## Facts

- Mrs. Palk, a mortgagor, sought to sell her property to repay the mortgage debt owed to Mortgage Services Funding plc.
- The mortgagee objected to the sale, arguing the proposed sale price was insufficient to cover the outstanding debt and that delaying the sale might allow the property's value to increase.
- Mrs. Palk claimed the sale was necessary to avoid further financial hardship and asserted the property's value was unlikely to rise significantly in the near future.
- The court was required to determine whether to order the sale of the property under Section 91(2) of the Law of Property Act 1925, considering the interests of both parties and the property's market prospects.

## Issues

1. Whether the court could order the sale of mortgaged property under Section 91(2) of the Law of Property Act 1925 over the objection of the mortgagee.
2. How the court should balance the financial interests and hardship of the mortgagor against the mortgagee’s opposition, particularly regarding speculative future property values.

## Decision

- The Court of Appeal upheld the decision to order the sale of the property.
- It found that the purpose of Section 91(2) is to allow intervention when a mortgagor’s financial circumstances necessitate a sale to discharge the mortgage debt, despite mortgagee objection.
- The mortgagee’s opposition did not outweigh the equitable need to address the mortgagor’s financial hardship.
- The speculative argument for waiting on future property appreciation was rejected given the current decline in value and lack of certainty about future recovery.

## Legal Principles

- Section 91(2) of the Law of Property Act 1925 grants the court broad discretion to order the sale of mortgaged property at the request of the mortgagor or interested parties.
- The court must exercise this discretion by balancing the equitable interests of both mortgagor and mortgagee, focusing on practicality and the actual financial circumstances.
- The mortgagor’s need to mitigate further financial hardship may outweigh speculative or tactical arguments from the mortgagee concerning potential future value increases.
- The case sets a precedent that practical and equitable considerations underlie the resolution of mortgage sale disputes.

## Conclusion

Palk v Mortgage Services Funding plc [1993] Ch 330 clarified the court’s discretionary power under s 91(2) of the Law of Property Act 1925 to order the sale of mortgaged property, emphasizing the fair balancing of interests and rejecting mere speculation about future value in the face of present financial hardship.
