Mortgages
Barclays Bank plc v Thomson [1997]
[solicitors giving independent advice were acting exclusively for the advisee, even if they were introduced and retained by the lender.]
Britannia BS v Earl [1990]
[statutory tenants did not have interest in land to come under Administration of Justice Act 1970 s36]
Santley v Wilde [1899]
'If I convey land in fee subject to a condition forbidding alienation, that is a repugnant condition.
Santley v Wilde [1899]
'If I give a mortgage on a condition that I shall not redeem, that is a repugnant condition.'
Multiservice Bookbinding v Marden [1979]
'a bargain cannot be unconscionable unless one of the parties has imposed the objectionable terms in a morally reprehensible manner; that is to say, in a manner which affects his conscience.'
Alexander v West Bromwich Mortgage Co Ltd [2015]
(contract allowed variation in buy to let mortgage from 1.99% to 3.99% over Bank of England rate. This was acceptable because of commercial nature of agreement.)
Jones v Morgan [2001
(many problems, but mortgagor had legal advice and so mortgage not unconscionable)
Wanner v Caruana [1974]
(post-default flat rate for balance of term - void)
Nash v Paragon Finance [2001]
(to give effect to the parties' 'reasonable expectations' there was an implied term in the mortgage that discretion to alter interest rates should not be exercised dishonestly, for an improper purpose, capriciously, arbitrarily or in a way in which no reasonable mortgagee, acting reasonably, would do. But market changes can be taken into account.)
Cityland Properties v Dabrah [1968]
-clear disparity of power - court changed the contract- shows the power of the court. -capitalised rate of 57%; Goff J held this was 'unfair and unconscionable; 7% rate set instead)
Barcabe v Edwards [1983]
100% flat rate, actually 319% APR. The court reduced the rate to 40% flat rate, APR = 92%.)
Esso Petroleum v Harpers Garage [1968]
5 year tie ok, 21 years probably not
Bank of Scotland v Grimes [1985]
AJA covered endowment mortgages]
Habib Bank Ltd v Tailor [1982]
Act has no application if mortgage is giving as a security for a bank overdraft [AJA of no application over mortgage securing overdraft]
Santley v Wilde [1899]
Any provision inserted to prevent redemption on payment or performance of the debt or obligation for which the security was given is what is meant by a clog or fetter on the equity of redemption and is therefore void. It follows from this, that "once a mortgage always a mortgage" ... The right to redeem is not a personal right, but an equitable estate or interest in the property mortgaged. A "clog" or "fetter" is something which is inconsistent with the idea of "security": a clog or fetter is in the nature of a repugnant condition. ... The Courts of Equity have fought for years to maintain the doctrine that a security is redeemable. But when and under what circumstances? On the performance of the obligation for which it was given. If the obligation is the payment of a debt, the security is redeemable on the payment of that debt. That, in my opinion, is the true principle applicable to the cases, and that is what is meant when it is said there must not be any clog or fetter on the equity of redemption.'
Kinane v Alimamy Mackie-Conteh [2005]
Arden LJ: equitable charge may come under the aegis of Law of Property (Miscellaneous Provisions) Act 1989 s2 and therefore may need to be in writing.
China & South Sea Bank Ltd v Tan Soon Gin [1990]
China & South Sea Bank Ltd v Tan Soon Gin [1990] [mortgage owed no duty to surety to exercise power of sale] Lord Templeman, at 545: 'If the creditor chose to exercise his power of sale over the mortgaged security he must sell for the current market value but the creditor must decide in his own interest if and when he should sell. The creditor does not become a trustee of the mortgaged securities and the power of sale for the surety unless and until the creditor is paid in full and the surety, having paid the whole of the debt is entitled to a transfer of the mortgaged securities to procure recovery of the whole or part of the sum he has paid to the creditor. The creditor is not obliged to do anything. If the creditor does nothing and the debtor declines into bankruptcy the mortgaged securities become valueless and the surety decamps abroad, the creditor loses his money. If disaster strikes the debtor and the mortgaged securities but the surety remains capable of repaying the debt then the creditor loses nothing. The surety contracts to pay if the debtor does not pay and the surety is bound by his contract. If the surety, perhaps less indolent or less well protected than the creditor, is worried that the mortgaged securities may decline in value then the surety may request the creditor to sell and if the creditor remains idle then the surety may bustle about, pay off the debt, take over the benefit of the securities and sell them.'
R v Cornelius [2012]
EFFECT OF FRAUD C, a solicitor, provided bridging loans to purchasers. Purchasers applied for buy-to-let mortgages, and C represented there was clear title. HELD: not fraud by false representation, as trust deed was not trust by way of security therefore LRA 2002 s29 did not apply. Followed Halifax v Curry Popeck.
Leeds Permanent BS v Famini
FAILURE TO REGISTER MORTGAGE - priority retained as equitable mortgage vis-à-vis a later-in-time created equitable lease.
Halifax v Curry Popeck [2008]
FAILURE TO REGISTER MORTGAGE- disposition by the owner (this was part of a fraud) was not 'for value' (because of the fraud) for the purposes of LRA 2002 s29, therefore mortgage did not lose priority.
Scott v Southern Pacific Mortgages Ltd [2014]
Facts: People sell their homes due to financial difficulties and then rent them back from buyers at discounted price. Some transactions were fraudulent, house's were being bought using a mortgage, when buyers defaulted home owners faced eviction and banks lost money. Found in favour of bank. (the singular and indivisible nature of the transaction) Scott sold her house to North East Property Buyers on a sale and rent back basis. NEPB funded this with a mortgage from Southern Pacific. Clause limited leases to ASTs for 1 year. NEPB granted 2 year tenancy, just after completion. No LRA 2002 sch 3[2] overriding interest, and NEPB had only granted personal rights at point of exchange; following Abbey National BS v Cann.
Barclays Bank v Zaroovabli [1997]
Failure register a legal charge (mortgage) by the mortgagees resulted in the mortgagees losing priority to a legal lease over the land (which took effect as an overriding right and therefore took priority)
Swift 1st Ltd v Chief Land Registrar [2015]
Fraudster executed charge over property which was occupied by the registered proprietor. Fraudster then executed second charge in favour of S. Both charges were registered. S redeemed first charge, and advanced the loan. S brought possession proceedings after fraudster failed to repay, but accepted it had no enforceable security. C altered register under LRA 2002 sch 4 to delete S's charges. S claimed indemnity from C.
Four Maids Ltd v Dudley Marshall Ltd [1957
Harman J: 'The mortgagee may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted himself out of that right. He has the right because he has a legal term of years in the property or its statutory equivalent. If there is an attornment clause, he must give notice. If there is a provision that, so long as certain payments are made, he will not go into possession, then he has contracted himself out of his rights. Apart from that, possession is a matter of course.'
Graham-York v York and Lees BS [2015]
Here it was held that the beneficial share of 25% was correct (following Stack; Jones v Kernott etc). The wife's share was subject to the remaining mortgage debt, as the wife had not pleaded an equity of exoneration ie that her (now dead) partner's mortgage had been solely for his benefit. Here the debt was for the purchase and the female partner had derived the benefit of the male partner's earnings, so she should take the burden of the debt also.
Agarwala v Agarwala (2013)
Here there was a business venture: J was S's sister-in-law. S had approached J for her to take legal title and mortgage over property, which S would benefit from, because S had a poor credit rating. J argued the property was hers; S would merely benefit in the form of employment. S argued that he provided the money for conversion of property (to a bed and breakfast), and for mortgage payments, and so he had the property. Although the facts indicated some element of fraud, on the balance of probability, S's version of events was more probable. Furthermore, Laskar was distinguished, because the fact J was liable for the mortgage was of little help because S was the conduit for the mortgage payments. S had to have acted to his detriment as well as there being a common understanding; this he had done, and thus he was entitled to the property.
Noakes v Rice [1902]
HoL held this would be a clog on the equity of redemption. Lord Lindley: was overruled by other judges. (Lord Lindley): 'My Lords, I agree in thinking that the covenant contained in this mortgage, and by which the mortgagees have attempted to convert the house mortgaged from a free public-house into a tied public-house even after redemption, is invalid. I see no answer to the objection taken to it that upon payment off of the mortgage money the mortgagor cannot get back what he mortgaged, namely, a free public-house.'
Kinane v Alimamy Mackie-Conteh [2005]
If a lender has actually advanced money on the basis of a promise, it is possible that the mortgage will be enforced under estoppel despite the absence of any formality, prided that there is evidence of unconscionability
William Brandt v Dunlop Rubber [1905]
It may be that potential mortgagor has only an equitable interest in the land, as where they are an equitable owner behind a trust of land, or they may have only an equitable lease. It follows that the mortgage will be equitable. Mortgages of equitable interests are carried in to effect by a conveyance of the whole of the mortgagor's equitable interest to the mortgagee. This will be accompanied by a provision for retransfer of the equitable interest when the loan is repaid
Santley v Wilde [1899]
Lindley LJ: Mortgage= a conveyance of land as security for the payment of a debt or the discharge of some other obligation
Pettitt v Pettitt [1970]
Lord Diplock: Notes 'the emergence of a property-owning, particularly a real-property-mortgaged-to-a-building-society-owning, democracy'.
Vernon v Bethell (1762)
Lord Henley LC 'necessitous men are not, truly speaking, free men, but, to answer a present exigency, will submit to any terms that the crafty may impose upon them'.
Samuel v Jarrah Timber & Wood Paving Corp Ltd [1904]
Lord Lindley: A limited company borrowed money upon the security of their debenture stock subject to the lender having the option to purchase the stock at 40% within twelve months. The loan was to be repaid with interest at thirty days' notice on either side. Within the twelve months and before the company gave notice of their intention to repay the loan, the lender claimed to purchase the stock at the agreed price. 'The doctrine "Once a mortgage always a mortgage" means that no contract between a mortgagor and a mortgagee made at the time of the mortgage and as part of the mortgage transaction, or, in other words, as one of the terms of the loan, can be valid if it prevents the mortgagor from getting back his property on paying off what is due on his security. Any bargain which has that effect is invalid, and is inconsistent with the transaction being a mortgage.'
Samuel v Jarrah Timber [1904]
Lord McNaghten: 'no-one ... by the lights of nature ever understood an English mortgage of real estate.'
Royal Bank of Scotland plc v Etridge (No 2) [2002]
Lord Nicholls: -Bank finance = the most important source of external capital for small businesses with fewer than 10 employees -These businesses comprise about 95% of all businesses in the country, responsible for nearly 1/3 of all employment -Finance raised by 2nd mortgages on the principal's home is a significant source of capital for the start-up of small businesses
Downsview Nominees Ltd v First City Corp Ltd [1993]
Lord Templeman: The same land can be mortgaged many times over - only factor that will stop this is the economic value of the land.
Knightsbridge Estates v Byrne [1940]
Mortgage of freehold land. A term of 40 years was negotiated at arm's length for the most advantageous terms available, therefore the postponement was held to be valid.)
Fairclough v Swan Breweries [1912]
Mortgage of leasehold land. Postponement here was held to be void because a lease is a wasting asset. Mortgagor wanted to redeem early and the court agreed.)
Graves v Capital Home Loans Ltd [2014]
Mortgagor (G) obtained a buy-to-let mortgage from C, but almost immediately fell into arrears. G suffered from mental ill-health. C appointed a receiver after finding out that G was in hospital and lacked capacity. Eventually G regained capacity, but C sold the property in reliance of a clause in the deed conferring a power of sale if mortgagor became incapable. CA held that the essentially commercial nature of a buy-to-let mortgage meant it was not unfair for C to have included a power to appoint a receiver in such circumstances; a common-place power. The fact the power of sale had to become exercisable in order for a receiver to be appointed was simply a function of the Law of Property Act 1925 s109(1) and could not, itself, make the inclusion of such a power unfair.
Kreglinger v New Patagonia Meat & Cold Storage Co Ltd [1914]
No collateral advantages - outside attached to mortgage deal that brings benefit to one party Company got mortgage based on stock of sheepskins. Right to buy sheepskin at best price available on the market. Wanted to pay off mortgage - why do we have to keep selling sheep skins to these people= not unfair as offering the best price and was separate from mortgage deal Lord Parker—>imposition of the agreement which would extract the equity of redemption (unconscionable etc...) 'In every case in which a stipulation by a mortgagee for a collateral advantage has, since the repeal of the usury laws, been held invalid, the stipulation has been open to objection, either (1) because it was unconscionable, or (2) because it was in the nature of a penal clause clogging the equity arising on failure to exercise a contractual right to redeem, or (3) because it was in the nature of a condition repugnant as well to the contractual as to the equitable right.'
Mortgage Corp Ltd v Nationwide Credit Corp Ltd [1994]
PRIORITIES OF MORTGAGE- REGISTERED LAND- LEGAL MORTGAGE Mortgage over registered land which is not completed by substantive registration could only take effect as an equitable charge.
Silven Properties Ltd v Royal Bank of Scotland [2004]
Primary duty of the receiver is to ensure the secured debt is repaid. The duty of a receiver with regard to the power of sale is the same as that of the mortgagee and does not include a duty to bring about increase in value of the property or to improve it.
Texaco Ltd v Mulberry Filling Station [1972]
Texaco and Mulberry entered into a solus tie, for M to only use T's petrol. When T was prohibited from delivering petrol due to a strike, M obtained petrol from another supplier. This was sufficient to allow T relief in the form of an interlocutory injunction. Ungoed Thomas J appeared to justify this on the basis of (1) bargaining equality and (2) that there was no unreasonable restraint on M's liberty to trade, in 'the light of the present-day organisation of industry and society'.
Woodstead Finance v Petrou [1986]
The interest rate was 42%. The loan, £25,000, to Mrs P, was for six months until the husband could sort out proper long-term borrowing. Held this was acceptable to cover poor financial record of borrower)
Royal Bank of Scotland v Etridge (No 2) [2002]
The relationship between a husband and wife is not one where there is an irrebuttable presumption of trust and confidence. However, if the wife could demonstrate on the facts that she did put trust and confidence in her husband vis-à-vis her financial affairs, and the particular transaction concerned was not explicable in an ordinary way, then she could rely on a presumption which shifted the burden of proof to her opponent. If the lender was put on inquiry, they were obliged to take reasonable steps to satisfy itself that wife had understood and freely entered into the transaction.]
Barclays Bank v O'Brien [1994]
Theres a system of land which is cues on a need to alienate and dispose of that land. On the other hand we have to balance the rights of those who live in homes- conflict with residents and banks. Conflict at heart of mortgages. Lord Browne-Wilkinson There are dangers to offering sympathy to a wife who is 'threatened with the loss of her home at the suit of a rich bank to obscure an important public interest, viz the need to ensure that the wealth currently tied up in the matrimonial home does not become economically sterile'.
Laskar v Laskar [2008]
Where property purchased by mother and daughter as an investment - no presumption of joint ownership, but where both parties were jointly liable under the mortgage, it was appropriate to treat the value of the mortgage as representing equal contributions to the purchase price in order to calculate the beneficial interest, following Stack v Dowden.
CIBC Mortgages plc v Pitt [1994]
Where the claimant had no actual knowledge or notice of actual or presumed undue influence put on the wife by the husband, and there was no indication the relevant transaction was anything other than a normal advance to both husband and wife for their joint benefit, the claimant was not put on inquiry. There was thus no constructive notice, and thus the charge was enforceable.
Bristol & West BS v Ellis (1997)
[CA held initial suspension of possession order under AJA 1970 s36 was incorrect, as repayment terms (£5000 immediately and sale to discharge debt in 3-5 years (when children finished school)) were not reasonable to mortgagee]
Tse Kwok Lam v Wong Chit Sen [1983]
[Held that whilst there was no fixed rule against mortgagee purchasing mortgaged property, mortgagee had to show the sale was in good faith, and he had to show he had taken reasonable precautions to obtain the best price reasonably obtainable.]
Palk v Mortgage Services Funding Plc [1993]
[LPA s91(2) discretion was unfettered, but required due regard to all interests]
White v City of London Brewery (1889)
[The lender in possession was held accountable for the greater rent that he would have received had he leased the place as a free house]
Dubai Islamic Bank PJSC v PSI Energy Holding Company BSC [2013]
[complex case; followed Silven Properties]
Royal Trust of Canada v Markham [1975]
[court cannot suspend possession forever]
Standard Chartered Bank v Walker [1982]
[duty to exercise reasonable care in choosing the time of sale]
Barclays Bank v Zaroovabli [1997]
[effect of overriding interest and failure to register]
Cheltenham & Gloucester BS v Norgan [1996]
[how much time to give to mortgagor when exercising AJA powers?]
Stroud BS v Delamont [1960]
[lease without consent; mortgagee's receiver later created relationship of landlord and tenant]
Northern Rock BS v Archer (1998)
[lender must have known that without any information from the lender about the particular arrangement, then the solicitors, could not have guessed at the need for special advice.]
Parker-Tweedale v Dunbar Bank [1991]
[mortgagee exercising a power of sale did not owe a known holder of a beneficial interest an independent duty over and above that owed to the mortgagor.]
Western Bank v Schindler [1977]
[mortgagee had right to possession to protect security; mortgagor failed to pay endowment premium]
Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971]
[mortgagee has duty to obtain proper price]
Quennell v Maltby [1971]
[prohibition on obtaining possession order because of sham exercise of power]
Credit Lyonnais Bank Nederland NV v Burch [1997]
[relationship of trust and confidence between employer and employee]
Silven Properties Ltd v Royal Bank of Scotland [2004]
[unless otherwise indicated the receiver had to be active in the protection and preservation of the mortgaged property. In cases like this where the receiver was appointed by the mortgagee to act as agent to mortgagor, the core duty of the receiver to account to the mortgagor subsisted, and thus the receiver's primary duty was to ensure repayment of the mortgage debt.] Lightman J, at 1005: 'When and if the mortgagee does exercise the power of sale, he comes under a duty in equity (and not tort) to the mortgagor (and all others interested in the equity of redemption) to take reasonable precautions to obtain the 'fair' or 'the true market' value or 'the proper price' for the mortgaged property at the date of the sale, and not . . . the date of the decision to sell. . . . The remedy for breach of this equitable duty is not common law damages, but an order that the mortgagee account to the mortgagor and all others interested in the equity of redemption, not just for what he received but for what he should have received.'
Woolwich BS v Dickman [1996]
[written consent to subjection of interested sufficient; mistaken assumption of nature of rights]
National Provisional and Union Bank of England v Charnley [1924]
all that is required is an intention to charge property with a debt
Ketley v Scott [1980]
annual rate of 48% was held to be not extortionate under ss137 - 140)
TSB plc v Camfield [1995
bank stipulated the wife get independent advice, but failed to ensure this actually occurred, and so the wife's understanding remained incorrect. Bank thus had notice.]
Swift 1st Ltd v Colin [2011]
charge must be properly registered in accordance with LRA 2002 sch2, but a charge under an unregistered deed still enjoys the powers of a mortgage created by deed (such as a power of sale on default). It comes within LRA 2002 ss85, 88)
Banco Exterior v Mann [1995]
claimant had to take reasonable steps to ensure so far as he can that the undue influence of the husband is counteracted by ensuring that the wife is aware of the consequences of entering into the proposed transaction for the benefit of the husband.]
Ropaigealach v Barclays Bank Plc [2000]
common law right of possession]
Szepietowski v National Crime Agency [2013]
complex case involving a combination of 'plank'? charges and confiscation procedures. There was dissent on this point. Obiter: in such case as this, the provisions of the administration of justice act were not relevant. This case could be considered as first steps where court held that there are limits to HRs protection. [interesting analysis of marshalling debts, including those against matrimonial home, for criminal confiscation proceedings: suggested in such cases JA 1970 s36 not relevant].
Biggs v Hoddinott [1898]
covenant by the mortgagors that during the continuance of the mortgage they would take all their beer from the mortgagee: valid because independent of redemption, and a reasonable trade bargain)
Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971]
duty to take reasonable care to obtain a proper price (or, per Salmon LJ, the true market value). Also (Cross LJ dissenting), that defendants had been in breach of such a duty here.]
Corbett v Halifax plc [2003]
employee of mortgagee secretly purchased property at undervalue. Held that equity would only intervene if there was an element of bad faith on the part of the mortgagee in the exercise of its power and this was known to the sub-purchaser]
United Bank of Kuwait plc v Sahib [1997]
equitable mortgage must be wholly in writing (ie the 'part performance' of deposit of title deeds is no longer sufficient), and if legal, it must be registered, otherwise it is void
Halifax BS v Clarke [1973]
illustrated rebels of the 1970 Act. What is a reasonable amount of time? [AJA 1970 s36(2) powers only exercisable if s36(1) complied with: here because s36(1) not complied, court could not postpone possession]
Horsham Properties Group Ltd v Clark [2008
important decision. There was no breach of ECHR protection for peaceful enjoyment of possession. [contracted bargain involving mortgagee's right to sell was not infringement of ECHR P1A1]
Bank of Scotland plc v Waugh [2014]
legal charge which was void under LPA 1925 s52 because of the borrowers' failure to have their signatures attested was nevertheless valid as an equitable mortgage
Polonski v Lloyds Bank Mortgages Ltd (1998)
mortgagor was a single parent in poor area. House was paid by housing benefit. Wanted to move for better education and work. Mortgage opposed his sale as would leaving an outstanding debt which mortgagor count repay. Held: this wouldn't be limited to financial issues but could take into account social considerations. [LPA s91(2) discretion was not limited to financial issues: could take into account social considerations, therefore wrong to oppose sale when move was for good reason (employment and education of children)]
BCCI v Aboody [1990]
need for manifest disadvantage; overruled by Pitt]
Wallingford v Mutual Society (1880)
no interference where the mortgage agreement allowed the mortgagor a reduction from the normal rate if he made punctual payment (!!))
Multiservice Bookbinding v Marden [1979]
not against public policy to index link to foreign currency)
Carrington Ltd v Smith [1906]
not assistance for 'intelligent man of business', even where rate was 50% - caveat emptor!)
Barclays Bank plc v O'Brien [1994]
o Husband and wife agreed to second mortgage their home as security for an overdraft, extended by the claimant to a company in which the husband had an interest. The wife did not have an interest in the company. o The bank manager sent the relevant documents with instructions to ensure both husband and wife were fully aware of the nature of the documents, and if in doubt that they should consult their solicitors. The wife signed the document without reading it, in reliance of a false representation by the husband (he said the overdraft was limited to £60,000 and would last three weeks). The overdraft was exceeded, and the claimant sought possession. The wife argued she should not be bound. o The HL held that there was no special protection for wives. They also held that where the wife (or any other equivalent cohabite) was induced to stand as surety for her husband's debt by his undue influence, misrepresentation or some other legal wrong, she had an equity as against him to set aside that transaction. The wife's right to set aside the transaction would be enforceable against a third party who had actual or constructive notice of the circumstances giving rise to her equity. The HL also held that when a wife offered to stand surety for her husband's debt in a transaction which was not to her financial advantage and which carried a substantial risk of the husband committing a legal or equitable wrong entitling the wife to set aside the transaction, the creditor was put on inquiry and would have constructive notice of the wife's rights unless he took reasonable steps to ensure that her agreement to stand surety had been properly obtained. These circumstances occurred here, thus the wife could set aside the charge on the home. Lord Browne-Wilkinson, at 189-190: 'Even if there is no relationship falling within Class 2(A), if the complainant proves the de facto existence of a relationship under which the complainant generally reposed trust and confidence in the wrongdoer, the existence of such relationship raises the presumption of undue influence. In a Class 2(B) case therefore, in the absence of evidence disproving undue influence, the complainant will succeed in setting aside the impugned transaction merely by proof that the complainant reposed trust and confidence in the wrongdoer without having to prove that the wrongdoer exerted actual undue influence or otherwise abused such trust and confidence in relation to the particular transaction impugned.'
Alliance and Leicester plc v Slayford [2001]
possessory proceedings stayed because mortgagor's wife had an interest, but action on covenant was successful)
Jones v Morgan [2001]
review of the doctrine by Chadwick LJ, describing Lord Parker's statement as 'seminal')
Cheltenham & Gloucester BS v Grant [1994]
sets out the process how to assess how much time to give. Key case. Length of term is only a starting point for ascertaining how long it would take to reasonably pay off the debt. [CA held mortgagor can give ex tempore evidence which can suffice, especially if mortgagee doesn't object]
Palk v Mortgage Service Funding Plc [1993]
the mortgagee Brought a possession action in respect of a house in which there was a negative equity. Its purpose in obtaining possession was not, however, as a prelude to the exercise of its power of sale. Instead, it intended to rent out the property with a view to selling it some years later, by which time it was confident that the value of the house would have risen sufficiently to enable the mortgagors' debt to be recouped in full. The mortgagors argued that the house should be sold straightaway as, under the mortgagees scheme, their indebtedness would increase progressively as the projected rental income was less than they would be expected they each month under the mortgage. The COA accepted this argument and directed a sale of the property.
Cheltenham & Gloucester plc v Krausz [1997]
there were multiple warrants of possesion. The borrower defaulted and eventually agreed to sell house to charity undervalued in act of spite. The court was not justified in exercising in its inherent jurisdiction where the sole object with which the mortgagee ... [mortgagor arranged for sale to defeat mortgagee; mortgagee applied for suspension under LPA s91: court should not exercise power to order sale here]
* Kreglinger v New Patagonia Meat Co [1914]
this is interesting- in scott and southern pacific- the supreme court decided that the mortgage transaction must beset as a whole indivisible transaction.But here it says we can distinguish between distinct contracts we have room to choose on an ad hoc contract or an indivisible contract. In both cases they decide in favour of the lender- mortgagee wins. (collateral advantage may be allowed) Viscount Haldane said: 'The question is in my opinion not whether the two contracts were made at the same moment and evidenced by the same instrument, but whether they were in substance a single and undivided contract or two distinct contracts.' He held, in effect, that the agreement for a right to purchase the respondent's sheepskins was in the nature of a collateral bargain 'the entering into which was a preliminary and separable condition of the loan'.
West Bromwich BS v Wilkinson [2005]
time runs from when the principal money becomes due (this is when the cause of action arises))
Lewis v Frank Love [1961]
two documents, the second had an option to purchase: option held to be clog and void - need to look to substance of transaction)
Bank of Scotland plc v Joseph [2014]
unclear notice not necessarily ineffective, provided notice holder had interest that can be protected
Palk v Mortgage Services Funding Plc [1993]
unusual case. CoA: Mortgagees have to keep in mind the liability of the mortgagor - if theres a shortfall they have to take that into account. [what if sale is not the best option: CA held mortgagee has to keep in mind mortgagors' liability]
First National Bank plc v Syed [1991]
you won't have to go beyond the means- you wont be forced into further debt but you'll move your home. Court cannot require mortgagor go beyond their means]
Citibank Trust Ltd v Ayivor [1987]
¥ Here P advanced money to D for purchase of home, secured by mortgage. D accepted the offer, only to find out the house had dry rot. D found out that prior to P's offer, P, at D's expense, had commissioned a surveyor's report which revealed dry rot. D claimed a set-off (counter claim) against P on this basis, when P claimed possession on the grounds of D's arrears. ¥ ¥ Held - that s36 of the 1970 Act and s8 of the 1973 Act did not affect the general rule that a mortgagee's right to possession could not be made subservient to a set off on the part of the mortgagor. Thus although D could pay the instalments as they arose, they would not be able (on the evidence, ignoring the set-off) to pay the arrears, therefore no justification for a s36 discretion.
