Property Market in UK Law

In the valuable analysis contained in Radford v. de Froberville [1972] 1 W.L.R. 1262 Oliver J. emphasised (at p. 1270) that it was for the plaintiff to judge what performance he required in exchange for the price. If the appellant's argument leads to the conclusion that in all cases like the present the employer is entitled to no more than nominal damages, the average householder would say that there must be something wrong with the law.

In the exercise of his rights over his security the mortgagee must act fairly towards the mortgagor. His interest in the property has priority over the interest of the mortgagor, and he is entitled to proceed on that footing. He can protect his own interest, but he is not entitled to conduct himself in a way which unfairly prejudices the mortgagor.

But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have – and even in a case where the evidence is that there was no discussion on that point – the question still requires an answer. It must now be accepted that (at least in this Court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.

We were referred to the cases where a house is damaged or destroyed by the fault of a tortfeasor. If the injured person reasonably goes to the expense of repairing the house, the tortfeasor may well be bound to pay the cost of repair, less an allowance because new work takes the place of old: see Lukin v. Godsell, Peake's Additional Cases, 15; Hide v. Thornborough (1846) 2 Carrington & Kirwan, 250.

It may well be that if, on learning of the real condition of the house, he had decided to leave and re-sell, be would have been entitled to recover from the Defendant, in addition to the £4,000, his costs and expenses of moving in and moving out and of the re-sale. As, however, he elected to stay, after all the facts had become known to him, this point does not arise.

I therefore am of the same view as my Lord the Master of the Rolls that the right measure of damage is the measure suggested in both Philips v. Ward and Ford v. White, which is simply the difference between what the plaintiff paid for the property and its value at the date when he obtained it.

I accordingly conclude, both on principle and authority, that a mortgagee in exercising his power of 3ale does owe a duty to take reasonable precaution to obtain the true market value of the mortgaged property at the date on which he decides to sell it. No doubt in deciding whether he has fallen short of that duty, the facts must be looked at broadly and he will not be adjudged to be indefault unless he is plainly on the wrong side of the line.