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Mortgage Arrears

The arrears on Jayashankar’s mortgage account were in the region of £14,000 and so Lloyds TSB obtained possession.

Jayashankar applied to suspend the warrant for possession but the application was refused because the court was not satisfied that Jayashankar had the financial means to pay the arrears.

The question for the appeal court was whether they had any jurisdiction to entertain an appeal from a refusal to stay a warrant once the warrant has been executed, that is once Lloyds TSB has obtained possession.

Section 36 of the Administration of Justice Act 1970 states:

“36: Additional Powers of the Court in action by mortgagee for possession of a dwelling house
(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.
(2) The court –
(a) may adjourn the proceedings, or
(b) on giving judgment or making an order for delivery of possession of the mortgaged property. or at any time before the execution of such judgment or order (my emphasis), may –
(i) stay or suspend execution of the judgment or order
(ii) postpone the date for delivery of possession’
for such period or periods as the court thinks reasonable.

Therefore the courts power under the above section to adjourn mortgage possession proceedings, stay or suspend execution or postpone the date for delivery of possession, comes to an end once a warrant has been executed.

However counsel for Jayashankar stated that CPR 52 allows a judge to suspend the warrant under section 36 on the basis that at the hearing of the appeal from the District Judge the Circuit Judge could exercise all the powers of the lower court and could make any order that the District Judge could have made, that is to suspend the warrant. However, the court was not persuaded and insisted that legal certainty should prevail. Permission to appeal was granted but Jayashankar’s appeal was dismissed.

It is possible that the court may have reached a different decision if the warrant had not been executed but until then, this is the binding precedent.

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