• In the case of Bristol & West Building Society v Ellis [1996] 73 P&CR 158, the factors required to make a possession order were explored in the context of repayment solely through sale of the property.

Facts of Bristol & West Building Society v Ellis [1996] 73 P&CR 158

  • The mortgager, Mrs Ellis, defaulted on her payments
  • A suspended order by the Bristol County Court was made for the mortgager to pay however she did not comply with it and the mortgage went unpaid
  • After such, an order for repossession was postposed without a term imposed as to the sale of the property
  • There was an expectation that such would occur after Mrs Ellis’ children had completed university in 3-5 years

Issues in Bristol & West Building Society v Ellis [1996] 73 P&CR 158

  • Was it right of the district judge to order the postponement of the order of possession?

Held by the Court of Appeal

  • The postponing was inappropriate. Where there is no prospect of sale within 3-5 years, a mortgage repossession order should be made.

Lord Justice Auld

Factors the courts should consider in situations of possession orders

  • “The important factors in determining the reasonableness of the period are likely to be the extent to which the mortgage debt and arrears are secured by the value of the property and the effect of time on that security. There should be evidence, or at least some informal material, before the court of the likelihood of a sale, the proceeds of which will discharge the debt, and of the period within which such a sale is likely to be achieved.” [158]

If “the property is already on the market and there is some indication of delay on the part of the mortgagor, it may be that a short period of suspension of only a few months would be reasonable” [162]

In certain situations, a delay period (albeit a short one) is reasonable

  • “Where there is likely to be considerable delay in selling the property and/or its value is close to the total of the mortgage debt and arrears so that the mortgagee is at risk as to the adequacy of the security, immediate possession or only a short period of suspension may be reasonable.” [163]

However, where there has already been delay and cost of sale would likely not cover the debt, Lord Justice Auld said immediate possession would be the most appropriate:

  • Where there has already been considerable delay in realising a sale of the property and/or the likely sale proceeds are unlikely to cover the mortgage debt and arrears or there is simply no sufficient evidence as to sale value, the normal order would be for immediate possession.” [163]

Having looked at the debt totalling over the years, Lord Justice Auld believed such would not be repaid in the expectation provided by Mrs Ellis and did not think the district judge’s decision of postponement was therefore appropriate:

  • “In my view, the evidence was simply insufficient to entitle the district judge to contemplate, behind the order he made, a likelihood that the house would or could be sold at a price sufficient to discharge Mrs Ellis’s overall debt to Bristol & West within any reasonable period, and certainly not one of up to three to five years.” [163]