Horsham Properties Group Ltd v Clark [2009] 1 WLR 1255

Key point

  • Selling property without obtaining a possession order is not contrary to the ECHR A1FP

Facts

  • When the mortgagors defaulted, the mortgagees sold the land without first taking possession so as to circumvent the judicial discretion to order postponement of possession under s36 AJA 1970
  • The purchaser now sought an order for possession as the sale overreached the mortgagors’ interests

Issue

  • Whether permitting mortgagees to overreach the mortgagor’s rights in relation to mortgaged property by selling it out of court without first obtaining a order for possession infringes the ECHR Article 1 First Protocol (A1FP), right to protection against deprivation of possessions

Held (High Court)

  • Order for possession was granted
  • Sale without obtaining a possession order does not breach A1FP

Briggs J

  • Allowing mortgagees to make a sale out of court is justified in the public interest, despite it resulting in the mortgagor being deprived of possession by the purchaser without the protection of s36 AJA 1970
  • It reflects the bargain drawn between mortgagee and mortgagor for nearly 200 years in which the ability of the mortgagee to sell property offered as security without having to go to court has an essential aspect of the security if lending is to be provided at affordable rates of interest