The home owners requested the setting aside of the sale of their house after a re-possession, alleging impropriety, and that it had been sold at an undervalue. The respondent society had a rule that properties taken into possession could not be purchased by its own employees. The property had been purchased in breach of that rule.
Held: An impropriety which might allow a sale to be set aside would have to relate to the person taking possession. The lender had been deceived by its employee, and had not acted in bad faith, and no right was conferred on the original owners. The lender might have a right to avoid the transaction, but not the mortgagor.
Pumfrey J: ‘section 104(2) makes it clear that the purchaser is not protected if he has actual knowledge of the impropriety. But if the purchaser has no notice of the impropriety, then on the face of it he takes free. Thus, the completed sale by a mortgagee pursuant to his statutory power is vulnerable only if the purchaser has knowledge of, or participates in, an impropriety in the exercise of the power.’
Judges:
Mr Justice Scott Baker Lord Justice Schiemann The Honourable Mr Justice Pumfrey
Citations:
Times 28-Dec-2002, Gazette 13-Mar-2003, [2002] EWCA Civ 1849, [2005] 1 WLR 964, [2003] 2 All ER (Comm) 384, [2003] 1 WLR 964, [2003] 4 All ER 180
Links:
Statutes:
Law of Property Act 1925 104(2)
Jurisdiction:
England and Wales
Cited by:
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, Torts – Other
Updated: 19 November 2022; Ref: scu.178559