• In the case of Birmingham Citizens Permanent BS v Caunt [1962] Ch 883, the High Court held that the mortgagee can exercise a right to possession at any time, notwithstanding the absence of default on the behalf of the borrower.
  • However- the court may confine the right to possession to circumstances where there has been default on the borrowers behalf, where there is an implied term limiting possession to these circumstances.

Facts of the Case

  • C applied by summons to the court for an order of possession of a mortgaged property on the ground that payment of the instalments was arrear.
  • D made an application to the district registrar for the case to stand over generally.
  • The district registrar adjourned the summons on the terms that D should make minimum weekly payments in order to overtake the arrears.

Issues in the Case

  • In this case, the High Court had to decide whether the order for possession could be declined.

High Court Held

  • The High Court held that there was no jurisdiction to decline an order for possession, and that, accordingly, an order for possession of the mortgaged property must be made.

Russel J

  • [890] “In the present case it was, I think, an implied term of the mortgage that the mortgagee would not take possession unless and until the mortgagors were in default. But they have long since defaulted. Prior to 1936, as is pointed out in the above extracts, a mortgagee desiring merely possession sued at common law. He could not apply for possession only by summons in the Chancery”
  • [891] “There appears no trace, prior to 1936, of any right in any court to deny to a mortgagee asserting or claiming his right to possession, the appropriate order—though to this a qualification has to be made in that a court in the exercise of its inherent jurisdiction for proper reason to postpone or adjourn a hearing might by adjournment for a short time afford the mortgagor a limited opportunity to find means to pay off the mortgagee or otherwise satisfy him if there was a reasonable prospect of either of those events occurring.”
  • [897] “I should perhaps say two things at this stage. First, it was argued for- the mortgagees that the ” tenor of the mortgage ” argument could not succeed in a case where, as here, the original loan period was at the volition of the mortgagee expressly terminable on six months’ notice, though not in fact so determined. My rejection of the ” tenor of the mortgage ” argument does not depend on that circumstance. Secondly, for the purpose of considering that same argument as to the tenor of the mortgage, I am prepared to assume that in an instalment mortgage where there is no provision for or possibility of the whole sum becoming payable in one sum, there would be jurisdiction to keep the mortgagee out of possession by redemption spread over the whole period. I have come to no conclusion, tentative or otherwise, that such jurisdiction would exist.”