Law2017 Summative Essay.
Word Count: 2183.
‘[Jones v Morgan [2001] EWCA Civ 995] is another modern example of the ancient
doctrine of clogs upsetting an otherwise unobjectionable commercial contract.’ (Mark
Thompson, ‘Do we really need clogs?’ [2001] Conveyancer and Property Lawyer
502, 514)
In light of the statement above, critically discuss whether the Supreme Court should
remove the rule against clogs and fetters on the equity of redemption.
The rule against clogs and fetters (hereinafter the doctrine) prevents the mortgagee
1
from imposing intolerable restrictions on the mortgagor’s equity of redemption,
2
which represents mortgagor’s rights over the mortgaged property. Any terms
which restrict the mortgagor’s right to redeem, enables the mortgagee to acquire the
property, or confers collateral advantages on the mortgagee, may be challenged as
clogs. 3 The Courts look to the substance of agreements rather than form to
determine validity. 4 If a term is deemed a clog, it becomes void. 5 This essay will
discuss Jones v Morgan6 and whether the doctrine upsets unobjectionable contracts.
Secondly, it will assess how subsequent cases have narrowed the doctrines scope,
but rendered its application unpredictable. Finally, it will argue that socio-economic
and legal changes have rendered the doctrine largely redundant. Overall, this essay
will conclude that the doctrine should be removed.
1
Duncan Sheehan, ‘The Principles of Personal Property Law’ (1st edn, Hart Publishing,
2017), 320.
2
Barbara Bogusz, ‘Complete land law: text, cases, materials’ (7th edn, OUP, 2022), 649.
3
Martin George and Antonia Layard, ‘Thompsons Modern Land Law’ (8th edn, OUP, 2022),
380.
4
Lewis v Frank Love Ltd [1961] 1 WLR 264.
5
Chris Bevan, ‘Land Law’ (3rd edn, OUP, 2022), 556.
6
[2001] EWCA Civ 995.
, Law2017 Summative Essay.
Jones v Morgan
Thompson criticises the doctrine for unduly interfering with freedom of contract,
hence Thompsons’ disdain. This is because terms that clog the equity of redemption
may be acceptable under contract law but not under land law. In Jones,7 the parties
entered into a second agreement in 1997 after the original mortgage was established
in 1994. The subsequent agreement granted the mortgagee the right to purchase a
half share of the property. The Court considered whether the clause could be set
aside on the basis of economic duress however they held that the clause was not
void as unconscionable.8 Consequently, Thompson states that had the case not
involved a mortgage ‘the contract would have been enforced.’ 9 When purchase
options are contained in a mortgage, they can prevent redemption and thus
constitute a clog.10 However, if such terms are in a separate agreement they are
considered ‘independent’ of the mortgage and do not constitute a clog. 11 Thus, the
Court was tasked with deciding whether the 1997 agreement formed part of the
original mortgage. Chadwick LJ and Lord Phillips MR held that the sale agreement
was a variation of the mortgage and was void as a clog. According to Chadwick LJ it
was ‘artificial’ to regard the 1997 agreement as being ‘in substance’ independent. 12
However Pill LJ viewed it as an independent transaction. Sheehan attributes the
judges’ differing opinions to uncertainty over what qualifies as ‘in substance’ the
same transaction.13 Berg contends the majority wrongly recharacterised the second
7
Jones (n6).
8
Mark Thompson, ‘Do we really need clogs?’ (2001) Conv 502.
9
Ibid.
10
George and Layard (n3), 381.
11
Jones (n6), 62.
12
Ibid, 71.
13
Duncan Sheehan, (n1), 321.
Word Count: 2183.
‘[Jones v Morgan [2001] EWCA Civ 995] is another modern example of the ancient
doctrine of clogs upsetting an otherwise unobjectionable commercial contract.’ (Mark
Thompson, ‘Do we really need clogs?’ [2001] Conveyancer and Property Lawyer
502, 514)
In light of the statement above, critically discuss whether the Supreme Court should
remove the rule against clogs and fetters on the equity of redemption.
The rule against clogs and fetters (hereinafter the doctrine) prevents the mortgagee
1
from imposing intolerable restrictions on the mortgagor’s equity of redemption,
2
which represents mortgagor’s rights over the mortgaged property. Any terms
which restrict the mortgagor’s right to redeem, enables the mortgagee to acquire the
property, or confers collateral advantages on the mortgagee, may be challenged as
clogs. 3 The Courts look to the substance of agreements rather than form to
determine validity. 4 If a term is deemed a clog, it becomes void. 5 This essay will
discuss Jones v Morgan6 and whether the doctrine upsets unobjectionable contracts.
Secondly, it will assess how subsequent cases have narrowed the doctrines scope,
but rendered its application unpredictable. Finally, it will argue that socio-economic
and legal changes have rendered the doctrine largely redundant. Overall, this essay
will conclude that the doctrine should be removed.
1
Duncan Sheehan, ‘The Principles of Personal Property Law’ (1st edn, Hart Publishing,
2017), 320.
2
Barbara Bogusz, ‘Complete land law: text, cases, materials’ (7th edn, OUP, 2022), 649.
3
Martin George and Antonia Layard, ‘Thompsons Modern Land Law’ (8th edn, OUP, 2022),
380.
4
Lewis v Frank Love Ltd [1961] 1 WLR 264.
5
Chris Bevan, ‘Land Law’ (3rd edn, OUP, 2022), 556.
6
[2001] EWCA Civ 995.
, Law2017 Summative Essay.
Jones v Morgan
Thompson criticises the doctrine for unduly interfering with freedom of contract,
hence Thompsons’ disdain. This is because terms that clog the equity of redemption
may be acceptable under contract law but not under land law. In Jones,7 the parties
entered into a second agreement in 1997 after the original mortgage was established
in 1994. The subsequent agreement granted the mortgagee the right to purchase a
half share of the property. The Court considered whether the clause could be set
aside on the basis of economic duress however they held that the clause was not
void as unconscionable.8 Consequently, Thompson states that had the case not
involved a mortgage ‘the contract would have been enforced.’ 9 When purchase
options are contained in a mortgage, they can prevent redemption and thus
constitute a clog.10 However, if such terms are in a separate agreement they are
considered ‘independent’ of the mortgage and do not constitute a clog. 11 Thus, the
Court was tasked with deciding whether the 1997 agreement formed part of the
original mortgage. Chadwick LJ and Lord Phillips MR held that the sale agreement
was a variation of the mortgage and was void as a clog. According to Chadwick LJ it
was ‘artificial’ to regard the 1997 agreement as being ‘in substance’ independent. 12
However Pill LJ viewed it as an independent transaction. Sheehan attributes the
judges’ differing opinions to uncertainty over what qualifies as ‘in substance’ the
same transaction.13 Berg contends the majority wrongly recharacterised the second
7
Jones (n6).
8
Mark Thompson, ‘Do we really need clogs?’ (2001) Conv 502.
9
Ibid.
10
George and Layard (n3), 381.
11
Jones (n6), 62.
12
Ibid, 71.
13
Duncan Sheehan, (n1), 321.
