Britannia BS v Earl [1990] 1 WLR 422

Key point

  • Tenants under a tenancy that is barred by the terms of a prior mortgage do not have a claim under s36 AJA 1970


  • The owner (D1) of a property mortgaged it to a building society (C)
  • The mortgage deed containing a covenant preventing the owner from letting the premises without C’s consent
  • In contravention of the covenant, D1 let the premises to D2
  • C sought possession after D1 defaulted
  • D2 thought to postpone the possession order under s36 AJA 1970

Held (Court of Appeal)

  • D2 did not have a claim under s36 AJA 1970 for postponement

McCowan LJ

  • Although the D2 were likely to be able within a reasonable period to pay any sums due under the mortgage, the court had no power under s36 AJA 1970 to adjourn C’s claim
  • D2 could not be regarded as persons deriving title under the mortgagor for the purposes of s39(1) AJA, the very existence of the lease was a breach of the mortgage