Royal Trust Company of Canada v Markham
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW,SIR JOHN PENNYCUICK,LORD JUSTICE BROWNE |
| Judgment Date | 17 July 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0717-6 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 July 1975 |
[1975] EWCA Civ J0717-6
Lord Justice Megaw
Lord Justice Browne and
Sir John Pennycuick
In The Supreme Court of Judicature
The Court of Appeal
Civil Division
From: His Honour Judge Macgregor-Banbury County Court (sitting at Northampton)
Revised
Mr. KENNETH ZUCKER (instructed by Messrs. McKenna & Co.) appeared on behalf of the Appellants (Plaintiffs).
The Respondents (Defendants) did not appear and were not represented.
I shall ask Sir John Pennycuick to deliver the first judgment.
In this action the plaintiff is the Royal Trust Company of Canada; the defendants are Robert Bernard Markham and Mrs. June Markham. By the action the Royal Trust Company, as mortgagee, seeks possession of certain property known as Court End, West Adderbury, in the County of Oxford, which is comprised in a mortgage created by the defendants in favour of the Royal Trust Company. Summarily, the learned registrar before whom this action came made an order for possession but with a provision that no warrant for possession should be issued without leave of the court. An appeal by the plaintiffs to the County Court judge against that order was dismissed. The Royal Trust Company appeals against the latter part of the order and contends that an order for possession should be made without any such qualification.
The facts may be shortly stated, and are not in dispute. I should mention at this stage that the defendants have not at any stage in these proceedings adduced any evidence before the court. The legal charge was dated 28th August, 1973. It is more or less in common form. The defendants, Mr. and Mrs. Markham, are the borrowers, and the Royal Trust Company is the mortgagee. There are recitals of seisin and of an agreement by the mortgagees to advance the sum of £45,000. Then in consideration of that sum there is a covenant by the borrowers to pay to the mortgagees on the 4th September, 1973, the principal sum with interest at the rate of 10 per cent, per annum, or 4 per cent, per annum above the mortgagees' base rate from time to time by equal quarterly instalments. Then there is a charge by way of legal mortgage upon the property, which is described in the H schedule as Court End. Then there are a number of covenants by the mortgagors. There is a proviso in clause 10 that notwithstandinganything in the deed contained "if the borrowers shall on every day on which interest is made payable up to 28th August, 1978 (hereinafter referred to as 'the repayment date')….pay to the mortgagees interest on the principal money….and if the power of sale shall not have become exercisable then the mortgagees shall not before the repayment date call in the principal sum…." Then by clause 11 there is a provision that the security shall become enforceable and all remedies exercisable forthwith by the mortgagees without notice upon the happening inter alia of the neglect or failure of the borrowers to pay any money payable on or within 14 days of the due date. I do not think I need read any of the other provisions in the mortgage.
In the event, the borrowers, Mr. and Mrs. Markham, have been continuously in default in payment of interest. Some interest has been paid, but at all material times the interest has been in arrear to large amounts. At the 28th February, 1975 (which is a relevant date for the present purpose) the interest was in arrear to the amount of £8,025. The arrears are now greater.
The Royal Trust Company issued its summons for possession on the 4th. December, 1974. That was supported by a formal affidavit setting out the facts. The summons was issued originally in the Chancery Division but was transferred to the County Court by an order dated 3rd March, 1975. The summons came before the registrar in the County Court at Banbury on the 14th April, 1975, when he made the order for possession to which I have already referred. The Royal Trust Company appealed from that order. The appeal came before Judge MacGregor on the 2nd June, 1975. On that occasion each party was represented by a solicitor. It appears from the notice of appeal to the County Court judge that upon that occasion the only written ground of appeal was that the limitation upon the order for possession — that is to say that the leave of the court must first be obtained — was prejudicial to the Royal Trust Company, for reasonstherein mentioned. In that notice of appeal no point was made as to whether the registrar had power to make such an order. We are told, however, by counsel (who was not himself present at the hearing before Judge MacGregor) that at that hearing objection to the registrar's order on the ground of jurisdiction was expressly made. The learned County Court judge, however, dismissed the appeal. He apparently gave no reasons for so doing. What he did was to suggest to the Royal Trust Company that it should go back to the registrar with an application for leave of the court to issue a warrant for possession. He took from the defendants an undertaking to vacate the premises on an exchange of contracts for sale. The Royal Trust Company complied with the judge's suggestion and went back to the registrar, who, however, on the 17th June, 1975, refused leave to issue a warrant for possession. The Royal Trust Company now appeals to this Court.
To complete the statement of facts, the property remains unsold, and there is no evidence of any negotiations for a sale, much less of any agreement, or agreement subject to contract, for a sale. There is some evidence concerning the asking price, the defendants putting upon the property an asking price much higher than that which the Royal Trust Company is advised that the property would be likely to realise.
The grounds of appeal to this Court are stated as follows:
(l) The learned judge was wrong in law in not holding that the learned registrar in ordering pursuant to section 36 (2) of the Administration of Justice Act, 1970, that the said Order for possession should not be executed without leave of the Court had no jurisdiction to so stay or suspend the said Order for possession either pursuant to section 36 (2) of the Administration of Justice Act, 1970, or at all.
(2) The learned judge was wrong in law in not holding that thelearned registrar in ordering a stay or suspension as aforesaid had no jurisdiction pursuant to section 36 (2) of the Administration of Justice Act, 1970, to order such stay or suspension without fixing a period for which the said Order should he stayed or suspended.
(3) The learned judge was wrong in law in not holding that there was no evidence upon which the learned registrar could have held pursuant to section 36 (l) of the Administration of Justice Act, 1970, that the defendants were likely to he able within a reasonable period to pay the sums due under the legal charge dated the 28th August, 1973, and made between the plaintiffs and the defendants or the sums which would become due under the said charge by the end of such reasonable period.
"(4) The learned judge was wrong in law in not holding that the learned registrar was wrong in law in taking into account as evidence that the defendants were likely to be able to pay the aforesaid sums within a reasonable period the defendants' proposal to pay such sums by selling the said property, such proposal being repugnant to and/or incompatible with an order for possession".
Upon the hearing of this appeal the defendant-respondents, although duly served, did not appear and were not represented. However, they did not concede victory to the Royal Trust Company and the appeal has been fully and, if I may say so, very clearly argued by Mr. Zucker for the company.
I will endeavour to deal with the points raised by the notice of appeal in the same order as they are there raised. I propose first to refer to the law as it stood before the enactment of the 1970 and 1973 Acts. Before the enactment of those Acts, it had been established by a series of decisions that a mortgagee is entitled as of right to immediate possession of the mortgaged premises, subject only to the possibility of an adjournment for a short time to give the mortgagor an opportunity of paying off the mortgage. I will not refer to any of the earlier cases: it will be sufficient to quote aparagraph from the concluding page of Mr. Justice Russell's judgment in the case of Birmingham Citizens Permanent Building Society v. Caunt (1962 Chancery 883, at page 912). After a full review of the authorities, Mr. Justice Russell proceeded: "Accordingly, in my judgment, where (as here) the legal mortgagee under an instalment mortgage under which by reason of default the whole money has become payable, is entitled to possession, the court has no jurisdiction to decline the order or to adjourn the hearing whether on terms of keeping up payments or paying arrears, if the mortgagee cannot be persuaded to agree to this course. To this the sole exception is that the application may be adjourned for a short time to afford to the mortgagor a chance of paying off the mortgagee in full or otherwise satisfying him; but this should not be done if there is no reasonable prospect of this occurring. When I say the sole exception, I do not, of course, intend to exclude adjournments which in the ordinary course of procedure may be desirable in circumstances such as temporary inability of a party to attend, and so forth". A characteristic instance in which that sole exception is applicable is where the mortgagor has entered or is about to enter into a contract for the sale of the property at a price which will enable the mortgage to be paid off in full. (Of course, there might be other sources from which the mortgagor would be enabled to pay off the mortgage in full). It will be observed...
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