02 December 2010


The borrower sought to defend on the basis of a failure to serve a s57(2)(b) notice and the lender responded by seeking summary judgement.

The borrower’s wife had died and the court found that lender had served a section 57(2)(b) notice on both the borrower and the Public Trustee pursuant to s.61 Probate and Administration Act 1898. The judge found this was proper but unnecessary because the borrower and his late wife were joint tenants of the subject property so that upon her death, as the sole surviving joint tenant, the borrower became the sole beneficial owner of the property by right of survivorship.

The judge also noted that in any event service of a notice under s.57(2)(b) Real Property Act 1900 is not a precondition to the bringing of proceedings seeking possession for mortgage default. Thus, even if there had been non-service of the notices, the judge found it would not have been not something that would entitle him to defend the proceedings.

The borrower had made a complaint to the Financial Ombudsman Service (“FSO”). Thereafter, a conciliation conference took place at which an agreement was reached to give the borrower time to sell his property. During the time allowed the lender agreed to charge no default interest provided the arrangement was adhered. The agreement expressly stated that:

This arrangement does not constitute a waiver of the Bank's rights and as such, the Bank reserves all of its rights under its mortgage and loan contract.

The borrower did not sell the property and the judge held that the entry into the agreement did not constitute a waiver of a power of sale, or an estoppel of the Plaintiff's right to enforce the mortgage on default.

Accordingly, the judge held that there was no possibility of the defence succeeding. There was no serious issue in the proceeding which could be raised by the borrower to resist the claim for relief by the lender and so accordingly summary judgement was entered.

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Kate Cooper joined Bransgroves Lawyers in 2006 and has been a partner since 2009. Kate specialises in Supreme Court litigation in the fields of mortgage enforcement, professional negligence and originator/funder disputes. She has an extensive transactional practice including, origination deeds, aggregation deeds, commercial and construction lending and mortgage securitisation.

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