Cheltenham & Gloucester Plc v Booker & Anor

The court has a residual common-law jurisdiction to postpone delivery of possession for a short period where statutory mortgage-relief powers are unavailable or are not exercised. It may defer possession to allow a sale by the mortgagor or, in principle, by the mortgagee. The latter course is exceptional. The court must be satisfied that possession is unnecessary until completion, continued occupation will not reduce the price, the mortgagor will cooperate with the sale, and vacant possession will be given on completion. The jurisdiction should be exercised sparingly. Repeated default and an absence of realistic cooperation justified immediate execution of the warrant.

The mortgagee held a legal charge over the defendants’ home. A possession order had been made and repeatedly suspended, but the mortgage arrears continued to increase and numerous appointments for execution of the warrant were vacated or suspended.

The county court ordered that the warrant lie in the court office while the mortgagee conducted a sale, conditional on the defendants’ cooperation and delivery of vacant possession on completion. The judge considered that statutory powers were unavailable but relied on an alleged long-established county court practice. The appeal concerned the existence and limits of any residual jurisdiction to postpone possession, including whether it could operate while the mortgagee conducted the sale.

Appeal allowed. Lord Justice Millett delivered the judgment and Lord Justice Potter agreed. The county court order was set aside and the warrant was directed to issue without delay. The mortgagee had liberty to add the appeal costs to the security.

1. The judge had no jurisdiction to exercise the statutory powers under section 36 of the Administration of Justice Act 1970 or section 8 of the Administration of Justice Act 1973, because the statutory requirements were not satisfied. That did not exclude the limited jurisdiction existing at common law.
2. Where the statutory powers cannot be used, or the court declines to use them, the court may postpone delivery of possession for a short period to enable the mortgagor to sell the property. In principle, the same jurisdiction may enable a mortgagee to sell while the mortgagor remains in possession.
3. Such an order requires clear satisfaction that: possession will not be needed by the mortgagee before completion; continued occupation will enhance or at least not depress the price; the mortgagor will cooperate with marketing and viewings; and possession will be given to the purchaser on completion.
4. The jurisdiction should be exercised sparingly and with great caution. The party conducting the sale should normally decide when possession is needed. A mortgagee conducting the sale while the mortgagor remains in possession creates practical risks, including uncertainty over vacant possession and disclosure that the sale is forced. The course should ordinarily be adopted only with the mortgagee’s consent.
5. The conditions were not met. The defendants’ history showed repeated attempts to postpone execution and no realistic prospect of cooperation. The order was likely to delay the sale and might depress the net proceeds. It was therefore plainly wrong.

• Court of Appeal (Civil Division) In [1996] EWCA Civ 957, the appeal was allowed. The county court order was set aside and the warrant was made available for immediate execution.
• Stoke-on-Trent County Court On 30 April 1996, His Honour Judge Mitchell ordered that the warrant lie in the court office while the mortgagee conducted the sale, subject to the defendants’ cooperation and provision of vacant possession on completion. Leave to appeal was refused on 15 May 1996 but later granted by a single Lord Justice.