Mortgages

Question 1

National Securities v Hegarty

Answer 1

Husband forged wife’s signature to mortgage the JT. His act of alienation severed the JT, but the wife’s share was unaffected by the mortgage.

Question 2

Ahmed v Kendrick

Answer 2

Although wife had not signed mortgage agreement, the effect of it was to vest title to property in her name, so she could not deny the charge in equity. The effect of the passing of beneficial interest by a fraudster owner of that interest is to sever the beneficial JT

Question 3

Thames Guaranty v Campbell

Answer 3

The other party can obtain an order compelling him to grant what the has got

Question 4

Barclays Bank v Zaroovabli

Answer 4

Mortgagor leased premises without permission from lender, contrary to mortgage agreement. But lender had never registered the charge, and when it tried to 6 years later, it found itself bound by the lease.

Question 5

Abbey National v Cann

Answer 5

Acquisition mortgages - the mortgagee’s interest always takes precedence

Question 6

Barclays Bank v Buhr

Answer 6

The borrower still holds proceeds of sale on constructive trust for lender

Question 7

Western Bank v Schindler

Answer 7

An unusual case of the bank seeking possession even though no default - they were trying to protect the security. The right to possession is not contingent on default, it’s a common law right, also by virtue of s.85-87 LPA

Question 8

Administration of Justice Act s.36

Answer 8

Where mortgaged property is residential, motgagee may prefer to go through court and ask for an order for possession through s.36

Question 9

Ropaigaelach v Barclays Bank

Answer 9

Where no one is in residence, mortgagee may take possession and is entitled to do so.

Question 10

Albany Homes v Massey

Answer 10

No possession where charge effective in equity over only one co-owner’s interest. But not Achampong

Question 11

First National Bank v Achampong

Answer 11

Mortgagee can still get order for sale under s.14 TLATA 1996 without going into posession

Question 12

Mortgage Corporation v Shaire

Answer 12

Ms Shaire had a legal charge, but undue influence, Mr defaulted and the C wanted their money. She was not in actual occupation of the property, but she was able to pay the money back. The mortgage company would not be kept out of their money, because she could repay the whole sum during the lifetime of the mortgage.
TLATA replaces trusts for sale with trusts of land, giving more discretion to tip the balance in favour of families

Question 13

Bank of Ireland Home Mortgages v Bell

Answer 13

It is generally unjust to keep a creditor out of its money if no payments are made. But not where refusal to order sale would leave bank with no realistic prospect of ever recovering at least some of the money. The innocent co-owner has to show that they are able to meet the repayments to keep up their home (see Mortgage Corporation v Shaire)

Question 14

Edwards v Lloyds TBS Bank

Answer 14

Charged share valued at more than enough to cover the debt, and Mrs E could not, with her share, afford to move elsewhere. There was no danger that the creditor could not be paid. Purpose was still possible and no danger of negative equity.

Question 15

Re Citro

Answer 15

Trustee in bankruptcy should prevail. They are the melancholy consequences of debt and improvidence with which every civilized society has been familiar. Children and homelessness where not extreme enough to postpone sale.

Question 16

Alliance and Leicester v Slayford

Answer 16

Mortgagee can purse debt claim against mortgagor so that he falls into bankruptcy: easier to get sale under Insolvency Act, one year after bankruptcy, and this is not an abuse of process.

Question 17

Cheltenham & Gloucester v Krausz

Answer 17

S.36 cannot help the mortgagor when there is negative equity. Once a lender wants possession to realise its security, a defaulting borrower with no definite prospect of repaying will be powerless to prevent loss of the home

Question 18

Quennell v Maltby

Answer 18

Possession sought in order - a mortgagee’s power can be said to be exercised improperly only if no part of the reason was to protect the security (like in this case)

Question 19

Halifax BS v Thomas

Answer 19

T had defrauded H in obtaining a mortgage loan to buy property; defaulted, T convicted of fraud, H sold property, some left over after discharge of debt. Q - who got this residue? Since T could not profit prom sale of property which he had acquired through fraud, could H keep it? No. It went to the Crown as bona vacantia.

Question 20

Cuckmere Brick v Mutual Finance

Answer 20

Planning permission was not mentioned in an advert, which would significantly raise the price of the sale. Mortgagee to take ‘reasonable steps’ - no duty to make profit for mortgagor: purpose of duty is to obtain enough to release mortgagor from debt

Question 21

Standard Chartered Bank v Walker

Answer 21

Choice open to the mortgagee to choose the time of sale did not extend to choosing the ‘worst possible time’ and that there was an arguable case that any choice should involve a reasonable degree of care.

Question 22

Parker-Tweedale v Dunbar Bank

Answer 22

Duty owed to mortgagee because of relationship but not owed to beneficiary under trust of land. Here mortgagor agreed with mortgagee the price of sale, week later before completion of sale from mortgage, X agrees to sell to Z for 150k more;

Question 23

Corbett v Halifax

Answer 23

Equity will intervene but only where improprietary

Question 24

Tse Kowng Lam v Wong Chit Sen

Answer 24

Auctions were usually alright, but not on these facts (only one bid offerred by mortgagee’s family at the reserve price fixed by the mortgagee

Question 25

Barclays Bank v O’Brian

Answer 25

Mrs O ‘agreed that a loan to her husband’s business be secured on the family home. Believed loan was for 60k, but in fact it was unlimited (overdraft account) and soon rose more than double that. She later argued that husband has unduly influenced her, that this vitiated her consent, and that the contract should be set aside with respect to her.
Held: Contract was voidable for UI

Question 26

RBS v Etridge

Answer 26

The solicitor advising W had falsely confiirmed in writing to RBS that he had explained everything to her. RBS could reasonably rely on that to ignore possiblity of undue influence.

Question 27

CIBC Mortgages v Pitt

Answer 27

UI: here, the picture given to the bank was of an ordinary transaction which would benefit both the wife and a husband. Notice depends on the nature of transaction: must be to manifest disadvantage of compliant (or need explaining post-Etridge)

Question 28

TSB Bank v Camfield

Answer 28

Result of undue influence - all or nothing. UI vitiates contract, so bank has no claim against W’s share despite her having agreed to a lesser amount. Mrs Camfeld was a legal as well as a beneficial owner and so had entered into a contract with the bank which she then set aside.

Question 29

Barclays Bank v Caplan

Answer 29

Here constructive notice of UI not shown on original agreement, but accepted for later agreements extending amount of loan, so W interest still charged up to the amount of the original loan.

Question 30

Barclays Bank v Rivett

Answer 30

Man can be unduly influenced too!