially affecting the terms of the loan or the ability of the Respondent to enforce against the House – see [79] and [80] of the Judgment. That tied in with the fact that, because the Respondent had only ever relied on the security of the House, the alteration to add the Field to the security was not prejudicial to the Appellant.

However, in my judgment, that is a misapplication of the law, principally as clarified by Potter LJ in Raiffeisen. At the time the alteration was made by the solicitor and the Legal Charge was registered against the Field, there was clearly “potential prejudice” to the Appellant. She was at risk of enforcement action being taken by the Respondent against the Field. Because of her experience with Blemain Finance, she thought that she had been the victim of a fraud. It was only by chance that she discovered what had happened; and it was only actually reversed after the police had become involved.

The point of the rule in Pigot’s Case is to deter people from doing this sort of thing. The Judge should have found that the alteration was material at the time it was made and the Legal Charge was accordingly void at that point. Whatever happened subsequently, such as the Respondent removing the charge over the Field and only seeking to enforce against the House, is irrelevant to the question of whether this was a material alteration at the time it was made.

Accordingly, I think the Judge was wrong to conclude that the alteration was not material.

In the light of my conclusions set out above, it follows that I consider that the Judge erred in finding that the rule in Pigot’s Case did not apply to the Legal Charge. He should have found that the Respondent had not proved either that the alteration was a mistake or that it was not material. The alteration was both deliberate and material and the application of the rule means that the Legal Charge was rendered void, and the Respondent was not able to enforce it by a possession order against the House.

For the reasons set out above, I allow the appeal.

Mr Cawsey submitted that the consequence of allowing the appeal should be that the Respondent’s claim is dismissed in full, including the money judgment. He said that there was no claim in restitution if the Legal Charge was found to be void. The Judge had also been concerned about this consequence and referred to Goss v Chilcott [1996] AC 788 (PC) in such respect. He said there was no respondent’s notice seeking to uphold the money judgment.

However, as Ms Carter submitted, section 9 of the Appellant’s Notice only sought the dismissal of the Respondent’s claim for possession of the House and a change to the costs order. Even though section 5 referred to the money judgment, it would have appeared as though the Appellant was only seeking to appeal the possession order. And in the Grounds of Appeal, and perfected Grounds of Appeal, the Appellant made clear that she was only seeking to overturn the possession order. There has never been any challenge to the amount of the outstanding loan and interest.

There is no doubt that the money was loaned to the Appellant and that the time for repayment has long since passed. It would be contrary to justice for the Appellant to be not only relieved from the security over the House because the Legal Charge has been found to be void but also that she should be relieved from her liability to repay the loan. Since there appeared to be no appeal against the money judgment, I will not be overturning that part of the Judge’s Order. I will only set aside the order for possession.

I hope the parties will be able to agree a draft order to reflect my judgment above. If there are any consequential matters that cannot be resolved by agreement, I would ask for short written submissions in relation thereto and I will decide such matters on paper.