Borrowers can’t hide behind shields created for tenants

The recent High Court decision of Richards v Avery-Gee [2019] EWHC 1956 (QB) is of interest to mortgage practitioners. Mr Justice Nicol dismissed the application to stay the warrant for possession, made by the borrower, as totally without merit.

The claim started life in the County Court, as a possession claim based on a short-term loan, the terms of which the Defendant breached by not making the monthly payments as contractually obligated. A possession order was granted and the matter was transferred to the High Court for the purpose of enforcement. The application itself was set down for hearing 4 weeks after it was first considered by the High Court.

The case serves as a reminder that the court can proceed in the absence of either the Applicant or the Respondent pursuant to CPR 23.11. There is a degree of protection within CPR 23.11(2), in that the court may – either on application or of its own initiative – re-list the application if an order is made in the absence of one or more parties to the application.

However, the more pertinent point to take from the decision of Nicol J is the holding that borrowers cannot avail themselves of the protections conferred by the provisions which require the mortgagee to send notice to the tenant or the occupier under the Mortgage Repossessions (Protection of Tenants etc) Act 2010, section 2. The basis of the mortgagor’s application was that such a notice was not received.

The Dwelling Houses (Execution of Possession Orders by Mortgagees) Regulations 2010 set out requirements for such a notice and give a prescribed form which it must take. In a similar fashion, CPR 55.10 requires that the mortgagee send a notice of the hearing date to ‘the tenant or the occupier’ within 5 days of their being notified of the hearing date.

The judge found as fact that the notice was sent, and held that the mortgagor did not fall into the category of persons whom the 2010 Act was intended to protect. The purpose of the Act was to protect tenants who might be prejudiced by the grant of a mortgage at a different time to the grant of the tenancy (ordinarily, the tenancy post-dating the tenancy).

It stands to reason, therefore, that borrowers cannot argue that a failure to serve a CPR 55.10 notice vitiates the entitlement to possession.

The decision acts as authority for the proposition that borrowers cannot take a point about a notice which is not intended for them, but is intended for tenants or occupiers. It is a reminder that 55.10 notices exist not for the benefit of the borrower, but for persons other than the borrower who might be interested in the outcome of the possession proceedings.

Cookie Policy
This site uses cookies to improve the overall user experience. Cookie Policy