2m
- Created by: Rachel
- Created on: 10-04-14 13:34
View mindmap
- Protection for the Mortgagor
- mortgagor retains equity of redemption
- the rights of the borrower that arise as soon as the mortgage is executed
- used to cover the...
- right to redeem the mortgage
- the rights protecting the borrower from exploration by the lender
- mortgage can't be made irredeemable
- can't be made limited by their terms of the mortgage deed so that it can only be redeemed by a certain persons for a limited time
- "A mortgagor is entitled to get his property as free as he gave it"
- "once a mortgage, always a mortgage"
- mortgagee can't enforce any "clog or fetter on the EoR" - Browne v Ryan
- CASES
- Knightsbridge Estates Trust v Byrne 1939
- Redemption of mortgage was postponed for 40 years, borrower argued this time period was unreasonable
- HELD: As long as the date of redemption is genuine and not a sham - it will be upheld.
- In this case there were good reasons why the date of redemption was postponed
- HELD: As long as the date of redemption is genuine and not a sham - it will be upheld.
- Redemption of mortgage was postponed for 40 years, borrower argued this time period was unreasonable
- Fairclough v Swan Brewery 1912
- Mortgage included a term stating it couldn't be paid off (and interest redeemed) until the last 6 weeks of the 21 year lease.
- HoL HELD: this contradicted the requirement of redeem-abilty of the mortgage
- Mortgage included a term stating it couldn't be paid off (and interest redeemed) until the last 6 weeks of the 21 year lease.
- Knightsbridge Estates Trust v Byrne 1939
- used to cover the...
- the rights of the borrower that arise as soon as the mortgage is executed
- a mortgage will be set aside if its been obtained via undue influence or oppression
- mortgage can be set aside/terms modified where theres evidence of undue influence or misrep
- borrower can be pressurised by the lender in such a way that the transaction entered into isn't from his own free will
- Undue influence can be in 2 different forms
- 1. ACTUAL undue influence
- you can rely on evidence of undue influence or pressure put on borrower by lender
- Claimant must prove the wrongdoer actually exerted undue influence on him
- 2. PRESUMED undue influence
- relationship of parties is one where one party is assumed to be more powerful than the other
- thus, can easily take advantage of this position to put pressure on other side in negotiations
- BCCI SA v Aboody 1990
- Claimant must prove that there was a relationship of trust between the parties and that the trust and confidence of claimant was abused
- 2a) relationships where undue influence is presumed due to NATURE OF REALTIONSHIP
- eg: solicitor and client, parent and child
- Husband & wife are excluded from this group
- Langton v Langton 1995
- Allcard v Skinner 1887
- eg: solicitor and client, parent and child
- 2b) relationships where undue influence is presumed because of SPECIFIC RELATIONSHIP between the parties
- relationship where undue influence isn't automatically presumed from the nature of relationship BUT may arise as one party placed so much trust in the other
- Barclays Bank v O''Brien 1994
- Avon Finance v Bridger 1985
- relationship of parties is one where one party is assumed to be more powerful than the other
- 2 landmark decisions which has clarified the law on what constitutes undue influence
- Barclays Bank v O'Brien 1994
- Royal Bank of Scotland v Etridge (no 2) 2001
- 1. ACTUAL undue influence
- Undue influence can be in 2 different forms
- Mortgages which act in an oppressive or unconscionable manner (mostly w/ interest rates) can be struck down
- Cityland & Property (Holdings) Ltd v Dabrah 1968
- Multiservice Bookbinding Ltd v Marden
- borrower can be pressurised by the lender in such a way that the transaction entered into isn't from his own free will
- mortgage can be set aside/terms modified where theres evidence of undue influence or misrep
- no collateral advantages
- if mortgage contained a term which prevented the borrowers from redeeming the mortgage for another reason - TERM WOULD BE VOID
- must be no clog or fetter on the borrowers equity of redemption
- Rights of the lender is to have the return of the loan, interest and costs and any attempt to get an extra benefit from borrower will be struck down
- CASES
- Bigg v Hoddinott 1989
- Decision
- Collateral advantage can be upheld as long as it ends when mortgage comes to end
- Comment
- Lenders could enjoy additional advantage of covenant as well as repayment of capital and interest
- Decision
- Noakes & Co v Rice
- Decision
- Any collateral terms in mortgage deed must come to an end when mortgage is redeemed even if the mortgage allows them to continue
- Comment
- once a mortgage, always a mortgage and nothing but a mortgage - Lord Davey
- Decision
- Bradley v Carritt 1903
- Decision
- A collateral advantage which continued after the mortgage ended was unenforceable
- Comment
- There was a strong dissenting judgement from Lord Lindley who though term should be upheld
- Decision
- Kreglinger v New Patagonia Meat & Cold Storage CO Ltd 1914
- Decision
- A collateral advantage lasting after mortgage has been redeemed will be upheld if its fair and doesn't clog the equity of redemption & isn't inconsistent w/ the right to redeem mortgage
- Comment
- marked a turning point w/ collateral advantages - allowed such terms to continue after mortgage has been redeemed
- Decision
- Bigg v Hoddinott 1989
- Consumer Credit Act 1974
- mortgagor retains equity of redemption
Comments
No comments have yet been made