The mortgagees had made no payments under the charge for more than twelve years, and had remained in possession throughout. They argued that the bank were prevented from now seeking to enforce the charge. The bank argued that the possession had not been adverse. The court had declared that the bank could not proceed.
Held: The bank’s appeal failed. The bank’s right of possession first accrued when the legal charge took effect. Any payment restarted the limitation period. The Bank had an immediate right of action to possession of the Property as soon as the legal charge was executed. Its initial right of action to possession of the Property was not dependent on the termination of a permission granted by the Bank for Mr and Mrs Babai to be in possession of the Property. ‘it does not necessarily follow from the Bank’s non-enforcement of its right to possession, or its lack of objection to, or tolerance of, Mr and Mrs Babai’s possession that the Bank was impliedly granting them permission to remain in possession of the Property so as to prevent them from being in adverse possession within paragraph 8 of Schedule 1. The Bank was simply not doing anything to enforce its right of action. ‘
‘In summary, the Bank had a right of action. More than 12 years passed since it accrued afresh . Mr and Mrs Babai’s continued possession of the Property with the apparent leave and licence of the Bank did not prevent them from being persons against whom the Bank’s right of action to recover the Property arose on the granting of the legal charge, which right is treated as having accrued afresh when a payment in respect of it was made. Nor did it prevent Mr and Mrs Babai from being persons in whose favour time can run under the 1980 Act. According to the ruling in Pye their possession was ‘adverse possession’ within paragraph 8. ‘
Mummery LJ, Hughes LJ, David Richards J
[2008] EWCA Civ 55, [2008] 1 WLR 710, [2008] 2 P and CR 10, [2008] BPIR 1, [2008] 7 EG 143, [2008] NPC 14, [2008] 1 EGLR 123
Bailii
Limitation Act 1980 15 17
England and Wales
Citing:
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 . .
Cited – National Westminster Bank plc v Skelton (Note) 1993
The court distinguished a claim by the mortgagee for possession from a claim on the mortgagor’s personal covenant to pay what was due. A claim for a set-off is merely a sub-species of counterclaim. The court will not readily imply a term into a . .
Cited – Keech v Hall 1778
The tenant resisted ejectment by the landlord’s mortgagee. His tenancy had been created after the mortgage.
Held: The mortgagee seeking ejectment did not first need to give a tenant a notice to quit. Mansfield CJ said: ‘Whoever wants to be . .
Cited – J A Pye (Oxford) Ltd and Others v Graham and Another HL 4-Jul-2002
The claimants sought ownership by adverse possession of land. Once the paper owner had been found, they indicated a readiness to purchase their interest. The court had found that this letter contradicted an animus possidendi. The claimant had . .
Cited – Rhodes v Allied Dunbar Pension Services Ltd CA 1989
The intermediate tenant had charged the lease to the bank, which appointed receivers. Both the sub rent and the head rent fell into arrears. The head landlord then served a notice direct on the subtenant requiring him to pay the rent direct to the . .
Cited – Heath v Pugh CA 1881
The freeholder charged the land in 1856. He remained in possession, and did not make any payments or give any acknowledgment of the mortgagee’s title. In 1870 the mortgagee presented a bill for foreclosure, and in 1874 a bill of redemption or . .
Cited by:
Cited – Yorkshire Bank Finance Ltd v Mulhall and Another CA 24-Oct-2008
The bank had obtained a judgement against the defendant, and took a charging order. Nothing happened for more than twelve years, and the defendant now argued that the order and debt was discharged.
Held: The enforcement of the charging order . .
Lists of cited by and citing cases may be incomplete.
Land, Limitation
Updated: 01 November 2021; Ref: scu.264269