Mortgage possession

Question 1

Abbey National v Mewton [1995] CLY 3598

CA

Answer 1

The court in entitled to infer, from the mortgagor’s poor payment record, that he is unlikely to make future payments.

Question 2

Alliance Building Society v Yap [1962] 3 All ER 601

Answer 2

In ejectment, no one other than the person in possession of a property must be served with the summons for possession (relying on Alliance Building Society v Shave).

Question 3

Britannia Building Society v Earl [1990] 2 All ER 46

CA

Answer 3

Where a mortgagor granted a lease of the mortgaged property without consent of mortgagee in breach of covenant of mortgage - occupant becomes a statutory tenant as against mortgagor but not against mortgagee. MtP

Question 4

Cheltenham & Gloucester Building Society v Booker (1997) 1 FLR 311
CA

Answer 4

“There is an inherent illogicality in entrusting conduct of the sale to the mortgagee and yet leaving the mortgagor in possession pending completion unless the mortagee has agreed to this course” - Millett LJ MtP

Question 5

Cheltenham & Gloucester Building Society v Grant (1994) TLR 9/5/94

Answer 5

A Judge is entitled to stay execution of a possession order without hearing formal evidence in the event that the mortgagee does not dispute this oral evidence. MtP

Question 6

Cheltenham & Gloucester Building Society v Krausz [1997] 1 All ER 21
CA

Answer 6

Where proceeds of sale likely to discharge mortgage debt, s.36 AJA 1970 conferred on court power to suspend warrant of possession. However, it did not empower the court where proceeds not sufficient to discharge debt and in absence of other funds. (Negative equity)

Question 7

Cheltenham & Gloucester Building Society v Norgan [1996] 1 All ER 449
CA

Answer 7

When assessing ‘reasonable period’ for the purposes of Section 36 and 8, it was appropriate for the Court to take into account the whole of the remaining part of the original term of the mortgage as a starting point. MtP

Question 8

Citibank Trust Ltd v Ayivor [1987]

HC, Ch

Answer 8

The existence of a counterclaim does not affect the Mortgagee’s right to a possession order. The mere existence of a counterclaim showed neither that the Defendants would be likely to pay off the arrears within a reasonable period within the meaning of s.36, nor that even if the counterclaim had a reasonable prospect of success any damages would be applied to pay off the arrears.

Question 9

Cook & Others v Mortgage Business and others [2011] EWCA Civ 17.

Answer 9

Court of Appeal decision in the “North East Property Buyers” cases where registered owners of their homes sold their homes to purchasers who promised a right to remain in their homes after sale. The purchasers then defaulted on their mortgages and the mortgagees took possession.mtp

Question 10

First National Bank v Syed [1991] 2 All ER 250

Answer 10

The Court should not exercise its Section 36 power to stay or suspend execution of a possession order if the amonut of instalments required to clear the arrears in a reasonable time is manifestly beyond the debtor’s means, or if an order which is within the debtor’s means will not clear the arrears within a reasonable time and also cover the monthly instalments. MtP RofG

Question 11

Forceleux Ltd v Binnie [2009] EWCA Civ 854

CA

Answer 11

A hearing to which CPR 55.8 applies and the Court decides the claim cannot sensibly be called a “trial” within the meaning of CPR 39.3. Therefore in a Defendant’s application to set aside a possession order, the provisions of CPR 39.3 do not apply. In such circumstances CPR 3.1(2)(m) is amply wide enough to give a Court power to set aside a possession order if, in its discretion, it considers that the interests of justice demand it. The need to act promptly is not an absolute requirement imposed on the Defendant but simply a factor to be taken into account. Mtp. GCv

Question 12

Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1992] 4 All ER 588 
CA

Answer 12

The Court’s discretion as to costs should usually be exercised so as to reflect contractual rights. A decision to disallow costs was one derived from the courts of equity. A decision to refuse costs might be exercised under Section 51, Supreme Courts Act 1981. The Mortgagors could object to costs being unreasonably incurred or being unreasonable in amount. The burden of proof would be on the mortgagor and any doubts resolved in favour of the mortgagee. MtP

Question 13

Habib Bank v Tailor [1982] 3 All ER 561

CA

Answer 13

Section 8 of the Administration of Justice Act 1973 does not apply to mortgages securing an overdraft i.e. ‘all monies charges’, which are not repayable until a written demand has been made and therefore in which there is no power of postponement of the debt. MtP

Question 14

Hackney LBC v Findlay

Answer 14

Distinguishing the case of Forcelux Ltd v Binnie. In considering whether to set aside a possession order made at the first possession hearing in the tenant’s absence, the court should usually apply the requirements of CPR 39.3(5).mtp

Question 15

Halifax plc v Taffs CA (Civil Division) [1999] C.L.Y. 4385

CA

Answer 15

Where arrears are cleared before a possession order is made but after proceedings are issued, the correct order is to adjourn generally with liberty to restore. MtP

Question 16

Halifax v Ankermann [1999] EWCA Civ 697

CA

Answer 16

Chadwick LJ approves the comments of Nourse LJ in Mortgage Services Funding plc v Steele in respect of the requirement of firm evidence from the Defendant if the court is to exercise its discretion to deny the Claimant his remedy. MtP

Question 17

Jayashankar v Lloyds TSB [2011]

Answer 17

Concerns an appeal (by the Defendant mortgagor) of a decision of a District Judge who dismissed a Defendant’s application to suspend a warrant of eviction. The appeal notice was lodged after the eviction had been executed. This is a crucial factor of the Judge’s decision. The Circuit Judge dismissed the appeal. His reasoning was as follows: • Section 36 ceases to operate on execution of a warrant (Cheltenham & Gloucester v Obi 1996 28 HLR 22). • CPR 52 does not have the effect of extending the application of section 36 for the following reasons: a) The wording of Section 36 is clear and sets out ‘special provisions’ by necessary implication that the decision of the court must be made before execution and this applies to appeals against refusals to suspend a warrant b) The argument for ‘certainty ‘ is decisive. If section 36 could be considered after a warrant has been executed by virtue of CPR52. This would mean that mortgagees would have to wait an indefinite period of time before selling the property they have repossessed because CPR52 allows appeals to be made out of time. c) This is not a circumstance where a re-hearing is appropriate. CPR52.11 allows a rehearing only in specific circumstances. The basis of the appeal is that the Defendant effectively seeks the opportunity to present his arguments in a more cogent form. These arguments could have been put before the District Judge. d) This decision does not breach the Defendant’s Article 6 or 8 rights because the Defendant had the opportunity to apply for a stay of execution pending the hearing of the appeal. CPR52.7 makes it clear that unless the court orders otherwise an appeal shall not operate as a stay of any order or decision of the lower court. Further the Defendant has the right until execution to redeem the mortgage at which point the mortgagee’s right to possession and sale ceases to exist. This case does not make any findings regarding: 1. Warrants executed by oppression etc. as dealt with in LB Hammersmith & Fulham v Harridge. 2. Warrants executed after a notice of appeal has been lodged with the Court where the Defendant is unable to apply for a stay of the warrant or to have the appeal heard prior to execution because of lack of judicial resources. mtp

Question 18

Jephson Homes Housing Association Limited v Moisejevs

Answer 18

A possession warrant obtained and executed without fault on the part of either the landlord or the court could not properly be set aside as an abuse of process or oppressive. MtP

Question 19

Meads v UK (unreported)

Answer 19

Eviction compatible with Aticle 8 ECHR MtP

Question 20

Mortgage Agency Services Number Two Limited v Bal &a Bal

Answer 20

The court cannot exercise its discretion under Section 36 AJA 1970 once the warrant for possession has been executed.mtp

Question 21

Mortgage Repossessions (Protection of Tenants etc) Act 2010

Answer 21

An Act to protect persons whose tenancies are not binding on mortgagees and to require mortgagees to give notice of the proposed execution of possession orders. MtP

Question 22

Mortgage Services Funding plc v Steele (1996) 72 P&CR D40
CA

Answer 22

Where the mortgagor recognises that the property has got to be sold, the Court’s approach is not to delay the mortgagee from enforcing his remedies. Any potential buyers can be dealt with by the mortgagee. Only if there is firm evidence that a particular sale is about to be completed should the court prevent possession. MtP

Question 23

National & Provincial Building Society v Lloyd [1996] 1 All ER 630

Answer 23

A case distinguishable from most house sale situations. In Lloyd, the property was a farm to be sold peicemeal. The Judge ultimately found for the Building Society in any event. MtP

Question 24

Paragon Finance v Nash [2001] EWCA Civ 1466

Answer 24

Consumer credit – Extortionate credit bargain – Mortgage – Variable interest rate clause – Mortgagee failing to adjust charging rates in line with Bank of England or prevailing market rates – Whether extortionate credit bargain – Consumer Credit Act 1974, ss 137, 138. MtP GCv

Question 25

Paratus AMC v Jameer [2012] All ER (D) 300 (Oct)

CA

Answer 25

The Court of Appeal dismissed an appeal by a Mortgagee against a decision in the Count Court to refuse to suspend a possession order. The court found that a borrower who asked the court to exercise its discretion in his favour to allow further time for payment had to present frankly and fully up to date information in respect of his expenditure and income such that the court could place reliance on that information.mtp

Question 26

Standard Bank Plc v Agrinvest International Inc

Answer 26

Moore Bick LJ obiter at Para 22. Whether an application to set aside judgment is made promtply is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that releif should be granted, even though the application was not made promptly. The strength of the defence may well be one.GCv

Question 27

Swift v Colin [2011] EWHC 2410 (Ch)

Answer 27

The court held that s.101 LPA 1925 confers a power of sale where the mortgage is made by deed. The Claimant had full power of sale over the freehold, notwithstanding that its charge was not substantively registered and that it did not become the registered proprietor of any charge. mtp

Question 28

Target Home Loans Limited v Clothier [1994] 1 All ER 439

CA

Answer 28

A sale would be more readily achieved if the house was occupied than repossessed. Consequently, the possession order was deferred for three months. MtP

Question 29

Tim Martin Interiors Ltd v Akin Gump LLP

Answer 29

Where a Solicitor’s bill of costs is being challenged by a third party who is liable for them under Section 71 Solicitors Act 1974, a third party is only entltled to raise those objections that the client itself would have been entitled to raise on an assessment of solicitor-client costs. Where the amount of costs have been agreed by the client, these costs will be presumed to be reasonable in amount. The court will interfere with an agreed hourly rate only in exceptional circumstances.mtp