Mortgages

First National Bank v Thompson (1996)

The mortgages of a beneficial interest under a trust of land is thus an equitable mortgage

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Dutton v Davies (2006)

The agreement was in SUBSTANCE a mortgage transaction

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Jones v Morgan (2001)

An option to purchase contained in a ortgage deed is void even if it relates t part only of the mortgaged land

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Samuel v Jarrah Timber (1904)

An option to purchase contradicts the equitable right to redeem

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Reeve v Lisel (1902)

If an option to purchase is granted by the borrower in a separate and independent transaction, it can be upheld

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Fairclough v Swan Brewery (1912)

A provision postponing the date of redemption may be valid provided that it does not make the equitable right to redeem void

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Knightsbridge Estates v Byrne (1939)

Clause postponing redemption of mortgage re freehold estate for 40 years was valid – sig that parties were large commercial enterprises that had entered into mutually enforceable agreement after being professionally advised

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Bradley v Carritt (1903)

General rule= any collateral adv must cease when the mortgage is redeemed

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Kreglinger v New Patagonia Meat (1914)

HL upheld mortgage term preventing mortgagor from selling to anyone other than mortgagee for 5 yr period – although the mortgage was paid off in 3 years, the collateral adv was viewed as a distinct and ind agreement and thus was capable of continuing

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Noakes v Rice (1902)

Collateral adv was void because it was oppressive as it was to continue after redemption of the mortgage

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Biggs v Hoddinott (1898)

Collateral adv was upheld as it was reasonable and fair

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Cityland Holdings v Dabrah (1968)

A provn which entailed that the int rate was to rise to 57% on any default in repayment was regarded as an unconscionable collateral adv and held to be void

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Esso Petroleum v Harper’s Garage (1968)

Agreement which tied borrower to selling only products of lender (a solus agreement) for period of 21 years was invalid (long period) – whereas tie in period for 5yrs was upheld

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Ropaigealach (1999)

A court order for possn is not ne if the premises are unoccupied or the borrower has left willingly

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RBS v Miller (2001)

The time for determining whether there is a dwelling house on the landis when possn is sought and not the time the mortgage was granted

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Four Maids v Dudley Marshall (1957)

Mortgagor’s right to take possn arises automatically at common law and is exercisable even if the mortgagor is not in default

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Bristol & West v Bartlett (2003)

Rights and remedies of the mortgage lender are in general cumulative – e.g. if sale realises less than the mortgage debt, then the mortgagee may sue on the personal covt

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White v City of London Brewery (1889)

If the mortgagee leases the prop, the lender must get the best possible rent

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State Bank of New South Wales v Harrison (200)

If there is no likelihood that mortgagor will be able to pay any sums due in reasonable time, then there is NO jurisdiction to stay the execution of a warrant for possn

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Norgan (1996)

Lender’s position was secure thus court was generous; guidleines re s 36: reasonable time = remaining years on mortgage; borrower burden to convince court that they can repay arrears and meet future payments; no 2nd chance

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Realkredit v Brookfield (2000)

Norgan did not apply here as the lender’s interests were in real jeopardy

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Ropaigealach (1999)

Mortgagor does not have power to sell under s 101 if excluded in the mortgage deed – although this is rare

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Swift 1st v Collin (2011)

An equitable mortgage made by deed falls within scope of s 101

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Michael v Miller (2004)

Reasonably obtained price means ‘proper price’ and ‘the true market value of the mortgaged’

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Cuckmere Brick v Mutual Finance (1971)

The lender’s oblign is to obtain the best price reasonably obtainable for the property in the condition it is when sold

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Nash v Eads (1880)

The lender is not a trustee of the power of sale

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China v Tan (1990)

There is no duty to sell as quickly as possible

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Silven Props v RBS (2003)

The lender need not delay sale until planning permission is obtained or leases granted in order to obtain a better price

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Kennedy v De Trafford (1897)

The lender must act in good faith

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Farrars v Farrars (1888)

The lender cannot sell the prop to itself

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Tse Kwong Lam (1983)

The lender cannot sell to a family member of a business associate

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Palk (1993)

A lender cannot sell it quickly at a knock down price

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Cuckmere Brick (1971)

If the sale is achieved at an undervalue, the court will interfere only when there is fraud, neg or bad faith on lender’s part

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Mercantile Credit (1997)

A borrower can specifically agree to a sale at a lower price, and if so, will be estopped from asserting a claim against the lender

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Tse Kwong Lam (1983)

The mortgagee must make an informed judgment in exercising the power of sale and this will involve the taking of advice from a qualified agent

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Michael v Miller (2004)

In calculating the market value the court will adopt a ‘bracket concept’

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Silven Props v RBS (2004)

The mortgagee need not advertise the prop or attempt to sell it otherwise than by auction

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Downsview v First City (1993)

The mortgagee can choose when to sell and does not have to wait for an increase in prop values before doing so

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Bishop v Blake (2006)

The lender must expose the prop to the market to obtain the best price, which means that there has to be some element of competitive bidding

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Palk (1993)

Court is reluctant to order foreclosure, and wil almost inevitably grant sale instead

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Twentieth Century Banking (1977)

Judidical sale may be used by the court as alt to foreclosure

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Polonski v Lloyds Bank (1993)

In exercising its discretion to order a sale, the court is NOT limited to considering financial matters, but can also take into account social considerations, e.g. reasons why the borrower seeks to sell

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Toor v State Bank of India (2010)

Court will not exercise sale where to do so would cause manifest unfairness to the lender

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Sliven Props v RBS (2003)

The mortgagor does NOT appoint the receiver, cannot give him instructinos and cannot sack him

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Medforth v Blake (199)

Where a receiver manages prop, his duty to the mortgagor and anyone else interested in the equity of redemption was NOT necessarily confined to a duty of good faith

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Wilkinson v west Bromwich (2004)

Re right to sue on personal cov’t to pay, the limitation period begins to run from date of the lender’s initial written demand for the arrears

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Ashley Guarantee v Zacaria (1993)

The equitable mortgagee has NO right at law to possn because he holds NO legal estate

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Mortgages

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