Quennell v Maltby
Equity will restrain a mortgagee from taking possession for a purpose other than enforcing its security.
Facts
Mr Quennell mortgaged his house to a bank and then let it to tenants, who were protected by the Rent Acts and so could not be evicted by him. The mortgage prohibited letting without the bank's consent, so the tenants did not have protection against the bank. Mr Quennell's wife then paid off the bank and took a transfer of the mortgage, so that she could seek possession against the tenants in the bank's place. Her aim was to evict the tenants so that the house could be sold with vacant possession.
Legal principle
The Court of Appeal refused to order possession. Lord Denning MR said that a mortgagee will be restrained from getting possession except when it is sought bona fide and reasonably for the purpose of enforcing the security, and then only subject to such conditions as the court thinks fit. Mrs Quennell was not seeking possession to enforce the security, but to get round the Rent Acts for the benefit of her husband. The other members of the court reached the same result on the basis that Mrs Quennell was acting as her husband's agent.
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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