The company mortgaged properties in London to secure an advance from a Friendly Society. A clause of the mortgage provided for repayment by eighty half-yearly instalments. The mortgage further provided that if the mortgagor paid the instalments on the due dates and otherwise complied with the mortgage terms, the mortgagee would not require repayment at a date earlier than the scheduled forty year redemption date. Six years after entering the mortgage, the mortgagor wanted to redeem, and claimed that Clause 1 which postponed their equitable right to redeem for forty years was void as a clog on the equitable right to redeem.
Held: The clause was valid. Equity would grant relief against contractual terms that were oppressive or unconscionable, but this mortgage could not be so regarded. In assessing whether relief should be granted, all circumstances of the case should be considered, including the degree of mutuality. Although the contractual right to redeem had been postponed for forty years, the mortgagee also covenanted not to require payment of the sum for that time. It was an arm’s length commercial transaction upon which each party had received legal advice.
Citations:
[1939] 1 Ch 441, [1939] Ch 441
Jurisdiction:
England and Wales
Citing:
Appealed to – Knightsbridge Estates Trust Ltd v Byrne HL 1940
A mortgage of freehold land contained a covenant to repay the secured loan by half-yearly instalments over a period of 40 years. The mortgagors sought early redemption arguing that the contractual postponement of repayment over a 40 year period was . .
Cited by:
Cited – Multiservice Bookbinding Ltd v Marden ChD 1978
To have a transaction set aside as a harsh and unconscionable bargain, a party would have to show not only that the terms of the transaction were harsh or oppressive, but also moral unfairness. Browne-Wilkinson J said: ‘In my judgment a bargain . .
Cited – Brighton and Hove City Council v Audus ChD 26-Feb-2009
The claimant was the proprietor of a fourth legal charge on a title. It sought a declaration that a second charge in favour of the defendant was void as a clog on the proprietor’s equity of redemption. An advance secured by a first charge, also in . .
Lists of cited by and citing cases may be incomplete.
Land
Updated: 23 March 2022; Ref: scu.219912