Western Bank Ltd v Schindler: CA 1977

The mortgagee sought possession in circumstances in which the mortgagor had allowed a life policy, taken as collateral security, to lapse, but where there had been no default under the mortgage itself. The question arose whether the court could exercise the powers conferred by section 36(2) of the Act in a case where no sums being due under the mortgage and there being no default.
Held: The Court found it possible to construe section 36 of the Act of 1970 in such a way as to avoid what the court perceived would be an obvious lacuna if the words were given a literal meaning. The section in its terms was enacted in order to deal with problem which had arisen following Caunt; and which had been the subject of examination and recommendation by the Payne Committee. However an insertion by a judge must not be too big, or too much at variance with the language used by the legislature.
Lord Justice Buckley: ‘If sub-s (1) [of section 36] is read literally, the conditional clause introduced by the words ‘if it appears to the court’ (which I shall refer to as ‘the conditional clause’) appears to restrict the operation of the section to cases in which some sum is due or some default has taken place and remains unremedied when the application comes before the court. This, however, seems to me to lead to a ridiculous result.’ The words of the section being unfair and irrational, the court ‘must therefore investigate whether the section is capable of some other construction’ and ‘Section 36 is an enabling section which empowers the court to inhibit the mortgagee’s right to take possession. It confers a discretionary power on the court to achieve this result. It is, in my judgment, impossible to spell out of it a positive abrogation of an important property right, and, moreover, an abrogation of it only in particular circumstances.’
Lord Justice Scarman saw three ways forward: ‘The first is to treat the section as having a ‘casus omissus’ which only Parliament can fill. The second . . . is to treat the section as excluding the common law right to possession from mortgages of dwelling houses. The third is to treat the section as giving the court a power to delay making an order in all cases where, upon whatever ground, a mortgagee is seeking possession of a mortgaged dwelling house.’ and ‘Judicial legislation is not an option open to an English judge. Our courts are not required, as are, for instance, the Swiss courts (see the Swiss Civil Code, arts 1 and 2), to declare and insert into legislation rules which the judge would have put there had he been the legislator. But our courts do have the duty of giving effect to the intention of Parliament, if it be possible, even though the process require a strained construction of the language used or the insertion of some words in order to do so; see Luke v Inland Revenue Commissioners [1963] AC 557, per Lord Reid at p.577. The line between judicial legislation, which our law does not permit, and judicial interpretation in a way best designed to give effect to the intention of Parliament is not an easy one to draw. Suffice it to say that before our courts can imply words into an Act the statutory intention must be plain and the insertion not too big, or too much at variance with the language in fact used by the legislature. The courts will strain against having to take the first of the three courses I mentioned; that is to say, leaving unfulfilled the ‘casus omissus’. In the case of this section, is there an acceptable reading which would enable us to give effect to Parliament’s intention within the principle which I think governs the problem?
It would be going too far, in my judgment, to adopt the second course. It would, indeed, be judicial legislation to read a section conferring discretionary powers on the court as abrogating a common law right. I am not prepared to go that far in an attempt to make sense. If one had to go that far, then it would be for the legislature, not the courts, to take the step.’
Lord Justice Goff: Section 36 could not be held, by a side wind, to have abrogated the mortgagee’s proprietary right to take possession: ‘This would not, I think, be applying the principle of liberal construction to avoid absurdity stated in Luke v Inland Revenue Commissioners [1963] AC 577, but disregarding the statute or overriding it, which as Ungoed-Thomas J. pointed out in In re Maryon-Wilson’s Will Trusts [1968] Ch 268, 282, and in my judgment rightly pointed out, is what the court is not allowed to do.’ There were only two courses open to the court: to construe the section as conferring a discretion in all cases; or to construe the section literally and face whatever anomalies or absurdities that produced. He preferred the latter; on the ground that he could not see how any sensible effect could be given to the powers in subsection (2) if there was nothing to be done by the mortgagor which an adjournment, stay, suspension or postponement would enable to be done within a time which the court was required to decide was a reasonable time.

Lord Justice Scarman, Lord Justice Buckley, Lord Justice Goff
[1977] Ch 1
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 . .
CitedInco Europe Ltd and Others v First Choice Distributors (A Firm) and Others HL 10-Mar-2000
Although the plain words of the Act would not allow an appeal to the Court of Appeal under the circumstances presently applying, it was clear that the parliamentary draftsman had failed to achieve what he had wanted to, that the omission was in . .

Lists of cited by and citing cases may be incomplete.

Land, Constitutional

Leading Case

Updated: 11 November 2021; Ref: scu.230370