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Bristol & West Building Society v Ellis

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Bristol & West Building Society v Ellis
CourtCourt of Appeal
Full case name Bristol and West Building Society v John Howard Ellis and Barbara Anne Ellis
Decided24 April 1996
Citations EWCA Civ 1294
(1997) 73 P&CR 158
Case history
Prior actionAppellant lost at appeal before HHJ MacNaught in the Bristol County Court. Leapfrog-appealed to Court of Appeal.
Court membership
Judges sittingHirst LJ
Auld LJ
Case opinions
Auld LJ
Keywords
Mortgage

Bristol & West Building Society v Ellis is an English land law case, concerning mortgage arrears, specifically the definition of "such time as the court thinks reasonable" for its suspension of possession orders under section 36 of the Administration of Justice Act 1970.

It was held on the facts that the delay was not appropriate because there was a risk that if the delay was granted, the mortgagor’s debt would rise too much, possibly into negative equity, which outweighed the interest in the two children completing their higher and further education respectively.

Facts

Mrs Ellis fell into arrears after her husband left. A credible payment plan for her would have taken 98 years. She applied for suspension of a warrant for possession because she wanted sell the property in three to five years when her children had finished full-time education. To support her application, she gave the opinions of estate agents showing what the likely sale price would be. This was argued to be enough to discharge the debt and therefore the mortgage, balancing the interests of her children and the interest of the lender who was no longer receiving full mortgage instalments.

The Judge (at first instance, the court below the appeal made) granted an order to delay.

Judgment

The two-member panel in the Court of Appeal through the written judgment of Auld LJ held that the delay was not appropriate because there was a risk that if the delay was granted, the mortgagor’s debt would rise too much. The total debt was £70k plus £10k interest. Auld LJ held that the estate agents’ opinions were not good enough. The court will need evidence or at least some informal material before the court is satisfied of what period for sale is reasonable.

It all depends on the individual circumstances of each case, though the important factors in most are likely to be the extent to which the mortgage debt and arrears are secured by the value of the property and the effect of time on that security...

As to value, the evidence was not compelling: two estate agents’ estimates of between £80,000 and £85,000 as against the redemption figure at the time of just over £77,000 plus costs...

‘Give the inevitable uncertainty as to the movement of property values over the next few years and the reserve with which the courts should approach estate agents’ estimates of sale prices… no court could be sanguine about the adequacy, now or continuing over that period, of the property as security for the mortgage debt and arrears.

See also

Sources on mortgages
In general
Law of Property Act 1925 ss 85-87
and ss 88-91
FSMA 2000 ss 2-28, 56-66, 138 and 150
CCA 1974ss 8-16B, 26-40, 50-88C, 126-136, 140A-B
Financial Conduct Authority Handbook (MCOB 13)
UTCCR 1999 rr 5-7, Sch 2, para 2(b) and (d)
Undue Influence and Separate Advice
Barclays Bank plc v O'Brien UKHL 6
Royal Bank of Scotland v Etridge (No 2) UKHL 44
The right to redeem and harsh variation of mortgages
Vernon v Bethell (1762) 28 ER 838
Fairclough v Swan Brewery UKPC 1
G and C Kreglinger v New Patagonia Meat and Cold Storage Company Limited AC 25
Jones v Morgan EWCA Civ 995
Arrears and repossession
Administration of Justice Act 1970 s 36
Ropaigealach v Barclays Bank plc QB 263
Cheltenham & Gloucester BS v Norgan EWCA Civ 11
Bristol & West Building Society v Ellis (1997) 73 P&CR 158
Powers of lender in repossession and application of proceeds of sale
Law of Property Act 1925 ss 88-89, 101-109
Negligent and non-market conduct of sale
Cuckmere Brick Co v Mutual Finance EWCA Civ 9
Tse Kwong Lam v Wong Chit Sen UKPC 28
Neither lender nor receivers required by law to extend beyond an ordinary period for sale
Silven Ltd v Royal Bank of Scotland EWCA Civ 1409
see English land law and easements

References

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