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Undue Influence Question

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    Hi, I saw this question recently and it seems like quite a tricky one, I've put my thoughts below but I'm unsure what a correct response would include.

    The question is as follows.

    Joan and Roger are both members of a new fiction book club. Although the club has only met three or four times since its inception, Joan and Roger hit it off because of a mutual interest in the works of James Joyce. After each session they go out for dinner together to discuss Joyce's masterpiece, Ulysses.
    At one of these dinners Roger reveals that he is deeply unhappy and that the only thing that is keeping him going are these dinners with Joan. He says that his marriage is on the rocks and that his business, an advertising agency called Slick Ads Ltd, is in a deep financial mess due to the recent loss of a major client. To save the business he needs to borrow £300,000 from the bank but his wife isn't prepared to let them use their matrimonial home as security for the debt.
    Joan is deeply upset and shocked. Concerned that Roger is close to the edge, she tells him that she would be happy to put up her flat as security for the debt. Roger says that this is completely out of the question, but Joan insists.
    The next day, Joan wakes up worried that she may have done the wrong thing. Her flat is her only major asset and she does not know what she would do if she lost it. She phones her sister, Peggy, who is a law professor, for advice. Peggy tells her that she must not guarantee the debt, and that she is "being taken for a ride." However, as soon as Joan puts the phone down, thoughts that Roger might harm himself come flooding into her head and she decides that she must help.
    A week later, Joan goes to the bank, Loan Sharks Plc, with Roger and signs the necessary paperwork. When Joan next goes to the book club, however, Roger is not there. She calls him but he does not answer. Slick Ads goes bust and Loan Sharks take possession proceedings against Joan to recoup the money owed to them by the agency.
    Advise Joan.

    The first problem is establishing whether this form of undue influence would fall under Actual (1) or presumed (2b).
    It seems too tenuous a link (having just met) to categorise this relationship as presumed undue influence B. There is some merit to classing this relationship under 2B, that Joan entrusted Roger with her flat, she does not pass over complete control of her financial affairs nor does it seem that she places trust and confidence in him - instead her primary reason is pity.
    I would therefore set out to establish that actual undue influence took place.
    A case that seems to share some elements with these circumstances is CIBC Mortgages v Pitt (1993) but differ in other aspects:
    1) the security is not a shared domestic home but a home owned solely by one party
    2) they are not married, nor are they in a romantic relationship

    Nonetheless, the ratio can be applied to some extent: if a claim of undue influence is made where an innocent 3rd party is involved, in order for the contract to be voidable it must be shown that the facts known to the 3rd party should have put it on inquiry.

    My approach would therefore be that the bank should have been 'put on inquiry' from the fact that Joan was putting her flat up as security for someone she had little relation to. While Joan did receive advice from Peggy, this is unknown to the bank who should have provided independent legal advice of their own. Since it becomes the bank's duty to take reasonable care to protect Joan from undue influence and they failed to do so, the contract is voidable.

    I have doubts with this approach since it is Joan who insisted to have her flat put up as security. Indeed it seems that rather than Roger having to convince her to put up the security, she ha convinced herself. Despite this, I don't really see an alternative approach the question would want me to take.

    Any and all input is appreciated, thanks in advance
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