Mortgage – Repossession – Pending negligence claim against valuer of property – Effect of likely outcome of pending proceedings – Whether court having power to suspend possession order – Administration of Justice Act 1970 section 36 – Appeal of plaintiff allowed in part
The plaintiff operated a ‘homewinners’ scheme’ allowing the owner of a house who wished to purchase a second house to do so before the first was sold. It did so by making a bridging loan providing for deferment of payment of the additional interest attributable to the part of the debt which was in theory to be repaid on sale of the first house. The success of the scheme depended upon the first house being sold within a reasonably short period at a satisfactory price, and it was necessary therefore for each house to be valued.The defendants entered into such an arrangement in 1989. The house they owned already, subject to a mortgage of about £100,000 in favour of the Britannia Building Society, was valued at £270,000, and the house they wished to, and did, purchase was valued at £290,000.
In the event they claimed the valuation of their first house was negligent, and it was subsequently repossessed and then sold for £140,000. After repayment of the Britannia mortgage and expenses there was nothing left to reduce the outstanding borrowing. The plaintiff brought proceedings for possession of the second house. The defendants’ defence alleged negligence on the part of the valuer. The application came before the judge on September 19 1995 at a time when the defendants’ case against the plaintiff and the valuer appointed by the plaintiff, and also the plaintiff’s action against the valuer, was unresolved. The judge made a possession order suspended on terms, later clarified by a second order, for payments to be made at a rate of £2,000 per month. The plaintiff appealed, contending that the judge had been correct to make the possession order, but that he had not been entitled to order a stay under section 36 of the Administration Act 1970.
