Bank of Ireland Home Mortgages Ltd v Bell [2001] 2 FLR 809 (CA)

Facts

  • Mr. and Mrs. Bell obtained a mortgage from Bank of Ireland Home Mortgages Ltd on their family home.
  • Mr. Bell’s business experienced difficulties, leading to missed mortgage payments.
  • The Bank of Ireland sought a possession order for the property because of significant arrears.
  • Mrs. Bell, whose income was limited, cared for their adult daughter with severe disabilities.
  • Mrs. Bell applied for postponement of possession, citing her daughter’s needs and significant hardship should the family be required to relocate.

Issues

  1. Whether the court had power under section 36 of the Administration of Justice Act 1970 (as amended by section 8 of the Administration of Justice Act 1973) to postpone a possession order in light of the family’s hardship and inability to repay arrears immediately.
  2. Whether indefinite delay of possession is permissible where repayment of arrears is not feasible within a reasonable time.
  3. How courts should balance the legal rights of lenders against hardship experienced by families in possession order applications.

Decision

  • The Court of Appeal upheld the grant of a possession order in favour of the lender.
  • The judgment confirmed that courts must consider all relevant circumstances but the lender’s legal rights have priority.
  • Section 36 AJA 1970 does not allow possession to be postponed indefinitely if there is no realistic plan to repay arrears.
  • The court acknowledged Mrs. Bell’s hardship but determined there was no reasonable prospect of the debt being paid within a reasonable period, justifying possession.
  • The importance of practical outcomes was stressed, with significant arrears and lack of a viable repayment plan being decisive.

Legal Principles

  • Section 36 of the Administration of Justice Act 1970 enables courts to postpone possession if the mortgagor can repay within a reasonable period.
  • The lender’s contractual and statutory rights are primary; family hardship cannot justify indefinite delay of possession.
  • Fairness requires courts to weigh the hardship faced by occupiers against the legitimate interests and potential losses of lenders.
  • Repayment feasibility and the length of any requested delay are central considerations in exercising the court’s discretion.

Conclusion

The case affirms that while courts must weigh all circumstances in mortgage possession proceedings, lenders’ rights take precedence and indefinite postponement is not allowed unless arrears can clearly be addressed within a reasonable period, ensuring a balanced and practical application of section 36 AJA 1970.

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