Horsham Properties Group Ltd v Clark
A mortgagee can exercise its power of sale over a residential property without first obtaining possession or a court order.
Facts
Mr and Mrs Clark mortgaged their home and fell into arrears. The lender sold the house to Horsham Properties without first obtaining an order for possession. Horsham then sought possession against the Clarks, who argued that a sale without a court order was a breach of their rights under article 8 of, and article 1 of the First Protocol to, the European Convention on Human Rights.
Legal principle
Briggs J held that the sale was valid and that Horsham was entitled to possession. The lender's statutory power of sale under section 101 of the Law of Property Act 1925 arose once the mortgage money became due, and it could be exercised without first obtaining possession or a court order. This did not breach the Convention, because the power of sale was part of the bargain the Clarks had made when they took out the mortgage, and the statutory scheme struck a fair balance. The case raised concern about lenders avoiding court supervision, and led to changes in lending practice.
Related cases on mortgages
- Barclays Bank plc v O'Brien [1994] 1 AC 180
- Biggs v Hoddinott [1898] 2 Ch 307
- Cheltenham & Gloucester Building Society v Norgan [1996] 1 WLR 343
- CIBC Mortgages plc v Pitt [1994] 1 AC 200
- Cityland and Property (Holdings) Ltd v Dabrah [1968] Ch 166
- Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949
- Fairclough v Swan Brewery Co Ltd [1912] AC 565
- Four-Maids Ltd v Dudley Marshall (Properties) Ltd [1957] Ch 317
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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
