Sinfield v Sweet
| Jurisdiction | England & Wales |
| Date | 1967 |
| Year | 1967 |
| Court | Chancery Division |
Mortgage - Costs - Protection of security - Exercise of power of sale - Sum realised insufficient to pay off mortgage debt - Action by mortgagor to set aside sale alleging that sale was at a gross undervalue - Mortgagees' summons to amend pleadings by delivery of counterclaim - Mortgagees counterclaim for balance owing and costs of action and counterclaim against mortgagor personally - Provision in mortgage that expenses to protect security to be deemed properly paid - Whether mortgagor personally liable for costs - Whether counterclaim should be disallowed as demurrable - Mortgagee legally aided - Effect -
By a mortgage, dated July 31, 1953, the plaintiff mortgaged to the first and second defendants and to another person, who died in 1956, certain reversionary interests and a policy of insurance. By clause 5 of the mortgage the mortgagees were empowered to do all such acts, with a view to perfecting, proving or upholding their title or protecting their security, as they should think fit, to use the plaintiff's name for that purpose, and it was provided that all moneys thus expended by them were to be deemed to be properly paid.
In 1961, the first and second defendants, in purported exercise of their power of sale under the mortgage, sold the reversionary interests to the third defendant, E. Ltd., the deed of assignment being dated March 23, 1962. At that date the sum owing was £705 16s. 8d. The reversionary interests were sold for £635, and a surrender of the policy of insurance produced a further £41 3s. 0d., which left a deficit of £29 13s. 8d.
On April 13, 1965, the plaintiff issued a writ claiming: (1) an order to set aside the sale on the ground that it was at a gross undervalue, (2) as against the first and second defendants an account of the amount owing to them, for principal and interest under the mortgage and upon payment by her of the sum so found to be due, liberty to redeem the mortgage, and (3) in the alternative, damages for the improper use of the power of sale. The pleadings were concluded during 1965. On November 22, 1966, the first and second defendants issued a summons asking for an order that they be at liberty to amend their defence by adding a counterclaim, asking (1) for payment of £29 13s. 8d. and (2) a declaration that they were entitled to recover from and be paid by the plaintiff such of the costs of the action and counterclaim as should not be paid under an order or orders for costs in the action and counterclaim. The plaintiff was legally aided and it was contended that the effect of the declaration which the defendants sought would be to render her personally liable, quite apart from any order for costs which might be made for the defendants' costs of the action, if she should fail and would thus circumvent the Legal Aid and Advice Act, 1949. The major factor which it was alleged the first and second defendants had omitted to take into account in valuing the reversionary interests was the death of a tenant for life to which the plaintiff's interest was subject:—
Held, (1) that although clause 5 of the mortgage provided that moneys expended by the lenders in defending their security should be deemed to be properly expended, thus enabling them to add such moneys to their security, it was impossible to construe the clause as imposing by implication an affirmative obligation on the part of the plaintiff to make good to them the moneys so expended (post, p. 1494B–E).
(2) That no authority existed for the proposition that where a mortgagee expended moneys in protecting the security, he was entitled under the general law not only to treat those moneys as a charge upon the mortgaged property, but also as creating a personal liability upon the part of the mortgagor to repay those moneys to the mortgagee. Accordingly, if the proposed counterclaim were allowed it would be demurrable since it had no chance of success, and it should be disallowed (post, pp. 1494E, F, 1495F, 1496A–F).
(3) That the court would not under R.S.C., Ord. 20, r. 8, allow an amendment which, as here, did not on its face show an arguable case (post, p. 1496F–H).
Per curiam: The contention that the proposed amendments are contrary to section 2 (2) (e) of the Legal Aid and Advice Act, 1949, admits of contrary argument and they showed otherwise a cause of action, it would not be right to disallow them on that ground (post, p. 1497C–D).
PROCEDURE SUMMONS.
By a mortgage, dated July 31, 1953, the plaintiff, Mrs. Deidre Sinfield, mortgaged certain reversionary interests, and a policy of life insurance to the first two defendants, Gerald Herbert Leslie Sweet and John Cyril Leslie Sweet, and to a third person, Harold Isaac Taylor, who died in 1956. The reversionary interests were, respectively (1) a one-third interest, to which, in the events which had happened, the plaintiff was entitled, subject to her mother's life interest, under her parents' marriage settlement dated March 4, 1913; and (2) a one-third share to which, in the events which had happened, she was entitled, subject to the deaths of her mother and two other persons, in the residuary estate of her father, who died in 1950. The policy of insurance was a policy for £400 on the plaintiff's own life with the Sun Life Assurance Society, dated July 25, 1953.
By clause 1 of the mortgage the plaintiff, in consideration of the sum of £400 paid to her by the lenders, covenanted with the lenders that she would on January 31, 1954, pay to the lenders the sum of £400, with interest thereon at 7 per cent. per annum and if the sum should not be paid on that day then so long as any part thereof should remain owing, would pay interest at that rate, on the principal money for the time being so remaining owing, by equal half-yearly instalments in advance on January 31 and July 31 in every year.
Clause 5 of the mortgage provided:
“The lenders may during this security as well before as after January 31, 1954 give such notices obtain such stop or other orders, and such information and evidence, make such enquiries, take such proceedings and do all such other acts with a view to perfecting, proving or upholding their title to all or any of the promises hereby assigned or ascertaining the...
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The Royal Bank of Scotland Plc v Chandra
...debt from the company, but there would be a right of recoupment out of the sale proceeds – Ex p Fewings, In re Sneyd (1884) 25 Ch D 338, Sinfield v Sweet [1967] 1 WLR 1482. 64 A fifth basis advanced by the Bank was that as the purpose and effect of the deed of warranty was to provide securi......
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Island Life Insurance Company Ltd v Huntley Manhertz and another [Consolidated Suits]
...advise. Often, however, an alleged undervalue will merely be the difference in the opinions of the respective valuers concerned: Sinfield v Sweet (1967) 3 All ER 479. Property valuation is not an exact science and differences in opinions and professional valuers is not necessary evidence o......
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Gomba Holdings (U.K.) Ltd v Minories Finance Ltd (No. 2)
...the report reveals, was silent about costs charges and expenses. The mortgagor had no express contractual obligation to pay them (see Sinfield v. Sweet [1967] 3 AER 479). But Lord Selborne treated the mortgagee's right to add his costs, charges and expenses to the security as an implied ter......
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David Raymond Brierley v Frank Otuo
...The authorities referred to in support of the first sentence of this paragraph are Re Sneyd, ex p Fewings (1883) 25 Ch D 338 at 352, CA; Sinfield v Sweet [1967] 1 WLR 1489. Similar passages to that in Fisher & Lightwood are found in other textbooks on mortgages e.g. Cousins on Mortgages (4......