Raja v Lloyds TSB Bank Plc
| Jurisdiction | England & Wales |
| Judgment Date | 18 April 2000 |
| Date | 18 April 2000 |
| Court | Chancery Division |
CHANCERY DIVISION
Before Mr Michael Tugendhat, QC
Limitation of actions - claim that mortgagee had sold properties at an undervalue - limitation period six years
The duty of a mortgagee on the sale of the mortgaged property to obtain a proper price was owed in equity and not in contract or tort.
However, as the relief sought corresponded to that available in an action for damages for negligence at common law, the limitation period governing any breach of the said duty, even where the charge had been entered into by deed, was the six years provided for by section 2 of the Limitation Act 1980.
Mr Michael Tugendhat, QC, sitting as a deputy Chancery Division judge, so held in a reserved judgment, dismissing the appeal of the claimant, Ibrahim Khan Raja, from the order of Master Moncaster dated November 17, 1999, striking out on the application of the defendant, Lloyds TSB Bank plc, Mr Raja's action for damages for negligence and/or a declaration that his liabilities to the defendant had been wholly discharged by the sale of four residential properties owned by him, 4 Dunheved Road North, Thornton Heath, Surrey; 23 Granville Road, 7 Granville Road and 22 Brunswick Square, all of Hove, East Sussex, which had been repossessed and sold pursuant to a number of charges granted in favour of the defendant and others.
Mr Oriel Hinds for Mr Raja; Mr Richard Handyside for Lloyds TSB.
HIS LORDSHIP said that the claimant had appealed, inter alia, on the basis that his claim that the defendant had sold the properties at an undervalue was not statute-barred because such claims arose from charges entered into by deed, and therefore had the benefit of a 12-year limitation period by operation of section 8 of the 1980 Act.
As an action for damages for breach of a contract for services executed under seal was an action on a specialty (see Aiken v Steward Wrightson AgencyWLR ((1995) 1 WLR 1281)) the question was whether the duty in question arose independently of the contractual relationship.
The power of sale under a mortgage formed no part of the consideration provided to the mortgagor pursuant to the contract. Rather it was a power arising for the benefit of the mortgagee when the mortgagor had failed to repay the debt secured by the mortgage.
In both China and South Sea Bank Ltd v TanELR ((1990) 1 AC 536, 543) andDownsview Nominees Ltd v First City CorporationELR ((1993) AC 295, 315-6)...
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