Bristol & West BS v Ellis (1996) 73 P&CR 158

Key point

  • This case establishes the factors to consider in making a possession order where the only prospect of repayment is through sale

Facts

  • Mortgagor had defaulted on her payments
  • An order was possession was postponed with no term imposed as to the sale of the property, but with the expectation that it will be made by the mortgagor once her children have completed university in 3-5 years

Held (Court of Appeal)

  • The postponement was inappropriate

Auld LJ

  • In cases where the only prospect of repaying the entire mortgage loan and interest is from the sale of the property, the reasonableness of the period to be granted depends on a number of factors including
    1. the extent to which the mortgage debt and arrears are secured by the value of the property and
    2. the effect of time on that security
  • Where the property is already on the market and there is some indication of delay on the party of the mortgage, a short period of suspension of a few months would be reasonable
  • Where there is likely to be considerable delay in selling the property and/or its value is close to the total mortgage debt and arrears so that the mortgagee is at risk as to the adequacy of the security, immediate possession or only a short period of suspension may be reasonable
  • Where there has already been considerable delay in realising a sale and/or the sales proceeds are unlikely to cover the mortgage debt or there is simply no sufficient evidence as to sale value immediate possession is reasonable
  • On the facts there is a low likelihood that the house would or could be sold at a price sufficient to discharge the mortgagor’s overall debt within any reasonable period, and certainly not up to 3-5 years