LAND LAW – MORTGAGES EXAM
QUESTIONS WITH VERIFIED
ANSWERS
Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 Art
60C(2) (statutory and regulatory control) - Answer--Looks at exemptions to the CCA
Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 at [10] (statutory and
regulatory control) - Answer--Lord Sumption states that Section 140A is deliberately
framed in wide terms with very little in the way of guidance about the criteria for its
application, such as is to be found in other provisions of the Act conferring
discretionary powers on the courts. It is not possible to state a precise or universal
test for its application, which must depend on the court's judgment of all the relevant
facts. Some general points may, however, be made.
-First, what must be unfair is the relationship between the debtor and the creditor. In
a case like the present one, where the terms themselves are not intrinsically unfair,
this will often be because the relationship is so one-sided as substantially to limit the
debtor's ability to choose. Secondly, although the court is concerned with hardship to
the debtor, s 140A(2) envisages that matters relating to the creditor or the debtor
may also be relevant. There may be features of the transaction which operate
harshly against the debtor but it does not necessarily follow that the relationship is
unfair. These features may be required in order to protect what the court regards as
a legitimate interest of the creditor
-Thirdly, the alleged unfairness must arise from one of the three categories of cause
listed at sub-paras (a) to (c). Fourthly, the great majority of relationships between
commercial lenders and private borrowers are probably characterised by large
differences of financial knowledge and expertise
Statutory and regulatory control under the Consumer Rights Act 2015 - Answer-See
part 2 on unfair contract terms
Statutes on rights and remedies of the mortgagee regarding the creation of the
mortgage - Answer--Law of Property Act 1925, s 85, 89
-Land Registration Act 2002, s 23 (1)(a)
Law of Property Act 1925, s 85, 89 (rights and remedies of the mortagee - creation of
the mortgage) - Answer--89(2) - Where any such mortgagee obtains an order for
foreclosure absolute, the order shall, unless it otherwise provides, operate (without
giving rise to a forfeiture for want of a licence to assign) to vest the leasehold
reversion affected by the mortgage and any subsequent mortgage term in him,
subject to any legal mortgage having priority to the mortgage in right of which the
foreclosure is obtained and to any money thereby secured, and thereupon the
mortgage term and any subsequent mortgage term or charge by way of legal
mortgage bound by the order shall, subject to any express provision to the contrary
contained in the order, merge in such leasehold reversion or be extinguished.
, Cases regarding possession as a right of a mortagee - the statutory framework -
Answer--Administration of Justice Act 1970 s 36
-Administration of Justice Act 1973 s 8 Mortgage
- Repossessions (Protection of Tenants etc) Act 2010
- DCLG guidance
-Family Law Act 1996 ss 30(3) (shaped by s 30(1)-(2)), 55 (shaped by s 54(5)), 56
Administration of Justice Act 1970 s 36 (statutory framework of possession) -
Answer-(1)Where the mortgagee under a mortgage of land which consists of or
includes a dwelling-house brings an action in which he claims possession of the
mortgaged property, not being an action for foreclosure in which a claim for
possession of the mortgaged property is also made, the court may exercise any of
the powers conferred on it by subsection (2) below if it appears to the court that in
the event of its exercising the power the mortgagor is likely to be able within a
reasonable period to pay any sums due under the mortgage or to remedy a default
consisting of a breach of any other obligation arising under or by virtue of the
mortgage.
Administration of Justice Act 1973 s 8 (statutory framework of possession) -
Answer--Extension of powers of court in action by mortgage of dwelling-house
-(1)Where by a mortgage of land which consists of or includes a dwelling-house, or
by any agreement between the mortgagee under such a mortgage and the
mortgagor, the mortgagor is entitled or is to be permitted to pay the principal sum
secured by instalments or otherwise to defer payment of it in whole or in part, but
provision is also made for earlier payment in the event of any default by the
mortgagor or of a demand by the mortgagee or otherwise, then for purposes of
section 36 of the M1Administration of Justice Act 1970
-(2)A court shall not exercise by virtue of subsection (1) above the powers conferred
by section 36 of the M2Administration of Justice Act 1970 unless it appears to the
court not only that the mortgagor is likely to be able within a reasonable period to pay
any amounts regarded (in accordance with subsection (1) above) as due on account
of the principal sum secured, together with the interest on those amounts, but also
that he is likely to be able by the end of that period to pay any further amounts that
he would have expected to be required to pay by then on account of that sum and of
interest on it if there had been no such provision as is referred to in subsection
Mortgage Repossessions (Protection of Tenants etc) Act 2010 (statutory framework
of possession) - Answer--Section 1 outlines the power of the court to postpone giving
possession
-2Notice of execution of possession order
(1)This section applies where the mortgagee under a mortgage of land which
consists of or includes a dwelling-house has obtained an order for possession of the
mortgaged property.
(2)The order may be executed—
(a)only if the mortgagee gives notice at the property of any prescribed step taken for
the purpose of executing the order, and
(b)only after the end of a prescribed period beginning with the day on which such
notice is given.
QUESTIONS WITH VERIFIED
ANSWERS
Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 Art
60C(2) (statutory and regulatory control) - Answer--Looks at exemptions to the CCA
Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 at [10] (statutory and
regulatory control) - Answer--Lord Sumption states that Section 140A is deliberately
framed in wide terms with very little in the way of guidance about the criteria for its
application, such as is to be found in other provisions of the Act conferring
discretionary powers on the courts. It is not possible to state a precise or universal
test for its application, which must depend on the court's judgment of all the relevant
facts. Some general points may, however, be made.
-First, what must be unfair is the relationship between the debtor and the creditor. In
a case like the present one, where the terms themselves are not intrinsically unfair,
this will often be because the relationship is so one-sided as substantially to limit the
debtor's ability to choose. Secondly, although the court is concerned with hardship to
the debtor, s 140A(2) envisages that matters relating to the creditor or the debtor
may also be relevant. There may be features of the transaction which operate
harshly against the debtor but it does not necessarily follow that the relationship is
unfair. These features may be required in order to protect what the court regards as
a legitimate interest of the creditor
-Thirdly, the alleged unfairness must arise from one of the three categories of cause
listed at sub-paras (a) to (c). Fourthly, the great majority of relationships between
commercial lenders and private borrowers are probably characterised by large
differences of financial knowledge and expertise
Statutory and regulatory control under the Consumer Rights Act 2015 - Answer-See
part 2 on unfair contract terms
Statutes on rights and remedies of the mortgagee regarding the creation of the
mortgage - Answer--Law of Property Act 1925, s 85, 89
-Land Registration Act 2002, s 23 (1)(a)
Law of Property Act 1925, s 85, 89 (rights and remedies of the mortagee - creation of
the mortgage) - Answer--89(2) - Where any such mortgagee obtains an order for
foreclosure absolute, the order shall, unless it otherwise provides, operate (without
giving rise to a forfeiture for want of a licence to assign) to vest the leasehold
reversion affected by the mortgage and any subsequent mortgage term in him,
subject to any legal mortgage having priority to the mortgage in right of which the
foreclosure is obtained and to any money thereby secured, and thereupon the
mortgage term and any subsequent mortgage term or charge by way of legal
mortgage bound by the order shall, subject to any express provision to the contrary
contained in the order, merge in such leasehold reversion or be extinguished.
, Cases regarding possession as a right of a mortagee - the statutory framework -
Answer--Administration of Justice Act 1970 s 36
-Administration of Justice Act 1973 s 8 Mortgage
- Repossessions (Protection of Tenants etc) Act 2010
- DCLG guidance
-Family Law Act 1996 ss 30(3) (shaped by s 30(1)-(2)), 55 (shaped by s 54(5)), 56
Administration of Justice Act 1970 s 36 (statutory framework of possession) -
Answer-(1)Where the mortgagee under a mortgage of land which consists of or
includes a dwelling-house brings an action in which he claims possession of the
mortgaged property, not being an action for foreclosure in which a claim for
possession of the mortgaged property is also made, the court may exercise any of
the powers conferred on it by subsection (2) below if it appears to the court that in
the event of its exercising the power the mortgagor is likely to be able within a
reasonable period to pay any sums due under the mortgage or to remedy a default
consisting of a breach of any other obligation arising under or by virtue of the
mortgage.
Administration of Justice Act 1973 s 8 (statutory framework of possession) -
Answer--Extension of powers of court in action by mortgage of dwelling-house
-(1)Where by a mortgage of land which consists of or includes a dwelling-house, or
by any agreement between the mortgagee under such a mortgage and the
mortgagor, the mortgagor is entitled or is to be permitted to pay the principal sum
secured by instalments or otherwise to defer payment of it in whole or in part, but
provision is also made for earlier payment in the event of any default by the
mortgagor or of a demand by the mortgagee or otherwise, then for purposes of
section 36 of the M1Administration of Justice Act 1970
-(2)A court shall not exercise by virtue of subsection (1) above the powers conferred
by section 36 of the M2Administration of Justice Act 1970 unless it appears to the
court not only that the mortgagor is likely to be able within a reasonable period to pay
any amounts regarded (in accordance with subsection (1) above) as due on account
of the principal sum secured, together with the interest on those amounts, but also
that he is likely to be able by the end of that period to pay any further amounts that
he would have expected to be required to pay by then on account of that sum and of
interest on it if there had been no such provision as is referred to in subsection
Mortgage Repossessions (Protection of Tenants etc) Act 2010 (statutory framework
of possession) - Answer--Section 1 outlines the power of the court to postpone giving
possession
-2Notice of execution of possession order
(1)This section applies where the mortgagee under a mortgage of land which
consists of or includes a dwelling-house has obtained an order for possession of the
mortgaged property.
(2)The order may be executed—
(a)only if the mortgagee gives notice at the property of any prescribed step taken for
the purpose of executing the order, and
(b)only after the end of a prescribed period beginning with the day on which such
notice is given.
