Source: All England Reporter
Publisher Citation: [2014] All ER (D) 120 (Jan)
Neutral Citation: [2014] EWHC 36 (Ch)
Court: Chancery Division, Bristol District Registry

Mr Justice Morgan

Representation Michael Selway (instructed by Powells with Chawner Grey, Weston-Super-Mare) for the claimant. 
  Daisy Brown (instructed by Alletsons, Burnham-on-Sea) for the defendants.
Judgment Dates: 17 January 2014


Equity - Exoneration - Husband and wife - Company debt to bank being secured by joint charge over matrimonial home - Husband being director of company having guaranteed debt to bank - House being sold and debt to bank being discharged - Claimant securing judgment debt against husband by way of charging order on husband's proprietorial interest in matrimonial home - Claimant's application to enforce charging order being successful - Judge finding equity of exoneration applying and wife being entitled to indemnification by husband in respect of liability to bank - Whether equity of exoneration applying - Whether wife entitled to indemnity for debt to bank to be met out of husband's interest in matrimonial home.

The Case

Equity Exoneration. The defendants owned a house jointly. The first defendant was the director of a company, which took a loan from Barclays Bank that the company guaranteed. That loan was also secured by way of a second charge over the defendants' house, and they were both mortgagors. The claimant issued proceedings against the first defendant, seeking to recover sums owed to him, which was granted and secured by way of a charging order against the first defendant's share of the property. The claimant applied to the county court for an order that the charging order come out of the first defendant's share of the sale proceeds after Barclays had been paid from both defendants' share. The application was dismissed. The Chancery Division, in dismissing the appeal, held that the second defendant was entitled to indemnification from the first defendant against her liability to Barclays. The second defendant, as sub-surety, was entitled to the right of exoneration by the first defendant, as surety.

Practice Areas

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