The mortgagee having obtained insufficient on the sale at auction of the property charged to recover the sum secured, applied for summary judgment against the mortgagor for that sum. The mortgagor resisted the application alleging that the mortgagee had sold at an undervalue on a variety of grounds one of which was that the sale took place at the wrong time of year.
Held: the mortgagor should have leave to defend on the ground that there was an arguable case that the sale had been negligently handled. A mortgagee can choose his own time for sale. A lender recovering funds on sale of the mortgaged property must use the proceeds to reduce the debt. ‘If it should appear that the mortgagee or the receiver have not used reasonable care to realise the assets to the best advantage, then the mortgagor, the company, and the guarantor are entitled in equity to an allowance. They should be given credit for the amount which the sale should have realised if reasonable care had been used. Their indebtedness is to be reduced accordingly.’ The mortgagee’s duty is ‘to take reasonable care to obtain the best price that the circumstances permit’.
Judges:
Lord Denning MR
Citations:
[1982] 1 WLR 1410, [1982] 3 All ER 938
Jurisdiction:
England and Wales
Cited by:
Cited – Platts v Trustees Savings Bank Plc CA 13-Feb-1998
A counterclaim for negligent sale was a valid claim allowing potential against repossessing bank but would not make bank’s claim unliquidated. The Judge could properly hold that there was a liquidated and unsecured debt the subject of the statutory . .
Cited – Re Charnley Davies Ltd (No 2) ChD 1990
An administrator owed a duty to the company over which he was appointed to take reasonable care to obtain the best price that the circumstances, as he reasonably perceived them to be, permitted, including a duty to take reasonable care in choosing . .
Cited – Silven Properties Limited, Chart Enterprises Incorporated v Royal Bank of Scotland Plc, Vooght, Harris CA 21-Oct-2003
The claimants sought damages from mortgagees who had sold their charged properties as receivers. They said they had failed to sell at a proper value. They asked whether the express appointment in the mortgage of receivers as agents of the mortgagor . .
Cited – Silven Properties Ltd and Another v Royal Bank of Scotland Plc and Others CA 21-Oct-2003
The claimants complained that the receivers appointed by the bank had failed to get the best price for properties charged to the bank and sold, in that they had failed to obtain planning permissions which would have increased the values of the . .
Cited – Silven Properties Ltd and Another v Royal Bank of Scotland Plc and Others CA 21-Oct-2003
The claimants complained that the receivers appointed by the bank had failed to get the best price for properties charged to the bank and sold, in that they had failed to obtain planning permissions which would have increased the values of the . .
Cited – Silven Properties Ltd and Another v Royal Bank of Scotland Plc and Others CA 21-Oct-2003
The claimants complained that the receivers appointed by the bank had failed to get the best price for properties charged to the bank and sold, in that they had failed to obtain planning permissions which would have increased the values of the . .
Lists of cited by and citing cases may be incomplete.
Land, Banking
Updated: 06 May 2022; Ref: scu.184792