“…It is right to record that Mr Pengelly in subsequent years took out a much larger loan through the same brokers and with the same lender. Those loans, as is the case with the one with which I am concerned, fell substantially into arrears, and proceedings involving the latter loan have long ago been concluded in separate possession proceedings.”
“Mr Pengelly describes himself, I am sure quite accurately, as a hardworking farmer who has had to deal with financial matters as part of his day-to-day business, but he was in no way a financial expert. That is why he approached brokers that he knew in order to address the finances he wishes to raise. In his witness statement, Mr Pengelly describes at length the business model operated by UKMFS. Everything was very informal. It is clear that Mr Horton and Mr Philips were gifted salesmen who showed an interest in their client’s business and gave the impression that they were people who could be trusted. In essence, their sales pitch was to reassure Mr Pengelly that he could take a step back and they would organise everything; all he had to do was sign on the dotted line. As a result of that, Mr Pengelly accepts that he would often not read the documentation provided, even when it came to signing it. He cannot even say whether the documents he signed had been completed or were blank, or what had been completed on those in which entries had been made. He accepts entirely that he had every opportunity to read the documentation and every opportunity to consider what it provided him with. He agrees that he signed documentation, waiving any requirement for independent legal advice, and documentation accepting the various terms and conditions of the mortgage by which he is bound.”
“1. I/We instruct you to endeavour to re-structure/re-negotiate my/our existing finance arrangements and provide ongoing advice. 2. I/We undertake to be bound by the terms and conditions as detailed overleaf. 3. I/We confirm that the information given is true and complete. 4. I/We confirm you have full authority to negotiate on our behalf from the date of signing this acceptance until such time as alternative instructions are given by me/us. 5. I/We undertake to keep confidential and not to disclose to any person other than our officers and employees or any of our professional advisors any information concerning potential providers of the facilities supplied by yourselves in the course of our performing under these terms. 6. I/We undertake not to approach your lending source direct at any time without the specific authority of yourself, such authority not to be unreasonably withheld. 7. I/We understand that any valuation, survey or inspection undertaken or made pursuant to our request will be made only for the benefit of yourselves and/or a lender. 8. I/We give permission to you and/or a lender to contact my Bank, Accountant. Solicitor, past or present employer or any other person regarding information which may be required to fulfil your instructions from me/us. 9. I/We agree to be responsible for any legal or other costs or expenses of yourselves or a lender incurred in endeavouring to re-structure our finances.”
“9. I move now very briefly to the evidence of Mr Barber. He worked for CFBL and had done for many years. I do not propose to go through his witness statement in detail, but it confirms the structure of this particular organisation. In simple terms, they had no direct access to potential borrowers and relied entirely on brokers to provide new business. As Mr Barber confirmed, at any given time there would be hundreds of brokers on their books and there was no restriction on those brokers working for other lenders. Put shortly, CFBL was prepared to underwrite mortgages that the more conventional high street lenders may have avoided. In this case, Mr Pengelly was relying on the value of agricultural land and buildings to provide security, which, as these courts are aware, can be more difficult to value than conventional residential housing. At the time, Mr Pengelly had two County Court judgments outstanding against him. 2. It was the policy of CBFL, as confirmed in their written documentation, to require all brokers to inform borrowers of the commission structure. They, of course, had no direct dealings with the borrowers prior to the mortgage being entered into. They would have satisfied themselves that the standard terms and conditions in this case complied with their requirements, as they did. They would have received the necessary documentation from the broker and made a decision as to the mortgage. They would then be responsible for managing and, if necessary, enforcing the terms of that mortgage. They operated a commission-based system common in business. Again, as their documentation makes clear, they would pay the broker between 2 and 4 per cent of the sum lent in the form of commission. We know that the broker took a similar commission directly from Mr Pengelly. All the evidence before me shows that this was standard business practice and there was nothing unusual or excessive about the rates provided by CFBL. Neither was there any attempt to hide the payment of the commission as it appears in clear terms on the underwriter’s documentation, being documentation Mr Pengelly could have requested at any time. It is perfectly clear, as regards the operation of the business, CFBL operated in an open and conventional fashion. CFBL have subsequently assigned the rights of this mortgage, along with many others, to the claimant in this case. The claimant therefore had no involvement in any of the dealings that led to the original mortgage.”
“19. The next question is whether [UKMFS] were acting as agents. There is no doubt in my mind that [UKMFS] were providing what can properly be described as advice to Mr Pengelly. Mr Pengelly contacted them because he knew them and wanted assistance with the sourcing of a mortgage. He did not want to do that himself. Indeed, he felt he did not have the expertise, so he went to [UKMFS]. In simple terms, they told him they could deal with the problem and they had access to the products that would meet his need. I accept entirely they did not provide him with a range of options nor did they discuss with him the possibility of other lenders. That was because Mr Pengelly was not particularly interested in undertaking a comparative exercise. He simply wanted two loans rolled into one alone with the provision of additional working capital. I have no doubt that Mr Pengelly was interested, of course, in the interest rates achieved and the repayment schedule provided. But having concluded it was a loan he could service that was significantly better that his present position, that was where his interest began and ended. Thereafter, [UFMS] carried out necessary administrative functions and provided the bundle of information to the lenders. 20. However, the provision of advice in such a way is not the same as establishment of an agency. As is made clear in Bowstead & Reynolds on Agency (21st ed), agency is a fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relationships with third parties, and the other of whom simply manifests assent so as to or so acts pursuant to the manifestation. There are plentiful Court of Appeal authorities to support such a proposition. For two quite distinct reasons, [UKMFS] never achieved the heights of such a fiduciary relationship. The first arises as a result of my conclusions about what Mr Pengelly knew or was deemed to know about the terms and conditions in which the broker operated. At that point, he had those terms and conditions and he could have no expectation that the brokers were acting with undivided loyalty. That in itself was seen [sic] to be fatal to a finding of an agency arrangement of the type argued for. 21. Secondly, what [UKMFS] actually did for Mr Pengelly was in no way akin to a fiduciary relationship. There has never been any suggestion that they could commit Mr Pengelly to any contractual arrangements, much less signed or entered into the mortgage on his behalf. After they had identified the product that Mr Pengelly had accepted, they simply put together the information necessary to allow the lender to progress. The only person who could have entered into the mortgage agreement was Mr Pengelly. He could have stopped and withdrawn at any point. In simple terms, without his agreement and signature, there would have been no mortgage. It follows that there is no fiduciary relationship in this case.”
“Mr Pengelly was clear that he made no enquiries at the time to see whether the interest rates were compatible or not and what other mortgages he could have obtained elsewhere. He was also clear that he was extremely glad to have redeemed the two expensive loans and to have capital available. When asked a number of times what he would have done had he been aware of the commission and its amount, he was unable to put together any cogent argument as to why he would have done anything other than accept the mortgage as was. In truth the only sensible reaction Mr Pengelly would have exhibited would have been relief that the part of the commission that was going to fund this mortgage was the responsibility of someone else. As was said a number of times, his brokers were extremely good at what they did and he trusted their judgment. The knowledge of a perfectly normal business standard commission would in no way have shaken that belief. I am quite clear that if Mr Pengelly had known of the commission’s legal [sic] amount, he would have acted in exactly the same way, taken out the same mortgage and sadly got into precisely the same difficulties when it came to managing the repayments.” “Where does that leave the legal position? The principal challenge in this case is there are two conflicting rulings by two Deputy High Court Judges. There is the judgment of His Honour Judge Raynor, QC in Commercial First Business Ltd v. Pickup, [2017] CTLC 1 and the judgment of Mr Pickering sitting as a Deputy High Court Judge in Wood v. Commercial First Business Ltd (in liquidation),[2019] EWHC 2205 . As these two judgments have effectively reached diametrically opposite decisions, I am required to decide between them when reaching my conclusions in this case. I make it clear I have read both judgments with care in what I accept is a complex and developing area of law. I will deal, where I need to, with the specific conclusions in each of these judgments, but, having considered them and the other authorities that have been placed in front of me, I am, with respect, quite clear that the decision in Commercial First Bank v. Pickup properly and fairly reflects the law in this area.”
“23. In any event, given this is a half-secret commission, there would be a discretion available to the court when it came to disposal. The court would have to decide in all the circumstances whether it is fair, just and appropriate to order rescission. It clearly would be neither fair, just or appropriate to do so in this case. As I have already found, had Mr Pengelly been aware of the amount of the commission, I am perfectly clear he would have continued with the mortgage in identical terms. Finding half the commission required was to be paid by the lender rather than being set at his door would have caused him nothing but relief. There is no evidence that it was anything other than a competitive mortgage appropriate to his circumstances which he was glad to receive. Granting rescission in such circumstances, with all the consequences that flow from such a decision, would be grossly disproportionate and unjust. 24. The question then arises as to whether some lesser sanction should be adopted, in particular the repayment of the commission with interest. For the reasons I have already indicated, I can see no justification for enriching Mr Pengelly in this way. In any event, while rescission could be ordered against an assignee such as the claimant, that is not the case with the lesser sanction that I have indicated. Such a debt would be owed by CFBL, who are no longer party to these proceedings. Therefore, even if I am wrong when it came to the exercise of this discretion, it cannot be awarded against the present claimant.”
“The accepted fiduciary relationships are sometimes referred to as relationships of trust and confidence or confidential relations viz trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and partners. The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. The expressions “for”, “on behalf of”, and “in the interests of” signify that the fiduciary acts in a “representative” character in the exercise of his responsibility…”
“A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary.”
“The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal.”
“…A fiduciary who acts for two principals with potentially conflicting interests without the informed consent of both is in breach of the obligation of undivided loyalty; he puts himself in a position where his duty to one principal may conflict with his duty to the other…This is sometimes described as “the double-employment rule”
“…Though I do not say there is a fraud in this case, yet he should rather have let it run out than to have the lease to himself. This may seem hard, that the trustee is the only person of all mankind who might not have the lease; but it is very proper that the rule should be strictly pursued, and not in the least relaxed; for it is very obvious what would be the consequences of letting trustees have the lease on refusal to renew to cestui que use.”
“the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that”…The principal, having been deprived by the other party to the transaction of the disinterested advice of his agent, is entitled to a further opportunity to consider whether it is in his interests to affirm it.”
“For this purpose they must establish that they were deprived of the disinterested advice of their agent by or at least to the knowledge of the [third party]. Is this condition satisfied? I have no doubt that it is. It is, of course, immaterial whether the initiative for the agent’s taking an interest of his own came from the agent himself or from the other party to the transaction. It must also be immaterial whether the other party provided it directly or knowingly assisted the agent to obtain it, for example by diverting to himself or an associate a payment intended for his principal. In all the reported cases, the other party has provided it himself and has been fully aware of the agent’s personal interest. There is, accordingly, no direct authority on the degree of knowledge which he must possess of the existence of the agent’s personal interest. With one reservation to which I shall come in a moment, however, and which goes only to the facts of which knowledge must be proved, I accept the submission made on behalf of the [third party] that nothing less than actual knowledge or wilful blindness will suffice. In particular, constructive notice will not do. Parties to negotiations do not owe each other a duty to act reasonably, but only to act honestly. In the present context, the principal’s right is a right to rescind for fraud, not negligence. There is in my judgment a close parallel with the cases on knowing assistance in a breach of trust. The same facts may give rise to different remedies, and as the present case demonstrates it will often be impossible to distinguish between the payment of a bribe or secret commission properly so-called and the diversion of the principal’s money into the agent’s pocket. There cannot in truth be any real difference between the secret payment to the agent of a sum additional to the purchase price and the payment to him of part of the purchase price of which his principal is unaware. In my judgment, the difference between the two lines of authority (that is to say the “bribery” cases and the “knowing assistance” cases) lies not in the factual background but in the remedy sought; and the state of mind necessary to make the other party liable ought to be the same whether the claim is for an account of the money which he helped the agent to misappropriate or rescission of the transaction itself. My one reservation, which I make for the sake of completeness, is this. It is clear that, where one party to a transaction takes what Collins LJ described as “the hazardous course” of making a payment for the personal benefit of the other’s agent, and does not disclose it to the principal, he cannot afterwards defend the transaction by claiming that he believed the agent to be an honest man who would disclose it himself…Where, therefore, knowing that the agent has an interest of his own he does not himself disclose it to the other party, then in the words of Collins LJ…“he must at least accept the risk of the agent’s not doing so.”
“As I have already said this issue only arose by amendment made at trial. The first defendant [one of the Principals] did not give or call any evidence about it. A letter from the [Fiduciary] was put before the recorder saying he was not tied to the [Third Party] and that “it was an expectation that we would receive a commission from the lender in addition to the broker fee negotiated with the borrower”
“33 Certain things are clear. The defendants retained the broker to act as their agent for a substantial fee. The contract of retainer contained the usual implied terms, but the relationship created was obviously a fiduciary one. As a fiduciary the agent was required to act loyally for the defendants and no put himself into a position where he had a conflict of interest. Yet he agreed that he would be paid a commission by the other party to the transaction which his clients had retained him to procure. By doing so he obviously put himself into a position where he had a conflict of interest. The defendants were entitled to expect him to get them the best possible deal, but the broker’s interest in obtaining a further commission for himself from the lender gave him an incentive to look for the lender who would give him the biggest commission. 34 The broker could only have acted in this way if the defendants had consented to his doing so “with full knowledge of all the material circumstances and of the nature and the extent of [his] interest”: Bowstead & Reynolds on Agency, 18th ed (2006), art 44, para 6-055 – duty to makefull disclosure. An agent who receives commission without the informedconsent of his principal will be in breach of fiduciary duty. A third partypaying commission knowing of the agency will be an accessory to such abreach. The remedies for breach of fiduciary duty are equitable: they ofcourse include rescission and compensation. 35 What amounts to sufficient disclosure for these purposes? Bowstead & Reynolds says, at para 6-057: “Consent of the principal is not uncommon. But it must be positivelyshown. The burden of proving full disclosure lies on the agent and it isnot sufficient for him merely to disclose that he has an interest or to makesuch statements as would put the principal on inquiry: nor is it a defenceto prove that had he asked for permission it would have been given.”
“where [the principal] leaves the agent to look to the other party for hisremuneration or knows that he will receive something from the otherparty, he cannot object on the ground that he did not know the preciseparticulars of the amount paid. Such situations often occur in connectionwith usage and custom of trades and markets. Where no usage isinvolved, however, the principal’s knowledge may require to be morespecific.”
“15 …warn that the broker or other intermediary may not be in a position to give unbiased advice if they are tied to the lender or are paid a fee or commission by the lender… 16 The contract documentation and any customer booklet or leaflet …should…indicate if any commission or other payment is payable by the lender to the broker, and should explain the purpose and nature of any such commission and the basis of calculation.” and told such brokers to: “20 …disclose, both orally and in writing at an early stage, the existence and nature of any commission or other payment payable by the lender…They should explain clearly the implications of any such commission for the broker’s role with regard to the borrower. This is in order that the borrower is clear as to any potential conflict of interest on the part of the broker. The [Office of Fair Trading] would encourage brokers to disclose the amount or likely amount or percentage of the commission, since such transparency will help to reassure borrowers that they are receiving appropriate advice from the broker. Where this is not done, the broker should disclose the factors which will determine its calculation, including whether it will be a percentage of the loan or a fixed sum, and whether it is intended to reject the actual costs incurred by the broker in arranging the loan or is linked to the total volume or value of business brought to the lender over a given period. All such disclosures should be made in writing before the borrower enters into the loan agreement, and preferably before the loan application is submitted to the lender.” “Consent of the principal is not uncommon. But it must be positivelyshown. The burden of proving full disclosure lies on the agent and it isnot sufficient for him merely to disclose that he has an interest or to makesuch statements as would put the principal on inquiry: nor is it a defenceto prove that had he asked for permission it would have been given.”
“15 …warn that the broker or other intermediary may not be in a position to give unbiased advice if they are tied to the lender or are paid a fee or commission by the lender… 16 The contract documentation and any customer booklet or leaflet …should…indicate if any commission or other payment is payable by the lender to the broker, and should explain the purpose and nature of any such commission and the basis of calculation.” and told such brokers to: “20 …disclose, both orally and in writing at an early stage, the existence and nature of any commission or other payment payable by the lender…They should explain clearly the implications of any such commission for the broker’s role with regard to the borrower. This is in order that the borrower is clear as to any potential conflict of interest on the part of the broker. The [Office of Fair Trading] would encourage brokers to disclose the amount or likely amount or percentage of the commission, since such transparency will help to reassure borrowers that they are receiving appropriate advice from the broker. Where this is not done, the broker should disclose the factors which will determine its calculation, including whether it will be a percentage of the loan or a fixed sum, and whether it is intended to reject the actual costs incurred by the broker in arranging the loan or is linked to the total volume or value of business brought to the lender over a given period. All such disclosures should be made in writing before the borrower enters into the loan agreement, and preferably before the loan application is submitted to the lender.”
“38 Obviously if there has been no disclosure the agent will have received a secret commission. This is a blatant breach of his fiduciary duty but additionally the payment or receipt of a secret commission is considered to be a form of bribe and is treated in the authorities as a special category of fraud in which it is unnecessary to prove motive, inducement or loss up to the amount of the bribe. The principal has alternative remedies against both the briber and the agent for money had and received where he can recover the amount of the bribe or for damages for fraud where he can recover the amount of any actual loss sustained by entering into the transaction in respect of which the bribe was given: Mahesan s/o Thambiah v. Malaysia Government Officers’ Housing Co-operative Society Ltd,[1979] AC 374 , 383. Furthermore the transaction is voidable at the election of the principal who can rescind it provided counter-restitution can be made: Panama and South Pacific Telegraph Co v. India Rubber, Gutta Percha and Telegraph Works Co (1875) LR 10 Ch App 515, 527, 532-533. 39 But “the real evil is not the payment of money, but the secrecy attending it”: Chitty LJ in the leading case of Shipway v. Broadwood,[1899] 1 QB 369 , 373. Is there a half- way house between the situation where there has been sufficient disclosure to negate secrecy, but nevertheless the principal’s informed consent has not been obtained? Logically I can see no objection to this. Where there has only been partial or inadequate disclosure but it is sufficient to negate secrecy, it would be unfair to visit the agent and any third party involved with a finding of fraud and the other consequences to which I have referred, or, conversely, to acquit them altogether for their involvement in what would still be breach of fiduciary duty unless informed consent had been obtained. There is no authority which sheds any light on this question. We have been referred to Bartram & Sons v. Lloyd,(1904) 90 LT 357 , where a secret commission had been agreed and paid but the question there was whether the principal had elected to affirm the contract with the other party at a later meeting when he was given some information about what had happened. The court held that he had not, but the decision turned upon whether the principal had made his election with full knowledge of the material facts and not upon the consequences of an inadequate initial disclosure. 40 So what is the position in this case? Mr Say [counsel for the Principals] submits that the disclosure to the defendants was entirely inadequate and did not negate secrecy. It simply said that a commission might be paid to the broker but should have said that a commission was to be paid and stated the amount because these facts were known at the time the defendants were asked to sign the document relied upon by the claimant. The defendants’ fully informed consent to the payment of commission had not therefore been obtained. Furthermore he submits that the notice was ambiguous: having said that in certain circumstances the claimants did pay commission it went on to say it would “pay moneys to your brokers strictly in accordance with your signed authority by deduction from this advance”. 41 Mr Seymour [counsel for the Third Party] submits that it was for the defendants to establish that there had been inadequate disclosure. The allegation that the claimant had paid a secret commission or bribe was serious and yet the defendants had called no evidence to substantiate it. We do not know what, if anything, they were told by the broker or what they understood from the document which they signed. It had not been established that the claimant had procured any breach of duty by the broker. Nevertheless Mr Seymour submits that there was sufficient disclosure. Secrecy had been negated by informing the defendants that commission might be paid and the payment did not become secret simply because they were not given the actual details of the amount paid. Nor, Mr Seymour submits, was the notice ambiguous. Read carefully, as the borrower was told to do, the passage relied upon by Mr Say referred first to a payment by “the company” “in certain circumstances”, and then two sentences later to moneys payable by the borrower which they had authorised to be dispersed out of the proceeds of the loan. In other words, the document is referring to different payments by the lender and the borrower. The payment by the lender to the broker would only be made in certain circumstances; the payment by the defendants out of the proceeds of the loan would be made to the broker in any event. 42 Having looked at the pleadings, the written submissions and the recorder’s judgment it seems to me that it was common ground between the parties at trial that the only disclosure made to the defendants was by means of the claimant’s document which the defendants signed. The broker’s letter said nothing about any disclosure which he had made; nor did Mr Fellowes suggest that anything else had been disclosed by anyone. By signing the document the defendants must be taken to have understood what it said but no more. Quite apart from this, the passage from Bowstead & Reynolds on Agency which I have cited in [35] says that it is for the agent to establish that sufficient disclosure has been made. Here the claimant knew that the broker was the defendants’ agent and so it had to show that it paid commission to him in circumstances where its borrowers had given their informed consent to such a payment. That was obviously the purpose of the document the defendants were asked to sign. The question is whether it achieved that purpose. 43 Did it negate secrecy? I think it did. If you tell someone that something may happen, and it does, I do not think that the person you told can claim that what happened was a secret. The secret was out when he was told that it might happen. This was the recorder’s view and I agree with him. 44 Was the defendants" informed consent obtained? I do not think it was. The passage which I have quoted was muddled although, read carefully, for the reasons given by Mr Seymour, it may not in fact have been ambiguous. But it could and should have been clearer and informed the defendants that a commission was to be paid and its amount and done so in terms which made it clear that the defendants were being asked to consent to this. I also think this statement should have been accompanied by the warning recommended by the Office of Fair Trading to the extent that its payment to the broker might mean that he had not been in a position to give unbiased advice. 45 So for these reasons I do not accept either party’s submissions about the disclosure. This is a half-way house case. The claimant did not pay the broker a secret commission but procured the broker’s breach of fiduciary duty by failing to obtain the defendants’ informed consent to the broker acting in the way he did. 46 This conclusion means that the defendants are not entitled to deploy the full armoury of remedies which would have been available if this had been a true secret commission case. If it had been, a difficult question would have arisen as to whether they were entitled to rescission as of right. As the loan agreement was voidable and the defendants had elected to avoid it, the argument would be that the agreement had gone and they were entitled to rescission simply on terms as to counter-restitution. In other words the equitable remedy of rescission would simply be deployed in aid of the common law to ensure that its consequences were dealt with fairly between the parties. 47 But no such difficulty arises when considering the appropriate remedy for breach of fiduciary duty for which purely equitable relief is available. Here there is no doubt that the court has a discretion as to whether or not to grant rescission. This is illustrated by Johnson v. EBS Pensioner Trustees Ltd, [2002] Lloyd’s Rep PN 309 where this court had to consider, among other things, whether a guarantee given by one of the defendants as security for a loan made by solicitors to his company should be rescinded because the solicitor acting for him had a conflict of interest and had been in breach of his fiduciary duty by failing to disclose that his firm received service charges on the loan. The court (Mummery, Dyson LJJ and Douglas Brown J) upheld the judge’s refusal to grant rescission and rejected the submission that rescission was available as of right in such circumstances. The remedy was discretionary. Dyson LJ said, at para 79: “When exercising its equitable jurisdiction the court considers what fairness requires not only when addressing the question of the precise form of relief, but also when considering whether the remedy should be granted at all.” 48 In Johnson’s case the court ordered the solicitor to account for the service charge to his client. In this case, the broker could similarly have been required to account to the defendants for the£240 commission he received from the claimant. But no such claim has been made against the broker and so, alternatively, the defendants have a claim for equitable compensation against the claimant as it procured the broker’s breach of fiduciary duty. This mirrors the common law right to claim the return of a bribe as money had and received. 49 I think the defendants are also entitled to interest on the£240 from the date it was received (5 August 2003 ). Mr Seymour says only “ordinary” interest should be awarded. I would award simple interest at the loan agreement rate of 1.29% per month. 50 The only remaining question is whether we should order rescission of the loan agreement and its related legal charge. As I have said we have a discretion as to whether or not to make such an order. I do not think we should do so. The agreement and charge are fair and have been held to be enforceable except for the£295 . The defendants will be fully compensated by an award of£240 plus interest. To rescind the transaction altogether would be unfair and disproportionate. This is my view irrespective of whether the defendants would be able to make counter-restitution.” way house between the situation where there has been sufficient disclosure to negate secrecy, but nevertheless the principal’s informed consent has not been obtained? Logically I can see no objection to this. Where there has only been partial or inadequate disclosure but it is sufficient to negate secrecy, it would be unfair to visit the agent and any third party involved with a finding of fraud and the other consequences to which I have referred, or, conversely, to acquit them altogether for their involvement in what would still be breach of fiduciary duty unless informed consent had been obtained. There is no authority which sheds any light on this question. We have been referred to Bartram & Sons v. Lloyd,(1904) 90 LT 357 , where a secret commission had been agreed and paid but the question there was whether the principal had elected to affirm the contract with the other party at a later meeting when he was given some information about what had happened. The court held that he had not, but the decision turned upon whether the principal had made his election with full knowledge of the material facts and not upon the consequences of an inadequate initial disclosure. purpose of the document the defendants were asked to sign. The question is whether it achieved that purpose. “When exercising its equitable jurisdiction the court considers what fairness requires not only when addressing the question of the precise form of relief, but also when considering whether the remedy should be granted at all.”
“We may receive fees from lenders with whom we place mortgages. Before we take out a mortgage, we will tell you the amount of the fee in writing. If the fee is less than£250 , we will confirm that we will receive up to this amount. If the fee is£250 or more, we will tell you the exact amount.”