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Just out is the brief judgment of the HL in Barclays Bank v Boulter. The appeal was dismissed on the ground that the particular pleading did not need to be amended, but the House made it clear that in the O'Brien type of case, it is for the person challenging the validity of the charge or guarantee to show that the bank had notice of the vitiating factor. It is not that the chargee bank must establish a defence. Per Lord Hoffmann:

In the present case, however, the bank took a charge directly from Mrs. Boulter. She had the necessary title to grant it. There was no prior interest which the bank needed to defeat. Likewise, the legal charge was an agreement under seal between Mrs. Boulter and the bank. She covenanted directly with the bank. What she claims is that the bank cannot rely upon the charge and the covenant because they were vitiated by the undue influence and misrepresentations of her husband. But in my opinion it is for her to show why these acts of a third party should make the charge and covenant invalid as against the bank. In my opinion a better analogy is the case of the purchaser of a chattel whose vendor's title is vitiated by fraud. In such a case the defrauded owner retains no proprietary interest in the chattel and it is therefore not for the purchaser to establish a defence which would defeat it. Instead, it is for the owner to prove that the purchaser had actual or constructive knowledge of the fraud: see Whitehorn Brothers v. Davison [1911] 1 K.B. 463.

The case is at

<http://www.parliament.the-stationery-office.co.uk/ pa/ld199899/ldjudgm=20 t/ jd991021/ barc.htm>.

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