The defendant had charged her home to the claimant and fallen into arrears. There was a sub-charge executed on the same day in favour of the Bank of Scotland (BOS) under which the claimant agreed to repay to BOS the amount it owed to them.
Held: The sub-charge did not operate to transfer to BOS all the claimant’s rights under its own charge, or particularly the right to recover possession. The sub-chargee’s rights arose only after it had itself made a formal demand for repayment. Though there was some authority for the defence asserted, there was no general proposition to that effect. The respondent had a right of possession under the facility letter and the principal charge. The mere existence of a sub-charge does not divest a principal chargee of such a right. Although it is possible for a sub-charge to have such an effect, this sub-charge did not have that effect.
Judges:
Lord Justice Clarke Lord Justice Dyson Lord Justice Wall
Citations:
[2004] EWCA Civ 568, Times 27-May-2004, Gazette 03-Jun-2004, [2004] 3 WLR 489, [2005] Ch 81
Links:
Statutes:
Law of Property Act 1925 114(1)
Jurisdiction:
England and Wales
Citing:
Approved – Owen v Cornell 1967
The mere fact of a sub-mortgage did not prevent the principal mortgagee from exercising his rights under the principal mortgage. ‘The fact was that the legal estate in the term of 3,000 years still remained in the head mortgagee, notwithstanding . .
Cited – Four-Maids Ltd v Dudley Marshall (Properties) Ltd 1957
A mortgagee may under common law 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 . .
Approved – Regent Oil Co Ltd v JA Gregory (Hatch End) Ltd CA 1966
No general distinction is to be drawn between the two types of mortgage and sub-mortgage. The court considered the practice for a mortgagor to attorn tenant to his mortgagee. The tenancy contained no covenants and was merely a device to give the . .
Cited – Paragon Finance Plc (Formerly the National Home Loans Corporation Plc) v Pender and Pender ChD 25-Nov-2003
Section 114 of the 1925 Act has no application to Registered Land. It provides for a transfer ‘unless a contrary intention is expressed’ in the mortgage. Thus if section 114 applies, all depends upon the true construction of the mortgage. The power . .
Cited by:
Cited – Paragon Finance Plc v Pender and Another CA 27-Jun-2005
The defendants had purchased their property from the local authority with the support of a loan from the claimants. The defendants fell into arrears but now sought to resist possession on the basis that the claimant, in securitising their portfolio . .
Cited – Meretz Investments Nv and Another v ACP Ltd and others ChD 30-Jan-2006
The applicant challenged the exercise of a power of sale under a mortgage, saying that the mortgagee’s purposes included purposes not those under the mortgage. The parties had been involved in an attempted development of a penthouse.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Land
Updated: 10 September 2022; Ref: scu.197002