[2025] EWHC 908 (Ch)

In order to establish economic duress, a defendant must show that there has been illegitimate pressure which caused it to enter into a contract and that there was no practical alternative but to accept the terms of the contract; see Pakistan International Airline Corporation (Respondent) v Times Travel (UK) Ltd (Appellant) [2021] UKSC 40. In order to set aside a transaction on the ground of undue influence, it is necessary to show that the parties were in a relationship of trust and confidence or emotional or physical dependency and that the transaction was an abuse of this relationship.

The facts pleaded at paragraph 2j of the Defence in support of Ms Lawrences’ case on undue influence/duress are as follows:

“Further and alternatively the Claimant knew or ought to have known that by obtaining 1^st charges and by not providing the said £300,000, the Defendant would not be able to complete the development and generate income to fund the exit of the loan within 9 months, The Claimant thereby caused the Defendant to suffer undue influence and/or duress by causing the Defendant to be unable topay the interest charges of the Claimant of between £20,000 and £80,000 per month. So the Defendant was disabled from exiting the loan.”

In short, Ms Lawrence is alleging that HNW knowingly caused Ms Lawrence to enter into the Loan Agreement knowing that she would not be able to complete the development and exit the loan within nine months and that she would not be able to afford the interest charges. These allegations do not, in my judgment, amount to a valid basis for a defence of either economic duress or undue influence. No facts are pleaded, or alleged in Ms Lawrence’s witness statement, to support a case that HNW exerted illegitimate pressure on Ms Lawrence to enter the Loan Agreement or that there was no practical alternative to entering the Loan Agreement/the Further Advances or that there was a relationship of trust and confidence between Ms Lawrence and HNW which HNW abused. It is incidentally no part of Ms Lawrence’s case that she was in the position of a consumer in her dealings with HNW and so entitled to protection under consumer credit legislation.