Global Financial Recoveries Ltd v Jones
| Jurisdiction | England & Wales |
| Judgment Date | 14 December 1999 |
| Date | 14 December 1999 |
| Court | Chancery Division |
Chancery Division
Before Mr Robert Englehart, QC
Limitation of actions - mortgage shortfall claim - not a claim in contract but upon a specialty
A claim to recover the shortfall after the realisation of mortgaged property securing a loan founded on an express provision in a mortgage agreement made under seal, was a claim upon a specialty, governed for the purposes of the Limitation Act 1980 by section 8(1) of that Act.
Mr Robert Englehart, QC, sitting as a deputy Chancery Division judge, so held in a reserved judgment dismissing the appeal of Global Financial Recoveries Ltd from the order of deputy District Judge McCourt, at Aylesbury County Court on July 1, 1999, setting aside a statutory demand of Pounds 144,672.05 served on the respondent, Kelvin McAllister Jones, by Rees Investments Ltd, a company incorporated under the law of Jersey whose claim against Mr Jones had been assigned to the appellant in the present case.
Mr Paul Key for Global Financial Recoveries; Mr Jones in person.
HIS LORDSHIP said that the central issue concerned whether any claim upon a shortfall after a mortgagee had realised his security, even where the mortgage was executed as a deed, was a claim in simple contract, with a limitation period of six years (section 5 of the 1980 Act), or a claim upon a specialty, with a limitation period of 12 years (section 8(1) of the 1980 Act).
It was well established that an action to enforce a contractual right or obligation arising under a contract under seal was an action upon a specialty: see Collin v Duke of WestminsterELR ((1985) QB 581, 601-3) and Aiken v Stewart Wrightson AgencyWLR ((1995) 1 WLR 1281, 1290-1293).
Mr Key relied upon Arbuthnot Latham Bank Ltd v Trafalgar Holdings LtdWLR((1998) 1 WLR 1426), in which it was conceded, apparently without query by the Court of Appeal, that whereas an action to enforce an underlying guarantee was statute-barred after six years, a claim upon the personal covenant in a subsequent mortgage under seal securing the guarantee had a 12-year limitation period: see also Securum Finance Ltd v AshtonUNK ((1999) 2 All ER (Comm) 331).
However, in Hopkinson v TupperUNK (unreported, January 30, 1997), the defendant applied to strike out for want of prosecution a claim to recover the shortfall after the realisation of mortgaged property securing a loan.
The plaintiffs, relying upon Birkett v JamesELR ((1978) AC...
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West Bromwich Building Society v Wilkinson and another
...in Hopkinson v Tupper ( 30 January 1997, unreported) and by Mr Robert Englehart QC sitting as a deputy High Court judge in Global Financial Recoveries Ltd v Jones [2000] BPIR 1029 which lent some support to his submission. But these observations, although entitled to respect, were fairly c......
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West Bromwich Building Society v. Wilkinson et al., [2005] N.R. Uned. 131
...1997, unreported) and by Mr. Robert Englehart Q.C. sitting as a deputy High Court judge in Global Financial Recoveries Ltd. v. Jones [2000] BPIR 1029 which lent some support to his submission. But these observations, although entitled to respect, were fairly casual. Auld, L.J., said no more......