Mortgagee Powers Rhetoric

Publication Date01 July 2006
AuthorMatthew Conaglen
Mortgagee Powers Rhetoric
Matthew Conaglen
This article addresses the rhetoric of land law’sinterpretive communityat the time of, and follow-
ing, the House of Lords’decision in Boland. It is argued, contrary to the views of other commen-
tators, that the decision was not strongly motivated by a concern to see social justice done
between commercial lenders and wivesbut, rather,was a sens ibleand social lyreal istic application
of clear statutory provisions understood within the context of land law orthodoxy. Furthermore,
decisions following Boland which havebee n said tohave sapped its strength also cohere comfor-
tably within that community’s stable rhetoric. Consequently, it cannot be argued that propor-
tionality in human rights law requires a return to the supposed ‘high point’ of Boland ^ when
considered carefully, the evidence, both from Bolanditself a nd from land law’swider i nterpretive
community, shows that such a highpoint did not exist.
Both in Engla nd and in Europe, courts are proving themselves more prepared to
examine the rules of property law to determine whether, in the judges’view, the
relevant ru les are‘proportionate’ interference s with human rights.
Examining the
courts’ rhetoric about property law will become more important in that context
in understanding the provenance, coherence (or otherwise) and rationale (or lack
thereof) of the structure of property laws rules, in order to consider in turn the
proportionality of thos er ules where they interfere with human rights. This article
focuses on one aspect of the structure of English real property law: the powers
that mortgagees have to take possession of the mortgaged property and to sell it.
These two powers provide mortgagees with potent means, especially when
deployed in combination, by which to ameliorate the adverse consequences
caused to them by the mortgagor’s failure to perform the obligation for which
the mortgage provides security. As everyone knows, in Williams and Glyns Bank
Ltd vBoland,
the House of Lords held that a mortgagee could not takepossession
from a mortgagor’s spouse whereshe had an equitable interest in the property and
was in actual occupation of the mortgaged property whenthe mortgage was cre-
ated.Thompson has argued that the House of Lords’ conclusion in Bolandwa s to
favour a policy of ‘protecting the rights of people whose pri ncipal interest i n the
property was its use as a home’ over one of facilitating conveyancing.
Gray and
University Lecturer in Law, University of Cambridge;John Collier Fellow in Law,Trinity Hall. I am
grateful,with the normal caveats, to DavidFox, Amy Goymour, Angus Johnston and Richard Nolan for
helpful comments on earlier drafts of this article.
1See,eg,BeaulanePropertiesLtd vPa lmer [2005] EWHC817 (Ch);[2006] Ch 79, [188]^[203]; J.A.Pye
(Oxford) Ltd vUnited Kingdom(ECHR App No 44302/03; Judgment (Merits):15 November2005),
[68]^[75]; L eeds City Council vPrice [2 005] EWCA Civ 289; [2005] 1 WLR 1825, [26], [33];
Manchester City Council vHiggins [2005] EWCA Civ 1423, [38]; Barca vMears [2004] EW HC 2170
(Ch); [20 05] 2 FLR 1, [38]; Kay vLondon Borough of Lambeth [2006] UKHL 10, [28], [32]^[39],
[53]^[54], [66], [108]^[113], [179]^[180], [198].
3 M. P. Thompson, ModernLand Law (Oxford: OUP, 2nd ed, 2003) 130.
rThe Modern LawReview Limited 2006
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2006) 69(4) MLR 583^600
Grayhave also descr ibed the decision in Boland ‘asa re sounding victory for women’s
rights and as atimely blow in the eye foroverweening institutional lenders’.
ever, the samecommentators argue that, since Boland, the courts have‘striven migh-
tily to ensure that otherwise overriding interests are swept away’
silently but surely the original Boland principle [has been], in following years,
eroded almost to the point of extinction . . . the balance which shifted so dramati-
cally with the Boland ruling has been readjusted by a relentless retreat from the high
point of judicial activismevident in that decision [and the] Boland approachhas be en
emasculated by a series of developments and strategems [sic] in which courts and
lawyers have sought to minimise the hazards for conveyancers and lenders posed
by bene¢cial entitlements which are concealed behi nd a trust of land.
Pascoe refers to‘the glorious days’
of Bolandas ‘the heyday of the overriding inter-
and argues that ‘whenever possible, the courts are straining themselves to
limit the e¡ects of overriding interests’.
In a similar vein, Sparkes has argued that
‘[s]ubsequent cases have sapped the strength of the decision’.
These commentators point to a number of mechanisms by which they argue
that this retreat from Boland has been achieved. Perhaps most remarkable among
them is the possibility of a mortgagee obtaining an order for possession and sale
of the property in circumstances where an application for possession would be
refused following Boland. For example, in the recent case of Pritchard Engle¢eld v
a ¢rm of solicitors successfully sued Mr Steinberg in defamation and
then obtained a charging order over a property of which Mr Steinberg was the
legal owner but in which Mrs Steinberg claimed a life interest under a construc-
tive trust. Mrs Steinberg had consented to a mortgage granted to the Midland
Bank (later HSBC), which thereby had priority over her equitable interest under
the constructive trust, but had not consented to the solicitors’charging order. The
solicitors accepted that their charging order did not have priorityover Mrs Stein-
bergs life interest, and so an orderfor possession would have been refused follow-
ing Boland, but the courtconsidered this no impediment to an order for sale being
Gray and Gray have pointed out that ‘it is the rhetorical power wielded by land
laws interpretive community which controls the logic of modern realty’.
e¡ect, therefore, the commentators’criticism of the retreat from Boland is suggest-
ing that the courts havewaxed and waned in their rhetoric regardingmortgagees
powers. This article presents a counter-argume nt: that the rhetoric regarding
mortgagees’ powers has in fact remained reasonably stable over this period.The
4 K. J.Gray and S. F. Gray,Elements of Land Law (Oxford: OUP, 4th ed, 2005) para 12.209.
5 K. J.Gray and S. F. Gray,‘The Rhetoric of Realty’in J. Getzler (ed), RationalizingProperty, Equity
andTrusts (London: LexisNexis UK, 2003) 204, 250.
6 n 4 above, paras 12.209^12.210.
7 S. Pascoe,‘The Further Decline of Overriding Interests’ [1998] Conv 415, 415.
9ibid, 415; see also 418.
10 P.Sparkes, A New Land Law (Oxford: Hart Publishing, 2nd ed,20 03)para 15.48.
11 [2004] EWHC 1908 (Ch); [2005] 1 Pand CR DG2.
12 ibid, [58]^[60].
13 n 5 above, 206 (emphasis in original).
Mortgagee Powers Rhetoric
584 rThe Modern Law ReviewLimited 2006
(2006) 69(4)MLR 583^600

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