Mortgages Cases Flashcards
Santley v Wilde
Definition of a mortgage
A transaction under which land or chattels are given as security for the payment of a debt or the discharge of some other obligation
United Bank of Kuwait Plc v Sahib
Equitable mortgages:
Prior to the LP(MP)A 1989 the deposit of title deeds was enough to create an equitable mortgage, but not any more
Cheltenham & Gloucester Building Society v Norgan [1996]
Case for mortgagees right of possession - relief for the mortgagor under S36 AJA 1970 (Changed reasonable time)
Extended the existing protection under the Chancery Division which only provides for about 28 days relief
This case gave the mortgagor 18 years to pay arrears being the remainder of the mortgage term
CONTRAST WITH
Bristol & West Building Society v Ellis [1996] where possession was ordered as there was little prospect of the mortgagor being able to repay the arrears and forthcoming mortgage payments
Halifax Building Society v Clark [1973]
Mortgagees right - possession
Mortgage deed contained a provision that
provided for the whole mortgage debt to become payable if the mortgagor fell into arrears
In this case, the mortgagor fell into £100 arrears, the whole £1,400 became payable and the court ordered possession
Unfair outcome - S8 AJA 1973 was enacted
Only actual arrears are payable, any request for the accelerated payment of capital sums will be ignored
Ropaigealach v Barclays Bank Plc [1999]
A court order for possession is not required if the mortgagee repossesses peaceably and entry is not forced
Horsham Properties Group Ltd v Clark [2008]
Banks power of sale
The mortgagees possession and subsequent sale under S101 LPA 1925 without obtaining a court order was held not to be in breach of the mortgagees right to peaceful enjoyment under Art 1 Protocol European Courts of Human Rights
Bishop v Blake [2006]
Mortgagees power of sale case
The bank has an equitable duty of reasonable care and good faith when selling the property. This extends to obtaining the best price reasonably obtainable
Cheltenham & Gloucester Building Society v Krause [1997]
Mortgagees power of sale
The borrower cannot use S36 AJA to request time to sell the house himself if there is negative equity and the bank is seeking to obtain possession and sell
What case did the well known maxim “once a mortgage, always a mortgage” originate from?
Seton v Slade (1802)
Four Maids Ltd v Dudley Marshall (Properties) Ltd (1957)
Established the fact that the banks right of possession is immediate…..I.e. before the ink on the mortgage has dried
Royal Bank of Scotland v Etridge (No.2) (2001)
Important case following Barclays Bank Plc v O’Brien (1993)
- this case looked at ways to protect the surety
- any situation where a relationship of trust and confidence coupled with a transaction requiring explanation arises
- and surety must now revive ILA
- bank automatically put on ‘inquiry’ whenever there is a non-commercial relationship
Recent case where the Etridge rule was followed is Brown v Stephenson (2013)
Recent case where the Etridge principles were applied
Brown v Stephenson (2013)
The courts did not find in favour of Mrs Brown. The land transfers into their joint names and even the ones to Mr Stephenson alone could all be readily explained, plus she received ILA and was not vulnerable or reliant on Mr Stephenson for her financial affairs
Samuel v Jarrah Timber & Wood Paving Corporation Ltd (1904)
Option agreement in the mortgage deed was held to be a Clog on the mortgagors right of redemption
Can be valid if the option and mortgage and completely separate as in Reeve v Lisle
Recent case - Jones v Morgan (2001)
Knightsbridge Estates Trust Ltd v Byrne (1939)
Case for mortgagors right - postponement of redemption date
Usually postponement of the redemption date is acceptable unless the delay makes redemption illusory
This case also established the rule that there can be no oppressive or unconscionable terms
CONTRAST KNIGHTSBRIDGE WITH
FAIRCLOUGH v SWAN BREWERY CO LTD (1912). Lease would effectively be worthless if the tenant was not allowed to redeem the charge until 6 weeks before the end of the lease term - postponement of redemption clause not valid
Kreglinger v New Patagonia Meat & Cold Storage Co Ltd (1914)
Case for Mortgagors protection relating to collateral advantages that exist after redemption
Generally not acceptable as illustrated in Noakes v Rice (1902)
Can be valid if they only exist up to the date of redemption or it’s seen as a separate contract that is totally independent of the mortgage as it was in Kreglinger - sheepskins case
