[Author name]

LAND CASES

S6 - Mortgages
Cases
(1) mortgagee duty to obtain best price satisfied by “open auction
even when prices are low
Cuckmere Brick v Mutual
1 (1) reasonable precautions to achieve best price at time of sale, no
Finance
need to wait
(2) mortgagee negligence = liable to mortgagor
Williams v Wellingborough
mortgagee can’t sell to himself or his agent
Concil
mortgagee sold land without awaiting planning permission/leases
Silven v Royal Bank of
10 1. No duty to delay to obtain higher price
Scotland
2. No duty to enhance/invest in property to achieve higher price
master class in how not to conduct a sale – virtually no likelihood that the
best price had been obtained
13 Bishop v Blake (1) before power of sale becomes exercisable, demand for
payment under s. 103 needs to be made
(2) improper sale = ‘pathertic adversing’, collusion with purchaser
[mortgagee duties] duty to conduct true sale  cannot sell to
Farrar v Farrar
themselves or to their agent
duty of reasonable price not owed to equitable onwer, only to
Parker-Tweedle v Dunbar
mortgagor
Meftah v Lloyds in obtaining proper price, must give enough exposure to market
term of interest linked to swiss franc exchange rate – equity of redemption
(1) for a term to detroy equity of redemption, it has to be
Multiservice Bookbinding v
2 unconscionable and contrary to public policy
Marden
(2) not enough that merely unreasonable when both parties of
equtal bargaining power
only auctioner is wife, on behalf of family company
Tse Kwong Lam v Wong Chit [proper power of sale] where mortgagee breaches duties and buyer
3
Sen had notice of improper behaviour, traditional remedy is rescission of
sale (or monetar remedy)
mortgage prohibited letting, but motgagor let
Britannia Bulding Society v
4 (1) subsequent lease not binding on mortgagee, and can get
Earl
possession
estoppel lease before mortgage
Abbey National v Cann estoppel point: tenancy by estoppel arising before mortgage is
effective between landlord and tennant (but not mortgagee)
s. 91(2) order when property worth less than debt (300k)
(1) under s 91(2) LPA, court’s jurisdiction is very wide
Palk v Mortgages Services (2) can award sale in lieu of foreclosure (or other remedies) if
5
Funding unjust and inequitable not to
(3) Factors: if mortgagee acts fairly, if reasonable care of property
in possession
Chatsworth Properties v if mortgagee appoints receiver, he is agent of mortgagor and
Effiom negligence is not attributable to mortgagee
Administration of Justice Act 1970, s. 36
(1) court can delay application for possession, give remaining
Cheltenham & Gloucester
6 mortgage time if mortgagor is able to pay without further
Bulding Society v Norgan
default
(2) only if there is positive equity in the property
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LAND CASES

(3) generous interpretation of s. 36

postponement of possession under s. 36, to apply for sale under s. 92(1)

(1) mortgagee right to possession must be strictly observed
Cheltenham & Gloucester (2) s. 36 postponement not available if mortgagor is in negative
7
Bulding Society v Krausz equity
(3) can postpone even if negative equity if ne has personal funds to
meet shortfall
duty of good faith in selling and obtaining best price – not to act
8 Medforth v Blake
fraudulently or recklessly, not a duty to act reasonably
[undue influence]
(1) Test = relationship of trust and confidence, vulnerability,
dependence, suspicious transaction that calls for explanation
(2) Reasonable steps = independent advice of solicitor,
RBS v Etridge (No. 2)
communicating core legal content, certificate presentedd to
bank
(3) Notice = whenever spouse is surety, bank is put on constructive
notice
where money from mortgagee B is used to pay off mortgagee A, B is
Halifax v Omar
subrogated to the rights of A (steps in their shoes)
Cheltenham & Gloucester [subrogation] stepping into A’s shoes is only true to the extent of A’s
Bulding Society v Appleyard original interest
no requirement for motgagee to have a “purity of purpose” when
11 Meretz Investments v ACP
selling, provided that part of his motive is to realise his security
mortgagee’s power of sale exercised impropertly only if no part of the
Quennell v Maltby
reason for sale is to protect the security
property un-occupied, peaceful re-entry is lawful
(1) the lender can take possession irrespective of fault without a
Ropaigealach v Barclays
12 court order, but it’s uncivilised and can lead to criminal penalties
Bank
(2) jurisdiction to delay re-possession only applied when M seeks
court order
Middlesbrough Mortgage v
‘reasonable period’ under AJA 1970 will usually be rest of mortgage
Cunningham
White v City of London mortgagee in possession called to strictly acccount for any income
Brewery generated by its possession
Alliance and Leicester v court will allow even vile behaviour like bankrupting the borrower if it is
14
Slayford the only way to realise their asset
15 Cityland Holdings v Dabrah if interest rate is arbitrary and unconscionable, it may be struck out
[HUMAN RIGHTS] s. 101 LPA implying right to sell/appoint receiver to
sell land does not infringe ECHR
(1) possible for mortgagee to take peacable possession, depriving
16 Horsham Properties v Clark
mortgor of protection under s. 36 AJA 1970
(2) if mortgagee takes possession without a court order, can’t use s.
36 to delay it
Statute

17 LPA 1925, s. 87 legal mortgage must be executed by deed

contract for mortgage must be in writing if it is to convey a legal
LPA 1925, S. 52(1)
mortgage
LP(MP)A 1989, S. 1 requirements of a deed

18 LPA 2002, S. 27(2)(F) legal mortgage must be registered

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LAND CASES

19 LRA 2002, s. 27(1)
20 LPA 1925, s 101(1)
21 LPA 1925, s 101(4)
22 LPA 1925, s. 103
Administration of Justiece
Act 1970, s 36
Administration of Justice Act
1973, S 8
Consumer Credit Act 1974
if formalities are not satisfied, mortgage will be equitable
power of sale implied due to two factors:
(1) mortgage made by deed
(2) motgage money becomes due
power of sale implied if nothing in mortgage deed expresses a
contrary intention
power of sale exercisable in 3 situations:
(1) date of redemption passed
(2) interest left unpaid for 2 months + notice
(3) instalments in arrears for 3 months + notice
(4) breach of a provision of the mortgage
mortgagee’s application for possession of a residential property can
be suspended, adjourned, postponed by court’s discretion if able to
pay within reasonable period ‘any sums due’
‘any sums due’ = instalments missed, not whole sum
credit controls shouldn’t be clog on the equity of redemption