Brighton and Hove City Council v Audus

  Judgment Mr Justice Morgan: Introduction 1.                  This case raises questions as to the nature and extent of the rights of the Defendant, Mr Audus, in relation to a lease of a residential flat known as Flat 6, Maple House, Bromley Road, Brighton BN2 3RD. 2.                  The lease in question is registered at HM Land Registry under title number ESX 154960. The lease was granted on the 19th December 1988 by Brighton Borough Council to George Bull and Cecily May Bull. The flat was demised for a term of 125 years from 19th December 1988 at a ground rent of £10 per annum. The lease was granted pursuant to the Right to Buy (“RTB”) provisions in Part V of the Housing Act 1985. Mr and Mrs Bull were duly registered as proprietors of the leasehold title on 21st January 1989. Mr Bull died on the 18th November 1991 and the current edition of the official copy of the register of title shows Mrs Bull as the sole registered proprietor. 3.                   The charges register in relation to the title shows three registered charges. The first registered charge is dated 19th December 1988 and the proprietor of the charge is Mr Audus. The second registered charge is also dated 19th December 1988 and the proprietor is again Mr Audus. The third registered charge is dated 29th January 2008 and is said to have arisen under Section 22 of the Health and Social Services and Social Security Adjudications Act 1983. The proprietor of this third charge is Brighton & Hove City Council. I will refer to Brighton Borough Council and Brighton & Hove City Council in this judgment as “the Council”. 4.                  In these proceedings, the Claimant is the Council and the Defendant is Mr Audus. Mrs Bull, the registered proprietor of the lease of the flat, is not a party to these proceedings. The relief claimed by the Council is, first, a declaration that the charge registered at the Land Registry as the second charge on Mrs Bull’s title is void, insofar as it purports to charge the lease of the flat and, secondly, an order for rectification which removes the second charge from the charges register. Thus, the orders sought by the Council will affect the position of the registered proprietor, Mrs Bull.  Further, as will be seen, some of the matters which arise in this case involve an investigation of the arrangement made by Mr and Mrs Bull on the one hand and Mr Audus on the other hand in 1988. 5.                  Neither the Council nor Mr Audus expressed any concern at the absence of Mrs Bull as a party to these proceedings. At the beginning of the trial, I expressed my unease about proceeding to try a dispute which required the Court to investigate the relationship between Mr and Mrs Bull on the one hand and Mr Audus on the other hand in 1988, in circumstances where the outcome of this trial would not bind Mrs Bull. It also seemed to me that the Court would be reluctant to rectify the registered title in a way which would affect the registered proprietor when she was not a party to these proceedings. 6.                  Although I was not given any reliable evidence as to Mrs Bull’s current physical or mental state, I was told that she is now in her 90s and if she were made a party, she would be unlikely to take any active part in these proceedings. Further, although members of Mrs Bull’s family (in particular her daughter) are aware of these proceedings, no family member has sought to intervene. 7.                  Mr Audus accepts that the Council has locus standi to bring these proceedings against him. The principal matter which the Council wishes to achieve is to have its registered charge postponed only to the first registered charge dated 19th December 1988 and so as to have priority to what is at present registered as the second registered charge. In these circumstances, I decided to proceed with the trial of this action, notwithstanding the absence of Mrs Bull as a party, but on the basis that the decision of the Court would not bind Mrs Bull (nor her estate) and whereas I would not in any event rectify the register so as to remove the second charge, I would be able to decide the question of priorities between Mr Audus and the Council. If I upheld the Council’s claim, I would be able to declare, with or without some record being made on the register of title, that the Council’s registered charge was subject only to the first registered charge of 19th December 1988 and not subject to the second registered charge of that date. The parties’ respective positions 8.                  The Council accepts that the first registered charge of 19th December 1988 is a valid legal charge which ranks in priority to the Council’s registered charge. Indeed, the Council positively asserts that the first charge of 19th December 1988 is a mortgage or security transaction, as that is the foundation for the Council’s submissions by way of attack on the second registered charge. The Council also says that the two charges of 19th December 1988 were “part of the same transaction”. The Council then contends that the terms of the second registered charge are void as being a clog upon Mrs Bull’s equity of redemption under the first registered charge. In particular, the Council says that the terms of the second registered charge are repugnant to Mrs Bull’s contractual and equitable rights to redeem the first registered charge and, further, they are collateral to the first registered charge and are unfair and unconscionable. 9.                  In his Defence, Mr Audus pleads details of the agreement which, he says, he reached with Mr and Mrs Bull in 1988, before the charges were entered into on the 19th December 1988. Mr Audus accepts that the first registered charge is a valid charge and that the two charges of 19th December 1988 were part of the same transaction. He denies that the terms of the second registered charge are a clog on the equity of redemption of the first registered charge or that they are repugnant to the right to redeem the first registered charge or that they are in any way unfair or unconscionable. Mr Audus also contends that the circumstances of the case are such that Mrs Bull would be estopped from disputing the validity of the second registered charge and that any estoppel binding Mrs Bull is also binding on the Council. Further, Mr Audus pleads that the express common intention of Mr and Mrs Bull on the one hand and Mr Audus on the other, in 1988, was that Mr Audus should receive the whole of the equitable interest in the lease and the result of the events which have happened is that Mrs Bull now holds the lease on a constructive trust for Mr Audus absolutely (alternatively on such terms as the Court shall determine) or that Mr Audus is absolutely entitled to the lease pursuant to the doctrine of proprietary estoppel. 10.              The Council did not serve a Reply to the Defence. However, in its submissions, the Council contended that Mrs Bull was not estopped in any relevant way and in any event such an estoppel would not bind the Council. Further, it was said that the alternative cases of a common intention constructive trust or a proprietary estoppel could not be put forward, not least because Mr Audus’s case was that the two registered charges of 19th December 1988 gave effect to the arrangement he had made with Mr and Mrs Bull. The Council also relied upon the Land Registration Act 2002 and contended that the registration of its charge overrode equitable interests or equitable claims of the kind being put forward by Mr Audus. 11.              Mr Tanney appeared on behalf of the Council and Mr Pithers appeared on behalf of Mr Audus. The matters arising 12.              These contentions of the parties require the Court to examine a large number of matters. These matters can conveniently be described as follows: (1)   What arrangement was made between Mr and Mrs Bull and Mr Audus in 1988? (2)   What is the nature of that arrangement? (3)   Do the various equitable rules, relied upon by the Council in support of its challenge to the second registered charge, apply to the arrangement in this case? (4)   If those equitable rules do not apply to the arrangement in this case, what is the result? (5)   If the mortgage rules do apply to the arrangement in this case, what is the result? (6)   Is there any relevant estoppel binding Mrs Bull? (7)   If there is a relevant estoppel binding Mrs Bull, does that estoppel bind the Council? (8)   Does Mr Audus have rights in relation to the lease under a common intention constructive trust? (9)   What is the effect of the Land Registration Act 2002? The evidence 13.              I will now attempt to set out the facts which are in evidence before the Court for the purpose of determining the matters arising. It will be seen from the list of matters arising that the Court is asked to make findings about the detail of the arrangements between Mr Audus on the one hand and Mr and Mrs Bull on the other in 1988 and also to consider questions of unconscionability, estoppel (including proprietary estoppel) and a common intention constructive trust. It is right to comment that the material before the Court is somewhat slender as compared with the material that one would expect to have in a case where issues of that kind required to be investigated. There are comparatively few documents which refer to the arrangements in 1988 and the documents which exist principally deal with the formal steps taken rather than with any other matters. Further, the oral evidence was confined to the evidence of Mr Audus and of his solicitor, Mr Aspinall. Mr Audus’ witness statement runs to some three pages and he was not cross-examined at any length. Mr Aspinall’s witness statement runs to some two pages and he too was not cross-examined at any length. Thus, there was no evidence before the Court which was designed to rebut the factual evidence given by Mr Audus and his evidence was not the subject of any significant challenge. 14.              Mr Bull was born in 1916. When he signed the two charges of 19th December 1988, he was 72 years old. I understand that Mrs Bull was a similar age to her husband. Mr Bull served in the RAF during the Second World War and from 1946 until his death in 1991, he lived with his wife in a council flat in Brighton. Mr and Mrs Bull moved to Flat 6, Maple House in 1957. 15.              The Housing Act 1980 conferred on Mr and Mrs Bull the status of secure tenants in their flat and created the right to buy (“RTB”). The RTB provisions of the 1980 Act were re-enacted in the Housing Act 1985. Under the RTB provisions, Mr and Mrs Bull were entitled to claim a long lease of the flat. On 20th January 1986, Mr and Mrs Bull completed a form and sent it to the Council expressing an interest in buying a long lease of the flat. It seems that in around May 1986, the Council valued the flat but the amount of the valuation is not in evidence. Around that time, Mr Bull underwent open heart surgery and the purchase of a lease of the flat was put on one side. On the 14th February 1988, Mr and Mrs Bull felt able once again to take up the question of a purchase of a lease of the flat. On that date, they served a notice on the Council pursuant to Section 122 of the Housing Act 1985, claiming the right to buy. They sent a covering letter to the Council suggesting that the price for the lease should be by way of an adjustment from the May 1986 valuation. 16.              On 3rd August 1988, the Council gave notice to Mr and Mrs Bull that it was prepared to grant a long lease of the flat. The Council’s notice was in accordance with the detailed provisions of the Housing Act 1985 and contained certain prescribed information. The value of the flat was stated to be £41,250. Mr and Mrs Bull were entitled to a 70% discount, that is, £28,875. The net sale price was stated to be £12,375. The ground rent under the lease would be £10 per annum. The Council’s notice contained detailed terms as to service charges, repairs and improvements. The predicted service charges for items other than repairs were of the order of £220 per annum. Service charges in respect of repairs were predicted to be £1,366 and a contribution in respect of improvements was predicted to be £2,927. The Council’s covering letter, sent with its notice of 3rd August 1988, referred to the possibility of Mr and Mrs Bull claiming a right to a mortgage under the Housing Act 1985. 17.              On 22nd August 1988, Mr and Mrs Bull replied to the Council confirming their wish to purchase the property on the terms stated in the Council’s notice. Mr and Mrs Bull’s reply indicated that they were not claiming a right to a mortgage. They stated their solicitors were Hall Ennion & Young, which was a firm known to Mr Audus and, indeed, instructed by Mr Audus to deal with this transaction. 18.              There followed correspondence between the Council and Hall Ennion & Young in relation to the grant of a lease of the flat. In the main, the correspondence was of a routine nature. 19.              The solicitor acting at Hall Ennion & Young was Mr Aspinall. He wrote to Mr and Mrs Bull on a couple of occasions dealing with fairly routine matters. In addition, on 15th December 1988, he wrote a longer letter to Mr and Mrs Bull referring to the arrangements with Mr Audus. I will return to that letter later in this judgment. 20.              On 19th December 1988, the Council granted the long lease of the flat to Mr and Mrs Bull in return for a premium of £12,375. All of this sum was provided by Mr Audus. 21.              It is now necessary to go back in time to describe the evidence as to the discussions between Mr and Mrs Bull on the one hand and Mr Audus on the other. Mr Audus gave the following evidence. He stated he was the nephew of Mrs Bull. He said he enjoyed a very good and close relationship with Mr and Mrs Bull. In the period up to 1988 he used to visit them about two or three times a year and he would also speak to them on the telephone. Mr and Mrs Bull told Mr Audus in 1988 that they had applied to purchase a lease of their flat and that they were entitled to a substantial discount but they did not have the capital to buy the lease. Mr and Mrs Bull told Mr Audus that they had earlier approached their daughter to see if she was in a position to help them. The daughter was unable to assist so Mr and Mrs Bull discussed the proposed purchase with Mr Audus. Mr Audus was in a financial position to provide the purchase money for the lease. His evidence was that he: “… reached agreement with them that I would provide all the necessary money to allow them to purchase the flat in their joint names on the basis that they would be able to live there rent free for the rest of their lives and when they had both died I would become the legal owner of the flat. It was also agreed that no interest would be payable by my aunt and uncle on the monies which I had provided to fund the purchase. In addition I agreed to pay the legal costs relating to the purchase, the annual service charge and the costs of some storage heaters, new carpets and replacement double glazed windows which were being installed by the council.” 22.              Mr Audus gave evidence that the arrangement was a fair and equitable one on both sides. Mr and Mrs Bull had the benefit of living rent free in the flat for the rest of their lives and he would ultimately acquire the flat which he had been able to purchase at a substantial discount. Mr Bull instructed Mr Aspinall at Hall Ennion & Young to prepare “the necessary legal documentation”. The two charges of 19th December 1988 were executed “to give effect to the legal agreement between the parties”. Mr Audus added that following completion, although he did not specify the date, he executed a codicil to his will to the effect that the two charges of 19th December 1988 would not be enforceable after his death and his interest in the property would pass to Mr and Mrs Bull. Mr and Mrs Bull told Mr Audus that as a “belt and braces” measure they would make wills in which they left the flat to Mr Audus on the death of the survivor of them. 23.              Mr Audus gave evidence that he had from 19th December 1988 to date paid all the service charges and expenses relating to the maintenance and repair of the flat. He produced a list of such expenditure. The list included the purchase price, the solicitors’ fees in connection with the purchase, insurance of the flat for some years (although the list does not continue in this respect up to date), rent and service charge and various other outgoings. 24.              Mr Audus stated that following the death of Mr Bull, Mr Audus continued to visit his aunt on a regular basis. Mr Audus discussed the flat with his aunt on many occasions and she always regarded it as his flat. Mrs Bull told Mr Audus that she would like to think that he would keep the flat if anything happened to her and that he would either come down occasionally to stay in the flat or would rent it out. 25.              When Mr Audus was cross-examined, he was asked very little as to the terms of the arrangement he had made with Mr and Mrs Bull. He explained that when Mr Aspinall had drawn up the draft legal charges, Mr Aspinall had gone through the drafts with Mr Audus. Mr Audus saw that Mr and Mrs Bull were described as beneficial owners of the flat. He understood what that meant and did not challenge it. He said that that was what “we had agreed”. In this statement he was referring to an agreement between himself and Mr Aspinall and also to his agreement with Mr and Mrs Bull. He understood that the flat would be the property of Mr and Mrs Bull until their death. Mr Audus was asked some questions about the circumstances in which he was asked to assist Mr and Mrs Bull with the purchase. He understood that they had applied to buy a lease of the flat before they approached him. He understood that they had earlier approached their daughter. When they approached him, they had no source of funds other than him. He stated that the list of expenditure was not complete and there were occasions when he would reimburse expenditure by Mr and/or Mrs Bull by sending them a cheque. 26.              Mr Aspinall was the solicitor who handled the transaction in 1988 and he gave evidence. Mr Audus was a client of his firm. Mr Audus instructed Mr Aspinall that the flat was going to be purchased in the name of Mr and Mrs Bull under the RTB provisions, at a substantial discount. Mr Audus was to provide the purchase money on the basis that there would be a legal charge in his favour both in respect of the money he provided and any increase in value of the property. Mr Aspinall said this: “My recollection of the instructions that I was given at the time were that Mr and Mrs Bull had approached their nephew Peter Audus and asked him if he was interested in buying the property. The intention was that they would be allowed to live there rent free during their respective lifetimes and he would have the advantage of any increase in value of the property when they died or the property was voluntarily sold.” 27.              Mr Aspinall stated that he dealt with “the legal formalities”. He drew up the two charges. He forwarded the draft documents to Mr and Mrs Bull on the 15th December 1988. He believed that the intention of the parties was clearly evidenced by that letter. Mr Aspinall subsequently prepared a codicil to Mr Audus’ will to ensure that any interest which he had in the property would revert to Mr and Mrs Bull in the event of his death before either of them. 28.              The letter which Mr Aspinall wrote to Mr and Mrs Bull on 15th December 1988 contained these statements: “I should explain that the effect of these documents is to give your nephew a Legal Charge over your property in respect of the money which he has advanced to enable the property to be purchased, and also in respect of any increase in value. I can assure you that there is no intention on the part of your nephew to require repayment of any monies, and indeed there is a specific provision in the Legal Charge that no right to any interest shall be implied from the documentation. I can also confirm that I have drawn up a codicil to your nephew’s Will whereby the executors cannot enforce the Legal Charge or Supplemental Deed after our client’s death, and any interest which our client might have in the property is left to you.” 29.              Mr Aspinall was briefly cross-examined. He said he had not met Mr and Mrs Bull at any time and he did not recollect speaking to them on the telephone. Mr Audus had explained to Mr Aspinall the arrangement that had been made with Mr and Mrs Bull. Mr Aspinall spoke to one of his partners who had, as he described it, done something similar. The partner had drafted certain documents which he provided to Mr Aspinall and Mr Aspinall essentially used those drafts. Mr Aspinall said that he was drafting two charges. Mr Audus relied on Mr Aspinall to prepare appropriate documentation. Mr Audus did not use the word “charge” to Mr Aspinall when he instructed Mr Aspinall. Mr Aspinall believes that he went through the draft documents with Mr Audus before Mr Audus signed them. The intention behind the arrangement was that when Mr and Mrs Bull no longer lived in the flat, the flat would “revert” to Mr Audus. 30.              I will now refer to some of the detailed provisions of the two documents entered into between Mr and Mrs Bull on the one hand and Mr Audus on the other hand on 19th December 1988. The first document is described as a  “Legal Charge”. In this judgment, I will refer to this document as “a Legal Charge” or as “a charge” but that is not to prejudge my conclusion as to its true legal character nor the character of the arrangement made in 1988. Mr and Mrs Bull are described as “the Borrowers” and Mr Audus is described as “the Lender”. The first recital stated that Mr and Mrs Bull were the estate owners in respect of the fee simple absolute in possession of the property described in the schedule. However, the schedule correctly stated that the interest in question was a leasehold interest pursuant to a lease dated 1988, although the day and the month were not stated. The erroneous reference to a fee simple is probably attributable to the fact that Mr Aspinall was using draft documents prepared for another transaction supplied to him by his partner. The second recital stated that Mr Audus had agreed to lend Mr and Mrs Bull £12,375 upon having the repayment of that sum secured as appeared in the document. 31.              The first four clauses of the Legal Charge of 19th December 1988 were in these terms: “1. In consideration of the sum of twelve thousand three hundred and seventy-five pounds now paid to the Borrowers by the Lender (the receipt whereof the Borrowers hereby acknowledge) the Borrowers hereby covenant with the Lender that the Borrowers will repay to the Lender the said sum of Twelve Thousand Three Hundred and Seventy-Five Pounds on the…. day  of…. One Thousand Nine Hundred and Eighty-Eight No right to interest on the said sum shall be herein implied 2. The Borrowers as Beneficial Owners hereby charge by way of legal mortgage the property described in the Schedule hereto with repayment to the Lender of all monies hereby covenanted to be paid 3. If the Borrowers shall pay to the Lender the said sum of Twelve Thousand Three Hundred and Seventy-Five Pounds in accordance with the covenant hereinbefore contained the Lender will at the request and cost of the Borrowers duly discharge this security 4. On default being made by the Borrowers in the payment of the said sum of Twelve Thousand Three Hundred and Seventy- Five Pounds hereby covenanted to be paid at the time aforesaid or in the payment of any other monies hereby covenanted to be paid or in the observance or performance of the covenants herein expressed or implied or if the Borrowers shall become bankrupt or enter into any composition or arrangement with their creditors generally then and in any such case the whole of the monies hereby secured shall become immediately payable and the Lender may upon giving the Borrowers two month’s notice of his intention so to do exercise all statutory powers conferred on mortgagees by the Law of Property Act 1925 or any Act amending the same subject to any order of the Court required for exercise of such powers”. 32.              Clause 5 of the Legal Charge of 19th December 1988 contained covenants by Mr and Mrs Bull with Mr Audus. Those covenants were in a form which was appropriate for a legal charge but not necessarily appropriate for the detailed arrangement actually made between the parties in this case. For example, by clause 5(1), Mr and Mrs Bull agreed with Mr Audus that they would keep all buildings the subject of the charge in good and substantial repair and condition and insured against certain insured risks and that they would pay all premiums necessary to keep up such insurance. By clause 5(4), Mr and Mrs Bull agreed that if they failed to observe their covenants then Mr Audus could do what was necessary to make good the default and Mr and Mrs Bull would on demand repay to Mr Audus all costs and charges so incurred and until so repaid the same should be charged upon the mortgaged property. By clause 5(5), Mr and Mrs Bull agreed not without the consent in writing of Mr Audus to let share or part with the possession of the mortgaged property and sections 99 and 100 of the Law of Property Act 1925 should not apply. 33.              The second document entered into by Mr and Mrs Bull and Mr Audus on 19th December 1988 was described as “this Deed”. In this judgment, I will refer to this document as “the Supplemental Deed”. I may also refer to it as “a charge” but that is not to prejudge my conclusion as to its true legal character nor the character of the arrangement made in 1988. Mr and Mrs Bull were again described as “the Borrowers” and Mr Audus was described as “the Lender”. The first recital referred to the lease granted by the Council although it erroneously referred to “an estate in fee simple in possession”. The second recital to the Supplemental Deed referred to the earlier Legal Charge called “the principle (sic) deed”. The third recital was in these terms: “Upon treaty for the advance of the said sum of Twelve Thousand Three Hundred and Seventy-Five Pounds it was agreed between the parties hereto that the Borrowers should secure to the Lender the benefit of any capital appreciation of the property in manner hereinafter appearing”. 34.              The Supplemental Deed contained three operative clauses in these terms: “1. The Borrowers hereby covenant with the Lender than (sic) in addition to the monies secured by the principle deed they their executors administrators or assignees will on redemption of the charge thereby effected pay to the Lender any increase in the base value of the property as hereinafter defined between the date hereof and the date of such redemption (hereinafter called “the redemption date”)   2. The amount of such increase in value shall be calculated as follows:- (i)         The base value of such increases shall be the said sum of Twelve Thousand Three Hundred and Seventy-Five Pounds plus any expenses incurred by the Lender in respect of the following:- (a) Legal costs and stamp duties in connection with the purchase of the property and the preparation of the deed and in connection with any sale of the property (b) Surveyors and estate agents fees in connection with any sale of the property or any valuation of the type hereinafter referred to (c) Improvements carried out to the property with the prior consent in writing of the Lender (such consent not to be unreasonably withheld)                         (ii)        The value of the property as at the redemption date shall be:- (a) The price fixed by any agreement for the sale of the property entered into by the Lender prior to the redemption date or (if no such agreement shall have been entered into) (b) The fair market value of the property as assessed by an independent surveyor to be appointed by agreement between the parties hereto or in the event of any dispute to be appointed by the President for the time being of the Royal Institution of Chartered Surveyors or (c)                The fair market value with the benefit of vacant possession of the property at the date of the death of the Borrowers if redemption shall not have taken place during the Borrowers lifetime 3. The Borrowers as beneficial owners hereby charge the property by way of Legal Mortgage with the payment to the Lender of all sums hereinbefore covenanted to be paid in addition to the sum secured by the principle deed.” 35.     The Council has produced certain letters which Mrs Bull wrote to it over the years. Those letters generally concern routine matters of no present significance. However I refer to her letter of 21st October 1993 which contains this statement: “When we decided to buy the above flat my dear husband was taken ill and unfortunately passed away – then my nephew took over as I lost my state pension (£63) and was worried I might have to move.” 36.    It seems that Mrs Bull continued to reside in the flat until April 2007 when she moved to a residential care home. Since April 2007, Mrs Bull has continued to live in such accommodation which has been provided by the Council, or paid for by the Council. Under section 22 of the Health and Social Services and Social Security Adjudications Act 1983, where a person avails him or herself of accommodation under Part III of the 1983 Act provided by a local authority and fails to pay any sum assessed as due to be paid by him or her for the accommodation and has a beneficial interest in land, the local authority may create a charge in its favour on that person’s interest in the land. By section 22(8), any such charge, in the case of registered land, is a registrable charge taking effect as a charge by way of legal mortgage. On 29th January 2008, the Council executed a declaration under the 1983 Act reciting that its entitlement to a charge had arisen and by Clause 1 of the declaration Mrs Bull’s interest in Flat 6, Maple House was charged in favour of the Council in respect of outstanding amounts due to the Council. On 30th January 2008, this declaration was registered as a registered charge against the leasehold title at the Land Registry. My findings based on the evidence 37.              I accept the evidence given by Mr Audus as to the arrangement he made with Mr and Mrs Bull in 1988. I also accept his evidence as to his expenditure in relation to the flat since 1988. I have considered whether the arrangement orally discussed by Mr and Mrs Bull on the one hand and Mr Audus on the other was an arrangement which involved the creation of a loan or a security interest by way of charge. In my judgment, the oral agreement between Mr and Mrs Bull on the one hand and Mr Audus on the other did not involve a loan or the creation of a security interest by way of charge. Mr Audus was not lending the purchase monies to Mr and Mrs Bull. There was no intention that he would be entitled to be repaid those monies by Mr and Mrs Bull. There was no intention that Mr and Mrs Bull would be entitled to repay Mr Audus and free the flat from any interest held by Mr Audus. Mr Audus was to be the owner of the flat although his rights as owner were to be subordinate to three agreed matters. The first agreed matter was that the lease of the flat would be in the names of Mr and Mrs Bull. The second agreed matter was that Mr and Mrs Bull could live there for the remainder of their lives and Mr Audus’ right could not prevail over that right on the part of Mr and Mrs Bull. The third agreed matter was that if Mr Audus died before the death of the survivor of Mr and Mrs Bull, Mr Audus should leave the flat to Mr and/or Mrs Bull, as the case may be. I also find that the idea that the transaction should be recorded in documents taking the form of a legal charge or charges was Mr Aspinall’s idea. He got the idea from his partner. I accept that Mr Aspinall took Mr Audus through the draft documents before he signed them but there was no specific evidence as to what was said at that time. I also accept that Mr Aspinall wrote to Mr and Mrs Bull on 15th December 1988 referring to the documents and in particular describing them as a Legal Charge and a Supplemental Deed. 38.              Neither Mr Audus nor Mr Aspinall were asked why the transaction was recorded in the form of the two documents of 19th December 1988. It may be that it is not strictly relevant to speculate as to the reason. However, both Counsel suggested to me that the transaction was recorded the way it was because of section 155 of the Housing Act 1985. By section 155(2), in the case of a grant of a lease in pursuance of the RTB, the lease is to contain a covenant to pay to the landlord all or part of the discount to which the secure tenant was entitled on the grant of the lease if, within a period of five years, there were a relevant disposal which was not an exempted disposal. I refer to Section 155 as enacted which I understand was the provision current in 1988 rather than Section 155 as subsequently amended. “Relevant disposal” and “exempted disposal” were defined by sections 159 and 160 of the 1985 Act. It is true that a loan by Mr Audus to Mr and Mrs Bull secured by a charge granted by Mr and Mrs Bull would not have been a disposal within these provisions. However, it would have been possible to draw up a document to record the oral arrangement between the parties, which would not be a relevant disposal for these purposes, and it was far from necessary, or indeed appropriate, for the parties to enter into documents in the form of the two documents of 19th December 1988. 39.              It is apparent from the evidence as to the arrangement made in 1988 that the two documents of 19th December 1988 do not set out all of the relevant terms. The first term that was obviously missing was a term giving Mr and Mrs Bull a right to remain in the flat for the rest of their lives. Of course, on the documents as executed, Mr and Mrs Bull were lessees and were entitled to possession as such. However, under the documents as executed, Mr Audus as the chargee was entitled to possession in certain circumstances and was not expressly bound to permit Mr and Mrs Bull to live in the flat for the rest of their lives. The second term which is missing from the documents as executed is a term imposing an obligation upon Mr Audus to pay the rent and service charge under the lease and, further, to pay for matters such as maintenance and insurance of the flat. If Mr Audus had failed to pay the rent and service charge under the lease then, in principle, the lease would have been liable to forfeiture leading to the Council recovering possession of the flat from Mr and Mrs Bull. 40.              Further, the documents as executed contain terms which are contrary to matters which were either agreed or, at the very least, understood by the parties to be the basis of the arrangement. The Legal Charge contains a covenant by Mr and Mrs Bull to pay £12,375 to Mr Audus. The covenant does not specify the precise date on which the sum is to be paid but one would construe the covenant as drafted as requiring Mr and Mrs Bull to repay £12,375 on 31st December 1988. Mr Aspinall’s letter of 15th December 1988 stated that Mr Audus had “no intention” to require repayment of any monies. I do not think that Mr and Mrs Bull’s liability to repay £12,375 rested merely on Mr Audus remaining of that “intention”. In my view, the agreement made between the parties was that Mr and Mrs Bull were not obliged to repay that sum and Mr Audus was not entitled to require repayment of that sum. The Council submits that the position in relation to the estate of the survivor of Mr and Mrs Bull would have been different from the position during the lifetime of Mr or Mrs Bull. Following the death of the survivor of Mr and Mrs Bull, the Council submits that the restriction on Mr Audus’ ability to require repayment of the sum of £12,375 would fall away. The result would then be that the estate would be liable to repay that sum and Mr Audus would be entitled to recover that sum and exercise his remedies as chargee for that purpose. The most likely event which would occur at that stage would be that the estate would wish to sell the lease and from the proceeds of sale, the estate would pay to Mr Audus the sum of £12,375 under the Legal Charge and the sum due (which would be more or less all of the remaining proceeds of sale of the lease) under the Supplemental Deed of 19th December 1988. The Council submits that the position accordingly was that the Legal Charge of 19th December 1988 did indeed create a security interest by way of charge, albeit heavily qualified by the restriction on Mr Audus’ ability to recover the sum of £12,375 during the lifetime of Mr and Mrs Bull.   41.               The next area where the documents as executed need to be compared with the oral arrangement made between the parties relates to whether Mr and Mrs Bull were to be entitled to redeem the charges by paying to Mr Audus all the sums due under them. Under clause 3 of the Legal Charge of 19th December 1988 Mr and Mrs Bull were given an express legal right to redeem that charge. On the face of the documents, if they redeemed the Legal Charge of 19th December 1988 then under clause 1 of the Supplemental Deed of 19th December 1988 they would become obliged to pay to Mr Audus the figure computed in accordance with clauses 1 and 2 of that Deed. The Council submitted that under the Supplemental Deed, assuming the provisions were valid, Mr and Mrs Bull were entitled to redeem the charge created by the Deed on a redemption date of their choosing. In other words, it was possible to fix a redemption date during the life time of Mr or Mrs Bull not involving a sale of the lease. In the case of such redemption date, the amount payable would be calculated by reference to the fair market value of the property in accordance with clause 2(ii)(b). The Council submitted that if Mr and Mrs Bull suddenly came into money, for example by winning the lottery, they could free themselves  from the provisions of the two documents of 19th December 1988 by paying over to Mr Audus what was essentially the whole value of the lease and could then enjoy the lease free from charges. I accept the Council’s submission that the express terms, if they were valid, would provide for that possibility. However, I do not think that Mr and Mrs Bull on the one hand, or Mr Audus on the other, ever considered such a possibility could come about. The documents provide for this possibility because Mr Aspinall chose the language of legal charges in the documents he drafted. However, this possibility did not feature in any way as a part of the oral arrangement made between the parties. 42.              In addition to the matters already discussed, where the documents as executed either are incomplete or contradict the arrangement made between the parties, there are other perhaps more minor matters to which I should refer. Clause 5(1) of the charge of 19th December 1988 is a covenant by Mr and Mrs Bull to repair and insure the flat. That is contrary to the agreement the parties made. Clause 5(5) of the charge of 19th December 1988 refers to Mrs and Mrs Bull, amongst other things, letting the flat. The parties did not consider that eventuality as the flat was intended to be the home of Mr and Mrs Bull. 43.              In relation to the Supplemental Deed of 19th December 1988, Counsel for both parties suggested that the reference to “any expenses incurred by the Lender” in clause 2(i) should be read as a reference to expenses incurred by the Borrowers i.e. Mr and Mrs Bull. That may be so. It was also suggested that the reference to “the sale of the property entered into by the Lender” in clause 2(ii)(a) of that Deed should similarly be read so that it referred to the Borrowers. That is less clear. The legal principles 44.              Before addressing the matters which fall to be decided in this case, it is necessary to set out the legal principles which are relevant. 45.              It is first necessary to understand the concept of a mortgage or charge. A classic definition of a mortgage (albeit based on the conventional form of a mortgage of land before 1926) was given by Lindley MR in Santley v Wilde [1899] 2 Ch 474 where he said: “…a mortgage is a conveyance of land or an assignment of chattels as a security for the payment of a debt or the discharge of some other obligation for which it is given. This is the idea of a mortgage: and the security is redeemable on the payment or discharge of such debt or obligation, any provision to the contrary notwithstanding”.             Most mortgages or charges involve a loan where the relevant obligation on the mortgagor is to repay the loan, rather than perform some other obligation. The function of the mortgage is to give the lender security for the repayment of the loan. 46.              It is inherent in the concept of a mortgage or security interest that the borrower of money should be able to discharge the security interest, that is, to redeem the mortgage by paying the money and in that way performing the obligation performance of which is secured. At common law it was possible to include in a mortgage a contractual term which had the effect that the mortgagor would lose the right to redeem if he failed to repay the monies due by a specified date. Equity regarded such a term as liable to work injustice and hardship and equity granted relief against the operation of such a contractual term by recognising an equitable right to redeem, notwithstanding non-compliance with the contractual term. It is not necessary for present purposes to describe in detail the difference between a right to redeem at law, the right to redeem in equity and the “equity of redemption”. It is sufficient to turn to the rules of equity which came into existence to protect the equitable right to redeem. These rules have a long history and they operated in one way before the repeal of the usury laws in 1854 and in a different way after that date. For present purposes, the modern law is stated in the speeches in the House of Lords in Kreglinger v New Patagonia Meat and Cold Storage Company Limited [1914] AC 25. That decision restated some of the equitable rules and clarified the law in relation to suggested collateral advantages taken by the mortgagee from the mortgagor and relating to the circumstances in which the mortgagor could redeem the mortgage. This area of the law is often described by using the phrase “clogs on the equity of redemption” but that phrase is not particularly helpful in identifying the detail of the relevant rules. 47.              The relevant rules are threefold. The first is that a condition which is repugnant to the contractual right to redeem and the equitable right to redeem is void. The second rule is that a condition which imposes a penalty in respect of the exercise of the equitable right to redeem, following a failure to exercise a contractual right to redeem, is void in equity. The third rule is that a provision which regulates or controls the right to redeem is invalid, if it is unconscionable. 48.              The question of when a provision regulating the right to redeem is unconscionable was considered in Cityland and Property (Holdings) Limited v Dabrah [1968] Ch 166. That decision was analysed in Multiservice Bookbinding Limited v Marden [1979] Ch 84, where the decision of the Court of Appeal in Knightsbridge Estates Trust Limited v Byrne [1939] Ch 441 (which had not been cited in the Cityland case) was also considered. In Marden, it was held (at page 110) that a bargain could not be unfair and unconscionable unless one of the parties to it had imposed the objectionable terms in a morally reprehensible manner, that is to say, in a way which affects his conscience. It was not enough to show that the term was “unreasonable”. 49.               In relation to the rule, identified in Kreglinger, that a term relating to the right to redeem which was unconscionable was “invalid”, there was considerable debate at the hearing before me as to whether such a term was void and of no effect, or whether such a term was voidable, so that an application to avoid the term had to be made by the mortgagor and so that such a claim would be subject to any equitable defences available where there is a claim to set aside a transaction in equity. In my judgment, having regard to the history of the equitable rules and the way in which the matter is described in Kreglinger itself, an unconscionable term of this kind will be void. It is thus open to a subsequent encumbrancer such as the Council in this case, who has a right to redeem a prior charge, to come to court and establish that a term in that prior charge relating to the right to redeem is an unconscionable term and if that is established the term will be of no effect for all purposes. Indeed, that is the way in which the matter is described by Lord Tomlin in Mehrban Khan v Makhna (1930) 57 Ind. App. 168 at 172. 50.              The equitable rules described above apply to mortgages or security interests. Over the centuries, disputes have arisen as to whether a transaction involved a mortgage or security interest, or had some other character. This type of dispute was prevalent before 1926 when the conventional land mortgage consisted of a conveyance to the mortgagee with a right for the mortgagor to a reconveyance. The courts frequently had to rule whether the transaction involved an absolute conveyance in the first place or a conveyance by way of security. Consistently with equity’s concern to protect the right to redeem a security interest, equity looked to the substance and not the form of such transactions in order to detect whether the underlying transaction was in truth a security transaction. Since 1925, questions of this kind continue to arise but less often in relation to land transactions. 51.              The modern approach to an issue as to whether a transaction is in substance a security transaction or has some other character is stated by the Court of Appeal in Welsh Development Agency v Export Finance Co Limited [1992] BCC 270. One of the issues in that case was whether the transactions were by way of absolute sale or by way of secured loan. The court (Dillon, Ralph Gibson and Staughton LJJ) held that the transaction was by way of sale. The documents in that case took the form of a sale transaction. It was not suggested that the documents were a sham or a pretence. The court examined the detailed terms of the documents and identified the legal substance of the matter, as set out in those terms, as being in accordance with the form, that is as a sale and not a secured loan. Staughton LJ pointed out at page 300A that one was seeking to ascertain the legal nature of a transaction and not its economic effect. There were many ways of raising money besides borrowing. If the transaction is not in the form of a loan it is not to the point to say that its object was to raise money or that the parties could have produced the same result more conveniently by borrowing and lending money. He identified two ways of examining the question. The first was the external route and the second was the internal route. The external route involved an allegation that the written document did not truly represent the agreement of the parties in that it was a sham or a pretence. The internal route involved an examination of the written agreement in order to ascertain its legal nature from the terms contained in the document. 52.              The analysis of Staughton LJ in the Welsh Development Agency case has been influential. It was applied by the Court of Appeal in Lavin v Johnson [2002] EWCA Civ 1138. That case is interesting in that when the court applied this analysis to the facts before it, it held that the legal nature of one part of the transaction was in accordance with the form of the documents where the form was not that of a security transaction, whereas the legal nature of a second part of the transaction was not in accordance with its form and in substance represented a security transaction. 53.              Staughton LJ’s analysis was again applied by the Court of Appeal in Dutton v Davis [2006] EWCA Civ 694 where it was again held that the legal nature of the transaction was in accordance with the form of the transaction and did not involve the grant of a security interest which could be redeemed. 54.              The overwhelming majority of the cases where the courts have examined the substance of the transaction, to see whether it created a security interest, have been cases where the documents did not take the form of a security interest and the allegation was that the substance of the matter did involve a security interest. However, the principle relating to the search for the substance of the transaction seems to apply in reverse also, at any rate, in relation to the equitable rules which I have described above, which control certain terms relating to redemption of a security interest. A modern example of a case of this kind is Warnborough Limited v Garmite Limited [2003] EWCA Civ 1544. The facts can be simplified for present purposes. Warnborough sold real property to Garmite. The purchase price was left outstanding as payable to Warnborough and Garmite’s obligation to pay the purchase price was secured by a mortgage in favour of Warnborough. Garmite also granted Warnborough an option to repurchase the property. The issue was whether the option to repurchase was “a clog on the equity of redemption”. The only judgment given in the Court of Appeal was that of Jonathan Parker LJ. He referred to the Kreglinger case and the passages in the speeches of Viscount Haldane LC and Lord Parker which referred to the need to assess the real nature and substance of the transaction. Jonathan Parker LJ said at [73] that the Court had to look at the “substance” of the transaction and to enquire as to the true nature of the bargain which the parties had made. To do that, the Court examined all the circumstances, with the assistance of oral evidence if necessary. At [76], he said that where the alleged “clog” was entered into against the background of a sale of the property, by the grantee of the option as owner of the property to the grantor, for a price left outstanding on mortgage there must be “a very strong likelihood” that on an examination of all the circumstances the court would conclude that the substance of the transaction was one of sale and of purchase and not one of mortgage. It will be noted in that case that the transaction undoubtedly involved a genuine and enforceable mortgage. The approach of the Court of Appeal did not involve a finding that the mortgage was ineffective or had some other character but rather that the part of the transaction which involved a mortgage was not to be regarded as the dominant part of the transaction, which identified the character of the transaction. The transaction was a composite of its parts and although one part of the transaction involved a mortgage, the legal character of the composite transaction was a transaction of sale and purchase. Jonathan Parker LJ at [76] rejected the argument that the sale was “incidental to the loan” as turning the transaction “on its head”. The appeal in the Warnborough case to the Court of Appeal was against a decision of a Deputy High Court Judge who had given summary judgment in favour of the mortgagee. The Court of Appeal allowed the appeal with the result that the issue as to the character of the transaction had to be determined at a subsequent trial. That issue, together with many other issues, was tried by Mr Sheldon QC sitting as a Deputy High Court Judge: [2006] EWHC 10 (Ch). He held, in particular at [34], that the substance of the transaction was a sale and purchase. Warnborough’s position as seller was crucial. The case was not a case of a third party lender obtaining a mortgage and an option to purchase. 55.              In my judgment, Warnborough Limited v Garmite Limited is authority for the proposition that where there is a composite transaction, which includes as one of its elements a genuine mortgage, it is open to the court to assess the overall character of the composite transaction and identify that character as being other than that of mortgage. The court can, and indeed should,  proceed in that way even where it is an admitted fact that one element in the transaction is a genuine mortgage. 56.              The Council came close to submitting to me that Warnborough Limited v Garmite Limited was wrongly decided. I am quite clear that the principle established in that case is one which I ought to apply in the present case. The decision is a binding authority of the Court of Appeal and is itself based on the decision of the House of Lords in Kreglinger. Further, although Warnborough is a relatively rare example in more recent times of a court holding that the substance of a composite transaction (which includes a mortgage) is otherwise than a mortgage or security transaction, the decision is in line with much more ancient authority, to which I later refer. 57.              The Council also submitted that when one applied the principle in Warnborough Limited v Garmite Limited in a case where a provision was being attacked as repugnant to the right to redeem the mortgage, one should assess the character of the composite transaction without taking into account the allegedly repugnant provision. I do not think that can be right. Before one knows whether the composite character of the transaction is a mortgage or security transaction, one must assess the character of the transaction taken as a whole and that must include the provision in dispute. Indeed the very provision which is said to be “repugnant” to a security transaction may be such an important or dominant provision that it demonstrates that the substance of the transaction is not that of a security transaction. It is only in a case where one holds that the composite character is that of mortgage that one then goes on to consider whether the provision under attack is in truth repugnant to the mortgage transaction. 58.              As I have indicated, the decision in Warnborough Limited v Garmite Limited does not stand alone. There is ancient authority which adopts a somewhat similar approach where the transaction is a composite one and, although one element is a mortgage, the character of the composite transaction differs from a mortgage or security transaction. The earlier cases have previously been analysed under the heading of “family arrangement”. The principal examples in this line of cases are Howard v Harris (1681) 1 Vern 33 and Newcomb v Bonham (1681-1683) 1 Vern 7, 214, 232 and 233n. The decision in the latter case is also described in the argument of counsel in Salt v The Marquess of Northampton  [1892] AC 1 at pages 11-12. This special treatment of cases of family arrangements is also singled out for mention in Coote on the Law on Mortgages, 9th Edition (1927), at page 26. Coote also cites the decision in Gossip v Wright   32 LJ  Ch 648, see at page 653. 59.              The family arrangement cases were discussed and approved by the House of Lords in Kreglinger. At page 36, Viscount Haldane said: “But whatever else may have been the intention of those judges who laid the foundations of the modern doctrines with which we are concerned in this appeal, they certainly do not appear to have contemplated that their principles should develop consequences which would go far beyond the necessities of the case with which they were dealing and interfere with transactions which were not really of the nature of a mortgage, and which were free from objection on moral grounds. Moreover, the principle on which the Court of Chancery interfered with contracts of the class under consideration was not a rigid one. The equity judges looked, not at what was technically the form, but at what was really the substance of transactions, and confined the application of their rules to cases in which they thought that in its substance the transaction was oppressive. Thus in Howard v Harris Lord Keeper North in 1683 set aside an agreement that a mortgage should be irredeemable after the death of the mortgagor and failure of the heirs of his body, on the ground that such a restriction on the right to redeem was void in equity. But he went on to intimate that if the money had been borrowed by the mortgagor from his brother, and the former had agreed that if he had no issue the land should become irredeemable, equity would not have interfered with what would really have been a family arrangement. The exception thus made to the rule, in cases where the transaction includes a family arrangement as well as a mortgage has been recognised in later authorities.” (Emphasis added). 60.              At page 37, Viscount Haldane referred again to Howard v Harris, stating that the substance of the transaction must be looked at to see whether the cases in question “were in reality something more than cases of mortgage…” 61.              In Kreglinger, Lord Parker of Waddington, at page 51, referred to Newcomb v Bonham. He described a case where the real intention of the parties was that the property should be held as security for the monies charged thereon and restored intact to the mortgagor as soon as these monies were paid. He then gave Newcomb v Bonham as an example of a case where that was not the true intention of the parties and in such a case the transaction was not really a mortgage under the rule “but something more complex”. Analysis and conclusions 62.              Having directed myself as to the legal principles which fall to be applied, I will now attempt to deal with the matters arising. 63.              The first question is as to the arrangement made between Mr and Mrs Bull on the one hand and Mr Audus on the other in 1988. I have made my findings of fact on that question earlier in this judgment. I now need to consider the nature of that arrangement. Neither party to this action contends that the deeds entered into on the 19th December 1988 were a sham or a pretence. I have pointed out that the two documents do not set out all of the terms agreed between the parties. I have also attempted to describe the various important respects in which the documents are at variance with the terms agreed. Although there was scope for argument as to whether the written terms should prevail over the oral terms, the Council appeared to me to accept that Mr Audus’ promise to allow Mr and Mrs Bull to remain in the flat for the remainder of their lives and his further promise to pay rent and service charge and outgoings were contractually binding on him. Similarly, the Council accepted that Mr and Mrs Bull were not obliged to repay the sum of £12,375 during their lifetime. Nonetheless, both parties proceeded on the basis that if I had to assess the legal character of the interests created by the two deeds of 19th December 1988 I should hold the nature of those interests to be interests by way of legal charge. I suspect that Mr Audus contended for this result due to a concern that if his rights were not as chargee but took effect in equity only, they might possibly be overridden by the Council’s statutory charge. Conversely, the Council was concerned to persuade me that Mr Audus was a chargee under the first deed of 19th December 1988 so as to enable the Council to invoke the equitable rules to which I have referred above. It follows from this that neither party asks me to follow the external route identified by Staughton LJ in the Welsh Development Agency case, when determining the substance of the transaction. However, this question as to the legal character of the interests created by the two relevant deeds is not necessarily the same question as to the nature of the transaction which is represented by the two relevant deeds together with the surrounding oral agreement made in 1988. 64.              It follows that I should next consider what Staughton LJ described as the internal route. On the facts of this case, the internal route does not restrict the court to examining the express terms of the two written documents. Mr Audus and the Council agree that the arrangement between the parties in 1988 was not contained exclusively in those written documents but extended to terms agreed orally. Accordingly, to assess by the internal route the character of the arrangement, I must have regard to the written terms and also to the terms agreed orally. There was some debate as to how far one could go to admit oral evidence of the background circumstances but, in my judgment, it is not necessary to resolve any such question as the answer in the present case clearly emerges from considering the terms which are binding on the parties, whether expressed in writing or orally. I should add, for the avoidance of doubt, that no point was taken on the validity of the oral terms as a result of Section 2 of the Law of Property  (Miscellaneous Provisions) Act 1989. 65.              Approaching the matter in accordance with the principle identified in Warnborough Limited v Garmite Limited, my assessment of the substance of the composite transaction in this case is that it went beyond a security transaction. I have already discussed the question of whether Mr and Mrs Bull were obliged to repay the sum of £12,375 and whether Mr Audus was entitled to pursue that sum. I have also discussed whether it was ever envisaged that Mr and Mrs Bull would redeem the two charges during their lifetime. In my judgment, the transaction in the present case was not in substance a loan nor a security for a loan. It was in substance a transaction whereby Mr Audus would buy the flat and have ownership of the flat but his rights were to be postponed to the rights of Mr and Mrs Bull to live in the flat for their lives. 66.              Similarly, if I approach the question in accordance with the family arrangement cases as analysed in Kreglinger, I hold that although the transaction included the grant of a charge or charges the substance of the transaction was wider than that and that substance differed from a security transaction. This transaction was “something more complex” than a mortgage, to use the words of Lord Parker in Kreglinger. 67.              Having assessed the substance of the transaction entered into in 1988, it follows that the equitable rules relied upon by the Council in this case do not apply. 68.              If the equitable rules relied upon by the Council in this case do not apply then there is no basis on which I am asked to hold that the Council can disregard Mr Audus’ rights under the Supplemental Deed. 69.              Mr Audus’ rights under the Supplemental Deed have priority to the Council’s rights under its statutory charge. Under Section 22 of the Health and Social Services and Social Security Adjudications Act 1983, the Council’s charge is on Mrs Bull’s interest in the land. At the relevant time Mrs Bull’s interest in the land was subject to the two charges in favour of Mr Audus. This is not a case where the statute gives the Council a right to charge “the land” or “the property” so that the charge is an effective charge on all interests in the land and has priority to other pre-existing charges, as was the case in Westminster City Council v Haymarket Publishing Limited [1981] 1 WLR677 (and the cases cited therein). 70.              Furthermore, even if Mrs Bull had some claim in equity to set aside one or both of the charges of 19th December 1988, the Council accepts that such a claim is vested in Mrs Bull alone and the statutory charge does not entitle the Council to bring its own claim of that kind. In addition, the Council does not put forward any contention in reliance on consumer credit legislation. Other matters 71.              The above conclusions determine the outcome in this case. Other matters were argued and it may be convenient if I briefly indicate the conclusions I would have reached on some of those matters if they had arisen, which they do not. 72.              If I had regarded the substance of the transaction as a security transaction so that the equitable rules relied upon by the Council applied, then in my view, it would have been clear that the terms of the Supplemental Deed were repugnant to the right to redeem the first Legal Charge (if I proceeded on the basis that the charge was intended to be a security for the repayment of a loan of £12,375). Alternatively, if it were right to read the two charges together so that there was in effect a single charge which could be redeemed by paying to the chargee the sums due under both charges as the price for redemption, then again I would have regarded those provisions as void because the right of redemption was rendered illusory: see Fairclough v Swan Brewery Co Ltd [1912] AC 565. 73.              I would not have held that the terms of the Supplemental Deed would have been invalid on the alternative ground that the terms were unconscionable. In considering whether those terms were unconscionable I would not have regarded this case in the same way as I would have regarded a transaction between Mr and Mrs Bull and a commercial lender, such as a high street building society. Instead, I would have taken into account all of the circumstances of the parties referred to in the relatively brief evidence on that matter before the Court. Indeed, if as I later consider, Mr Audus would have had a good claim to an equity against Mrs Bull under the doctrine of proprietary estoppel, it would be quite inconsistent with that finding to hold that his reliance on the written documents was unconscionable. 74.               If I had held that the terms of the Supplemental Deed were invalid, I would not have held that Mrs Bull had done or said anything which would amount to a promissory estoppel or an estoppel by representation or an estoppel by convention. Accordingly, the question whether any such estoppel would bind the Council would simply not have arisen. 75.              If I had held that the terms of the Supplemental Deed were invalid, I would not have held that Mrs Bull was bound by a common intention constructive trust so that she held the entirety of the beneficial interest on trust for Mr Audus. The arrangement between the parties in 1988 contained terms which do not accord with such a constructive trust. 76.              Conversely, if I had held that the Supplemental Deed was void then I would have held, albeit with a little hesitation on the limited evidence in this case, that Mr Audus had established an equity on the principles of proprietary estoppel. Mr Audus believed that he had an entitlement, in due course, to the full value of the flat subject to letting Mr and Mrs Bull live in it for their lives and subject to him paying the rent and service charge and outgoings. Mr and Mrs Bull understood that Mr Audus had that belief. Mr Audus had allowed Mr and Mrs Bull to live in the flat for the full period they wished. Mr Audus had observed his promise to pay rent and service charge and outgoings for many years. Mr Audus would be asserting a proprietary right pursuant to the Supplemental Deed. I am assuming for the purposes of this argument that Mrs Bull wished to argue that the Supplemental Deed was void. Mr Audus would then wish to assert that Mrs Bull was estopped from so asserting. The court must be satisfied that it would be unconscionable for Mrs Bull so to assert. The court does not ask whether Mr and Mrs Bull acted in 1988 in any way which was unconscionable. The search for unconscionable behaviour in this context involves the court asking whether it would now be unconscionable for Mrs Bull to contend that Mr Audus’ rights were restricted to the rights granted by the Legal Charge and so as to exclude any rights under the Supplemental Deed. I regard the above analysis as the conventional analysis which is to be undertaken in a proprietary estoppel case. There is nothing in it contrary to Cobbe v Yeoman’s Row Management Ltd  [2008] 1 WLR 1752 which was much relied upon by the Council. If Mr Audus established an equity in that way, I would be minded to give effect to the equity in a way which reflected Mr Audus’ expectations in and after 1988, rather than a way which confined him to reimbursement of his expenditure. 77.              My provisional findings as to proprietary estoppel would then have raised a question whether Mr Audus’ equitable rights in relation to the lease would prevail over the Council’s statutory charge. At the hearing, the Council contended that any such equitable rights would have been overridden by its statutory charge. The Council relied on section 29(1) and 29(2) of the Land Registration Act 2002. Section 29(1) refers to a disposition of a registered estate “made for valuable consideration”. Mr Audus did not accept the Council’s contention on this point. The parties were not in a position at the hearing to make detailed submissions on this question. Accordingly, I permitted the parties to make written submissions on this point following the hearing. 78.              I have now received written submissions from the parties. I have also received a witness statement on behalf of the Council. That witness statement seeks to deal with the arrangements which were arrived at between the Council and Mrs Bull’s daughter, who has a power of attorney for her mother. This further material causes certain difficulties. First of all, I am presented with evidence after the close of the hearing. This evidence was therefore not examined at the hearing itself. Further, one point now taken by Mr Audus is that the Council’s assessment of the sums payable by Mrs Bull for her care may have been calculated on a false basis, in that the Council assumed that the flat was a valuable asset belonging in whole or in part to her. In addition, the operation of the National Assistance Act 1948 and the Health and Social Services and Social Security Adjudications Act 1983, in the particular circumstances of this case, raise various questions which are not covered by authority. The same can be said about the application of section 29(1) of the Land Registration Act 2002 to the circumstances of this case. 79.              Having considered the new material served after the close of the hearing, I have decided that, in view of the fact that none of these matters needs to be addressed for the purposes of the disposal of this claim, it would be much wiser not to comment on such matters. All points of law arising in relation to those matters are better dealt with in a case where they will affect the outcome. The overall result 80.              The relief sought by the Council is a declaration that the Supplemental Deed is void insofar as it purports to create a charge over the lease and for rectification of the register in respect of Mrs Bull’s leasehold title. For the reasons which I have given above, I hold that the Council is not entitled to that relief and I will dismiss the action.