Bristol & West BS v Ellis [1996] 73 P&CR 158

KEY POINTS

• In cases where a property is up for sale and there are signs that the homeowner may cause delays, a brief suspension of a few months might be considered reasonable.

• In situations where there is anticipated significant delay in selling the property and its value is nearly equal to the total mortgage debt and arrears, putting the lender's security at risk, immediate possession or a short suspension period could be justified.

• If there has already been substantial delay in selling the property, or it's unlikely that the sale proceeds will cover the mortgage debt and arrears, or if there is insufficient evidence regarding the property's value, the standard course of action would be to grant immediate possession.

FACTS

• The Bristol & West Building Society was the mortgagee for Mr. and Mrs. Ellis's home. The mortgage was initially £40,000 with monthly interest-only payments. Later, it was increased to £60,000. Mr. Ellis left in 1990, and the Ellises fell behind on payments. In 1990, Bristol & West sought possession of the house due to arrears. A court ordered Mrs. Ellis to pay a lump sum and additional monthly payments to cover the arrears. She didn't comply.

• By 1995, Mrs. Ellis owed over £76,000 to Bristol & West. She applied for suspension of a warrant for possession, stating her intention to sell the house in 3 to 5 years after her children completed their education. The court ordered suspension but imposed terms for her to pay off the arrears over 98 years without specifying the sale of the house.

• Bristol & West appealed, arguing that the order was unreasonable. The Judge upheld the order, considering the difficult circumstances Mrs. Ellis faced. Bristol & West's argument was that the repayment periods were too long to be reasonable under the law. Mrs. Ellis argued that 3 to 5 years until the house sale was reasonable, but the court order did not reflect this.

JUDGEMENT

• Appeal allowed.

COMMENTARY

• This case underscores the importance of considering the individual circumstances of mortgagors and the discretion that judges have in determining what constitutes a reasonable repayment period under the law.

• It serves as a reminder that courts may take a compassionate view when dealing with homeowners facing financial challenges and may tailor possession orders accordingly.