Kingsnorth Finance v Tizard [1986] 1 WLR 783

Mr Tizard was the sole registered proprietor of the matrimonial home in which his wife had
a beneficial interest. The marriage broke down and Mrs Tizard moved out but returned each
day to look after their twin children and would stay the night if her husband was away. Mr
Tizard mortgaged the property. On his application for the loan he stated that he was single.
He arranged for the inspection to take place on a Sunday when he knew his wife and
children would be out. The agent inspecting the property noted that there was occupation
by the children but he found no signs of occupation by the wife. Mr Tizard had said that she
had moved out many months ago and was living with someone else close by.

Held: Kingsnorth Finance took the property subject to the wifes interest. The discrepancy
between what Mr Tizard had stated on his application form and what the agent found when
he inspected the property put the lenders on notice. The lender had failed to take
reasonable steps to avoid being fixed with constructive notice. The inspection was
inadequate since it was at a pre-arranged time.

Midland Bank v Green [1981] 2 WLR 28 House of Lords

In 1961 Walter Green granted an option to purchase Gravel Hill farm to his son Geoffrey
Green. The option, although registrable as a land charge under the Land Charges Act 1925,
was not registered. In 1967 there was a disagreement in the family and Walter sold the farm
to his wife for 500 (it was worth around 40,000) in a deliberate attempt to defeat the
option granted to his son. The wife then changed her will so as to leave the farm to all five
of her children including Geoffrey. Geoffrey learnt of the sale and sought to enforce the
option. The question for the court was whether the option was binding on the wife or
whether she took the farm free of the option. S 13 (2) of the Land Charges Act 1925
provided that a land charge would be void against a purchaser of the land unless registered
and where an estate contract was under consideration it would only be void against a
purchaser of a legal estate for money or moneys worth. Purchaser was also defined in
s.20(8) as a purchaser who for valuable consideration takes any interest in land. The trial
judge found for the wife and held that the option was not binding on the wife. This was
reversed by the Court of Appeal with Lord Denning MR holding that the sale was not for
money or moneys worth and that the protection of the Act was not available in cases of
fraud where there was a deliberate attempt to defeat an interest. The wifes representative
appealed to the House of Lords.

Held: The appeal was allowed. There was no requirement of good faith for a purchaser
under the Land Charges Act 1925. Reference to money or moneys worth excluded marriage
consideration but did not require the consideration to be adequate.

Lord Wilberforce:

Supposeand this may not be far from the truththat the purchaser's motives were in
part to take the farm from Geoffrey, and in part to distribute it between Geoffrey and his
brothers and sisters, but not at all to obtain any benefit for herself, is this acting in "good
faith" or not? Should family feeling be denied a protection afforded to simple greed? To
eliminate the necessity for enquiries of this kind may well have been part of the legislative
intention. Certainly there is here no argument for departingviolentlyfrom the wording
of the Act.

This conclusion makes it unnecessary to determine whether 500 is a nominal sum of

money or not. But I must say that for my part I should have great difficulty in so holding. "
Nominal consideration" and a " nominal sum " in the law appear to me, as terms of art, to
refer to a sum or consideration which can be mentioned as consideration but is not
necessarily paid. To equate " nominal " with "inadequate " or even " grossly inadequate"
would embark the law upon enquiries which I cannot think were contemplated by
Parliament.