young v axa

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					Unit linked endowment policy invested in a managed fund. Date of birth 4/850 Some form of guarantee that the mortgage would be cleared at the end of the mortgage term!!!!! IN THE MANCHESTER COUNTY COURT Claim No.______






INTRODUCTION: (1) The defendant is a financial services company that offers, amongst other things, mortgages, and more particularly endowment mortgages, to the public at large. As well as welcoming direct approaches from the public the defendant also offers its financial services products through a number of appointed agents. One of the agents appointed by the defendant at the time that is relevant to these proceedings was the firm of J.W Wood Estate Agents. The defendant was vicariously liable for the advice provided by their agents in the course of their business as financial advisers.

(2) The claimant was born on the 4th of August 1950. In August 1997 the claimant wished to purchase a property as previously she had resided in rented accommodation. The claimant was 47 years of age, and a single parent of one child. The claimant had previously been married and despite her separation from her husband, remained the joint owner of the former matrimonial home. She had originally envisaged that the former matrimonial home would be sold and that any proceeds accruing to her because of that sale would be put towards the purchase of alternative accommodation for herself and her daughter.

(3) However, once the former matrimonial home had been put up for sale it became immediately apparent that it would be difficult to sell, and even if such a sale could be achieved there would be no capital equity resulting form that sale. The property was therefore rented out whilst the claimant attempted to achieve a sale.

(4) Although the matrimonial home did not sell, the claimant wished to stop renting and decided to try and purchase a property known as 14, North View, Blackhill Consett County Durham, and in order to achieve that purchase she needed to obtain a mortgage in the sum of £31,395.00. At the time that the claimant was seeking that mortgage she worked as a clerk/typist on behalf for Derwentside District Council and received an annual gross salary £10,449.00.

(5) The claimant approached JW Wood, the defendant’s agent, in order to seek a mortgage. At the instigation of JW Wood the claimant, on the 28th of August 1997, provided information for JW Wood to undertake a financial review. The purpose of that review was to provide JW Wood with sufficient information to advise her as to the type of mortgage that best suited her needs. In providing that advice the defendant and its agents owed to the claimant a duty in both contract (either express or implied) and in tort to: (a) Provide advice with the necessary degree of skill and care. (b) To act as a reasonably competent financial advisor providing mortgage advice. (c) To act in the best interests of the claimant. (d) To fill in that Financial Review Form both accurately and truthfully and in accordance with the information which the claimant had made known to the defendant, and furthermore not to make any misrepresentations on that form. (e) To advise her as to the most suitable mortgage product to meet her needs based upon her circumstances as they existed at the time that form was written.

(6) When completing that Financial Review Form (and the review letter attached to that form) JW Wood stated the following inaccuracies on the face of that document and in so doing misrepresented the claimant’s true financial position and/or deliberately or negligently misstated the claimant’s attitude to financial risk:

(a) It was alleged and stated that the claimant was prepared to take a ‘managed’ financial risk which is defined as being suitable for an investor who ‘is prepared to accept greater risk to obtain potentially high returns, but with the possibility of significant falls in value as well’.

It is the claimant’s case that she was never advised as to the true and proper meaning of the phrase ‘managed’ financial risk, and that she had no intention of entering into any financial arrangement, namely a mortgage, that put her at risk of a significant fall in the value of her investment. The claimant did not have available to her either sufficient income or capital to undertake such a risk.

(b) It was alleged that the claimant was prepared to extent the period of her mortgage beyond her anticipated retirement age of 65 because she was also in possession of a ‘wholly owned property with more than enough equity to cover the loan if sold, should the need arise’

It is the claimant’s case that she was not the sole owner of that property and she was well aware that the property would yield no equity and this was a fact that was made known to the defendant. In the premises JW Wood had misrepresented the claimant’s financial position.

(7) On completion of that aforementioned review JW Wood, in breach of the duty of acre and skill that it owed to the claimant represented to the claimant that

she should enter into a Unit linked endowment policy invested in a fund managed by the defendant. JW Wood also represented that they had ascertained the most suitable mortgage product for the claimant, that the product they advised her to take out was the most suitable mortgage to meet her needs, and that upon maturity of her endowment the claimant was guaranteed to be able to pay off her mortgage and would have available to her additional an additional amount of money to spend as she would wish.

(8) The claimant in reliance upon those representations entered into the Unit linked endowment policy managed by the defendant. In making those representations the defendant was negligent and its representations were false inaccurate and misleading.: (a) The defendant had in fact failed to ascertain the type of mortgage that was most suited to the meeting of the claimant’s needs. (b) The suggested mortgage was not suitable for the claimant who was a single parent with a modest income, who was unlikely to increase her income significantly in the foreseeable future and who has no capital. The claimant’s finances were not sufficiently robust that they would allow her to take any financial risks with her money. (c) The said endowment was not guaranteed to pay off her mortgage and in reality that fund performed so badly that the claimant faced a significant loss. The defendant failed to forsee and failed to advise or wilfully omitted to advise the claimant that the value of her investment could fall.

(9) By reason of the matters set out at paragraphs 7 and 8 hereof the defendant has failed to provide advice with the necessary degree of skill and care and has failed to act in accordance with its duties as set out at paragraph 5 hereof. In the premises the defendant has acted both negligently and in breach of contract.


The claimant was subsequently informed that her endowment was

under performing and that upon maturity she would be left with an endowment mortgage shortfall. The claimant was advised to surrender her endowment policy and to take out a repayment mortgage.


By reason of the matters aforesaid the claimant has suffered loss and



The claimant is unable to quantify her loss at this time that loss shall be calculated by reference to the loss she has made under the endowment policy as compared with the amount of money that she would have made had she taken out a repayment mortgage in 1997.


Further the claimant claims interest pursuant to section 69 of the

County Courts Act 1984 on the amount found to be due and owing to her at such rate and for such period as the court shall think fit.


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