Western Bank v Schindler [1977] Ch 1

• Plaintiff borrowed money from Defendant in return for a charge on his house. The money was to be repaid over 10 years in monthly installments.

• Plaintiff then lapsed on payments and Defendant sued for possession.

• CA found for Plaintiff, but decided to exercise its ability under s.36 to stay possession for a period.

  • It upheld the judge’s finding that on the peculiar facts, there were two separate agreements: the loan agreement and the mortgage agreement were separate, but that failure to keep up the loan payments led to repossession of the house.

  • The Court held that a “reasonable time” for Defendant to be allowed to repay outstanding payments under s. 36 AJA was applicable even where the mortgagor was not in default. 

Buckley LJ

• It would be manifestly unfair to give s.36 a literal meaning so that it would give help to a mortgagor in default, but not one who is not in default.