National and Provincial Building Society v Ahmed: CA 1995

A mortgagor’s equity of redemption is extinguished when the mortgagee, in the exercise of his power of sale, enters into a contract of sale of the mortgaged property.
Millett LJ said: ‘The purpose of making an order under section 36 of the Administration Act 1970 is to enable a mortgagor who has fallen into arrears with the payment of the mortgage instalments to resume his payments and to pay off the arrears with a view to the ultimate redemption of the mortgage by instalments in the ordinary way. But that result can no longer be achieved once the mortgagor’s equity of redemption has been extinguished by the exchange of contracts of sale of the mortgaged property by the mortgagee to a purchaser. Of course, if the order for possession had not been executed so that the court still retained jurisdiction to suspend it, and the mortgagor or his tenants were in possession at the date of the contract for sale so that the purchaser had notice of the mortgagor’s rights, the mortgagee would not be able to rely upon the contract to defeat the mortgagor’s application. But that is not the present case.’
Millett, Russell and Rose LJJ
[1995] 2 EGLR 127
Administration of Justice Act 1970 36
England and Wales
Cited by:
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 . .
CitedScott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .

These lists may be incomplete.
Updated: 02 June 2021; Ref: scu.230374