Ministry of Justice investigates implications of repossession case

The Ministry of Justice (MoJ) is investigating the implications of a legal ruling allowing lenders to repossess homes from defaulting borrowers without first obtaining a court order. Last month, in a decision that had “wide-ranging implications” given its applicability to all residential mortgages, Briggs J made an order for possession of a Kent buy-to-let property after rejecting the borrowers’ argument that their human rights had been violated. The case, Horsham Properties Group Ltd v Clark [2008] EWHC 2327 (Ch); [2008] 41 EG 156 (CS), came to court after Carol Beech and Paul Clark fell into arrears and their lender, GMAC RFC Ltd, appointed receivers over the property at Walderslade Road, Chatham, Kent. In September 2006, the receivers sold the property at auction and the buyer sought possession of the property. Beech and Clark argued that for their human rights to be respected a lender had to first obtain a court order for possession before the sale could proceed. Dismissing those arguments, Briggs J held that the exercise of a statutory power of sale after a relevant default by the mortgagor is not a deprivation of possessions within the meaning of the European Convention on Human Rights. A MoJ spokesperson said: “Given the current economic situation, the government is working hard to ensure that people losing their homes is a last resort. “Justice secretary Jack Straw has asked for advice on the implications of this judgment and will consider with colleagues across government whether further action is needed to protect homeowners.”