“SLF received a Report on Title dated26 August 2011 , prepared for it by Miramar Legal, its conveyancing solicitors (and who appear to have drafted the Option Agreement), which included the following points: 4.9 We have not reviewed [Mrs Durnford’s] current mortgage conditions but it is probable that, unless [she] gets their mortgagee’s consent before entering into the Option Agreement they will be breaching its terms and conditions. In that case, the mortgage company may be able to claim an event of default and repossess the Property. If they do, they will be able to overreach the Agreement and sell the Property free of your interest. Please note, for the avoidance of doubt, in such circumstances you will not be able to recover the Option Sum from the mortgagee, i.e., you will lose the Option Sum. … 17. Breach of [Mrs Durnford’s] existing mortgage condition. We have not seen [Mrs Durnford’s] mortgage conditions. However, generally mortgage conditions will prohibit any dealing with the property, i.e., entering into this Agreement. It is therefore likely that the [Mrs Durnford] will be in breach of the mortgage conditions. In the event that the [Bank] were to exercise its powers of sale, the Property and the Vineyard could be sold free of your interest to a third party even though the Agreement has been registered at the Land Registry. Of course you would have a claim against [Mrs Durnford] for breach of contract but as [Mrs Durnford] is in financial difficulties your chances of financial redress would be slim. Even though the author of the Report on Title did not have the mortgage conditions in front of him or her, the report correctly assumed that the Bank’s mortgage conditions contained what are (it is submitted) standard terms. In particular, Mrs Durnford was subject to the following obligations and restrictions: 5(b) You must not neglect the Property or do anything else to reduce its value… 9(a) You must not, without the Bank’s written consent: (i) agree to, or give, any licence or tenancy affecting the Property;… (iii) in any other way, either create, or dispose of, (or agree to) any legal estate or legal or equitable interest in the Property;… 9(b) You must do everything in your power to prevent: (i) any other person from being registered under the Land Registration Acts and Rules from time to time in force as proprietor of the Property… and (ii) any person from becoming entitled to claim any right over the Property. 9(c) You must do everything necessary to help the Bank to: (i) confirm or protect its interest in the Property; and (ii) exercise any of its rights under the Mortgage. 9(d) You must not, without the Bank’s written consent, at any time create or allow any other mortgage, charge or burden in relation to the Assets. The Report on Title was also correct about the implications of breaching the mortgage conditions, which included: 11 The Mortgage shall become enforceable if: (a) the Debt, or any part of it, is not paid or discharged when due; (b) you are in breach of any of your obligations under the Mortgage; … (d) anyone seeks to, or takes possession of, or seeks to enforce, or enforces, any security affecting the Assets or if anything else happens which might adversely affect the security given by the Mortgage;… and when any of the above has occurred (whether or not it is continuing) and at any time afterwards, the powers of sale and of appointing a receiver conferred bysection 101 of the Law of Property Act 1925 shall immediately arise and become exercisable by the Bank in respect of the Assets free from the restrictions contained in sections 103 and 109 of that Act…”
“the creation of the Option confirms an equitable interest in land which, having served the option notice upon [Mrs Durnford] in November 2018 means that in equity the option has been performed by [Mrs Durnford]. Thus redeeming the mortgage and transferring title to [SLF] prior to the Possession Order being made. [SLF] asserts that this brings it within S39 [AJA] and that [SLF] can rely on S36 AJA to defeat the [Bank’s] claim.”
“In my judgement the submission made by [the Bank] is correct; there is no basis in this case for asserting that a power of attorney entitles someone to pay money on behalf of the principal (as opposed to entering into an obligation to pay money) and the power of attorney itself does not purport to confer such are right. Furthermore, the power of attorney is said to be given by way of security, which renders it in breach of [the Bank’s] mortgage which gives rise to a further right of possession on the part of [the Bank]. Lastly, [the Bank] itself has a power of attorney in respect of the property (by virtue of clause 16 of the mortgage conditions) which ranks in priority to any similar power held by [SLF]. ”
“the Option is specifically enforceable, the option notice was served before the [possession] claim was issued, the mortgage would be redeemed by [SLF] (whereas in Earl the tenants are not seeking to redeem the mortgage) and that in equity the option has been performed by [Mrs Durnford] in accordance with the option notice. As a result this title has been transferred and the mortgage is redeemed prior to the date of the Possession Order.”
“ our clients are able to clear the arrears and meet the monthly payments as they fall due, which our clients have done for the past 7-years. Indeed, as previously stated SLF is able to redeem the mortgage in full as per the terms of the Option.”
“25. This claim is primarily an action for redemption and sale unders.92(2) of the Law of Property Act 1925 ("the Act"). [SLF] is interested in the equity of redemption for the purposes of s.92(2) as a consequence of [Mrs Durnford’s] failure to complete the sale and the substantial sums paid by [SLF] to reduce the Mortgage. 26. Furthermore, even if the Option did expire on30 August 2012 (which is denied), [SLF] has a beneficial interest in the Property, or alternatively in the mortgage money, by constructive trust and/or resulting trust or by proprietary estoppel. It is [SLF’s] alternative case that, after to discharge of the mortgage, [SLF] holds the entire beneficial interest in the Property. 27. Further and in the alternative, if so required or the court thinks appropriate, [SLF] seeks a declaration unders.50 of the Act that, upon payment into court of the redemption monies, the Mortgage is discharged.”
“a legal first mortgagee of a freehold was vested with the fee simple, and once the legal date for redemption had passed, the mortgagor’s right to redeem was merely equitable. “Foreclosure” was the name given to the process whereby the mortgagor’s equitable right to redeem was declared by the court to be extinguished and the mortgagee was left owner of the property, both at law and in equity” (Megarry & Wade, The Law of Real Property, 9ed, at 24-006).”
“But an application to strike out a redemption claim, on the ground of lack of title in the Claimant, was held bad, where the mortgagor had parted with his interest in the security to an assignee for whose benefit he was seeking redemption, though the assignee must be a party to such a claim: Winterbottom v Taybe (1854) 2 Drew 279.” “If the right to redeem is dependent on the validity of an instrument, there will be no declaration as to the terms of redemption until the question of validity has been settled: Blake V Foster (1813) 2 Ball 85 B 387.”
“ the Claimant is willing to provide evidence of funding from a preferred funder. It is [SLF’s] position that a number of different funding sources are open to [SLF] and [SLF] has therefore the financial means to fully redeem the mortgage.”
“29 I also wish to add a word as to the approach that should be adopted if a similar problem arises in the future. In circumstances such as those that arose in this case, the proper course is to raise the issue with the court… 30 Parties are sometimes faced with the issue of wishing to pursue other proceedings whilst reserving a right in existing proceedings. Often, no problem arises; in this case, Aldi, WSP and Aspinwall each in truth knew at one time or another between August 2003 and the settlement of the original action in January 2004 that there was a potential problem, but it was never raised with the court. I have already expressed the view that it should have been. The court would, at the very least, have been able to express its view as to the proper use of its resources and on the efficient and economical conduct of the litigation. It may have seen if a way could have been found to determine the issues applicable to Aldiin a manner proportionate to the size of Aldi's claim and without the very large expenditure that would have been necessary if Aldihad to participate in the trial of the actions. It may be that the court would have said that it was for Aldito elect whether it wished to pursue its claim in the proceedings, but if it did not, that would be the end of the matter. It might have inquired whether the action against excess underwriters could have been expedited. Whatever might have happened in this case is a matter of speculation. 31 However, for the future, if a similar issue arises in complex commercial multi-party litigation, it must be referred to the court seised of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future.”
“there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.”
“[Thomas LJ in Aldi] plainly regarded the requirement to refer a contemplated future claim for case management directions in the earlier claim as mandatory, and as serving the public interest in the efficient use of court resources. He described a failure to do so as inexcusable. Furthermore, in the Stuart case, both Sedley L.J. and Sir Anthony Clarke MR spelt out in express terms that a failure to follow the Aldi guidelinesinvolved the claimant running a risk that the pursuit of a second claim would constitute an abuse. As has been repeatedly stated, the conduct of civil proceedings is a process in which the stakeholders include not merely the parties, but also other litigants waiting for their cases to be tried, and the public at large, who have an interest in the efficient and economic conduct of litigation. I consider that Arnold J was correct to treat a failure by the Appellant to follow guidelines laid down as mandatory future conduct in two successive reported decisions of this court as relevant matters pointing to a conclusion that the Second Claim constituted an abuse of the process of civil litigation.”
“For my part, I do not think that parties should keep future claims secret merely because a second claim might involve other issues. The proper course is for parties to put their cards on the table so that no one is taken by surprise and the appropriate course in case management terms can be considered by the judge. In particular parties should not keep quiet in the hope of improving their position in respect of a claim arising out of similar facts or evidence in the future. Nor should they do so simply because a second claim may involve other complex issues. On the contrary they should come clean so that the court can decide whether one or more trials is required and when. The time for such a decision to be taken is before there is a trial of any of the issues. In this way the underlying approach of the CPR, namely that of co-operation between the parties, robust case management and disposing of cases, including particular issues, justly can be forwarded and not frustrated. ”