Cheltenham & Gloucester Building Society v Johnson and another

Arrears of mortgage repayments — Possession order suspended on terms — Money claim for balance outstanding adjourned generally — County court upholding adjournment of money judgment — Court of Appeal allowing appealIn 1990 Heart of England Building Society (“H”) lent £40,000 to the defendants jointly on a dwelling-house at 28 Rosemullion Close, Exhall, Coventry. Following the merger between H and Cheltenham & Gloucester Building Society (C&G), C&G became entitled to enforce H’s rights against the defendants, who fell into arrears. The outstanding balance rose to £44,589. In April 1996 a district judge made a possession order, suspended on terms that the instalments be paid, together with £36.86 per calendar month off the arrears. He adjourned generally the application for a money judgment for the balance outstanding. C&G appealed against the adjournment of the money judgment. That appeal was dismissed on the basis that the district judge had followed the common practice of adjourning the application for the money judgment until the correct sum in respect of which the building society would be entitled to enforce its rights could be determined. C&G appealed. Held The appeal was allowed. 1. A mortgagee was entitled as of right to a judgment for whatever sum of money was due and payable under the terms of the mortgage. He was entitled to exercise all his remedies concurrently and could not, in respect of the money claim, be in a worse position than if he had lent unsecured: see Cheltenham & Gloucester Building Society v Grattidge (1993) 25 HLR 454. 2. Section 71(2) of the County Courts Act 1984 gave the court a discretion to suspend its judgment upon such conditions as it thought fit and section 88 conferred a similar discretion in relation to execution. Section 36 of the Administration of Justice Act 1970 had no direct bearing upon the power to suspend a money judgment. It dealt solely with the power to suspend the order for possession and conferred a separate discretion. But one would ordinarily expect the discretion to be exercised in the same way for the same person. If the judge thought it right to suspend a possession order, upon terms, then the proper exercise of the discretion in respect of the money judgment would normally require a suspension on the same terms: see Grattidge above. 3. However, the discretions were separate and there might well be cases in which it would be proper to exercise them differently: see Birmingham Citizens Permanent Building Society v Caunt [1962] Ch 883, a case which led several years later to the enactment of section 36 of the 1970 Act. 4. There was no rule of law to the effect that an order for possession of mortgaged property would only be adjourned or suspended if a sale would take place within a short period of time. If there were clear evidence that the completion of the sale of a property could take place in six or nine months or even a year, there was no reason why a court could not exercise its discretion to adjourn the order: National & Provincial Building Society v Lloyd [1996] 1 All ER 630. 5. The practice of adjourning the money part of a claim in situations like the present was inconsistent with the decision in Grattidge. There were no special circumstances which justified a departure from the norm. Malcolm Waters (instructed by the solicitor to the Cheltenham & Gloucester Building Society) appeared for C&G; the respondents did not appear and were not represented.