Factual and Procedural Background
This opinion concerns a preliminary trial issue of liability regarding whether the Plaintiff, as mortgagor, has a claim for damages against the Defendant, as mortgagee, relating to chattels left behind at a property following execution of a warrant for possession. The Plaintiff executed a mortgage over the property in 2006, which was subsequently assigned to the Defendant. After the Plaintiff fell into arrears, possession proceedings were initiated and multiple hearings and adjournments occurred over several years. The Defendant obtained a possession order in 2008, which the Plaintiff failed to comply with, leading to the execution of a warrant for possession in January 2014. Upon eviction, notices were left requiring the Plaintiff to remove her possessions within seven days or risk disposal. The Plaintiff was granted several court orders allowing access to remove chattels but failed to do so, and eventually barricaded herself inside the property. The Defendant commenced clearance and disposal of the chattels, which was temporarily halted by an injunction obtained by third parties associated with the Plaintiff. After the injunction was discharged, the Defendant resumed disposal. The Plaintiff also made multiple applications challenging the validity of the mortgage and possession proceedings, all of which were dismissed or struck out. The present trial focuses on the issue of whether the Defendant is liable for damages for the disposal of the chattels.
Legal Issues Presented
- Is the Plaintiff entitled to have the mortgage set aside on the basis that it was procured by fraud or that it does not comply with s.1(3) of the Law of Property (Miscellaneous Provisions) Act 1989?
- Is the Defendant liable to the Plaintiff in damages as a result of the steps it took when it was involuntary bailee of the Plaintiff's chattels?
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Ladd v Marshall [1954] 1 WLR 1489 (CA) |
Sets out special grounds for admitting fresh evidence in appeals. |
Used to reject Plaintiff's attempt to introduce fresh evidence challenging prior possession decision. |
| Secretary of State for Trade and Industry v Bairstow [2004] Ch 1 (CA) |
Addresses abuse of process in challenging final decisions in related proceedings. |
Applied to conclude Plaintiff's claim attacking possession order is an abuse of process. |
| Shah v Shah [2002] QB 35 (CA) |
Estoppel arising from acceptance of payments under a mortgage despite alleged invalidity. |
Applied to bar Plaintiff from asserting mortgage was procured by fraud after accepting payments. |
| Bank of Scotland Plc v Waugh & others [2014] EWHC 2117 (Ch) |
Requirements for valid execution of mortgage deeds under s.1(3) Law of Property Act 1989. |
Distinguished on facts; Plaintiff's case differed as mortgage deed was regular on its face. |
| Da Rocha-Afodu v Mortgage Express Ltd [2014] EWCA Civ 454 |
Law on involuntary bailment and duty to do what is right and reasonable with goods left after possession. |
Guided court's assessment of Defendant's conduct as involuntary bailee of Plaintiff's chattels. |
| Scotland v Solomon [2002] EWHC 1886 |
Duty of involuntary bailee to act reasonably in enabling former owners to recover possessions. |
Referenced for principle that duty depends on facts and reasonableness. |
| Elvin & Powell Ltd v Plummer Roddis Ltd [1933] Solicitors Journal 48 |
Statement that involuntary bailees must do what is right and reasonable. |
Affirmed the standard of care applicable to involuntary bailees in this context. |
| Houghland v RR Low [1962] All ER 159 |
Recognition of varied circumstances in bailment and the requirement of sufficient standard of care. |
Quoted to support flexible application of duty depending on case specifics. |
Court's Reasoning and Analysis
The court first addressed the mortgage issue, rejecting the Plaintiff's claims to set aside the mortgage on grounds of fraud or improper execution. The court found these claims to be vexatious, late, and an abuse of process, given the extensive prior proceedings and payments accepted by the Defendant. The court distinguished relevant precedent and struck out the Plaintiff's challenge.
Regarding the damages issue, the court applied the law of involuntary bailment as recently reviewed in Da Rocha-Afodu. Upon execution of the warrant for possession, the Defendant became an involuntary bailee of the Plaintiff's chattels and owed a duty to act in a manner that was right and reasonable under the circumstances.
The court found that the Defendant gave ample notice to the Plaintiff of the intention to dispose of goods, including notices pursuant to the mortgage terms and the Torts (Interference with Goods) Act 1977. The Plaintiff was afforded multiple court orders granting access to remove possessions but failed to do so and actively obstructed the process by barricading herself inside the property.
The Defendant did not hinder the Plaintiff's removal of chattels and made reasonable efforts to facilitate collection. Given the volume and condition of goods, disposal rather than storage or sale was appropriate and cost-effective. The Defendant ceased disposal upon injunction and offered further opportunity for collection, which was not taken up.
In these exceptional circumstances, the court held that the Defendant's conduct was right and reasonable and thus it was not liable in damages for the disposal of the goods.
Additional applications by the Plaintiff disputing the validity of possession proceedings and seeking injunctions were dismissed as without merit or abuse of process.
Holding and Implications
The court held that:
- The Plaintiff's claims to set aside the mortgage on grounds of fraud or improper execution are dismissed and struck out as vexatious and an abuse of process.
- The Defendant, as involuntary bailee of the Plaintiff's chattels following possession, acted in a manner that was right and reasonable under the circumstances and is not liable in damages for the disposal of those goods.
- All outstanding applications by the Plaintiff challenging possession or seeking injunctions are dismissed or struck out.
Implications: The decision confirms that a mortgagee in possession who becomes an involuntary bailee of goods left on the property owes a duty to act reasonably, but is entitled to dispose of goods after reasonable notice and opportunity for removal have been given, particularly where the goods have no intrinsic value and removal or storage is impractical. The ruling does not establish new precedent but applies established principles to the facts of this case, reinforcing the limits on mortgagors' claims for damages in such contexts.