Horsham Properties Group Ltd v Clark and Another: ChD 8 Oct 2008

The court was asked whether section 101 of the 1925 Act infringes the Convention rights of residential mortgagors by allowing mortgagees to overreach the mortgagor by selling the property out of court, without first obtaining a court order either for possession or sale. The owners had charged the property, but fell into arrears. The creditor appointed receivers who contracted to sell the property at auction. No court proceedings had been taken. The claimants now sought possession as against the chargors who ha remained in possession.
Held: The argument failed; there was no infringement of the mortgagor’s rights. The loss of the equity of redemption occurred on the sale by transfer of the property. Section 101 was not infringing since it serves to implement rather than override the private bargain between mortgagor and mortgagee. Any deprivation of possession constituted by the exercise by a mortgagee of its powers under section 101 of the Law of Property Act after a relevant default by the mortgagor is justified in the public interest, and requires no case-by-case exercise of a proportionality discretion by the court.
‘My primary reason for that conclusion is that section 101 serves to implement rather than override the private bargain between mortgagor and mortgagee. As I have described, its history, going back to 1860, is that it supplies a convenient power of sale out of court to mortgagees in substitution for the parties having (as they routinely did before 1860) to spell out such a power in every legal mortgage. It is in substance a form of conveyancing shorthand designed to implement the ordinary expectations of mortgagors and mortgagees while reducing the costs and delays of conveyancing.
Furthermore, all the statutory powers in section 101 are expressed to be subject to contrary intention. Section 101(4) provides that: ‘This section applies only if and as far as a contrary intention is not expressed in the mortgage deed, and has effect subject to the terms of the mortgage deed and to the provisions therein contained.’
That sub-section on its own demonstrates that section 101 serves rather than overrides the parties’ bargain.’

Briggs J
[2008] EWHC 2327 (Ch)
Bailii, Times
Law of Property Act 1925 101, European Convention on Human Rights 8 A1 FP
England and Wales
CitedRopaigealach v Barclays Bank plc CA 6-Jan-1999
The applicant’s property was charged to the defendant. At the time it was not occupied. The mortgage fell into arrears, and after serving notice at the property, the bank took posssession and sold the property at auction. The claimants said the bank . .
CitedShaws (EAL) Ltd v Pennycook CA 2-Feb-2004
Tenant’s First Notice to terminate, stood
The landlord served a notice to terminate the business lease. The tenant first served a notice to say that it would not seek a new lease, but then, and still within the time limit, it served a second counter-notice seeking a new tenancy. The . .
CitedWilson v Secretary of State for Trade and Industry; Wilson v First County Trust Ltd (No 2) HL 10-Jul-2003
The respondent appealed against a finding that the provision which made a loan agreement completely invalid for lack of compliance with the 1974 Act was itself invalid under the Human Rights Act since it deprived the respondent of its property . .
CitedBarclays Bank plc v Alcorn ChD 2002
Hart J said: ‘It seems to me however, that her general submission on the effect of the Human Rights Act in relationship to a mortgagee’s action for possession is correct, namely, that the matter is regulated by section 36 of the Administration of . .
CitedLondon Borough of Harrow v Qazi HL 31-Jul-2003
The applicant had held a joint tenancy of the respondent. His partner gave notice and left, and the property was taken into possession. The claimant claimed restoration of his tenancy saying the order did not respect his right to a private life and . .
CitedWood v United Kingdom ECHR 2-Jul-1997
(Commission decision as to admissibility) The applicant’s house had been repossessed by a mortgagee when she defaulted on her payments due under the mortgage. Her complaint was found to be manifestly ill-founded, saying ‘In so far as the . .

Cited by:
CitedHand and Another v George ChD 17-Mar-2017
Adopted grandchildren entitled to succession
The court was asked whether the adopted children whose adopting father, the son of the testator, were grandchildren of the testator for the purposes of his will.
Held: The claim succeeded. The defendants, the other beneficiaries were not . .

Lists of cited by and citing cases may be incomplete.

Land, Human Rights

Updated: 31 October 2021; Ref: scu.276774