Mortgages Structure Flashcards
Mortgagee Powers Cases/ Statutes ?
Possession Action
Equity
—- Quennell v Maltby (Cannot take possession if in bad faith or improper use)
Statute
- — Horsham v Clark (Dwelling house required to use A.J.A/ Mortgagee does not need to take possession to sell)
- — Norgan (Reasonable time to pay back mortgage is the rest of the mortgage term)
- — Bank of Scotland v Zinda (reasonable time is half the mortgage term)
- — National Provincial Bank v Lloyd (Court may postpone possession up to a yr)
- — Palk (Court can order sell under s.91(2))
- — White v City London Brewery (Strict Accountability with possession)
Power of Sale
2 Precondition
—- Bailey v Barnes (purchaser has no duty to find out)
Duties
- – China v South Sea Bank v Tan Soon Gin (Mortgagee chooses method of Sale)
- –Silven Properties (M’gee does not have to wait for property price to rise)
- — Cuckmire v Brick (M’gee has duty to take reasonable care in determining market price)
- — Halifax v Corbett (M’gee cannot sell to himself)
- — Tse Kwong Lamb (M’gee has onus of proof that sale was in good faith if sells to associated person/company)
After Sale
- s. 105
Mortgagor sells property
—- Krausz (Court can deny possession if M’gor can get better price)
Mortgagor’s Rights/Protection?
Statutory Protection
Consumer Credit Act 1974 (only protects 2nd Mortgages)
s. 36 AJA 1970 & 1973 (M’gor must show ability to repay & future income)
- — Horsham v Clark (requires dwelling house & possession action)
- — Norgan (Reasonable time is to the end of the mortgage)
Challenging Interest Rates
- — Paragon finance v Nash (Lord Dyson) (cannot dishonestly or arbitrarily set or vary interest rates)
- — Dabrah (Unconscionable terms will be struck out)
- — Multiservice Bookbinding v Marden (Parties of equal bargaining powers)
Equity of Redemption
- — Right to Sell/ Second mortgage
- —- Right to Redeem (Clogs)
- —- Right to get property back in original State
- Noakes v Rice (below)
Clogs
Term permitting purchase
—- Warborough v Garmite (valid if in different transaction)
—- Jones v Morgan (contradicts Reeve/ Invalid if 2 documents are interdependent)
—- Samuel v Jarrah (Lord Macnaughton/ issue of equal bargaining power)
—- Reeve v Lisle (valid if in different document)
term restricting redemption
- — Fairclough v Swan Brewery (void because of length)
- — Knightsbridge v Byrne (valid because of equal bargaining powers)
Collateral Advantage
- — Noakes v Rice (property must be returned in original form)
- — Bradley v Carritt (Collaterl advantage must end at the end of the mortgage)
- — Kreglinger New Patagonia Meat (Solus tie may be valid after redemption if it is independent from mortgage)
- — Biggs v Hoddinott (Agreement cannot be unconscionable/ Price must be fair)
- — Esso v Marden (Restraint of Trade Doctrine)(Reasonableness and duration test) (longer tie requires stronger justification)
Equity of Redemption cases?
Equity of Redemption
- Right to Sell/ Second mortgage
- Right to Redeem (Clogs)
- Right to get property back in original State
- Noakes v Rice
Clogs
Term permitting purchase
—- Warborough v Garmite (valid if in different transaction)
—- Jones v Morgan (contradicts Reeve/ Invalid if 2 documents are interdependent)
—- Samuel v Jarrah (Lord Macnaughton/ issue of equal bargaining power)
—- Reeve v Lisle (valid if in different document)
term restricting redemption
- — Fairclough v Swan Brewery (void because of length)
- — Knightsbridge v Byrne (valid because of equal bargaining powers)
Collateral Advantage
- — Noakes v Rice (property must be returned in original form)
- — Bradley v Carritt (Collaterl advantage must end at the end of the mortgage)
- — Kreglinger New Patagonia Meat (Solus tie may be valid after redemption if it is independent from mortgage)
- — Biggs v Hoddinott (Agreement cannot be unconscionable/ Price must be fair)
- — Esso v Marden (Restraint of Trade Doctrine)(Reasonableness and duration test) (longer tie requires stronger justification)
Statutory Protection of Mortgagor’s rights?
Challenging interest rates?
Statutory Protection
Consumer Credit Act 1974 (only protects 2nd Mortgages)
s. 36 AJA 1970 & 1973 (M’gor must show ability to repay & future income)
- — Horsham v Clark (requires dwelling house & possession action)
- — Norgan (Reasonable time is to the end of the mortgage)
Challenging Interest Rates
- — Paragon finance v Nash (Lord Dyson) (cannot dishonestly or arbitrarily set or vary interest rates)
- — Dabrah (Unconscionable terms will be struck out)
- — Multiservice Bookbinding v Marden (Parties of equal bargaining powers)
Power of Sale cases?
Power of Sale
2 Precondition
—- Bailey v Barnes (purchaser has no duty to find out)
Duties
- – China v South Sea Bank v Tan Soon Gin (Mortgagee chooses method of Sale)
- –Silven Properties (M’gee does not have to wait for property price to rise)
- — Cuckmire v Brick (M’gee has duty to take reasonable care in determining market price)
- — Halifax v Corbett (M’gee cannot sell to himself)
- — Tse Kwong Lamb (M’gee has onus of proof that sale was in good faith if sells to associated person/company)
After Sale
- s. 105
Mortgagor sells property
—- Krausz (Court can deny possession if M’gor can get better price)
Mortgagor Protection against Possession?
Common Law
- 28 Days to repay what is owed
- —Birmingham v Caunt case
- Must be reasonable prospect that M’gor can repay the whole debt in the period
Equity
- May prevent possession unless it is being claimed in order to protect its security
- — Quennell v Maltby (Cannot take possession if in bad faith or improper use)
Statute
- AJA 1970 & 1973
- — Horsham v Clark (Dwelling house required to use A.J.A/ Mortgagee does not need to take possession to sell)
- — Norgan (Reasonable time to pay back mortgage is the rest of the mortgage term)
- — Bank of Scotland v Zinda (reasonable time is half the mortgage term)
s. 91(2)
- –Palk (Court can order sell under s.91(2))
Strict Accountability
—- White v City London Brewery (Strict Accountability with possession)
Postpone possession in positive equity
—- National Provincial Bank v Lloyd (Court may postpone possession up to a yr)
